MILAN—Italian police early on Tuesday arrested Finmeccanica SpA FNC.MI -7.31%Chief Executive Giuseppe Orsi as part of an investigation into possible international corruption related to the 2010 sale of helicopters by the Italian aerospace company to India, according to the prosecutor in the investigation. Hours after the arrest, India's Defense Secretary Shashikant Sharma told The Wall Street Journal that the country's government had ordered its federal investigation agency to investigate the helicopter deal. The official gave no further details of the Indian investigation. Mr. Orsi has been under investigation for several months in the case, in which Italian prosecutors are looking into whether the helicopter unit of Finmeccanica paid bribes to secure the €560 million ($750 million) sale of 12 helicopters to the Indian government, according to Finmeccanica and a person close to the investigation. Mr. Orsi was chief executive of AgustaWestland, the helicopter unit, at the time. Eugenio Fusco, the prosecutor on the case, also said that Bruno Spagnolini, current head of AgustaWestland, had been placed under house arrest as part of the same probe. Mr. Spagnolini was chief operating officer of AgustaWestland in 2010. A lawyer for Mr. Orsi, who hasn't been charged in the case, wasn't immediately reachable for comment. Mr. Orsi has in the past denied any wrongdoing. In a statement, Finmeccanica expressed support for Mr. Orsi and said the company's operations would not be affected by the arrest. A spokesman for AgustaWestland had no comment, and a lawyer for Mr. Spagnolini—who hasn't been charged—wasn't reachable for comment. The arrest of Mr. Orsi—who runs a company that is majority-owned by the Italian state—comes at a politically sensitive moment, just two weeks ahead of national elections. Outgoing Prime Minister Mario Monti said the government would deal with management issues created by the arrest. "(This opens up) a problem of governance at Finmeccanica, which we will address," he said in a radio interview on Tuesday morning. Mr. Orsi has said that he would step down from his position if the Italian government, which owns 30.2% of Finmeccanica, asked him to. Finmeccanica's stock fell 8.06% to €4.37—its lowest in two months—after being suspended from trade on the opening of the Milan exchange.

Almost 200,000 people lost jobs between October and December to send the jobless figure to nearly 6m, Spain's National Statistics Institute reported on Thursday.

Spain's youth unemployment - the number aged 16 to 24 without a job - hit a new quarterly high of 55pc, but showed tentative signs of retreating after falling from a peak of 56.5pc in November. Similarly, overall unemployment hit a high in November of 26.6pc and slid in December.

Meanwhile, the number of households in which every member is out of work climbed to 1.8m, more than one tenth of all Spanish families.

The report also suggests the long-term unemployed face a tougher struggle in returning to work, with the number of people remaining unemployed more than a year after losing their jobs rising by 213,800 during 2012.

The bleak figures - which make Spain home to a third of the eurozone's total unemployed - will cast a dark shadow over the one-year-old premiership of Mariano Rajoy, who has faced mounting criticism and a wave of general strikes over his administration's handling of the economy.

Well there is one comment that comes to mind.....

They think its all over..... It is now..

Now we know why last week we had all the talking heads out telling us how great everything is.

