# The  EURO  thread



## Trajan

there has been a lot going on already, and, lets be serious, a great deal more is to come soooooo instead of starting  a thread every time the &#8364; has a bad day, eats its own, or some such junior calamity on the way to the cataclysmic calamity occurs, we can just post it here and take it all in like we are at the  Imax 

so, I'll go first-



 interesting blurb from the BI-  I was wondering  why they just didn't cut Greece loose now......right now,  now I know, Eurobonds!!!!Hey don't shove..get back in line, theres debt enough to go round. 

they plan on doing to the whole EU what our own did to us ( comparatively) , make us eat the banks failures ala our 401ks, etc.  the whole EU not just the krauts () will now get to pay to eat Greece like a buffett and the banks get to eat and walk away and leave the checks for the saps....

snip-

The reason leaders want to get Greece to the ESM stage is that it entails some sort of orderly restructuring of the country's debt, where private creditors will take part in the deal. There is the potential that the ESM could swap its debt to creditors in exchange for the sovereign debt they are holding. Essentially, that's a eurobond in exchange for a Greek bond, in everything but name. This has not yet been agreed to, and will likely garner significant political opposition.




Read more: The Real Endgame In Greece That European Leaders Are Privately Praying For


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## boedicca

All the big money is going to be in a scramble to keep retail investors on board until they can cash out. 

Greece shouldn't be bailed out right now.  They broke the convenants on their last bail out.  All this is doing is punting the problem down the road a couple of months.


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## Toro

The euro as we know it is finished.  It is untenable.

Either the political structure has to change such that funds are constantly flowing from the north to the south or the weak countries will leave.  There are no other options, unless the PIIGS are to become German copycats.

Its amusing when the market rallies "On a Greek bailout."  How many times has that happened over the past year?  Seven?


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## JBeukema

The symbol of the Euro is a crescent moon!


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## Zander

The impending Euro collapse is driving US Long bonds rates even lower. The yield for the 30 yr T-bond is  down to 4.22 as of today.  


PS- I was laughed at by Toro when I bought in Feb at 4.75.  The fund has a duration of 20...do the math baby!!


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## Toro

Zander said:


> The impending Euro collapse is driving US Long bonds rates even lower. The yield for the 30 yr T-bond is  down to 4.22 as of today.
> 
> 
> PS- I was laughed at by Toro when I bought in Feb at 4.75.  The fund has a duration of 20...do the math baby!!



I didn't laugh.  I may disagree but I don't laugh.  I've been in the business too long to know that anything can happen.  Last survey I checked had 97% of money managers bearish on Treasuries.  And though I'm one of them, when that many are on one side of the boat, it gives me pause.

Anyways, the Europeans are doing their best to keep this game of three-card monty going.



> Greece&#8217;s next aid package may include incentives for bondholders to roll over maturing debt without triggering a credit-rating downgrade that would roil Europe&#8217;s banking system, two people with knowledge of the talks said.
> 
> Investors may be offered preferred status, higher coupon payments or collateral as inducements to buy bonds replacing Greek debt maturing between 2012 and 2014, said the people, who declined to be identified because the talks are in progress.
> 
> The sweeteners would be part of a revised aid package, to be decided by the end of June, amounting to a voluntary extension of Greece&#8217;s debt maturities that aims to skirt the technical definition of default, the people said.



EU Said to Consider Sweeteners to Encourage Greek Debt Extension - Bloomberg.com


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## Trajan

Zander said:


> The impending Euro collapse is driving US Long bonds rates even lower. The yield for the 30 yr T-bond is  down to 4.22 as of today.
> 
> 
> PS- I was laughed at by Toro when I bought in Feb at 4.75.  The fund has a duration of 20...do the math baby!!



I lauged......I laugh at you now, I scoff at you, I fart in your general direction...
....

( how was the Allen bros btw.?)


and don't be getting froggy....$998.00 baby...


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## Zander

Trajan said:


> Zander said:
> 
> 
> 
> The impending Euro collapse is driving US Long bonds rates even lower. The yield for the 30 yr T-bond is  down to 4.22 as of today.
> 
> 
> PS- I was laughed at by Toro when I bought in Feb at 4.75.  The fund has a duration of 20...do the math baby!!
> 
> 
> 
> 
> I lauged......I laugh at you now, I scoff at you, I fart in your general direction...
> ....
> 
> ( how was the Allen bros btw.?)
> 
> 
> and don't be getting froggy....$998.00 baby...
Click to expand...


Down to 4.15 as of today. 
The steaks were stellar. I went with the "dry aged" - the porterhouses are 2" thick and OMFG good. Thanks for the heads up on them. 

PS- they threw in 8 burgers with the order- and they were great too!


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## Trajan

Zander said:


> Trajan said:
> 
> 
> 
> 
> 
> Zander said:
> 
> 
> 
> The impending Euro collapse is driving US Long bonds rates even lower. The yield for the 30 yr T-bond is  down to 4.22 as of today.
> 
> 
> PS- I was laughed at by Toro when I bought in Feb at 4.75.  The fund has a duration of 20...do the math baby!!
> 
> 
> 
> 
> I lauged......I laugh at you now, I scoff at you, I fart in your general direction...
> ....
> 
> ( how was the Allen bros btw.?)
> 
> 
> and don't be getting froggy....$998.00 baby...
> 
> Click to expand...
> 
> 
> Down to 4.15 as of today.
> The steaks were stellar. I went with the "dry aged" - the porterhouses are 2" thick and OMFG good. Thanks for the heads up on them.
> 
> PS- they threw in 8 burgers with the order- and they were great too!
Click to expand...


I didn't get my invite zander


did you get any black truffle butter? duuude its like, well,  its almost sexual.....


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## Zander

Toro said:


> Zander said:
> 
> 
> 
> The impending Euro collapse is driving US Long bonds rates even lower. The yield for the 30 yr T-bond is  down to 4.22 as of today.
> 
> 
> PS- I was laughed at by Toro when I bought in Feb at 4.75.  The fund has a duration of 20...do the math baby!!
> 
> 
> 
> 
> I didn't laugh.  I may disagree but I don't laugh.  I've been in the business too long to know that anything can happen.  Last survey I checked had 97% of money managers bearish on Treasuries.  And though I'm one of them, when that many are on one side of the boat, it gives me pause.
> 
> Anyways, the Europeans are doing their best to keep this game of three-card monty going.
> 
> 
> 
> 
> Greeces next aid package may include incentives for bondholders to roll over maturing debt without triggering a credit-rating downgrade that would roil Europes banking system, two people with knowledge of the talks said.
> 
> Investors may be offered preferred status, higher coupon payments or collateral as inducements to buy bonds replacing Greek debt maturing between 2012 and 2014, said the people, who declined to be identified because the talks are in progress.
> 
> The sweeteners would be part of a revised aid package, to be decided by the end of June, amounting to a voluntary extension of Greeces debt maturities that aims to skirt the technical definition of default, the people said.
> 
> Click to expand...
> 
> 
> EU Said to Consider Sweeteners to Encourage Greek Debt Extension - Bloomberg.com
Click to expand...

Just razzing ya Toro- you're the consummate professional and I respect your opinion.


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## Political Junky

The Euro is worth $1.447 right now.


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## Trajan

this is so , so,surreal....it defys logic, 100 Billion.....100 Billion euros.......Greece....

Spiegel Reports Greek Bailout #2 To Surpass &#8364;100 Billion

It's the weekend, which means another Spiegel hit piece over the solvency and stability of the Eurozone is overdue. Sure enough, the publication comes through admirably with "New Greek aid to cost more than one hundred billion euros." As a reminder, until as recently as 24 hours ago it was expected that the bailout would be at most &#8364;80 billion, with half coming from Greek privatization efforts. Naturally, this means that even more money will be transferred from taxpayer pockets to bank capital deficiency accounts. Next up: Greek bailouts 3, 4, 5, by which point Goldman will have hopefully achieved its life long ambition of opening a Goldman Sachs-branded ATM at the main entrance to the Acropolis, which GS will have LBOed using discount window capital.

As for the photo from a May 30 protest which accompanies the Spiegel piece, it is sadly amusing that the Greek lady next to the EU Swastika flag is wearing designer glasses and a gold watch.

more at-
Spiegel Reports Greek Bailout #2 To Surpass ?100 Billion | zero hedge


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## Trajan

and....

Merkel Changes Stance on Aid to Greece

BERLIN &#8212; Chancellor Angela Merkel of Germany retreated Friday from demands that private financial institutions be pressured to participate in efforts to rescue the Greek economy, a compromise that seemed to offer some breathing space in Europe&#8217;s efforts to confront its potentially ruinous debt crisis. 

Her critics in the European Central Bank and in many European capitals had argued that any requirement that private investors absorb some losses risked plunging Greece into a disorderly default on its enormous debt.

But after a two-hour meeting with President Nicolas Sarkozy of France, whose banks are among the most heavily exposed in the Greek debt crisis, Mrs. Merkel relented, saying, &#8220;We would like to have a participation of private creditors on a voluntary basis.&#8221; She acknowledged, too, that there was no legal way of forcing banks to participate.

&#8220;This should be worked out jointly with the E.C.B,&#8221; she added, referring to the European Central Bank. &#8220;There shouldn&#8217;t be any dispute with the E.C.B. on this.&#8221; It was her second major political reversal in a month and could compound her political woes at home. 

http://www.nytimes.com/2011/06/18/business/global/18euro.html?_r=2&hp

wave bye bye Angie....


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## Zander

The question is, how long will the German people continue to pay Greeks to sit around all day, doing nothing but passing olive scented gas?  When the state pays people to do nothing, guess what they'll do?  

The Euro is over. It will not survive. It was doomed from the beginning.


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## Political Junky

Zander said:


> The question is, how long will the German people continue to pay Greeks to sit around all day, doing nothing but passing olive scented gas?  When the state pays people to do nothing, guess what they'll do?
> 
> The Euro is over. It will not survive. It was doomed from the beginning.


In the meantime, the Euro is worth a lot more than the Dollar, which makes travel there expensive for us.


&#8220;Travel is fatal to prejudice, bigotry, and narrow-mindedness.&#8221;
     -*Mark Twain


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## Zander

Political Junky said:


> Zander said:
> 
> 
> 
> The question is, how long will the German people continue to pay Greeks to sit around all day, doing nothing but passing olive scented gas?  When the state pays people to do nothing, guess what they'll do?
> 
> The Euro is over. It will not survive. It was doomed from the beginning.
> 
> 
> 
> In the meantime, the Euro is worth a lot more than the Dollar, which makes travel there expensive for us.
> 
> 
> Travel is fatal to prejudice, bigotry, and narrow-mindedness.
> -*Mark Twain
Click to expand...


IF you are planning to visit Europe, now is probably a good time.


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## Political Junky

Why? The Euro is worth $1.43.


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## Zander

Political Junky said:


> Why? The Euro is worth $1.43.


Because it is summer and the weather is nice. I am going to Italy in August to visit some family. If you want to wait for a better exchange rate, I expect parity with the dollar over the next few years.


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## Zander

Personally. I would tell the Greeks to figure out their own problems. They got themselves into it. If they want to stay with the euro, fine. But we are not going to bail you out. We are not throwing good money after bad. Europe should take the money they are giving to Greece (which is just going to default later anyway) and bail out their financial system directly. Let bondholders lose and realize they actually have to pay attention to what they invest in. Are these guys creditworthy?

It is like loaning your rotten brother-in-law money. You do it to keep peace in the family, but there comes a point when it helps neither him nor you.


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## Baruch Menachem

So, you put our entire retirement account into Greek bonds because they were paying such a high rate of interest?   What other brilliant things have you done recently that you want to tell me about?


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## editec

Zander said:


> The impending Euro collapse is driving US Long bonds rates even lower. The yield for the 30 yr T-bond is down to 4.22 as of today.
> 
> 
> PS- I was laughed at by Toro when I bought in Feb at 4.75. The fund has a duration of 20...do the math baby!!


 
One wonders how much of your happy investing has to do with CHINA migrating its US debt portfolio out of short term T-bills and into longer term bonds.

I'm informed they moved something like $1 Trillion into longer term bonds in the last few months.


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## Cuyo

I've been trying to buy some chinchillas from &#8364;urope here recently, and I can state as fact that the high relativity of the &#8364;uro to the dollar is making that a very difficult prospect.


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## Trajan

interesting chart from ZH...they have rearranged their own deck chairs and nobody else was invited to the poop deck. what a joke. Giving them one more dime is just , I don't know, are these people intelligent...really? Because all indicators say no.


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## Trajan

and to cheer us up this Saturday morning.....only in the EU does Ireland, Greece and Portugal NOT constitute a canary ion a coal mine. 


Moody's Puts Italy's Aa2 Rating On Downgrade Review, EUR Slides, And A Bonus Report From SocGen: "How Vulnerable Is Italy?"

RATIONALE FOR REVIEW

First, the Italian economy faces growth challenges in an environment characterized by long-term structural impediments to growth and potentially rising interest rates. Structural economic weaknesses -- mainly low productivity and important labour and product market rigidities -- have been a major impediment to growth in the last decade and continue to hinder the economy's recovery from the severe recession it experienced in 2009. Italy has so far only recovered a fraction of the nearly seven percentage points in GDP that it lost during the global crisis, despite low interest rates, which are likely to rise in the medium term. Growth prospects for the Italian economy in the coming years will be a crucial factor that will determine the government's revenues and the achievement of fiscal consolidation targets.

Second, there are implementation risks to the fiscal consolidation plans that are required to reduce Italy's stock of public debt to more affordable levels. Against a backdrop of rising interest rates and weak economic growth, the government may find it difficult to generate the primary surpluses that are needed to place the public debt-to-GDP ratio and the interest burden on a solid downward trend. The adoption of additional conservative fiscal policies may prove more difficult in the near future because the current government's electoral support is weakening, with the government facing challenges in gaining public approval for its policies. For example, the government's recent energy and water supply proposals were rejected by popular vote.

Third, the fragile market sentiment that continues to surround European sovereigns with high levels of debt poses additional risks for Italy. The continued stability of market demand for Italy's debt is uncertain at current yields. Although future policy actions within the euro area could reduce investors' concerns and stabilize funding costs, the opposite is also possible. In any event, going forward, investors appear likely to differentiate more among euro area sovereign borrowers than they did prior to the financial crisis, to the disadvantage of euro area countries with higher-than-average debt burdens, like Italy. 

Moody&#039;s Puts Italy&#039;s Aa2 Rating On Downgrade Review, EUR Slides, And A Bonus Report From SocGen: "How Vulnerable Is Italy?" | zero hedge


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## Political Junky

I'd welcome a drop in the value of the Euro, myself, but I don't see it happening.

XE - Universal Currency Converter


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## Zander

editec said:


> Zander said:
> 
> 
> 
> The impending Euro collapse is driving US Long bonds rates even lower. The yield for the 30 yr T-bond is down to 4.22 as of today.
> 
> 
> PS- I was laughed at by Toro when I bought in Feb at 4.75. The fund has a duration of 20...do the math baby!!
> 
> 
> 
> 
> One wonders how much of your happy investing has to do with CHINA migrating its US debt portfolio out of short term T-bills and into longer term bonds.
> 
> I'm informed they moved something like $1 Trillion into longer term bonds in the last few months.
Click to expand...

I am generally a contrarian investor- I go the opposite of the herd. When I bought the long bond in February, the bearish sentiment was at 97% (the market was convinced that long term interest rates would rise).  China may have helped, I really don't know.


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## Trajan

angies in...UK is out. 

_UK banks abandon eurozone over Greek default fears_
UK banks have pulled billions of pounds of funding from the eurozone as fears grow about the impact of a Lehman-style event connected to a Greek default.

UK banks abandon eurozone over Greek default fears - Telegraph


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## Magnum2

Zander said:


> The question is, how long will the German people continue to pay Greeks to sit around all day, doing nothing but passing olive scented gas?  When the state pays people to do nothing, guess what they'll do?
> 
> The Euro is over. It will not survive. It was doomed from the beginning.



If Greece defaults, Germany, France, and to a lesser extent, Britain are in big big trouble.


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## Trajan

the sky is falling!!!!!!!!!!


Greece Deputy PM Warns Of Tanks In The Streets, Mass Suicides, If Second Bailout Voted Down By Greek Parliament

With just days left until the crucial vote on passing the Greek mid-term austerity package, the assured destruction rhetoric used by the Greek status quo has hit fever pitch. Just to make sure the message is not lost on the broader population that Europe's banks will not admit defeat in a vote that could end the kleptocratic cartel's hegemony for ever, Greece's Deputy Prime Minister Theodoros Pangalos has blasted suggestions that it would be better for his country to abandon the euro and return to the drachma as an "immense stupidity". He didn't stop there. For dramatic impact, the Greek vice PM also said that the country would devolve into complete anarchy, with tanks roaming the streets, a population on the verge of civil war, with mass suicides, just for dramatic impact, should bankers not get their way. More or less in line with the Hank Paulson script that is regurgitated every few years when the Ponzi system is on the verge of imploding yet again.

From AFP:

    "Those who say this are extremely stupid. While they may be analysts, university professors or economists, saying that is an immense stupidity," Pangalos told daily Spanish newspaper El Mundo in an interview published Sunday.

    Debt-wracked Greece has been told by European peers that it cannot hope to continue receiving aid from a 110-billion-euro rescue package agreed with the EU and the IMF last year without biting budget reforms and privatisations.

    The Greek parliament will vote on an austerity package this week but some economists have argued that Athens needs to restructure its debt and leave the euro to become economically competitive again.

    "Returning to the drachma would mean that on the following day banks would be surrounded by terrified people trying to withdraw their money, the army would have to protect them with tanks because there would not be enough police," said Pangalos.

    "There would be riots everywhere, shops would be empty, some people would throw themselves out the window ... And it would also be a disaster for the entire European economy."

more at-
Greece Deputy PM Warns Of Tanks In The Streets, Mass Suicides, If Second Bailout Voted Down By Greek Parliament | zero hedge


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## Trajan

so here we go, Italy next up in the box.............damn spaghetti benders...Italy has just put a rule in place to halt or limit closely bank  short selling.......cost of insuring Italian sovereign debt rose to an all time high.


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## Baruch Menachem

Spain is in trouble again too.


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## Toro

Today was about Italy. 

In some ways, it's fairly odd, given that Italy doesn't have a big deficit and has been reducing it's deficit over time. It didn't have a big bubble and it's banks aren't distressed, or at least not more so than other European banks. However, it was the third slowest growing economy in the world over the past decade, with only Zimbabwe and another country worse. It has negative productivity and a lot if debt.


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## Trajan

Toro said:


> Today was about Italy.
> 
> In some ways, it's fairly odd, given that Italy doesn't have a big deficit and has been reducing it's deficit over time. It didn't have a big bubble and it's banks aren't distressed, or at least not more so than other European banks. However, it was the third slowest growing economy in the world over the past decade, with only Zimbabwe and another country worse. It has negative productivity and a lot if debt.



I hear you but I see this as I am sure you as part and parcel of the contagion they simply cannot handle....the IMF wants us to up our contributions for greece et al, Spain? Italy? (Portugal is lost to them period)


The Euro house of cards is folding, merkel may have already committed political suicide and the German people will reached their limit if they already are not there yet. 

Oh and Italy has a HUUUUUUUUUGE off the books cash economy. I doubt they collect half the taxes they could.


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## Trajan

well Greece misses more benchmarksFitch has downgraded them again.......Ireland is in junk status now too......well, heres the IMF to the rescue ( with OUR money too)....*sigh*

just dump Greece, Merkel  save yourself my kleingebäck, pick up the phone get with  Sark and just fucking dump their asses.


L....e....t.........them....GO.


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## freedombecki

Maybe the people will band together and start helping each other out over there. I was of the understanding they pay double the price for gasoline as us, and having been over there and having seen the prices in their gift stores on both sides of the Baltic Sea, I was just wondering how average people could get by as far back as 2006, when the world seemed a lot lusher. I'm not much of a financier, but I am putting all of them on my prayer list, and us, too. Night, fellas. Carry on.


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## Baruch Menachem

With all of the south Euro zone in trouble, there is no way the Germans can keep bailing.

Especially since it seems that the south Euro zone isn't serious about reforms.


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## Trajan

interesting article.....


The Euro Endgame
At last, the voters
Aug 1, 2011, 

Billion by billion by billion, showdown by argument by ultimatum, Greece&#8217;s latest bailout is being put together by those who run the eurozone. The country&#8217;s finances are so bad, and its prospects so poor, that even the new $159 billion rescue package announced on Thursday will (assuming it comes into effect) probably only prove to be a reprieve. 

Never mind. Buying time is the name of the game. If Greece can be kept going, and Portugal and Ireland too, financial markets might, fingers crossed, calm down, and the threat that panic might engulf Spain and Italy&#8212;two economies too big to bail&#8212;and the banks that have lent to them might recede. Then, come July 2013, the $1.1 trillion European Stability Mechanism will spring to life. It will be backed by the 17 members of the eurozone, be policed by Brussels, and it will inherit the proto-IMF powers now being proposed for the European Financial Stability Facility that it will succeed. Well, that is the plan (at the time of writing), complete with a hint of Ponzi, a dash of Micawber, and dire warnings of what the alternative might be. 

There&#8217;s a lot that needs not to go wrong, but of all the elements that could, the most dangerous may come from a source that Brussels has long tried to write out of the plot: the ballot box. There&#8217;s an irony to that. If there was anything (other than misplaced Carolingian nostalgia) at the heart of the project for a European union it was the idea that, after the wars of the first half of the twentieth century, the peoples of the old world could no longer be trusted with their own sovereignty. It&#8217;s never been much of an argument, but it&#8217;s worked well enough for the EU&#8217;s emerging technocratic elite. 

The establishment of the euro is thus best understood as just another stage in the progressive disenfranchisement of Europe&#8217;s voters. The replacement of domestic currencies with what was, in effect, foreign money meant that, as a practical matter, the countries (and particularly the weaker countries) of the eurozone lost much of what was left of their fiscal and economic autonomy. Previously a nation with subpar finances and/or an uncompetitive cost base could allow the depreciation of its lira, its drachma, or its escudo to restore some balance. Its standard of living might fall relative to its international competitors&#8217;, but it could usually muddle along in the fashion that its people had, one way or another, chosen. 

Now that option was closed. Forget the voters; once a country could no longer print its own money it had to run itself in ways that ensured it could keep international creditors&#8212;which is to say all creditors&#8212;happy. More generally, it had to manage itself in a manner that allowed it to keep reasonably close to the pacesetters of the monetary union in which it now dwelt&#8212;and if that country was Greece and the pacesetter was Germany, that was only going to be possible (if at all) with wrenching political and cultural change. That change might have been desirable, but to think that external discipline alone would be enough to set it in motion was a fatal conceit.

more at-
The Euro Endgame | The Weekly Standard


it just takes one to drop the euro, the rest will run like scolded cats.


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## Trajan

word is to watch the Spanish and Italian 10 year,...if they float over 7lol, deep deep do do...


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## Toro

Spain and Italy CDS at all time highs right now.


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## Trajan

and here it is.....get over yourselves, lance the boil guys, and just end this. 

Please Europe, either put up or break up 

By Ambrose Evans-Pritchard Economics Last updated: August 5th, 2011


So we wait to see whether the ECB is really willing to sit back and let the whole edifice collapse.

Are the Bundesbankers really so stubborn that they would rather bring down the European financial system, tank the world economy, and cause a deep global depression, rather than enter the bond market on a sufficient scale to back-stop Italy and Spain?

Tough call. 50:50, I&#8217;d say.

The hardliners are seriously ideological people, and there seem to be some in the upper echelons of German policy-making (though obviously not the floundering bean-counter Schauble, or the battered Chancellor), who suspect that it might be better to lance the boil by forcing an immediate break-up of EMU.

I note that Belgium&#8217;s central bank governor Coene hinted that the ECB is withholding bond purchases to force Italy and Spain to push through &#8211; you guessed it &#8211; yet more growth-destroying austerity. Dangerous game. These 1930s deflationists really are a menace to society.

In a nutshell, unless the ECB is willing to step in &#8211; I mean really step in, not piss in the wind &#8211; until such a time as the revamped EFSF bail-out is ratified by all parliaments and is ready to take the baton (say November), and unless the EFSF itself is quadrupled in size and given a &#8364;2 trillion mandate without all the German-imposed ifs and buts, then the game is up.

If the EU authorities refuse to do this, it is best for everybody that it is recognized immediately and that arrangements are made for the orderly break-up of monetary union&#8230;  not next year, or next month, but next week.

more at-

Please Europe, either put up or break up &#8211; Telegraph Blogs


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## Zander

I predict Euro/Dollar parity within the next 12-24 months. Invest accordingly....


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## Trajan

hummmmmmm....


It Just Went From Bad To Far, Far Worse As Germany Says Italy Is Too Big For EFSF To Save, Refuses To Carry Euro Bailout Burden

Dow Jones just hitting the tape referencing Spiegel
SPIEGEL ONLINE - Nachrichten


    * German Govt: Italy Too Big For EFSF To Save - Spiegel
    * German Govt: Doubts Whether Tripling EFSF Would Help It Save Italy
    * German Govt: Italy Must Make Savings, Reforms To Exit Crisis - Spiegel
    * Italy Debt Guarantee Could Raise Doubts Over Germany's Finances - Spiegel
    * German Govt: EFSF Should Only Help Small, Mid-Size Countries - Spiegel

As a reminder, yesterday's stopgap announcement by the ECB to expand its SMP purchases of secondary market Italian and Spanish bonds was merely as a precursor to full EFSF monetization until its comes fully online in September (or sooner) in a vastly expanded format (between &#8364;1.5 and &#8364;3.5 trillion).

If Germany is now against this, which appears to be the case, it pretty much means, well, game over.

Add the uncerainty over the unwind of the Europe rescue "gamechanger" as one of the more naive CNBC anchors said yesterday, and Monday is now guaranteed to be a bloodbath.

As for those saying China will gladly step in and fund a $5 trillion EFSF shortfall, they may want to read the following article from Reuters:

    Italian Economy Minister Giulio Tremonti said on Thursday that Asian investors are reluctant to buy Italian bonds because it sees they are not being bought by the European Central Bank.



    Speaking at a news conference, Tremonti also said it would be desirable for the central bank to follow the lead of the Japanese and Swiss central banks in taking expansionary steps to tackly the euro zone's crisis.



    "I note that the Bank of Japan today launched quantitative easing and the Swiss cen bank cut rates to zero, we are waiting for decisions if possible, but desirable (from the ECB)," Tremonti said.

     more at;
http://www.zerohedge.com/news/it-ju...too-big-efsf-save-refuses-carry-euro-bailout-


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## Trajan

Zander said:


> I predict Euro/Dollar parity within the next 12-24 months. Invest accordingly....



you were right, we are still the tallest midgets at the circus...O U rep


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## Baruch Menachem

Maybe someday Soon the Euro zone will split into a north euro zone (Poland, Czeck Republic, Hungary, Slovakia, Germany, Denmark, etc.) and a south euro zone, which will just go broke.

Germany and France badly want the Euro to survive, but they don't feel like being patsies for the Greeks and the spaniards.


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## Zander

Trajan said:


> Zander said:
> 
> 
> 
> I predict Euro/Dollar parity within the next 12-24 months. Invest accordingly....
> 
> 
> 
> 
> you were right, we are still the tallest midgets at the circus...O U rep
Click to expand...


An argument could be made that by agreeing to join the EU, the individual nations were giving up part their Sovereignty. Greece is a perfect example of this- they can't inflate away their problems.  They have no national currency. They must use the Euro. They are screwed!


----------



## Trajan

Baruch Menachem said:


> Maybe someday Soon the Euro zone will split into a north euro zone (Poland, Czeck Republic, Hungary, Slovakia, Germany, Denmark, etc.) and a south euro zone, which will just go broke.
> 
> Germany and France badly want the Euro to survive, but they don't feel like being patsies for the Greeks and the spaniards.



the euro was always a political tool, they told themselves it would add heft to the entire grp. it appears to me; that the entire euro franchise and whats become of the referendums , treaties etc. precludes popular participation. the 'people' are not quite ready to become one worlders,  not is it really feasible unless you totally and absolutely break down every border and brain wipe nationality from the body.


----------



## Trajan

so it appears italys uni-credit and several BIG Europe banks will need recapitalization, the 'people' are now fully awake, the plan to prop the south, I figure, its over. they are outta bullets too.


----------



## Trajan

I have a question- what is the exposure of  US money market funds to the euro? or that is its positions is positions they have taken in European banks etc etc ?


----------



## Toro

Trajan said:


> I have a question- what is the exposure of  US money market funds to the euro? or that is its positions is positions they have taken in European banks etc etc ?



It's been taken through the banks.  They've been dialing it down, though.


----------



## Trajan

Toro said:


> Trajan said:
> 
> 
> 
> I have a question- what is the exposure of  US money market funds to the euro? or that is its positions is positions they have taken in European banks etc etc ?
> 
> 
> 
> 
> It's been taken through the banks.  They've been dialing it down, though.
Click to expand...


meaning;  we have been paying for their failed positions....wonderful.


----------



## Trajan

On another note;

the German GDP just took a major hit, revisions have them stalled at *.*1%

Oh and I am sure they are going to lower the rates they just raised 6 months agao .50% too..... ( Frances gdp will of course crater too)

You know, these folks fon't live in the real world ....please pardon my 'french'; just let the fucking euro go....you are going to anyway, stop prolonging the agony and the inevitable, wrecking the system further....jesus Christ for supposedly intelligent  people, stupidity seems to reign supreme. 

Sluggish German GDP derails European stock rebound

PARIS, Aug 16 (Reuters) - European stocks fell on Tuesday, halting a rebound that started last week, as investors fretted about tepid German GDP growth ahead of talks between German and French leaders on the euro zone debt crisis.

At 0811 GMT, the FTSEurofirst 300 index of top European shares was down 1.5 percent at 954.55 points.

Data showed German GDP growth slowed more than expected in the second quarter, dropping to 0.1 percent in seasonally adjusted terms from a revised 1.3 percent in the first three months of the year.

"This is a serious disappointment," West LB economist Joerg Lueschow said. "Many growth forecasts will now likely be lowered and we will do so too. This does not provide any positive signs for euro zone GDP. We cannot expect more than stagnation now."

With French data last week signalling a stagnated economy in the second quarter, the weak German figures suggested the 0.3 percent forecast for euro zone growth, due at 0900 GMT, could turn out to be too optimistic. 

more at-
Sluggish German GDP derails European stock rebound | Reuters


----------



## Trajan

Toro said:


> Trajan said:
> 
> 
> 
> I have a question- what is the exposure of  US money market funds to the euro? or that is its positions is positions they have taken in European banks etc etc ?
> 
> 
> 
> 
> It's been taken through the banks.  They've been dialing it down, though.
Click to expand...


in related news...



Fed Eyes European Banks
Regulators Scrutinize Ability of Institutions' U.S. Units to Fund Themselves

Federal and state regulators, signaling their growing worry that Europe's debt crisis could spill into the U.S. banking system, are intensifying their scrutiny of the U.S. arms of Europe's biggest banks, according to people familiar with the matter.

The Federal Reserve Bank of New York, which oversees the U.S. operations of many large European banks, recently has been holding extensive meetings with the lenders to gauge their vulnerability to escalating financial pressures. The Fed is demanding more information from the banks about whether they have reliable access to the funds needed to operate on a day-to-day basis in the U.S. and, in some cases, pushing the banks to overhaul their U.S. structures, the people familiar with the matter say.

Officials at the New York Fed "are very concerned" about European banks facing funding difficulties in the U.S., said a senior executive at a major European bank who has participated in the talks.

Regulators are seeking to avoid a repeat of the 2008 financial crisis, when the global financial system began to seize up. This time the worry is that the euro-zone debt crisis could eventually hinder the ability of European banks to fund loans and meet other financial obligations in the U.S. While signs of stress are bubbling up, the problems aren't yet approaching the severity of past crises. 

more at-

Fed Eyes Cash Europe Banks Have in U.S. - WSJ.com


----------



## PeteEU

Trajan said:


> so it appears italys uni-credit and several BIG Europe banks will need recapitalization, the 'people' are now fully awake, the plan to prop the south, I figure, its over. they are outta bullets too.



False rumour promoted by an anti Europe British tabloid that use to support the Nazies. The newspaper retracted the article and apologized. Investigations are ongoing about where the rumour came from since it was a clear market manipulation attempt.


----------



## Trajan

PeteEU said:


> Trajan said:
> 
> 
> 
> so it appears italys uni-credit and several BIG Europe banks will need recapitalization, the 'people' are now fully awake, the plan to prop the south, I figure, its over. they are outta bullets too.
> 
> 
> 
> 
> False rumour promoted by an anti Europe British tabloid that use to support the Nazies. The newspaper retracted the article and apologized. Investigations are ongoing about where the rumour came from since it was a clear market manipulation attempt.
Click to expand...


I wasn't aware of that, can you link to that please?


----------



## PeteEU

Trajan said:


> PeteEU said:
> 
> 
> 
> 
> 
> Trajan said:
> 
> 
> 
> so it appears italys uni-credit and several BIG Europe banks will need recapitalization, the 'people' are now fully awake, the plan to prop the south, I figure, its over. they are outta bullets too.
> 
> 
> 
> 
> False rumour promoted by an anti Europe British tabloid that use to support the Nazies. The newspaper retracted the article and apologized. Investigations are ongoing about where the rumour came from since it was a clear market manipulation attempt.
> 
> Click to expand...
> 
> 
> I wasn't aware of that, can you link to that please?
Click to expand...


cant post links yet hehe... but google "mail sunday soc gen" and you will get a few links. It was widely reported on the financial news channels (Bloomberg and CNBC) last week.


----------



## Colin

PeteEU said:


> Trajan said:
> 
> 
> 
> so it appears italys uni-credit and several BIG Europe banks will need recapitalization, the 'people' are now fully awake, the plan to prop the south, I figure, its over. they are outta bullets too.
> 
> 
> 
> 
> False rumour promoted by an anti Europe British tabloid that use to support the Nazies. The newspaper retracted the article and apologized. Investigations are ongoing about where the rumour came from since it was a clear market manipulation attempt.
Click to expand...


A false rumour applying to one French bank. There are a number of European banks that are in danger of defaulting.



> Eight out of 90 European banks have failed stress tests designed to ensure they can withstand another financial crisis.
> The European Banking Authority (EBA), which carried out the healthcheck, said another 16 banks were in the danger zone.
> The EBA called on national financial regulators to ensure that capital shortfalls would be quickly resolved.
> Five Spanish banks failed, as well as one in Austria and two in Greece.
> On Wednesday, Germany's Helaba pulled out of the stress tests, effectively making it the ninth bank to fail.
> 
> BBC News - Eight banks fail EU stress test with 16 in danger zone


----------



## PeteEU

Colin said:


> A false rumour applying to one French bank. There are a number of European banks that are in danger of defaulting.
> 
> 
> 
> 
> Eight out of 90 European banks have failed stress tests designed to ensure they can withstand another financial crisis.
> The European Banking Authority (EBA), which carried out the healthcheck, said another 16 banks were in the danger zone.
> The EBA called on national financial regulators to ensure that capital shortfalls would be quickly resolved.
> Five Spanish banks failed, as well as one in Austria and two in Greece.
> On Wednesday, Germany's Helaba pulled out of the stress tests, effectively making it the ninth bank to fail.
Click to expand...


Was a French bank and an Italian. Was also an utter baseless lie by the Mail on Sunday and I hope they sue the shit out of the newspaper group for slander and liable.

As for the European stress tests... they have to be taken with a grain of salt so to say.

First off you have to look at the banks who failed the tests. All the Spanish banks were Caja's, and were already known suspects. Caja's are local saving banks and there are far far too many of them. There has been a consolodiation of these banks going on for the last 5 years. They are very small banks in the grand scale of things and frankly I have never understood why they were included considering their size. They account for around 3% or so of the Spanish banking market last I looked. And on top of that other local banks around Europe were not included... err okay. There are far more than 90 banks in Europe  

Secondly, you have to factor in the American banks and other international banks as well. The last time there was a stress test of American banks was several years ago and we already know now that those stress tests were not exactly impartial. For one Bank of America was and until very recently (if not still) pretty much insolvent. But BOA managed to dump 76 billion worth of toxic sub-prime mortgage backed securities on Fannie and Freddie and suddenly the problem with BOA is less.. but the US federal debt just grew with 76 billion. Funny how no one on the other side of the pond or in Europe dared talk about the problems BOA was in for years, but all of a sudden it is all the European banks that are a problem and being talked down including banks like very profitable and secure banks like HSBC and Barclays and Banco Santander. No one talks about American banks for some reason.... denial?

So this attack on European banks is mostly baseless and more than likely is a way to direct attention away from the real problem,... the US banking sector.

You do realize that over 139 banks have so far failed this year in the US right? It is 389 banks since the crisis started in 2007.  

I say irrational driven panic based on constant talking down of economies and companies and rumours instead of facts. We are in a very evil cycle at the moment where people are talking down markets and causing the sell offs and panic pure based on rumour and "talking heads" being negative on pretty much everything.... negativity breeds negativity.. 

Average people in the US and Europe will stop spending because they hear daily how bad things are, which will only make things even worse and actually for-fill the dire negative comments of the pundits and experts, which in turn will lead to even more negative comments which will make people panic even more and make the economies even worse and worse. We need to break this cycle and re-establish a rational market again or else we will end in that depression certain pundits have been fearing since 2007... pundits I bet who have a lot of money invested in CDSs and are in line for a huge payout if countries and companies start falling like flies...


----------



## Toro

The stress tests were a joke.

Several big European banks are very undercapitalized and at risk.  SocGen is one of them.  So is Commerzbank.  In fact, the German banks are in worse shape than the French banks.  If this thing spreads to Germany, look out.  The politicians are looking at Tier 1 capital and saying the banks are well capitalized.  That's a joke.  These banks have large off balance sheet liabilities.  If you bring those liabilities back onto the balance sheet and mark them to market, the European banks are very weak.

The US banking system is not the problem.  The US banking system raised hundreds of billions of dollars in capital and have written down nearly a trillion dollars in assets since the Financial Crisis began.  The European banks never raised capital and have been playing "kick the can down the road" during the whole crisis.  They are still marking their sovereign debt at par.  They are keeping loans on their books way above their actual value.  And they refuse to do anything about it.  Europe is the problem, not America.


----------



## PeteEU

Toro said:


> The stress tests were a joke.
> 
> Several big European banks are very undercapitalized and at risk.  SocGen is one of them.  So is Commerzbank.  In fact, the German banks are in worse shape than the French banks.  If this thing spreads to Germany, look out.  The politicians are looking at Tier 1 capital and saying the banks are well capitalized.  That's a joke.  These banks have large off balance sheet liabilities.  If you bring those liabilities back onto the balance sheet and mark them to market, the European banks are very weak.



Off balance sheet liabilities.. like what?

Fact is regardless how pessimistic you are, the European banks have the backing of government. Say Commerzbank is an issue, but guess what... then it will be sold off to another bank or nationalised. It aint a major problem as you think it is. Much of this "panic" is based on false talking points, hype and rumour. 

For example, earlier this week the talking heads on financial news started talking about the "supposed fear" that inter-banking lending could be a problem because of the "European debt crisis".. and guess what? As of last night it suddenly became a problem which it was not before these moronic talking heads started floating the idea. Even the freaking Swiss banks are in trouble.



> The US banking system is not the problem.  The US banking system raised hundreds of billions of dollars in capital and have written down nearly a trillion dollars in assets since the Financial Crisis began.



Yes it is.. just because the US banks had and have the ability to off load their shitty loans to government backed companies does not mean that the banking system is healthy. BOA just offloaded 76 billion in sub-prime crap to Fannie Mae. Guess who now has to deal with that bad debt? And if the US banks have "dealt" with their crappy loans, then why all of a sudden did BOA have to make a deal with Fannie Mae for 76 billion in loans? Was this not suppose to be dealt with years ago?

Also where did you get the 1 trillion number? The numbers I have seen on write downs of US sub-prime crap dont tally up to anywhere near 1 trillion. And ironically many of those write downs were done by European banks.... But it would be great if you could provide a link as I am very interested in where you got the number  



> The European banks never raised capital and have been playing "kick the can down the road" during the whole crisis.



Not true. Our capital requirements according to the regulations have been met and are in many banks far higher than the requirements. Where there was need for capital, the banks did raise capital. You see in Europe we have banking regulations, and regulators that actually work. Some countries like Spain have quite harsh no-nonsense regulators which has meant that Europe is not burdened with the same "sub-prime" bad loans as the US was.... with the exception of Ireland of course. 

Are there some banks that may be in trouble? Of course but as an over all banking system, the European is pretty okay as it stands now and has been through this whole crisis. 



> They are still marking their sovereign debt at par.  They are keeping loans on their books way above their actual value.  And they refuse to do anything about it.



Again not true. Most banks have been writing down Greek debt, Irish debt and other debt over the last few years. In fact Soc Gen rumours started when they said they were writing down their Greek debt load yet again. Google it... still cant post links.. 5 more posts to go..



> Europe is the problem, not America.



It is a problem on both sides of the Atlantic. Only issue is one side is in total denial of their own financial system and think they dodged a bullet 3 years ago via TARP and so on. If you had not noticed, your housing problem has gotten worse and aint going away any time soon. 

What is need is to stop blaming others while ignoring your own problems. I dont deny that Europeans need to fix their structural problems and sadly due to elections coming up in both Spain, Italy, France and Germany, that these changes wont happen any time soon. But like it or not, Europeans are use to "hard times" and never have been major spenders as it was. But as long as the US is in a political nightmare of the part of NO vs a wussy President then the problem will remain with the US since the US like it or not, is the engine of the world economy... Europe aint.. we just sell to the rest of the world. So the whole world is waiting for the US to fix its shit.


----------



## Toro

It's more than just rumours and fear mongering. The Fed opened up swap lines to the ECB way back in May and began instructing money market funds to cut bank on European bank paper last month. Eurodollar swap spreads widened out as did Eurolibor-OIS. 

European banks are not well capitalized. They have not marked down their books far enough. Commerzbank wrote Greek bonds to zero but SocGen marked them down 20%. The Spanish banks in no way have marked their books to reflect the fall in housing prices in Spain. 

America is not in great shape but it is better than in Europe. Loan loss provisions to delinquent loans are about half that in Europe as they are in America.  The government force fed American banks capital-raises through TARP. Even though European banks have built capital through net interest margin, they have resisted issuing large amounts of shares as US banks did. 

As I said, Europeans are saying that the banks are well capitalized. They are not. There was no correlation beween Tier 1 capital and solvency when the American banking system was insolvent a few years ago. Citigroup had Tier 1 capital of 8% just before it was bailed out. 

Adjusting for off balance sheet liabilities and marking assets to market, equity capital is much lower than the accounts suggest. And though I fully expect the European governments to backstop any failures, don't be surprised if big European banks implode over the 24 months and get bailed out by their respective governments.


----------



## Toro

Here are a couple of clips with Sean Egan from CNBC yesterday.  Egan is the founder of the ratings firm Egan-Jones, which is generally considered far less conflicted than Standard & Poor's or Moody's, given that Egan-Jones charges those who use their service as opposed to other ratings agencies that charge the companies they are rating.

Repeat of the Credit Crisis? - CNBC
Markets' Sharp Price Decline - CNBC


----------



## Trajan

Toro said:


> Here are a couple of clips with Sean Egan from CNBC yesterday.  Egan is the founder of the ratings firm Egan-Jones, which is generally considered far less conflicted than Standard & Poor's or Moody's, given that Egan-Jones charges those who use their service as opposed to other ratings agencies that charge the companies they are rating.
> 
> Repeat of the Credit Crisis? - CNBC
> Markets' Sharp Price Decline - CNBC



thx for that.

scary, very scary. and, I think we know that if he estimates a 20 billion gap, thats what he thinks he knows, the banks know what he doesn't so I will add another 30% fudge factor. 

 5 bill. to cover ireland portugal greece....italy(?) The Euro bank is fracked.


toro lets skip ahead, how long before the dilution hits our pocket books by proxy?


edit-  to tired to get into it now but, here, tarp 2 is on the event horizon, BofA is fracked too.....


----------



## Trajan

well, Der Fuhrer has spoken-

The recent resolutions transfer sizeable additional risks to the countries providing assistance and their taxpayers, and go a long way towards communitising risks caused by unsound public finances and misguided macroeconomic policies in individual euro-area countries. This weakens the foundations of monetary union, which is based on the principles of national fiscal responsibility and the disciplining effect of capital markets, without noticeably increasing the influence and control over individual national fiscal policies as a quid pro quo. 

*Overall, there is a risk that the originally agreed institutional framework of the monetary union will increasingly become eroded.* While fiscal policy will continue to be determined by democratically elected parliaments at national level, the resultant risks and burdens will increasingly be borne by the Community in general and the financially sound countries in particular, without this being offset by any concrete powers to intervene in the sovereignty of national fiscal policies. No comprehensive change in the European treaties is currently envisaged that would democratically empower a central entity to exert some control over national budgetary policies. This means there is a danger that the euro-area countries&#8217; propensity to incur debt may increase even further, and the euro area&#8217;s single monetary policy will be increasingly susceptible to the temptation to adopt an accommodating stance. *Unless and until a fundamental change of regime occurs involving an extensive surrender of national fiscal sovereignty,* it is imperative that the no bail-out rule that is still enshrined in the treaties and the associated disciplining function of the capital markets be strengthened, and not fatally weakened.

from-
BundesBank  Policy outline

http://www.bundesbank.de/download/volkswirtschaft/mba/2011/201108mb_en_overview.pdf


the smack, has been laid down.


----------



## Toro

The IASB says that banks have not marked down their Greek debt enough.  If so, they probably haven't marked down their other sovereign debt as well.



> Some European financial institutions should have taken bigger losses on their Greek government bond holdings in recent results announcements, according to the body that sets their accounting rules.
> 
> In a letter sent to the European Securities and Markets Authority, the European Unions market regulator, the International Accounting Standards Board criticised the inconsistent way in which banks and insurers have been writing down the value of their Greek sovereign debt.
> 
> This is a matter of great concern to us, Hans Hoogervorst, IASB chairman, said in the letter, which was published on Tuesday after the IASBs concerns were revealed by the Financial Times.
> 
> People familiar with the IASBs thinking said the intervention was unprecedented and reflected its belief that some European companies had not been making enough provisions for Greek sovereign debt losses.
> 
> Financial institutions have slashed billions of euros from the value of their Greek government bond holdings following the countrys second bail-out. The extent to which Greek sovereign debt losses were acknowledged has varied, with some banks and insurers writing down their holdings by a half and others by only a fifth.
> 
> The letter did not single out particular countries or banks. But according to one person familiar with the correspondence, it reflected concern at the approach taken by BNP Paribas and CNP Assurances.
> 
> The French bank and insurer both announced 21 per cent writedowns, as envisaged by last months Greek bail-out. They argued there were no reliable market prices to guide a fair value for Greek government debt because of their illiquidity and instead used a mark to model valuation. Banks and insurers that used market prices suffered a bigger hit. Royal Bank of Scotland wiped £733m from the value of a £1.45bn Greek government bond portfolio  a 51 per cent cut.
> 
> Mr Hoogervorst challenged the justification for a mark to model approach and also the valuations these produced. Although the level of trading activity in Greek government bonds has decreased, transactions are still taking place, he said. It is hard to imagine that there are buyers willing to buy those bonds at the prices indicated ... it is therefore difficult to justify that those models would meet the objective of a fair-value measurement.



