Europe in a Financial Crisis

[The Virginian]

Now back to the original topic of what you expect to happen when the Euro collapses and what are you doing to prepare for it. ;D

Everything else - belongs on Market Talk.

[Driftr]

Jun 29, 2012 16:36:30 GMT -5 The Virginian said:

Enjoy your conspiracy sites

Really?? Since when did factual information become a conspiracy?

Whenever it conflicts with the invest in the markets at all costs meme.

[Driftr]

Hat's off to Finland and Netherlands. Go get 'em fellas. Wonder what Merkel promised them to get them to say this? :-)

(Reuters) - Finland and the Netherlands will block the euro zone's permanent bailout fund from buying bonds in secondary markets, the Finnish government said on Monday, despite European leaders' decision last week that rescue funds be available to stabilise markets.

in.reuters.com/article/2012/07/02/finland-esm-idINL6E8I26JG20120702

[Aman A.K.A. Ahamburger]

[decoy409]

'Whenever it conflicts with the invest in the markets at all costs meme.'

That's funny as that is what the report states to do(Page 1 of the POST ).

'Everything else - belongs on Market Talk. '

Why that's right! As it is the only place NOT catering to similac milk. The real stuff ran out long ago.

[The Virginian]

Why can't we ever have a serious disscussion without falling off the deep end?

[Driftr]

He does not have that entire board to himself. I still post occasionally in the dividend thread that gdgyva started. It has all my history in it.

[The Virginian]

I think I am going to change the topic of this thread. All I really wanted was to discuss what people might do if things fall apart in Europe but it is falling apart.

[Trongersoll]

You can't avoid something when you are already there.

[bimetalaupt]

Jul 2, 2012 18:03:07 GMT -5 Trongersoll said:

You can't avoid something when you are already there.

This weekend, everyone’s attention will be on the Greek elections, however it is Spain that has now become the “fulcrum security” of Europe. As such, events in Greece are merely a catalyst that will set off a chain of events that will have an impact not only on Spain, but on all of Europe, and thus, the world.

As we pointed out last week after the Spanish bailout announcement, based on a preliminary analysis which had been compiled by Deutsche Bank’s europhiles hours before the formal announcement, and one which just happened to be a carbon-copy of what was proposed as the ‘final (and failed) Spanish solution’, it appears that the events in Europe are if not orchestrated by the largest German bank, then certainly receiving part-time advice.

Which is why we were somewhat disturbed to read Gilles Moec’s summary this morning, which points out the patently obvious: “Spain recapitalization: it’s not working.” Whether it is that Europe’s brightest minds forgot about the threat of subordination (promptlyreminded by Zero Hedge hours after the formal announcement), and that the scars of the Greek cramdown are still fresh in the private sector’s mind, it does not matter: as DB says: “Unfortunately, the market reaction was clearly negative, with Spanish 10 year rate brushing past 7% for the first time since 1996. Two main elements probably explain the market reaction: first, the increase in public debt triggered by the recapitalization whose cost will stay on the sovereign’s balance sheet under the current rules); second the seniority attached to ESM loans, if this scheme is used as the final channel for the EU loan instead of the EFSF.”

Yes, it is “unfortunate” that Spain’s bailout plan was poorly planned, organized and executed. It is not unfortunate that some are still left who can do simple math and call out Europe’s failed plans. Which brings us to the present, where we find that even Deutsche Bank has given up hope for interim solutions, having realized that the market will no longer accept transitory, feeble arrangements. Instead DB is now formally calling for a big bang resolution, one coming from the ECB. Here is the punchline: “ECB has room for manoeuvre, but needs political cover for a ‘big’ policy” or said otherwise, “A shock is required to get a liquidity response.” In other words: Europe’s only real hope for even a stop gap solution… is a wholesale market crash, not surprisingly the very same conclusion that Citi reached on May 19 when they warned that only Crossover (XO) at 1000 bps or wider could push Europe into acting…

Basically stated, anything less than a controlled market crash, one that finally gets the ECB involved with Germany’s permission of course, merely pushes the market higher on nothing but hope of an intervention that said market lift makes even more improbable, as now both Citi and DB admit, which can and will lead to an uncontrolled market collapse, one from which not even the ECB will be able to extricate Europe.

In this light, will Greece simply be the start of the much overdue “controlled demolition”, that will bring the ECB out of hibernation, that is paradoxically instrumental in avoiding an uncontrolled demolition, where not even the ECB will have any powers left to prevent a collapse?

[happyhippy]

You may have to do what Iceland have done. Refuse to pay the world banks and get on with life.

[The Virginian]

Yes, so far Iceland has proven to be the smartest of the bunch! ;D

[bimetalaupt]

Jul 3, 2012 6:22:38 GMT -5 happyhippy said:

You may have to do what Iceland have done. Refuse to pay the world banks and get on with life.

As for Me I will take the USA over Iceland or Finland.. GDP more stable.. looks like Ben b. got it right..just look at the strength of our banking system now,

If you want to talk about small countries.. Compare to Luxembourg.. AVERAGE GDP per person of $84,000 and increase in GDP of 3.6%..VS AVERAGE GDP per person of $38,000 with a growth rate of 2.4% in 2011!! About the same population.. And you can drive to Germany or France on good highways.

Just a thought,
BimetalAuPt

[Value Buy]

The commodity markets were on fire today.
Metals, oil and grain complexes were all strong.
Europe must be fine now!

[bimetalaupt]

Jul 3, 2012 21:02:01 GMT -5 Value Buy said:

The commodity markets were on fire today.
Metals, oil and grain complexes were all strong.
Europe must be fine now!