Shares in Bankia have slid almost 20% after Spain's bank rescue fund said the troubled lender had a negative value of -4.2bn euros (£3.4bn; $5.6bn). Bankia's parent company, BFA, which is being bailed out, was deemed to be worth -10.4bn euros. The assessments suggest losses on bad loans are even worse than expected. Bankia shares will be suspended from Spain's benchmark Ibex index from 2 January until at least after it is recapitalised, the stock exchange said. The Spanish government-owned bailout fund, which is called the FROB, said that a further 13.5bn euros of rescue money would have to be injected into BFA, on top of the 4.5bn provided by Madrid in September. The money, which is ultimately provided by the eurozone's bailout fund, is being injected into the bank via the sale of new shares in BFA to the FROB. By doing this, the FROB increases the bank's capital - its ability to absorb potential future losses on the loans it has made - by putting Spanish taxpayers' money at risk.Ordinary investors The FROB told the BFA it must provide 10.7bn of the rescue money as new capital to Bankia, which will have the effect of diluting the value of the bank's existing shares. The statement by the rescue fund has made clear that this dilution will be even worse than feared, causing Bankia's shares to drop further on the stock exchange. Its shares have lost over 80% of their value since the bank was first listed on the Madrid Stock Exchange in July 2011. Bankia is the largest of a string of Spanish banks to suffer massive losses on the loans it made to property developers and home buyers during the country's property bubble in the past decade. As well as Bankia, three other banks are currently being patched up by the FROB - Catalunya Banc and NGC of Galicia, as well as Banco de Valencia, which was in such bad shape that it is being sold off to another, privately-owned bank. Some 10bn euros of the cost associated with the four banks' rescue must be borne by other investors in the banks. This decision has proved controversial in Spain, as these investors include many ordinary Spaniards, particularly older investors, to whom their banks sold preferred shares - a high-risk form of bank debt - as a savings product. In Bankia's case, about 350,000 such investors are expected to have most of their money wiped out as part of the bank's rescue, according an unnamed source cited by the Reuters news agency.

I have a feeling that this whole economic situation is going to end up with a "boy who cried wolf" scenario....there have been so many "crisis" stories since 2007 that no one cares any more, then one day we will wake up and the Euro will be on its knees ....then the media will be happy because there will be an actual crisis to report on !

In the mean time...A "French expansionary policy' would have to be paid for with German, Dutch, Finnish money. These payees may agree if as part of the package deal there was real external control at a federal level over spending in France (and Spain, Portugal, Italy, Greece) and as a result of this control see a roll back of many aspects of the huge government spending in France where 65% of GDP is direct government spending. What the payees want is a reform of rigid labor markets and money to be spent on supporting projects that will employ people and not on cradle to grave government largesse beloved of French socialists. On the other hand, the French ideal is an agreement where they get pots of other peoples money to allow them to carry on exactly as they where doing and even expand the dirigiste state more. Mr Hollande made lots of election promises (eg hiring 65000 more teachers that he now he is President he knows France cannot afford. He would love Germany to pay. France (and others) will never give up an iota of sovereignty over their economy, so don't expect the Germans and others to agree to mutualize debts....Well...It is really all a big scam. Governments borrowing money that they know they wont pay back, banks doing the same, senior politicians and banksters all know that they will be retired soon, into the sunset with their golden pensions and pots of cash. They wont be around to live in the hell they have created. Meanwhile, the workers, the poor, the unemployed, the pensioners will all pay the price of rising unemployment, failed social systems and rising crime. Eventually there will be an overthrow of the current system, but the crooks will all be gone to Dubai, USA or some other capitalist entity that doesnt ask questions about how they got their money. I live in the UK, the poverty is visibly worse every day and our politicians do nothing. Same everwhere I guess. Pity. Within weeks of taking office at the start of the year he was flooding Europe's banks with €1tn in cheap, short-term credit. Was that the same cheap loan scheme that was known as LTRO? Long Term Refinancing Operation? Either way Angela seems to have it well under control. She will play it her way, loosen the purse strings as and when necessary. The Germans really couldn't give a damn but if, in their desperation, the EU wishes to place the future of Europe in her lap, who is she, a mere frau, to refuse? Interesting times. Time for us to think about where's the EXIT maybe?

The EU's general court has blocked an attempt to force the European Central Bank to release files showing how Greece used derivatives to hide its debt in the run-up to the financial crisis. The case was brought by Bloomberg News under the EU's freedom of information rules in August 2010 but was thrown out on Thursday by the court in Luxembourg.