IASB criticises Greek debt writedowns - FT.com


----------



## editec

Toro said:


> Today was about Italy.
> 
> In some ways,* it's fairly odd*, given that Italy doesn't have a big deficit and has been reducing it's deficit over time. It didn't have a big bubble and it's banks aren't distressed, or at least not more so than other European banks. However, it was the third slowest growing economy in the world over the past decade, with only Zimbabwe and another country worse. It has negative productivity and a lot if debt.


 
It's NOT odd.

Look at the Celtic tiger.

They did everything right.  Their national economic plan could have been written by the most conservative economic NEO-conservatives.

And STILL their economy tanked.

At some point in time we're going to have to acknowledge to ourselves that having people working is ALSO part of the formula for having a healthy economy.

Don't know when we're going to do that, though, as the mavens that control the Western economies surely don't give a fuck about their people.


----------



## KissMy

toro said:


> here are a couple of clips with sean egan from cnbc yesterday.  Egan is the founder of the ratings firm egan-jones, which is generally considered far less conflicted than standard & poor's or moody's, given that egan-jones charges those who use their service as opposed to other ratings agencies that charge the companies they are rating.
> 
> repeat of the credit crisis? - cnbc
> markets' sharp price decline - cnbc



$6 trillion shocker!


----------



## Zander

The problem with Europe.....

Pythagorean theorem: 24 words
Lord's prayer: 66 words
Archimedes' Principle: 67 words
Ten Commandments: 179 words
Gettysburg address: 286 words
US Declaration of Independence: 1,300 words
US Constitution with all 27 Amendments: 7,818 words
EU regulations on the sale of cabbage: 26,911 words 

On a serious note, Wednesday is the German Constitutional Court decision. If they rule against the euro, all hell will break loose. And they could, although I expect a more moderate outcome......Surely they realize the entire future of the Euro is riding on their ruling?


----------



## Trajan

Zander said:


> The problem with Europe.....
> 
> Pythagorean theorem: 24 words
> Lord's prayer: 66 words
> Archimedes' Principle: 67 words
> Ten Commandments: 179 words
> Gettysburg address: 286 words
> US Declaration of Independence: 1,300 words
> US Constitution with all 27 Amendments: 7,818 words
> EU regulations on the sale of cabbage: 26,911 words
> 
> On a serious note, Wednesday is the German Constitutional Court decision. If they rule against the euro, all hell will break loose. And they could, although I expect a more moderate outcome......Surely they realize the entire future of the Euro is riding on their ruling?



and ahead of that, merkel is sinking fast, her party got pounded, if they the court plays  games and punt, shes even in worse of a pickle because it will be up to her, and the public aint down with it. IF they rule the bailout illegal, oh boy. long term good short term, very very bad.


----------



## Baruch Menachem

Given the electoral pounding the German government has been receiving no matter which way the court rules, she may face no confidence votes out of her own party.

If the court punts, there will be a new election and the SDU will win it.


----------



## Trajan

and it appears they will not go along with the bailout. this was sooner or later going to happen, you can hide the facts from the rubes for only so long.


----------



## Trajan

looks like the German courts decision  has had little effect in that the their will have to be a major move by the g-7 before Monday's European open. how much firepower and influence do the central banks have left, seriously?


----------



## Toro

It's like a never-ending B movie.

But a bank or three have to go under before the German public will move.


----------



## Baruch Menachem

we have gone beyond too big to fail to too big to rescue.  

In boy scouts we had lifesaving class.  First lesson is don't get too close to the person you are trying to rescue.   They will drown you before going under themselves.   You toss them ropes, and if they are cool enough, they will grab them.   YOu toss them flotation devices, and the will grab them.   But under no circumstances do you get where they can destroy you.

If they don't grab the rope, if they don't grab the ring, all you can do is fish the body out afterwards.    The Greeks and the Italians have had multiple chances to fix the problem.    They have tried to pull Germany and France in with them.

The best decision right now is just to wash their hands and let it all sort out the hard way.  Recognize the previous spending was a sunk cost and invest no more into this rat hole.


----------



## Toro

French Banks Poised for Moody


----------



## Trajan

Baruch Menachem said:


> we have gone beyond too big to fail to too big to rescue.
> 
> In boy scouts we had lifesaving class.  First lesson is don't get too close to the person you are trying to rescue.   They will drown you before going under themselves.   You toss them ropes, and if they are cool enough, they will grab them.   YOu toss them flotation devices, and the will grab them.   But under no circumstances do you get where they can destroy you.
> 
> If they don't grab the rope, if they don't grab the ring, all you can do is fish the body out afterwards.    The Greeks and the Italians have had multiple chances to fix the problem.    They have tried to pull Germany and France in with them.
> 
> The best decision right now is just to wash their hands and let it all sort out the hard way.  Recognize the previous spending was a sunk cost and invest no more into this rat hole.





> we have gone beyond too big to fail to too big to rescue.





exactly.....


and;

The head of the IMF has warned that its $384bn (£248bn) war chest designed as an emergency bail-out fund is inadequate to deliver the scale of the support required by troubled states.

In a document distributed to the IMF steering committee at the weekend, Ms Lagarde said: "The fund's credibility, and hence effectiveness, rests on its perceived capacity to cope with worst-casescenarios. Our lending capacity of almost $400bn looks comfortable today, but pales in comparison with the potential financing needs of vulnerable countries and crisis bystanders."

The suggestion came after European officials revealed they were working on a radical plan to boost their own bail-out fund, the European Financial Stability Facility (EFSF), from 440bn (£384bn) to around 3 trillion.

The plan to increase the EFSF firepower is the crucial part of a three-pronged strategy being designed by German and French authorities to stop the eurozone's debt crisis spiralling out of control. It also includes a large-scale recapitalisation of European banks and a plan for an "orderly" Greek default. 

more at-

Christine Lagarde: IMF may need billions in extra funding - Telegraph



an orderly default? 


and...
_ almost $400bn looks comfortable today, but pales in comparison _

you bet it does. they are just reinforcing failure.


----------



## Toro

A better line is "We've gone from 'Too big to fail'" to "Too big to bail."


----------



## editec

Before we start kneeling to Germany and blaming the mediteranians, lets us remember that Germany was in trouble (and needed the EU's help) when it undertook to absorb East Germany, shall we?

Shit happens, folks.


----------



## Toro

editec said:


> Before we start kneeling to Germany and blaming the mediteranians, lets us remember that Germany was in trouble (and needed the EU's help) when it undertook to absorb East Germany, shall we?
> 
> Shit happens, folks.



Really?  How?


----------



## Baruch Menachem

That was a smart decision at the time, very dumb in retrospect.   They wanted to get the ossies as close to western values as quickly as possible, but marking up the ostmark at .5 dmarks was way too high.

I was not aware that the Greeks and the Italians and Spaniards helped out the Germans at the time.   I thought they financed that entirely internally.  


According to Wiki, there is no way for the eurozone to sanction a state that fails to follow the rules once it is in, and Greece seems to have lied their way in, and now can't be removed.

Right now it looks like the Forint and Zloty are the healthiest currencies in europe.  Given history, that is very funny.


----------



## Trajan

well, let it be said, there is never a shortage of suckers, ever and they exist in every nation. The German people are screwed. 

and whats funny is, the standards they have to come down from means they will feel the screwing before the heaps they are volunteering to rescue. 

lets remember what this is for and driven by  one thing at its crux;  a lets all get along  pile of Unicorn poppey.

I don't care how many pseudo or not academic/intellectual's ( who will shortly be divorcing themselves as usual from their wreckage) came out of the woodwork to prophecy the grand bargain of Pan- Europeanism expressed thru one set of voices and one currency   come out of the wood work, Germans are Germans Brits are Brits and Greeks and Italians are Greeks and  Italians. 

They started breaking the rules set forth ala fiscal and financial strictures as laid down in the Maastricht  treaty almost from the very start, in fact much of what they are doing now runs contrary to their charter. But like all such social engineering, they can never ever take a step back nor admit failure. 

So they will pursue this right into the abyss. instead of letting Greece ( which they will anyway in Nov.)  default and just let them out from the Euro and see how that works as a test case, they shut their eyes and just send in the D Marks oops, Deutsch Euros like the Grenadier Guard in a futile attmept to change the inevitable.

They will take the collection of the 400 or billion and use it as collateral for some form of other financial vehicles that will yield trillions,  leveraging their finances forward for decades ....and they will once again  "La Garde a Feu" this time for Italy or Spain or?  .......*shrugs*...and so it is and so it shall be, they won't stop till they run out of bodies.


----------



## Baruch Menachem

The SPD is not happy with this, and neither is the German voter.

The SDU is going to crater in the next election like the Tories under John Major.   Unless they stop this, the SDU may not make the 5% cut in order to get into the Bundestag.


----------



## Trajan

Baruch Menachem said:


> The SPD is not happy with this, and neither is the German voter.
> 
> The SDU is going to crater in the next election like the Tories under John Major.   Unless they stop this, the SDU may not make the 5% cut in order to get into the Bundestag.



merkel is at the head of that column of Grenadiers, .the old Potsdam Guard of old, the back benchers wanted to stay in the barracks but alas......she won't survive,  but they bet they will...we'll see.


----------



## Toro

Eventually, some sort of transfer is going to get done.  But there is likely to be a fair amount of pain first.

I'm looking to short the euro on any bounces.


----------



## KissMy

Just as we discovered that our currency is only as strong as the weakest subprime loans we back. Europe is discovering that their currency is only as strong as their weakest country. This puts more nails in the coffin of any plans for a One World Currency. I just laugh at the IMF's SDRs. 

EFSF = Euro TARP


----------



## Trajan

"entrenched inflation"...or, 'we're all the Weimer Republic now', the chorus to be had in 2020. 





Why Europe Dithers
German voters don't want to bail out French banks and the French government can't afford to.

 * OCTOBER 21, 2011, 7:11 P.M. ET

'All political lives, unless they are cut off in midstream at a happy juncture, end in failure." That morbid thought, voiced by a British politician named Enoch Powell in the 1970s, is now playing out in the careers of Angela Merkel and Nicolas Sarkozy. Neither leader has an incentive to sacrifice what have become vital and divergent interests to produce a credible bailout plan for Europe. To simplify, German voters don't want to bail out French banks, and the French government can't afford to bail out French banks, when and if the long-awaited Greek default is allowed to happen.

Thus Mr. Sarkozy's re-election hopes are going down the drain, but not as quickly as they would if he acceded to the Merkel plan to let each government rescue its own banks.

Ms. Merkel's hopes for a third term are being eroded in regional election after regional election, though not as quickly as they would if she agreed to put German taxpayers on the hook for France's troubled banking sector.

There is another savior in the wings, of course, the European Central Bank. But the ECB has no incentive to betray in advance its willingness to get France and Germany off the hook by printing money to keep Europe's heavily indebted governments afloat. Yet all know this is the outcome politicians are stalling for. This is the outcome markets are relying on, and why they haven't crashed.

All are waiting for some market ruction hairy enough that the central bank will cast aside every political and legal restraint in order to save the euro.

In doing so, of course, the bank will be acting far above its pay grade, and far outside the law, to make momentous decisions for all of Europe. Which countries will be saved via the bank's willingness to print unlimited euros and buy unlimited assets to keep them out of default?

Which countries will be allowed to default and (if they so choose) drop out of the euro altogether?

These choices the bank understands perfectly well it would be making in lieu of politicians who are unwilling to make such decisions, though not unwilling that such decisions be made. In their non-rescue of Greece last July, Europe's leaders proposed a 21% "voluntary" haircut to Greek debt held by banks, and now scuttlebutt has raised the politically acceptable haircut to 60%.

Though the central bank has been adamantly against a Greek default (because it owns a lot of Greek debt), this means it will surely read its mandate as permission to let Greece default.

The central bank has already stepped up, to wide applause, to keep Spain and Italy afloat when demand for their debt began to evaporate. Italy and Spain are "core" countries that the bank understands the politicians view as too big to fail. And France will likely get a temporary pass from the markets to run up its national debt in order to recapitalize its banks because, obviously, if the ECB won't let Italy and Spain sink, it won't let France sink.

That leaves Portugal and Ireland. Let's just guess that the ECB, aware of how far beyond the pale it has wandered, will act conservatively and prop them up too.

And then the crisis will be over? Not by a long shot. 

more at-
Jenkins: Why Europe Dithers - WSJ.com


----------



## Baruch Menachem

We have been through sovereign debt crises before.   Remember the whole mess in the early 80s about the South American Sovereign debt?   It passed without a real blip.

The voters in France and Germany are going to hold the governments who plowed them into this mess accountable.    We will see a whole new generation of politicians soon.  Politicians who will get us into new messes.   But not the same messes


----------



## Baruch Menachem

Interesting article from Germany on the current crisis. 



> In October 2009, Marko Mr&#353;nik's analysts at rating agency Standard & Poor's computed that Greece's debt would increase to 125 percent of economic output in 2010. On the same day, it became more expensive to hedge Greek bonds against default. The default insurance instruments, known in market jargon as credit default swaps (CDS), were an indicator of how bad things stood for Greece. It was now costing $189,000 a year to hedge a $10-million Greek government bond against default. For major investors, it was a signal to get out of Greece.
> 
> A few people had also become nervous at the headquarters of the Pacific Investment Company (PIMCO) in Newport Beach, California, about an hour's drive south of Los Angeles.
> PIMCO is by far the world's largest investor in government bonds. The company lends governments money by buying their bonds. When PIMCO stops buying a country's bonds, it's a clear sign that the country is on the verge of crisis and possibly even bankruptcy.
> 
> PIMCO controls more than $1.3 trillion (&#8364;1.05 trillion) on behalf of its customers. It is an absurd number, even in these times of superlatives, times of bailout funds and banks being supported with billions upon billions in taxpayer money. Though far from a household word, PIMCO has four times the German national budget to invest.
> 
> That's why almost all governments maintain close ties to PIMCO. They send their finance ministers, the heads of their central banks and sometimes even their national leaders to see CEO Mohamed El-Erian and convince him to buy their government bonds.
> 
> In the last few weeks of 2009, PIMCO sold all of its Greek bonds. El-Erian says the company wanted to get out before everyone else noticed that the numbers weren't adding up. The company never relies on outside assessments. Instead, it employs hordes of analysts, some of whom used to work at the International Monetary Fund, where El-Erian began his career.
> 
> The analysts spend all of their time digging through large quantities of data and the financial statements of nations, re-calculating, preparing projections and feeding numbers into computers. When they don't like what they see, PIMCO gets out.
> 
> When Greece was accepted into the euro zone, it was one more reason for PIMCO to buy Greek bonds. El-Erian says the sentiment at PIMCO was that if the Greeks were being granted membership in such an elite club, then Athens would follow the rules -- or the government would be severely sanctioned if it didn't. But that didn't happen. Instead, political concessions were made and the rules were ignored. That, El-Erian argues, is what brought the cancer into the euro zone.
> 
> So why didn't the financial markets penalize Greece earlier? Why was the same yardstick applied to Greek government bonds as to German bonds, until only a few years ago? Why did the markets continue to buy the country's bonds?
> 
> The Crash of Greek Bonds
> 
> On April 27, 2010, a country's debt was downgraded to junk status for the first time in the history of the young currency. Standard & Poor's downgraded Greece's bond rating by three notches, to BB+, putting it at the same level as Azerbaijan and Egypt, and just ahead of countries like Ecuador, El Salvador and Zimbabwe.
> 
> Mr&#353;nik wrote that Greece's government debt had to be "restructured" -- a fancy word for bankruptcy. Restructuring involves a debt haircut, so that owners of Greek bonds might only get 30 percent of their money back, that is, lenders are only repaid a fraction of the money they lent. The markets view a downgrade as the kiss of death. At this point, anyone who was still holding Greek bonds in his portfolio was crazy -- or a charitable donor.
> 
> But the market is neither crazy nor charitable. As soon as the downgrade was announced, Greek bonds were thrown onto the market, causing their prices to plunge. If the Greek government had introduced two-year bonds into the market at that point, it would have had to promise buyers a 13-percent interest rate, up from only 6.3 percent a few days earlier. The rate for 10-year bonds climbed to above 10 percent.
> 
> This came as a shock to many European banks. After the Lehman bankruptcy, they had invested heavily in the supposedly safer government bonds, with small yields that suggested security. But now it wasn't only Greek bonds that were seen as risky; confidence was also dwindling in Portugal, Ireland, Spain and even Italy.
> Fear in Europe's Financial Capitals
> 
> Fear began to spread in places like Frankfurt and London. European banks had invested more than &#8364;700 billion in government bonds from the five crisis-stricken countries. And Greek banks alone were holding &#8364;50 billion in Greek government bonds. When the government bond rating was downgraded, so were the ratings of Greek banks, as part of a chain reaction that would not stop at Greece's borders.


----------



## Trajan

Baruch Menachem said:


> We have been through sovereign debt crises before.   Remember the whole mess in the early 80s about the South American Sovereign debt?   It passed without a real blip.
> 
> The voters in France and Germany are going to hold the governments who plowed them into this mess accountable.    We will see a whole new generation of politicians soon.  Politicians who will get us into new messes.   But not the same messes



yes we have, however, they had the assets to expend, room to either grow and deflate or just deflate. Now? 

I have an analogy- They have tied themselves like mountain climbers all together in the Euro...2 members have slipped and other members take up the slack and when the bigger member's of the rope line slide ala spain and italy*shrugs*...they are barely holding on now....and you betcha there a great deal we don't know yet either.  I bet its half again as worse as what they let on.


----------



## Trajan

Baruch Menachem said:


> Interesting article from Germany on the current crisis.
> 
> 
> 
> 
> In October 2009, Marko Mrnik's analysts at rating agency Standard & Poor's computed that Greece's debt would increase to 125 percent of economic output in 2010. On the same day, it became more expensive to hedge Greek bonds against default. The default insurance instruments, known in market jargon as credit default swaps (CDS), were an indicator of how bad things stood for Greece. It was now costing $189,000 a year to hedge a $10-million Greek government bond against default. For major investors, it was a signal to get out of Greece.
> 
> A few people had also become nervous at the headquarters of the Pacific Investment Company (PIMCO) in Newport Beach, California, about an hour's drive south of Los Angeles.
> PIMCO is by far the world's largest investor in government bonds. The company lends governments money by buying their bonds. When PIMCO stops buying a country's bonds, it's a clear sign that the country is on the verge of crisis and possibly even bankruptcy.
> 
> PIMCO controls more than $1.3 trillion (1.05 trillion) on behalf of its customers. It is an absurd number, even in these times of superlatives, times of bailout funds and banks being supported with billions upon billions in taxpayer money. Though far from a household word, PIMCO has four times the German national budget to invest.
> 
> That's why almost all governments maintain close ties to PIMCO. They send their finance ministers, the heads of their central banks and sometimes even their national leaders to see CEO Mohamed El-Erian and convince him to buy their government bonds.
> 
> In the last few weeks of 2009, PIMCO sold all of its Greek bonds. El-Erian says the company wanted to get out before everyone else noticed that the numbers weren't adding up. The company never relies on outside assessments. Instead, it employs hordes of analysts, some of whom used to work at the International Monetary Fund, where El-Erian began his career.
> 
> The analysts spend all of their time digging through large quantities of data and the financial statements of nations, re-calculating, preparing projections and feeding numbers into computers. When they don't like what they see, PIMCO gets out.
> 
> When Greece was accepted into the euro zone, it was one more reason for PIMCO to buy Greek bonds. El-Erian says the sentiment at PIMCO was that if the Greeks were being granted membership in such an elite club, then Athens would follow the rules -- or the government would be severely sanctioned if it didn't. But that didn't happen. Instead, political concessions were made and the rules were ignored. That, El-Erian argues, is what brought the cancer into the euro zone.
> 
> So why didn't the financial markets penalize Greece earlier? Why was the same yardstick applied to Greek government bonds as to German bonds, until only a few years ago? Why did the markets continue to buy the country's bonds?
> 
> The Crash of Greek Bonds
> 
> On April 27, 2010, a country's debt was downgraded to junk status for the first time in the history of the young currency. Standard & Poor's downgraded Greece's bond rating by three notches, to BB+, putting it at the same level as Azerbaijan and Egypt, and just ahead of countries like Ecuador, El Salvador and Zimbabwe.
> 
> Mrnik wrote that Greece's government debt had to be "restructured" -- a fancy word for bankruptcy. Restructuring involves a debt haircut, so that owners of Greek bonds might only get 30 percent of their money back, that is, lenders are only repaid a fraction of the money they lent. The markets view a downgrade as the kiss of death. At this point, anyone who was still holding Greek bonds in his portfolio was crazy -- or a charitable donor.
> 
> But the market is neither crazy nor charitable. As soon as the downgrade was announced, Greek bonds were thrown onto the market, causing their prices to plunge. If the Greek government had introduced two-year bonds into the market at that point, it would have had to promise buyers a 13-percent interest rate, up from only 6.3 percent a few days earlier. The rate for 10-year bonds climbed to above 10 percent.
> 
> This came as a shock to many European banks. After the Lehman bankruptcy, they had invested heavily in the supposedly safer government bonds, with small yields that suggested security. But now it wasn't only Greek bonds that were seen as risky; confidence was also dwindling in Portugal, Ireland, Spain and even Italy.
> Fear in Europe's Financial Capitals
> 
> Fear began to spread in places like Frankfurt and London. European banks had invested more than 700 billion in government bonds from the five crisis-stricken countries. And Greek banks alone were holding 50 billion in Greek government bonds. When the government bond rating was downgraded, so were the ratings of Greek banks, as part of a chain reaction that would not stop at Greece's borders.
Click to expand...


the money shot-

When Greece was accepted into the euro zone, it was one more reason for PIMCO to buy Greek bonds. El-Erian says the sentiment at PIMCO was that if the Greeks were being granted membership in such an elite club, then Athens would follow the rules -- or the government would be severely sanctioned if it didn't. But that didn't happen. Instead, political concessions were made and the rules were ignored. That, El-Erian argues, is what brought the cancer into the euro zone.


----------



## Trajan

hey BM, this paragraph that you cut off due to copyright etc.....to bad, because this the payoff pitch.I read in the WSJ a few weeks ago they would create another 'fund' to which they would collect pledges etc. from all of the EU nations and whomever they can convince ( see: con) and issue bonds based on that, a fund full of promises......its going to unravel. It has to, how many times can you fool/con the same suckers, oops, I mean folks? 




> Government bonds also serve as collateral when banks borrow money from the European Central Bank. The bonds are a key link in monetary transactions, and when their value becomes questionable, the supply of money to economies begins to falter.



good article btw thxx.


----------



## Baruch Menachem

Angela Merkel is contemplating a healthier Diet.....


----------



## Baruch Menachem

That sammich doesn't make itself you know.....


----------



## Trajan

well, as anyone other than those in the higher environs of the myriad EU Commissions'  head up the ass club knew, the day has come. 

Italy's bonds have moved across a pretty significant psychological  and material boundary, + yields 7%. 

Berlusconi and all the jazz not withstanding, Italy was always Lehman.....I think I have some lira from a trip way back in a box around here, I'll make a point of digging it out later


----------



## Toro

1 yr Italys yielding 8.4% this am.


----------



## KissMy

Toro said:


> 1 yr Italys yielding 8.4% this am.



I hear anything above 6.2% is unsustainable. Gold has been on a tear.

Europe is discovering that their currency is only as strong as their weakest / most corrupt country hiding off budget debt. This puts more nails in the coffin of any plans for a One World Currency. I just laugh at the World Bank / IMF's SDRs.

In a few years people around the globe will realize that only Gold can be used as a global reserve money.


----------



## Trajan

doing some reading, and I found it beyond belief that Italy has not had one year with over 2% growth since......2000. 

I have been there several times, twice in the last 5 years, they have an  underground economy that rivals anyone's, any former eastern bloc country or Greece.


----------



## Trajan

Toro said:


> 1 yr Italys yielding 8.4% this am.



ugh, and they are still planning to offer a 1 yer auction for 5 billion euros tomorrow? unreal. 

Is the market in for another 3% drop? 


who wants to bid?


----------



## KissMy

France may be getting a downgrade this weekend.


----------



## Trajan

KissMy said:


> France may be getting a downgrade this weekend.



I heard that too, now it appears they are waling that back. look italy is going to bring it all down, france? thats,   I don't even know how describe that cataclysm.


----------



## KissMy

Trajan said:


> KissMy said:
> 
> 
> 
> France may be getting a downgrade this weekend.
> 
> 
> 
> 
> I heard that too, now it appears they are waling that back. look italy is going to bring it all down, france? thats,   I don't even know how describe that cataclysm.
Click to expand...


Italy has the worlds 3rd largest debt market & 9th largest economy. If they go down they will take down the global financial system. Your ATM card won't work for a long time.


----------



## Toro

lol


----------



## Trajan

well, looks like the BJ's are humming and the Spanish have eaten their own 'Spanish fly' to get them up,  yields on the Spanish 10 year rose above 6.9% yesterday. 


and now? a monty python moment- for something completely crazy, as in insane as in the same actions with the expectation of different cooked results, we will have another round of bank stress tests. 

first time, tragedy, ...second time as farce.


----------



## KissMy

Trajan said:


> well, looks like the BJ's are humming and the Spanish have eaten their own 'Spanish fly' to get them up,  yields on the Spanish 10 year rose above 6.9% yesterday.
> 
> 
> and now? a monty python moment- for something completely crazy, as in insane as in the same actions with the expectation of different cooked results, we will have another round of bank stress tests.
> 
> first time, tragedy, ...second time as farce.



*Their 'Spanish fly' must be working. Looks like Merkel is getting cozy with Sarkozy*


----------



## Toro

Yesterday, European bond yields reversed intra-day and closed on their lows or near their lows.  At 6am this morning, they are down hard on ECB buying.  Technically, it looks like yields may - *may* - have put in a near-term top, which would be good for risk assets.


----------



## Trajan

some interesting not so surprising news.....we'll see how deep this river really runs next week. 


    The flight from European sovereign debt and banks has spanned the globe. European institutions like the Royal Bank of Scotland and pension funds in the Netherlands have been heavy sellers in recent days. And earlier this month, Kokusai Asset Management in Japan unloaded nearly $1 billion in Italian debt.



    At the same time, American institutions are pulling back on loans to even the sturdiest banks in Europe. When a $300 million certificate of deposit held by Vanguard&#8217;s $114 billion Prime Money Market Fund from Rabobank in the Netherlands came due on Nov. 9, Vanguard decided to let the loan expire and move the money out of Europe. Rabobank enjoys a AAA-credit rating and is considered one of the strongest banks in the world.



    American money market funds, long a key supplier of dollars to European banks through short-term loans, have also become nervous. Fund managers have cut their holdings of notes issued by euro zone banks by $261 billion from around its peak in May, a 54 percent drop, according to JPMorgan Chase research.

more at-
http://www.nytimes.com/2011/11/19/b...pean-nations-and-banks.html?_r=2&pagewanted=2


----------



## Toro

That's been happening for some time.  It's why yields have been blowing out.


----------



## Zander

The problem with the Eurozone is simple - the Eurozone must find at least 3 trillion (give or take) to pay for the sovereign debt haircuts and bank losses.  Some argue it is only 2 trillion and others argue for 6 trillion. Whatever it is, it is such a large number that it cannot be found by borrowing or creating a special fund.  The ONLY way to deal with it is to allow the ECB to print, essentially putting a floor underneath Eurozone bonds, especially those of Italy and Spain, both of which governments are too big to save by conventional means.   

But Merkel is saying NEIN!!!!  She is against printing more EURO's because it will cause inflation and lower the value of the Euro, possibly a lot! 

Germany is now stuck in a game where the costs of leaving the euro are extremely high. But the costs of bailing out the worst members of the Eurozone are also extremely high.  Either way they are facing huge costs.   It is not a choice of whether they will bear a huge cost burden, but just what form that burden takes.

 Somewhere in Germany I will bet you there is a memo on what it would take for Germany to leave the euro and who would go with them. Just saying........


----------



## FireFly

Trajan said:


> KissMy said:
> 
> 
> 
> France may be getting a downgrade this weekend.
> 
> 
> 
> 
> I heard that too, now it appears they are waling that back. look italy is going to bring it all down, france? thats,   I don't even know how describe that cataclysm.
Click to expand...


The France downgrade is back on!

The odds of the EURO collapsing have risen to over 40%

The US Debt to GDP ratio surged past 100%. We are heading towards default within 6 years.


----------



## PeteEU

Zander said:


> The problem with the Eurozone is simple - the Eurozone must find at least 3 trillion (give or take) to pay for the sovereign debt haircuts and bank losses.  Some argue it is only 2 trillion and others argue for 6 trillion.



And those that argue 6 trillion are idiots.. the total debt of the EU  is only 9 trillion for god sake out of a 15 trillion economy. The debt of the Eurozone is between 7 to 8 trillion euros.. So these morons are saying that the Eurozone should basically write off all their debt?



> Whatever it is, it is such a large number that it cannot be found by borrowing or creating a special fund.  The ONLY way to deal with it is to allow the ECB to print, essentially putting a floor underneath Eurozone bonds, especially those of Italy and Spain, both of which governments are too big to save by conventional means.
> 
> But Merkel is saying NEIN!!!!  She is against printing more EURO's because it will cause inflation and lower the value of the Euro, possibly a lot!



Wow sorry but you or someone you are quoting dont understand economics and the Germans. First off... Germany WANTS a lower value of the Euro... they are an export country and need a lower valued Euro.. it is one of the reasons that Germany cant and wont leave the Euro. But the real reason is a historic one.. Printing money is so much against the German economic model due to flash-backs to the hyper-inflation days of the 1920-30s. 



> Germany is now stuck in a game where the costs of leaving the euro are extremely high.



To say the least.. a new German currency would be so strong (since the UK pound and US Dollar are being devalued) that German exports will crash. That is of course on top of the administration costs of switching currency (not to mention time)..



> But the costs of bailing out the worst members of the Eurozone are also extremely high.



Not really. This is not about bail-outs, because Spain for one does not need one.. nor Italy. This is about confidence in the Euro and Eurozone and structural issues for both the Eurozone and individual European countries. If Italy can get growth going via fixing its structural problems, then it can easily pay its debt. Spain's debt is 64% for god sake,.... how on earth is that a problem and need a bail-out? Does that mean that China needs one too since it has 30+% debt vs GDP?



> Either way they are facing huge costs.   It is not a choice of whether they will bear a huge cost burden, but just what form that burden takes.



Of course there are costs, and it wont be cheap. And those costs will continue to go up as long as the politicans cant get their act together.. basically Merkel needs to compromise on the whole idea of printing money. But most of all to fix the Eurozone, you will need a treaty change and that opens up a whole different can of worms. 



> Somewhere in Germany I will bet you there is a memo on what it would take for Germany to leave the euro and who would go with them. Just saying........



Of course there is, just as there is a memo on the US invading Canada and California ceding from the union. Dont mean it is going to happen. There are so many negatives for Germany and very few positives if any... for leaving the Euro.


----------



## PeteEU

FireFly said:


> Trajan said:
> 
> 
> 
> 
> 
> KissMy said:
> 
> 
> 
> France may be getting a downgrade this weekend.
> 
> 
> 
> 
> I heard that too, now it appears they are waling that back. look italy is going to bring it all down, france? thats,   I don't even know how describe that cataclysm.
> 
> Click to expand...
> 
> 
> The France downgrade is back on!
Click to expand...


Yes by Anglo-American owned ratings agencies who receive most of their income from companies that have a vested interest in a downgrade. Not to mention ratings agencies that have zero credibility since they listed Lehman Brothers as AAA the day before the bankruptcy. 



> The odds of the EURO collapsing have risen to over 40%



Yes, and one has to ask why... 



> The US Debt to GDP ratio surged past 100%. We are heading towards default within 6 years.



Its been higher than 100% since late 2008. As for heading for a "default", not bloody likely as long as the US dollar is the reserve currency. Also the interest rate the US pays on its debt is pathetically small and much of the debt is long term.


----------



## Toro

PeteEU said:


> Yes by Anglo-American owned ratings agencies who receive most of their income from companies that have a vested interest in a downgrade.



This is not a serious answer.


----------



## Toro

PeteEU said:


> Spain's debt is 64% for god sake,.... how on earth is that a problem and need a bail-out? Does that mean that China needs one too since it has 30+% debt vs GDP?



Spain is a problem because the marks on the banks' assets are nowhere near market prices.  Bond markets are assuming that Spain will eventually have to backstop its banks and Spain's debt will soar.

China doesn't need a bailout but when you aggregate debt at the municipal and provincial level, then debt is much higher since a lot of debt in China is at the local level.  Also, it is widely assumed that Beijing will recapitalize the banks, like it did in the 1990s, which will either increase debt or cause assets to fall since Beijing may unwind some of its massive currency reserves to do so.  Plus, unlike the PIIGS, China has its own currency.


----------



## FireFly

PeteEU said:


> FireFly said:
> 
> 
> 
> 
> 
> Trajan said:
> 
> 
> 
> I heard that too, now it appears they are waling that back. look italy is going to bring it all down, france? thats,   I don't even know how describe that cataclysm.
> 
> 
> 
> 
> The France downgrade is back on!
> 
> Click to expand...
> 
> 
> Yes by Anglo-American owned ratings agencies who receive most of their income from companies that have a vested interest in a downgrade. Not to mention ratings agencies that have zero credibility since they listed Lehman Brothers as AAA the day before the bankruptcy.
> 
> 
> 
> 
> The odds of the EURO collapsing have risen to over 40%
> 
> Click to expand...
> 
> 
> Yes, and one has to ask why...
> 
> 
> 
> 
> The US Debt to GDP ratio surged past 100%. We are heading towards default within 6 years.
> 
> Click to expand...
> 
> 
> Its been higher than 100% since late 2008. As for heading for a "default", not bloody likely as long as the US dollar is the reserve currency. Also the interest rate the US pays on its debt is pathetically small and much of the debt is long term.
Click to expand...


 But of course, and Greece did not just default on 50% of it's debt. 

 And Mexico did not default on it's debts 15 years ago. 

 How about the Asian Contagion 12 years back?


----------



## PeteEU

Toro said:


> PeteEU said:
> 
> 
> 
> Yes by Anglo-American owned ratings agencies who receive most of their income from companies that have a vested interest in a downgrade.
> 
> 
> 
> 
> This is not a serious answer.
Click to expand...


It is a VERY serious answer. The problem with the ratings agencies other than two countries basically control them, is that they get their income from the very companies that dependent on ratings to run their business.. There is a built in conflict of interest in the system and it has shown its ugly head more than once, as has national bias.. hence the anglo-American comment. 

Any other country with 10% budget deficit and debt ratios over 70% and if not 100%, would have their ratings on at least a downward watch if not downgraded, but that simply is not happening with the UK (still AAA) and it took one hell of a while for the US to be downgraded (and only by one rating agency) despite having a clusterfuck of a political system that cant get anything done.


----------



## PeteEU

Toro said:


> PeteEU said:
> 
> 
> 
> Spain's debt is 64% for god sake,.... how on earth is that a problem and need a bail-out? Does that mean that China needs one too since it has 30+% debt vs GDP?
> 
> 
> 
> 
> Spain is a problem because the marks on the banks' assets are nowhere near market prices.  Bond markets are assuming that Spain will eventually have to backstop its banks and Spain's debt will soar.
Click to expand...


The Spanish banks (the big main ones) have always been considered some of the best and most stable banks out there. They did not jump into the sub-prime mortgage mess of the US because they were not allowed due to regulations and the corporate ideals, which also meant they continued to have profits (and still do) despite the economic crisis. 

The problem banks in Spain are the Caja's, which are small regional and local banks. There use to be about  75 of them but they have now been cut down considerably to the high 20s (if not lower) and there is still consolidation going on. They account for about 3% of the total banking market in Spain last I looked. Back stopping these banks would cost relatively nothing and only add a few % to the over all debt vs GDP ratio. The main big banks have the ability to absorb any losses on the building sector collapse and have done so over the last 4+ years and passed the capital requirements of the stress tests with flying colours and have since increased their capital requirements because the Bank of Spain required it so.

So explain your comment.  



> China doesn't need a bailout but when you aggregate debt at the municipal and provincial level, then debt is much higher since a lot of debt in China is at the local level.



Never said it did. Having debt does not mean automatically you need a bail-out, but that is the attitude there is in the markets and among especially the kitchen table right wing economists that are dominating the political discourse in the US and certain countries and have infected the market with this idiotic economic theory that all debt is bad. 

For example.. Italy.. 120% debt vs GDP.. world goes in panic mode and says it is too much and Italy cant pay its loans. What the world forgets is that Italy has a primary surplus already, and that we never have gotten out of the US sub-prime mortgage failure, so there is next to no growth. If growth came back then that would mean higher tax income and that would mean a surplus... then the 120% debt would not be a problem and would go down. Now of course Italy has a lot of structural problems in the labour market and society as a whole that prevents mega uber growth the markets like but if they fix those some what, then growth should come back under normal circumstances. And lets not forget, a very large portion of Italian debt is owed to the Italians themselves!

But no everyone is living in the now, and are very short term focused... and of course very pessimistic and unrealistic...which means morons come with comments of cutting 6 trillion euros worth of debt out of a 7.5 trillion debt burden in the Eurozone .. fine do so.. would mean most countries would have NO DEBT left!



> Also, it is widely assumed that Beijing will recapitalize the banks, like it did in the 1990s, which will either increase debt or cause assets to fall since Beijing may unwind some of its massive currency reserves to do so.  Plus, unlike the PIIGS, China has its own currency.



PIIGS have their own currency as well.. it is just not as flexible as it should be because of the Germany hatred to printing money. Now if the Eurozone could get its act together and fix its structural problems in the Euro then do you expect the markets to say okay? I doubt that... the Eurozone is a good place to keep focus away form the real clusterfucks of the US and UK and use as a blame game when the whole house of cards come collapsing in the US.

Personally I hope Merkel and the Germans get over their hatred of printing money.. because we need to print money to counteract the devaluation of the pound and dollar, but also use that money to be able to fix the structural problems in the south of Europe.


----------



## PeteEU

FireFly said:


> PeteEU said:
> 
> 
> 
> 
> 
> FireFly said:
> 
> 
> 
> The France downgrade is back on!
> 
> 
> 
> 
> Yes by Anglo-American owned ratings agencies who receive most of their income from companies that have a vested interest in a downgrade. Not to mention ratings agencies that have zero credibility since they listed Lehman Brothers as AAA the day before the bankruptcy.
> 
> 
> 
> Yes, and one has to ask why...
> 
> 
> 
> 
> The US Debt to GDP ratio surged past 100%. We are heading towards default within 6 years.
> 
> Click to expand...
> 
> 
> Its been higher than 100% since late 2008. As for heading for a "default", not bloody likely as long as the US dollar is the reserve currency. Also the interest rate the US pays on its debt is pathetically small and much of the debt is long term.
> 
> Click to expand...
> 
> 
> But of course, and Greece did not just default on 50% of it's debt.
Click to expand...


Greece has not defaulted. CDSs have not be triggered (yet) so there is no default. 



> And Mexico did not default on it's debts 15 years ago.



Technically Mexico did not default as far as I understand it. The US bailed Mexico out and once Mexico got its act together, the US made a profit on its investment.



> How about the Asian Contagion 12 years back?



Yea.. that was


----------



## FireFly

PeteEU said:


> Greece has not defaulted. CDSs have not be triggered (yet) so there is no default.


 Yeah right, tell that to MF Global.  A write-down is a default! 



> Technically Mexico did not default as far as I understand it. The US bailed Mexico out and once Mexico got its act together, the US made a profit on its investment.



Yeah, the US made some money on the Mexicans, But they lost half of the value of their Peso currency in the process.


----------



## Toro

PeteEU said:


> The Spanish banks (the big main ones) have always been considered some of the best and most stable banks out there. They did not jump into the sub-prime mortgage mess of the US because they were not allowed due to regulations and the corporate ideals, which also meant they continued to have profits (and still do) despite the economic crisis.



The problem with Spanish banks is Spain.  The Spanish banks look more profitable than they really are because they have not marked the value of their loans to market.  Spanish banks made loans against this.






And now, they have this.



> Spanish banks, under pressure to cut property-backed debt, hold about 30 billion euros ($41 billion) of real estate thats unsellable, according to a risk adviser to Banco Santander SA (SAN) and five other lenders.
> 
> Im really worried about the small- and medium-sized banks whose business is 100 percent in Spain and based on real- estate growth, Pablo Cantos, managing partner of Madrid-based MaC Group, said in an interview. I foresee Spain will be left with just four large banks.
> 
> Spanish lenders hold 308 billion euros of real estate loans, about half of which are troubled, according to the Bank of Spain. The central bank tightened rules last year to force lenders to aside more reserves against property taken onto their books in exchange for unpaid debts, pressing them to sell assets rather than wait for the market to recover from a four- year decline.
> 
> Land in the middle of nowhere and unfinished residential units will take as long as 40 years to sell, Cantos said. Only bigger banks such as Santander, Banco Bilbao Vizcaya Argentaria SA (BBVA), La Caixa and Bankia SA are strong enough to survive their real-estate losses, he said. MaC Group is an adviser on company strategy focused on financial services.



âUnsellableâ Real Estate Assets Threaten Survival of Smaller Spanish Banks - Bloomberg

Soaring yields and CDS for Spain isn't some lame Anglo-American right-wing plot.  The market simply believes Spain has taken on too much debt.  Spain had an even bigger housing bubble than the US, relatively speaking.  And no, the problem is not just the cajas.

You are in for a rude shock.



> For example.. Italy.. 120% debt vs GDP.. world goes in panic mode and says it is too much and Italy cant pay its loans. What the world forgets is that Italy has a primary surplus already, and that we never have gotten out of the US sub-prime mortgage failure, so there is next to no growth. If growth came back then that would mean higher tax income and that would mean a surplus... then the 120% debt would not be a problem and would go down. Now of course Italy has a lot of structural problems in the labour market and society as a whole that prevents mega uber growth the markets like but if they fix those some what, then growth should come back under normal circumstances. And lets not forget, a very large portion of Italian debt is owed to the Italians themselves!



As you can see, Italy's debt has been above 100% of GDP forever.






Rising yields on Italian debt isn't the fault of the collapse of the US subprime market, nor the fault of "right-wing economists."  It is the fault of the Italians.  The fact that it is happening now is no surprise.  When there is a liquidity crisis, the weaker hands get shaken out first.  It doesn't matter if the debt is owned by Italians anyways, not when monetary policy is being run out of Frankfurt and Berlin.



> PIIGS have their own currency as well.. it is just not as flexible as it should be because of the Germany hatred to printing money. Now if the Eurozone could get its act together and fix its structural problems in the Euro then do you expect the markets to say okay? I doubt that... the Eurozone is a good place to keep focus away form the real clusterfucks of the US and UK and use as a blame game when the whole house of cards come collapsing in the US.



Spain is a house of cards.  Europe's banks are weak and undercapitalized compared to the US and much of the rest of the world.  Blaming it on the British and Americans is really lame, like an alcoholic blaming everyone else for his problems.  You Europeans wanted a German currency with German interest rates.  You wanted low interest rates and cheap credit, and all the benefits that came with that.  You got it.  Now you have to live with the aftermath.  I imagine Germany will cave eventually, but not before you feel some pain first.


----------



## Toro

PeteEU said:


> Toro said:
> 
> 
> 
> 
> 
> PeteEU said:
> 
> 
> 
> Yes by Anglo-American owned ratings agencies who receive most of their income from companies that have a vested interest in a downgrade.
> 
> 
> 
> 
> This is not a serious answer.
> 
> Click to expand...
> 
> 
> It is a VERY serious answer. The problem with the ratings agencies other than two countries basically control them, is that they get their income from the very companies that dependent on ratings to run their business.. There is a built in conflict of interest in the system and it has shown its ugly head more than once, as has national bias.. hence the anglo-American comment.
> 
> Any other country with 10% budget deficit and debt ratios over 70% and if not 100%, would have their ratings on at least a downward watch if not downgraded, but that simply is not happening with the UK (still AAA) and it took one hell of a while for the US to be downgraded (and only by one rating agency) despite having a clusterfuck of a political system that cant get anything done.
Click to expand...


You said they are run by companies that have a vested interest in downgrading the debt of the countries.  That is not a serious answer.  You did not address that in your post.

And you should be more worried about the clusterfuck going on in Europe and the laughable inability of its institutions to get anything done first before whining about what is going on elsewhere.  Europe is the fulcrum of the globe's problems right now, not America.


----------



## Toro

I'm looking at our banking data, which includes two big Spanish banks, BBVA and Banco Santander. We normalize accounting around the world and mark to market the assets on the balance sheets. We then bring on all off balance sheet items and aggregated them into total assets.  We have done this for over 100 global banks. As of the end of Q2, Santander is one of the weakest banks in the world, with tangible common equity to fair value assets at 2%. BBVA is better but is still weak at about 4%. And remember, this was at the end of June, before the markets collapsed during the summer. Perhaps ironically, the country with the weakest banking system is Germany, which is another reason why Germany will eventually cave and start printing money. 

This methodology had Dexia - which passed the laughable European stress tests - as the weakest bank with negative equity.  It was also a very good indicator at predicting which banks were in trouble in 2008. FTR there was no correlation between Tier 1 capital and individual bank stress in 08 & 09.


----------



## ekrem

PeteEU said:


> Personally I hope Merkel and the Germans get over their hatred of printing money.. because we need to print money to counteract the devaluation of the pound and dollar, but also use that money to be able to fix the structural problems in the south of Europe.



There's only 1 way forward:
The other -countries have to downsize: Wages down, down with government spending and down with social benefit-payments. And you are back with a happy and healthy economy. 
Cutting spending is not nice, but there is not another way to handle the situation. Germany has already gone through this process and still Germany itself doesn't .meet some parts of Maastricht criterias.

The Euro-Zone partners want Germany's money and German commitment to liability for other's debts. They want Germany to pay for Europe exceeding what it already pays through the cohesion policy to the underdeveloped regions surrounding it. 

Just as it was planned in Versailles.


----------



## Toro

Spain 10 year government bond yield.


----------



## Toro

Institutions are pulling their deposits out of Italian and Spanish banks.



> Euro-zone leaders say they are determined to save the single currency. But the smart money is voting with its feet. First, short-term U.S. dollar-funding markets effectively closed, then the senior unsecured-bond markets shut down, then the interbank market. Now, corporate customers appear to be withdrawing their deposits from some countries' banks. With an estimated 1.7 trillion ($2.29 trillion) of funding to roll over in the next three years, the stresses in the euro-zone banking system look doomed to get worse.
> 
> In some cases, the drop in corporate deposits has been startling. In Italy, nonretail customers withdrew 56 billion in the three months to the end of September, a fall of 12%. Intesa Sanpaolo and UniCredit saw corporate deposits decline by 16% and 10%, respectively, according to Citigroup research. Similarly, in Spain, nonretail deposits fell by 20% in the third quarter, with Santander and BBVA losing 10% and 11%, respectively. Even the French banks weren't immune: Société Générale and BNP Paribas saw their corporate-deposit balances fall by 7% and 6%, respectively.



