Europe in Crisis

[saxitoxin]

[saxitoxin]

DATELINE: TODAY
THREAT LEVEL: 11:15PM

As Greece, Italy, Spain, Portugal and Ireland hurtled toward the edge of oblivion, markets reacted with horror when President Sarkozy and Chancellor Merkel failed to make a planned appearance together.

Meanwhile, Stater President Obama ordered the EU to quickly resolve the debt crisis and said the time for holding the hands of the little countries was over; order must be imposed by Germany and France on the alphabet soup of nonsense nations sprinkled around the continent.

In the end the big countries in Europe must meet and take a decision on how to coordinate monetary integration.

He then sent Secretary of the Treasury Timothy Geithner to supervise the EU's monthly meeting of finance ministers.

http://www.reuters.com/article/2011/09/ ... me=topNews

[Symmetry]

Always already

[saxitoxin]

DATELINE: TODAY
THREAT LEVEL: 11:20PM

German EU Energy Commissioner Günther Oettinger has issued a controversial statement demanding the German flag be flown higher than the flags of other nations at EU facilities. He also called on the EU to forcibly replace Greek civil servants with French and German officials to supervise some Greek government functions such as tax collection. Germany previously was responsible for tax collection in Greece over a 2 year period from 1941 to 1943:

German EU Energy Commissioner Günther Oettinger suggested some radical solutions on Friday … ‘deficit sinner’ countries should be made to fly their flags at half mast. Another tactic for pulling the debt-stricken country out of crisis could be replacing "the obviously ineffective administrators" there, he added. Because Greek officials have failed at collecting outstanding taxes and selling state-owned assets as planned, Oettinger alleged, experts from other EU nations should be sent in to do their jobs instead. "They could operate without concern for resistance and end the inefficiency," he told Bild.

http://www.spiegel.de/international/eur ... 65,00.html

[saxitoxin]

DATELINE: TODAY
THREAT LEVEL: 11:24PM

Greece will run out of money in 28 days it was announced.

Debt-laden Greece will run out of cash next month, the country's deputy finance minister said today...

http://www.thisislondon.co.uk/standard- ... f-money.do

[Symmetry]

DATELINE: TODAY
THREAT LEVEL: 11:24PM

Greece will run out of money in 28 days, it was announced.

Debt-laden Greece will run out of cash next month, the country's deputy finance minister said today...

http://www.thisislondon.co.uk/standard- ... f-money.do

This is really B-material when you should be pulling out your A-stuff. I don't think I'm the only poster that senses a kind of malaise recently, as if you're just phoning this in. What's up?

[saxitoxin]

DATELINE: TODAY
THREAT LEVEL: 11:26PM

Danske Bank, the largest bank in Denmark (don't get excited, that just means it's about the size of the Milton-Keynes Credit Union), has called on the the UK's credit rating to be dropped 4 levels from AAA to A+.

The Financial Times wrote:Viewers of European CNBC early on Thursday morning will probably have seen Danske Bank making their case for cutting the UK’s credit rating by no fewer than four notches, from AAA to A+.
(Which is about where Italy is at the moment.)

http://ftalphaville.ft.com/blog/2011/09 ... still-aaa/

[neanderpaul14]

Debt-laden Greece will run out of cash next month, the country's deputy finance minister said today...

Will there be a bankruptcy sale?

[saxitoxin]

DATELINE: TODAY
THREAT LEVEL: 11:27PM

In a humbling moment for the former colonial overlords, Brazil has pledged it is ready to help bail-out Europe, calling on India and South Africa to send much-needed financial aid to the continent as well. India responded by saying the problem was so big that there was nothing left anyone could do and Europe would have to be cut-loose to fend for itself.

Brazil's president, Dilma Rousseff, reiterated on Wednesday that her country was ready to join an international rescue effort, a day after officials said Brazil was in preliminary talks with the four other members of the BRICS group -- Russia, India, China and South Africa -- to make coordinated purchases of bonds of euro zone countries.

"The magnitude of the European crisis is so large," said Abheek Barua, chief economist at HDFC Bank in New Delhi. "Unless there's sort of massive buying, then it won't make a difference."

http://www.reuters.com/article/2011/09/ ... 2U20110914

[saxitoxin]

DATELINE: TODAY
THREAT LEVEL: 11:30PM

The President of the "World" Bank Robert Zoellick (a former U.S. Deputy Secretary of State and the 17th consecutive U.S. citizen to hold the presidency of the "World" Bank) accused Europe of living in a fantasy land in a scathing attack.

