BiMetalAUPTMessage #1 - 12/07/10 05:22 AMLets face it Axel Weber is all for Germany.. For low inflation and a strong Germany with a balanced budget.. We can also fight the effect of German history.. Now he needs the Jewish Bankers, Doctors and Lawyers to return to the State of Berlin!!!! The state has never recovered from WWII. From the point man , he is backed by A. Merkel... I can see her now with the 308 Merkel semi auto in her hand backing him with words of wisdom.. KEEP YOU MOUTH SHUT.. LET ME TALK..
[
www.reuters.com/places/germany] Germany on Monday rejected the idea of increasing the size of the European Union's safety net and ruled out a proposal to issue a joint euro zone bond, but said it stood squarely behind the single European currency.
Chancellor Angela Merkel cited legal obstacles to the issuance of a joint sovereign bond, or "E-bond" -- an idea that was refloated jointly on Monday by the chairman of the Eurogroup of euro zone finance ministers and [
www.reuters.com/places/italy] Italy's finance minister.
Instead, Merkel called on European governments to implement tougher budget rules to prevent countries living beyond their means, guarding against the fiscal indiscipline that Germany sees as being the root cause of the [
www.reuters.com/subjects/euro-zone] euro zone debt crisis.
"The treaty does not in our firm view allow any euro bonds, so no uniform interest rate," Merkel told a joint news conference with visiting Polish Prime Minister Donald Tusk.
Countries would have a greater incentive to comply with the EU's fiscal rules, enshrined in the Stability and Growth Pact, if they each had to pay interest on their own debt, she said.
"It is important that innovations to the Stability and Growth Pact are implemented as these guarantee that in the future we will not have a situation like we had in the past," Merkel added.
Europe needed the euro, Merkel said, and Germany would do everything to ensure the single currency was strong and safe -- comments echoed by government spokesman Christoph Steegmans.
"Germany feels committed to the euro, like all member states," Steegmans said. "In a nutshell, if the euro fails, then Europe fails -- that is the position of the whole government."
"The government stands squarely behind the euro and its stability, we have never let there be any doubt about that," he said, adding: "I want to stress that Germany has a great interest in the stability of the euro growing."
EUROGROUP "SIGNAL"
Euro zone finance ministers, who meet in Brussels later on Monday, face pressure to increase the size of a 750 billion euro ($994.5 billion) safety net for debt-stricken members in order to halt contagion in the single currency bloc.
Steegmans rejected this idea, telling reporters: "We see no reason at all at the moment for an increase in the size of the euro rescue shield -- no reason at all."
But he suggested the meeting may produce tangible results.
"The meeting of the Eurogroup today ... will give a joint signal for more stability and confidence," he said.
Wide differences remain in the 16-nation single currency area over how to overcome a debt crisis that has already led to EU-IMF bailouts for [www.reuters.com/places/greece] Greece and Ireland, and now threatens to spread to Portugal, Spain and possibly Italy.
AhamburgerMessage #2 - 12/07/10 05:28 AMWhat about a default? They say no now to joint bonds, however....
BiMetalAUPTMessage #3 - 12/07/10 05:29 AMWednesday's press conference with ECB President Jean-Claude Trichet turned out to be a real jaw-dropper. While Master illusionist Trichet didn't commit himself to massive bond purchases (Quantitative Easing) as many had hoped, he did impress the gathering with his magical skills. The Financial Times recounts Trichet's what happened like this: "...as Trichet started to speak, his ECB troops stepped into the market to buy as many peripheral bonds as they could, particularly Portugal and Ireland. Started evidently in bidding for 10 -25 mln ··· clips and then moved onto 100 mln ··· clips ··· which is very rare indeed."
Nice trick, eh? So while Jean-Claude Houdini was somberly reading from the ECB's cue cards, his central bank elves were beating down bond yields to convince investors that the contagion had been contained. Not bad for a 70-something bankster with no background in the paranormal. And it seems to have worked, too, at least for the time being. But, unlike the Fed, Trichet can't simply print money. He's required to "sterilize" the bond purchases, which means he'll have to mop up the extra liquidity created by the program. And, that's the hard part. If he pushes down yields in Ireland and Portugal, he has to tighten up somewhere else.
Trichet's critics, like Bundesbank President Axel Weber, think he's gone too far by buying up the bonds of struggling PIGS. (Portugal, Ireland, Greece and Spain) But these countries borrowing costs have skyrocketed and they're quickly losing access to the markets. The more it costs to borrow, the quicker the slide to default, which is trouble for the EU, because it means a wider meltdown across the continent. So what better time for Trichet to stretch the rules?
Maybe Weber hasn't noticed, but the EU is disintegrating, and if Irish voters reject the budget in the December 7 elections or if Spain starts to teeter, the dominoes could start tumbling and bring down the European project in a heap. That's why Portugal, Spain and the rest are counting on the ECB to lend a hand despite Berlin's relentless fingerwagging. Here's an excerpt from the Telegraph which gives a good summary of what's going on:
"Spain's former leader Felipe Gonzalez warned that unless the European Central Bank steps into the market with mass bond purchases, the EMU system will lurch from one emergency to the next until it blows up....
Arturo de Frias, from Evolution Securities, said the eurozone will have to move rapidly to some sort of fiscal union to prevent an EMU-break up and massive losses on ···1.2 trillion of debt lent by northern banks to the southern states....
The market will keep selling until the yields of Spanish and Italian bonds (and perhaps Belgian and French also) reach sufficiently horrendous levels. ("Mounting calls for 'nuclear response' to save monetary union", Telegraph)
AhamburgerMessage #4 - 12/07/10 05:37 AMIrish voters reject the budget in the December 7 elections
This is the economic news I was talking about that will affect the markets more than the tax extensions. I was watching trading day at lunch today and one analysts opinion was that if it get rejected, watch out!
BiMetalAUPTMessage #5 - 12/07/10 05:38 AMA......!!!
FRANK THINKS GREECE IS TOAST AND WILL NOT CUT SPENDING AS PART OF THE DEAL TO GET THE LOANS...FRANCE ALSO HAS A PROBLEM WITH BUDGET AS YOU CAN SEE FROM THE RETIREMENT PROBLEMS AND HUGE GROWTH OF SOCIAL PAYMENTS DUE TO AGING OF THE POPULATION..lIKE GERMAN SYSTEM THEY ARE USED TO THE 70% REPLACEMENT PAYMENTS AT RETIREMENT OF 62 YEARS OLD.
Irish vote is Dec 7 on the budget cut.. had to call it.. Bet on NO!!!!
Weber and Merkel are for Germany. They work about as hard as our Central Texas Farmers.. About 85 hours a week..
just my thought from what I have heard and read.. It is a herd of cows looking for a safe warm place ....The store is coming!!!
Bruce
AhamburgerMessage #6 - 12/07/10 05:46 AMjust my thought from what I have heard and read.. It is a herd of cows looking for a safe warm place
LOL, I hear ya! That's what I can gather as well.
I was betting on a NO out of Ireland as well. Glad to hear that you agree.
Man do I luv the farmers!
So what do you think, is Germany's hand force if/when Greece defaults?? Joint bonds I mean.
