THE Eurozone Economics Thread pt 1 (merged) Archived

[dolanbaker]

It's called, "not being the slowest camper when the bear starts running towards you", trade all way to the edge of the abyss!

[Anvil]

I was reading this
http://biggovernment.com/publius/2011/1 ... a-edition/ About the large scale economic warfare going on between china and the west and how the new bail out plan for the EU is to suck up to the BRICS whilst quietly stabbing them in the back. Except now stabbing china in the back wont work because they have all the ammo this time not the other way around like it usually is. I was trying to work out the bigger economic picture, when i decide to distract my self playing HO2. Then bingo it hit me a historical comparison was clear to me, the USA during and after WW2 bailed out the EU from the NAZI threat with money, military assistance and economic preference. So the USA bought the future by buying out the EU during WW2 and the EU went along gladly selling out there future to the USA if it could guarantee its safety from the the threat of the NAZIs and USSR. In many ways the same thing is happening today as it did in the EU and the west during and after WW2 but instead of military threats USSR and NAZIs threatening human rights, peace and freedom. Its an economic threat with the west begging china for a bail out and slowly chugging there way to permanently selling out there future to the Chinese in order to gain temporary economic assistance. The EU and the rest are not all the way to begging the Chinese for economic aid but give it time and an other economic depression and you will see. The alfather piss down on most of the western scum bags from a great height for the crimes they have committed against nature and developing nations.

[Revi]

I am feeling a bit of schadenfreunde about this. I think it's time the Eurozone has a trillion or two stolen from it. It's just like what the big banks did to us in 2008. The Central Banks have to be fed. Feed them! Feed them your whole economy. Your whole future. It's the only way. What if the whole banking system went down? Then we would have no pensions and the fat cats would be broke too. Now isn't it better that at least the fat cats are going to be sitting pretty when they have stolen our pensions and reduced the middle class of both the entire western world to penniless serfs? That's why I'm feeling schadenfreunde. Welcome to our world. I say we reoccupy our economy. Starve the beast. Time banks, alternative ways of living. Then the bankers will be sitting on a pile of fiat currency that nobody wants.

[Daniel_Plainview]

Mister market seems to think the crisis is over. The price of everything is up about 5% today. Silver is up about 2 bucks, copper about a buck and even oil is up a couple of bucks already. Happy days are here again, unless you are buying heating oil for the winter...

I don't quite get the ebullience we're seeing in the markets. The fundamentals have not changed or so it seems. The guillotine blade is still on its way down the Euro's neck is in the stocks. I'm confused.

The ebullience is misguided and shortlived:

Italian debt soars on EU bail-out fears
Fears over the ability of the eurozone bail-out to protect the region's embattled members have been heightened after Italy was forced to pay the highest price to issue debt since the launch of the euro.

Italy sold €8bn (£7bn) of 10-year bonds at [a record] 6.06pc, a level seen as unsustainable by analysts, in the first major test of market appetite since European leaders agreed steps to tackle the crisis. Italian leader Silvio Berlusconi is seen as critically weakened and there are doubts he will be able to push through the austerity measures demanded by markets. "[Italy] is still the bête noire of the whole eurozone problem," said Monument Securities strategist Marc Oswald.

In comments that appeared unlikely to calm concerns, Mr Berlusconi issued an extraordinary outburst against the single currency, blaming it for the scrutiny on Italy's finances. He described the euro as a "strange currency" that "has convinced nobody" and claimed that after Germany, Italy had the eurozone's strongest economy. The outburst came just hours after Klaus Regling, chief executive of the European Financial Stability Facility (EFSF), arrived in Beijing to try to persuade China to help finance the eurozone's bail-out vehicle. China has said there will be no "charity" and Mr Regling warned it would likely take "several weeks" to hammer out a deal.

... In a further complication for the EFSF, Germany's constitutional court suspended the right of a small committee of politicians to approve the bail-out fund's actions. The nine-person group had been given the green light to sanction EFSF matters but its powers were suspended after two German politicians argued it infringed other Bundestag members' rights. Some sources suggested the suspension would curtail the EFSF's power to buy embattled countries' bonds in the market. ...

[Daniel_Plainview]

Furious Greeks lampoon German 'overlords' as Nazis with picture of Merkel dressed as an SS guard

Greeks angry at the fate of the euro are comparing the German government with the Nazis who occupied the country in the Second World War. Newspaper cartoons have presented modern-day German officials dressed in Nazi uniform, and a street poster depicts Chancellor Angela Merkel dressed as an officer in Hitler’s regime accompanied with the words: ‘Public nuisance.’ She wears a swastika armband bearing the EU stars logo on the outside.