"Disclosure of those documents would have undermined the protection of the public interest so far as concerns the economic policy of the EU and Greece," the EU's general court said.  Goldman Sachs and other investment banks have been criticised by European leaders over claims that they helped Greece disguise the true scale of its debts over several years. German chancellor Angela Merkel said in February 2010: "It's a scandal if it turned out that the same banks that brought us to the brink of the abyss helped to fake the statistics."  The ECB is headed by a former Goldman banker, Mario Draghi.  The ruling means European taxpayers who are footing the bill for the €240bn Greek bailout will not find out whether EU officials knew of irregularities in Greece's national accounts before they became public in 2009.  Georg Erber, a specialist in financial market regulation at the German Institute for Economic Research, told Bloomberg: "The courts are bending the rules to legalise the policies of the European institutions and help stabilise the region. It reveals implicitly that the EU was well informed about what was going on and didn't take steps to avert the crisis."

Opinion ....2...

Disaster was visited on the global economy 40 years ago with the Nixon 'shock' - the disengagement between the dollar and gold and other currencies with gold via their linkage with the dollar. That is the demise of the Bretton Woods agreement.
With the end of that arrangement countries were now free to create as much money as they liked and run as big a trade deficit as they liked. Under Bretton Woods, any trade defict had to be quickly reversed by cutting demand to maintain parity with the dollar and therefore gold
In 1963 Reginald Maudling tried to stimulate the UK economy only for UK business to fail to meet demand and so sucked in imports. That stimulus had to be quickly reversed. The same 10 years later with Anthony Barbour. The failure of Brits to create wealth goes back way before Margaret Thatcher. And way before GCSEs - but that's another matter.
Of course, Germany was the exception as the Bundesbank was not about to engage in this game of Monopoly.
Like all frauds, it starts small and the fraudster, having got away with it, then becomes more ambitious.
By 2007 the global economy had split into two camps - those who could create wealth, Germany (being smart and well-organised) and China (using slave labour) being the two prme examples, and those who could only consume wealth, the UK and US being the best examples. The US having exported a large chunk of its wealth creating capacity to the likes of China for the benefit of the few
The circle being squared with debt.
The Anglo-saxons convinced themseleves that crazy maths could be used to make even the worst debt perform.
In an attempt to maintain this farce from 2008 onwards the fraudsters now went one better by a quasi-monetisation of debt, quantative easing. Rather than solve the basic problem of not creating wealth they reach for their trusty tools of deceit and fraud.
Having got over the last few years with quasi-monestisation the UK, like all confident fraudsters, now becomes more confident and goes for full monetisation as Osborne claws back interest payments on bonds owned bythe BoE. One of the attributes of fraudsters is being adept at the use of convoluted logic to defy logic.
Eventually they will also write off the capital value of these bonds.
That gives a short breathing space but just as qe has solved nothing neither will that. The 'grand plan' seems to hope something will turn up.
But still there is this huge global trade imbalance that is being addressed by the default of everything just winding down as the there are fewer and fewer buyers for the sellers.

The fourth REICH in full action according to the Ribbentrop - Molotov Treaty ... Europe is under the German boot !!!!..

Mario Draghi has defended his Outright Monetary Transactions plan to the Bundestag in the last few minutes.

Draghi promised German MPs that the pledge to buy unlimited quantities of bonds will dispel fears over the euro's future.

The ECB president also began his two-hour appearance in Berlin by repeating his line that politicians, not central bankers, must take the decisive steps to ensure Europe's future

Here's how Draghi defended the OMT, which he insisted did not put taxpayers at risk.

We designed the OMTs exactly to...restore monetary policy transmission in two key ways.

First, it provides for ex ante unlimited interventions in government bond markets, focusing on bonds with a remaining maturity of up to three years. A lot of comments have been made about this commitment. But we have to understand how markets work. Interventions are designed to send a clear signal to investors that their fears about the euro area are baseless.

Second, as a pre-requisite for OMTs, countries must have negotiated with the other euro area governments a European Stability Mechanism (ESM) programme with strict and effective conditionality. This ensures that governments continue to correct economic weaknesses while the ECB is active. The involvement of the IMF, with its unparalleled track record in monitoring adjustment programmes would be an additional safeguard.

The full statement has been uploaded to the ECB website.

Draghi also warned that deflation is a bigger risk than inflation today, which may not convince German lawmakers who fear a return to the 1920s.

