The € EURO thread

[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’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

 

[JimBowie1958]

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]

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]

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.

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]

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.

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.

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]

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’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 “well informed” 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]

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 €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