The backlash has been provoked by Germany’s role in driving through painful measures to stop Greece’s debt crisis from spiralling out of control. Greeks are furious at the deal, even though it means the banks will write off 50 per cent of the country’s debt and Socialist prime minister George Papandreou said Greece had ‘avoided a mortal national danger’.

Opposition parties blasted the landmark agreement, with conservatives warning it condemned the country to ‘nine more years of collapse and poverty’. But it is the fury of ordinary Greeks which is raising eyebrows. Greek government officials who agreed to the belt-tightening moves have been portrayed in cartoons giving the Nazi ‘Sieg Heil’ salute. And German visitors flocking to ancient tourist sites are being met with a hostile welcome from some Greeks.

Berlin’s interference has revived historical enmities and evoked comparisons to the massive destruction of Greece at the hands of Hitler’s Germany more than 65 years ago. Cartoons have sprung up depicting the European Union’s ‘troika’ as ferocious soldiers in Second World War uniforms. ...

link

[Daniel_Plainview]

Merkel is now acutely aware of the Pandora's Box of moral hazards that have been unleashed with the 50% Greek haircut, and the likelihood that other debtor sovereigns will want the same treatment ...
Says Merkel: "In Europe it must be prevented that others come seeking a haircut."

(Reuters) - Chancellor Angela Merkel said on Friday it was important to prevent others from seeking debt reductions after European Union leaders struck a deal with private banks to accept a nominal 50 percent cut on their Greek government debt holdings.

"In Europe it must be prevented that others come seeking a haircut," she said. Speaking in the Bavarian town of Deggendorf, Merkel also said that it was important to put restraints of speculative financial elements and show banks with better regulations. Merkel also told a meeting of her conservative party that it will take many years to overcome the sovereign debt crisis, noting that it was affecting not only Europe but also the United States and Japan as well.

[dolanbaker]

There are rumblings here in Ireland for a share in the haircut!

[Daniel_Plainview]

Czech Republic Seeking to Nullify Commitment to Enter Eurozone

BRUSSELS - The ruling euro-sceptic ODS party in the Czech Republic wants to push for a referendum on the country's future eurozone accession, claiming that the rules have changed since 2003 when Czechs said yes to the EU and the euro. The recent agreement on another bail-out for Greece and on boosting the eurozone's bailout fund is fuelling Czech calls for a referendum, said Czech MEP Jan Zahradil, leader of the European Conservatives and Reformists.

"We should allow non-eurozone members – such as my country the Czech Republic – to decide again whether they wish to enter. We signed up to a monetary union, not a transfer union or a bond union in our accession treaty. This is the major reason why the Czech Prime minister wishes to call the referendum on this matter," Zahradil said in a statement.

The Czech Republic, along with all other eastern European countries that joined the EU in 2004 and 2007, is obliged to adopt the euro once budget deficit and other economic conditions are met. Slovenia, Estonia and neighbouring Slovakia are already members of the 17-strong club. Latvia is also striving to join, while Poland, though still seeing it as goal, says eurozone accession is no longer a priority. But none has so far demanded a referendum, since nine of newest member states, including the Czech Republic, already had a plebiscite on joining the EU.

Last weekend, at an ODS party congress, Prime Minister Petr Necas demanded a referendum on whether the country should join the eurozone. "The conditions under which the Czech citizens decided in a referendum in 2003 on the country's accession to the EU and on its commitment to adopt the single currency, euro, have changed. That is why the ODS will demand that a possible accession to the single currency and the entry into the European stabilisation mechanism be decided on by Czech citizens," the ODS resolution says.

Prime Minister Necas also floated the idea in case Germany gets it way on another treaty change bringing about more economic integration and tougher sanctions for deficit sinners. "In the event that there is a change to fundamental rights that would result in powers being transferred from national organs to European organs, this government is bound to ratify this step with a referendum,” Necas told reporters in Brussels on Sunday evening. ...

Gee, why the second thoughts about entering the Eurozone? What could possibly go wrong?

[Daniel_Plainview]

There are rumblings here in Ireland for a share in the haircut!

And those rumblings will grow LOUDER by the week ...

[Lore]

I'm going to ask Merkel if she can get my bank to take a haircut.

[Daniel_Plainview]

I'm going to ask Merkel if she can get my bank to take a haircut.

Let's do a conference call with Merkel ... I'd like a 50% haircut on my mortgage ...