What has Weimar to do with the Greece ...????? nothing !!!!

I was in Greece a few weeks ago, people are living on nothing, some people have not been paid in months, others surive on low salaries while the social welfare system is nowhere near good enough.  Greek people are being crushed, their livelihoods are being crushed, their spirit is being crushed, their country is being crushed.  If this EU is assisting in that process rather than stepping in to try and assist and find proactive ways forward then the whole damn thing should be wrapped up as a monumental failure, it simply has not performed in the way the founding fathers envisaged as it is all stick and no carrot. Debt on debt, austerity and stupid statements out of  Berlin and Brussels from mult-millionaire natzies like The Governor designated of Greece - Horst Reichenbach... who know next to nothing about deep personal and financial struggle.

What has Weimar to do with the Greeks?  Fake Left and Neo-Fascist Right keep on talking about ...Weimar.  Greece never was an imperialist power. It is almost  a banana republic. It is currently occuppied by the Troika and has a german governor. Under the Euro Greece had massive de-industrialisaion, massive importation of illegal labour. a collapse of agricultural production and an arms budget that has skyrocket beyond all proportion.  Yesterday they used riot police vans to arrest half a dockworkers demo outside the Defence Ministry, which is a crime scene, for all the financial fraud and bribery from Franco-German defence contractors.

On the other hand ... Germany went nationalist under Hitler, rearmed, got involved in civil wars in other countries and then allied itself with France, took over Europe leading to a war where 50-70 million died.
That was Weimar..."WTF" has that to do with a small banana republic on the outskirts of Europe ????  Nothing.

 

Poland under the current administration is based on “a system of clientelism”....

WARSAW–Tens of thousands of people marched through the center of the Polish capital Saturday in an anti-government rally organized by the conservative opposition hoping to unseat the country’s popular prime minister who it says has turned Poland’s democracy into a facade through his firm grip on power.   Police estimated that 50,000 people participated, while the conservative Law and Justice party said 200,000 people took part in the march, held under the slogan “Wake up, Poland.” The party’s leader, Jaroslaw Kaczynski, said Poland doesn’t give equal opportunities to all its citizens and discriminates against Catholics. He put the blame on Prime Minister Donald Tusk.

“These huge crowds mean strength,” he said at the end of the march at Warsaw’s Castle Square. “This means that Poland has awakened. The cup of evil has overflowed and we Poles, we Polish patriots, say ‘no’.”    Mr. Tusk’s administration, which took power away from Mr. Kaczynski in 2007 and is now in its second term of office, has been going through several rough patches recently. The collapse of a gold fund, Amber Gold, which the authorities said was a Ponzi scheme, highlighted possible systemic problems with enforcement of financial regulation. On Mr. Tusk’s watch, bodies of victims of a Polish government airplane crash in Russia in 2010 were mixed up and buried in incorrect graves, with the administration taking the heat this month for relying on autopsies performed in Moscow and not ordering that all coffins be opened upon arrival.   The economy is slowing more than expected, while the latest statistical data showed that Poles continue to emigrate to other European Union countries in search of better life. Poland has been growing robustly since the early 1990s, at 4.3% in 2011, much above EU and regional averages. But the EU’s largest emerging economy is expected to grow 2.5% this year amid the crisis in the euro zone, the largest recipient of Polish exports.  With economic output per capita adjusted for purchasing power about $20,000 a year, Poland remains a poor relative of the more developed nations in the European Union, which it joined in 2004 after more than a decade of transition from communist central planning.

Mr. Kaczynski said Poland under the current administration is based on “a system of clientelism” and said the mostly leftist and liberal media flatter the ruling Civic Platform party by painting a rosy picture of Poland’s economic and international situation while ignoring challenges and keeping mum on the governing camp’s shortcomings.

The EU is dead in the water....