HEARD ON THE STREET: Europe's Smart Money Votes With Its Feet - WSJ.com


----------



## PeteEU

ekrem said:


> PeteEU said:
> 
> 
> 
> Personally I hope Merkel and the Germans get over their hatred of printing money.. because we need to print money to counteract the devaluation of the pound and dollar, but also use that money to be able to fix the structural problems in the south of Europe.
> 
> 
> 
> 
> There's only 1 way forward:
> The other -countries have to downsize: Wages down, down with government spending and down with social benefit-payments. And you are back with a happy and healthy economy.
> Cutting spending is not nice, but there is not another way to handle the situation. Germany has already gone through this process and still Germany itself doesn't .meet some parts of Maastricht criterias.
> 
> The Euro-Zone partners want Germany's money and German commitment to liability for other's debts. They want Germany to pay for Europe exceeding what it already pays through the cohesion policy to the underdeveloped regions surrounding it.
> 
> Just as it was planned in Versailles.
Click to expand...


So your solution is to make people poorer? Does that include the rich and bankers? or is it just the lower and middle classes?


----------



## PeteEU

Toro said:


> The problem with Spanish banks is Spain.  The Spanish banks look more profitable than they really are because they have not marked the value of their loans to market.  Spanish banks made loans against this.
> 
> 
> 
> 
> 
> 
> And now, they have this.
> 
> 
> 
> 
> Spanish banks, under pressure to cut property-backed debt, hold about 30 billion euros ($41 billion) of real estate thats unsellable, according to a risk adviser to Banco Santander SA (SAN) and five other lenders.
> 
> Im really worried about the small- and medium-sized banks whose business is 100 percent in Spain and based on real- estate growth, Pablo Cantos, managing partner of Madrid-based MaC Group, said in an interview. I foresee Spain will be left with just four large banks.
> 
> Spanish lenders hold 308 billion euros of real estate loans, about half of which are troubled, according to the Bank of Spain. The central bank tightened rules last year to force lenders to aside more reserves against property taken onto their books in exchange for unpaid debts, pressing them to sell assets rather than wait for the market to recover from a four- year decline.
> 
> Land in the middle of nowhere and unfinished residential units will take as long as 40 years to sell, Cantos said. Only bigger banks such as Santander, Banco Bilbao Vizcaya Argentaria SA (BBVA), La Caixa and Bankia SA are strong enough to survive their real-estate losses, he said. MaC Group is an adviser on company strategy focused on financial services.
> 
> 
> 
> 
> âUnsellableâ Real Estate Assets Threaten Survival of Smaller Spanish Banks - Bloomberg
> 
> Soaring yields and CDS for Spain isn't some lame Anglo-American right-wing plot.  The market simply believes Spain has taken on too much debt.  Spain had an even bigger housing bubble than the US, relatively speaking.  And no, the problem is not just the cajas.
> 
> You are in for a rude shock.
Click to expand...


You do realize that you proved my point right? "Only the bigger banks... are strong enough to survive".. it is in your quote. And since it is the bigger banks who hold most of the "bad housing debt", then what exactly is the problem? It is not like Spain is trying to ignore or hide the building bubble it went trough... and yes it was worse than the US, but unlike the US, in Spain the average Spaniard did not participate as much in the boom as the average American. Most of the buying was done by expats, which drove up prices. 

And look at the numbers... 308 billion in real estate loans and half are in trouble. So that is 154 billion the Spanish state might have to take over adding to their over all debt.

Okay... what will that do to the debt ratio? Well the Spanish economy is about 1 trillion Euros, and has a debt ratio of 64%, which means 640ish billion in debt... so the debt ratio will go from 64% to 80%... the same as Germany btw.... and that is if the Spanish government takes over ALL the bad debt.. which is unrealistic...

So come again on how that is a problem? 



> For example.. Italy.. 120% debt vs GDP.. world goes in panic mode and says it is too much and Italy cant pay its loans. What the world forgets is that Italy has a primary surplus already, and that we never have gotten out of the US sub-prime mortgage failure, so there is next to no growth. If growth came back then that would mean higher tax income and that would mean a surplus... then the 120% debt would not be a problem and would go down. Now of course Italy has a lot of structural problems in the labour market and society as a whole that prevents mega uber growth the markets like but if they fix those some what, then growth should come back under normal circumstances. And lets not forget, a very large portion of Italian debt is owed to the Italians themselves!
> 
> 
> 
> 
> As you can see, Italy's debt has been above 100% of GDP forever.
> 
> 
> 
> 
> 
> 
> Rising yields on Italian debt isn't the fault of the collapse of the US subprime market, nor the fault of "right-wing economists."  It is the fault of the Italians.  The fact that it is happening now is no surprise.  When there is a liquidity crisis, the weaker hands get shaken out first.  It doesn't matter if the debt is owned by Italians anyways, not when monetary policy is being run out of Frankfurt and Berlin.
Click to expand...


LOL seriously? First you correctly state that Italy has had high debt ratio since "forever", and then you say it is not surprising that it is happening now.. what the hell? If debt was such a serious issue as it is claimed to be now, then why was it not such a serious issue 20 years ago? And yes it is right wing policies, Italy has been under right wing control for over a decade.



> PIIGS have their own currency as well.. it is just not as flexible as it should be because of the Germany hatred to printing money. Now if the Eurozone could get its act together and fix its structural problems in the Euro then do you expect the markets to say okay? I doubt that... the Eurozone is a good place to keep focus away form the real clusterfucks of the US and UK and use as a blame game when the whole house of cards come collapsing in the US.
> 
> 
> 
> 
> Spain is a house of cards.  Europe's banks are weak and undercapitalized compared to the US and much of the rest of the world.  Blaming it on the British and Americans is really lame, like an alcoholic blaming everyone else for his problems.  You Europeans wanted a German currency with German interest rates.  You wanted low interest rates and cheap credit, and all the benefits that came with that.  You got it.  Now you have to live with the aftermath.  I imagine Germany will cave eventually, but not before you feel some pain first.
Click to expand...


Hog wash. Bank of America has be insolvent for a very long time, and yet nothing has been done about it. CITI is not much better. But unlike the European banks, who have the bear their losses, American banks can push their crap loans onto the US federal government via Fannie and Freddie Mac. Funny how Bank of American managed to get rid of 86 billion of toxic mortgages to Fannie Mae for 500 million dollars.. And how many banks has the US feds taken over since the crisis... several hundred... 

And ignoring the facts of who caused this fucking mess we all are in is lame. Americans and the Brits are running form responsibility in starting the economic crisis we all are in now. Yes Europe had its problems and thanks to the Anglo-American "dream" of cheap credit and sub-prime, then Europe was able to ignore the problem.. now with the crash thanks to the American sub-prime market scandal, then Europe is forced to deal with it, and that is all fine and dandy.. but dont come here and claim some sort of economic saint-hood when it is the US and UK that in large parts are responsible for the economic melt down we are all in now.  

While Europe has its problems and I dont deny it, and we have our political problems... it is nothing compared to the clusterfuck going on in the US. Not only are there no plans to fix the budget, but everyone is carrying along like nothing is wrong and blaming each other for the ills of the country (when not blaming the Europeans). At least in Europe we are dealing with our deficits and structural problems.... it might take time, but it is happening.


----------



## Toro

PeteEU said:


> You do realize that you proved my point right? "Only the bigger banks... are strong enough to survive".. it is in your quote. And since it is the bigger banks who hold most of the "bad housing debt", then what exactly is the problem? It is not like Spain is trying to ignore or hide the building bubble it went trough... and yes it was worse than the US, but unlike the US, in Spain the average Spaniard did not participate as much in the boom as the average American. Most of the buying was done by expats, which drove up prices.
> 
> And look at the numbers... 308 billion in real estate loans and half are in trouble. So that is 154 billion the Spanish state might have to take over adding to their over all debt.
> 
> Okay... what will that do to the debt ratio? Well the Spanish economy is about 1 trillion Euros, and has a debt ratio of 64%, which means 640ish billion in debt... so the debt ratio will go from 64% to 80%... the same as Germany btw.... and that is if the Spanish government takes over ALL the bad debt.. which is unrealistic...
> 
> So come again on how that is a problem?



It is a problem for the same reason why it is a problem in Italy and Greece - the Spanish economy is not productive enough to grow at a fast enough rate to outgrow its debt.

The fact that Spain's debt would "only" be 80% of GDP isn't particularly relevant.  There is no magical threshold that a nation crosses when it suddenly becomes a problem.  Countries have defaulted when debt to GDP was 60%.  At other times, countries have not defaulted until debt has reached 130%.  Reinhardt and Rogoff have estimated that _on average_, a nation becomes vulnerable when debt hits 90%, but default can occur at much lower or much higher levels.  Japan is much higher and they have not defaulted.  It depends on the vagaries of the market.  And when the market stresses, the first to go are the weakest.  Spain is highly-indebted weak economy that uses a German currency.  That is a bad recipe.



> LOL seriously? First you correctly state that Italy has had high debt ratio since "forever", and then you say it is not surprising that it is happening now.. what the hell? If debt was such a serious issue as it is claimed to be now, then why was it not such a serious issue 20 years ago? And yes it is right wing policies, Italy has been under right wing control for over a decade.



Left-wingers whine about the market and don't understand it.  It wasn't an issue for the past 20 years because the market did not perceive it to be an issue.  It's not surprising that it is happening now because the market is figuring out the illogic of the eurozone as constructed.  It didn't matter when debts were lower and growth was higher.  It is happening now because the market has decided to make it an issue now.  

In times of stress, the first to get cut off from the capital markets are the weakest credits.  We are in a time of stress because European banks have too little equity and European countries have too much debt and not enough growth.  When things are good, the cracks can be papered over.  When things turn bad, those cracks get exposed.  Overlay that with the internal illogic of the eurozone and you have a sovereign debt crisis.

The euro as designed was destined to fail.  The math and logic of it - despite the protestations of dreamy-eyed idealists - does not work.  It is fundamentally flawed economically.  It can work if the more productive north decides to subsidize the less productive south forever, or if the south becomes as productive as the north (and that's not going to happen).  So if the German, Dutch and Finnish taxpayer wants to send their money south forever, or if the Spanish, Italians and Greeks want to be as productive as the north, then the euro experiment can work.  Otherwise, it will fail as is.  And it is failing now.



> Hog wash. Bank of America has be insolvent for a very long time, and yet nothing has been done about it. CITI is not much better. But unlike the European banks, who have the bear their losses, American banks can push their crap loans onto the US federal government via Fannie and Freddie Mac. Funny how Bank of American managed to get rid of 86 billion of toxic mortgages to Fannie Mae for 500 million dollars.. And how many banks has the US feds taken over since the crisis... several hundred...



BofA is undercapitalized, but the American banks - including BofA - have raised hundreds of billions of dollars in equity and have removed hundreds of billions of dollars of bad assets off their books.  They are far, far better off than the European banks today.  This is not seriously debated by anyone.

The European banks, for the most part, denied there was a problem, and resisted raising equity.  Now, they are woefully undercapitalized.  Dexia is done.  The Landesbanks in Germany are essentially insolvent.  The Spanish banks are bouyed by their Latin American assets but have their heads in the sand regarding their domestic market.  The Greek banks will be on life support.  And Italian banks are dumping their Italian bonds.

European banks have been playing Pretend for some time now.  They have refused to shop their pools of assets because it would have required them taking marks on the loan books, which would have demonstrated they are woefully undercapitalized.  So they pretended there wasn't a problem.  Now the market is forcing them to dump their assets and shrink their balance sheets, and the banks hoping to buy enough time to find a solution.  They have to because they are shopping their best assets.  The best assets will get sold and the shittiest assets will get dumped on to the balance sheets of the states.



> And ignoring the facts of who caused this fucking mess we all are in is lame. Americans and the Brits are running form responsibility in starting the economic crisis we all are in now. Yes Europe had its problems and thanks to the Anglo-American "dream" of cheap credit and sub-prime, then Europe was able to ignore the problem.. now with the crash thanks to the American sub-prime market scandal, then Europe is forced to deal with it, and that is all fine and dandy.. but dont come here and claim some sort of economic saint-hood when it is the US and UK that in large parts are responsible for the economic melt down we are all in now.



I'm not the one claiming sainthood.  But we've gone through the fire, we've taken our medicine, and we aren't blaming anyone else.  You're the one blaming your problems on others, brushing Europe's internal problems aside as if they are easily solvable - "Oh, Italy will be fine once it liberalizes its labour markets."  Yeah, good luck with that. Your banks are woefully undercapitalized and they resist doing anything about it.  Don't blame others if you got sold.  You sucked up the easy credit.  You bought the store.  That's on you.



> While Europe has its problems and I dont deny it, and we have our political problems... it is nothing compared to the clusterfuck going on in the US. Not only are there no plans to fix the budget, but everyone is carrying along like nothing is wrong and blaming each other for the ills of the country (when not blaming the Europeans). At least in Europe we are dealing with our deficits and structural problems.... it might take time, but it is happening.



Yeah, right.  Get back to us when the IMF is involved in bailing out America like it is in Europe.


----------



## editec

One of the better discussion happening on this board.

Thanks for your input boys.

Clearly you're paying closer attention to the machinations of Europes debt crises than I am and I appreciate your POVs about it.


----------



## Toro

BTW

Yesterday, Belgian 10 year bonds fell $3.  (Par is $100.)  That is an enormous move in the bond market.  It had fallen $5 in two days.


----------



## Toro

Belgium is the next in line.  This is the price of 10 year government bonds issued by the Kingdom of Belgium.  It is falling off a cliff.


----------



## Trajan

PeteEU said:


> Zander said:
> 
> 
> 
> The problem with the Eurozone is simple - the Eurozone must find at least &#8364;3 trillion (give or take) to pay for the sovereign debt &#8220;haircuts&#8221; and bank losses.  Some argue it is only &#8364;2 trillion and others argue for &#8364;6 trillion.
> 
> 
> 
> 
> And those that argue 6 trillion are idiots.. the total debt of the EU  is only 9 trillion for god sake out of a 15 trillion economy. The debt of the Eurozone is between 7 to 8 trillion euros.. So these morons are saying that the Eurozone should basically write off all their debt?
> 
> 
> 
> 
> Whatever it is, it is such a large number that it cannot be found by borrowing or creating a special fund.  The ONLY way to deal with it is to allow the ECB to print, essentially putting a floor underneath Eurozone bonds, especially those of Italy and Spain, both of which governments are too big to save by conventional means.
> 
> But Merkel is saying NEIN!!!!  She is against printing more EURO's because it will cause inflation and lower the value of the Euro, possibly a lot!
> 
> Click to expand...
> 
> 
> Wow sorry but you or someone you are quoting dont understand economics and the Germans. First off... Germany WANTS a lower value of the Euro... they are an export country and need a lower valued Euro.. it is one of the reasons that Germany cant and wont leave the Euro. But the real reason is a historic one.. Printing money is so much against the German economic model due to flash-backs to the hyper-inflation days of the 1920-30s.
> 
> 
> 
> To say the least.. a new German currency would be so strong (since the UK pound and US Dollar are being devalued) that German exports will crash. That is of course on top of the administration costs of switching currency (not to mention time)..
> 
> 
> 
> Not really. This is not about bail-outs, because Spain for one does not need one.. nor Italy. This is about confidence in the Euro and Eurozone and structural issues for both the Eurozone and individual European countries. If Italy can get growth going via fixing its structural problems, then it can easily pay its debt. Spain's debt is 64% for god sake,.... how on earth is that a problem and need a bail-out? Does that mean that China needs one too since it has 30+% debt vs GDP?
> 
> 
> 
> 
> Either way they are facing huge costs.   It is not a choice of whether they will bear a huge cost burden, but just what form that burden takes.
> 
> Click to expand...
> 
> 
> Of course there are costs, and it wont be cheap. And those costs will continue to go up as long as the politicans cant get their act together.. basically Merkel needs to compromise on the whole idea of printing money. But most of all to fix the Eurozone, you will need a treaty change and that opens up a whole different can of worms.
> 
> 
> 
> 
> Somewhere in Germany I will bet you there is a memo on what it would take for Germany to leave the euro and who would go with them. Just saying........
> 
> Click to expand...
> 
> 
> Of course there is, just as there is a memo on the US invading Canada and California ceding from the union. Dont mean it is going to happen. There are so many negatives for Germany and very few positives if any... for leaving the Euro.
Click to expand...




> Not really. This is not about bail-outs, because Spain for one does not need one.. nor Italy. This is about confidence in the Euro and Eurozone and structural issues for both the Eurozone and individual European countries.



the driving force that created the euro wasn't a financial/fiduciary one per se', it was created as political device, that is why it is doomed to fail. 

so, in effect it appears that you wish the ECB to become just another 'nation-state' that prints money to pay its bills in the short term?Because they won't grow their way out of this, minus, huge, and I mean huge structural changes. 

Until Greeks stop being Greeks and Italians Italians etc etc. the issue will only be kicked down the road, printing presses won't save you and I have my doubts as to Greece et al all of sudden taking orders for what will amount to a lower standard of living from what they perceive as The EU, ala Germany, France etc., not that they aren't going to have one anyway, but its one thing to stumble into it on your own  and wholly in another to have one dictated to you.


----------



## Trajan

Toro said:


> Belgium is the next in line.  This is the price of 10 year government bonds issued by the Kingdom of Belgium.  It is falling off a cliff.



I have not checked the news in the last 24....wow.


----------



## Trajan

editec said:


> One of the better discussion happening on this board.
> 
> Thanks for your input boys.
> 
> Clearly you're paying closer attention to the machinations of Europes debt crises than I am and I appreciate your POVs about it.



and its pretty much 'contention' free


----------



## Trajan

from Toro-




> The European banks, for the most part, denied there was a problem, and resisted raising equity. Now, they are woefully undercapitalized. Dexia is done. The Landesbanks in Germany are essentially insolvent. The Spanish banks are bouyed by their Latin American assets but have their heads in the sand regarding their domestic market. The Greek banks will be on life support. And Italian banks are dumping their Italian bonds.




I'd like to point out as part of the theatre of the absurd that has been allowed to fester there, Dexia was 'stressed tested in June and pronounced- healthy, with maybe 5 billion as the HIGHEST level of euro sppt. necessary if push came to shove. We saw how that worked out.


----------



## Trajan

Toro said:


> [
> 
> As you can see, Italy's debt has been above 100% of GDP forever.



yes BUT, they have not had GDP north of 2% since,....drumroll please, 2000. It comes home to roost sooner, or later. 

this imho just buttresses your other point though, that they cannot grow their way out.


----------



## ekrem

PeteEU said:


> ekrem said:
> 
> 
> 
> There's only 1 way forward:
> The other -countries have to downsize: Wages down, down with government spending and down with social benefit-payments. And you are back with a happy and healthy economy.
> Cutting spending is not nice, but there is not another way to handle the situation. Germany has already gone through this process and still Germany itself doesn't .meet some parts of Maastricht criterias.
> 
> The Euro-Zone partners want Germany's money and German commitment to liability for other's debts. They want Germany to pay for Europe exceeding what it already pays through the cohesion policy to the underdeveloped regions surrounding it.
> 
> Just as it was planned in Versailles.
> 
> 
> 
> 
> So your solution is to make people poorer? Does that include the rich and bankers? or is it just the lower and middle classes?
Click to expand...


Real wages are stagnant in Germany for 10 years. There were painful reforms.
There's no reason why Germany should pay for other people's living standards.
Germans are biggest contributors to EU's funds, and are biggest shareholders of ECB which already is in debt to German CB more than 330 Billion  because Trichet (former French president of ECB) started to buy up the Siesta-Bonds from the South to save the French Banks.

If they want more, they'll all have to play by Germany's rules: Austerity. 
It's simple as that.


----------



## ekrem

Toro said:


> The euro as designed was destined to fail. The math and logic of it - despite the protestations of dreamy-eyed idealists - does not work. It is fundamentally flawed economically.



The  itself isn't "flawed economically", the problem is, that there is no institution and measures to punish the member-states who violate the Maastricht criterion (no more than 3% of GDP deficit, no more than 60% debt of GDP).
Once member-states are forced into complying to the criterion everything will be fine.
That's why Germany wants the contracts changed to introduce punitive measures.


----------



## Toro

ekrem said:


> Toro said:
> 
> 
> 
> The euro as designed was destined to fail. The math and logic of it - despite the protestations of dreamy-eyed idealists - does not work. It is fundamentally flawed economically.
> 
> 
> 
> 
> The  itself isn't "flawed economically", the problem is, that there is no institution and measures to punish the member-states who violate the Maastricht criterion (no more than 3% of GDP deficit, no more than 60% debt of GDP).
> Once member-states are forced into complying to the criterion everything will be fine.
> That's why Germany wants the contracts changed to introduce punitive measures.
Click to expand...


Not true.

It is true that the Maastricht Treaty has been shredded by the likes of France and Germany, but that's not the fundamental problem.  The fundamental problem is that there is no mechanism to counter-balance economic pressures within the eurozone.  

For a currency union to work, when one region is economically depressed and another reason is booming, there must be some transfer between regions.  In a well-functioning currency union, labour would flow freely from the depressed region to the booming region, and/or money flowing from the booming region to the depressed region.

The EU has a free market in labour but in practice, there are significant cultural barriers to the mass movement of labour from one region to another.  A third of Greece is not going to move to Germany for example.  And apart from the CAP and some infrastructure spending, there isn't much in the way of transfers from the rich to the poor areas, at least not in the scale required.  Social programs that could alleviate the depressed region are funded mainly by national governments, not from Brussels, when what is needed is for the Germans to fund the Spanish unemployed.  

This is why the eurozone was destined to fail.  Economically weak regions need to be subsidized by the strong areas.  Or the economically weak areas have to become more productive and efficient.  The problem is thus a political one, not an economic one.  But you have to either convince the northern countries to subsidize the southern countries *forever*, or the southern countries have to become more like the north, which is highly unlikely.


----------



## ekrem

Toro said:


> Not true.
> 
> It is true that the Maastricht Treaty has been shredded by the likes of France and Germany, but that's not the fundamental problem.  The fundamental problem is that there is no mechanism to counter-balance economic pressures within the eurozone.
> 
> For a currency union to work, when one region is economically depressed and another reason is booming, there must be some transfer between regions.  In a well-functioning currency union, labour would flow freely from the depressed region to the booming region, and/or money flowing from the booming region to the depressed region.
> 
> The EU has a free market in labour but in practice, there are significant cultural barriers to the mass movement of labour from one region to another.  A third of Greece is not going to move to Germany for example.  And apart from the CAP and some infrastructure spending, there isn't much in the way of transfers from the rich to the poor areas, at least not in the scale required.  Social programs that could alleviate the depressed region are funded mainly by national governments, not from Brussels, when what is needed is for the Germans to fund the Spanish unemployed.
> 
> This is why the eurozone was destined to fail.  Economically weak regions need to be subsidized by the strong areas.  Or the economically weak areas have to become more productive and efficient.  The problem is thus a political one, not an economic one.  But you have to either convince the northern countries to subsidize the southern countries *forever*, or the southern countries have to become more like the north, which is highly unlikely.



The capital transfer is happening independent from  and EU has mechanisms (funds) to support poorer regions within the EU. Long before  was introduced. 
It equals  347 billion for current budget period of the EU.
Structural Funds and Cohesion Fund - Wikipedia, the free encyclopedia

German economy has been 2nd biggest capital exporter in world since 1990's after China. Only 24% of what has been generated in Germany has been reinvested in Germany. The rest went to foreign countries, also to the southern EU countries. Germany had the 2nd lowest growth within the EU since 90's and between 1998-2005 wages in Germany decreased in relation to the EU by 18%. The wages didn't really decrease but the wages elsewhere in EU skyrocketed.
Source is from IFO, which makes tax estimates for German Finance Ministry for next fiscal years.

In the meantime, Germany introduced some very painfully reforms and catapulted a 2-3rd world country (East-Germany) into a situation where infrastructure is even better than in West-Germany.
Countries like Greece meanwhile were on a big siesta could refinance with much lower costs on the markets () and overplayed (debt) by continuously violating the stability pact (Maastricht). 
Now they're bankrupt, money is re-entering Germany with very positive effects (lowest unemployment since re-union with East-G.) and now those unproductive countries call for bailouts, Eurobonds.

I live in Germany and there is strong opposition to such kind of adventures and people think, that the other countries should go into austerity and make reforms, just like Germany did.
It is clear, that the German economic-system is one of most successful if not most successful in whole Western world. Like in evolution the fittest survive and there's no reason to continue uncompetitive habits and systems - and clearly not bailing them out for them to continue the same way.


----------



## ekrem

The average Italian is wealthier than the average German.
They should tax their people, they don't need bailouts or securities from Germany.


----------



## ekrem

Toro said:


> Or the economically weak areas have to become more productive and efficient.



That's what has to happen or they'll have to leave -zone once the crisis doesn't represent anymore a fundamental threat. There can not be always chieftains, but there also have to be normal Indians. Like in USA where there are states who do well and states who do not so well.

At some point the crisis will be defused by introducing a form of Eurobond-light where Germany will give guarantees for other' country's debts, but only after Germany's demands are met and political weight of EU has been relocated from Brussels to Berlin, like it always should've been.
Can not be, that an EU Commission President who himself contributed to Portugal's debt-crisis when he was that country's Prime Minister tells Germany what to do and demands unconditional guarantees and cash-flow. 

At the end of the crisis the EU's political system will resemble the EU's economic structure, where Germany is the heavyweight.
The USA also isn't making a currency-zone with S.America and gives Trinidad and Tobago the same political weight within that currency-zone and freedom to do as it wishes with the debt-situation.

So you shouldn't declare the  dead. It isn't and won't die. 
Germany has no intention to depart or let the  fall. The crisis also profits indirectly Germany as money re-enters Germany and there are elections in 2013. 
Germany has them all by the balls, and they now have a little time to adapt to the reality and then situation will move on and crisis will be defused.


----------



## Toro

ekrem said:


> Toro said:
> 
> 
> 
> Not true.
> 
> It is true that the Maastricht Treaty has been shredded by the likes of France and Germany, but that's not the fundamental problem.  The fundamental problem is that there is no mechanism to counter-balance economic pressures within the eurozone.
> 
> For a currency union to work, when one region is economically depressed and another reason is booming, there must be some transfer between regions.  In a well-functioning currency union, labour would flow freely from the depressed region to the booming region, and/or money flowing from the booming region to the depressed region.
> 
> The EU has a free market in labour but in practice, there are significant cultural barriers to the mass movement of labour from one region to another.  A third of Greece is not going to move to Germany for example.  And apart from the CAP and some infrastructure spending, there isn't much in the way of transfers from the rich to the poor areas, at least not in the scale required.  Social programs that could alleviate the depressed region are funded mainly by national governments, not from Brussels, when what is needed is for the Germans to fund the Spanish unemployed.
> 
> This is why the eurozone was destined to fail.  Economically weak regions need to be subsidized by the strong areas.  Or the economically weak areas have to become more productive and efficient.  The problem is thus a political one, not an economic one.  But you have to either convince the northern countries to subsidize the southern countries *forever*, or the southern countries have to become more like the north, which is highly unlikely.
> 
> 
> 
> 
> The capital transfer is happening independent from  and EU has mechanisms (funds) to support poorer regions within the EU. Long before  was introduced.
> It equals  347 billion for current budget period of the EU.
> Structural Funds and Cohesion Fund - Wikipedia, the free encyclopedia
> 
> German economy has been 2nd biggest capital exporter in world since 1990's after China. Only 24% of what has been generated in Germany has been reinvested in Germany. The rest went to foreign countries, also to the southern EU countries. Germany had the 2nd lowest growth within the EU since 90's and between 1998-2005 wages in Germany decreased in relation to the EU by 18%. The wages didn't really decrease but the wages elsewhere in EU skyrocketed.
> Source is from IFO, which makes tax estimates for German Finance Ministry for next fiscal years.
> 
> In the meantime, Germany introduced some very painfully reforms and catapulted a 2-3rd world country (East-Germany) into a situation where infrastructure is even better than in West-Germany.
> Countries like Greece meanwhile were on a big siesta could refinance with much lower costs on the markets () and overplayed (debt) by continuously violating the stability pact (Maastricht).
> Now they're bankrupt, money is re-entering Germany with very positive effects (lowest unemployment since re-union with East-G.) and now those unproductive countries call for bailouts, Eurobonds.
> 
> I live in Germany and there is strong opposition to such kind of adventures and people think, that the other countries should go into austerity and make reforms, just like Germany did.
> It is clear, that the German economic-system is one of most successful if not most successful in whole Western world. Like in evolution the fittest survive and there's no reason to continue uncompetitive habits and systems - and clearly not bailing them out for them to continue the same way.
Click to expand...


60 billion a year isn't enough to mitigate the pressure in the south.

Germany an exporter of capital is what one would expect from a country that runs a trade surplus with its partners.  Half of Germany's exports go to the rest of Europe, which is no surprise because Germany is more productive than the south.  When countries use the same currency, the relative price of the more productive country falls and the relative price of the less productive country rises.  *This is the fundamental problem with the eurozone.*  The more productive economy is more competitive and the less productive economy is less competitive.  Thus, the productive north sells more than the unproductive south.  To alleviate the pressures in the south, either capital has to come in or labour has to go out. 

Equity capital flows are not a problem - the investor takes the loss if it goes sour.  Debt isn't a problem either if the lender is willing to take a haircut on their debt.  But the Germans and French banks don't want to take the requisite haircuts because they risk insolvency.  They want their money back.  Well, that's not going to happen.  Banks have already started to take haircuts on Greek bonds and eventually will on lending to Italy and Spain.

Capital came into the south primarily through lending.  German banks had excess capital deposited by German companies making lots of money selling to their European neighbors.  German banks then lent it outside of Germany because their home market is stagnant - the population isn't growing and consumption is relatively weak.  Much of that money went into funding a speculative boom in Spanish real estate.  For a time, more homes were built in Spain than were built in France and Germany combined, which is nuts given that Spain has a population a third that of the two.  But, like housing bubbles around the world, it went bust, and the banks are holding a lot of bad loans they don't want to recognize.  

This situation is untenable.  For a currency union to work, there must be sufficient funds transferred into the depressed region, or a sufficient amount of labour must leave.  Even if all the debt is wiped out, the fundamental problem is not solved because it will happen again (unless German and French banks want to continuously underwrite bad loans to the south).

The euro will not survive as is.  I believe it will survive in some form but either members will leave or there will be a tighter political union.  The problem goes away if there is a tighter political union that facilitates the flow of capital from the north to the south.  But it is hard to see that happening.


----------



## Toro

Portugal cut to junk.

Fitch cuts Portugal credit rating to junk status - MarketWatch


----------



## ekrem

Toro said:


> &#8364;60 billion a year isn't enough to mitigate the pressure in the south.
> 
> Germany an exporter of capital is what one would expect from a country that runs a trade surplus with its partners.  Half of Germany's exports go to the rest of Europe, which is no surprise because Germany is more productive than the south.  When countries use the same currency, the relative price of the more productive country falls and the relative price of the less productive country rises.  *This is the fundamental problem with the eurozone.*  The more productive economy is more competitive and the less productive economy is less competitive.  Thus, the productive north sells more than the unproductive south.  To alleviate the pressures in the south, either capital has to come in or labour has to go out.



Since &#8364; was introduced the relative share of &#8364;-countries within Germany's foreign trade-volume decreased to 41% from 43%. 
There's a misconception that Germany is only a leading exporter because of the &#8364;-system. No, it does well generally on the world-market.
After Finland Germany has the lowest interconnectedness-rate within the &#8364;-system when it comes to intra-&#8364; trade.

(Prof from University Frankfurt writing for Frankfurter A. Zeitung).
Krise der Währungsunion: Der Euro ist nicht unser Schicksal - Europas Schuldenkrise - FAZ


----------



## ekrem

Germany is *world's* *2nd largest* exporter. It exports more then USA.
Germany has the world's 3rd largest trade-volume.
List of countries by exports - Wikipedia, the free encyclopedia
All with just 82 Million people.

In sectors like Machine and Engineering it has a world-market share near 20%.

http://www.gtai.com/fileadmin/user_...Overview_MachineryEquipment_June2011_GTAI.pdf


----------



## Trajan

ekrem said:


> The average Italian is wealthier than the average German.
> They should tax their people, they don't need bailouts or securities from Germany.



uhm, hello, the Italians have the largest underground economy in the EU already, rasikng rates won't work, they need to revamp the tax code and get more people paying less than the present rates, over time that will correct the underground economy, and increase revenue.


----------



## ekrem

Real wages in Greece have risen by 40% between 2000-2008:
Reallöhne: Griechen mit größtem Plus der EU-Staaten - Ausland - Politik - Wirtschaftswoche

Real wages in Germany, where red line represents real-wages and 2006 the basis of 100 points:
*Since 1991*






*Between 2000-2008:*
Germany is the only country where real wages decreased.






Now people are speaking of a "golden decade" for exports.
So, what's so special about the other -countries that justifies wage-increases and government-spending on unproductive models and debt?


----------



## Trajan

ekrem said:


> Real wages in Greece have risen by 40% between 2000-2008:
> Reallöhne: Griechen mit größtem Plus der EU-Staaten - Ausland - Politik - Wirtschaftswoche
> 
> Real wages in Germany, where red line represents real-wages and 2006 the basis of 100 points:
> *Since 1991*
> 
> 
> 
> 
> 
> 
> *Between 2000-2008:*
> Germany is the only country where real wages decreased.
> 
> 
> 
> 
> 
> 
> Now people are speaking of a "golden decade" for exports.
> So, what's so special about the other -countries that justifies wage-increases and government-spending on unproductive models and debt?



this is;  > The  EURO thread

what is the point you are trying to make?


----------



## Toro

I'm reading this piece with data from ECB on banks.  In the US, the loan to deposit ratio is 73%.  In the eurozone, it is 108%.  Deposits as a percentage of bank financing in the eurozone is 54%.  It is 76% in the US.  The ratio in the US has fallen by 20 points since the financial crisis.  This is because the US banks have deleveraged and decreased their reliance on wholesale financing, i.e. the capital and interbank markets.


----------



## ekrem

Trajan said:


> this is;  > The  EURO thread
> 
> what is the point you are trying to make?




The  is under stress. The reason is the debt-situation of the -countries and disproportional spending (debt) in relation to actual economic situation.
I asked what justifies this kind of real wage increases in those countries with such kind of problems without any significant performance either in productivity or exports. And as counter example I showed the situation in Germany, the country which is ultimately to save the .

Germans have stagnant real wages, and had painful reforms. Yet, they didn't go onto streets and demonstrated like the crisis-countries now do who take it as granted to be bailed out and who are not really willing to go the way of austerity,. but are expecting for German bailout.

I think my points are relevant, so what's the point you're trying to make ?


----------



## Trajan

ekrem said:


> Trajan said:
> 
> 
> 
> this is;  > The &#8364; EURO thread
> 
> what is the point you are trying to make?
> 
> 
> 
> 
> 
> The &#8364; is under stress. The reason is the debt-situation of the &#8364;-countries and disproportional spending (debt) in relation to actual economic situation.
> I asked what justifies this kind of real wage increases in those countries with such kind of problems without any significant performance either in productivity or exports. And as counter example I showed the situation in Germany, the country which is ultimately to save the &#8364;.
> 
> Germans have stagnant real wages, and had painful reforms. Yet, they didn't go onto streets and demonstrated like the crisis-countries now do who take it as granted to be bailed out and who are not really willing to go the way of austerity,. but are expecting for German bailout.
> 
> I think my points are relevant, so what's the point you're trying to make ?
Click to expand...




> The &#8364; is under stress. The reason is the debt-situation of the &#8364;-countries and disproportional spending (debt) in relation to actual economic situation.



*shrugs* ...you should have just said so. 

my point is  this was all preordained, due to the political nature of the Euro at its inception and the hide the salami what institutions are flat on their asses is just stringing the pain out. 

the euro was dead the day it was created, the funeral is coming, it should be tomorrow.


----------



## Toro

Ekrem is correct. Real wages have risen too much in the south relative to the north.  The EU does not have the institutions to address the imbalances that have arisen.  That's the political problem you correctly identified.


----------



## Trajan

Toro said:


> Ekrem is correct. Real wages have risen too much in the south relative to the north, and the EU does not have the institutions to address the imbalances that have arisen.



uhm....ok. Oh and pension costs..lets not forget those. 


oh, and, who are you talking too btw?


----------



## Trajan

* NOVEMBER 25, 2011

Options Dwindle for Euro Crisis 



The biggest question in Europe isn't what it was a few weeks ago. It is no longer just whether any of the 17 governments in the euro zone will default on its debts; increasingly it is whether the euro zone will survive in its current form at all.

On Thursday, it emerged that the European Central Bank is considering a dramatic extension of its longest loans to commercial banks, to stave off a potential collapse of the bloc's banking system.

Meanwhile, leaders of the Continent's three largest economies met and pledged to work toward the closer political and economic integration most analysts say is needed&#8212;but with no specifics, meaning the pace for such efforts still lags behind the market's demand.

Germany's failure to sell almost 40% of a &#8364;6 billion ($8 billion) bond issue at an auction Wednesday is, many analysts say, symptomatic of this new phase of the crisis, with investors beginning to question even the bloc's safest harbors.

Some experts think the poor auction result has been over-interpreted; they note that German yields remain at historic and healthy lows and that demand for them may momentarily be weakened by the recent flight to them from the increasingly risky bonds of their southern neighbors.

But on Thursday, concern over German bonds drove their yields up to near-convergence with the U.K.'s sovereign debt, which has no clear advantage beyond not being in euros. In recent weeks, borrowing costs for financially strong euro-zone governments such as the Netherlands and Finland have increased. Other high-rated European bonds&#8212;such as those for the European Financial Stability Facility&#8212;have struggled to find buyers.

If the first phase of the crisis saw investors fleeing from the periphery of the currency union to its core, the second has them fleeing the euro area altogether. 

more at-
Options Dwindle for Euro Crisis - WSJ.com


----------



## ekrem

Trajan said:


> the euro was dead the day it was created, the funeral is coming, it should be tomorrow.



Behind the EU and  are not only economic interests but enormous strategic interests. 
It's not dead because you wish it to be dead.

Forget Greece, read about corruption in Romania and Bulgaria who are already EU members and should one day enter -zone. There's significant mentality differences in some parts of Europe.
States need to be organized in an effective way and they need to increase tax revenues, EU has major plans from common defense policy (Army) to achieving the switch to green energy. All which needs money. 
No dolce-vita or corruption, and for this to happen there is no path other than centralization.

German Finance Minister:


> We can only achieve a political union if we have a crisis,


http://www.nytimes.com/2011/11/19/w...opes-crisis.html?_r=4&pagewanted=2&ref=global

I wouldn't bet on 's "funeral". It's more likely, that -zone will transform from a union of equals to a union controlled by the heavyweights. If the smaller states don't like it, they'll have to leave , go bankrupt and will be bought anyway by the heavyweights.
In some parts of -zone they already can't pay the social benefits without next payment tranches from EU-IMF, and their governments have been replaced by technocrats who do as they're told to do.


----------



## ekrem

Trajan said:


> Germany's failure to sell almost 40% of a 6 billion ($8 billion) bond issue at an auction Wednesday is, many analysts say, symptomatic of this new phase of the crisis, with investors beginning to question even the bloc's safest harbors.
> 
> Options Dwindle for Euro Crisis - WSJ.com



Since 's introduction it has happened 12 times already, that Germany couldn't sell her bonds completely. On 4 occasions Germany sold less than 65% of the volume it paced for sale. The 10-year  interest was very low, lower than inflation. 
At a higher interest there would've been more demand.

I posted it also in another thread:
Germany also brought 3-month bonds to the market this month.
*0.08%* interest.
Krisenprofiteur: Deutschland*kann sich fast umsonst verschulden - SPIEGEL ONLINE - Nachrichten - Wirtschaft

Why should investors continue to buy such kind of bonds when they can buy other European bonds with much higher interest for which ECB&Germany indirectly stand as security (Greek bailout).


----------



## Political Junky

The euro is down to $1.33.


----------



## PeteEU

Toro said:


> It is a problem for the same reason why it is a problem in Italy and Greece - the Spanish economy is not productive enough to grow at a fast enough rate to outgrow its debt.
> 
> The fact that Spain's debt would "only" be 80% of GDP isn't particularly relevant.  There is no magical threshold that a nation crosses when it suddenly becomes a problem.  Countries have defaulted when debt to GDP was 60%.  At other times, countries have not defaulted until debt has reached 130%.  Reinhardt and Rogoff have estimated that _on average_, a nation becomes vulnerable when debt hits 90%, but default can occur at much lower or much higher levels.  Japan is much higher and they have not defaulted.  It depends on the vagaries of the market.  And when the market stresses, the first to go are the weakest.  Spain is highly-indebted weak economy that uses a German currency.  That is a bad recipe.



And you dont get it...it is relevant the % of GDP numbers. They are the numbers being used to drive markets and countries into the ground by the media and the big financial institutions because they are easily digestible by the Joe Public. And the longer the crisis goes on because of lack of consumer demand and out right depression in the consumer mind, the more money some people are making....

Also we are still in the economic crisis started in 2008! The Spanish economy is weak, just like pretty much every economy because of the ramifications from the 2008 US sub-prime crash. Spain grew 4% or so in 2007 and had a massive budget surplus! Granted that was on the backs of the building boom, but still it grew. 

The problem is people like you seem to think that Spanish, Italian and so on economies will be flat lining and not growing at all forever. How realistic is that? Already the crisis has brought key changes in Spanish labour and business law, and with the new conservative government I suspect even more are on the way.



> Left-wingers whine about the market and don't understand it.  It wasn't an issue for the past 20 years because the market did not perceive it to be an issue.  It's not surprising that it is happening now because the market is figuring out the illogic of the eurozone as constructed.  It didn't matter when debts were lower and growth was higher.  It is happening now because the market has decided to make it an issue now.



And right wingers think the markets are the best thing since swiss chocolate... which is also a load of bullshit as we have seen time and time again when the supposed "free markets" have screwed up. 

The market fear on debt is highly biased towards certain nations and areas of the world and that is solely due to the Anglo-American influence on the financial world. Look at yesterday... Thanksgiving in the US.. the world markets are still up and running, but the  financial TV stations (owned by Americans) cant be bothered to show European market moves but show repeats of documentaries of mostly US companies and thanksgiving shows... who the FUCK cares about some stupid American holiday... the markets are open and should be reported from. 

The illogical part is the markets, they do not behave as they should because of huge bias towards the Anglo-American sphere of influence. For the love of god, the UK and US have massive deficits and zero plans to fix them and their debts are rising faster than anyone else (even Greece) and they still have some of the lowest yields out there... how logical is that? 



> In times of stress, the first to get cut off from the capital markets are the weakest credits.  We are in a time of stress because European banks have too little equity and European countries have too much debt and not enough growth.  When things are good, the cracks can be papered over.  When things turn bad, those cracks get exposed.  Overlay that with the internal illogic of the eurozone and you have a sovereign debt crisis.



Hog wash excuses for a broken market. European banks have plenty of equity on average, not to mention they will always have the backing of the national government when it comes to peoples money in the banks, and as for European countries having too much debt and not enough growth.. then answer me this..

Why is the UK having some of the lowest yields on the books, and yet its growth is basically negative since the only thing that made the UK economy grow last quarter was government spending.. and its deficit is at record highs as is its lending... 

And you forget yet again.. we are in an economic crisis thanks to the 2008 US sub-prime crash and in crisis there is no growth since the average person does not have the money or/and faith to go out and consume, which like it or not is a huge portion of most economies.



> The euro as designed was destined to fail.  The math and logic of it - despite the protestations of dreamy-eyed idealists - does not work.  It is fundamentally flawed economically.



No, it is flawed politically. The political aspects were not put in place for it to act like it should on an economic scale. That is fixable if the will is there. And dont bring math and logic into a political discussion, since you will loose every time. The Euro does work up to a point and it is up to the dreamy-eyed idealists to take it to the next level... question is if they are willing to do that. Considering the benefits of the Euro, then I hope they do and ignore the Anglo-American "experts" who are against the Euro and who have a vested interest in seeing it go away... world economic domination.



> It can work if the more productive north decides to subsidize the less productive south forever, or if the south becomes as productive as the north (and that's not going to happen).  So if the German, Dutch and Finnish taxpayer wants to send their money south forever, or if the Spanish, Italians and Greeks want to be as productive as the north, then the euro experiment can work.  Otherwise, it will fail as is.  And it is failing now.



Sorry but this text book bulllshit that has no sense of reality. The very idea that Germany and the other northern "non Eurozone" countries some how have been "bailing-out" the South for a long while is utter bullshit. If you had any clue on the Italian bond market, and on the situation in Spain then you would know otherwise. 

The problem in Spain is the labour market. It is very un-flexable. In Italy it is closed industries, that does not allow new members and hence competition. But like it or not, Northern Italy is competitive and productive as Germany even with this handicap. Fix these issue and you will change everything, something that the doom and gloom right wingers in the UK and US funny enough forget to mention.



> BofA is undercapitalized, but the American banks - including BofA - have raised hundreds of billions of dollars in equity and have removed hundreds of billions of dollars of bad assets off their books.  They are far, far better off than the European banks today.  This is not seriously debated by anyone.



Yes they have the ability to dump their bad assets on the US tax payer... If it had not been for Fannie and Freddie, then the US banks would be in a real shitter. 



> The European banks, for the most part, denied there was a problem, and resisted raising equity.  Now, they are woefully undercapitalized.  Dexia is done.  The Landesbanks in Germany are essentially insolvent.  The Spanish banks are bouyed by their Latin American assets but have their heads in the sand regarding their domestic market.  The Greek banks will be on life support.



The Spanish banks dont have their head in the sand.. quite the opposite. As for the rest. utter bullshit propoganda. Dexia is gone.. so fucking what? America looses banks almost daily lol. And Dexia is not gone per-say but sold off... that is how the markets work.. Landesbanks in Germany are insolvent? HAHHAHA. You do know what Landesbanks are right? Are you saying that the German state is now insolvent?



> And Italian banks are dumping their Italian bonds.



And this shows you have no clue on what is going on.



> European banks have been playing Pretend for some time now.  They have refused to shop their pools of assets because it would have required them taking marks on the loan books, which would have demonstrated they are woefully undercapitalized.  So they pretended there wasn't a problem.  Now the market is forcing them to dump their assets and shrink their balance sheets, and the banks hoping to buy enough time to find a solution.  They have to because they are shopping their best assets.  The best assets will get sold and the shittiest assets will get dumped on to the balance sheets of the states.



You do realise that you can exchange European with American right? You claim we have been ignoring our problems, when America is the country with a clusterfuck political system that cant agree on anything, has a huge deficit, massive debt on every level of government, and a massive personal debt of its citizens, and you say we are ignoring our problems? They are small compared to the hole the US is in and is ignoring totally by shifting focus to Europe and random war.... at least our personal debt levels in Europe are pathetically low (minus the UK) when compared to the US.... and yes that is important... very important even with our government debt levels. 



> I'm not the one claiming sainthood.  But we've gone through the fire, we've taken our medicine, and we aren't blaming anyone else.