[Daniel_Plainview]

Telegraph: China warns it cannot 'cure' the eurozone's debt crisis

China has stressed it will not be a "saviour" to Europe as President Hu Jintao embarks on an official visit to the continent that will take in this Thursday's crucial G20 summit in Cannes. "China can neither take up the role as a saviour to the Europeans, nor provide a 'cure' for the European malaise," Xinhua news agency stated. "Obviously, it is up to European countries themselves to tackle their financial problems." Chinese officials also sought to play down hopes of a breakthrough at the G20. Vice Finance Minister Zhu Guangyao said that investment in the bail-out fund was not on the agenda at present.

[Daniel_Plainview]

Greek Contagion Spreads to Italy -- Eurozone Bailout Half-life Down to 48 Hours

The duration of the European bailout was 48 hours give or take. And now reality is back in the form of the following headlines:

— Italian 10 Year BTP Yield surges to all time high 6.153%
— Italian-German 10 year yield passes 400 bps
— Italy CDS soar 22 bps to 427 bps
— Italy 5 Year yields bonds join drop, yield rises to over record 5.91%

See a trend? The one thing Europe was trying to avoid, contagion spreading to Italy, has happened.

So the bailout that took months to hammer away ... has a half-life of 48 hours. True, the Greek problem has been solved (somewhat) for a few months ... but now the focus has switched to the PIIS countries ...

[tsakach]

Think-tank sparks fears of second recession by slashing eurozone growth forecast

The OECD has suggested that growth will be just 0.3 per cent (Euro area) - down from a two per cent forecast in the spring - as it comes to a near-halt, hitting Britain's economic prospects.

The UK's GDP figures will be published tomorrow and it is expected that economists' forecasts will be grim.

The OECD also warned that some eurozone countries could see contractions of up to five per cent by the first half of 2013.

http://www.dailymail.co.uk/news/article-2055695/Eurozone-debt-crisis-OECD-sparks-fears-2nd-recession.html

[Pops]

The interesting thing to me is how everyone is trying to get the investors to take a "haircut" without triggering the CDS avalanche.

A CDS (credit default swap) - if I understand this particular bit of modern finance - is sorta like insurance that protects an investor in the case of a default. But unlike real insurance, the person buying the CDS doesn't necessarily need to be the lender or even anyone involved in the loan.

Really, it's just a bet.

So, TPTB are trying to make it appear that is not a default if the lenders, bond holders, etc voluntarily take a 50% haircut (not partial default) because a real default (50.1% ?) would trigger the implosion of X-Trillions in such bets.

[dolanbaker]

MF Global files for Chapter 11 bankruptcy protection
http://www.bbc.co.uk/news/15519124
MF Global MF Global could be one of the biggest eurozone debt casualties


US brokerage firm MF Global has filed for Chapter 11 bankruptcy protection after revealing £4bn of eurozone debt exposure.

The US brokerage, which has 2,000 staff worldwide including 600 in London, is said to be planning to sell its assets to rival Interactive Brokers Group.

Shares in MF Global were suspended by the New York authorities on Monday.

This snowball's started to roll.

[dolanbaker]

http://www.bbc.co.uk/news/world-europe-15526719
Greece will hold a referendum on a new European Union aid package intended to resolve the country's debt crisis, Prime Minister George Papandreou says.

Mr Papandreou said a vote of no-confidence would also be held on the deal - but no dates were set.

The package envisages losses of up to 50% for private holders of Greek debt and a new 100bn euro loan ($140bn).

There have been large-scale protests in Greece against the austerity measures introduced by the government.

[careinke]

Welcome to our world. I say we reoccupy our economy. Starve the beast. Time banks, alternative ways of living. Then the bankers will be sitting on a pile of fiat currency that nobody wants.

I've been trying that approach for a few years now. I'm slowly working myself off the BAU teat. So far it's been fun.

[Sixstrings]

Greek Contagion Spreads to Italy -- Eurozone Bailout Half-life Down to 48 Hours

Whaaaat?

I thought everything was groovy now with the trillion euro bailout deal.. now they're out of money again already like two days later.. ? ? ?

Ok so if Greece takes a trillion euros for a patch-up, then what's Italy.. a gazillion trillion.. ?

Anyway, just as I predicted, China is tightening it's grip on Europe:

European Bailout Fund Could ‘One Day’ Issue Bonds in Yuan
http://www.bloomberg.com/news/2011-10-29/european-bailout-fund-could-one-day-issue-bonds-in-yuan-regling-says.html

Bonsoir Europeans, say hello to your Chinese overlords..
问好你的中国统治者

[oddone]

They agreed to create the "financial stability facility", but the money to feed the fund had yet to be found.
And now it is realized that nobody, including the aliens, will bite

See http://www.xtranormal.com/watch/1261173 ... -explained