The EU is dead in the water already, the Euro and Eurozone even more so. Or perhaps you think the whole mad caboodle is a roaring success, and on an ever-upwards curve? Who cares when it finally unravels - it will, by its nature, never be a success in the future, because its structure and aims are stuck in the past in a fast-changing world. UKIP were top in the EU elections, and have gained significant success in the polls ever since the last General Election, so much so that they are challenging the Limp Dicks for third place. Most Conservatives agree privately with UKIP, and significant numbers have deserted to UKIP, so much so that the Conservatives cannot possibly win the next General Election without UKIP aid or without adopting UKIP policies in a significant fashion. There's a message for you there, chum. There is a great irony here that the steps taken in order to prevent a deflationary collapse could mean there is an even greater "danger" if we do start to recover. Put simply, the debt burden of the major economies are so large that they cannot afford to pay higher rates. The central banks, have massive rate risk through the bonds they are holding. What we are trying to do is create via financial alchemy a solution to the problem that the debtors cannot pay the creditors, but a restructuring is politically impossible as well as a mortal threat to undercapitalized banks. Therefore, we hope that we can somehow flood the world with liquidity, to inflate only specific assets (property, equities) but not others (food and energy). Because this is "unnatural" we see efforts made to manipulate markets (officially sanctioned fudges of housing data, outright equity market intervention, and rumors of oil releases) so the markets just get weirder every day. The question is, whether we are happy to live in a world of extreme central planning, which seems to benefit the ultra wealthy the most or would be prefer to stop the charade, allow the markets to clear, accept the reality that we are not as rich as we thought, but move on.

Difficulties in the markets for Spain, a slippery slope towards a bailout, austerity, protests and social unrest, we have seen this movie before. Here is my a guide for how to deal with the situation.

An ancient Greek guide for Spanish and other PIIGS who wish to deal effectively with the crisis

1. Dealing in private with the pain and anxiety caused by the market turmoil and/or frequent visits of the Troika and their impossible demands (for how to deal in public see other points below): Draw from Stoicism. Stoics strived to be free of suffering and through exercise of reason achieve peace of mind - meant in the ancient sense of having "clear judgment" – as well as maintain equanimity in the face of life's highs and lows.

2. Dealing with “nice” comments about your morality: Use Aristotelian or Chryssipian logic. Convince yourself with sound deductive syllogisms that the rubbish posted around the world about your country & culture is the result of incorrect induction and reckless stereotyping (one pig does this, two pigs do this, therefore all pigs do this).

3. Dealing with the unethical behaviour of political and economic elites in your country and the abroad: Adopt Socratic dialectic and ethics in public life. Socrates was renowned for his relentless questioning of authorities and public figures, which was aimed not to humiliate individuals (yeah sure – never swallowed this at school) but to discover truth with a view to achieving the “good life” for everyone.

4. Dealing with seemingly endless half-baked attempts to re-establish financial stability: Recall Zenon’s paradoxes especially the one of Achilles and the Tortoise. If the Tortoise is given advantage in the race, Achilles will never reach her because by the time he has reached the last position, the Tortoise will always have moved a bit further.

5. Dealing with debt slavery: Recall σεισάχθεια (seisachtheia), Prior to Solon (5th cent BC) Athenians practiced debt enslavement: a citizen incapable of paying his debts became "enslaved" to the creditor. This issue primarily concerned peasants working leased land belonging to rich landowners and unable to pay their rents. In theory, those enslaved would be liberated when their original debts were repaid. Solon put an end to it with the σεισάχθεια / seisachtheia, liberation of debts, which prevented all claim to the person by the debtor.

6. Finally, if you fail to bring about the much desired relief or political change with the above measures why not go for a Roman style “Spartacus slave revolt” and then establish “Epicurean philosophical communes” all over the Med. They survived for hundreds of years in antiquity and provided peace and happiness to millions.

SO MUCH FOR THE ECB plans...

MADRID--Mariano Rajoy, the Spanish prime minister, has said he is more determined than ever to avoid having to ask for a bailout – despite the insistence last week by ECB president, Mario Draghi, that it would be a condition of the central bank helping to keep down a country's borrowing costs.