What medicine lol? Nothing has changed in the US. No new regulations to prevent the crap happening again, no break up of the "too big to fail" banks (they have in fact gotten bigger and even more dangerous), zero consequences for those who created and caused the crisis and more and more secret subsidy payments to the banking sector via tax breaks, and Fannie and Freddie. So what "medicine" did you exactly take... kicking more people out on the street, making more people poor in the US?



> You're the one blaming your problems on others, brushing Europe's internal problems aside as if they are easily solvable - "Oh, Italy will be fine once it liberalizes its labour markets."  Yeah, good luck with that. Your banks are woefully undercapitalized and they resist doing anything about it.  Don't blame others if you got sold.  You sucked up the easy credit.  You bought the store.  That's on you.



Oh it is on us, but we did not start the cheap credit craze nor the current economic crisis... that is what we blame rightfully on the US. 

And yes it is easy to fix if given time. I have seen it done in Denmark and am seeing it being done in Spain. 5 years ago changes to the Spanish labour market laws would have been political suicide for any side of the political spectrum, but now both sides and the unions even are talking about it and have implemented changes. It can be done. What you want is changes over night, and that is impossible even for the US.... well especially the US. You have trillions you need to cut from your budget and yet you cant even agree on basic common sense cuts without making it into a political clusterfuck of a political ideology fight. 



> Yeah, right.  Get back to us when the IMF is involved in bailing out America like it is in Europe.



The IMF wont bail-out the US.. cant afford it. Which is in part why the world seems to ignore for now the big elephant in the room and its problems. 

The sad thing is, when Europe fixes its problems, then we still have to deal with the collapse of the US... guess we got to take one problem at a time.


----------



## editec

Trajan said:


> editec said:
> 
> 
> 
> One of the better discussion happening on this board.
> 
> Thanks for your input boys.
> 
> Clearly you're paying closer attention to the machinations of Europes debt crises than I am and I appreciate your POVs about it.
> 
> 
> 
> 
> and its pretty much 'contention' free
Click to expand...

 
Well there's differences of opinion regarding the issues at hand but at least the debate is about the issue, and it hasn't devolved into two or three clueless people trading personal insults.

If I can weight in here about this issue?

We have too much paper that represents assets that were overvalued.

SOMEBODY is going to have to take a haricut sooner or later.

If, as has been suggested, the Euro banks refuse to acknowedge that the debt insturments they are holding ar over valued?

The market is going to take them to school.


----------



## Toro

Trajan said:


> Toro said:
> 
> 
> 
> Ekrem is correct. Real wages have risen too much in the south relative to the north, and the EU does not have the institutions to address the imbalances that have arisen.
> 
> 
> 
> 
> uhm....ok. Oh and pension costs..lets not forget those.
> 
> 
> oh, and, who are you talking too btw?
Click to expand...


I'm talking to both of you.  You both have hit the problem correctly.  

Ekrem is correct because he has boiled down the fundamental problem in one sentence - southern wages are too high relative to their productivity.  You've hit the political problem since the eurozone as originally configured did not create the institutions to deal with the imbalances within the eurozone.


----------



## Toro

PeteEU said:


> And you dont get it...it is relevant the % of GDP numbers. They are the numbers being used to drive markets and countries into the ground by the media and the big financial institutions because they are easily digestible by the Joe Public. And the longer the crisis goes on because of lack of consumer demand and out right depression in the consumer mind, the more money some people are making....



Weird conspiracy theories about the press and financial companies conspiring to drive countries into the ground undermines your credibility, just as it does when you evoke the same conspiracy theories about ratings agencies.   

It appears that you either did not read or you did not comprehend what I wrote since I cited debt levels to GDP.  There is no magical threshold at which countries run into financial stress.  Some countries have defaulted at 60% debt to GDP, others not until 130% or higher.  The European countries are in the danger zone.  The fact that they have gone a long time with high debt levels is not relevant.  What is relevant is that it becomes an issue when financial markets are under duress.



> Also we are still in the economic crisis started in 2008! The Spanish economy is weak, just like pretty much every economy because of the ramifications from the 2008 US sub-prime crash. Spain grew 4% or so in 2007 and had a massive budget surplus! Granted that was on the backs of the building boom, but still it grew.
> 
> The problem is people like you seem to think that Spanish, Italian and so on economies will be flat lining and not growing at all forever. How realistic is that? Already the crisis has brought key changes in Spanish labour and business law, and with the new conservative government I suspect even more are on the way.



Spain grew as strong as it did _because_ it had a massive building boom.  Spain had its own housing bubble.  Spain feasted on easy credit.  Spain crashed because of Spain, not because of the US.  Germany didn't crash because of the US because Germany didn't have the structural imbalances Spain had.  But Spain did have the structural imbalances, so it crashed.  That had nothing to do with the US.

And nobody said that they didn't expect the Italian and Spanish economies to not grow forever.



> The illogical part is the markets, they do not behave as they should because of huge bias towards the Anglo-American sphere of influence. For the love of god, the UK and US have massive deficits and zero plans to fix them and their debts are rising faster than anyone else (even Greece) and they still have some of the lowest yields out there... how logical is that?



Until a few days ago, Germany had lower yields than the US.  Japan has lower yields than the US.  That's partly because Japan has its own currency and the ECB is an extension of the Bundesbank.  Yields are rising in Europe because the rot is spreading from the periphery to the core as markets perceive that French and German governments will eventually have to bail out the PIIGS.  The euro is like the old gold standard to the peripheral nations.  Investors see defaults and no ability to affect monetary policy.

It's not surprising that US yields are low.  The US is the biggest, strongest economy in the world and the dollar is the reserve currency, so this is where investors flee for safety.  But you make the mistake in assuming this is not logical because yields are low in the US _right now._  They might not be in the future.  Financial crises start at the weakest links then spread out.  There could be a dollar crisis and spike in Treasury yields in the future.



> Hog wash excuses for a broken market. European banks have plenty of equity on average,



No, they do not.  You are wrong.



> not to mention they will always have the backing of the national government when it comes to peoples money in the banks,



But you are probably right here.  I expect that if there are bank failures, then the European governments will back stop them.  But it is unknown what is going to happen, so investors sell first and banks stop lending to each other, or do so at higher prices, which is what is happening now.



> and as for European countries having too much debt and not enough growth.. then answer me this..
> 
> Why is the UK having some of the lowest yields on the books, and yet its growth is basically negative since the only thing that made the UK economy grow last quarter was government spending.. and its deficit is at record highs as is its lending...



For two reasons.  First, when growth is low, interest rates fall as demand for credit declines.  That is standard.  The second reason is because the UK uses its own currency.  The problem in the eurozone is not just the risk of default but also the inability of nations to be able to respond their own problems.  The logic of the eurozone does not work because the PIIGS are subject to German monetary policy.  This makes it more likely that the haircuts bondholders would endure would be even greater than if they had their own currencies because they will need to reduce their debts by even more to grow than if they had their own currencies.

And again, you are making the mistake by looking at what is happening _right now_.  British interest rates may be much higher in the future if investors think Britain will default.



> No, it is flawed politically. The political aspects were not put in place for it to act like it should on an economic scale. That is fixable if the will is there. And dont bring math and logic into a political discussion, since you will loose every time. The Euro does work up to a point and it is up to the dreamy-eyed idealists to take it to the next level... question is if they are willing to do that. Considering the benefits of the Euro, then I hope they do and ignore the Anglo-American "experts" who are against the Euro and who have a vested interest in seeing it go away... world economic domination.



Your arguments would have more credence if you didn't think everyone was out to get you.

As I have repeatedly said in this thread, the eurozone can work if the more productive nations are willing to subsidize the less productive nations, or if the less productive nations become more productive.  This is primarily a political problem.  But to ignore the math is to ignore reality.  The math doesn't work for the eurozone as currently configured.  The graves are filled with dreamy idealists.



> Sorry but this text book bulllshit that has no sense of reality. The very idea that Germany and the other northern "non Eurozone" countries some how *have been* "bailing-out" the South for a long while is utter bullshit. If you had any clue on the Italian bond market, and on the situation in Spain then you would know otherwise.
> 
> The problem in Spain is the labour market. It is very un-flexable. In Italy it is closed industries, that does not allow new members and hence competition. But like it or not, Northern Italy is competitive and productive as Germany even with this handicap. Fix these issue and you will change everything, something that the doom and gloom right wingers in the UK and US funny enough forget to mention.



Again, you either did not read what I said or did not comprehend it.  So I will post it again.



> It can work *if* the more productive north *decides to *subsidize the less productive south forever, or if the south becomes as productive as the north (and that's not going to happen). So if the German, Dutch and Finnish taxpayer *wants to* send their money south forever, or if the Spanish, Italians and Greeks *want to be* as productive as the north, then the euro experiment can work. Otherwise, it will fail as is. And it is failing now.



I don't know if English is your first language or not, but I have highlighted the tenses.  I did not say that the north *has been* bailing out the south, as you claim.  I said that the eurozone can work if the north *decides to* send resources to the south.  One is past tense, one is future tense.  

The eurozone can also work if the south becomes as productive as the north.  I agree with you regarding Spanish labour laws and Italian industries.  Those are examples of countries becoming more efficient.  Will those reforms occur, and will they be enough?  I don't know.  I doubt it but maybe I'm wrong.

As for the Italian bond market, I know a little bit about it.  I know that the &#8364;1.9 trillion dollar BTP market is primarily a domestic one.  So your bent of this being some Anglo-American conspiracy is pretty silly since it is the Italians who dominate that market.



> Yes they have the ability to dump their bad assets on the US tax payer... If it had not been for Fannie and Freddie, then the US banks would be in a real shitter.



They also dumped their shitty loans onto the FDIC, the Fed, and an alphabet soup of programs designed to offload bad loans to investors, and the SEC suspended mark to market accounting.  But they were also required to raise hundreds of billions of dollars in capital, sell assets, and recapitalize.  For the most part, they did.  But this did not happen on the same scale in Europe.  So today, European banks are weaker than American banks in general.  Of course you can always find one off examples, i.e. BofA, but in aggregate, American banks are stronger.



> The Spanish banks dont have their head in the sand.. quite the opposite. As for the rest. utter bullshit propoganda. Dexia is gone.. so fucking what? America looses banks almost daily lol. And Dexia is not gone per-say but sold off... that is how the markets work.. Landesbanks in Germany are insolvent? HAHHAHA. You do know what Landesbanks are right? Are you saying that the German state is now insolvent?
> 
> ... And this shows you have no clue on what is going on.



Actually, almost all of the people whom we have hired to do the work for us are European.  They have been into most of the European central banks and regulatory authorities.  We have people on the ground in Spain, France and Germany digging deep into the banks.  

And yes, based on their work, the Landesbanks are effectively insolvent if you mark their books to market.  The German banks, in aggregate, are the most undercapitalized in the developed world.  Of course, surely you understand that doesn't mean the German state is insolvent, since the state can raise taxes and recapitalize the banks.  If you're a dreamy euro idealist, this fact facilitates Germany eventually cutting a deal because it's banks aren't strong enough to withstand a tremendous shock to the eurozone system.



> What medicine lol? Nothing has changed in the US. No new regulations to prevent the crap happening again, no break up of the "too big to fail" banks (they have in fact gotten bigger and even more dangerous), zero consequences for those who created and caused the crisis and more and more secret subsidy payments to the banking sector via tax breaks, and Fannie and Freddie. So what "medicine" did you exactly take... kicking more people out on the street, making more people poor in the US?



The medicine we took was the write down hundreds of billions of dollars worth of loans, took massive losses, sold assets and raised hundreds of billions of dollars in equity, eviscerating shareholders.  That hasn't happened in Europe yet.  But it will.

I wish I could disagree with you that things have otherwise fundamentally changed, but I can't.


----------



## Trajan

ekrem said:


> Trajan said:
> 
> 
> 
> the euro was dead the day it was created, the funeral is coming, it should be tomorrow.
> 
> 
> 
> 
> Behind the EU and  are not only economic interests but enormous strategic interests.
> It's not dead because you wish it to be dead.
> 
> Forget Greece, read about corruption in Romania and Bulgaria who are already EU members and should one day enter -zone. There's significant mentality differences in some parts of Europe.
> States need to be organized in an effective way and they need to increase tax revenues, EU has major plans from common defense policy (Army) to achieving the switch to green energy. All which needs money.
> No dolce-vita or corruption, and for this to happen there is no path other than centralization.
> 
> German Finance Minister:
> 
> 
> 
> We can only achieve a political union if we have a crisis,
> 
> Click to expand...
> 
> http://www.nytimes.com/2011/11/19/w...opes-crisis.html?_r=4&pagewanted=2&ref=global
> 
> I wouldn't bet on 's "funeral". It's more likely, that -zone will transform from a union of equals to a union controlled by the heavyweights. If the smaller states don't like it, they'll have to leave , go bankrupt and will be bought anyway by the heavyweights.
> In some parts of -zone they already can't pay the social benefits without next payment tranches from EU-IMF, and their governments have been replaced by technocrats who do as they're told to do.
Click to expand...




first- I don't *wish* it dead. you are it appears taken up by the very same emotion that  created it, you THINK it should be and WANT it to be, except, social-human mechanics says- it CANNOT be.

I think it should die becasue its a mess and was never well thought out, as they began almost immediately to break their own rules....anyway, its going t happen, becasue thats the reality. 





    * NOVEMBER 25, 2011, 8:19 A.M. ET

Italian Yields Jump After Poor Auction 

FRANKFURTItalian two-year and five-year government-bond yields soared to euro-era highs Friday as investors began giving up on the euro zone's ability to break the political gridlock that is blocking a more decisive response to the currency bloc's debt crisis.

Italian two-year and five-year yields climbed to 7.7% and 7.8%, respectively, and the 10-year yield moved further above the key 7% mark to 7.3%.

more at-

Italian Yields Jump After Poor Auction - WSJ.com


----------



## Toro

I think the euro is going to survive but it is not inconceivable that it won't.  



> As the Italian government struggled to borrow and Spain considered seeking an international bail-out, British ministers privately warned that the break-up of the euro, once almost unthinkable, is now increasingly plausible.
> 
> Diplomats are preparing to help Britons abroad through a banking collapse and even riots arising from the debt crisis.
> 
> The Treasury confirmed earlier this month that contingency planning for a collapse is now under way.
> 
> A senior minister has now revealed the extent of the Government&#8217;s concern, saying that Britain is now planning on the basis that a euro collapse is now just a matter of time.
> 
> &#8220;It&#8217;s in our interests that they keep playing for time because that gives us more time to prepare,&#8221; the minister told the Daily Telegraph.
> 
> Recent Foreign and Commonwealth Office instructions to embassies and consulates request contingency planning for extreme scenarios including rioting and social unrest.
> 
> Greece has seen several outbreaks of civil disorder as its government struggles with its huge debts. British officials think similar scenes cannot be ruled out in other nations if the euro collapses.
> 
> Diplomats have also been told to prepare to help tens of thousands of British citizens in eurozone countries with the consequences of a financial collapse that would leave them unable to access bank accounts or even withdraw cash.
> 
> Fuelling the fears of financial markets for the euro, reports in Madrid yesterday suggested that the new Popular Party government could seek a bail-out from either the European Union rescue fund or the International Monetary Fund.
> 
> There are also growing fears for Italy, whose new government was forced to pay record interest rates on new bonds issued yesterday.
> 
> The yield on new six-month loans was 6.5 per cent, nearly double last month&#8217;s rate. And the yield on outstanding two-year loans was 7.8 per cent, well above the level considered unsustainable.
> 
> Italy&#8217;s new government will have to sell more than EURO 30 billion of new bonds by the end of January to refinance its debts. Analysts say there is no guarantee that investors will buy all of those bonds, which could force Italy to default.
> 
> The Italian government yesterday said that in talks with German Chancellor Angela Merkel and French President Nicolas Sarkozy, Prime Minister Mario Monti had agreed that an Italian collapse &#8220;would inevitably be the end of the euro.&#8221;
> 
> The EU treaties that created the euro and set its membership rules contain no provision for members to leave, meaning any break-up would be disorderly and potentially chaotic.
> 
> If eurozone governments defaulted on their debts, the European banks that hold many of their bonds would risk collapse.



Prepare for riots in euro collapse, Foreign Office warns - Telegraph


----------



## Toro

Merkel's opposition to eurobonds.



> Angela Merkel's response could hardly have been clearer. European Commission President Jose Manuel Barroso on Wednesday presented a study outlining the possible forms euro bonds could take -- whereupon the German chancellor found unusually unambiguous words in response. The proposal, she said, was "extraordinarily distressing." She also called it "inappropriate."
> 
> The reaction was unusually firm for Merkel. She has become notorious in Germany for shying away from positions that can't be wriggled out of later. But when it comes to pooling the debt of all euro-zone member states in the form of euro bonds, she has long been firm in her rejection. In December 2010, for example, she said "the euro zone needs more harmony and competitiveness rather than common euro-zone bonds." In September, she called euro bonds "absolutely wrong." Wednesday's outburst, in other words, should not come as a surprise.  ...
> 
> Germany has largely isolated itself in the ongoing European discussion over what steps should next be taken to confront the euro crisis. Governments across the Continent are clamoring for a solution. And analysts around the world have come to the conclusion that the spread of Europe's ongoing debt crisis can only be halted by implementing one -- or both -- of two methods: Either debt must be pooled in the form of euro bonds, or the European Central Bank must become the lender of last resort by buying up massive quantities of sovereign bonds from indebted euro-zone members.
> 
> Virtually all euro-zone members have thrown their support behind one of those two antidotes. Germany, though, has firmly opposed both. Berlin fears that massive ECB bond purchases could significantly drive up inflation (indeed, it evokes fears of 1920s hyperinflation in the country) and sacrifice the independence of the Frankfurt institution, which was modelled after the German central bank, the Bundesbank, that for decades served as guardian of the highly stable deutsche mark. And it's opposition to euro bonds? SPIEGEL ONLINE provides an overview of the most important reasons.
> 
> ... Euro bonds, though, would essentially transform Germany -- and its solid, AAA credit rating -- into the strongest guarantor of collectivized euro-zone debt. And, should worse come to worst, German taxpayers would, once again, be forced to fork over. That, at least, would appear to be the widespread fear. A survey performed by Emnid in August found that fully 76 percent of Germans oppose euro bonds, with only 15 percent in favor. ...
> 
> Less than 2 percent. That was the interest rate being commanded by German 10-year government Bund bonds on Wednesday. Indeed, there are some analysts who would argue that Berlin's inability to find buyers for its entire bond issue was not necessarily an indication of growing wariness of euro-zone debt. Rather, it showed merely that, with such a low return, they simply weren't all that attractive.
> 
> That particular view of the situation was not widely shared, however. Most saw the shortfall as another sign that the euro-zone crisis is frightening investors off. And on Thursday, interest rates on German bonds shot upwards to 2.26 percent. "This is just one auction," Don Smith, an analyst with ICAP, told the Financial Times. "But there is a growing feeling among many in the markets that the crisis is heading one way -- and that is towards the break-up of the euro zone." ...
> 
> By pooling euro-zone debt, however, euro bonds would likely make it more expensive for Germany to borrow. Some models under consideration would, of course, allow Germany to continue to issue its own sovereign bonds. But it seems certain that the interest rates on those bonds, too, would rise were the country to become a guarantor of pooled euro-zone debt. And with a debt load of over 2.2 trillion, representing 81.2 percent of the country's gross domestic product, a lasting increase in German bond yields would translate to billions more needed to service that debt.
> 
> In September, Germany's Constitutional Court handed down a landmark ruling on the country's participation in bailout efforts for Greece and for other heavily indebted euro-zone countries. While the court allowed Berlin to go ahead on its planned support for the European Financial Stability Facility (EFSF), it made it clear that any additional moves to aid fellow euro-zone member states would be viewed negatively.
> 
> Specifically, the ruling clearly indicated that Germany's constitution frowns on any permanent mechanism to transfer German taxpayer money to foreign countries in the form of a bailout. The larger such payments are, the larger the frown. The court also specifically warned against a situation whereby foreign governments could trigger payments of German guarantees through their actions. ...
> 
> euro bonds would be an entirely different case. Wolfgang Münchau, the Financial Times columnist who recently began writing editorials for SPIEGEL ONLINE, points out that they would be everything that the German Constitutional Court finds questionable about bailout programs thus far. They would have the potential to make Germany liable for debts incurred by other countries in the euro zone, the program would be huge (otherwise there would be no point in introducing them in the first place) and German guarantees could be triggered by the actions of foreign governments. "The court's verdict leaves me no alternative but to conclude that (euro bonds) are indeed unconstitutional," Münchau wrote in the Financial Times in September. ...




The Return of 'Madame Non': Why Merkel Remains Opposed to Euro Bonds - SPIEGEL ONLINE - News - International


----------



## Toro

> Now an even bigger calamity is looking likelier. The intensifying financial pressure raises the chances of a disorderly default by a government, a run of retail deposits on banks short of cash, or a revolt against austerity that would mark the start of the break-up of the euro zone. ...
> 
> Consider the three ingredients for recession: a credit crunch, tighter fiscal policy and a dearth of confidence. In aggregate, European banks loans exceed their deposits, so they rely on wholesale fundsshort-term bills, longer-term bonds or loans from other banksto bridge the gap. But investors are becoming warier of lending to banks that have euro-zone bonds on their books and that can no longer rely on the backing of governments with borrowing troubles of their own. Long-term bond issues have become scarce and American money-market funds, hitherto buyers of short-term bank bills, are running scared. ...
> 
> The drying-up of funding for sovereigns and for banks is a threat to the integrity of the euro, because of the stark divide between debtor and creditor countries within the zone.  ...
> 
> *During the credit boom, cheap capital flowed into Greece, Ireland, Portugal and Spain to finance trade deficits and housing booms. As a result, the net foreign liabilitieswhat businesses, householders and government owe to foreigners, less the foreign assets they ownof all four are close to 100% of GDP. (By comparison, Americas net foreign liabilities are 17% of GDP.) Much of their debt is being financed by local bank borrowing or bonds sold to investors in creditor countries, such as Germany. *Ireland is unusual in that a large chunk of what it owes is in the form of equity (all those American-owned factories and offices) and so does not need to be refinanced.
> 
> 
> 
> 
> 
> 
> 
> With a few exceptions, the benchmark cost of credit in each euro-zone country is related to the balance of its international debts. Germany, which is owed more than it owes, still has low bond yields; Greece, which is heavily in debt to foreigners, has a high cost of borrowing (see chart 2). Portugal, Greece and (to a lesser extent) Spain still have big current-account deficits, and so are still adding to their already high foreign liabilities. Refinancing these is becoming harder and putting strain on local banks and credit availability.
> 
> The higher the cost of funding becomes, the more money flows out to foreigners to service these debts. This is why the issue of national solvency goes beyond what governments owe. The euro zone is showing the symptoms of an internal balance-of-payments crisis, with self-fulfilling runs on countries, because at bottom that is the nature of its troubles. And such crises put extraordinary pressure on exchange-rate pegs, no matter how permanent policymakers claim them to be.
> 
> One of the initial attractions of euro membership for peripheral countriesaccess to cheap fundsno longer applies. If a messy default is forced upon a euro-zone country, it might be tempted to reinvent its own currency. Indeed, it may have little option. That way, at least, it could write down the value of its private and public debts, as well as cutting its wages and prices relative to those abroad, improving its competitiveness. The switch would be hugely costly for debtors and creditors alike. But the alternative is scarcely more appealing. Austerity, high unemployment, social unrest, high borrowing costs and banking chaos seem likely either way. ...
> 
> Market gurus and other students of misaligned stock, bond or home prices often say that although it is easy to spot an asset-price bubble, it is impossible to know the event that finally pricks it. In much the same way, the likeliest trigger for a disintegration of the euro is unknowable. But there are plenty of candidates. ...



The euro: Beware of falling masonry | The Economist


----------



## editec

The euro: Beware of falling masonry | The Economist 

What a chilling read _that_ was, Toro.  

Thanks for bringing it to my attention.


----------



## Trajan

Toro said:


> I think the euro is going to survive but it is not inconceivable that it won't.



...well yes it can go either way. 

I will say-  it won't. It can't. 

for this carefully contrived  house of cards to  survive, whats required is a  total, and I mean total restructuring in how the weaker gov.s do biz. and I mean from who gets a truck drivers license to who gets to open a pharmacy, thats how much control some of these nations states have over enterprise in their countries. This and the welfare state cum pension system cannot survive in the form its natives demand as they have become accustomed to it. 

to say that they,  the great unwashed would take a bath in newly minted or from under the mattress poorer than euro drachmas/francs etc.  if they jumped the euro is an argument in MITIGATION. 

they are boxed in and what is true when he said it is still true today in every use;

"You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the time."


----------



## Trajan

humm, word on the street is the German central bank is ready to drop growth outlook to or  below .5 % next year....is a downgrade coming for Germany?


----------



## Toro

Trajan said:


> humm, word on the street is the German central bank is ready to drop growth outlook to or  below .5 % next year....is a downgrade coming for Germany?



No.


----------



## Trajan

so what to make of this; 


Europe's Leaders Pursue New Pact
Deal Would Bring Closer Fiscal Ties

BERLIN&#8212;Euro-zone leaders are negotiating a potentially groundbreaking fiscal pact aimed at preventing the currency bloc from fracturing by tethering its members even closer together.

The proposal, which hasn't yet been agreed to, would make budget discipline legally binding and enforceable by European authorities. Officials regard the moves as a first step toward closer fiscal and economic coordination within the currency area. That would mark a seminal shift in the governance of the 17-nation euro-zone.

European officials hope a new agreement, which would aim to shrink the excessive public debt that helped spark the crisis, would persuade the European Central Bank to undertake more drastic action to reverse the recent selloff in euro-zone debt markets.

The proposed pact represents the boldest attempt by Europe's leaders to halt the spread of the crisis since they agreed in July to offer Greece a new bailout and to bolster the region's bailout fund. Those steps, initially hailed as a breakthrough, quickly proved insufficient.

snip-

As recently as this summer, measures such as a centralized fiscal-enforcement authority with power to seize control of national budgets would have been viewed in most capitals as an unacceptable invasion of sovereignty. That such steps are now under serious consideration reflects the perilous turn the crisis has taken in recent months.

more at-
Europe's Leaders Pursue New Pact - WSJ.com



didn't they have rules in the Maastricht treaty that demanded gdp debt ration limits etc etc? now they think that say Greece et al will turn over the direct power to allocate national departmental funding to...the EU? seriously?

 In effect this would be tantamount to say,  allowing Peking to dictate our budget if sold them bonds..... 

They are desperate now, that is clear, I can smell it.


----------



## Wiseacre

Trajan said:


> so what to make of this;
> 
> 
> Europe's Leaders Pursue New Pact
> Deal Would Bring Closer Fiscal Ties
> 
> BERLINEuro-zone leaders are negotiating a potentially groundbreaking fiscal pact aimed at preventing the currency bloc from fracturing by tethering its members even closer together.
> 
> The proposal, which hasn't yet been agreed to, would make budget discipline legally binding and enforceable by European authorities. Officials regard the moves as a first step toward closer fiscal and economic coordination within the currency area. That would mark a seminal shift in the governance of the 17-nation euro-zone.
> 
> European officials hope a new agreement, which would aim to shrink the excessive public debt that helped spark the crisis, would persuade the European Central Bank to undertake more drastic action to reverse the recent selloff in euro-zone debt markets.
> 
> The proposed pact represents the boldest attempt by Europe's leaders to halt the spread of the crisis since they agreed in July to offer Greece a new bailout and to bolster the region's bailout fund. Those steps, initially hailed as a breakthrough, quickly proved insufficient.
> 
> snip-
> 
> As recently as this summer, measures such as a centralized fiscal-enforcement authority with power to seize control of national budgets would have been viewed in most capitals as an unacceptable invasion of sovereignty. That such steps are now under serious consideration reflects the perilous turn the crisis has taken in recent months.
> 
> more at-
> Europe's Leaders Pursue New Pact - WSJ.com
> 
> 
> 
> didn't they have rules in the Maastricht treaty that demanded gdp debt ration limits etc etc? now they think that say Greece et al will turn over the direct power to allocate national departmental funding to...the EU? seriously?
> 
> In effect this would be tantamount to say,  allowing Peking to dictate our budget if sold them bonds.....
> 
> They are desperate now, that is clear, I can smell it.




Yes, that treaty has to be changed and ratified.   Which is problematical, there's some countries who won't give up any part of their sovereignty.   Some countries are gonna pull out, the question is who and when.   Don't know that anybody cares a whole lot about Greece, but Italy is another matter.


----------



## Zander

Interesting take by Peter Schiff.....well worth the time to read. 



> With fiscal time bombs ticking in both Europe and the United States, the pertinent question for now seems to be which will explode first. For much of the past few months it looked as if Europe was set to blow. But Angela Merkel's refusal to support a Federal Reserve style bailout of European sovereigns and her recent statement the she had no Hank Paulson style fiscal bazooka in her handbag, has lowered the heat. In contrast, the utter failure of the Congressional Super Committee in the United States to come up with any shred of success in addressing America's fiscal problems has sparked a renewed realization that America's fuse is dangerously short.
> 
> Chancellor Merkel has been emphatic that European politicians not be given a monetary crutch similar to the one relied on by their American counterparts. Her laudable goal, much derided on the editorial pages of the New York Times, is to defuse Europe's debt bomb with substantive budget reforms, and as a result to make the euro "the strongest currency in the world." Much has been made of the poorly received auction today of German Government bonds, with some saying the lack of demand (which pushed yields on 10-year German Bonds past 2% --hardly indicative of panic selling) is evidence of investor unease with Merkel's economic policies. I would argue the opposite: that many investors still think that Merkel is bluffing and that eventually Germany will print and stimulate like everyone else. It is likely for this reason that yields on German debt have increased modestly.
> 
> In contrast, the U.S. is crystal clear in its intention to ignore its debt problems. With the failure of the Super Committee this week it actually became official. American politicians will not, under any circumstances willingly confront our underlying debt crisis. While the outcome of the Super Committee shouldn't have come as a great surprise, the sheer dysfunction displayed should serve as a wakeup call for those who still harbor any desperate illusions. Some members of Congress, such as John McCain, have even come out against the $1.2 trillion in automatic spending cuts that would go into effect in January 2013. Expect more politicians of both parties to cravenly follow suit.
> 
> Over the next decade, the U.S. government expects to spend more than $40 trillion. Even if the $1.2 trillion in automatic cuts are allowed to go through, the amount totals just 3% of the expected outlays. In a masterstroke of hypocritical accounting, $216 billion of these proposed "cuts" merely represent the expected reductions in interest payments that would result from $984 billion of actual cuts. These cuts won't make a noticeable dent in our projected deficits, which if history can be any guide, will likely rise by much more as economic reality proves far gloomier than government statisticians predict. Finally, the cuts are not cuts in the ordinary sense of the word, where spending is actually reduced. They are cuts in the baseline, which means spending merely increases less than what was previously budgeted.
> 
> In the mean time, the prospect of sovereign default in Europe is driving "safe" haven demand for the dollar. So contrary to the political blame game, Europe's problems are actually providing a temporary boost to America's bubble economy. However, a resolution to the crisis in Europe could reverse those flows. And given the discipline emanating from Berlin, a real solution is not out of the question. If confidence can be restored there, each episodic flight to safety may be less focused on the U.S. dollar. Instead, risk-averse investors may prefer a basket of other, higher-yielding, more fiscally sustainable currencies.
> 
> The irony is that Europe is actually being criticized for its failure to follow America's lead. This misplaced criticism is based on the mistaken belief that our approach worked. It did not. Sure, it may have delayed the explosion, but only by assuring a much larger one in the future. In the mean time, many have mistaken the delay for success.
> 
> However, if Merkel's hard line works, and real cuts follow, Europe will be praised for blazing a different trail. As a result the euro could rally and the dollar sinks. Commodity prices will rise, putting even more upward pressure on consumer prices and interest rates in the United States.
> 
> Any significant reversal of the current upward dollar trend could provide a long awaited catalyst for nations holding large dollar reserves to diversify into other currencies. My guess is that Merkel understands the great advantage the U.S. has enjoyed as the issuer of the world's reserve currency. I believe she covets that prize for Europe, and based on her strategy, it is clearly within her reach.
> 
> There is an old saving that one often does not appreciate what one has until it's lost. The nearly criminal foolishness now on display in Washington may finally force the rest of the world to cancel our reserve currency privileges. The loss may give Americans a profound appreciation of this concept.


----------



## Trajan

Zander said:


> Interesting take by Peter Schiff.....well worth the time to read.
> 
> 
> 
> 
> With fiscal time bombs ticking in both Europe and the United States, the pertinent question for now seems to be which will explode first. For much of the past few months it looked as if Europe was set to blow. But Angela Merkel's refusal to support a Federal Reserve style bailout of European sovereigns and her recent statement the she had no Hank Paulson style fiscal bazooka in her handbag, has lowered the heat. In contrast, the utter failure of the Congressional Super Committee in the United States to come up with any shred of success in addressing America's fiscal problems has sparked a renewed realization that America's fuse is dangerously short.
> 
> Chancellor Merkel has been emphatic that European politicians not be given a monetary crutch similar to the one relied on by their American counterparts. Her laudable goal, much derided on the editorial pages of the New York Times, is to defuse Europe's debt bomb with substantive budget reforms, and as a result to make the euro "the strongest currency in the world." Much has been made of the poorly received auction today of German Government bonds, with some saying the lack of demand (which pushed yields on 10-year German Bonds past 2% --hardly indicative of panic selling) is evidence of investor unease with Merkel's economic policies. I would argue the opposite: that many investors still think that Merkel is bluffing and that eventually Germany will print and stimulate like everyone else. It is likely for this reason that yields on German debt have increased modestly.
> 
> In contrast, the U.S. is crystal clear in its intention to ignore its debt problems. With the failure of the Super Committee this week it actually became official. American politicians will not, under any circumstances willingly confront our underlying debt crisis. While the outcome of the Super Committee shouldn't have come as a great surprise, the sheer dysfunction displayed should serve as a wakeup call for those who still harbor any desperate illusions. Some members of Congress, such as John McCain, have even come out against the $1.2 trillion in automatic spending cuts that would go into effect in January 2013. Expect more politicians of both parties to cravenly follow suit.
> 
> Over the next decade, the U.S. government expects to spend more than $40 trillion. Even if the $1.2 trillion in automatic cuts are allowed to go through, the amount totals just 3% of the expected outlays. In a masterstroke of hypocritical accounting, $216 billion of these proposed "cuts" merely represent the expected reductions in interest payments that would result from $984 billion of actual cuts. These cuts won't make a noticeable dent in our projected deficits, which if history can be any guide, will likely rise by much more as economic reality proves far gloomier than government statisticians predict. Finally, the cuts are not cuts in the ordinary sense of the word, where spending is actually reduced. They are cuts in the baseline, which means spending merely increases less than what was previously budgeted.
> 
> In the mean time, the prospect of sovereign default in Europe is driving "safe" haven demand for the dollar. So contrary to the political blame game, Europe's problems are actually providing a temporary boost to America's bubble economy. However, a resolution to the crisis in Europe could reverse those flows. And given the discipline emanating from Berlin, a real solution is not out of the question. If confidence can be restored there, each episodic flight to safety may be less focused on the U.S. dollar. Instead, risk-averse investors may prefer a basket of other, higher-yielding, more fiscally sustainable currencies.
> 
> The irony is that Europe is actually being criticized for its failure to follow America's lead. This misplaced criticism is based on the mistaken belief that our approach worked. It did not. Sure, it may have delayed the explosion, but only by assuring a much larger one in the future. In the mean time, many have mistaken the delay for success.
> 
> However, if Merkel's hard line works, and real cuts follow, Europe will be praised for blazing a different trail. As a result the euro could rally and the dollar sinks. Commodity prices will rise, putting even more upward pressure on consumer prices and interest rates in the United States.
> 
> Any significant reversal of the current upward dollar trend could provide a long awaited catalyst for nations holding large dollar reserves to diversify into other currencies. My guess is that Merkel understands the great advantage the U.S. has enjoyed as the issuer of the world's reserve currency. I believe she covets that prize for Europe, and based on her strategy, it is clearly within her reach.
> 
> There is an old saving that one often does not appreciate what one has until it's lost. The nearly criminal foolishness now on display in Washington may finally force the rest of the world to cancel our reserve currency privileges. The loss may give Americans a profound appreciation of this concept.
Click to expand...


thx A-man...

this;

_ Finally, the cuts are not cuts in the ordinary sense of the word, where spending is actually reduced. They are cuts in the baseline, which means spending merely increases less than what was previously budgeted._

is what I have been saying and at the risk of going off Euro for a moment, in what nation in what universe is trying to cut spending in a country that already borrows  40 cents of EVERY single dollar we spend every single day an infamnia? why here of course...

and his points on the EU unwittingly shielding us from inflationary blowback, as he alludes, this to shall pass, good Christ when they get their shit together, we'll be in for some hard sledding.


----------



## Toro

Several good articles today.

79% of Germans oppose the issuance of Eurobonds.  Hence, there will be no Eurobonds.

Poll: Germans strongly against eurobonds - BusinessWeek

Per ekrem's point, the PIIGS have become uncompetitive because wages have risen too much.






Here's The REAL Reason Germany Doesn't Want The ECB To Print Money

Egan Jones cuts Italy's bond ratings to BB.  That is junk.

Egan Jones Downgrades Italy From BB+ To BB, Projects 157% Debt/GDP By 2014 | ZeroHedge


----------



## Trajan

Toro said:


> Several good articles today.
> 
> 79% of Germans oppose the issuance of Eurobonds.  Hence, there will be no Eurobonds.
> 
> Poll: Germans strongly against eurobonds - BusinessWeek
> 
> Per ekrem's point, the PIIGS have become uncompetitive because wages have risen too much.
> 
> 
> 
> 
> 
> 
> Here's The REAL Reason Germany Doesn't Want The ECB To Print Money
> 
> Egan Jones cuts Italy's bond ratings to BB.  That is junk.
> 
> Egan Jones Downgrades Italy From BB+ To BB, Projects 157% Debt/GDP By 2014 | ZeroHedge



do those wage calcs count benefits


----------



## Toro

> Moodys Investors Service said its considering lowering debt ratings for banks in 15 European nations reflecting the potential removal of government support.




Moody


----------



## Wiseacre

Toro said:


> Moodys Investors Service said its considering lowering debt ratings for banks in 15 European nations reflecting the potential removal of government support.
> 
> 
> 
> 
> 
> Moody
Click to expand...



I believe they're taking a hard look at France right now.   I wouldn't be at all surprised if they didn't get downgraded pretty soon.


----------



## Toro

> Some European nations, struggling to find buyers for their bonds, are pressuring their own already-stressed banks to fill the gap by acting as lenders of last resortin certain cases, pushing the amount of risky European debt on those institutions' books even higher.
> 
> Italy and Portugal, among other European governments, are leaning on their banks to continue buyingor at least to stop sellinggovernment bonds, according to people familiar with the matter.
> 
> Meanwhile, in Spain and other European countries, the quantities of loans banks are doling out to local and national governments have been rising sharply.
> 
> The pressure reflects mounting worry in Europe's financially shaky countries that, without buyers, their own borrowing costs will spiral out of control. At the same time it presents banks with a paradox: While investors and regulators want the banks to sell off their holdings of European sovereign debt, local politicians are twisting arms to make sure they don't. ...
> 
> Lackluster demand for the bonds could push the countries' borrowing costs into unsustainable territory. To make sure that doesn't happen, banks in each country are likely to face heavy pressure to participate in the auctions, experts say. Already, they are among the biggest holders of the bonds, accounting for about 16% of Italy's outstanding government debt securities and about 23% in Portugal.
> 
> The deep financial links between European governments and their banks have played a part in fueling the Continent's debt crisis. Banks across Europe are collectively holding hundreds of billions of euros of bonds issued by countries that investors fear are at risk of default. Worries about whether the banks are strong enough to survive losses on their government-bond holdings have ignited fears that strained governments might need to bail out their banks.
> 
> Investors have been punishing banks holding big portfolios of debt issued by countries such as Greece, Ireland, Italy, Portugal and Spain. And regulators have provided further reason for banks to pare their positions. The European Banking Authority is in the process of calculating new capital requirements for banks, based partly on their holdings of risky government bonds. The more such bonds they're holding, the more capital they will need to protect against potential losses.
> 
> The situation has prompted many big lenders in Europe and the U.S. to rapidly sell down their holdings, which they accumulated in an era when the high-yielding bonds were viewed as virtually risk-free.
> 
> Yet as those pressures bear down on the banks, governments are running out of options for borrowing money and increasingly turning to their banks for help. That is further entrenching the kinds of financial ties causing heartburn among investors, regulators and policy makers.
> 
> When some European banks have begun selling chunks of their sovereign debt in the market, their governments have urged them to stop, according to people familiar with the matter. In some cases, the requests have persuaded banks to stop shrinking their government-bond portfolios, the people said.
> 
> "We know that if we reduce our exposure, we'll be killed by the Italian Treasury," a senior Italian bank executive said. Echoing other people familiar with the matter, the executive described receiving phone calls from Treasury officials exerting "friendly pressure" after his bank unloaded some Italian government bonds. ...
> 
> Some governments are approaching banks for loans to finance their day-to-day operations.
> 
> In Spain, bank loans to the public sector increased 14% in the first nine months of the year, reaching a record of 87 billion, according to the Bank of Spain. It's the only loan segment that's growing, and it came as overall lending fell 2.6%, the sharpest drop on record.



European Nations Pressure Own Banks for Loans - WSJ.com


----------



## KissMy

Greece gets it's 6th bailout traunch of $7.7 billion.


----------



## Wiseacre

..BRUSSELS (AP) &#8212; Officials in Brussels say eurozone finance ministers have approved an &#8364;8 billion ($10.7 billion) bailout loan installment for Greece.

Without the loan Greece would have run out of cash and been in default before Christmas.

The EU had demanded, and received, letters from the leaders of Greece's main political parties pledging support for tough austerity measures to get the loan.

The installment is part of a &#8364;110 billion ($150 billion) bailout package from eurozone nations and the International Monetary Fund that has kept Greece afloat since May 2010.

The officials spoke on condition of anonymity to divulge information while the meeting was still going on.

..

So, not official yet.   Oooohhh, letters of support, I'll bet the German voters are appeased now.   Can, meet foot.


----------



## Toro

> It is increasingly clear that Italy&#8217;s public debt is unsustainable and needs an orderly restructuring to avert a disorderly default. The eurozone&#8217;s wish to exclude private sector involvement from the design of the new European Stability Mechanism is pig-headed &#8211; and lacks all credibility.
> 
> With public debt at 120 per cent of gross domestic product, real interest rates close to five per cent and zero growth, Italy would need a primary surplus of five per cent of gross domestic product &#8211; not the current near-zero &#8211; merely to stabilise its debt. Soon real rates will be higher and growth negative. Moreover, the austerity that the European Central Bank and Germany are imposing on Italy will turn recession into depression. ...



More

EconoMonitor : Nouriel Roubini's Global EconoMonitor » Italy


----------



## Toro

I thought this was excellent.

EconoMonitor : Don&#039;t Shoot the Messenger » Last Days of Pompeii?

A small blip.



> Secondly there is the problem of population ageing. The figures below show the transformation in Italys population pyramid between 1970 and 2030. In many ways Italys demography was at the most favourable point for economic growth (supply side) around 1990 (third figure top row) since the proportion of the total population in the working age group was at near its maximum, and the median age of the workforce was still relatively low. The point to get is that it isnt simply the level of debt that is the problem, it is the level of debt in the context of  the implicit liabilities (in terms of health and pensions) which such population ageing represents, and the reduced growth outlook that having declining and ageing populations represents. Europes leaders are essentially in denial on the extent of this problem, and are putting all their eggs in the structural reforms to raise trend growth basket.


----------



## ekrem

Maturity of Greek bonds in **





Spanish bonds





Italian bonds


----------



## PeteEU

Interesting graphs ekrem, explains a lot.


----------



## PeteEU

Toro said:


> I thought this was excellent.
> 
> EconoMonitor : Don't Shoot the Messenger » Last Days of Pompeii?
> 
> A small blip.
> 
> 
> 
> 
> Secondly there is the problem of population ageing. The figures below show the transformation in Italys population pyramid between 1970 and 2030. In many ways Italys demography was at the most favourable point for economic growth (supply side) around 1990 (third figure top row) since the proportion of the total population in the working age group was at near its maximum, and the median age of the workforce was still relatively low. The point to get is that it isnt simply the level of debt that is the problem, it is the level of debt in the context of  the implicit liabilities (in terms of health and pensions) which such population ageing represents, and the reduced growth outlook that having declining and ageing populations represents. Europes leaders are essentially in denial on the extent of this problem, and are putting all their eggs in the structural reforms to raise trend growth basket.
Click to expand...


Yea yea I have seen that before and while I dont dispute the fact that Italy's population is getting older (all western industrialised nations are getting older), I do have serious issues with not only the people behind such reports but those that are promoting them. They more than often have a political agenda that would imply a gutting of the wealth fare state and a return to "the good old days" of the early industrial revolution with mass poverty, slave/child labour and so on. 

It is all and well pointing out an issue like ageing populations, but using partisan debunked ideas of getting rid of universal healthcare, and the wealth fare state as a whole, is nothing but moronic. 

As populations get older, things change. People work longer because they can or want or are forced too.. that is life. Also these demographic changes, the big evil used by especially the right to promote a political stance, are all based on the one fact that nothing changes in society from the status quo, and how realistic is that? It is the same bullshit with "muslim birth rates and the taking over of Europe by muslims".

But changing our societies in the drastic ways that some on the right want just because they hate the idea of UHC and helping people, is simply not going to happen.. it would mean a dramatic cut in living standards that would cause revolutions and wars. Those advocating massive changes are deluding themselves far more than Europeans who want and believe in the wealth fare state.


----------



## Toro

PeteEU said:


> Toro said:
> 
> 
> 
> I thought this was excellent.
> 
> EconoMonitor : Don't Shoot the Messenger » Last Days of Pompeii?
> 
> A small blip.
> 
> 
> 
> 
> Secondly there is the problem of population ageing. The figures below show the transformation in Italys population pyramid between 1970 and 2030. In many ways Italys demography was at the most favourable point for economic growth (supply side) around 1990 (third figure top row) since the proportion of the total population in the working age group was at near its maximum, and the median age of the workforce was still relatively low. The point to get is that it isnt simply the level of debt that is the problem, it is the level of debt in the context of  the implicit liabilities (in terms of health and pensions) which such population ageing represents, and the reduced growth outlook that having declining and ageing populations represents. Europes leaders are essentially in denial on the extent of this problem, and are putting all their eggs in the structural reforms to raise trend growth basket.
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Click to expand...
> 
> 
> Yea yea I have seen that before and while I dont dispute the fact that Italy's population is getting older (all western industrialised nations are getting older), I do have serious issues with not only the people behind such reports but those that are promoting them. They more than often have a political agenda that would imply a gutting of the wealth fare state and a return to "the good old days" of the early industrial revolution with mass poverty, slave/child labour and so on.
> 
> It is all and well pointing out an issue like ageing populations, but using partisan debunked ideas of getting rid of universal healthcare, and the wealth fare state as a whole, is nothing but moronic.
> 
> As populations get older, things change. People work longer because they can or want or are forced too.. that is life. Also these demographic changes, the big evil used by especially the right to promote a political stance, are all based on the one fact that nothing changes in society from the status quo, and how realistic is that? It is the same bullshit with "muslim birth rates and the taking over of Europe by muslims".
> 
> But changing our societies in the drastic ways that some on the right want just because they hate the idea of UHC and helping people, is simply not going to happen.. it would mean a dramatic cut in living standards that would cause revolutions and wars. Those advocating massive changes are deluding themselves far more than Europeans who want and believe in the wealth fare state.
Click to expand...


