On Wednesday, before the New York stock market opened, regulators invoked special powers that would have enabled them to suspend trading if share prices were to begin swinging wildly. The Federal Reserve said it was intervening even though “US financial institutions currently do not face difficulty obtaining liquidity in short-term funding”, because of fears that the euro crisis could derail markets in America and Asia. In a statement, the Bank of England said: “The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing co-ordinated actions to enhance their capacity to provide liquidity support to the global financial system. “The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity.” In another day of turmoil in Brussels, European finance ministers also admitted that they had failed to raise enough funds for a rescue fund to prop up the single currency. The International Monetary Fund (IMF) is expected to assist in the bail-out plan – and a senior European official warned that there were now 10 days to save the euro. Olli Rehn, the European Commission vice-president responsible for economic affairs (also known for his wrong decizions - 99% of the time), warned that a summit of Europe’s leaders on Friday Dec 9 was now crucial. MY POINT : When dismantling a currency the first step is to reassure the markets their interests will not be harmed in the process. This is achieved by a group of well respected national banks combining to provide a guarantee. The presence of that guarantee means Europe has accepted the inevitable and the Euro is being dismantled. 
Access Investments-Building Awareness - European Union-ROMANIA
Thursday, December 1, 2011
Europe has accepted the inevitable and the Euro is being dismantled.
On Wednesday, before the New York stock market opened, regulators invoked special powers that would have enabled them to suspend trading if share prices were to begin swinging wildly. The Federal Reserve said it was intervening even though “US financial institutions currently do not face difficulty obtaining liquidity in short-term funding”, because of fears that the euro crisis could derail markets in America and Asia. In a statement, the Bank of England said: “The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing co-ordinated actions to enhance their capacity to provide liquidity support to the global financial system. “The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity.” In another day of turmoil in Brussels, European finance ministers also admitted that they had failed to raise enough funds for a rescue fund to prop up the single currency. The International Monetary Fund (IMF) is expected to assist in the bail-out plan – and a senior European official warned that there were now 10 days to save the euro. Olli Rehn, the European Commission vice-president responsible for economic affairs (also known for his wrong decizions - 99% of the time), warned that a summit of Europe’s leaders on Friday Dec 9 was now crucial. MY POINT : When dismantling a currency the first step is to reassure the markets their interests will not be harmed in the process. This is achieved by a group of well respected national banks combining to provide a guarantee. The presence of that guarantee means Europe has accepted the inevitable and the Euro is being dismantled. 
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8 comments:
So all those banks in Europe that are known to have vast and very dodgy holdings of PIIGS debt will be bailed out by the Fed, the Bank of England, the European Central Bank, the Bank of Japan etc etc ( for this, read the taxpayers of the world).
And of course the purpose of this will be to maintain the economic incoherence that is the Eurozone.
As I said the other day, when you try to solve the unsolvable , try to be logical with something illogical, your schemes get larger, more Byzantine in their nature and increasingly as insane as the original insane concept.
I can't help feeling that those people who used their homes as a piggy bank or maxed-out (shouldn't have listened to the Fabians: Tony, Gordon, etc.), to have lots of nice holidays, buy flashy cars, etc., should accept some of the responsibility. The banks, like the irresponsible barman may have kept serving but...
Why not just let the bankrupt go bankrupt instead of throwing (lending) good (fiat) money after bad - then maybe conjure-up some fresh funds (out of nothing) to reimburse the depositors.
The Euro is too big to fail so I dont believe it will be allowed to fail. The problem is now one of solvency not liquidity so ultimately printing money is what will be the outcome. A sceptic may say that the US needed a Euro crisis so that more Euro would be printed otherwise the $ may have its own problems. Ultimately inflation will be the outcome but with so much public and private sector debt around and no way of repayng otherwise inflating away the debt is the apparent intention, as in the US
re: A big part of it not breaking up is because it is a corner stone to the eventual United States of Europe.. Without it the Euro project will be stuck and unable to move towards its utopian dream.
The problem is that all of the countries except maybe France are not ready for this complete union and this crisis has put a big spanner in their works to move this union forward by their usual slow creep.
Yes, they definitely want political union and yes this will be used to further that cause and I hope it fails. Even if they succeed, it will still all come crashing down. I don't want it to crash - no sane person wants that, but nor do I want political union and neither does anyone else I speak to. Just ask people.
France’s credit rating was cut to A from AA- by Egan-Jones Ratings Co., which cited the risk that the country’s government will have to bail out its banks.
“It’s increasingly obvious that France is going to have to support its banks,” Sean Egan, the Haverford, Pennsylvania- based firm’s president, said today in a telephone interview.
The sovereign debt crisis that began more than two years ago in Greece is putting more pressure on France as European Union political leaders struggle to convince investors they’ll be able to stem its spread. The extra yield investors demand to lend for 10 years to France instead of Germany has climbed to 111 basis points today from as low as 28 basis points in April.
“The EU to date hasn’t directly addressed the fundamental problems in the periphery countries,” Egan said. France’s borrowing costs will rise as the crisis continues, Egan wrote today in a report.
Standard & Poor’s, Moody’s Investors Service and Fitch Ratings, the three largest providers of credit ratings, all assign France their highest grades. On Nov. 10, after S&P sent and then corrected an erroneous message to subscribers suggesting France’s rating had been cut, French 10-year bond yields surged and European stocks dropped.
France’s rising debt also contributed to the decision, Egan said. The country’s debt reached 100 percent of its gross domestic product in June, up from 76 percent two years earlier, according to Egan-Jones. President Nicolas Sarkozy, who faces an election in April and May of next year, has announced two sets of tax increases and spending cuts since August and pledged to do whatever it takes to cut the budget deficit to 3 percent of GDP in 2013.
9.07am: European Central Bank president Mario Draghi has sent a few shivers through the markets in the last few minutes -- after warning that the downside risks to Europe's economy had increased.
German government bond prices rose and the euro hit a session low of $1.341 after the comments, which were interpreted by markets as pointing to a second interest rate cut in as many months at the central bank's meeting next week. This would reverse the two rate hikes earlier this year.
Presenting the ECB's annual report, Draghi told the European parliament:
The ECB's monetary policy is constantly guided by the goal of maintaining price stability in the euro area over the medium term - and this applies to price stability in both directions.
Downside risks to the economic outlook have increased.
We are aware of the continuing difficulties for banks due to the stress on sovereign bonds, the tightness of funding markets and the scarcity of eligible collateral in some financial sectors.
News just in from the bond market -- Spain has successfully sold €3.75bn of government debt.
Three types of bond were up for auction, and the good news for the country's new government is that there was decent demand for all three. The bid-to-cover ratio (measuring how oversubscribed the auctions were) increased.
However, Spain did also have to pay much higher interest rates to get the bonds away. For example, the yield on €1.4bn of six-year bonds jumped to 5.544%, from 4.782% in the last auction of this type.
Analysts had said the auction would be "a test of investor confidence', and traders are responding well - pushing down the yields of Belgian, Italian, Spanish and French debt in the wholesale bond markets.
Shares are also rallying, slightly (FTSE 100 up 24 points now
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