"If there is one overriding priority for creating employment it's reducing the public deficit. That is far more important than what people like to call a bailout," Rajoy said in a televised interview on Monday night. Draghi announced last week that the bank would buy unlimited quantities of sovereign debt to ensure eurozone governments retained access to funding, but he made it clear that there would be strings attached. However, Rajoy said he was not prepared to accept such conditions. "I couldn't accept anyone else telling us what our policies should be or where we have to make cuts," he said. How this apparent intransigence is received in Brussels and Berlin remains to be seen, but Rajoy received some support for his stance on Tuesday during a visit to Madrid by the Finnish prime minister, Jyrki Katainen, who said a bailout could be avoided as long as the measures taken in Madrid were seen as credible. Rajoy is at pains to show that he is in charge, that he is not the victim of circumstance and that he is making decisions of his own free will and not because they have been imposed on him. He appears to have decided that, if he has to make spending cuts and other unpopular decisions, then he will do it without ceding sovereignty the way the Greeks have been forced to do.

Green light for the "QARTO REICH"...

The eurozone's permanent bail-out fund HAS BEEN ratified - with conditions.......Germany's constitutional court has given the green light for Germany's president to sign the €700bn European Stability Mechanism into German law.

That takes away the danger of the bailout fund being blocked.

But there are also some key conditions:

1) The court has rules that German liability to the ESM must not exceed €190bn without asking the Bundestag for approval.

2) Both houses of the German Parliament must be kept informed about how the funds within the ESM are deployed.

No-one really has the courage to kill the Euro, nor do they have the where with all to rescue it. How do people think the markets will react to yet another plan about what we'd like to do if we had the balls/mandate.

Another important element in today's court ruling: the judges are going to consider the bond-buying programme announced last week by the European Central Bank.

German MP Peter Gauweiler asked the court to consider whether the Outright Monetary Transactions (OMT) plan was also a violation of German sovereignty, as it allows the ECB to buy unlimited quantities of eurozone sovereign debt. Gauweiler's complaint failed to postpone today's decision, but it suggests there could be further action from Karlsruhe in the months ahead, as the judges examine whether OMT transfers German sovereignty to the ECB.

"EU assembly" ( in fact a bunch of retards )

Members of the "EU assembly" ( in fact a bunch of retards ) have been chastised for revealing details of a confidential briefing with ECB president, Mario Draghi. Mr Draghi was taking part in a hearing organised by the EU assembly's economic and monetary affairs committee on the future of the euro and plans to build a so-called banking union. Jean-Paul Gauzes, a French member of the panel, commented that Mr Draghi had told the committee that he was comfortable with the central bank buying bonds with maturities up to about three years. Members had their knuckles rapped over leaking their briefing, with the committee chairman Sharon Bowles saying the leaks were “a complete breach of confidence". "I think it has brought this house into disrepute,” she added.

Bloomberg reported: While it had originally been intended that Draghi’s hearing with lawmakers would be public, that plan was changed because of the convention that senior ECB officials don't comment publicly on policy in the week before an ECB Governing Council meeting, according to a parliament spokesman.

Moodys have downgraded 28 Spanish banks recently to just above junk status, also downgrading several Italian banks because of the contagion effect.The whole of Europe is utterly screwed by a debt mountain that cant ever possibly be paid off....Unless the ECB can magic up another 500 billion in a vain attempt to stop Spain and Italy going down the tube. ... We have politicians across the EU without a backbone between them, clenching their buttocks as hard as possible to not be the first to publicly shit themselves in panic. Yet the EU keeps a triple A credit rating. That sounds like a ponzi scheme to me...