And here we are, the evil right-wing Anglo-American conspiracy between the media, ratings agencies and the banks who have a political and economic agenda to make Europe fail, pushing Italian yields above 7%.  Yes, yes, it's all very clear now.



Outstanding.


----------



## Toro

ekrem said:


> Maturity of Greek bonds in **
> 
> 
> 
> 
> 
> Spanish bonds
> 
> 
> 
> 
> 
> Italian bonds



Spain and Italy have 400 billion of debt to refinance next year.

Should be fun!


----------



## KissMy

Toro said:


> Several good articles today.
> 
> 79% of Germans oppose the issuance of Eurobonds.  Hence, there will be no Eurobonds.
> 
> Poll: Germans strongly against eurobonds - BusinessWeek
> 
> Per ekrem's point, the PIIGS have become uncompetitive because wages have risen too much.
> 
> Here's The REAL Reason Germany Doesn't Want The ECB To Print Money
> 
> Egan Jones cuts Italy's bond ratings to BB.  That is junk.
> 
> Egan Jones Downgrades Italy From BB+ To BB, Projects 157% Debt/GDP By 2014 | ZeroHedge



You know - when they bailed out everything over here that 93% of us opposed it & only 2% supported it, yet they still did it anyway. The Germans are in the same boat. Will they let the Euro fail? I have been believing that they might, but now think the leaders will take the world all the way to the edge of the cliff & let 1 or 2 banks & possibly a small country fail so the population gets a clue before they bail the whole thing out. So far there have been at least 2 banking failures due to the 50% Greece write-down. It just took a massive global coordinated Central Bank liquidity injection just to prevent massive bank failures before the December 9th Euro meeting that will determine the fate of the Euro & Global Economy.


----------



## ekrem

Toro said:


> Spain and Italy have 400 billion of debt to refinance next year.
> 
> Should be fun!



And Spain and Italy make 29% of the EU-contribution to the EFSF 
European Financial Stability Facility - Wikipedia, the free encyclopedia

This means, that if a -country has to be bailed-out, the financial strains for Italy/Spain will increase besides the debt-refinancing in 2012 as they've a guaranteed contribution to the EFSF.


----------



## Trajan

this is such bullshit.  sorry but I am sick to death of a) this market rah rah crap, becasue b) we have just strung out the tragedy for a few more days on our dime too apparently.....

By JON HILSENRATH, WILLIAM LAUNDER and JEFFREY SPARSHOTT
_
WASHINGTON &#8212; The world's major central banks launched a joint action to provide cheap, emergency U.S. dollar loans to banks in Europe and elsewhere, a sign of growing alarm among policy makers about stresses in Europe and in the global financial system. _

http://online.wsj.com/article/SB100...9960192509068.html?mod=WSJ_Home_largeHeadline

unreal, we are so frucked ourselves,  why yes lets just lend a sinking ship money at the family rate while we soak or deny small business here...wonderful. 

oh and if they try the IMF end run,( the ECB prints money, gives it to the IMF who then lend/gives it to the nations who don't have the discipline/where with all, nor the productivity to pay it back, see- down a black hole/money pit). where in  we, and  the non European members of the IMF would be on the hook for the lions share  share of that cash,  congress, every last one of them should be taken out and shot. seriously, that would be the sell out of all sell outs.  

This reinforcing failure has got to stop.

Its amazing to me the number of schizo sheep that inhabit wall st and the markets, a run up of 400 after another useless headline for- " hey we got a plan", ' plan', to be followed by a drop of 400 over 2 days when once again this 'plan' falls apart and only the real insiders,  sitting in the middle make  money only. nice.


----------



## Trajan

KissMy said:


> Toro said:
> 
> 
> 
> Several good articles today.
> 
> 79% of Germans oppose the issuance of Eurobonds.  Hence, there will be no Eurobonds.
> 
> Poll: Germans strongly against eurobonds - BusinessWeek
> 
> Per ekrem's point, the PIIGS have become uncompetitive because wages have risen too much.
> 
> Here's The REAL Reason Germany Doesn't Want The ECB To Print Money
> 
> Egan Jones cuts Italy's bond ratings to BB.  That is junk.
> 
> Egan Jones Downgrades Italy From BB+ To BB, Projects 157% Debt/GDP By 2014 | ZeroHedge
> 
> 
> 
> 
> You know - when they bailed out everything over here that 93% of us opposed it & only 2% supported it, yet they still did it anyway. The Germans are in the same boat. Will they let the Euro fail? I have been believing that they might, but now think the leaders will take the world all the way to the edge of the cliff & let 1 or 2 banks & possibly a small country fail so the population gets a clue before they bail the whole thing out. So far there have been at least 2 banking failures due to the 50% Greece write-down. It just took a massive global coordinated Central Bank liquidity injection just to prevent massive bank failures before the December 9th Euro meeting that will determine the fate of the Euro & Global Economy.
Click to expand...



in others words you buy the bears sterns/ lehman bros. scenario? 

maybe but, when the 'Lehman' happens they could easily lose control.


----------



## Trajan

Toro said:


> I thought this was excellent.
> 
> EconoMonitor : Don't Shoot the Messenger » Last Days of Pompeii?
> 
> A small blip.
> 
> 
> 
> 
> Secondly there is the problem of population ageing. The figures below show the transformation in Italys population pyramid between 1970 and 2030. In many ways Italys demography was at the most favourable point for economic growth (supply side) around 1990 (third figure top row) since the proportion of the total population in the working age group was at near its maximum, and the median age of the workforce was still relatively low. The point to get is that it isnt simply the level of debt that is the problem, it is the level of debt in the context of  the implicit liabilities (in terms of health and pensions) which such population ageing represents, and the reduced growth outlook that having declining and ageing populations represents. Europes leaders are essentially in denial on the extent of this problem, and are putting all their eggs in the structural reforms to raise trend growth basket.
Click to expand...


no offense,  but Mark Steyn has been all over this for years.


----------



## Toro

Trajan said:


> this is such bullshit.  sorry but I am sick to death of a) this market rah rah crap, becasue b) we have just strung out the tragedy for a few more days on our dime too apparently.....
> 
> By JON HILSENRATH, WILLIAM LAUNDER and JEFFREY SPARSHOTT
> _
> WASHINGTON &mdash; The world's major central banks launched a joint action to provide cheap, emergency U.S. dollar loans to banks in Europe and elsewhere, a sign of growing alarm among policy makers about stresses in Europe and in the global financial system. _
> 
> http://online.wsj.com/article/SB100...9960192509068.html?mod=WSJ_Home_largeHeadline
> 
> unreal, we are so frucked ourselves,  why yes lets just lend a sinking ship money at the family rate while we soak or deny small business here...wonderful.
> 
> oh and if they try the IMF end run,( the ECB prints money, gives it to the IMF who then lend/gives it to the nations who don't have the discipline/where with all, nor the productivity to pay it back, see- down a black hole/money pit). where in  we, and  the non European members of the IMF would be on the hook for the lions share  share of that cash,  congress, every last one of them should be taken out and shot. seriously, that would be the sell out of all sell outs.
> 
> This reinforcing failure has got to stop.
> 
> Its amazing to me the number of schizo sheep that inhabit wall st and the markets, a run up of 400 after another useless headline for- " hey we got a plan", ' plan', to be followed by a drop of 400 over 2 days when once again this 'plan' falls apart and only the real insiders,  sitting in the middle make  money only. nice.



I'm happier than a pig in shit. (Yes I'm aware of the analogy.) I had been buying gold and silver all week, and made a big buy yesterday!  Sometimes it's better to be lucky than good!

BTW these are just the swap line rates. We will have forgotten all about this in a few weeks time.


----------



## Toro

Trajan said:


> Toro said:
> 
> 
> 
> I thought this was excellent.
> 
> EconoMonitor : Don't Shoot the Messenger » Last Days of Pompeii?
> 
> A small blip.
> 
> 
> 
> 
> Secondly there is the problem of population ageing. The figures below show the transformation in Italy&#146;s population pyramid between 1970 and 2030. In many ways Italy&#146;s demography was at the most favourable point for economic growth (supply side) around 1990 (third figure top row) since the proportion of the total population in the working age group was at near its maximum, and the median age of the workforce was still relatively low. The point to get is that it isn&#146;t simply the level of debt that is the problem, it is the level of debt in the context of  the implicit liabilities (in terms of health and pensions) which such population ageing represents, and the reduced growth outlook that having declining and ageing populations represents. Europe&#146;s leaders are essentially in denial on the extent of this problem, and are putting all their eggs in the &#147;structural reforms to raise trend growth&#148; basket.
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Click to expand...
> 
> 
> no offense,  but Mark Steyn has been all over this for years.
Click to expand...


Were you short this morning?  Just curious. 

The book Boom Bust and Echo, written 20 years ago, said the same thing. It is interesting nonetheless. (And Steyn rocks!)


----------



## KissMy

Productivity due to innovation can cover for productivity due to population.


----------



## Trajan

Toro said:


> Trajan said:
> 
> 
> 
> 
> 
> Toro said:
> 
> 
> 
> I thought this was excellent.
> 
> EconoMonitor : Don't Shoot the Messenger » Last Days of Pompeii?
> 
> A small blip.
> 
> 
> 
> 
> no offense,  but Mark Steyn has been all over this for years.
> 
> Click to expand...
> 
> 
> Were you short this morning?  Just curious.
> 
> The book Boom Bust and Echo, written 20 years ago, said the same thing. It is interesting nonetheless. (And Steyn rocks!)
Click to expand...


nope. and yes he does.


----------



## spectrumc01

Trajan said:


> this is such bullshit.  sorry but I am sick to death of a) this market rah rah crap, becasue b) we have just strung out the tragedy for a few more days on our dime too apparently.....
> 
> By JON HILSENRATH, WILLIAM LAUNDER and JEFFREY SPARSHOTT
> _
> WASHINGTON  The world's major central banks launched a joint action to provide cheap, emergency U.S. dollar loans to banks in Europe and elsewhere, a sign of growing alarm among policy makers about stresses in Europe and in the global financial system. _
> 
> Central Banks Take Coordinated Action - WSJ.com
> 
> unreal, we are so frucked ourselves,  why yes lets just lend a sinking ship money at the family rate while we soak or deny small business here...wonderful.
> 
> oh and if they try the IMF end run,( the ECB prints money, gives it to the IMF who then lend/gives it to the nations who don't have the discipline/where with all, nor the productivity to pay it back, see- down a black hole/money pit). where in  we, and  the non European members of the IMF would be on the hook for the lions share  share of that cash,  congress, every last one of them should be taken out and shot. seriously, that would be the sell out of all sell outs.
> 
> This reinforcing failure has got to stop.
> 
> Its amazing to me the number of schizo sheep that inhabit wall st and the markets, a run up of 400 after another useless headline for- " hey we got a plan", ' plan', to be followed by a drop of 400 over 2 days when once again this 'plan' falls apart and only the real insiders,  sitting in the middle make  money only. nice.



Hey, hey, now the markets and Wall street are all for it.
Millionaires and billionaires getting more american tax dollars.
Where is the Tea Party?
OWS is still under attack, are they still wrong?

I share your outrage
Democrats and Republicans were all for the bail out, go figure.


----------



## Trajan

gotta love it...I am seriously, this is not to  to start any politics here but really, when is/are these OSW types going to wake up? And in the real world with a REAL Media apparatus doing what the founders thought they would do, everyone would understand this and everyone r/l/c would be pissed off. 

7 trillion under the table out of sight in TARP and......cue up the GF music-


    * DECEMBER 1, 2011

Wall Street Pushed Federal Reserve for Europe Action 

Wall Street executives, in a private meeting with a top Federal Reserve official in late September, recommended a coordinated effort by central banks to remedy the European financial crisis, according to Fed documents received in an open-records request.

The meeting, led by Louis Bacon, founder of hedge fund Moore Capital Management, preceded a joint action Wednesday by the world's major central banks, which banded together to provide liquidity to the markets through cheap U.S. dollar loans. 

more at-
Wall Street Pushed Fed on Europe - WSJ.com


so with Cor-zone down for the count, Bernbank IN gov., who IS the new Wall st. Godfather pulling wee timmy  and Bernbanks strings? Bacon one of the Heads of the 5 Families oops, I mean members of the Investor Advisory Committee on Financial Markets committee?


----------



## Wiseacre

The Fed already has a lot of toxic debt on it's balance sheet, adding still more debt from Europe seems like a step in the wrong direction.   Unless the real truth is that the risks of contagion here is greater than what we're being told, or that we're closer to a global meltdown than we know.   A part of me wonders if this is a political move to avoid a recession over there that could migrate over here and influence Obama's re-election chances.

So - we will make loans to them, which doesn't have to be approved by Congress if the Fed does it.   Maybe we get paid back someday, all or part of it.   Our dollar gets weaker, which means exports go up if we can find any buyers, but prices here also go up for the American consumer.   They get to kick the can down the road a little bit longer, but the underlying problems still exist and have not been addressed.  Does that about sum it up?


----------



## Trajan

Wiseacre said:


> The Fed already has a lot of toxic debt on it's balance sheet, adding still more debt from Europe seems like a step in the wrong direction.   Unless the real truth is that the risks of contagion here is greater than what we're being told, or that we're closer to a global meltdown than we know.   A part of me wonders if this is a political move to avoid a recession over there that could migrate over here and influence Obama's re-election chances.
> 
> So - we will make loans to them, which doesn't have to be approved by Congress if the Fed does it.   Maybe we get paid back someday, all or part of it.   Our dollar gets weaker, which means exports go up if we can find any buyers, but prices here also go up for the American consumer.   They get to kick the can down the road a little bit longer, but the underlying problems still exist and have not been addressed.  Does that about sum it up?



recession over there? my man, 'theys be recessed', the media has just not been making much of it and of course due to some cleverly crafted esoteric bullshit, formula they aren't 'officially' recessed...

check this-







this chart tells me 2 other things aside from the naked numbers, 1) they are recessed  and 2) you don't need Panzers and a Lutfwaffe to be hated. I suspect Merkel is wrestling with that part of the German consciousness of guilt. And brother, I bet Sarkozy presses that button every chances he gets.


----------



## Toro

Yields have collapsed this week for Spain, France and Italy. 

Europe is saved!


----------



## Trajan

Toro said:


> Yields have collapsed this week for Spain, France and Italy.
> 
> Europe is saved!



tongue in cheek you little devil you.


----------



## Toro

American banks: Contagion? What contagion? | The Economist


----------



## ekrem




----------



## ekrem




----------



## editec

> ...America&#8217;s banks are reasonably healthy. They have significantly bolstered capital since 2008 and now boast core capital of 9% of assets, well above regulatory requirements


 
Well _shoot!._  If the FED had given me trillions of dollars in ZERO PERCENT LOANS, money that I could then lend back to the FEDERAL GOVERNMENT at 3% interest, I guess I'd be reasonably economically healthy, too.

Guess, now that the FED has given enough CORPORATE WELFARE to the US Banksters, they'll also have to make whole the US BANSTERS' VICTIMS, too.


----------



## KissMy

EFSF gets downgraded. The end is near!


----------



## Trajan

KissMy said:


> EFSF gets downgraded. The end is near!



I so prophesied 2 pages ago and was told NO, when asked if Germany would be DGed etc etc...they are all on several  Ratings co. lists, as a grp. individually, Germany too.....I demand prophecy rep you mortals!!!!!!!!!!!!!!

    * DECEMBER 6, 2011, 9:52 A.M. ET

S&P Threatens EFSF Downgrade


S&P Threatens EFSF Downgrade - WSJ.com


----------



## Trajan

a visual representation....France? AAA?  *chuckle*...


----------



## Toro

Draghi, gettin' street cred with da Germans!


----------



## FireFly

It all comes crashing down after tomorrow.


----------



## Trajan

always good..



Hitler hears about the eurozone downgrade - YouTube

"Go and get the D-Marks"...


----------



## KissMy

Toro said:


> Draghi, gettin' street cred with da Germans!



There goes the economy!


----------



## Toro

Europe&#8217;s disastrous summit | Felix Salmon


----------



## Trajan

Toro said:


> Europes disastrous summit | Felix Salmon




is anyone up on their Eliot?Why he wrote it and what he was trying to say...the seeds could have been sonw there... they thought not,  that they could fool nature, but each other,not.  

from the Hollow Men-

    This is the way the world ends
    This is the way the world ends
    This is the way the world ends
    Not with a bang but a whimper. 


and my fav?

"Mistah Kurtz - _he dead_"


----------



## PeteEU

Toro said:


> Europes disastrous summit | Felix Salmon



Weird article.. almost as if it was written before the summit even started. Not much of what he writes is reflective of what actually happened at the summit or the actual facts of the issue.


----------



## KissMy

Printing presses are now running full time to keep the EU a-float until they get a working united governmental budget structure with teeth in place. This will likely take them 2 years. There will be an awful lot of printing going on until then. The Euro-zone will now become a successive string of bailouts. It started with EFSF then global coordination of central bankers & next the ESM. The Euro-zone economies will weaken in-spite of the devalued Euro. Negative GDP for some EU countries.


----------



## Trajan

KissMy said:


> Printing presses are now running full time to keep the EU a-float until they get a working united governmental budget structure with teeth in place. This will likely take them 2 years. There will be an awful lot of printing going on until then. The Euro-zone will now become a successive string of bailouts. It started with EFSF then global coordination of central bankers & next the ESM. The Euro-zone economies will weaken in-spite of the devalued Euro. Negative GDP for some EU countries.



the IMF has never been a 'pro growth' outfit. were they go, the 'sag' follows. look, raising taxes in say Greece or Italy, both of whom have HUGE underground economies is a non starter, aside from turning even more folks into law breakers as tax cheats and generating a profligate disrespect for tax authority and regulation,  they won't realize half of what they claim on paper. Greece is already giving up on collecting taxes they have enacted. 

Its the age old definition of insanity;  doing the same over and over expecting different results. 

They need to somehow some way, destroy the old paradigm of work regs rules and top down economic mgt. they have been using.

does any know for instance how a long haul trucker in Greece or Italy gets a license to do so? the gov. has a cap on the number of licenses it allows at any one time. the market in these licenses is like a taxi lic. (Medallion) in NYC. Its willed to family members or sold under ground from one person to  another, no growth, no competition.

Want to open a pharmacy? If its within a certain distance of another pharmacy, nope, no dice. I could go on............but you get the picture.


----------



## Toro

Niall Ferguson: Great Britain Saves Itself by Rejecting the EU - The Daily Beast


----------



## Toro

> Let's put aside the above concerns for a minute.  When all is said and done, I am still amazed that the outcome of this summit is being described as a move toward fiscal union.  It is not that - it is commitment to unified fiscal austerity, nothing more.  Consider just a strict enforcement of the 3% deficit ceiling in light of actual deficits in the EU.  Via NPR:
> 
> 
> 
> 
> 
> 
> Just on the surface, it is tough to see any commitment to fiscal austerity as credible.  Germany itself exceeded the targets in 7 out of the past 11 years.  Talk about the pot calling the kettle black.  France missed 6 in the past 11 years.  And Italy 8 times.  Thus, in addition to the periphery nations, the biggest economies in the Eurozone will all need to increase government saving to meet these targets.
> 
> Such saving will be attempted in the context of a recession in which the private sector also will be increasing savings as well.  In other words, the public sector will be engaging in massive pro-cyclical fiscal policy as the recession intensifies.  You have to imagine the end result is a substantial deflationary environment.



A Mixed Bag From Europe - Tim Duy's Fed Watch


----------



## Trajan

Toro said:


> Niall Ferguson: Great Britain Saves Itself by Rejecting the EU - The Daily Beast



When hasn't Britain walked its own path vis a vis Europe? 

This should be entirely consistent with the Brits character. 

There is and was huge pressure brought by the usual suspects, academics, the Fabian elitists, Eurotrash set  that wanted the UK to dump the Pound back then and they have not given up, they are applying the pressure on Cameron to cave right now. But the rubes didn't roll over then, who's laughing now?


----------



## Toro

JOHN TAYLOR: The ECB Is Taking On Massive Risks That Would Make Even Ben Bernanke Blush


----------



## Trajan

Toro said:


> Let's put aside the above concerns for a minute.  When all is said and done, I am still amazed that the outcome of this summit is being described as a move toward fiscal union.  It is not that - it is commitment to unified fiscal austerity, nothing more.  Consider just a strict enforcement of the 3% deficit ceiling in light of actual deficits in the EU.  Via NPR:
> 
> 
> 
> 
> 
> 
> 
> Just on the surface, it is tough to see any commitment to fiscal austerity as credible.  Germany itself exceeded the targets in 7 out of the past 11 years.  Talk about the pot calling the kettle black.  France missed 6 in the past 11 years.  And Italy 8 times.  Thus, in addition to the periphery nations, the biggest economies in the Eurozone will all need to increase government saving to meet these targets.
> 
> Such saving will be attempted in the context of a recession in which the private sector also will be increasing savings as well.  In other words, the public sector will be engaging in massive pro-cyclical fiscal policy as the recession intensifies.  You have to imagine the end result is a substantial deflationary environment.
> 
> 
> 
> 
> A Mixed Bag From Europe - Tim Duy's Fed Watch
Click to expand...


and in GOOD times, Italy , since 2000 never got above 2% a year, so, no growth then. Now? without it? the walking dead.


----------



## PeteEU

KissMy said:


> Printing presses are now running full time to keep the EU a-float until they get a working united governmental budget structure with teeth in place. This will likely take them 2 years. There will be an awful lot of printing going on until then. The Euro-zone will now become a successive string of bailouts. It started with EFSF then global coordination of central bankers & next the ESM. The Euro-zone economies will weaken in-spite of the devalued Euro. Negative GDP for some EU countries.



What planet are you on because it is certainly not on planet Earth. The Euro printing presses are not running full time.. would be nice, but they aint.


----------



## Ringel05

PeteEU said:


> KissMy said:
> 
> 
> 
> Printing presses are now running full time to keep the EU a-float until they get a working united governmental budget structure with teeth in place. This will likely take them 2 years. There will be an awful lot of printing going on until then. The Euro-zone will now become a successive string of bailouts. It started with EFSF then global coordination of central bankers & next the ESM. The Euro-zone economies will weaken in-spite of the devalued Euro. Negative GDP for some EU countries.
> 
> 
> 
> 
> What planet are you on because it is certainly not on planet Earth. The Euro printing presses are not running full time.. would be nice, but they aint.
Click to expand...


It's a euphemism for rampant or potentially rampant inflation.


----------



## Zander

Question: A Greek, an Italian and a Spaniard walk into a bar. Who picks up the tab?

Answer: The Americans.


----------



## Dr Grump

Zander said:


> Question: A Greek, an Italian and a Spaniard walk into a bar. Who picks up the tab?
> 
> Answer: The Americans.



The correct answer is Germans or French...


----------



## Munin

Zander said:


> Question: A Greek, an Italian and a Spaniard walk into a bar. Who picks up the tab?
> 
> Answer: The Americans.



Hahaha, you must be dreaming that the Americans can pay the tab. In the real world it is the Germans that pay the biggest price for the European mess. 


And who pays the bill when 3 American capitalists walk into a bar?

Answer: A Chinese communist


----------



## Trajan

from the ministry of fantabulous psychopathy;


"Calls have been mounting for the ECB to act as a lender of last resort to crisis-hit euro-zone sovereign states. The ECB must *boost financial stability without weakening its credibility*, Mr. Draghi added as a reason for the ECB rejecting large-scale government bond buys."

who in the hell is he kidding?






ECB Will Provide Unlimited Liquidity to Banks, Draghi Says - WSJ.com


----------



## Zander

Dr Grump said:


> Zander said:
> 
> 
> 
> Question: A Greek, an Italian and a Spaniard walk into a bar. Who picks up the tab?
> 
> Answer: The Americans.
> 
> 
> 
> 
> The correct answer is Germans or French...
Click to expand...


not really...
Fed Bails Out European Banks
Federal Reserve Bails Out Europe. | Elliott Wave Market Service


----------



## JimBowie1958

Zander said:


> Dr Grump said:
> 
> 
> 
> 
> 
> Zander said:
> 
> 
> 
> Question: A Greek, an Italian and a Spaniard walk into a bar. Who picks up the tab?
> 
> Answer: The Americans.
> 
> 
> 
> 
> The correct answer is Germans or French...
> 
> Click to expand...
> 
> 
> not really...
> Fed Bails Out European Banks
> Federal Reserve Bails Out Europe. | Elliott Wave Market Service
Click to expand...


The Italian banks have more than $2 TRILLION in bad debt, and Spain over $1.2 TRILLION.

The ECB has only $150 BILLION and about $50 BILLION is pledged by Spain and Italy.

No one is fixing this situation.  The best solution is put as much distance between you and the crash when it comes, unless you know how to surf that Mother of all financial Tidal Waves.


----------



## Zander

We are not in a recovery. We are in the early stages of a global depression. Europe is just the first domino.....wake me up in 2016.


----------



## Trajan

Zander said:


> We are not in a recovery. We are in the early stages of a global depression. Europe is just the first domino.....wake me up in 2016.



*sigh*..

ECB lends banks $639 billion over 3 years

FRANKFURT, Germany (AP) &#8212; The European Central Bank flipped its credit tap wide open Wednesday to help Europe's troubled banking system, allowing hundreds of nervous banks to take out a record euro489 billion ($639 billion) in loans.

The move was the biggest ECB infusion of credit into the banking system in the 13-year history of the shared euro currency. It aimed to keep the Europe's debt crisis from choking off credit to businesses &#8212; since a credit crunch could cause a continent-wide recession that would make the debt loads hanging over the 17 nations that use the euro even harder to pay.

Many European banks are also having trouble borrowing normally from other banks &#8212; everyone is afraid they won't get paid back because the banks they are lending to may have large amounts of risky European government bonds.

*The ECB loans to 523 banks surpassed the euro442 billion ($578 billion) in one-year loans from June 2009, when the global financial system was reeling from the collapse of the U.S. investment bank Lehman Brothers.*

More at-

ECB lends banks $639 billion over 3 years - Yahoo! News


a lot of those banks had also passed stress tests back in late April early summer. this is all such BS. What is the ECB demanding as  collateral backing these loans? Sovereign debt?


----------



## Wiseacre

Kicking that can.   I don't see any good news coming for the EU, as far as their economy is concerned.   Even if all the countries sign up for more stringent fiscal rules, they can't or won't be able to live up to whatever the new agreement is.


----------



## Colin

Hans, a middle-aged German tourist on his first visit to Orlando, Florida, finds the red light district and enters a large brothel. The madam asks him to be seated and sends over a young lady to entertain him.

They sit and talk, frolic a little, giggle a bit, drink a bit, and she sits on his lap. He whispers in her ear and she gasps and runs away! Seeing this, the madam sends over a more experienced lady to entertain the gentleman.

They sit and talk, frolic a little, giggle a bit, drink a bit, and she sits on his lap. He whispers in her ear, and she too screams, "No!" and walks quickly away.

The madam is surprised that this ordinary looking man has asked for something so outrageous that her two girls will have nothing to do with him. She decides that only her most experienced lady, Lola, will do. Lola has never said no, and it's not likely anything would surprise her. So the madam sends her over to Hans. The sit and talk, frolic a little, giggle a bit, drink a bit, and she sits on his lap. He whispers in her ear and she screams, "NO WAY, BUDDY!" and smacks him as hard as she can and leaves.

Madam is by now absolutely intrigued, having seen nothing like this in all her years of operating a brothel. She hasn't done the bedroom work herself for a long time, but she's sure she has said yes to everything a man could possibly ask for. She just has to find out what this man wants that has made her girls so angry. Besides she sees a chance to teach her employees a lesson.

So she goes over to Hans and says that she's the best in the house and is available. She sits and talks with him. They frolic, giggle, drink and then she sits in his lap.

Hans leans forwards and whispers in her ear, "Can I pay in Euros?"


----------



## Jos

Yet you can  pay with paper and green ink....for now?


----------



## JStone

Jos said:


> Yet you can  pay with paper and green ink....for now?



Posting, again, during your 18-hour daily siesta, puta?


----------



## Trajan

a one stop  shoppe for Britain's  debt picture.....its a pretty graphic and pretty friggin awful. 400% of gdp? wow, simply wow. 

the forum shrunk the image, see the original and entirely legible graphic here-

http://www.borrowmoneyonline.co.uk/images/uk-debt-infographic.jpg


----------



## Trajan

JStone said:


> Jos said:
> 
> 
> 
> Yet you can  pay with paper and green ink....for now?
> 
> 
> 
> 
> Posting, again, during your 18-hour daily siesta, puta?
Click to expand...


this is an acrimony free thread, please leave that elsewhere, thx much.


----------



## Wiseacre

From what I read, Germany is about to enter a recession or is about to.   Maybe not a nasty one, but things ain't looking real good right now over there.

http://www.bloomberg.com/news/2012-...-sovereign-debt-crisis-weighs-on-exports.html


----------



## Trajan

Wiseacre said:


> From what I read, Germany is about to enter a recession or is about to.   Maybe not a nasty one, but things ain't looking real good right now over there.
> 
> Germany on Brink of Recession as Euro Debt Crisis Damps Exports: Economy - Bloomberg



the whole joint is going down...France and Germany underwrote insurance for aprox. 240 Billion euros of sovereign debt last year, which they are going to have to cough up in the next 6 months, Italy alone has approx 1.5 TRILLION euros in debt to roll over. Spain, new election meant totally new party in power,  here comes the austerity, no growth there.........Germany exports, great well, they won't be exporting much to the rest of the EU and china is slowing and will hit a real nice size speed bump here in oh 4-6 months....gonna be another long year.


----------



## Zander

The problems in Europe are helping, not hindering, the U.S economy -at least for now. The fact that the dollar is perceived as a safe haven acts as a sort of self-fulfilling prophesy. Investors flee the Euro and pile into US Dollars (mainly treasuries- which lowers interest rates). The Dollar then rises to reflect the increased demand. The increase validates the decision to buy in the first place, and attracts even more buyers looking to profit from its appreciation. It's a nice ride while it lasts.   

But when reality rears its ugly head and the spell breaks, the reversal will be vicious.


----------



## Wiseacre

France and Austria down one notch, Italy and Spain down 2 notches.   Italy is getting close to junk status for it's bonds, they and Spain are significant parts of the EU.


----------



## JimBowie1958

Wiseacre said:


> France and Austria down one notch, Italy and Spain down 2 notches.   Italy is getting close to junk status for it's bonds, they and Spain are significant parts of the EU.



And as their interest rates go up in order to auction their bonds, the proportion of their budget required to pay interest on existing debt grows as well.

Which makes keeping ones obligations to honor ones debts that much harder.


----------



## KissMy

Nine Countries have been downgraded

Austria, France, Malta, Slovakia and Slovenia have all been cut by one-notch

Cyprus, Italy, Portugal and Spain have been cut by two notches.

Germany, the Netherlands, Belgium, Estonia, Finland, Ireland and Luxembourg have all seen their ratings affirmed.

5 Euro countries are rated as Junk Bond Status or worse.

- Austria cut by one notch to AA+ Outlook Negative
- Belgium keeps it's AA Outlook Negative
- Cyprus cut by two notches to BB+ Outlook Negative
- Estonia keeps it's AA- Outlook Negative
- France cut by one notch to AA+ Outlook Negative
- Finland keeps its AAA Outlook cut to Negative
- Germany keeps it's AAA Outlook Stable
- Greece keeps it's CCC Debt talks broke down between Greece and its creditors.
- Ireland keeps it's BBB+ Outlook Negative
- Italy cut by two notches to BBB+ Outlook Negative
- Luxembourg keeps it's AAA Outlook cut to Negative
- Malta cut by one notch to A- Outlook Negative
- Netherlands keeps it's AAA Outlook cut to Negative
- Portugal cut by two notches to BB Outlook Negative
- Spain cut by two notches to A Outlook Negative
- Slovakia cut by one notch to A Outlook Negative
- Slovenia cut by one notch to A+ Outlook Negative
- USA keeps it's AA+ Outlook Negative
- Canada keeps it's AAA Outlook Stable
- Mexico keeps it's BBB Outlook Stable


----------



## Trajan

Wiseacre said:


> France and Austria down one notch, Italy and Spain down 2 notches.   Italy is getting close to junk status for it's bonds, they and Spain are significant parts of the EU.



Italy always was the one  they were watching out for, and......spain? well, thats academic too. 

what a riot, german parsimony doing what the Wehrmacht couldn't.


----------



## JimBowie1958

Trajan said:


> Wiseacre said:
> 
> 
> 
> France and Austria down one notch, Italy and Spain down 2 notches.   Italy is getting close to junk status for it's bonds, they and Spain are significant parts of the EU.
> 
> 
> 
> 
> Italy always was the one  they were watching out for, and......spain? well, thats academic too.
> 
> what a riot, german parsimony doing what the Wehrmacht couldn't.
Click to expand...


Most often its easier to buy than to take by force.


----------



## percysunshine

"...- Slovenia cut by one notch to A+ Outlook Negative"

Holy shit! Even Slovenia has a better GPA than Obama.


----------



## editec

Its all FAKE debts, folks.

Seriously.

40 or 50 yearsw of Currency manipulation that gave every advantage to the BANSTERS.

Now these parsites have sucked the lifeblood out of nations  for so long that the victims can no longer sustain the drain on the systems.

They will attempt to keep up the illusion of business as usual, they will suck the marrow out of the bones of nations and call it creative capitalism.

What it really is, folks, is a very long CON that is reaching its END GAME.


----------



## KissMy

CNBC transcript:


> LUCAS PAPADEMOS: Well, first of all, let me say that over the past few weeks, substantial progress has been made towards reaching an agreement between creditors and Greece. The process itself is not straightforward, because, as you know, it involves a 50% haircut in the nominal value of Greek public debt held by private investors.



How the hell does Greece keeps it's CCC Debt Rating when it is defaulting on 50% of their debt. Their rating should be a C highly vulnerable or D for default. Greece has even admitted there will be a credit event.


----------



## editec

Wonder when we'll finally have to call this Monopoly game done and turn all our money and deeds back into the bank.

Won't be long, now, I suspect.​


----------



## KissMy

editec said:


> Wonder when we'll finally have to call this Monopoly game done and turn all our money and deeds back into the bank.
> 
> Won't be long, now, I suspect.​



They may string the Euro for a few years & the US dollar along for 6 years.


----------



## Trajan

they downgraded the EFSF....*shrugs* the message is they are using the lower tier nations to rate the entire block, which frankly is the only way to go. Its a house of cards.


----------



## Toro

The ECB has essentially implemented QE through the back door by providing liquidity for a year in exchange for shitty collateral.  

The euro will continue to go down but some systematic risk has been taken off the table.

Greece will default, but does anyone care anymore?  Who doesn't know that?


----------



## Wiseacre

I'm guessing they'll crank up the ole printing press and monetize the debt.   Won't work, but it'll delay the inevitable awhile longer.


----------



## Wiseacre

Toro said:


> The ECB has essentially implemented QE through the back door by providing liquidity for a year in exchange for shitty collateral.
> 
> The euro will continue to go down but some systematic risk has been taken off the table.
> 
> Greece will default, but does anyone care anymore?  Who doesn't know that?




Yeah, but isn't it the presidence that is set that make's it a big deal?   How do you trust the banks in any other country, particularly if that country has big debt?


----------



## Toro

Wiseacre said:


> Toro said:
> 
> 
> 
> The ECB has essentially implemented QE through the back door by providing liquidity for a year in exchange for shitty collateral.
> 
> The euro will continue to go down but some systematic risk has been taken off the table.
> 
> Greece will default, but does anyone care anymore?  Who doesn't know that?
> 
> 
> 
> 
> 
> Yeah, but isn't it the presidence that is set that make's it a big deal?   How do you trust the banks in any other country, particularly if that country has big debt?
Click to expand...


I don't trust the banks in those countries.  In the long-run, without major structural reform, the eurozone is dead.  But in the near-term, the ECB may have found a way to monetize the PIIGS's debt, which takes near-term liquidity concerns off the table.  Thus, the bias would be for a lower euro and a higher stock market.  And probably higher gold eventually too.


----------



## Trajan

Toro said:


> The ECB has essentially implemented QE through the back door by providing liquidity for a year in exchange for shitty collateral.
> 
> The euro will continue to go down but some systematic risk has been taken off the table.
> 
> Greece will default, but does anyone care anymore?  Who doesn't know that?



true but knowing and happening are 2 very different things amigo......when Greece defaults that opens the door for.....___________fill in the blank


----------



## Trajan

Toro said:


> Wiseacre said:
> 
> 
> 
> 
> 
> Toro said:
> 
> 
> 
> The ECB has essentially implemented QE through the back door by providing liquidity for a year in exchange for shitty collateral.
> 
> The euro will continue to go down but some systematic risk has been taken off the table.
> 
> Greece will default, but does anyone care anymore?  Who doesn't know that?
> 
> 
> 
> 
> 
> Yeah, but isn't it the presidence that is set that make's it a big deal?   How do you trust the banks in any other country, particularly if that country has big debt?
> 
> Click to expand...
> 
> 
> I don't trust the banks in those countries.  In the long-run, without major structural reform, the eurozone is dead.  But in the near-term, the ECB may have found a way to monetize the PIIGS's debt, which takes near-term liquidity concerns off the table.  Thus, the bias would be for a lower euro and a higher stock market.  A*nd probably higher gold eventually too*.
Click to expand...




yea baby, I could put 2 more kids thru school on my gold wrangling, lets go for 3, I don't _have_ 3 so I will happily pocket the proceeds.


----------



## Trajan

have to hand it to Brett, hes got  way with metaphors....

    * JANUARY 17, 2012

What Is Europe Sinking About?
The shipwreck of a cruise liner is a metaphor for a continent.

The Lord works in mysterious ways, or so it is often said. But in an era when few can read His signs, those signs have a way of becoming a bit more obvious. Like 45-10. Or how about another Titanic-type event, right on the eve of the 100th anniversary of the first one, as a way of prefiguring some great European disaster?

OK, probably better to leave Him out of it. But as metaphors go, Friday night's tragic-ridiculous shipwreck of a cruise liner off the Italian coast is an apt one for a continent in which nine countries had their credit ratings downgraded earlier that same day. Even the biggest ship can founder in calm waters if the captain is negligent. Even a rescue operation 50 feet from shore can turn into a fiasco if nobody has conducted a drill and the crew have no idea how to steer a lifeboat.

When the hors d'oeuvres are listing hard to starboard and the waiters tell you nothing's wrong, something's terribly wrong.

That last detail&#8212;from passenger accounts of the accident&#8212;reminded me of listening to European Council President Herman Van Rompuy in New York last fall, explaining that Greece would never default, that the euro zone's financial position was not a serious cause for alarm, and that the main thing was to prevent further outbursts of market irrationalism. *In other words, it wasn't the ship that was sinking, in Mr. Van Rompuy's view, it was just that the passengers had an odd way of occasionally going berserk. *


more at-
Stephens: What Is Europe Sinking About? - WSJ.com


I love that last sentence I bolded.....exactly. You see,  its everyone else who is crazy,  I am fine


----------



## Wiseacre

You have to wonder what the Germans are thinking these days.   It's not like their economy is going all that good right now, they're an export-driven country and nobody else is going to be buying much for awhile.   And everyone else in the EC wants them to pony up a lot more money?   What'll they do if the ECB starts printing gobs of more euros;  I'm sure they are well aware of the Weimar Republic catastrophe and what that lead to.


----------



## Toro

Had a conversation with a big, well-known macro hedge fund this afternoon.

They think the euro is in deep trouble.


----------



## percysunshine

The Euro;


----------



## Trajan

Toro said:


> Had a conversation with a big, well-known macro hedge fund this afternoon.
> 
> They think the euro is in deep trouble.



well, I assume they are taking the measures  necessary and preparing to make a bundle along the way. fine by me. 

merkel has already checked on the vaults that all those D marks went into. bet on it. and I am sure like our pentagon, whom has  plans for invading virtually every country on the planet, being German, they have a finely tuned plan in place to bring them up into the daylight. 


right now, I really feel, in my gut the only thing stopping them from getting off this sinking ship, is, the misplaced guilt they have been hauling around for 70 years. They should just do it, schedule a full Bundestag or whatever they call it, session and she should just come out and say it........end it. They are going to wind up doing it anyway, might as well do it now before they wind up sitting back 2 years from now saying Mien Gott,  I wish we had just done it in 2012.


----------



## KissMy

Greek Debt Agreement Falls Far Short of What&#8217;s Needed to Save Euro


----------



## Zander




----------



## FireFly

Zander said:


> The problems in Europe are helping, not hindering, the U.S economy -at least for now. *The fact that the dollar is perceived as a safe haven acts as a sort of self-fulfilling prophesy. Investors flee the Euro and pile into US Dollars* (mainly treasuries- which lowers interest rates). The Dollar then rises to reflect the increased demand. The increase validates the decision to buy in the first place, and attracts even more buyers looking to profit from its appreciation. It's a nice ride while it lasts.
> 
> But when reality rears its ugly head and the spell breaks, the reversal will be vicious.



This is the brainwashing dribble the media has been touting. The reality is foreign dollar reserves are plummeting & the US Federal Reserves monetary base is expanding rapidly. One day there will be a great epiphany.


----------



## Zander

FireFly said:


> Zander said:
> 
> 
> 
> The problems in Europe are helping, not hindering, the U.S economy -at least for now. *The fact that the dollar is perceived as a safe haven acts as a sort of self-fulfilling prophesy. Investors flee the Euro and pile into US Dollars* (mainly treasuries- which lowers interest rates). The Dollar then rises to reflect the increased demand. The increase validates the decision to buy in the first place, and attracts even more buyers looking to profit from its appreciation. It's a nice ride while it lasts.
> 
> But when reality rears its ugly head and the spell breaks, the reversal will be vicious.
> 
> 
> 
> 
> This is the brainwashing dribble the media has been touting. The reality is foreign dollar reserves are plummeting & the US Federal Reserves monetary base is expanding rapidly. One day there will be a great epiphany.
Click to expand...

And......


----------



## FireFly

The representatives of Greece's private creditors left Athens unexpectedly on Saturday without a deal on a debt swap plan that is vital to avert a disorderly default.

BNP Paribas has huge exposure to Greece along with other French banks. French banks will fail first.


----------



## Trajan

FireFly said:


> The representatives of Greece's private creditors left Athens unexpectedly on Saturday without a deal on a debt swap plan that is vital to avert a disorderly default.
> 
> BNP Paribas has huge exposure to Greece along with other French banks. French banks will fail first.



 but they passed their stress tests with flying colors!!! how can that be?


----------



## Trajan

FireFly said:


> The representatives of Greece's private creditors left Athens unexpectedly on Saturday without a deal on a debt swap plan that is vital to avert a disorderly default.
> 
> BNP Paribas has huge exposure to Greece along with other French banks. French banks will fail first.



notice the language too, a "disorderly default" as opposed to....? the rubber is going to meet the road in 2012.


----------



## FireFly

Trajan said:


> notice the language too, a "disorderly default" as opposed to....? the rubber is going to meet the road in 2012.



Oh Yeah! It's going to get ugly on March 20th.

Greek default on a 14.4 billion euro payment due March 20, and to keep open the financing spigot from the European Union and the International Monetary Fund.


----------



## FireFly

Fitch Ratings on Friday downgraded the sovereign credit ratings for Italy, Spain, Slovenia, Belgium and Cyprus indicating there is a 1-in-2 chance of further downgrades in the next two years.


----------



## Toro

FireFly said:


> Fitch Ratings on Friday downgraded the sovereign credit ratings for Italy, Spain, Slovenia, Belgium and Cyprus indicating there is a 1-in-2 chance of further downgrades in the next two years.



The market doesn't care now that we have EuroQE.


----------



## Iggy

http://www.usmessageboard.com/humor/205541-like-father-like-son.html


----------



## Trajan

* JANUARY 31, 2012

Europe Tightens Fiscal Ties
Leaders of Euro Zone Agree on Closer Union; Still No Deal to Reduce Greek Debt 


BRUSSELS&#8212;Leaders of 25 European Union governments agreed Monday night on what some billed as a historic pact to move to closer fiscal union and signed off on the details of a permanent bailout fund for the euro zone&#8212;yet Greece's looming debt restructuring threw a shadow over the summit.

more explanation of the idiocy at-
Europe Tightens Fiscal Ties - WSJ.com

I am sorry for the vulgarity, and the tirade but.....this is just, ....they are doubling down, minus a plan ( this warmed over horseshit is not a plan its a retread in denial of reality) and the ENACTED structure to get them out of the present mess.....


are these people fucking stupid....? seriously? I mean really honest to god stupid? Stupid can exist at all levels...like letting the assassination of one not very well liked or popular  archduke take down a generation of youth on the European continent and  not being able to see and recognize some not very complicated facts that have got them here.... ; a) which they created by ignoring the Maastricht Treaty fiduciary  rules almost immediately after they unionized, b) lived with for 20 years and and..c) have taken them down a path that leads no where? 

seriously are these people that insulated from reality? 


meet the new boss, same as the old boss? Ha....the 'new rules', ' same as the old rules'.....









"hey Angie,  we've never tried this before"


----------



## Trajan

quiet here lately,  time for a pick me up.......


The Cost Of The Combined Greek Bailout Just Rose To &#8364;320 Billion In Secured Debt, Or 136% Of Greek GDP

Some of our German readers may be laboring under the impression that following the &#8364;110 billion first Greek bailout agreed upon and executed in May 2010, the second Greek bailout would cost a "mere" &#8364;130 billion. Alas we have news for you - as of this morning, the formal cost of rescuing Greece for the adjusted adjusted adjusted second time has just risen to &#8364;145 billion, &#8364;175 billion, a whopping &#8364;210 billion, bringing the total explicit cost of all Greek bailout funds to date (and many more in store) to &#8364;320 billion. Which incidentally is a little more than Greek GDP (which however is declining rapidly) at 310 billion, only in dollars. So as of today, merely the ratio of the Greek DIP loan (Debtor In Possession, because Greece is after all broke) has reached a whopping ratio of 136% Debt to GDP. This excludes any standing debt which is for all intents and purposes worthless. This is secured debt, which means that if every dollar in assets generating one dollar in GDP were to be liquidated and Greece sold off entirely in part or whole to Goldman Sachs et al, there would still be a 36% shortfall to the Troika, EFSF, ECB and whoever else funds the DIP loan (i.e., European and US taxpayers)! Another way of putting this disturbing fact is that global bankers now have a priming lien on 136% of Greek GDP - the entire country and then some now officially belongs to the world banking syndicate. Consider that when evaluating Greek promises of reducing total debt to GDP to 120% in 2020, as it would mean wiping all existing "pre-petition debt" and paying off some of the DIP. Also keep in mind that Greece has roughly &#8364;240 billion in existing pre-petition debt, of which much will remain untouched as it is not held in Private hands (this is the debt which will see a major "haircut" - or not: all depends on the holdout lawsuits, the local vs non-local bonds and various other nuances discussed here). If you said this is beyond idiotic, you are right. It is not the impairment on the Greek "pre-petition' debt that the market should be worried about - that clearly is 100% wiped out. It is how much the Troika DIP will have to charge off when the Greek 363 asset sale finally comes. This is also what Angela Merkel will say tomorrow when Greece shows up on its doorstep with the latest "revised" agreement from its parliament to take Europe's money ahead of the March 20 D-Day. Because finally, after months (and to think we did the math for Die Frau back in July) Germany has done the math, and has reached the conclusion that letting Greece go is now the cheaper option.


more at
The Cost Of The Combined Greek Bailout Just Rose To


----------



## Baruch Menachem

It is always better to take care of a problem before it gets really bad.  Now every day they dither it just gets worse.


