Exploring Hydrocarbon Depletion
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jdmartin wrote:How's this for a guarantee: Either shovel over some money or our people won't have any funds to buy your cheaply made, useless crap.
In the wake of Papandreou's Call for Voter Referendum on EU Debt Deal sovereign debt yields plunged in Germany and surged higher in most other European countries, but most notably Italy and France.Italian bonds led declines among the securities issued by Europe’s most indebted nations after a Greek plan to hold a referendum on its international bailout added to concern the region’s financial turmoil will deepen.
Italy and France’s 10-year borrowing costs climbed the highest levels relative to benchmark German debt since before the creation of the euro in 1999. Bund yields fell the most on record, with the securities outperforming all their euro-area peers, as investors sought the safest assets.
“The run-up will put the European Central Bank, European Union and International Monetary Fund in a tough position regarding disbursements to Greece,” El-Erian wrote. The EU deal “appears to be unraveling from many sides.”
The ECB was said by three people to have bought Italian debt today as it tries to stem financial-market contagion to the euro area’s biggest bond market. Two-year note yields still rose 75 basis points to 5.75 percent, the highest since 1997. The five-year rate rose to more than 6 percent, a premium of more than 5 percentage points compared with similar-maturity German debt.
The deal is certainly "unraveling from many sides” with force, so much so that Europe is in the midst of an "all out sovereign bond crisis".
dolanbaker wrote:A Greek government collapse would put an even bigger bat up the bondholders nightdress, given Greece's recent history, there's every chance it could be a military junta!
Top brass replaced
In a surprise move, on Tuesday evening the defence minister replaced the country’s top brass.
An extraordinary meeting of the Government Council of Foreign Affairs and Defence (Kysea), which comprises the prime minister and other key cabinet members, accepted Defence Minister Panos Beglitis' proposal that the following changes be made to army, navy and air force and the general staff:
General Ioannis Giagkos, chief of the Greek National Defence General Staff, to be replaced by Lieutenant General Michalis Kostarakos
Lieutenant General Fragkos Fragkoulis, chief of the Greek Army General Staff, to be replaced by lieutenant general Konstantinos Zazias
Lieutenant General Vasilios Klokozas, chief of the Greek Air Force, to be replaced by air marshal Antonis Tsantirakis
Vice-Admiral Dimitrios Elefsiniotis, chief of the Greek Navy General Staff, to be replaced by Rear-Admiral Kosmas Christidis
It is understood that the personnel changes took many members of the government and of the armed forces by surprise.
Things are falling apart in Europe; the center is not holding. Papandreou is going to hold a referendum; the vote will be no. Italian 10-years at 6.29 at pixel time; that’s a level at which the cost of rolling over the existing debt will force a default, even though Italy has a primary surplus. And with everyone simultaneously pushing for fiscal austerity, a recession seems almost certain, aggravating all of the continent’s problems.
I’ve been charting this trainwreck for a couple of years, and am feeling too weary to trace through it again right now. Let’s just say that the euro was an inherently flawed idea that can work only given a strong European economy and a significant degree of inflation, plus open-ended credit to sovereigns facing speculative attack. Yet European elites embraced the notion of economics as morality play, imposing across-the-board austerity, tightening money despite low underlying inflation, and have been too concerned with punishing sinners to notice that everything was going to blow apart without an effective lender of last resort.
The question I’m trying to answer right now is how the final act will be played. At this point I’d guess soaring rates on Italian debt leading to a gigantic bank run, both because of solvency fears about Italian banks given a default and because of fear that Italy will end up leaving the euro. This then leads to emergency bank closing, and once that happens, a decision to drop the euro and install the new lira. Next stop, France.
It all sounds apocalyptic and unreal. But how is this situation supposed to resolve itself? The only route I see to avoid something like this involves the ECB totally changing its spots, fast.
Aside from that, Mr. Draghi, are you enjoying your new job?
Daniel_Plainview wrote:Can you guess who wrote the following apocalyptic red-alert?It all sounds apocalyptic and unreal.
Pops wrote:Daniel_Plainview wrote:Can you guess who wrote the following apocalyptic red-alert?It all sounds apocalyptic and unreal.
That was the giveaway, you'd have to get into giant sand worms and lizard people for the others to say something like that; "things are falling apart" is what Kunstler screams when his newspaper's late in the morning.
basil_hayden wrote:None of this makes any sense to me. I mean, Greece's GDP is equivalent to that of the State of Maryland, around $300 billion.
You could buy the whole damn state or country for that price and make it your personal vacationland.
There must be much more to this, like a bunch of bankers have bets on based failure that will be used to pay for their other, unexpected failures. Default by Greece ensures the bankers win their bet while austerity makes the banks lose their bets.
Am I close?
Sixstrings wrote: God forbid the US ever has to issue bonds in yuan, that would be a very sad day.
After a tumultuous day of political gamesmanship, Prime Minister George Papandreou called off his plan to hold a referendum on Greece’s new loan deal with the European Union, withdrew his previous offers to resign and opened talks on a unity government with his conservative opponents.
At first, Mr. Papandreou was said to have offered to resign before a confidence vote scheduled for Friday. By late afternoon, however, Greek news media reported during the cabinet meeting that he not only was refusing to resign but was in fact calling off the referendum plan.
Divisions within Mr. Papandreou’s government flared into the open on Thursday when the finance minister, Evangelos Venizelos, and his deputy broke ranks with the prime minister to oppose a referendum, saying it could jeopardize Greek membership in the single currency euro zone.
tsakach wrote:Greek Leader Calls Off Referendum on Bailout Plan
The Grand Plan for Europe became the Waterloo of the EurozoneThe facts remains the same:
-- Greece has been pushed too far and has not complied with the austerity it promised
-- We are beyond any proper solution for this mess and only the 'blame game' remains with Greece potentially leaving the EURO inside of the next three months. ...
Last week's EU Summit looks more and more like the Waterloo of the EU. ... The EU concept of a United States of Europe quickly became a political idea of building a monetary and currency zone. Unfortunately the stability and growth pact was never truly enacted and as such Europe became a house without a foundation. The EU has overstretched its ability and resources and the next 48 hours is yet again about saving the concept of the Eurozone as a powerful, pragmatic way of conducting fiscal and monetary policies, but in reality we have become saturated with debt, empty promises, and a political system which is reduced to producing plans for later plans.
Europe now needs action not empty words - but don't hold your breath as the domestic political agendas in the key players' home countries are turning increasingly hostile and herein lies the real threat!
Weak Economies, Weak Leaders, and Greece on the BrinkEurope’s leaders should have paid more attention to the distress of ordinary Greeks and less to the distress of well-heeled European bankers. Rather than trying to punish the “profligate,” they should have thought about the consequences of condemning Greece to years of negative growth, soaring unemployment and rising taxes with nothing promised in return except that maybe, a decade from now, its ratio of debt to gross domestic product might get back down to the problematic levels of 2008-9.
Greece needs to make serious, painful reforms, including doing away with antiquated labor rules, streamlining a bloated public sector and selling off poorly managed state assets.
Obama, G20 leaders push for EU debt crisis fix
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