More to the point.. The USD was down...The EURO was over shorted and the shorts ran to cover,,,EURO Now looks like it has a short term target of $1.300...

[decoy409]

'We tend to keep about 30+ days of food on hand all the time. As well as biological masks, etc ,etc. But we are NOT preppers. '


Biological masks? Ok.

[The Virginian]

FRANKFURT, Germany (AP) — The European Central Bank cut its key interest rate by a quarter percentage point Thursday to a record low 0.75 percent to try to help ease Europe's financial crisis and boost its flagging economy. The action, which was widely expected, is meant to make it cheaper for businesses and consumers to take loans.

In a more surprising move, the ECB also cut to zero the interest rate it pays banks on overnight deposits by a quarter percentage point. This pushes banks to lend the money, rather than sock it away with the ECB.

Stock markets initially rose after the news, but the gains quickly faded. Germany's DAX stock index was up 0.4 percent while the Dow futures index was flat. The euro was down 1.1 percent at $1.2380.

Economists say the interest rate cuts might have only limited impact because rates were already low and banks remain wary of lending to each other, while businesses often see no reason to borrow in a slack economy.

"Today's ECB interest rate cut does little to alter the bleak economic outlook," said Jennifer McKeown, analyst at Capital Economics.

In an effort to ease the continent's financial crisis, European leaders last week agreed to make it easier for troubled countries and banks to receive rescue loans and they signaled a greater willingness to use emergency funds to purchase government bonds. They also agreed to create a single Europe-wide banking regulator.

The answer my friend is blowing in the wind!

[decoy409]

Say Virginian,you may or may not be aware of the following as to those interest rates as the bamboozle was discussed and the tale of the tape shown back a spell. And why look,what you just presented,why it continues.

In this film from March, 2008 at time Bank of England was manipulating interest rates, I talk about Central Banks criminally manipulating interest rates and the damage done to the economy.

Power & People - Savers vs speculaters - March 23,2008

[The Virginian]

[Driftr]

Jul 9, 2012 14:36:30 GMT -5 The Virginian said:

I don't youtube at work. Whatcha putting out there for us to watch V. Riots in Spain now that their 10 year is back over 7%?

[Peace Of Mind]

Oops! I had clicked on another video and forgot the spoof one originally posted.

Maybe it was best my post didn't show up. LOL!!

[The Virginian]

It's just an amusing video - in the "who's on first" type format about Europe's debt.

[The Virginian]

Posts not showing up again when it changes pages for a while. I was hoping Virgil fixed this problem!

[The Virginian]

By msnbc.com staff and news services
MADRID -- Spain announced a 65 billion euro ($79.85 billion) austerity package that includes tax hikes and spending cuts on Wednesday, a day after it won approval from its euro partners for a huge bailout of the country's stricken banks.

Prime Minister Mariano Rajoy told parliament the country's future was at stake as Spain grapples with recession, a bloated deficit and investor wariness of its sovereign debt. He said the nearly $80 billion in savings will be achieved through 2015 by a hike in sales taxes and a series of spending cuts through 2015.

"We are living in a crucial moment which will determine our future and that of our families, that of our youth, of our welfare state," Rajoy said.


--------------------------------------------------------------------------------

This is the reality. There is no other and we have to get out of this hole and we have to do it as soon as possible and there is no room for fantasies or off-the cuff improvisations because there is no choice," he added.

Spain's economic crisis turns middle-class families into illegal squatters

Spain's unemployment rate is more than 24 percent overall and 50 percent for young people.

"What animates us is the five million people out of work," the BBC News quoted Rajoy as saying.

Wednesday's increases in sales tax include a hike to 21 percent on products and services like clothing, cars, cigarettes and telephone services to 21 percent, and increase to 10 percent on goods such as public transport fares, processed foods and bar and hotel services. The sales tax on basic goods like bread, medicine and books stays at four percent.

The increases were widely expected but go against campaign pledges Rajoy made before he was elected in November and since he came to power.

[bimetalaupt]

Mr. V.,
If Spain thinks they can cut expense to improve the GDP then Hoover was correct.. He could have get more long term growth with increase in M3/M4 then spending as none m2-m3 will produce four times more GDP Growth then Government spending.

They need growth and the Broken banks are not lending or can not lend to State or Farms..
Texas Farm Credit bank has higher credit ratings then any Country in the EU and only one bank in the EU can match its rating of AAA-Rated Bonds!!
Just a thought,
BimetalAupt

[The Virginian]

They are cutting expenses and raising taxes.

[moon/Laura]

The problem with missing posts when it switches to a new page *should* be fixed now. When I reported the problem to PB support, the thread page would show "x" number of replies, but the actual replies was higher. They now match on this thread. I'll be watching the next page turn. If replies still don't show up, please let me know.

[moon/Laura]

Jul 9, 2012 15:19:04 GMT -5 The Virginian said:

Posts not showing up again when it changes pages for a while. I was hoping Virgil fixed this problem!

Not Virgil's problem to fix. it isn't a problem on our side.

[bimetalaupt]

Jul 9, 2012 15:19:04 GMT -5 The Virginian said:

Posts not showing up again when it changes pages for a while. I was hoping Virgil fixed this problem!

Moon,
I did get an error message that it did not post but on checking back it had posted.

Bruce

[The Virginian]

Not Virgil's problem to fix. it isn't a problem on our side

Sorry Moon, I didn't mean to imply it was Virgil's problem. I just read where you stated he was going to look into it and try and resolve it. It's no big deal - just post a couple of smiley face pages and it shows back up again! ;D