----------



## Trajan

Baruch Menachem said:


> It is always better to take care of a problem before it gets really bad.  Now every day they dither it just gets worse.



the very same short sighted politics that married them to the euro,will,  like a bad marriage,  keep them together, till one of them 'goes postal'....


----------



## FireFly

KissMy said:


> Nine Countries have been downgraded
> 
> Austria, France, Malta, Slovakia and Slovenia have all been cut by one-notch
> 
> Cyprus, Italy, Portugal and Spain have been cut by two notches.
> 
> Germany, the Netherlands, Belgium, Estonia, Finland, Ireland and Luxembourg have all seen their ratings affirmed.
> 
> 5 Euro countries are rated as Junk Bond Status or worse.
> 
> - Austria cut by one notch to AA+ Outlook Negative
> - Belgium keeps it's AA Outlook Negative
> - Cyprus cut by two notches to BB+ Outlook Negative
> - Estonia keeps it's AA- Outlook Negative
> - France cut by one notch to AA+ Outlook Negative
> - Finland keeps its AAA Outlook cut to Negative
> - Germany keeps it's AAA Outlook Stable
> - Greece keeps it's CCC Debt talks broke down between Greece and its creditors.
> - Ireland keeps it's BBB+ Outlook Negative
> - Italy cut by two notches to BBB+ Outlook Negative
> - Luxembourg keeps it's AAA Outlook cut to Negative
> - Malta cut by one notch to A- Outlook Negative
> - Netherlands keeps it's AAA Outlook cut to Negative
> - Portugal cut by two notches to BB Outlook Negative
> - Spain cut by two notches to A Outlook Negative
> - Slovakia cut by one notch to A Outlook Negative
> - Slovenia cut by one notch to A+ Outlook Negative
> - USA keeps it's AA+ Outlook Negative
> - Canada keeps it's AAA Outlook Stable
> - Mexico keeps it's BBB Outlook Stable



Moodys play catch-up:


> Moodys Investor Service on Monday downgraded its credit ratings on Italy, Portugal and Spain, while France, Britain and Austria kept their top ratings but had their outlooks dropped to negative from stable.
> 
> Moodys also cut its ratings on the smaller nations of Slovakia, Slovenia and Malta. All nine countries are members of the European Union.


----------



## Wiseacre

I heard today that the Greeks will have elections sometime this April.   The guy that many favor to be the next prime minister was quoted as saying they should just pass the austerity measure and take the bailout money (again) and wait until after the elections to decide whether they will honor the terms.   Nice.   IMHO, the EU can bail Greece out until the cows come home, but eventually the Greeks will have to leave the Euro and go back to their drachma.   And anybody who buys their bonds is a fool.


----------



## JimBowie1958

Wiseacre said:


> You have to wonder what the Germans are thinking these days.   It's not like their economy is going all that good right now, they're an export-driven country and nobody else is going to be buying much for awhile.   And everyone else in the EC wants them to pony up a lot more money?   What'll they do if the ECB starts printing gobs of more euros;  I'm sure they are well aware of the Weimar Republic catastrophe and what that lead to.



I think the Germans are thinking, 'When's the fire sale!?!'


----------



## JimBowie1958

Wiseacre said:


> I heard today that the Greeks will have elections sometime this April.   The guy that many favor to be the next prime minister was quoted as saying they should just pass the austerity measure and take the bailout money (again) and wait until after the elections to decide whether they will honor the terms.   Nice.   IMHO, the EU can bail Greece out until the cows come home, but eventually the Greeks will have to leave the Euro and go back to their drachma.   And anybody who buys their bonds is a fool.



They are pretending to cut back on their spending while the EU pretends to bail them out with more leveraged monopoly money.


----------



## Wiseacre

JimBowie1958 said:


> Wiseacre said:
> 
> 
> 
> You have to wonder what the Germans are thinking these days.   It's not like their economy is going all that good right now, they're an export-driven country and nobody else is going to be buying much for awhile.   And everyone else in the EC wants them to pony up a lot more money?   What'll they do if the ECB starts printing gobs of more euros;  I'm sure they are well aware of the Weimar Republic catastrophe and what that lead to.
> 
> 
> 
> 
> I think the Germans are thinking, 'When's the fire sale!?!'
Click to expand...



I think the Germans are thinking, WHAT THE FUCK?!?!?


----------



## KissMy

Fitch cuts Greece's credit rating two notches from "CCC" to "C"

A Fitch statement said it now considered that a Greek debt default was "highly likely in the near term."


----------



## editec

So GREECE is getting that AUSTERIY economic that the Misians all seem to think will solve the problem.

Meanwhile Greece's GDP  has dropped 7% in the last year.

_That's_ a solution?!


----------



## Trajan

Wiseacre said:


> I heard today that the Greeks will have elections sometime this April.   The guy that many favor to be the next prime minister was quoted as saying they should just pass the austerity measure and take the bailout money (again) and wait until after the elections to decide whether they will honor the terms.   Nice.   IMHO, the EU can bail Greece out until the cows come home, but eventually the Greeks will have to leave the Euro and go back to their drachma.   And anybody who buys their bonds is a fool.



and this is not a secret either...you would think the dopes in the EU would get that/ what do thewy exect the greeks to do? Are they watching what we are on the Tele.? 

 hey they will just elect anyone who tells them they will scrap the austerity deal.

This is tantamount to inmates at the asylum run the place, seriously, how effing smart do you have to be to figure that out,  that you should wait to sign a deal till after the elections? 

AND lets get real here..........Greece stuck it to the EU right from the git go, less than 18 months after being made a member they restated or more like were forced to restate all of there financial data and their GDP numbers, debt ratio etc. was all BS and would have kept them out of the EU had they been honest, the EU and the Maastricht treaty lost all of its integrity and ability to discipline members,  right there.


----------



## Trajan

editec said:


> So GREECE is getting that AUSTERIY economic that the Misians all seem to think will solve the problem.
> 
> Meanwhile Greece's GDP  has dropped 7% in the last year.
> 
> _That's_ a solution?!



*shrugs* it is to the EU fat cats that will sit back and watch paris madrid rome burn when this all comes down.....there is NO growth to be had in Greece that will pay tnis new deal off anyway or keep them current......, so this will be another ritual burning of more money for no gain.


----------



## Trajan

so, whats going on? no one cares about the euro anymore?


anyhow,...I was wondering when this would happen.

 I said so, here like 2 months ago, just one not so  deeply in trouble player calls for a referendum,,,,,big trouble time. If the Mics say no, several nations, Finland, the Baltic states will revolt too, they've never been on board really with all of the 'shared' risk, debt. child care  they have been made to swallow...this can also unravel the EU itself as in the Charters for Judicial machinations, the Hague,  etc...go Ireland go, good night nurse, finally. 



By EAMON QUINN

DUBLIN&#8212;The Irish government announced plans Tuesday to call a referendum on the new European Union budget discipline treaty, a vote it&#8212;-and the rest of the euro zone&#8212;had hoped to avoid.

Irish Prime Minister Enda Kenny told parliament that he had taken the decision following advice given to his cabinet by his Attorney General Maire Whelan.

Political analysts had said that the public vote could be held before the summer.

It was a vote that the government coalition had tried everything to avoid because unpopular austerity entailed by the country's bailout from the EU, International Monetary and the European Central Bank has made EU institutions most unpopular.

snip-

Irish voters have in the past rejected EU treaty changes at their first time of asking. In 2009 they voted at a second referendum to approve the Lisbon Treaty after the government said it had won increased guarantees from its European partners on several matters, including an assurance on maintaining the country's competitive corporate tax rate.

more at
Ireland to Hold Referendum on EU Treaty - WSJ.com


----------



## Trajan

these numbers are low, last week  Barrons had a bit higher..........*shrugs* whats 2-300 Billion to quibble over?


anyway, another 1.3 TRILLION $ to the tab.......
_
The ECB offered two batches of the loans&#8212;first in December and again last week&#8212;with low 1% interest rates. Any bank based in the euro zone or with a locally incorporated business there could borrow virtually unlimited sums. In December, 523 banks borrowed &#8364;489 billion ($645.5 billion); last week, 800 banks borrowed &#8364;530 billion._

EU Bank Units Tap Cheap Cash - WSJ.com


echo echo echo....


----------



## Wiseacre

Trajan said:


> these numbers are low, last week  Barrons had a bit higher..........*shrugs* whats 2-300 Billion to quibble over?
> 
> 
> anyway, another 1.3 TRILLION $ to the tab.......
> _
> The ECB offered two batches of the loansfirst in December and again last weekwith low 1% interest rates. Any bank based in the euro zone or with a locally incorporated business there could borrow virtually unlimited sums. In December, 523 banks borrowed 489 billion ($645.5 billion); last week, 800 banks borrowed 530 billion._
> 
> EU Bank Units Tap Cheap Cash - WSJ.com
> 
> 
> echo echo echo....




Can, meet foot.   They're delaying the inevitable.


----------



## Trajan

god what a riot...I have been sorta zoned out on the euro for a while, so I am playing catch up.....

aside from the bond market interposing/introducing  some reality in the Spanish issue, the treaty France and Germany cooked up, calls on every participant, ala PIIGS et al, to  limit its "cyclically adjusted" budget deficit to no more than 0.5% of GDP....................... and, to add some more acid to the vat of kool aid they are drinking-   run a surplus until their debt drops below 60% of GDP.



 back in my party days, I would have loved to smoke ingest drink whatever it is these fools are on just for the hell of it, these people are actually  serious....this is unhinged from reality.


----------



## Wiseacre

I think the French are just trying to get past their elections, kinda like Obama is trying to do.   What's hard to understand is how Merkel and the Germans are going along with this.


----------



## Artevelde

Spain is a major concern but Greece will come back on radar very soon. Parliament must vote on the latest austerity there next week, after which it will be dissolved for early elections (probably on May 6) in which anti-European parties will make great gains. The situation in Greece is really draconian and beyond hope.
Meanwhile Portugal keeps losing all its best people who are looking for jobs and a future elsewhere. Government there makes unbelievable efforts, but the economic base just isn't there.
As for Spain, there too the government is making huge efforts. Spain has more of an economic base, but it's very unevenly spread over the country.
All in all it doesn't look good. I don't think the current Euro zone can hold.


----------



## Trajan

Wiseacre said:


> I think the French are just trying to get past their elections, kinda like Obama is trying to do.   What's hard to understand is how Merkel and the Germans are going along with this.



well we have lk elder, we can try and ask him, as far as I go,  I have several German acquaintances here where I work, between 22-30...if I told you 75% of them  carried around this martial continental guilt trip to the point where in they may tell someone they think doesn't know better that they  are from Switzerland instead of Germany, would you beleive me?

becasue of you had told me that, I wouldn't...but its true. unfuckingbeleivable ..they have or are, allowing themselves to be guilted into the poor house and do, whats clearly not in their best national interests in Theo long run ( the run is getting shorter too).


----------



## Trajan

annnd the newest contestant in the how do we blow up the EU some more steps forward;


Spanish Banks' ECB Borrowing Hits High 

    * April 13, 2012, 4:10 p.m. ET

MADRID&#8212;Spanish bank borrowing from the European Central Bank surged to new highs in March, the latest sign that skittish international investors have left the euro zone's fourth-largest economy at the mercy of ECB funding at a time when concerns are mounting over Spain's ailing finances and economy.

The fresh bank data, along with worries about the global economy spurred by softer-than-expected Chinese growth, combined to produce a miserable day in European markets. Stocks slid across the region and the euro fell. Spanish markets were particularly hard hit: Stocks dropped 3.6% to a new three-year low and its bond yields neared 6%. The cost of insuring Spanish debt against default soared to its highest on record.

Investors repeated a pattern they have run again and again during the worst days of the euro-zone's debt crisis, fleeing risky assets en masse. The major European stock markets all closed lower. Spanish and Italian bond yields were higher, the euro gave way to the dollar, and investors clamored for safe-haven German bonds.

more at-

Spanish Banks' ECB Borrowing Hits High - WSJ.com


----------



## Wiseacre

It's a house of cards IMHO, only a matter of time before the shit hits the fan.   Same thing here, we're just not quite as far down the road yet.


----------



## Trajan

I almost stopped posting here...no seems ot want to talk about anything other than putrid red meat BS politics..


as to your post, god who knows..exampple

hope you can see this..


Surrender, Italian Style
The unions water down Monti's labor reforms.

Review & Outlook: Surrender, Italian Style - WSJ.com


Monti tried to  corral the unions and break their job structure straggle hold but they chewed him up, so any growth in Italy will be minimal ....

spain has reformists at the helm too,  they need to do same, greece did but it didn't matter italys got shot down...I don't know why these people just cannot face the fact that the euro is a dead end, I guess they want to take the whole machine down rather than admit error.


----------



## Toro

CDS on Spain hit all-time highs today, I heard.  Spanish 10-year yields are still well below the highs, however.

Spain still has a problem.


----------



## Wiseacre

Trajan said:


> I almost stopped posting here...no seems ot want to talk about anything other than putrid red meat BS politics..
> 
> 
> as to your post, god who knows..exampple
> 
> hope you can see this..
> 
> 
> Surrender, Italian Style
> The unions water down Monti's labor reforms.
> 
> Review & Outlook: Surrender, Italian Style - WSJ.com
> 
> 
> Monti tried to  corral the unions and break their job structure straggle hold but they chewed him up, so any growth in Italy will be minimal ....
> 
> spain has reformists at the helm too,  they need to do same, greece did but it didn't matter italys got shot down...I don't know why these people just cannot face the fact that the euro is a dead end, I guess they want to take the whole machine down rather than admit error.




Couldn't read the WSJ story, but I can guess the main point.   Nobody wants to face the music, and do what's necessary to right the ship.   I just can't see any positive signs for economic growth over there, and the demographics are decidedly unfavorable.


----------



## JimBowie1958

Will Hollande be the spark that burns the EMU to the ground?

Sarkozy's comeback hopes crumble, polls show - Yahoo! News Canada


----------



## Political Junky

*What was Sarkozy thinking?*

French President Nicolas Sarkozy will just not make things easy for himself. He was caught in another embarrassing political gaffe after his claims that he had visited Japan&#8217;s Fukushima nuclear plant after the earthquake and tsunami last year were proved false, The Telegraph reports.

&#8220;I went to Fukushima [with then ecology minister, Nathalie Kosciusko-Morizet]&#8230; and unlike Francois Hollande, I can tell you the disaster was caused by the 42-meter wave from a tsunami. Frankly, I don&#8217;t see the immediate risk of a tsunami in Alsace,&#8221; Sarkozy told a 5,000-strong crowd in Normandy, according to The Daily Mail. He was referring to Hollande&#8217;s promise to close France&#8217;s Fessenheim plant in the Alsace region and scale back nuclear activities.

While Sarkozy was the first western leader to visit Japan after the tragedy, records show he did not leave Tokyo. &#8220;This is the first time in the history of the French republic that a candidate has told of a voyage he never made,&#8221; his rival, Francois Hollande said. Other politicians and even the Japanese media were merciless as well.

Sarkozy was finally forced to accept he had not been to Fukushima, telling I-Tele "I'm not an engineer, I don't need to stick my nose in the situation at Fukushima." He clarified it was Kosciusko-Morizet who went to the plant (which might also be untrue, according to Le Monde), and he was just pointing out that linking Fukushima to a plant in France was absurd.

Read more: OOPS: Sarkozy's Lied About Visiting Fukushima After The Japan's Nuclear Disaster - Business Insider


----------



## JimBowie1958

Political Junky said:


> *What was Sarkozy thinking?*
> 
> French President Nicolas Sarkozy will just not make things easy for himself. He was caught in another embarrassing political gaffe after his claims that he had visited Japans Fukushima nuclear plant after the earthquake and tsunami last year were proved false, The Telegraph reports.
> 
> I went to Fukushima [with then ecology minister, Nathalie Kosciusko-Morizet] and unlike Francois Hollande, I can tell you the disaster was caused by the 42-meter wave from a tsunami. Frankly, I dont see the immediate risk of a tsunami in Alsace, Sarkozy told a 5,000-strong crowd in Normandy, according to The Daily Mail. He was referring to Hollandes promise to close Frances Fessenheim plant in the Alsace region and scale back nuclear activities.
> 
> While Sarkozy was the first western leader to visit Japan after the tragedy, records show he did not leave Tokyo. This is the first time in the history of the French republic that a candidate has told of a voyage he never made, his rival, Francois Hollande said. Other politicians and even the Japanese media were merciless as well.
> 
> Sarkozy was finally forced to accept he had not been to Fukushima, telling I-Tele "I'm not an engineer, I don't need to stick my nose in the situation at Fukushima." He clarified it was Kosciusko-Morizet who went to the plant (which might also be untrue, according to Le Monde), and he was just pointing out that linking Fukushima to a plant in France was absurd.
> 
> Read more: OOPS: Sarkozy's Lied About Visiting Fukushima After The Japan's Nuclear Disaster - Business Insider



And what does Hollande plan to do about the record French deficits and its commitments to the EMU?

France's presidential rivals clash over debt fears | World news | guardian.co.uk



> Sarkozy, styling himself as the only figure who could save France from economic implosion, said that if Hollande won the final vote on 6 May it would spark a speculation run by financial markets and plunge the country into disarray.
> 
> "If we start hiring civil servants, if we start spending again, if we throw the pension reform into question, it's not a risk that interest rates will rise, it's a certainty," he said, warning of an immediate "crisis of confidence". He has repeatedly warned Hollande would lead France towards the fate of Greece or Spain.
> 
> The prime minister, Francois Fillon, said victory for the left would unleash unstoppable speculation against the euro. Hollande shot back that Sarkozy was encouraging market volatility for political ends. "What is in France's interest is fighting speculation, not encouraging it under the pretext of helping him in the presidential election," Hollande said on France 2 television. He said he was committed to restarting growth and sticking to deficit cutting, adding: "I have no reason to fear a crisis."
> 
> The Socialists accuse Sarkozy's right-wing government of plunging the country further into debt over the past five years, failing to solve the euro crisis and losing France its top credit rating.



Francois Hollande win may dent Angela Merkel's dominance | World news | guardian.co.uk



> Sworn in the previous day as France's first leftist head of state in a generation, President Francois Hollande will be making Berlin his first stop in order to tell Merkel that her central response to the two-year euro crisis, the fiscal pact signed by 25 heads of government this month, has to be re-opened.
> 
> This is the scenario being drawn by the Hollande camp if he wins the French presidency on May 6. ...
> 
> And his aides make clear that his first move will be to challenge Merkel's domination of the campaign to save the euro.
> 
> "I will renegotiate [the fiscal pact], improve it, then ratify it," Hollande told The Guardian at a recent meeting of centre-left leaders in Paris.



I think most people would call that 'renegging' on an agreement and I suspect would plunge Europe back into dissaray and confusion over whether any agreement can be reached that all parties will actually honor over the long haul.

Then banks collapse, governments assume the debts and the EMU collapses and the Euro and perhaps the EU with it.

Please tell me how I am wrong, I would prefer to think I am.


----------



## Political Junky

I guess we'll find out when Hollande is sworn in.


----------



## JimBowie1958

Political Junky said:


> I guess we'll find out when Hollande is sworn in.



It might be too late by then to do much about it.

Methinks the cards tumble then and am trying to figure out where to put what meager wealth I do have.

Thinking US bonds till our government gets into trouble then splitting what is left into PMs, German Marks and Swiss Francs.

But who knows what will be left standing? I dont.


----------



## Artevelde

Sarkozy is a bit of a buffoon and not really a very good President. But Hollande could be worse. He sounds like somebody who wants to remedy the mistakes of today by repeating the mistakes of the past.


----------



## JimBowie1958

An interesting discussion at zerohedge:
As Falls Sarkozy, So Falls Europe: The Full Story Behind The Upcoming French Election | ZeroHedge



> In a must-read discussion this evening, George Magnus of UBS points to the significance of the French elections and how Hollande's victory could unleash 'a new wave of instability and uncertainty, and that the relative calm or optimism in financials markets since the turn of the year would prove short-lived'. Specifically Magnus highlights how the politics of Europe could well trump the liquidity of the ECB as the main determinant of the Euro Area's prospects. While not playing down the role of the initial (and forthcoming second) LTRO, the UBS senior economic adviser has grave concerns of the much bigger and less tangible issues of sovereignty and national self-determination that will not only impact Greece (very shortly) but also Germany, France, and the Euro-zone itself. The French election could be a catalyst for Franco-German (Merkande? Hollel?) divisions which 'would not sit comfortably inside the ECB or in the minds and actions of investors'...
> 
> The French Socialist Party candidate for the presidency has recently nailed his colours unequivocally to the mast, with a bellicose approach to the cult of finance and financial firms, a* promise to promote state-funded industrial policies and employment growth, including an additional 60,000 teaching jobs and 150,000 subsidised jobs for the young, and a proposal to reverse the recently agreed rise in the retirement age from 60 to 62 years. He intends to continue the programme of budget deficit reduction, but wants to boost state spending by EUR20 billion by 2017, though within the context of largely tax-related measures on banks, higher incomes and wealth.*



Split between France and Germany = EU DOA. That duo helped drag the PIIGS toward fiscal austerity, but Sarkozy realizes that the austerity must be reciprocal. 

Without France tightening its belt like everyone else, and being one of the two leading states in the EMU, the rest will lose out in elections that will see populaces demand the same expenditures the French are helping themselves to.

This is definately a disaster in the making.


----------



## Trajan

JimBowie1958 said:


> An interesting discussion at zerohedge:
> As Falls Sarkozy, So Falls Europe: The Full Story Behind The Upcoming French Election | ZeroHedge
> 
> 
> 
> 
> In a must-read discussion this evening, George Magnus of UBS points to the significance of the French elections and how Hollande's victory could unleash 'a new wave of instability and uncertainty, and that the relative calm or optimism in financials markets since the turn of the year would prove short-lived'. Specifically Magnus highlights how the politics of Europe could well trump the liquidity of the ECB as the main determinant of the Euro Area's prospects. While not playing down the role of the initial (and forthcoming second) LTRO, the UBS senior economic adviser has grave concerns of the much bigger and less tangible issues of sovereignty and national self-determination that will not only impact Greece (very shortly) but also Germany, France, and the Euro-zone itself. The French election could be a catalyst for Franco-German (Merkande? Hollel?) divisions which 'would not sit comfortably inside the ECB or in the minds and actions of investors'...
> 
> The French Socialist Party candidate for the presidency has recently nailed his colours unequivocally to the mast, with a bellicose approach to the cult of finance and financial firms, a* promise to promote state-funded industrial policies and employment growth, including an additional 60,000 teaching jobs and 150,000 subsidised jobs for the young, and a proposal to reverse the recently agreed rise in the retirement age from 60 to 62 years. He intends to continue the programme of budget deficit reduction, but wants to boost state spending by EUR20 billion by 2017, though within the context of largely tax-related measures on banks, higher incomes and wealth.*
> 
> 
> 
> 
> Split between France and Germany = EU DOA. That duo helped drag the PIIGS toward fiscal austerity, but Sarkozy realizes that the austerity must be reciprocal.
> 
> Without France tightening its belt like everyone else, and being one of the two leading states in the EMU, the rest will lose out in elections that will see populaces demand the same expenditures the French are helping themselves to.
> 
> This is definately a disaster in the making.
Click to expand...


exactly. so they have like the good proletariat dupes they are,  went and voted for 'da utter guy' who will be just as ineffective but will take them further ( and faster) down the road to 100%, and more debt to gdp and to the inevitable 're-hook up' , the  french will be like drunk dudes looking for a hook up and their beer goggles will land on that tired whore of the french franc.....

just as the days of the Euro are numbered in Greece.

The center right (New Democracy party ) got their asses kicked, now the Greeks  will rush back to the center left ( the Pasok party) who is 75% responsible for getting them into this mess and the fringe parties who now have enough votes to form in the Parliament,( like neo-Nazi Golden Dawn) and the KKE commies who did way better at approx. 10%  of the vote. ....


So exit question when they drop the euro what happens ot all of the euros ( and promises) that the EU propped them up with? whats the tab? unreal.


----------



## JimBowie1958

Trajan said:


> JimBowie1958 said:
> 
> 
> 
> An interesting discussion at zerohedge:
> As Falls Sarkozy, So Falls Europe: The Full Story Behind The Upcoming French Election | ZeroHedge
> 
> 
> 
> 
> In a must-read discussion this evening, George Magnus of UBS points to the significance of the French elections and how Hollande's victory could unleash 'a new wave of instability and uncertainty, and that the relative calm or optimism in financials markets since the turn of the year would prove short-lived'. Specifically Magnus highlights how the politics of Europe could well trump the liquidity of the ECB as the main determinant of the Euro Area's prospects. While not playing down the role of the initial (and forthcoming second) LTRO, the UBS senior economic adviser has grave concerns of the much bigger and less tangible issues of sovereignty and national self-determination that will not only impact Greece (very shortly) but also Germany, France, and the Euro-zone itself. The French election could be a catalyst for Franco-German (Merkande? Hollel?) divisions which 'would not sit comfortably inside the ECB or in the minds and actions of investors'...
> 
> The French Socialist Party candidate for the presidency has recently nailed his colours unequivocally to the mast, with a bellicose approach to the cult of finance and financial firms, a* promise to promote state-funded industrial policies and employment growth, including an additional 60,000 teaching jobs and 150,000 subsidised jobs for the young, and a proposal to reverse the recently agreed rise in the retirement age from 60 to 62 years. He intends to continue the programme of budget deficit reduction, but wants to boost state spending by EUR20 billion by 2017, though within the context of largely tax-related measures on banks, higher incomes and wealth.*
> 
> 
> 
> 
> Split between France and Germany = EU DOA. That duo helped drag the PIIGS toward fiscal austerity, but Sarkozy realizes that the austerity must be reciprocal.
> 
> Without France tightening its belt like everyone else, and being one of the two leading states in the EMU, the rest will lose out in elections that will see populaces demand the same expenditures the French are helping themselves to.
> 
> This is definately a disaster in the making.
> 
> Click to expand...
> 
> 
> exactly. so they have like the good proletariat dupes they are,  went and voted for 'da utter guy' who will be just as ineffective but will take them further ( and faster) down the road to 100%, and more debt to gdp and to the inevitable 're-hook up' , the  french will be like drunk dudes looking for a hook up and their beer goggles will land on that tired whore of the french franc.....
> 
> just as the days of the Euro are numbered in Greece.
> 
> The center right (New Democracy party ) got their asses kicked, now the Greeks  will rush back to the center left ( the Pasok party) who is 75% responsible for getting them into this mess and the fringe parties who now have enough votes to form in the Parliament,( like neo-Nazi Golden Dawn) and the KKE commies who did way better at approx. 10%  of the vote. ....
> 
> 
> So exit question when they drop the euro what happens ot all of the euros ( and promises) that the EU propped them up with? whats the tab? unreal.
Click to expand...


Experts estimate this huge debt, that  is the result of real estate and bank defaults magnified by CDS wagers in the Derivatives market, will take at least TWO TRILLION EUROS to fix, and the IMF has been trying to put together 600 BILLION as a stop gap but can only get about one third of that and much of that is from the debtor nations like greece itself. Circular causation anyone?

No one in their right mind is going to bankroll the Euro fiasco. Even Norway has backed out its 500 billion Euro sovereign fund, dropping all risky debt about a month ago.

This is Stephen King stuff.


----------



## Artevelde

The Euro is indeed in very serious trouble and there is no light at the end of the tunnel.


----------



## JimBowie1958

Artevelde said:


> The Euro is indeed in very serious trouble and there is no light at the end of the tunnel.



And thus the EU itself is in trouble and thus China is in trouble, and thus the US is in trouble.

Isnt integrating all the banking systems in the world such a cool idea?


----------



## Trajan

annnnnd.....tadaaa....what was, how now become what is...no adults in the rooms over their either I guess. 


And so it all begins anew: "The so-called troika of the European Union, the International Monetary Fund and the European Central Bank is willing to make six important changes to Greece&#8217;s financial aid agreement if a pro-European government is formed in the country, Real News said.  The Troika is willing to extend by one year to end 2015 the time for Greece to cut its budget deficit as well as to proceed with a restructuring of loans, the Athens-based newspaper reported in its Sunday edition preleased today, citing &#8220;well informed&#8221; sources at the European Commission."


more at-

Europe Blinks: Troika Willing To Change Terms Of Greek Bailout Deal | ZeroHedge


----------



## JimBowie1958

Off Drudge Report

Debt crisis: Greek euro exit looms closer as banks crumble - Telegraph


Eurozone debt crisis: Fears of 'panic' as investors pull out 1.4billion euro in two days | Mail Online


Cost of Greek exit from euro put at $1tn | Business | The Guardian


'Vulture funds' circle as Greece fears grow - Business News - Business - The Independent


----------



## Trajan

last year when we were kicking this around at the start of the first real EU money parachute drops and declarations of austerity and coming solvency I remarked, that in 3-5 years when Greece hit the wall no matter how much money via bailouts etc. it was given, they would fail and when they did my point was that there were going to be a number of people asking ( and kicking)  themselves why they just didn't do what their reason was telling them to do before dropping money into  the sink hole that is greece........well, it didn't take 3-5 years, it is here and it is now. 

its amazing to me, really, that the most 'intelligent' well educated, established experts.....just fucked up consistently. This whole dance and wishful thinking was  quite literally stupid. 

 Ireland has a vote/referendum coming up on the  package Germany is driving as part of the EU  'Fiscal Compact"...as an Irishman I would asking myself, why the hell should we? Greece got every break in the world, defaulted and then un-defaulted   etc etc ...we, Ireland have been towing the line for 2 full years and have had our belts tightened, whats to be gained? 


Euros are going to flee Greece to accounts in border states, as preparation for the reinstallation/evaluation to the drachma  and along with it, a 2nd/3rd world living standard it will bring.

 Interesting ........... for what, the first time since the 16th century a 1st world European/Western country will slide into 2/3rd world status totally aside and unattributed to any cataclysmic event, War, Plague or similarly destructive national Continental calamity......


next up- Italy...and thats when the whole thing comes down, vaporizing the Euro.


----------



## TakeAStepBack

The only thing I can add or argue, is that I'm predicting Spain hits the wall before Italy. But as we are seeing, these bank runs will not end in Greece on the Euro. Once the Greeks exit, other debt riddled EU participants are going to weigh in on doing the same thing. Confidence is going to go right to the shitter. This is, the beginning of the end of the euro.


----------



## Trajan

TakeAStepBack said:


> The only thing I can add or argue, is that I'm predicting Spain hits the wall before Italy. But as we are seeing, these bank runs will not end in Greece on the Euro. Once the Greeks exit, other debt riddled EU participants are going to weigh in on doing the same thing. Confidence is going to go right to the shitter. This is, the beginning of the end of the euro.



you may be right, but Italy's PM,  Mario Monti has not been as successful as even he would like in instituting reforms. 

Spain's leadership seems to have a batter handle on it despite protests etc...*shrugs* hey,  nothing at this point would surprise me though. 


and heres a palate cleanser...


This Is What European Banks' Loan-To-Deposit Ratios Look Like

For those who feel like spreading rumors about European deposit insurance, please do. But at least have some sense about what it would entail. European banks already have the highest loan-to-deposit loan-to-deposit ratio in the world. This means they are massively more levered, roughly 3x more, the US banks. In other words, deposit "encumbrance" is already absolutely maxed out. Think the ECB can credibly backstop Europe's &#8364;11 trillion deposit market, with Germany's agreement? Good luck.

snip-








Actually, there is one more thing. Deposits, or specifically, the Loan to Deposit Ratios of European banks. The chart [above] explains why not only is Europe's several asset constrained, it is also running out of funding, in the form of depositor cash: the most critical bank liability. Remember: without incremental deposits, banks can not invest in new assets, unless they generate cash from operations, and thus grow shareholder equity. There is a problem: as the final chart below shows, Europe, and especially Scandinavia which has consistently remained off the radar, is literally off the charts when it comes to LTD ratios. 

more at-
This Is What European Banks' Loan-To-Deposit Ratios Look Like | ZeroHedge

they are maxxed out and this of course is bad news for us too....


----------



## KissMy

The European bank runs should topple these banks like dominoes.


----------



## BillyV

My company has a marketing agent in Greece who has lived there for years. He sent us the following yesterday about the state of affairs inside Greece:



> The situation in Greece is clouded by uncertainty. There are many scenarios  the gloomiest being the rise of the extreme (almost communist) left  named Syriza. In the recent elections, the rise of this extreme left was a new development. At the next elections (set for 17th June) the extreme left may gain ascendancy. If this happens, its leader has declared his intention of withdrawing the balances from Greeces private bank accounts in an arbitrary manner to raise funds  as such a government will not be supported by the EU, nor would it be allowed to remain within the EU or the Euro Zone. Since then, the Greeks have started withdrawing all their private funds from their banks.
> 
> I suppose that a Syriza (near communist) government would not be supported, or even tolerated (?), by the USA with its vulnerable military base in Greece. Then the USA might strive to evict Greece from NATO when the Greek military might take control to restore a semblance of order. Such a military control has happened before  to the nations benefit.
> 
> As it is, the extreme left is also advocating the eviction of foreigners; already their gangs are beating foreign men in the street. As foreigners can be hard to distinguish from Greeks, Greeks are being beaten as well. There have been few reported instances but already my wifes friends have had their husbands chased by these gangs  but not caught, not yet! So confidence withers.
> 
> The concern is not Greeces unrepayable trillion dollar debt from EU sources or even the interest on the debt. The trouble is that Greece only earns 8% of her national income leaving her to beg, borrow or steal 92% on a regular basis. This is unsustainable though it has been going on for over a generation. It leaves the present generations of Greeks convinced that Greece will be supported, regardless, as it has always been supported.
> 
> The fact is that Greece has no regular sustainable income  tourism is down through indifference, rudeness, lack of investment and now violence. And the only other national industry is shipping. And that is down because the Greeks over-built and over-tonnaged the shipping market. Now the huge Oriental shipyards, developed to meet this Greek requirement for new ships, will be building ships for their national fleets to keep their shipyards busy and then employing their new ships to exclude Greek ships from their national trades. Thus Greek shipping has a poor outlook.
> 
> Sadly, Greece has no appreciable source of income. It is in effect a banana republic without a banana. Inevitably, the outcome appears to be devaluation, an inability to obtain credit, a lack of funds to pay cash with shortages developing for goods in the shops and fuel in the pumps. The standard of living has fallen 20% over the last two years but it must fall a further 60% unless someone bails the country out and this seems increasingly unlikely.
> 
> Curiously though the Greeks were, until last year when the property market fell, an immensely rich people; in cash and property. They would probably have been just about the richest in Europe  hardly surprising after two generations neglect to pay their taxes. How curious!



Scary stuff. These kinds of economic upheavals have a way of morphing into armed conflicts.


----------



## Toro

The market is absolutely fucking untradeable right now.  

Yesterday, everything goes down at 2pm because some obscure Greek politician says Greece could leave the euro.  Today, everything goes up at 2pm because the market gets a whiff that a Euro FDIC might be in the offing.

This is by far the hardest market I have ever been involved in, harder than the tech and housing bubble collapses.  Then, there was an economic narrative behind both.  Today, the market moves on random musings from European politicians, no matter how fanciful or farfetched.  I'm thinking about packing it in until the Europeans get their shit together, or when the central banks have some new, massive QE, which is the only time the market seems to move in one direction in a non-schizophrenic manner.


----------



## KissMy

Greece using Euro Trojan Horse to defeat Germany.​
[ame="http://www.youtube.com/watch?v=Zvl9N9GdraQ"]The Greece Plan[/ame]


----------



## Trajan

3 years late and as predicted,  the real downturn, which will force them to wash out the non players and start, start mind you the unwind that was meant to be.

 the 20 year experiment has blown up...well,  17 years really as the handwriting was on the wall several years ago anyway. 


    Updated May 24, 2012, 8:16 a.m. ET
*
Euro-Zone Economic Contraction Deepens *
Concerns over the future of the euro deepened Thursday on more evidence of policy inertia and a fresh spate of dire economic data that showed some of the remaining supports for business activity in the 17-country euro zone splintering away.

The euro zone's economic contraction deepened in May with business activity falling at its steepest rate in nearly three years, an influential survey of purchasing managers showed Thursday. The data came alongside a sharp reversal in Germany's Ifo measure of business sentiment this month. A French business survey also delivered a poor result. Collectively, the economic vital signs pointed to a rising risk of the euro-zone economy remaining mired in recession for much of this year.

"The euro area might have side-stepped technical recession in the first quarter, but the indicators for the second quarter are looking increasingly ugly," said James Ashley, senior European Economist for RBC bank. 

Euro-Zone Economic Contraction Deepens - WSJ.com


yada yada yada....if you cannot see it, get a subscription


----------



## Trajan

Toro said:


> The market is absolutely fucking untradeable right now.
> 
> Yesterday, everything goes down at 2pm because some obscure Greek politician says Greece could leave the euro.  Today, everything goes up at 2pm because the market gets a whiff that a Euro FDIC might be in the offing.
> 
> This is by far the hardest market I have ever been involved in, harder than the tech and housing bubble collapses.  Then, there was an economic narrative behind both.  Today, the market moves on random musings from European politicians, no matter how fanciful or farfetched.  I'm thinking about packing it in until the Europeans get their shit together, or when the central banks have some new, massive QE, which is the only time the market seems to move in one direction in a non-schizophrenic manner.



whats interesting and worrying is, even the big boys, the ones who can make, break and move markets based on their own associated/collaborative heft, don't know where this is going hence which way to jump. 

I am a concepts gut toroI see things in a conceptual light as the rubber meets the road. 

....We truly are in uncharted waters in one sense, think of a cluster of Economic  'Weimer Reps.' scatted thru out Europe...Ireland, Portugal, Italy, Greece, it wasn't 'reparations' that got them here, it was a determined social policy that in the end, and I mean at the bottom of it all,  at the very very end after all of the arguments, calculations, debate of/on/over indicators/statistics are over- the 'system' has been set up to  award/reward indolence ......


human beings who build and create are NOT in the majority, the ones who don't are, they elect others alike to them, the job of those elected is to separate and impart  the goods services produced by the builders to the less able and fortunate. When the balance is destroyed,  this is where we wind up. 

Don't worry though bro, you think this is a mess? Wait, we are next and it won't take long, 5 years, max and ti will be, massive. 


back to the small ball day to day- the EU mess  will cost us at least .5% of gdp and when we don't have any we can afford to spare either AND China has finally hit the wall too. a) their gov is in serious crises, and  right now, at the worst possible time. I have not been creating any real and serious threads becasue I don't think any body here gives a shit, b) the vapor that was this huge run up to 9-10% gdp over the last 20 years , will now be outted for what it was and is, a third vapor with little lasting power. China wil cost another .5%....


----------



## KissMy

There is no saving the Euro short of those countries surrendering their sovereignty to a United Euro government that has real teeth. In the mean-time keep on expecting more band-aids to kick the can just a down the road until the very end.

This will also have to happen with any "Too Big to Fail Bank." They are ultimately going to have to give up their rights if we have to backstop their losses. If the government wants more student or home loans to people who the free market deems to risky then the government should lend to them directly. Then we can hold policy makers feet to the fire on bubbles & inflation.


----------



## JimBowie1958

KissMy said:


> There is no saving the Euro short of those countries surrendering their sovereignty to a United Euro government that has real teeth.



That wont work either. 

Just because a single state issues fiat currency based on runaway debt instead of multiple nations, nothing is different, much less improved.

Investors have no confidence in the current financial markets because of the bad debt, exessive debt and the high frequency trading algos dominating human trading.

Lets see what happens after our markets impose penalties on HFT quote stuffing. I get the feeling that the HFTs are the only thing keeping the markets up.


----------



## Trajan

annnnd they're off....





    * Updated May 25, 2012, 8:22 p.m. ET

Spain Pours Billions Into Bank
Revived Fears of Greece Contagion Prompt Government Injection; S&P Downgrades 5 Institutions

MADRID&#8212;Spain will pump &#8364;19 billion ($24 billion) into troubled lender Bankia SA, BKIA.MC -7.43% the bank said Friday, effectively nationalizing the country's third-largest bank in a dramatic effort to assuage concerns about the stability of its financial sector.

Worries about Spain's banks, which are saddled with billions in toxic real-estate loans, have heightened in recent weeks as Greece's political crisis has intensified and investors contemplate the knock-on effects of a potential Greek exit from the euro.

more at

Spain to Inject $24 Billion Into Bankia, Troubled Lender Says; S&P Downgrades Five Spanish Banks - WSJ.com




to put a little perspective on this, we had a gdp last year of approx. $15 Trillion, Spain, $1.4....so, 24 bn is  what, like 400 bn ?  they are not a reserve currency like we are etc.,   the spanish 10 year is over 6%, so, they can do this once.....this better be it.


----------



## KissMy

JimBowie1958 said:


> KissMy said:
> 
> 
> 
> There is no saving the Euro short of those countries surrendering their sovereignty to a United Euro government that has real teeth.
> 
> 
> 
> 
> That wont work either.
> 
> Just because a single state issues fiat currency based on runaway debt instead of multiple nations, nothing is different, much less improved.
> 
> Investors have no confidence in the current financial markets because of the bad debt, exessive debt and the high frequency trading algos dominating human trading.
> 
> Lets see what happens after our markets impose penalties on HFT quote stuffing. I get the feeling that the HFTs are the only thing keeping the markets up.
Click to expand...


A united euro government will help a lot. It will prevent one country from screwing all the others & then bailing out of the euro. The Euro Nation would directly control each states budget. United defense, rail & interstate highway system. Without strict controls, one  country's politician will always sweep shit under the rug so it will explode later on the next guy & screw all the other states just like Greece did. Right now Greece is to big to fail. But Italy is to big to bail-out. That shit will take everybody down.


----------



## Artevelde

KissMy said:


> JimBowie1958 said:
> 
> 
> 
> 
> 
> KissMy said:
> 
> 
> 
> There is no saving the Euro short of those countries surrendering their sovereignty to a United Euro government that has real teeth.
> 
> 
> 
> 
> That wont work either.
> 
> Just because a single state issues fiat currency based on runaway debt instead of multiple nations, nothing is different, much less improved.
> 
> Investors have no confidence in the current financial markets because of the bad debt, exessive debt and the high frequency trading algos dominating human trading.
> 
> Lets see what happens after our markets impose penalties on HFT quote stuffing. I get the feeling that the HFTs are the only thing keeping the markets up.
> 
> Click to expand...
> 
> 
> A united euro government will help a lot. It will prevent one country from screwing all the others & then bailing out of the euro. The Euro Nation would directly control each states budget. United defense, rail & interstate highway system. Without strict controls, one  country's politician will always sweep shit under the rug so it will explode later on the next guy & screw all the other states just like Greece did. Right now Greece is to big to fail. But Italy is to big to bail-out. That shit will take everybody down.
Click to expand...


A united Euro government is unworkable. You can't wish away more than a thousand years of history.


----------



## KissMy

Artevelde said:


> KissMy said:
> 
> 
> 
> 
> 
> JimBowie1958 said:
> 
> 
> 
> That wont work either.
> 
> Just because a single state issues fiat currency based on runaway debt instead of multiple nations, nothing is different, much less improved.
> 
> Investors have no confidence in the current financial markets because of the bad debt, exessive debt and the high frequency trading algos dominating human trading.
> 
> Lets see what happens after our markets impose penalties on HFT quote stuffing. I get the feeling that the HFTs are the only thing keeping the markets up.
> 
> 
> 
> 
> A united euro government will help a lot. It will prevent one country from screwing all the others & then bailing out of the euro. The Euro Nation would directly control each states budget. United defense, rail & interstate highway system. Without strict controls, one  country's politician will always sweep shit under the rug so it will explode later on the next guy & screw all the other states just like Greece did. Right now Greece is to big to fail. But Italy is to big to bail-out. That shit will take everybody down.
> 
> Click to expand...
> 
> 
> A united Euro government is unworkable. You can't wish away more than a thousand years of history.
Click to expand...


Well they did agree to a united currency. If they do not follow through with a united government then their currency is certainly doomed to fail.

It also mean that the IMF/World Bank's currency SDR's are also doomed to fail. So much for their plans for a one world currency or government.


----------



## Trajan

great debate. worth a view if this interest you at all.




unk Debates Live: "Has The European Experiment Failed?" - Niall Ferguson And Others Dissect Today's Most Critical Issue 

overview-

Today's most exciting piece of financial analysis and debate has been conveniently saved until early evening, when courtesy of BNN's "Munk Debates" we will get a great discussion on the number one topic of the times: whether the European experiment has failed. Arguing for the argument will be famed historian Niall Ferguson as well as Josef Joffe, while the contra side will be defended by Daniel Cohn-Bendit and Peter Mandelson. Courtesy of BNN: "In the sweep of human history, the European Union stands out as one of humankind's most ambitious endeavors. It encompasses half a billion people, twenty-seven member states, twenty-three languages and an economy valued at over $15 trillion. Modern Europe's stunning achievements aside, its sovereign debt crisis has shaken the world's largest political and economic union to its core. Can the federal institutions and shared values of Europeans meet the challenges of debt crisis that are as much political as economic? Or, are Europe's current woes indicative of a series of deep structural faults that will doom the European Union to breakup and failure?"

more at-

Munk Debates Live: "Has The European Experiment Failed?" - Niall Ferguson And Others Dissect Today's Most Critical Issue | ZeroHedge

watch at-


Europe Debate - Livestream | Munk Debates


----------



## Toro

Two good pieces.

Greece, the Euro, and Behavioral Economics : The New Yorker
Money Is Vanishing From Southern Europe


----------



## Toro

Spain May Use Its Debt Instead of Cash for Bankia Group - Bloomberg


----------



## FireFly

Is it still a good time to short the Euro vs Dollar or will there be a bounce back?


----------



## JimBowie1958

FireFly said:


> Is it still a good time to short the Euro vs Dollar or will there be a bounce back?



Probably, but you gotta realize that the churn in the value of the EURUSD pair is greater than the ability of most amateurs and diletantes to weather out. If you use a really small position that you ocan provide margin call for if the EURUSD reverse by several hundred pips, then you arent going to make a very large profit as a percentage anyway.