Robert Zoellick said Wednesday that the nations did not act responsibly because they created a shared currency without ensuring that it would work. He said they should have first considered those nations that couldn't compete in global trading markets and those that are burdened by debt.

"The global economy has entered a new danger zone with little running room as European countries resist difficult truths about the common responsibilities of a common currency," Zoellick said.

http://www.google.com/hostednews/ap/art ... ccb7e87427

[BigBallinStalin]

If they do purchase all these bonds, and if these almost-on-the-brink nations can't get their shit together, the next wave of cash won't come in, and certain smaller nations will experience a very, very shitty depression.

Or the next wave of cash does come in, but it's from newly printed cash, thus increasing inflation, devaluing your money, and running the now eminent risk of too much inflation, or hyper-inflation. Then, the larger nations will experience a really, really shitty Depression. Significantly worse than the US Great Depression.


It may be hard to believe, but the value of silver, gold, and other precious metals relative to the USD will probably keep increasing, but their worth won't be overvalued--which is scary.


Hopefully, people will remember the unintended consequences and lack of capable foresight of central planning, which has exacerbated the medium- and long-term negative effects since the 2007 recession.

[Pedronicus]

I think the logic of the European bank bail out is now on a knife edge and could well alter completely.

What has not changed is the fact that there was never enough money to bail out all the bad debts of all Europe’s Big Banks. But the logic was that we didn’t need to bail them all out. At some point, the logic said, growth will return and turn bad debts back in to good ones and create new debts and new profit. So what had to be done was bail out enough banks the minimum necessary to buy the time for the growth to happen. And so a little by little approach was adopted. And that had a chance to work so long as the balance of debtor nations to bailers looked convincing.

It has been Italy that has changed the logic. Everyone is looking at Greece as if something there has changed. Nothing has changed and nothing new has been discovered. From the start Europe and Greece have been playing the Argentina game plan. Talk about austerity, talk about debt reduction, enough to keep the lid on the situation and whenever it becomes a little too clear that cuts are not being made, growth has not returned and the debt is not going down, look grave and make more promises. And repeat as often as you can get away with. Argentina did it and now Greece has too. But the game has a limit and we have reached it.

But as I say, there is nothing new in this and nothing the big players were not aware of from the start. It was, after all, their plan.What has changed the entire situation is that Italy has gone from being one of the creditor nations to one of the debtor nations. And while Italy was never one of the BIG creditor nations like France and Germany, it is a massive debtor. Far, far too big for anyone to bail out. And that is what has changed everything.

With Italy and its banks collapsing – and make no mistake they are – the logic for France and especially Germany changes. There is not enough money to bail out Italy. Once that has come to light clearly then it makes less sense to bail out Greece.

Till now, the hope has been that a general bail out fund (the EFSF) and Europe wide bond buying (the ECB) would be enough, to keep the fires under control. In which case it made sense for Germany and France to grudgingly put their money in to a communal pot from which everyone could be helped. BUT, with a debtor as unhelpable as Italy defecting form the creditors and appearing in the debtors , then it no longer looks like the common pot is going to be enough. At which point it makes more political sense for Germany and France to keep what money and credit they still have and save it for bailing out ONLY their own banks.

This is where we are now. Does Merkel think we have arrived at the point where Germany thinks the whole cannot be saved and so it makes more sense to withhold its money and use it to save only German banks? All for one still? Or each for himself? I think the balance is tipping decisively in favour of every man for himself.

And I think there may be one more, perhaps quite important thing, which the change in Italy’s fortunes does to push Germany, and Austria as well, toward pulling up the draw bridge. And that is that there is enormous lingering nationalistic anger in Austria and Bavaria about how their banks were bought out from under them – by ‘foreigners’.

In Austria there is huge resentment at how, as they see it, HVB (Bavarian Bank) ruined Austria’s largest bank, Bank Austria, on purpose, as part of a deliberate plan to then buy Bank Austria for a fraction of its real worth. The story I was told – and it matters less if it is true or not, and more that it is what many people in Austria and Austrian banking believe – is, I think, libellous so I won’t repeat it here in any detail. But it involves HVB helping arrange large loans with Bank Austria, that then went catastrophically bad, allowing HVB to ‘rescue’ bank Austria by buying it. Strange as it may seem, I have often been told that there is a deep and active resentment in Austria towards the Bavarian Bankers.

But then HVB, the villain fo the Austrian piece, rammed itself in to a brick wall of debt of its own stupid making and was itself ‘saved’/bought up by UniCredit. At which point the Italian owned both HVB and Bank Austria and so Austrian nationalistic pride continued to be outraged and Bavarian nationalistic pride was now also outraged at the thought that Italians were now in charge of Bavarian banking. A whole lot of outrage going on. In places where they’ve had practice.