From week to week the EURUSD swings back and forth hundreds of pips and it is no straight slide down ever.


----------



## JimBowie1958

Greece to leave Euro if opposition wins
News Headlines


----------



## Trajan

had a good laugh here..


----------



## Trajan

Toro said:


> Spain May Use Its Debt Instead of Cash for Bankia Group - Bloomberg



this:

Risks to Spain&#8217;s financial industry and the state are becoming increasingly intertwined as the government&#8217;s access to borrowing narrows.

Foreign investors cut their holdings of Spanish debt of 37 percent Spain&#8217;s total outstanding debt in circulation in April from 50 percent at the end of last year. Domestic lenders, bolstered by emergency funding from the ECB, have picked up the slack, increasing their share to 29 percent from 17 percent over the same period.


----------



## Trajan

Toro said:


> Two good pieces.
> 
> Greece, the Euro, and Behavioral Economics : The New Yorker
> Money Is Vanishing From Southern Europe



what a joke, greece was 'lent' $174 billion, thats 75% of one years GDP. And that 'cushion' was blown away in less than a year. just awful.

and;

_To move Europe away from the brink, voters and politicians on all sides need to stop asking themselves what&#8217;s fair and start asking themselves what&#8217;s possible_

Read more http://www.newyorker.com/talk/financial/2012/06/04/120604ta_talk_surowiecki#ixzz1wJKPe2Ke

yes true, but, I have not heard word 1 on- REFORM and GROWTH , what it looks like where it comes from........


----------



## KissMy




----------



## Trajan

Ireland votes this Thursday on the new fiscal austerity plan......Greece goeas back to vote for a new gov,  again, June 17th.....gonna be an interesting month. 

The micks  should stay on course and say yes, BUT, if they say no, I don't blame them. they were the first to  have tightened their belts and comparably,  Greece has gotten away with murder....


----------



## Trajan

a palate cleanser....


Spain faces 'total emergency' as fear grips markets
Spain is facing the gravest danger since the end of the Franco dictatorship as the country is frozen out of global capital markets and slides towards an epic showdown with Europe. 

&#8220;We&#8217;re in a situation of total emergency, the worst crisis we have ever lived through&#8221; said ex-premier Felipe Gonzalez, the country&#8217;s elder statesman.

The warning came as the yields on Spanish 10-year bonds spiked to 6.7pc, pushing the &#8220;risk premium&#8221; over German Bunds to a post-euro high of 540 basis points. The IBEX index of stocks in Madrid fell 2.6pc, the lowest since the dotcom bust in 2003.

Chaos over the &#8364;23.5bn rescue of crippled lender Bankia has led to the abrupt resignation of central bank governor Miguel Ángel Fernández Ordóñez, who testified to the senate that he had been muzzled to avoid enflaming events as confidence in the country drains away.

Markets are on tenterhooks as Spanish yields test levels that forced the European Central Bank to respond last November with its &#8364;1 trillion liquidity blitz. &#8220;Nobody is short Spanish debt right now because they are expecting ECB intervention,&#8221; said Andrew Roberts, credit chief at RBS. &#8220;If it doesn&#8217;t come -- if we take out 6.8pc -- we&#8217;re going to see a hyberbolic sell-off,&#8221; he said.

Italy felt the full brunt of contagion from Spain on Wednesday, with 10-year yileds back near 6pc. The euro fell to a 2-year low of $1.239 against the dollar. Crude oil and metal prices plummeted and save-haven flight pushed rates on 2-year German debt to zero. Gilt yields fell to 1.64pc, the lowest in history. 

more at-
Spain faces 'total emergency' as fear grips markets - Telegraph


----------



## JimBowie1958

Trajan said:


> Ireland votes this Thursday on the new fiscal austerity plan......Greece goeas back to vote for a new gov,  again, June 17th.....gonna be an interesting month.
> 
> The micks  should stay on course and say yes, BUT, if they say no, I don't blame them. they were the first to  have tightened their belts and comparably,  Greece has gotten away with murder....



All the Southern countries are rejecting austerity, so why should Ireland play the martyr?


----------



## Euroconservativ

JimBowie1958 said:


> Trajan said:
> 
> 
> 
> Ireland votes this Thursday on the new fiscal austerity plan......Greece goeas back to vote for a new gov,  again, June 17th.....gonna be an interesting month.
> 
> The micks  should stay on course and say yes, BUT, if they say no, I don't blame them. they were the first to  have tightened their belts and comparably,  Greece has gotten away with murder....
> 
> 
> 
> 
> All the Southern countries are rejecting austerity, so why should Ireland play the martyr?
Click to expand...


Are you sure? Italy is running a budget deficit below 2% this year. They are passing reforms that get strong domestic opposition, leading to a few radical strikes. But Italy is still under attack.

Merkel said that Italy will balance the budget even before Germany. But what is the cost? Collapsing private consumption and public investment and record unemployment.

The situation is just plain absurd. If the ECB was a lender of last resort for states (like the Fed, the BoE, the BoJ or any other major central bank in the world) we would not be in this mess. You all must remember that *Eurozone states have no monetary sovereignty*. The most outrageous thing is that the ECB lends to private banks at 1%... so they can buy government debt at 5%. Germany (who is paying 0.07% interest for 2 years debt) does not want it to change. They fear inflation.


----------



## Euroconservativ

If nobody changes this situation, Germany will fall in recession this year. No doubt about it. And USA too, as the crisis eventually turns global.


----------



## SayMyName

I think most speculation by Americans on the fate and condition of the euro somewhat sophmoric. In the end, the euro will be just fine with the support of the many nations that do want it to succeed. Germany will lead that way, and prove once again why she is the dynamic power that she is in Europe, and a rising stalwart on the international stage.


----------



## Toro

Merkel rejects eurobonds

Merkel Rejects Debt Sharing as Obama Urges End to Crisis Cloud - Bloomberg


Spain's yields keep rising

Rajoy


"Permanent" euro bailout fund to start July 9

European Union Said to Prepare Start of ESM for July 9 - Bloomberg


In the meantime, gold was up $66.

AM-PM Roundup with Jim Wyckoff


----------



## KissMy

The worlds third largest debt market was downgraded. Egan-Jones Downgrades Italy To B+ From BB; Outlook Negative. An Italian default will completely destroy the planets financial system.


----------



## KissMy

[ame="http://www.youtube.com/watch?v=4tnmkkLo1mE"]Goldman Sachs, Eurostat, and cooked Greek books, part1/2[/ame]

[ame="http://www.youtube.com/watch?v=H03ZlgLEyDo"]Goldman Sachs, Eurostat, and cooked Greek books, part2/2[/ame]


----------



## KissMy

Fed Charles Evans says goal is to get unemployment down to 7% & inflation up to 3%.


----------



## Trajan

KissMy said:


> Fed Charles Evans says goal is to get unemployment down to 7% & inflation up to 3%.


----------



## JimBowie1958

Trajan said:


> KissMy said:
> 
> 
> 
> Fed Charles Evans says goal is to get unemployment down to 7% & inflation up to 3%.
Click to expand...


In other words, pay off much of the nations debt by stealing purchasing power from those on fixed incomes.

How humanitarian.


----------



## Trajan

JimBowie1958 said:


> Trajan said:
> 
> 
> 
> 
> 
> KissMy said:
> 
> 
> 
> Fed Charles Evans says goal is to get unemployment down to 7% & inflation up to 3%.
> 
> 
> 
> 
> 
> 
> Click to expand...
> 
> 
> In other words, pay off much of the nations debt by stealing purchasing power from those on fixed incomes.
> 
> How humanitarian.
Click to expand...


its the ole Fed hack octopus re-distribution policy.


----------



## KissMy

Europe is going to have to create an FDIC type insurance to prevent bank runs.


----------



## KissMy

Fitch's downgraded Spain's credit rating by three notches from A to BBB.

Spain needs another $150 billion bailout. Germany has loaned Spain $216 billion and France has loaned Spain $201 billion.


----------



## Trajan

KissMy said:


> Fitch's downgraded Spain's credit rating by three notches from A to BBB.
> 
> Spain needs another $150 billion bailout. Germany has loaned Spain $216 billion and France has loaned Spain $201 billion.



edit-


wait a  minute- if I recall their GDP is what, in 2010, 1.4 $trillion? so, 216 + 201 + 150+ 24=  591 Bn.( 40Bn below  not inc.) they need roughly a 50% of gdp boost? get the fuc! outta here....

madness, countries need equal to half their yearly productivity to 'survive', so where does the growth come from afterward? I have not heard word 1 on that....the EU is a ship of fools. 

and.....


A report from the International Monetary Fund released estimated Spanish banks need a recapitalization injection of at least (EURO)40 billion ($50 billion) following a stress test it performed on the country's financial sector. That report came out early Saturday, three days ahead of schedule, underscoring the urgency of the situation.

News from The Associated Press


----------



## KissMy

Euro zone finance ministers just agreed to lend Spain 100 billion euros ($125 billion) to shore up its teetering banks!

Insiders knew this was coming. That is why the market went wild for the last 3 days.


----------



## Trajan

yup, you're right. 

so this is now the game, the EU will lay out half the productivity of said nation to......do what again? 


where, does this get them, in real terms? Its a loan not a gift....


----------



## Trajan

uh huh...I think I have an answer. 

Details Emerge About Spain's Cramming Down "Bailout" Loan

El Pais reports: "European aid (through the EFSF or ESM) are actually loans to recapitalize the financial system, which the Treasury. Again, the State comes to the rescue of the bank. Of course, it is soft loans, in much better shape than the market: around 3%, according to sources familiar with the negotiations between Spain and its European partners. Faced with this 3%, Treasury currently pays interest of 6% over the 10-year debt." And there you have it: Bankruptcy 101, lesson on Equitable Subordination, where one always gets a priming DIP at terms much better than other classes of debt, when secured and guaranteed by unencumbered assets. Such as what is happening here, because for one to accept 3% rate compared to 6% for 10 Year Spanish GUCs, there obviously has to be some security incentive. It also means that, as we suggested yesterday, subordination has come to Spain.

El Pais continues:

    In return for subsidized rates, Spain will cede sovereignty over its financial system, but also lose tax sovereignty, contrary to what the Government said yesterday.

So yes, there will be conditions in exchange for priming. As anyone with the most rudimentary understanding of waterfall analysis could have suggested.

More Google translated:

    The Economy Minister Luis de Guindos, said flatly that the only conditionality for banks will require assistance . "There will be no fiscal or macroeconomic conditions," he said repeatedly in a crowded press conference, reports Amanda Mars. But he amended the flat Eurogroup: along with the praise for the Spanish efforts to address their varied and acute imbalances, the communique finance ministers of the euro area makes it clear otherwise. Europe monitored with an iron fist that Madrid continue on the path of fiscal consolidation, structural reforms and labor market. "We will look closely and regularly review progress in these areas, in parallel with financial assistance," the statement said.

The biggest problem, as Greece learned, is that once the priming begins, and the various sovereign debt classes start becoming subordinated, it doesn't end, until the PSI. At which point the crammed down debt gets impaired and receives 20-some cents on the dollar recoveries... which is roughly when Grey Wolf will say going long Spain it is the "no-brainer trade" of the year.

Details Emerge About Spain's Cramming Down "Bailout" Loan | ZeroHedge


----------



## JimBowie1958

Good ole Nigel...

Break up Euro and restore human dignity

UKIP Nigel Farage - Break up the euro and restore human dignity - 22nd May 2012 - YouTube

Should Greece Leave Euro?
[ame=http://www.youtube.com/watch?v=Ge4zCRQPGHA]Collapsing Euro, UKIP Nigel Farage vs Labour Denis MacShane - BBC Daily Politics (18May12) - YouTube[/ame]

Euro Doomed from Start
[ame=http://www.youtube.com/watch?v=-bX2ZSRUdtc&feature=related]Euro Was Doomed From Start, UKIP Nigel Farage- 3rd Dec 2011 - YouTube[/ame]


----------



## Trajan

of course they should...and, it going to be a very rough ride....in any event,  their ego will not allow them to just drop the Euro altogether, they have to much on a personal and national level ala my balls are bigger better than yours,  tied up in it. It will have to crumble and be infinitely more painful. 



and here we go, the sugar high is over and Houston, Reality had landed; 

    Updated June 11, 2012, 8:29 a.m. ET

Market Euphoria Starts to Wane 


Relief over Spain's bond markets started to wane and stock markets came off highs as investors began to question the logistics of the &#8364;100 billion ($125 billion) bailout of Spanish banks and wondered whether Monday's gains in financial markets were nothing but a relief rally. 

Stocks had risen sharply early in the European session, led by the Spanish market, while yields on the country's 10-year bond plunged as investors showed their relief that Spain has secured a bailout for its banks. But while stock markets remained higher as the day wore on, bond yields were also once again higher.

more at-

European Stocks Pare Gains - WSJ.com


----------



## Toro

It's bad news for the market that this sold right off the open.


----------



## Trajan

hey man, its bad news period. I am not in the day to day toro, I did what I had to during the last correction, only imho we are going to have an uber correction soon, do I stand fast? yes, I bought for the long haul.

as far as life overall and the larger impact, *shrugs* they are determined to die the death of the thousand cuts. There will be like last week sugar highs and folks on the insdie, perhaps like yourself can make a few bucks...but a/the bull market as we have come to know it is as dead as kelseys nuts. 


Oh and  heres why I dropped by really...Zero Hedge was on it....


    Updated June 11, 2012, 10:35 a.m. ET

EU: Spain Banks Will Be Monitored 

The European Commission on Monday said the so-called "troika" that includes the European Central Bank and the International Monetary Fund will monitor Spain's &#8364;100 billion ($125 billion) banking bailout, suggesting the deal agreed on over the weekend may be more stringent than signaled by Madrid.

Statements about the bailout by Spain and the European Union have left several open questions, including the exact amount of aid the country will need and how the funds will be disbursed. Spanish Prime Minister Mariano Rajoy said Sunday the deal will only include conditions related to the banking sector, and made no reference to any external monitoring of the process&#8212;a possibility that Madrid was explicitly ruling out last week. 

more at-

Review & Outlook: Europe's Latest Bailout - WSJ.com




folks all over the EU are going to wake up one day soon and recognize that  are all in the same class not matter what side of  the issue they have been on&#8230;.and one side will have it just marginally better than the other,  frankly I am not sure which one that will be&#8230;. 

Side 1; they are being robbed of their future standard of living by incremental slippage&#8230;they are being sold  faux &#8216;safety  security&#8217; line for today while their PMs et al give away their labor in the form of security/ monies for side 2&#8230;

side 2; being the bailout  patients that have  while taking the money to live for a few more years,  are surrendering  their rights step by step. 
Feudalism runs in Europe&#8217;s veins but, this is invisible to an extent,  will not work and leave them all again, right back at square one, broke and miserable, but with fewer rights liberties etc&#8230;


----------



## JimBowie1958

Trajan said:


> yup, you're right.
> 
> so this is now the game, the EU will lay out half the productivity of said nation to......do what again?




To kick that can down the road another block maybe?


----------



## KissMy

Trajan said:


> In return for subsidized rates, Spain will cede sovereignty over its financial system, but also lose tax sovereignty, contrary to what the Government said yesterday.[/url]



That was the key phrase in your post. One by one each country who gets into trouble will lose their sovereignty.

This is what I was saying in this post that will have to happen to save the Euro. They will have to turn into the "United States of Europe" with a united government that will control each nation state.

If they can all agree to do this, it will save the Euro & the global economy. If they fail - there is always GOLD!!!



KissMy said:


> JimBowie1958 said:
> 
> 
> 
> 
> 
> KissMy said:
> 
> 
> 
> There is no saving the Euro short of those countries surrendering their sovereignty to a United Euro government that has real teeth.
> 
> 
> 
> 
> That wont work either.
> 
> Just because a single state issues fiat currency based on runaway debt instead of multiple nations, nothing is different, much less improved.
> 
> Investors have no confidence in the current financial markets because of the bad debt, exessive debt and the high frequency trading algos dominating human trading.
> 
> Lets see what happens after our markets impose penalties on HFT quote stuffing. I get the feeling that the HFTs are the only thing keeping the markets up.
> 
> Click to expand...
> 
> 
> A united euro government will help a lot. It will prevent one country from screwing all the others & then bailing out of the euro. The Euro Nation would directly control each states budget. United defense, rail & interstate highway system. Without strict controls, one  country's politician will always sweep shit under the rug so it will explode later on the next elected official & screw all the other states just like Greece did. Right now Greece is to big to fail. But Italy is to big to bail-out. That shit will take everybody down.
Click to expand...


----------



## Trajan

and here we are, I have been saying for over a year, yea yea so have a lot of other folks I know....(everyone seems to see it but the egotistical douche bags  running the show it would turn), that spain truly was the canary, Italy is next and then thats all she wrote. 










on a general note- the folks making money in this market now, are making it by virtue of computer trading...... the last human 'values' move was FB which was a balls up and a venal, perfectly suitable wall st. huckster vehicle, it was smoke and mirrors,  a grab for a payday before it slid into mediocrity along side my space.


----------



## Euroconservativ

They will not expel Greece for two reasons. First, it's too expensive for european banks. Second, it could set an example for other Eurozone members. Even if Syriza wins, they will keep Greece inside.

I believe that Greece could do well outside the Euro. Because their first industry is tourism; they have not much manufacturing. They would struggle for some months or a year, they would need some foreign help to import essential items... but eventually a cheaper currency would save them.


----------



## Trajan

KissMy said:


> Trajan said:
> 
> 
> 
> In return for subsidized rates, Spain will cede sovereignty over its financial system, but also lose tax sovereignty, contrary to what the Government said yesterday.[/url]
> 
> 
> 
> 
> That was the key phrase in your post. One by one each country who gets into trouble will lose their sovereignty.
> 
> This is what I was saying in this post that will have to happen to save the Euro. They will have to turn into the "United States of Europe" with a united government that will control each nation state.
> 
> If they can all agree to do this, it will save the Euro & the global economy. If they fail - there is always GOLD!!!
> 
> 
> 
> KissMy said:
> 
> 
> 
> 
> 
> JimBowie1958 said:
> 
> 
> 
> That wont work either.
> 
> Just because a single state issues fiat currency based on runaway debt instead of multiple nations, nothing is different, much less improved.
> 
> Investors have no confidence in the current financial markets because of the bad debt, exessive debt and the high frequency trading algos dominating human trading.
> 
> Lets see what happens after our markets impose penalties on HFT quote stuffing. I get the feeling that the HFTs are the only thing keeping the markets up.
> 
> Click to expand...
> 
> 
> A united euro government will help a lot. It will prevent one country from screwing all the others & then bailing out of the euro. The Euro Nation would directly control each states budget. United defense, rail & interstate highway system. Without strict controls, one  country's politician will always sweep shit under the rug so it will explode later on the next elected official & screw all the other states just like Greece did. Right now Greece is to big to fail. But Italy is to big to bail-out. That shit will take everybody down.
> 
> Click to expand...
Click to expand...


 KM, I hear you and I agree. let me digress for a minute though before I say what I want say on your post.


I have been reading history for a hobby since I was 12, military, political etc etc &#8230;when I was in college, ( pretty good one too but I flunked out or that is flunked myself out) , I wanted to be a historian, I had several very good proff&#8217;s and it was no coincidence  that the best of them, the one  who seemed to have a grasp on historical contexts and the ability to translate that with the current events and make sense of it ,  told me that to understand where events are leading, one must be able to stand out said oneself. He told me that he trys to sit back clear his head and see it written on paper, as if he were reading today&#8217;s events and their  follow on issues/results  50 years later in a book, the words and conclusions conjured in his mind almost sub consciously working with all hes read and seen from the past.

 And too, remembering and this is a biggey- we occupy not a very large  tract of time relatively.  It appears to me that many people cannot think of time in the relative as it relates to history and the effect of humanity responding  the same old way to basically the same old stimuli &#8230;.they live in the here and now always, either they are afraid to get  outside themselves  or maybe, they just cannot. 


But whats at work is not going to wait on them, thinking a major revolution, upheaval resulting in a major shift or reorder of how thinks work today cannot happen on their watch  is an arrogance that, yes, has historical precedents&#8230;up the wazoo, which means that's probably whats going to happen, as Burke said&#8230;don&#8217;t learn it? Re-live it. 

Here is what I see;  either Europe in the next 2-3 years replicates something as concentrated, wise , binding  and far reaching  as the Peace of Westphalia, or, they are done.  

My definition of done is;  they sink into what a modern society would sink [to] equivalently with the step down of the fairest provinces of the Roman Empire as they sank to what we called the Dark Ages ( they weren&#8217;t as dark as the word implys but they were pretty shitty) . 

Further- Italians are not germans, Greeks are not irish nor shall the twain meet. The brits are another thing altogether, (how smart or lucky were they to stay out of the Euro?) In any event, the peace of Westphalia drove stakes into the ground to make the political social environment of Europe for, heck 200 years until the French rev&#8230;&#8230;sovereignty began to change , but the feudal DNA was still there, and, it is now reappearing.  

Will the Spaniards, Irish, Portuguese and Italians ( and Germans inversely by becoming the back stop) sit still for another give away of their rights and sovereignty to the &#8216;greater cause&#8217;..I have doubts, not this time.


----------



## KissMy

Neoconservative said:


> They will not expel Greece for two reasons. First, it's too expensive for European banks. Second, it could set an example for other Eur ozone members. Even if Syria wins, they will keep Greece inside.
> 
> I believe that Greece could do well outside the Euro. Because their first industry is tourism; they have not much manufacturing. They would struggle for some months or a year, they would need some foreign help to import essential items... but eventually a cheaper currency would save them.



A cheaper currency will not save them. They rely on imports & the inflation will crush them. It will also set off a chain of events that will cause a huge depression for both Europe & Greece. The depression will be more sever than any able bodied worker today has ever seen. No leader is stupid enough to let that happen & risk being hung in the town square. Greece will stay with the Euro. Greece & Spain have ceded their sovereignty to the ECB. Eventually all of the Euro member states will be controlled by one European government.

If this fails there will be nowhere to hide.


----------



## KissMy

Trajan said:


> Will the Spaniards, Irish, Portuguese and Italians ( and Germans inversely by becoming the back stop) sit still for another give away of their rights and sovereignty to the greater cause..I have doubts, not this time.



Their choice is give away sovereignty or face economic collapse & possible war. In this country they took away our civil rights with the NDAA & it was only a one day news event. Today people live for today & will never listen to people like Jefferson who warned: "He who would trade liberty for some temporary security, deserves neither liberty nor security."

Europe is likely further removed from the lessons of the past than we are. The majority will go with what ever keeps their money flowing, food on the table, buying iPhones, etc. They will not risk turning into Afganistan over something as trivial as something the majority does not understand like sovereignty. As bad as things are, they are not even close to being as bad as they will get within days of a Euro collapse.


----------



## Trajan

KissMy said:


> Trajan said:
> 
> 
> 
> Will the Spaniards, Irish, Portuguese and Italians ( and Germans inversely by becoming the back stop) sit still for another give away of their rights and sovereignty to the greater cause..I have doubts, not this time.
> 
> 
> 
> 
> Their choice is give away sovereignty or face economic collapse & possible war. In this country they took away our civil rights with the NDAA & it was only a one day news event. Today people live for today & will never listen to people like Jefferson who warned: "He who would trade liberty for some temporary security, deserves neither liberty nor security."
> 
> Europe is likely further removed from the lessons of the past than we are. The majority will go with what ever keeps their money flowing, food on the table, buying iPhones, etc. They will not risk turning into Afganistan over something as trivial as something the majority does not understand like sovereignty. As bad as things are, they are not even close to being as bad as they will get within days of a Euro collapse.
Click to expand...


heres the rub though, it will go that way, anyway. 

Now,  will it be after they surrender even more to the great gods in Brussels? There will be several national failures as they stumble along, the question is only how long. 

Wiemar lasted how long? 14 years? and only 5 until the top blew off into hyper inflation and each step of the way as the economy sunk lower and they swapped out 8 heads of state, until change came, in spades.


----------



## KissMy

Trajan said:


> KissMy said:
> 
> 
> 
> 
> 
> Trajan said:
> 
> 
> 
> Will the Spaniards, Irish, Portuguese and Italians ( and Germans inversely by becoming the back stop) sit still for another give away of their rights and sovereignty to the greater cause..I have doubts, not this time.
> 
> 
> 
> 
> Their choice is give away sovereignty or face economic collapse & possible war. In this country they took away our civil rights with the NDAA & it was only a one day news event. Today people live for today & will never listen to people like Jefferson who warned: "He who would trade liberty for some temporary security, deserves neither liberty nor security."
> 
> Europe is likely further removed from the lessons of the past than we are. The majority will go with what ever keeps their money flowing, food on the table, buying iPhones, etc. They will not risk turning into Afganistan over something as trivial as something the majority does not understand like sovereignty. As bad as things are, they are not even close to being as bad as they will get within days of a Euro collapse.
> 
> Click to expand...
> 
> 
> heres the rub though, it will go that way, anyway.
> 
> Now,  will it be after they surrender even more to the great gods in Brussels? There will be several national failures as they stumble along, the question is only how long.
> 
> Wiemar lasted how long? 14 years? and only 5 until the top blew off into hyper inflation and each step of the way as the economy sunk lower and they swapped out 8 heads of state, until change came, in spades.
Click to expand...


It will take time for sure. Basically as each state takes bailout money in exchange for their sovereignty they will be controlled by an unelected banker dictator from the ECB. They will not have the ability to borrow, spend or tax any more. That power will be in the hands of the ECB. This should prevent or slow the top from blowing off into hyper inflation. If not at least they have built some more road to continue kicking the can down for a while.


----------



## Trajan

time....time......


----------



## KissMy

This Time, Europe Really Is on the Brink by Niall Ferguson and Nouriel Roubini



> The European Union was created to avoid repeating the disasters of the 1930s, but Germany, of all countries, has failed to learn from history. As the euro crisis escalates, Berlin should remember how the banking crisis of 1931 contributed to the breakdown of democracy across Europe. Action is urgently needed to stop history from repeating itself.
> 
> Is it one minute to midnight in Europe?
> 
> The failure of German public opinion to grasp the dire state of affairs in Europe today is inviting a repeat of precisely the crisis of the mid 20th century that European integration was designed to avoid.


----------



## JimBowie1958

Greek Bank Withdrawals Hit $1 BILLION PER DAY
Greek banks see outflows pickup as election nears - bankers | World | Reuters


Greek Government down to $2 BILLION
Greece has money to pay bills until July 20: report - RT News


Greece: Limited Capital Controls Implemented
Report from Greece: Limited Capital Controls Implemented | Shenandoahcapital-controls-implemented/


----------



## Trajan

KissMy said:


> This Time, Europe Really Is on the Brink by Niall Ferguson and Nouriel Roubini
> 
> 
> 
> 
> The European Union was created to avoid repeating the disasters of the 1930s, but Germany, of all countries, has failed to learn from history. As the euro crisis escalates, Berlin should remember how the banking crisis of 1931 contributed to the breakdown of democracy across Europe. Action is urgently needed to stop history from repeating itself.
> 
> Is it one minute to midnight in Europe?
> 
> The failure of German public opinion to grasp the dire state of affairs in Europe today is inviting a repeat of precisely the crisis of the mid 20th century that European integration was designed to avoid.
Click to expand...


was I channeling Niall's? damn I am good.... j/k....


----------



## Trajan

JimBowie1958 said:


> Greek Bank Withdrawals Hit $1 BILLION PER DAY
> Greek banks see outflows pickup as election nears - bankers | World | Reuters
> 
> 
> Greek Government down to $2 BILLION
> Greece has money to pay bills until July 20: report - RT News
> 
> 
> Greece: Limited Capital Controls Implemented
> Report from Greece: Limited Capital Controls Implemented | Shenandoahcapital-controls-implemented/



yea I just saw this. any foreign co's doing  biz in Greece have instructed their accounting dept.s to sweep all funds on a monthly basis out of the county as well, if they have the agility to do it daily I bet they would.


a bon mot.... As soon as 5% of a group/herd/pod/gaggle behaves in a certain way, the majority will imitate this behavior too.humans are......animals in crowds too, Greece is pretty much there......then...


----------



## Trajan

KissMy said:


> This Time, Europe Really Is on the Brink by Niall Ferguson and Nouriel Roubini
> 
> 
> 
> 
> The European Union was created to avoid repeating the disasters of the 1930s, but Germany, of all countries, has failed to learn from history. As the euro crisis escalates, Berlin should remember how the banking crisis of 1931 contributed to the breakdown of democracy across Europe. Action is urgently needed to stop history from repeating itself.
> 
> Is it one minute to midnight in Europe?
> 
> The failure of German public opinion to grasp the dire state of affairs in Europe today is inviting a repeat of precisely the crisis of the mid 20th century that European integration was designed to avoid.
Click to expand...


from the link-


# Fiscal austerity policies should not be excessively front-loaded while structural reforms that accelerate productivity growth should be sped up.


# Economic growth needs to be jump-started in the euro zone. Without growth, the social and political backlash against austerity will be overwhelming. Repaying debt cannot be sustainable without growth. 

and as I have said, were is the growth plan? ex; Drahgi tried defanging the Italian unions and got smacked down.

 gov. rules on/over native market competition and mechanisms that shackle such, needs to be smashed, ex; in Greece you cannot open a pharmacy within 1000 feet of another, the licensing process for businesses make the NYC taxi/medallion process seem like a cake walk, truckers 'will' their registrations ( of the restricted number allowed) to family members or sell them for retirement money, work hours, vacation allowances etc  etc etc etc ...


of course there is the biggest,  most sweeping reset button of them all......war. but none of them have an army or air force that could do shit to one another 


the money shot-

Giving up some sovereignty is inevitable. However, becoming subject to a "neo-colonial" submission of one's fiscal policy to Germany -- as a senior periphery leader put it to us at a recent meeting of the Nicolas Berggruen Institute (NBI) in Rome -- is not acceptable.


----------



## KissMy

If the ECB buys up all the bad debt for zero interest they can keep the charade going for quite a while.


----------



## Trajan

KissMy said:


> If the ECB buys up all the bad debt for zero interest they can keep the charade going for quite a while.



*shrugs*

[ame=http://www.youtube.com/watch?v=1GrxHDyXyj8&feature=player_embedded]Spain: the beginning of the end - YouTube[/ame]


----------



## Trajan

example, 2 year sago-

Banco Santander's reported Tier 1 ratio was 10% as of Dec. 31, 2009 and under the adverse scenario rose to 10.2%. Even in the adverse scenario and adding a shock to the sovereign debt markets, Tier 1 stays at 10%. Much of its ability to keep that Tier 1 high is down to the bank's ability to keep earning more than it loses. Two years after the adverse scenario, two-year cumulative pre-impairment income is projected at &#8364;45.74 billion, against losses of some &#8364;28 million.

Tier one for BBVA, meanwhile, was 9.4% at end 2009, which edges up to 9.6% under the adverse scenario. Two years after the adverse scenario, BBVA would have pre-impairment income of &#8364;21.77 billion, against losses of around &#8364;12 billion. The worst scenario, adding sovereign risk, brings that Tier 1 down to 9.3%.

Five Spanish savings banks fail stress test - MarketWatch

tomorrow they both  will in all likelihood be downgraded.


----------



## percysunshine

With all this stuff going on, I can see how WWII started. Thank goodness for the internet and governments who cant afford armies.


----------



## Trajan

percysunshine said:


> With all this stuff going on, I can see how WWII started. Thank goodness for the internet and governments who cant afford armies.



guess what? IF they had kept and could afford armies this would not be happening....


----------



## percysunshine

Trajan said:


> percysunshine said:
> 
> 
> 
> With all this stuff going on, I can see how WWII started. Thank goodness for the internet and governments who cant afford armies.
> 
> 
> 
> 
> guess what? IF they had kept and could afford armies this would not be happening....
Click to expand...


So this will just devolve into chaos? I mean, France is next. They just elected a government which will double down on the fiscal policies which got everyone into trouble in the first place.

There is a very fine line between Socialism and Fascism.


----------



## Trajan

percysunshine said:


> Trajan said:
> 
> 
> 
> 
> 
> percysunshine said:
> 
> 
> 
> With all this stuff going on, I can see how WWII started. Thank goodness for the internet and governments who cant afford armies.
> 
> 
> 
> 
> guess what? IF they had kept and could afford armies this would not be happening....
> 
> Click to expand...
> 
> 
> So this will just devolve into chaos? I mean, France is next. They just elected a government which will double down on the fiscal policies which got everyone into trouble in the first place.
> 
> There is a very fine line between Socialism and Fascism.
Click to expand...


see previous page or 2. when people cannot stomach the truth they will follow someone who serves them up what they want to hear, chaos to follow...


----------



## KissMy

Stockton, CA filed bankruptcy & no one attacked them. It is going to take a lot to get a war started over debt. As long as they have butter they wont grab guns, if they can even afford guns. Do European citizens even have guns? They are passive now days. The government will probably drug the drinking water with Prozac.


----------



## JimBowie1958

percysunshine said:


> Trajan said:
> 
> 
> 
> 
> 
> percysunshine said:
> 
> 
> 
> With all this stuff going on, I can see how WWII started. Thank goodness for the internet and governments who cant afford armies.
> 
> 
> 
> 
> guess what? IF they had kept and could afford armies this would not be happening....
> 
> Click to expand...
> 
> 
> So this will just devolve into chaos? I mean, France is next. They just elected a government which will double down on the fiscal policies which got everyone into trouble in the first place.
> 
> There is a very fine line between Socialism and Fascism.
Click to expand...


There is a specter hauting Europe...

*Fitch, Moody's and S&P....*

*Credit Jihadists!**

They TERRORIZE Europe worse than a bunker buster! *

'It's Time for some PAYBACK!'  - French President Hollande


----------



## Wiseacre

KissMy said:


> Stockton, CA filed bankruptcy & no one attacked them. It is going to take a lot to get a war started over debt. As long as they have butter they wont grab guns, if they can even afford guns. Do European citizens even have guns? They are passive now days. The government will probably drug the drinking water with Prozac.




Yeah, but there are still a lot of hard feelings in Europe against the Germans.   And the fringe groups over there are gaining in political power.   Not saying WWIII is coming, nobody wants that.   But unemployment is sky high over there in many countries, especially among the young.


----------



## percysunshine

JimBowie1958 said:


> percysunshine said:
> 
> 
> 
> 
> 
> Trajan said:
> 
> 
> 
> guess what? IF they had kept and could afford armies this would not be happening....
> 
> 
> 
> 
> So this will just devolve into chaos? I mean, France is next. They just elected a government which will double down on the fiscal policies which got everyone into trouble in the first place.
> 
> There is a very fine line between Socialism and Fascism.
> 
> Click to expand...
> 
> 
> There is a specter hauting Europe...
> 
> *Fitch, Moody's and S&P....*
> 
> *Credit Jihadists!**
> 
> They TERRORIZE Europe worse than a bunker buster! *
> 
> 'It's Time for some PAYBACK!'  - French President Hollande
> 
> [ame=http://www.youtube.com/watch?v=EQ3swBEBqBc&feature=related]AC/DC - Givin The Dog A Bone - YouTube[/ame]
Click to expand...




Every Fascist in history had a boogyman.

.


----------



## JimBowie1958

[ame=http://www.youtube.com/watch?v=TN_1mF-3JTI&feature=player_embedded]The Genius of Mutual Indebtedness - Nigel Farage - YouTube[/ame]


----------



## KissMy

Wiseacre said:


> KissMy said:
> 
> 
> 
> Stockton, CA filed bankruptcy & no one attacked them. It is going to take a lot to get a war started over debt. As long as they have butter they wont grab guns, if they can even afford guns. Do European citizens even have guns? They are passive now days. The government will probably drug the drinking water with Prozac.
> 
> 
> 
> 
> 
> Yeah, but there are still a lot of hard feelings in Europe against the Germans.   And the fringe groups over there are gaining in political power.   Not saying WWIII is coming, nobody wants that.   But unemployment is sky high over there in many countries, especially among the young.
Click to expand...


What are they going to do, throw rocks at the Germans.


----------



## JimBowie1958

percysunshine said:


> Every Fascist in history had a boogyman.
> .



Trick question....EVERY period in history has boogeymen, from the Assyrians to the Huns to the Arabs, to the Mongols to the freaking Nazis.

History doesnt repeat but it sure does rhyme.


----------



## KissMy

The ECB will keep on taking sovereignty in exchange for bailouts. After-wards the ECB will be dictator over said state's taxes & budget. After they will not be able to afford to raise an army or buy any weapons to fight each-other. They will all sit around & cry while sucking their thumbs.


----------



## JimBowie1958

KissMy said:


> The ECB will keep on taking sovereignty in exchange for bailouts. After-wards the ECB will be dictator over said state's taxes & budget. After they will not be able to afford to raise an army or buy any weapons to fight each-other. They will all sit around & cry while sucking their thumbs.



How many army divisions does the ECB have?

If all the major players in the EU say 'fuck off' then the ECB cant do shit about it but cry.

And the Wermacht is now the Bundeswere and that is a sad thing to say if you like military shit.


----------



## percysunshine

JimBowie1958 said:


> percysunshine said:
> 
> 
> 
> Every Fascist in history had a boogyman.
> .
> 
> 
> 
> 
> Trick question....EVERY period in history has boogeymen, from the Assyrians to the Huns to the Arabs, to the Mongols to the freaking Nazis.
> 
> History doesnt repeat but it sure does rhyme.
Click to expand...


Every period in history had Fascists.


----------



## JimBowie1958

percysunshine said:


> JimBowie1958 said:
> 
> 
> 
> 
> 
> percysunshine said:
> 
> 
> 
> Every Fascist in history had a boogyman.
> .
> 
> 
> 
> 
> Trick question....EVERY period in history has boogeymen, from the Assyrians to the Huns to the Arabs, to the Mongols to the freaking Nazis.
> 
> History doesnt repeat but it sure does rhyme.
> 
> Click to expand...
> 
> 
> Every period in history had Fascists. So what is your point?
Click to expand...


So y ou like to complain about normal human existance or what?

Those of us who love liberty have to be vigilant in every age.

Julius Ceasar wasnt the first to subvert freedom and he was not the last.

Its just that a tree needs fertilization every once in a while, that is all.


----------



## KissMy

Spanish Bond is at 6.99% this morning. 7% means they will have to have a complete sovereign bailout.


----------



## KissMy

JimBowie1958 said:


> KissMy said:
> 
> 
> 
> The ECB will keep on taking sovereignty in exchange for bailouts. After-wards the ECB will be dictator over said state's taxes & budget. After they will not be able to afford to raise an army or buy any weapons to fight each-other. They will all sit around & cry while sucking their thumbs.
> 
> 
> 
> 
> How many army divisions does the ECB have?
> 
> If all the major players in the EU say 'fuck off' then the ECB cant do shit about it but cry.
> 
> And the Wermacht is now the Bundeswere and that is a sad thing to say if you like military shit.
Click to expand...


When a country gives sovereignty to the ECB in return for a bailout then the ECB controls it's military, instead of that states government & it's the citizens. If all the countries of the Euro gives sovereignty to the ECB they will be left with nothing but rocks to fight eachother with & the ECB will have total military superiority.

"Give me control over a nation's currency and I care not who makes its laws." -- Baron M.A. Rothschild (1744 - 1812).


----------



## JimBowie1958

KissMy said:


> JimBowie1958 said:
> 
> 
> 
> 
> 
> KissMy said:
> 
> 
> 
> The ECB will keep on taking sovereignty in exchange for bailouts. After-wards the ECB will be dictator over said state's taxes & budget. After they will not be able to afford to raise an army or buy any weapons to fight each-other. They will all sit around & cry while sucking their thumbs.
> 
> 
> 
> 
> How many army divisions does the ECB have?
> 
> If all the major players in the EU say 'fuck off' then the ECB cant do shit about it but cry.
> 
> And the Wermacht is now the Bundeswere and that is a sad thing to say if you like military shit.
> 
> Click to expand...
> 
> 
> When a country gives sovereignty to the ECB in return for a bailout then the ECB controls it's military, instead of that states government & it's the citizens.
Click to expand...


Only on paper. Do you really think that the French units would occupy PAris in order to force the people to live under starvation conditions?



KissMy said:


> If all the countries of the Euro gives sovereignty to the ECB they will be left with nothing but rocks to fight eachother with & the ECB will have total military superiority.



I  think that military command is made of more than paper diagrams of chain of command, and who signs their paycheck.

You better hope and pray that I am right.

Or we will likely see blood baths across the Western world.


----------



## Wiseacre

KissMy said:


> Spanish Bond is at 6.99% this morning. 7% means they will have to have a complete sovereign bailout.




My understanding is the Germans refused to underwrite Spain's debt or guarantee their bank deposits.   More or less a backdoor eurobond concept, and they didn't fall for it.   Merkel said it would violate Germany's constitution.


----------



## KissMy

Wiseacre said:


> KissMy said:
> 
> 
> 
> Spanish Bond is at 6.99% this morning. 7% means they will have to have a complete sovereign bailout.
> 
> 
> 
> 
> 
> My understanding is the Germans refused to underwrite Spain's debt or guarantee their bank deposits.   More or less a backdoor eurobond concept, and they didn't fall for it.   Merkel said it would violate Germany's constitution.
Click to expand...


Germany has loaned Spain to much money to allow them to default. After a couple more downgrades that are coming today Merkel will change her tune especially if Spain gives up it's sovereignty in exchange.


----------



## KissMy

JimBowie1958 said:


> KissMy said:
> 
> 
> 
> 
> 
> JimBowie1958 said:
> 
> 
> 
> How many army divisions does the ECB have?
> 
> If all the major players in the EU say 'fuck off' then the ECB cant do shit about it but cry.
> 
> And the Wermacht is now the Bundeswere and that is a sad thing to say if you like military shit.
> 
> 
> 
> 
> When a country gives sovereignty to the ECB in return for a bailout then the ECB controls it's military, instead of that states government & it's the citizens.
> 
> Click to expand...
> 
> 
> Only on paper. Do you really think that the French units would occupy PAris in order to force the people to live under starvation conditions?
> 
> 
> 
> KissMy said:
> 
> 
> 
> If all the countries of the Euro gives sovereignty to the ECB they will be left with nothing but rocks to fight eachother with & the ECB will have total military superiority.
> 
> Click to expand...
> 
> 
> I  think that military command is made of more than paper diagrams of chain of command, and who signs their paycheck.
> 
> You better hope and pray that I am right.
> 
> Or we will likely see blood baths across the Western world.
Click to expand...


These bankers are not stupid! The ECB will integrate troops just like we do. Just as Tennessee can't secede from the USA union, after a time Spain can't secede from the European Union. It won't be French units occupying Paris, it will be all the other Euro countries units occupying Paris.


----------



## Toro

Spain and Italy have ~1,500,000,000,000 to refinance over the next two years. Where's it all going to come from?


----------



## Toro

KissMy said:


> JimBowie1958 said:
> 
> 
> 
> 
> 
> KissMy said:
> 
> 
> 
> The ECB will keep on taking sovereignty in exchange for bailouts. After-wards the ECB will be dictator over said state's taxes & budget. After they will not be able to afford to raise an army or buy any weapons to fight each-other. They will all sit around & cry while sucking their thumbs.
> 
> 
> 
> 
> How many army divisions does the ECB have?
> 
> If all the major players in the EU say 'fuck off' then the ECB cant do shit about it but cry.
> 
> And the Wermacht is now the Bundeswere and that is a sad thing to say if you like military shit.
> 
> Click to expand...
> 
> 
> When a country gives sovereignty to the ECB in return for a bailout then the ECB controls it's military, instead of that states government & it's the citizens. If all the countries of the Euro gives sovereignty to the ECB they will be left with nothing but rocks to fight eachother with & the ECB will have total military superiority.
> 
> "Give me control over a nation's currency and I care not who makes its laws." -- Baron M.A. Rothschild (1744 - 1812).
Click to expand...


How does the ECB control Italy's military?


----------



## KissMy

Toro said:


> Spain and Italy have ~1,500,000,000,000 to refinance over the next two years. Where's it all going to come from?



They will have to sell their sovereignty to the ECB for a bailout.


----------



## KissMy

Toro said:


> How does the ECB control Italy's military?



Read: My post here It was in response to Trajan's post here




> Zero Hedge: Details Emerge About Spain's Cramming Down "Bailout" Loan - In return for subsidized rates, Spain will cede sovereignty over its financial system, but also lose tax sovereignty, contrary to what the Government said yesterday.





> Reuters: Nicastro said Italy would not resist proposals for a political and banking union requiring nations to cede more sovereignty in order to stabilise the euro bloc. "Italy is more oriented to accept this passage. We see resistance from other countries and not necessarily only in Germany," he said.


----------



## Wiseacre

You have to ask yourself a question, if you're Germany or any other fiscally solvent country in Europe who is being asked to co-sign for massive loans to the prolifigate PIIGS countries who aren't really showing any indication of changing their ways.   Governments in Spain, Italy, Portugal, Greece, etc., will agree to anything to get bailed out with someone else's money, but would they actually make the tough decisions necessary to regain fiscal control, and then follow through?   Will the populations in those countries revolt at the spending reductions that would have to take place, and the changes in many of the social safety net programs that must be made?   

Frankly, I don't think so.   I think promises were made in good times that cannot be kept, one way or another changes will have to be made.   Unpopular changes.


----------



## KissMy

Wiseacre said:


> You have to ask yourself a question, if you're Germany or any other fiscally solvent country in Europe who is being asked to co-sign for massive loans to the prolifigate PIIGS countries who aren't really showing any indication of changing their ways.   Governments in Spain, Italy, Portugal, Greece, etc., will agree to anything to get bailed out with someone else's money, but would they actually make the tough decisions necessary to regain fiscal control, and then follow through?   Will the populations in those countries revolt at the spending reductions that would have to take place, and the changes in many of the social safety net programs that must be made?
> 
> Frankly, I don't think so.   I think promises were made in good times that cannot be kept, one way or another changes will have to be made.   Unpopular changes.



Of course this stuff is not going to be popular. I bet the papers have already been drawn up for all these countries to give up their sovereignty but the leaders are just waiting until the majority is starring into the abyss & scared enough to allow their leaders to sign away their countries power to tax, borrow, spend & control their military. Italy will be the country that tips the scales.


----------



## Trajan

and this is  what a skittish crowd looks like......the fuse is burning, will it be lit? *shrugs*


    * Updated June 14, 2012, 3:12 p.m. ET

Ahead of Vote, Greeks Move Cash, Hire Guards 

As Greece prepares for a weekend vote that could determine whether the country stays in Europe's common currency, many Greeks are gripped by uncertainty and taking measures large and small to prepare for what may come next.

"I don't know whom to trust or what to believe," said Ilias Daskalopoulos, a 28-year-old unemployed writer who earlier this year went to the bank and withdrew his entire life savings&#8212;a few thousand euros that he now keeps stashed in a secret hiding spot.

With the stakes so high, Mr. Daskalopoulos said, he is nervous about the outcome of Sunday's national elections, the second to be held since May. "The situation could be very precarious," he said. 

Other Greeks are transferring money out of the country, hiring security guards, stocking up on groceries and keeping their cars' gas tanks full&#8212;measures of the anxiety many feel as the country's economy collapses and government institutions struggle to cope. Unemployment passed 22% in the first three months of the year, and crime rates are climbing.