It is worth noting that Bavaria has a very clear and virulent sense of ‘Bavaria first’. It is where many of Germany’s top bankers come from, and it considers itself the ‘real Germany’, the ‘better Germany’ and somehow both superior and entitled. I have been told this many times by people who worked with Bavarian banks and who live in Bavaria. I have been told lurid accounts of petty and not so petty rivalries and hatreds in Bavarian banking, from those who worked in it. So, weird as it may seem to me and you, I take it as true.

So now to return to the main point, UniCredit is the final resting place of the pride of Austrian banking, Bank Austria, and the pride of Bavarian Banking HVB. What do you think, would sentiment be to put German and Austrian money in to a communal pot in order to try to save not only Greek banks but Italian ones as well (especially knowing that the attempt to save Italy will be futile) OR to keep Austria’s money safe for use ‘saving’ only Austrian banks and Germany’s money for use only saving Bavarian banks? And in so doing, as UniCredit collapses, take back from the ‘rotten foreigners’ that which they ‘should never have had’ in the first place.

The argument may sound sordid and nastily nationalistic but I think it will get traction especially as Italy shows itself unable to rein in its spending, its corruption and its debts. The case for Italy being unsaveable and indeed not worthy of saving will make the ‘let’s save those worthy of saving – us” argument seem reasonable and sane.

In short I think the all for one moment is drawing to a close.

[saxitoxin]

DATELINE: TODAY
THREAT LEVEL: 11:09PM

Greece will stay in the Eurozone

The announcement by the three leaders appeared to suggest Greece would not fail to meet its debt obligations any time soon.

http://www.cbc.ca/news/business/story/2 ... ml?cmp=rss

[saxitoxin]

DATELINE: TODAY
THREAT LEVEL: 11:15PM

Night janitor at Swiss banking giant makes $2 billion in unauthorized trades; UBS facing crisis.

Swiss banking giant UBS said Thursday that a rogue trader has caused it an estimated loss of $2 billion, stunning a beleaguered banking industry that has proven vulnerable to unauthorized trades.

Police in London said they arrested 31-year-old Kweku Adoboli in connection with the loss.

http://www.cbc.ca/news/business/story/2 ... ml?cmp=rss

[Neoteny]

So, when we reach midnight do we all die or rush to our nearest discotheque and tanzen to Falco?

[saxitoxin]

DATELINE: TODAY
THREAT LEVEL: 11:07AM



The United States, Japan, United Kingdom and Switzerland have agreed to bail-out the Eurozone with 3-month loans to European banks to keep them open through the end of the year. The loans will be denominated in U.S. dollars to shore-up dwindling supplies of hard currency on the continent.

Many European banks have run into difficulties trying to borrow dollars to run their greenback based activities because US funds are refusing to lend to them on fears of the euro debt crisis.

http://www.independent.ie/business/euro ... 77614.html

[HapSmo19]

The United States...agreed to bail-out the Eurozone...

SAY WUT?

[BigBallinStalin]

The world's central banks have decided on an action plan to help European banks by flooding the market with dollars.

The move boosted the euro and stock markets also gained on the move.

Many European banks have run into difficulties trying to borrow dollars to run their greenback based activities because US funds are refusing to lend to them on fears of the euro debt crisis.

They're releasing their foreign currency reserves of US$, which means that their currencies relative to the US$ will increase. The price of gold and silver should increase relative to all fiat currencies, but it depends on how much US$ is dumped (assuming it actually is being released).

Depending on the amount released, the US could expect some serious inflation within the short-term.

The European Central Bank said it would coordinate with the U.S. Federal Reserve, Bank of England, Bank of Japan and Swiss National Bank to ensure banks unlimited dollar funding through the end of the year.

The rare coordinated move buoyed markets. European financial stocks, which have been battered in recent weeks, surged as concerns eased over some banks ability to raise enough dollars to meet their obligations

Why?

European banks need U.S. currency to fund loans they have made in dollars to companies and consumers around the world, and securities they hold that are denominated on dollars. They have tended to tap short-term markets, including money-market mutual funds, for the dollars they lend out, and need to frequently repay or roll over those borrowings. They would turn to the ECB for help only if they were unable to raise the funds elsewhere.

In other words, Keynesian economists are going to decrease the value of your dollars real fast.

[saxitoxin]

DATELINE: TODAY
THREAT LEVEL: 11:15PM

The EU was left reeling today after S&P slashed Italy's credit rating to A-, below that of Slovakia, in an unexpected move. Moody's has announced it may follow suit.

Standard & Poor's cut Italy's credit rating on Tuesday in a surprise move that increased strains on the debt-stressed eurozone.

http://www.reuters.com/article/2011/09/ ... me=topNews

[Phatscotty]

DATELINE: TODAY
THREAT LEVEL: 11:15PM

As Greece, Italy, Spain, Portugal and Ireland hurtled toward the edge of oblivion, markets reacted with horror when President Sarkozy and Chancellor Merkel failed to make a planned appearance together.

Meanwhile, Stater President Obama ordered the EU to quickly resolve the debt crisis and said the time for holding the hands of the little countries was over; order must be imposed by Germany and France on the alphabet soup of nonsense nations sprinkled around the continent.

In the end the big countries in Europe must meet and take a decision on how to coordinate monetary integration.

He then sent Secretary of the Treasury Timothy Geithner to supervise the EU's monthly meeting of finance ministers.

http://www.reuters.com/article/2011/09/ ... me=topNews

Dear Europe


We love you and want to help, but the help that is being offered to you is more poison. Just want you to know, any deals you make with the Federal Reserve not necessarily approved of by the US taxpayers. The Fed can create USD to buy Euros all they want, and they an paint the charts all they want, but we are opposed to that kind of aid because it isn't aid at all, it's a financial trap! We are doing what we can to deal with this. They are trying to keep the bubble alive and we should have just let it deflate a long time ago and it really wouldn't have been that big of a deal. Do not let the government bubble get out of hand, because that never end well.

The more you borrow, the worse it will become. Get your shit together!

[saxitoxin]

DATELINE: TODAY
THREAT LEVEL: 11:25PM

Billions upon billions of German and French taxpayer dollars have been blown on cocaine and hookers, it emerged - Greece is destined for collapse despite the EU's best efforts.

Talk of a possible Greek default gained pace on Friday while a pledge by the world's major economies to prevent Europe's debt crisis from undermining banks and the global economy failed to lift financial markets for long.

Greek Finance Minister Evangelos Venizelos was quoted by two newspapers as saying an orderly default with a 50 percent haircut for bondholders was one of three possible scenarios for resolving the heavily indebted euro zone nation's fiscal crunch.

http://www.reuters.com/article/2011/09/ ... me=topNews

[Pedronicus]

a haircut?

this isn't your ordinary haircut

we need
him

[Phatscotty]

The United States...agreed to bail-out the Eurozone...

SAY WUT?

yah (the Fed) which is why I made my post warning Europe not to get their expectations too high. The US people do not approve of the way it is being done, and I say it's going to make the crisis worse.

The head of the International Monetary Fund, Christine Largarde, said Friday the world economy is entering a “dangerous new phase.” Lagarde is referring to a debt bubble, the likes of which the planet has never seen before, and the possibility that it could all unravel at any moment. Uncertainty over the debt crisis in Europe is what caused the Dow to crash more than 300 points at the end of last week. This will lead to more guarantees of QE to infinity.



America’s debt woe is worse than Greece’s
By Laurence J. Kotlikoff, Special to CNN
September 20, 2011

Our government is utterly broke. There are signs everywhere one looks. Social Security can no longer afford to send us our annual benefit statements. The House can no longer afford its congressional pages. The Pentagon can no longer afford the pension and health care benefits of retired service members. NASA is no longer planning a manned mission to Mars.

We’re broke for a reason. We’ve spent six decades accumulating a huge official debt (U.S. Treasury bills and bonds) and vastly larger unofficial debts to pay for Social Security, Medicare, and Medicaid benefits to today’s and tomorrow’s 100 million-plus retirees.

The government’s total indebtedness — its fiscal gap — now stands at $211 trillion, by my arithmetic. The fiscal gap is the difference, measured in present value, between all projected future spending obligations — including our huge defense expenditures and massive entitlement programs, as well as making interest and principal payments on the official debt — and all projected future taxes.

The data underlying this figure come straight from the horse’s mouth — the Congressional Budget Office. The CBO’s June 22 Alternative Fiscal Scenario presents nothing less than a Greek tragedy. It’s actually worse than the Greek tragedy now playing in Athens. Our fiscal gap is 14 times our GDP. Greece’s fiscal gap is 12 times its GDP, according to Professor Bernd Raffelhüschen of the University of Freiburg.

[maasman]

All of these crises threads make me think of this song: http://www.youtube.com/watch?v=ctmctUpUwXo

[Phatscotty]

a haircut?

this isn't your ordinary haircut

we need
him

you coming out for spending cuts?