The elections pit the left-wing Syriza party, which has pledged to annul Greece's bailout deal with the European Union and International Monetary Fund, against its conservative rival, New Democracy, which backs the rescue package.

Stern warnings from EU leaders that deviating from the strict&#8212;and widely unpopular&#8212;terms of Greece's loan agreements could force the country out of the euro zone have set voters on edge.

more at-

Ahead of Vote, Greeks Move Cash, Hire Guards - WSJ.com

honestly, I don't know if the left loses that will matter for long, they need another bailout now. If the left does win, my feeling is it will just speed things up.

I wonder who merkel is rotting for?seriously....


----------



## KissMy

Drachmageddon is upon them - It wont do Greece much good to switch to drachmas if everyone has already emptied all their bank accounts.  They won't be able to confiscate any Euros to swap with drachmas. Greece should just default on it's creditors & suck it up for a few weeks as their defaults crumble the banking system.


----------



## Toro

Wiseacre said:


> You have to ask yourself a question, if you're Germany or any other fiscally solvent country in Europe who is being asked to co-sign for massive loans to the prolifigate PIIGS countries who aren't really showing any indication of changing their ways.   Governments in Spain, Italy, Portugal, Greece, etc., will agree to anything to get bailed out with someone else's money, but would they actually make the tough decisions necessary to regain fiscal control, and then follow through?   Will the populations in those countries revolt at the spending reductions that would have to take place, and the changes in many of the social safety net programs that must be made?
> 
> Frankly, I don't think so.   I think promises were made in good times that cannot be kept, one way or another changes will have to be made.   Unpopular changes.



Governments are cutting spending and implementing structural reforms. The question is whether it's enough and too late.

Germany is in a vice too. If they reject a bailout, they risk crashing their economy. 

Unlike KissMy, I do not believe further integration will mean loss of military sovereignty. But we would most likely see more fiscal and banking integration.


----------



## Toro

KissMy said:


> Drachmageddon is upon them - It wont do Greece much good to switch to drachmas if everyone has already emptied all their bank accounts.  They won't be able to confiscate any Euros to swap with drachmas. Greece should just default on it's creditors & suck it up for a few weeks as their defaults crumble the banking system.



The endgame is either the North subsidizing the Greeks (et al) permanently or a return to the drachma. Barring a miraculous spurt in Greek productivity, there is no other way. Any other option merely delays the inevitable. 

I believe the Greeks will leave the euro, and probably other countries too. But it will survive thereafter.


----------



## Trajan

KissMy said:


> Drachmageddon is upon them - It wont do Greece much good to switch to drachmas if everyone has already emptied all their bank accounts.  They won't be able to confiscate any Euros to swap with drachmas. Greece should just default on it's creditors & suck it up for a few weeks as their defaults crumble the banking system.



after they dump  the euro, they will only choose the drachma becasue its better than barter, which they are and will do plenty of anyway. 

saw that monti's union reforms got stepped on again, article 18 is killing the Italian economy, 24% of which is off the books anyway.

Oh, and they raised the vat last year and have another increase due this summer too.....for god sakes people it aint gonna matter, it will just increase the black economy more. get a clue, please.


----------



## Trajan

Toro said:


> KissMy said:
> 
> 
> 
> Drachmageddon is upon them - It wont do Greece much good to switch to drachmas if everyone has already emptied all their bank accounts.  They won't be able to confiscate any Euros to swap with drachmas. Greece should just default on it's creditors & suck it up for a few weeks as their defaults crumble the banking system.
> 
> 
> 
> 
> The endgame is either the North subsidizing the Greeks (et al) permanently or a return to the drachma. Barring a miraculous spurt in Greek productivity, there is no other way. Any other option merely delays the inevitable.
> 
> *I believe the Greeks will leave the euro, and probably other countries too. But it will survive thereafter.*
Click to expand...


should it? I don't think so.


----------



## KissMy

Toro said:


> KissMy said:
> 
> 
> 
> Drachmageddon is upon them - It wont do Greece much good to switch to drachmas if everyone has already emptied all their bank accounts.  They won't be able to confiscate any Euros to swap with drachmas. Greece should just default on it's creditors & suck it up for a few weeks as their defaults crumble the banking system.
> 
> 
> 
> 
> The endgame is either the North subsidizing the Greeks (et al) permanently or a return to the drachma. Barring a miraculous spurt in Greek productivity, there is no other way. Any other option merely delays the inevitable.
> 
> I believe the Greeks will leave the euro, and probably other countries too. But it will survive thereafter.
Click to expand...


The Euro will still fail because other countries will pull the same stunt as Greece. It's either a United States of Europe or a failed Euro.


----------



## Trajan

Zander said:


> The impending Euro collapse is driving US Long bonds rates even lower. The yield for the 30 yr T-bond is  down to 4.22 as of today.
> 
> 
> PS- I was laughed at by Toro when I bought in Feb at 4.75.  The fund has a duration of 20...do the math baby!!



the 10 year is just a Grecian or Spanish a hiccup away from sub 1% territory, is that simply unreal or what?


----------



## Wiseacre

Toro said:


> Wiseacre said:
> 
> 
> 
> You have to ask yourself a question, if you're Germany or any other fiscally solvent country in Europe who is being asked to co-sign for massive loans to the prolifigate PIIGS countries who aren't really showing any indication of changing their ways.   Governments in Spain, Italy, Portugal, Greece, etc., will agree to anything to get bailed out with someone else's money, but would they actually make the tough decisions necessary to regain fiscal control, and then follow through?   Will the populations in those countries revolt at the spending reductions that would have to take place, and the changes in many of the social safety net programs that must be made?
> 
> Frankly, I don't think so.   I think promises were made in good times that cannot be kept, one way or another changes will have to be made.   Unpopular changes.
> 
> 
> 
> 
> Governments are cutting spending and implementing structural reforms. The question is whether it's enough and too late.
> 
> Germany is in a vice too. If they reject a bailout, they risk crashing their economy.
> 
> Unlike KissMy, I do not believe further integration will mean loss of military sovereignty. But we would most likely see more fiscal and banking integration.
Click to expand...



Looks to me like Germany is risking a bad downturn either way.   Until and unless those PIIGS countries show the willingness to put their fiscal house in order, not just the gov'ts but the people, then Germany and the other more solvent states are just throwing good money after bad.

Fiscal and banking integration means permanent bailouts.   Everybody goes down the tubes then.


----------



## Trajan

Wiseacre said:


> Toro said:
> 
> 
> 
> 
> 
> Wiseacre said:
> 
> 
> 
> You have to ask yourself a question, if you're Germany or any other fiscally solvent country in Europe who is being asked to co-sign for massive loans to the prolifigate PIIGS countries who aren't really showing any indication of changing their ways.   Governments in Spain, Italy, Portugal, Greece, etc., will agree to anything to get bailed out with someone else's money, but would they actually make the tough decisions necessary to regain fiscal control, and then follow through?   Will the populations in those countries revolt at the spending reductions that would have to take place, and the changes in many of the social safety net programs that must be made?
> 
> Frankly, I don't think so.   I think promises were made in good times that cannot be kept, one way or another changes will have to be made.   Unpopular changes.
> 
> 
> 
> 
> Governments are cutting spending and implementing structural reforms. The question is whether it's enough and too late.
> 
> Germany is in a vice too. If they reject a bailout, they risk crashing their economy.
> 
> Unlike KissMy, I do not believe further integration will mean loss of military sovereignty. But we would most likely see more fiscal and banking integration.
> 
> Click to expand...
> 
> 
> 
> Looks to me like Germany is risking a bad downturn either way.   Until and unless those PIIGS countries show the willingness to put their fiscal house in order, not just the gov'ts but the people, then Germany and the other more solvent states are just throwing good money after bad.
> 
> Fiscal and banking integration means permanent bailouts.   Everybody goes down the tubes then.
Click to expand...


there needs to be a paradigm shift in thinking, and what  the EU sees as a 'free market capitalism', apparently,  Estonia for example gets it, they don't.


----------



## JimBowie1958

Trajan said:


> KissMy said:
> 
> 
> 
> Drachmageddon is upon them - It wont do Greece much good to switch to drachmas if everyone has already emptied all their bank accounts.  They won't be able to confiscate any Euros to swap with drachmas. Greece should just default on it's creditors & suck it up for a few weeks as their defaults crumble the banking system.
> 
> 
> 
> 
> after they dump  the euro, they will only choose the drachma becasue its better than barter, which they are and will do plenty of anyway.
Click to expand...



What if the Greeks reissue Drachmas and back them with gold or a basket of precious metals?

What about letting private banks issue their own bearer notes to replace a national currency?


----------



## Toro

KissMy said:


> Toro said:
> 
> 
> 
> 
> 
> KissMy said:
> 
> 
> 
> Drachmageddon is upon them - It wont do Greece much good to switch to drachmas if everyone has already emptied all their bank accounts.  They won't be able to confiscate any Euros to swap with drachmas. Greece should just default on it's creditors & suck it up for a few weeks as their defaults crumble the banking system.
> 
> 
> 
> 
> The endgame is either the North subsidizing the Greeks (et al) permanently or a return to the drachma. Barring a miraculous spurt in Greek productivity, there is no other way. Any other option merely delays the inevitable.
> 
> I believe the Greeks will leave the euro, and probably other countries too. But it will survive thereafter.
> 
> Click to expand...
> 
> 
> The Euro will still fail because other countries will pull the same stunt as Greece. It's either a United States of Europe or a failed Euro.
Click to expand...


A currency union can exist if there is either labour mobility or transfer of funds between regions without fiscal integration. In fact, it may be preferable because fiscal union does not necessarily solve the structural imbalances between regions. If there isn't a mechanism which allows pressure to be alleviated in a hard hit area, the currency union will implode whether there is fiscal union or not.


----------



## Toro

Trajan said:


> Zander said:
> 
> 
> 
> The impending Euro collapse is driving US Long bonds rates even lower. The yield for the 30 yr T-bond is  down to 4.22 as of today.
> 
> 
> PS- I was laughed at by Toro when I bought in Feb at 4.75.  The fund has a duration of 20...do the math baby!!
> 
> 
> 
> 
> the 10 year is just a Grecian or Spanish a hiccup away from sub 1% territory, is that simply unreal or what?
Click to expand...


I recall giving props to Zander for buying Tbonds at some time but I don't remember razzing him this year. I remember doing so some time ago, but maybe I'm wrong. 

I'm sitting in 90% cash right now. The problem with the Tbond, though, is that people view it as safe, but if you think through the logical endgame if we don't get our fiscal house in order, those holding Tbonds will be in for a very big surprise.

I've started picking away at high yielding, high quality stocks though. I've purchased JNJ recently, and have buy triggers on companies such as CAG, PG, KFT, K, HNZ etc. A 4% dividend yield + 3-5% growth will beat the 10 year over the next decade in almost any scenario. CSCO trades at 4.25x EV/EBITDA. That's fucking crazy.


----------



## KissMy

Toro said:


> KissMy said:
> 
> 
> 
> 
> 
> Toro said:
> 
> 
> 
> The endgame is either the North subsidizing the Greeks (et al) permanently or a return to the drachma. Barring a miraculous spurt in Greek productivity, there is no other way. Any other option merely delays the inevitable.
> 
> I believe the Greeks will leave the euro, and probably other countries too. But it will survive thereafter.
> 
> 
> 
> 
> The Euro will still fail because other countries will pull the same stunt as Greece. It's either a United States of Europe or a failed Euro.
> 
> Click to expand...
> 
> 
> A currency union can exist if there is either labour mobility or transfer of funds between regions without fiscal integration. In fact, it may be preferable because fiscal union does not necessarily solve the structural imbalances between regions. If there isn't a mechanism which allows pressure to be alleviated in a hard hit area, the currency union will implode whether there is fiscal union or not.
Click to expand...


Without iron fist enforcement some countries will want to take as much as they can until they bring the system down. They may do it because they believe they are due reparations, corruption or just plain greed. They know they can walk just walk away from the steaming pile of shit they create.

All elected politicians aren't honest. It's a popularity contest. Some will stimulate the economy by hiding debt to become popular with their voodoo economics. This way it will explode on their successor making them look bad by comparison. This explosion screws all the countries in the currency union.

People are fools to trust in a system like that. Shared currency spreads risk like a MBS & makes a default systemic for a larger portion of the planet.


----------



## JimBowie1958

France is now junk bond status, no?

Egan Jones Cuts France To BBB+, Outlook Negative | ZeroHedge

Wont this cause some crap as hedge fund managers around the globe have to replace their colateral that was based on French sovereign bonds?

Man, this is something I couldnt have believed just ten years ago.

Edit: on second thought, once the WS rumor/spin machine  is doen with it, I am sure it will be proven bullish no matter what.


----------



## KissMy

The Big Question is why did the European Commission allow Greece to hide it's debts so they would cause this problem today???

Goldman Sachs asked Eurostat if it was ok for them to help Greece hide their debts. Eurostat said it was fine.


----------



## Trajan

Toro said:


> Trajan said:
> 
> 
> 
> 
> 
> Zander said:
> 
> 
> 
> The impending Euro collapse is driving US Long bonds rates even lower. The yield for the 30 yr T-bond is  down to 4.22 as of today.
> 
> 
> PS- I was laughed at by Toro when I bought in Feb at 4.75.  The fund has a duration of 20...do the math baby!!
> 
> 
> 
> 
> the 10 year is just a Grecian or Spanish a hiccup away from sub 1% territory, is that simply unreal or what?
> 
> Click to expand...
> 
> 
> I recall giving props to Zander for buying Tbonds at some time but I don't remember razzing him this year. I remember doing so some time ago, but maybe I'm wrong.
> 
> I'm sitting in 90% cash right now. The problem with the Tbond, though, is that people view it as safe, but if you think through the logical endgame if we don't get our fiscal house in order, those holding Tbonds will be in for a very big surprise.
> 
> I've started picking away at high yielding, high quality stocks though. I've purchased JNJ recently, and have buy triggers on companies such as CAG, PG, KFT, K, HNZ etc. A 4% dividend yield + 3-5% growth will beat the 10 year over the next decade in almost any scenario. CSCO trades at 4.25x EV/EBITDA. That's fucking crazy.
Click to expand...


Oh I was just busting Zanders cahones...


agreed, I never understood the love affair with cisco, they never paid a dividend till last year and has, by and large been on its ass. *shrugs*


If you recall in the other thread, I bought my premiums in the last dip, J&J, Intel, yes P&G ....so far the trendline is good, they all pay a dvd. 
 par to or ahead of inflation so, sit and hold,  internal rate on my insurance polices are still ahead of the SP over the last 5 years.


I have been eyeing my gold holdings..I am torn.


----------



## Trajan

so, anyone want to go on record? 


I will take a flyer, greece winds up with a lefty coalition and austerity is a goner.

( greek default is priced in anyway)


----------



## JimBowie1958

Trajan said:


> so, anyone want to go on record?
> 
> 
> I will take a flyer, greece winds up with a lefty coalition and austerity is a goner.
> 
> ( greek default is priced in anyway)



Agreed.

Methinks the EMU is going to either condense to only major nations and small nations with solid economies and banks.

Or it will entirely unravel.

Thatcher was so damned right.


----------



## KissMy

Trajan said:


> so, anyone want to go on record?
> 
> 
> I will take a flyer, greece winds up with a lefty coalition and austerity is a goner.
> 
> ( greek default is priced in anyway)



I think Greece will default but stay with the Euro!


----------



## Trajan

KissMy said:


> Trajan said:
> 
> 
> 
> so, anyone want to go on record?
> 
> 
> I will take a flyer, greece winds up with a lefty coalition and austerity is a goner.
> 
> ( greek default is priced in anyway)
> 
> 
> 
> 
> I think Greece will default but stay with the Euro!
Click to expand...


wow.....ok.


----------



## JimBowie1958

KissMy said:


> Trajan said:
> 
> 
> 
> so, anyone want to go on record?
> 
> 
> I will take a flyer, greece winds up with a lefty coalition and austerity is a goner.
> 
> ( greek default is priced in anyway)
> 
> 
> 
> 
> I think Greece will default but stay with the Euro!
Click to expand...


KM, how would that work? Or are you being sarcastic?

If Greece defaults, those nations injured will kick Greece out of the EMU, I feel fairly certain.

I would be interested in reading your thoughts on the subject, though.


----------



## KissMy

Everyone was cheating their way into the Euro including Germany & France. The EU, ECB & Eurostat knew this & allowed Greece into the Euro. This is a huge con game. Just because Greece is the worse or say the best at the game dose not mean the others are not going down the same drain with them. They all knew how much Greece was cheating & allowed it. They will print, write down debt & default or do whatever it takes to keep the system going.


----------



## Wiseacre

Trajan said:


> so, anyone want to go on record?
> 
> 
> I will take a flyer, greece winds up with a lefty coalition and austerity is a goner.
> 
> ( greek default is priced in anyway)




I don't think Germany will allow any more bailouts if the austerity provisions are ignored.   I think the Greeks know this and will eventually form a coalition that will say one thing and do another.   The question is how long Germany will continue to loan money to gov'ts that will not pay it back.


----------



## Trajan

Wiseacre said:


> Trajan said:
> 
> 
> 
> so, anyone want to go on record?
> 
> 
> I will take a flyer, greece winds up with a lefty coalition and austerity is a goner.
> 
> ( greek default is priced in anyway)
> 
> 
> 
> 
> 
> I don't think Germany will allow any more bailouts if the austerity provisions are ignored.   I think the Greeks know this and will eventually form a coalition that will say one thing and do another.   The question is how long Germany will continue to loan money to gov'ts that will not pay it back.
Click to expand...


well, considering there is back door BS going on, in that Germany is assuming or speaking to debt that the German public and us are probably not aware of (yet), believe me, we know its happening, this whole thing is an iceberg, we see just 20% or so of what there is to be seen and known.......

this is why that continent has been savaging each other since the roman empire fell, and the only let up in 2000 years, a 60 year window,  was imposed/provided by us by virtue of our overwhelming power, $$$$$$$,  the security blanket that they drafted off of,   and a common  enemy, the ussr...........now that they are a shadow of their former selves,  that menace has evaporated,  so it begins again amongst the same old players whose national character has changed not a wit.

These idiots will bring the whole thing down,  again, watch, just as they fell into wars every 20 years or so, so to again will there be suffering on a concomitant scale with war,  this time the munition, is money.


----------



## Wiseacre

Apparently the pro-bailout parties won the Greek election, which means they'll try to form a coalition gov't and ask for more time and money from the ECB.   And the Germans will say no, not until you change your ways.   Problem is, the greek people want the money but not the austerity measures that go with it;   they want the good life with someone else footing the bill.   I think there are provisions that must be met for anymore money to go out to them;   No way are they even close to meeting the fiscal standards that were set;  at some point the cashflow will stop and Greece will exit the euro.


----------



## Trajan

and the market will bounce as we get another WSJ headline of Greece saved, (for now) tomorrow, the insiders will make money and then reality will set in again by Wednesday.....we have seen this shit so many times its pathetic now.


so what will this make it..? default bailout 3?


----------



## KissMy

Told ya so! - Greece will remain in the Euro.

Breaking News: The Troika (European Union, the European Central Bank and the International Monetary Fund) say they are unable to force Greece out of the EU.

Creditors will get more than a hair-cut, this time it will be a bikini-waxing!!! - Ooouuch!!!


----------



## JimBowie1958

KissMy said:


> Told ya so! - Greece will remain in the Euro.
> 
> Breaking News: The Troika (European Union, the European Central Bank and the International Monetary Fund) say they are unable to force Greece out of the EU.
> 
> Creditors will get more than a hair-cut, this time it will be a bikini-waxing!!! - Ooouuch!!!



Arent most of those bonds bought with leverage from 5 or ten to one?

Almost any significant haircut wipes them out.


----------



## Trajan

hummm maybe no bounce?


    Updated June 18, 2012, 8:24 a.m. ET

Spanish Yields Surge; Greek Relief Wanes 

Spain's 10-year government bond yield soared above 7% and equities lost early gains as investors struggled to find much to cheer about in the slim victory for the New Democracy party in the Greek election.

The benchmark Stoxx 600 Index was recently just 0.1% higher at 244.42. The U.K.'s FTSE 100 fell 0.1% to 5475.13, having opened up over 1%. Germany's DAX was 0.7% higher at 6273.12 and France's CAC-40 was up 0.2% at 3094.13. Spain's IBEX 35 index was off 1.1% at 6642.50 and Italy's FTSE MIB was down 1.2% at 13233.89. 

European Market Rally Fades - WSJ.com


----------



## Toro

Watch through the day and tomorrow. Sometimes there's a delayed reaction. 

Or they could just sell the news.


----------



## Trajan

KissMy said:


> Told ya so! - Greece will remain in the Euro.
> 
> Breaking News: The Troika (European Union, the European Central Bank and the International Monetary Fund) say they are unable to force Greece out of the EU.
> 
> Creditors will get more than a hair-cut, this time it will be a bikini-waxing!!! - Ooouuch!!!



sooo close..


----------



## KissMy

Trajan said:


> KissMy said:
> 
> 
> 
> Told ya so! - Greece will remain in the Euro.
> 
> Breaking News: The Troika (European Union, the European Central Bank and the International Monetary Fund) say they are unable to force Greece out of the EU.
> 
> Creditors will get more than a hair-cut, this time it will be a bikini-waxing!!! - Ooouuch!!!
> 
> 
> 
> 
> sooo close..
Click to expand...


My reasoning was based on a poll I saw a that showed that 70% of Greeks want to remain part of the eurozone. Only the parties of the extreme left and right want it to exit. The poll showed that 80% voted for parties that would prefer to keep Greece in.


----------



## JimBowie1958

Debt crisis: Greek government will be forced to seek third bail-out - Telegraph

Intersting article. Says the winners of the Greek elections will demand to renegotiate the autserity package, and also ask for a THIRD bailout.


----------



## Trajan

of course. they will keep throwing money at them , till herman the german screams stop...how so many supposedly smart people can get themselves into such a fix, is just hilarious at this point, I am beyond describing this all as  pathetic. 



Updated June 19, 2012, 4:36 p.m. ET

Spanish Woes Cast Rescue in New Light 

BRUSSELS&#8212;The dismal market reaction to the euro zone's promise to pump as much as &#8364;100 billion ($125.75 billion) into shaky Spanish banks&#8212;underlined by the high yield the government paid on Tuesday to raise short-term funds&#8212;is prompting a rethinking of the rescue's mechanics, which have heightened worries over Madrid's ability to repay its debts.

Spanish Prime Minister Mariano Rajoy relaunched a campaign to allow the euro zone's rescue fund to directly channel the aid money into the country's lenders, rather than through the governments&#8212;a demand that has previously run aground. 

more at-

Spanish Woes Cast Rescue in New Light - WSJ.com


----------



## Trajan

Toro said:


> Watch through the day and tomorrow. Sometimes there's a delayed reaction.
> 
> Or they could just sell the news.



well, they got a pop yesterday, you were right,  but,  I am not sure if its greece or bernbanks subtle op. twist or QE3 ruminations.....


----------



## JimBowie1958

Nigel Farage: "Listen! The Whole Thing&#39;s a Giant Ponzi Scheme!" - YouTube


----------



## Trajan

that it is....


----------



## Trajan

run run , the sky is falling!!!!!!



Mario Monti: we have a week to save the eurozone

Italian prime minister warns that there is no room for failure in talks between single currency's big four countries


Mario Monti: we have a week to save the eurozone | Business | The Guardian


----------



## KissMy

Spain should go bankrupt because over 2/3rds of their debt is external, owed to other countries.


----------



## JimBowie1958

Greek finance minister Vassilis Rapanos rushed to hospital after fainting | Mail Online

http://www.express.co.uk/posts/view...-euro-apocalypse-as-crisis-spreads-to-Germany


----------



## KissMy

The Telegraph: IMF help would set the eurozone on the road to fiscal and political union  lets not encourage it



> Viewed collectively, the 17 nations that make up the eurozone are still one of the two richest regions in the world, and on many other measures of economic success  balance of trade, overall size of budget deficit and national debt relative to GDP  they beat the US by a country mile. A visitor from Mars, looking at the aggregate data, would declare the eurozone a model economy.
> 
> That it is ripping itself apart, without any obvious solution in sight, is, to put it mildly, a major curiosity. Riches, it seems, cannot buy harmony. In an editorial comment this week on the G20 summit, the German financial daily Handelsblatt put it like this: It is rather hypocritical when the Americans and the British, whose own mountains of debt have reached a high point, try to lecture the Europeans At a time when the budget deficits of the US and Great Britain are about 8 per cent, the eurozone members have almost managed to bring their deficits as a whole down to 3 per cent.


----------



## Trajan

KissMy said:


> The Telegraph: IMF help would set the eurozone on the road to fiscal and political union  lets not encourage it
> 
> 
> 
> 
> Viewed collectively, the 17 nations that make up the eurozone are still one of the two richest regions in the world, and on many other measures of economic success  balance of trade, overall size of budget deficit and national debt relative to GDP  they beat the US by a country mile. A visitor from Mars, looking at the aggregate data, would declare the eurozone a model economy.
> 
> That it is ripping itself apart, without any obvious solution in sight, is, to put it mildly, a major curiosity. Riches, it seems, cannot buy harmony. In an editorial comment this week on the G20 summit, the German financial daily Handelsblatt put it like this: It is rather hypocritical when the Americans and the British, whose own mountains of debt have reached a high point, try to lecture the Europeans At a time when the budget deficits of the US and Great Britain are about 8 per cent, the eurozone members have almost managed to bring their deficits as a whole down to 3 per cent.
Click to expand...




> At a time when the budget deficits of the US and Great Britain are about 8 per cent, the eurozone members have almost managed to bring their deficits as a whole down to 3 per cent.



whose  numbers are they using?


----------



## JimBowie1958

KissMy said:


> The Telegraph: IMF help would set the eurozone on the road to fiscal and political union  lets not encourage it
> 
> 
> 
> 
> Viewed collectively, the 17 nations that make up the eurozone are still one of the two richest regions in the world, and on many other measures of economic success  balance of trade, overall size of budget deficit and national debt relative to GDP  they beat the US by a country mile. A visitor from Mars, looking at the aggregate data, would declare the eurozone a model economy.
> 
> *That it is ripping itself apart, without any obvious solution in sight, is, to put it mildly, a major curiosity*. Riches, it seems, cannot buy harmony. In an editorial comment this week on the G20 summit, the German financial daily Handelsblatt put it like this: It is rather hypocritical when the Americans and the British, whose own mountains of debt have reached a high point, try to lecture the Europeans At a time when the budget deficits of the US and Great Britain are about 8 per cent, the eurozone members have almost managed to bring their deficits as a whole down to 3 per cent.
Click to expand...


What is curious about it? They are using a one-size-fits-all currency when there are three very different economic zones to Europe: Northwestern, Mediteranean, and former Soviet states. Each of them have very different needs and should have their own monetary union with its own currency, or else back the Euro with PMs or some basket of commodities whose redeemed components would be determined at the time by the state.


----------



## KissMy

Trajan said:


> KissMy said:
> 
> 
> 
> The Telegraph: IMF help would set the eurozone on the road to fiscal and political union &#8211; let&#8217;s not encourage it
> 
> 
> 
> 
> Viewed collectively, the 17 nations that make up the eurozone are still one of the two richest regions in the world, and on many other measures of economic success &#8211; balance of trade, overall size of budget deficit and national debt relative to GDP &#8211; they beat the US by a country mile. A visitor from Mars, looking at the aggregate data, would declare the eurozone a model economy.
> 
> That it is ripping itself apart, without any obvious solution in sight, is, to put it mildly, a major curiosity. Riches, it seems, cannot buy harmony. In an editorial comment this week on the G20 summit, the German financial daily Handelsblatt put it like this: &#8220;It is rather hypocritical when the Americans and the British, whose own mountains of debt have reached a high point, try to lecture the Europeans&#8230; At a time when the budget deficits of the US and Great Britain are about 8 per cent, the eurozone members have almost managed to bring their deficits as a whole down to 3 per cent.&#8221;
> 
> 
> 
> 
> 
> Click to expand...
> 
> 
> 
> 
> 
> At a time when the budget deficits of the US and Great Britain are about 8 per cent, the eurozone members have almost managed to bring their deficits as a whole down to 3 per cent.&#8221;
> 
> Click to expand...
> 
> 
> whose  numbers are they using?
Click to expand...


List of World&#8217;s Largest Creditor and Debtor Nations

Since 2006 The International Monetary Fund&#8217;s Balance of Payment statistics have been uploaded into a neat online database accessible through its website. Among country balance of payments figures, the database also features the &#8220;Net International Investment Position&#8221; of a country, which is defined as the difference between foreign assets that domestic residents own and domestic assets held by foreign entities. Here are the most recent (2010) rankings. Note that the 2011 rankings are still in the process of being calculated.

2010 Country NIIP (Net International Investment Position) statistics by the IMF. NIIP is defined by a country&#8217;s total domestically owned assets minus its foreign owned assets. All figures have been adjusted to nominal US dollars.






It is no surprise that the most indebted country, the United States, takes the bottom of the list. Its NIIP means the value of its domestically owned assets is less than its liabilities to foreign investors. We see Spain, Greece, Italy, and Portugal on the list of negative NIIPers as well. Japan, China, and Germany are effectively the countries with the largest NIIP. Countries with a positive NIIP are considered to be creditor nations, while those with a negative NIIP are debtor nations. For everyday investors, the NIIP of a country promises to be a leading indicator of a country&#8217;s overall fiscal responsibility. Diversifying holdings in both creditor and debtor nations could help spread a portfolio&#8217;s risk over time.

Note that Germany and Switzerland have been acting as the main Eurozone creditors by maintaining a large and positive NIIP. Investors should keep the NIIP figures in mind  when measuring the creditworthiness of a country and its businesses. Ultimately, the terms of trade will be determined by those nations that are willing to lend out their capital.  Debtor nations will be the ones stuck with the credit card bill.


----------



## Trajan

depressing....


----------



## JimBowie1958

Trajan said:


> depressing....



Only if you let yourself think about it....

Sorry, trying to be positive here.


----------



## KissMy

What The Mother Of All Central Banks Says About The Financial System


> ...be prepared to lower your expectations.
> 
> The world is now five years on from the outbreak of the 2008 financial crisis that started with the  implosion of two major U.S. investment banks &#8212; Bear Stearns and Lehman Brothers. Yet, the global economy is still unbalanced and seemingly becoming more so as interacting weaknesses continue to amplify each other.
> 
> The goals of balanced growth, balanced economic policies and a safe financial system still elude us. In advanced economies at the center of the financial crisis, high debt loads continue to drag down recovery. Monetary and fiscal policies still lack a comprehensive solution to short-term needs and long-term dangers. And despite the international progress on regulation, the condition of the financial sector still poses a threat to stability....
> 
> Here are some takeaways from that 214 page report on the global banking system going forward.
> 
> - Private banks need to recognize losses.
> - Monetary easing more controversial than before.
> - This crisis is not over.
> - Shadow banking system ungovernable and growing.


----------



## tigerbob

Creeping death creeps a little faster...



> *EU unveils its vision for the future of monetary union*
> 
> European authorities have unveiled their vision for the future, which gives them much greater powers.
> 
> It includes the creation of a European treasury, which would have powers over national budgets.
> 
> European Commission President Jose Manuel Barroso said it was "a defining moment for European integration".
> 
> The 10-year plan is designed to strengthen the eurozone and prevent future crises, but critics say it will not address current debt problems.
> 
> This week, some markets fell sharply on fears that leaders at the EU summit on Thursday and Friday would fail to agree immediate measures to try to stem the current crisis, which has now engulfed five eurozone members.
> 
> Spain is negotiating the terms of loans worth up to 100bn euros for its banks, and the new Greek government wants to ease the terms of its huge bailout.
> 
> The governor of the Bank of England, Sir Mervyn King, expressed concern about the recent response of European authorities.
> 
> "I am pessimistic. I am particularly concerned because over two years now we have seen the situation in the euro area get worse and the problem being pushed down the road," he said, while appearing at a parliamentary hearing.
> 
> BBC News - EU unveils its vision for the future of monetary union


----------



## Trajan

so, is it me or are they just creating an all encompassing bigger 'fail' yet to come?


----------



## tigerbob

Trajan said:


> so, is it me or are they just creating an all encompassing bigger 'fail' yet to come?



If it is you, it's you and Sir Mervyn King.


----------



## Trajan

so the marketeers bubbled up a +2% rally based on...what again? 

Markets Cheer Europe Plan, 





Await Details 

Markets Cheer Europe Plan, Await Details - WSJ.com


----------



## Trajan

BERLIN&#8212;Germany's parliament ratified the euro zone's permanent bailout fund late Friday, as well as *rules that enshrine German-style budget discipline in euro-zone countries and most other European Union members,* despite widespread criticism of Chancellor Angela Merkel upon her return from a European summit where she made major concessions on support for Spain and Italy.

German Lawmakers Ratify Bailout Fund - WSJ.com

 right, this will last as long as Greek working day if it ever gets leveraged at all.


----------



## Toro

Some points to remember.

- The eurozone has no problem working if there is a mechanism to transfer money from the north to the south on a permanent basis.

- Breaking the daisy chain between government debt and bank debt substantially mitigates existential risk.

Today's deal - in theory - satisfies both of these axioms, at least partly.  So it's no wonder that risk assets rallied.  This is EuroTARP to some extent.

Of course, the devil is in the details.  Whether it passes or not remains to be seen.


----------



## Trajan

Updated July 2, 2012, 8:01 p.m. ET

Bond Rift Divides Merkel Coalition 

BERLIN&#8212;The increasingly radical measures needed to tame the euro-zone debt crisis are leading to a growing rift within German Chancellor Angela Merkel's governing coalition.

Ms. Merkel's junior partner, the pro-business Free Democratic Party, is angry about the mounting hints in Berlin that Germany might ultimately agree to collective debt issuance by euro-zone governments, known as euro bonds.

more at-

Bond Rift Divides Merkel Coalition - WSJ.com

and Greece wants their deal redone...big time...


frankly ,little has changed fundamentally, they are just spreading the risk wider and deeper.

the market here took a breather today, volume lowest in 10 years....I think they are thinking wtf with the horrible Manufacturing data, they excepted a drop but they were off massively.


----------



## KissMy

We are in way worse shape than socialist Europe!







America's debt is greater than the combined debt of the entire Eurozone and the U.K.. As the chart shows, America's debt is currently $15.1 trillion, while the Eurozone (which includes France, Germany, Greece, Italy, Spain, the U.K., and others) has a combined debt of $12.7 trillion. (All dollar amounts are in U.S. dollars, and the data refers to closing 2011 numbers.)

The Eurozone is larger than the United States, so America's debt per capita also exceeds the Eurozone's. According to the Census Bureau, the U.S. has a population of 313 million, whereas the Eurozone has a population in excess of 331 million.

Republican presidential candidate Mitt Romney frequently warns that the United States should not become like Greece. "We need to rein in government and unleash the extraordinary vitality and creativity of the American people," Romney wrote in a December op-ed. "We must not wait to suffer a crisis like Greece's or Portugal's to right the ship of state."

But with charts like this, that formulation might already be out of date, considering the enormity of America's debt burden.


----------



## Trajan

yup and Spain raising the vat to 21 from 18% is stupid too............*sigh*


----------



## Wiseacre

KissMy said:


> We are in way worse shape than socialist Europe!
> 
> 
> 
> 
> 
> 
> America's debt is greater than the combined debt of the entire Eurozone and the U.K.. As the chart shows, America's debt is currently $15.1 trillion, while the Eurozone (which includes France, Germany, Greece, Italy, Spain, the U.K., and others) has a combined debt of $12.7 trillion. (All dollar amounts are in U.S. dollars, and the data refers to closing 2011 numbers.)
> 
> The Eurozone is larger than the United States, so America's debt per capita also exceeds the Eurozone's. According to the Census Bureau, the U.S. has a population of 313 million, whereas the Eurozone has a population in excess of 331 million.
> 
> Republican presidential candidate Mitt Romney frequently warns that the United States should not become like Greece. "We need to rein in government and unleash the extraordinary vitality and creativity of the American people," Romney wrote in a December op-ed. "We must not wait to suffer a crisis like Greece's or Portugal's to right the ship of state."
> 
> But with charts like this, that formulation might already be out of date, considering the enormity of America's debt burden.




That chart was based on data as of the end of 2011.   Our debt is going to exceed 16 trillion before the end of this year.   As for being worse off than the EZ, not so sure.   We got time to turn things around, so do they.   Neither seems to be on the right track for that though.


----------



## Trajan




----------



## Franticfrank

Wow, that is quite an amount of US debt, and nobody really seems to panic about it in the same way as in Europe. I agree - something different really has to be done, the situation now is crazy. Even when you look at statistics from Germany, you don't even hear about their nearly 3 trillion in debt, yet they're the ones bailing out Europe.


----------



## KissMy

The Eurozone GDP was $17.6 Trillion in 2011 & they only had $12.7 Trillion of debt.

The US only has a GDP of $15.2 Trillion & $15.9 Trillion of debt.

Yes socialist Europe & China have kicked our ass. Our corrupt oligarchy has got to go. It is shocking how corrupt the Wallstreet / Government / Banking system is & no one has gone to jail.


----------



## Indofred

KissMy said:


> The Eurozond GDP was $17.6 Trillion in 2011 & they only had $12.7 Trillion of debt.
> 
> The US only has a GDP of $15.2 Trillion & $15.9 Trillion of debt.
> 
> Yes socialist Europe & China have kicked our ass. Our corrupt oligarchy has got to go. It is shocking how corrupt the Wallstreet banking system is & no one has gone to jail.



I haven't checked the numbers but I'll assume they're the publish figures.
The reason I haven't bothered to check is they're almost sure to be lies.
The EU never manages a set of audited accounts so no one knows what's actually happening anyway.
Any company doing that would ave been forced to close down after the first year but the Eurofools do it every year.
The whole thing was set up on lies and runs on lies.
No wonder it's in a mess.


----------



## Trajan

KissMy said:


> The Eurozond GDP was $17.6 Trillion in 2011 & they only had $12.7 Trillion of debt.
> 
> The US only has a GDP of $15.2 Trillion & $15.9 Trillion of debt.
> 
> Yes socialist Europe & China have kicked our ass. Our corrupt oligarchy has got to go. It is shocking how corrupt the Wallstreet banking system is & no one has gone to jail.



well I agree to an extent  but closer to the nuts and bolts;


Updated July 13, 2012, 8:15 a.m. ET

Spanish Bank Borrowing from ECB Surges 

MADRID&#8212;Spanish banks' borrowing from the European Central Bank rose at the fastest pace in three months to a record in June, as the country's lenders experienced increased stress in the weeks leading up to the announcement of a &#8364;100 billion ($122 billion) bailout for its financial sector. 


Net borrowings rose to &#8364;337.21 billion in June, an increase of 17% from &#8364;287.81 billion in May, according to data released Friday by the Bank of Spain. In the past year, banks' borrowing from the ECB has sky-rocketed from &#8364;47.78 billion in June 2011, a sevenfold increase.

Gross borrowings, which strip out cash deposited at the ECB, stood at &#8364;365 billion in June, up from &#8364;324.64 billion in May, the data showed. The figure represented 30% of the gross borrowings by all euro-zone lenders, which last month stood at &#8364;1.202 trillion.


more at-
Euro-Zone Banks Cut Back Lending - WSJ.com


I am just wondering how a country with a gdp of approx. 1 Trillion euros survives with a banking system that borrows a third of its  yearly output with no end in sight.
 yes I know its from the 'fund', but this cannot go on for long and I guess all those stress tests  were for shit to boot. Doing a quick calc. to dollars and our own Tarp etc. this is huuuuuuuuuuuge.


----------



## FireFly

[ame="http://www.youtube.com/watch?v=TN_1mF-3JTI"]The Genius of Mutual Indebtedness - Nigel Farage[/ame]
[ame="http://www.youtube.com/watch?v=Wb-MWoZKYmg"]Epic Rant - Nigel Farage Was Right![/ame]


----------



## Trajan

palate cleanser time......


'Black Friday' Blame-Game Escalates As Spain Is Out Of Money In 40 Days

With Valencia bust, Spanish bonds at all-time record spreads to bunds, and yields at euro-era record highs, Spain's access to public markets for more debt is as good as closed. What is most concerning however, as FAZ reports, is that "the money will last [only] until September", and "Spain has no 'Plan B". Yesterday's market meltdown - especially at the front-end of the Spanish curve - is now being dubbed 'Black Friday' and the desperation is clear among the Spanish elite. Jose Manuel Garcia-Margallo (JMGM) attacked the ECB for their inaction in the SMP (bond-buying program) as they do "nothing to stop the fire of the [Spanish] government debt" and when asked how he saw the future of the European Union, he replied that it could "not go on much longer." The riots protest rallies continue to gather pace as Black Friday saw the gravely concerned union-leaders (facing worrying austerity) calling for a second general strike (yeah - that will help) as they warn of a 'hot autumn'. It appears Spain has skipped 'worse' and gone from bad to worst as they work "to ensure that financial liabilities do not poison the national debt" - a little late we hesitate to point out.

snip-

_
from the best pen-pushers in the cabinet of Prime Minister Mariano Rajoy, another piece of bad news: Because of rising interest rates and unemployment benefits *would have to increase government spending in the coming year and by 9.2 percent. *As an upper limit for the next budget, he called 126 billion euros (116 this year) and estimated the proportion of debt service on up to 39 billion. So this would be the largest budget item in general._

more at-
'Black Friday' Blame-Game Escalates As Spain Is Out Of Money In 40 Days | ZeroHedge

and,  their banks need .....mo' money.....its a big money hole...nothing more.


----------



## Trajan

annnnd...

Floodgates Open As Four More Spanish Regions Seek Bailout; German Nürburgring Faces Bankruptcy

Even as Europe has become an utterly dysfunctional experiment in everything relating to modern economics and monetary theory, it has one redeeming feature: it has proven that the Defection regime under Game Theory is 100% correct. It says that once the defections from an unstable Nash equilibrium begin, there is no stopping until the entire system collapses under its own weight. This is precisely what has happened in Spain, where first Catalunya, then Valencia on Friday, and now virtually everyone else is set to demand a bailout. From Bloomberg: The Balearic Islands and Catalonia are among six Spanish regions that may ask for aid from the central government after Valencia sought a bailout, El Pais reported. Castilla-La-Mancha, Murcia, the Canary Islands and possibly Andalusia are also having difficulty funding themselves and some of these regions are studying plans to tap the recently created emergency-loan fund that Valencia said it would use yesterday, the newspaper said, without citing anyone."

"Spain created the 18 billion-euro ($23 billion) bailout mechanism last week to help cash-strapped regions even as its own access to financial markets narrows." What Spain's perfectly insolvent and highly corrupt regions also know is that the bailout money,* like in the case of the ESM, will be sufficient for one, perhaps two, of the applicants. *The rest will be out of luck.

Floodgates Open As Four More Spanish Regions Seek Bailout; German Nürburgring Faces Bankruptcy | ZeroHedge

yup...


----------



## Trajan

"Markets overreact and are sometimes irrational," Finance Minister Luis de Guindos told Parliament on Monday. "Market swings that are to some extent speculative must be curtailed, because they could lead to undesirable situations. But in a monetary union, that doesn't correspond to governments, but to other sorts of institutions."

Review & Outlook: Spain Blames Mario - WSJ.com


 how *ucked is Europe right now? seriously? for now and the next 5 years?


----------



## Indofred

The really shocking thing about all of this?
Some ruddy idiots in the UK still want the pound to be absorbed into the Euro sink hole.

The stupidity is astounding.


----------



## Colin

Just heard that due to the current economic crisis Greece is cancelling all production of houmous and taramasalata as it's a double dip recession.


----------



## tigerbob

Colin said:


> Just heard that due to the current economic crisis Greece is cancelling all production of houmous and taramasalata as it's a double dip recession.



That was the most pitaful joke I've ever heard.


----------



## Colin

tigerbob said:


> Colin said:
> 
> 
> 
> Just heard that due to the current economic crisis Greece is cancelling all production of houmous and taramasalata as it's a double dip recession.
> 
> 
> 
> 
> That was the most pitaful joke I've ever heard.
Click to expand...


A double dip recession is no joke!


----------



## tigerbob

Colin said:


> tigerbob said:
> 
> 
> 
> 
> 
> Colin said:
> 
> 
> 
> Just heard that due to the current economic crisis Greece is cancelling all production of houmous and taramasalata as it's a double dip recession.
> 
> 
> 
> 
> That was the most pitaful joke I've ever heard.
> 
> Click to expand...
> 
> 
> A double dip recession is no joke!
Click to expand...


It would be the worst recession we've ever ret-seen-a.

Sorry.


----------



## Colin

tigerbob said:


> Colin said:
> 
> 
> 
> 
> 
> tigerbob said:
> 
> 
> 
> That was the most pitaful joke I've ever heard.
> 
> 
> 
> 
> A double dip recession is no joke!
> 
> Click to expand...
> 
> 
> It would be the worst recession we've ever ret-seen-a.
> 
> Sorry.
Click to expand...


I didn't realise you spoke Chinese as well, Tiger!


----------



## Colin

tigerbob said:


> Colin said:
> 
> 
> 
> 
> 
> tigerbob said:
> 
> 
> 
> That was the most pitaful joke I've ever heard.
> 
> 
> 
> 
> A double dip recession is no joke!
> 
> Click to expand...
> 
> 
> It would be the worst recession we've ever ret-seen-a.
> 
> Sorry.
Click to expand...


I see that Greeks are leaving in droves looking for jobs abroad. Apparently a lot have gone to the USA where they've taken jobs waiting on tables, so beware of Greeks bearing grits.


----------



## tigerbob

Colin said:


> tigerbob said:
> 
> 
> 
> 
> 
> Colin said:
> 
> 
> 
> A double dip recession is no joke!
> 
> 
> 
> 
> It would be the worst recession we've ever ret-seen-a.
> 
> Sorry.
> 
> Click to expand...
> 
> 
> I see that Greeks are leaving in droves looking for jobs abroad. Apparently a lot have gone to the USA where they've taken jobs waiting on tables, so beware of Greeks bearing grits.
Click to expand...


Recession in Northern Califormia is hitting the high tech industry hard too, so beware of geeks bearing grits.


----------



## tigerbob

Colin said:


> tigerbob said:
> 
> 
> 
> 
> 
> Colin said:
> 
> 
> 
> A double dip recession is no joke!
> 
> 
> 
> 
> It would be the worst recession we've ever ret-seen-a.
> 
> Sorry.
> 
> Click to expand...
> 
> 
> I didn't realise you spoke Chinese as well, Tiger!
Click to expand...


I'm fluent in all forms of bollocks, mate.


----------



## Bleedmeen

The Euro soon collaps every one in europe knows that. The news paper is every day new report about Euron´s and the banks in euron zone how bad it´s.


----------



## FireFly

Bleedmeen said:


> The Euro soon collaps every one in europe knows that. The news paper is every day new report about Euron´s and the banks in euron zone how bad it´s.



You cant believe the news. We are in far worse shape than socialist Europe. Obama has appealed the courts ruling that blocked the NDAA & no news outlet has covered that. God save Wikileaks & long live Julian Assange!


----------