Enormous growth with cheap money, that's United Europe

That is what we experienced in the last decades of the EU. Regard Spain, it changed, grew and modernised, in rural regions partially medieval,her life with an unmatched velocity never experienced before in history. - And ended in the financial crisis. That was mainly the fault of the socialists, with the coward Zapatero, now fleeing before the voters, and by socialists inbred attitude to waste the money, that others earned. And this horror experience shall now be revived in France with a President to elect who already declared that he would disregard the rules for austerity- and preferably waste German money.
By the way:I just returned from the "total emergency“ in Spain’s most suffering region Catalonia, nearly bankrupt. The restaurants were filled with Spanish families. Enjoying excellent food with pescados, mariscos and bogavantes (lobster) together with cava and one of the favourite cars seems to be the Porsche Cayenne... With the speed at which the level of quoted debt is increasing and far greater than any rate of inflation surely there must be questions on how big the black hole in the finances actually is. If you told me it was a 100 billion today then all of a sudden it lurched to 300 billion any sane person would say "WTF". ... SO SOMEBODY HAS BEEN LYING OR HIDING THE TRUE SCALE OF THE PROBLEM! At that point you can't fix it the size of the problem is not yet determined so honestly now "how big is the problem"??? You will not get a straight answer on this because they would be called out on it tomorrow when it has doubled yet again!....Germany’s ECB board member, said today: “The risk premia of sovereign bonds now reflect not just the insolvency risk of some countries but an exchange rate risk, which should not theoretically exist in a currency union. The markets are pricing in a break-up of the eurozone. Such systemic doubts are not acceptable".
Ahhh, "theoretically"... Well, theories are often very, very wrong indeed. Or were Greece, Ireland, Portugal, now Spain and next Italy all supposed to be declared insolvent as part of the euro "master plan", eh? ...Want some more data for your "theory"?....there, you see..."The Catastrophic State of Italy's Labor Market - September 4, 2012 - Spiegel. Italy's economy remains in freefall. The country is shedding jobs, production rates are abysmal and the infrastructure is appalling. Banca d'Italia, now forecasts a 2 percent drop in GDP this year"

'If Germany goes under then the Titanic really hits the iceberg'

The Chinese are worried that Europe is going to collapse. The Europeans are worried that China is going to Collapse. Actually both are headed for Collapse. European demand comes from the north europeans lending to south europeans to consume in the hope that because they are in Eurozone, they will get repaid. Not going to happen, all that is lent will be written off one way or another.

Chinese demand is based on construction of empty cities, empty skyscrapers, trains on which nobody rides, highways and bridges to nowhere, municipal offices that look like palaces and factories to produce this malinvestment.

There is a saying in Chinese, A day comes when the yellow river clears. Well, the Chinese have run out of money, construction has halted across china, steel is piling up, iron ore is piling up. Dealers are choking on unsold cars. Nobody is taking delivery of ships the shipbuilders are building. Don't expect the chinese to keep buying German cars, French wine , Italian leather or Swiss watches. The south europeans have run out of money, don't expect them to buy chinese toys or electronics....Money supply numbers may be just based on channel stuffing. Don't expect it to put food on your table. Inventory liquidation will start soon, then we will find out who has been swimming without clothes

Isay : Merkel desperately sucking up to the Chinese, hoping that they can take up the slack for the increasing effect of falling demand in the Eurozone, to paraphrase a pundit on RT today, 'If Germany goes under then the Titanic really hits the iceberg'

"The Godmother"

A new book discribing Angela Merkel as a power-obsessed egomaniac whose authoritarian tactics threaten the foundations of democracy is creating a stir in Germany and focusing attention on opposition to the chancellor inside her party. "The Godmother" probably would have drawn little attention were the book's author, Gertrud Höhler, not an influential conservative voice in the chancellor's own Christian Democratic Union. Gertrud Höhler, presenting her new book Thursday, was a longtime adviser to Helmut Kohl and other conservatives in Ms. Merkel's party.A former adviser to Helmut Kohl and other senior German politicians and business leaders, Ms. Höhler is a frequent presence in the German media. She is a fixture of the old guard of Ms. Merkel's CDU.   In the book, which hit stores on Friday, the author assails Ms. Merkel's pragmatic governing style as a betrayal of core conservative values and accuses the chancellor of trying to consolidate her power by crushing internal opposition. In one passage, Ms. Höhler appears to draw a parallel between Ms. Merkel's solitary style of ruling and past authoritarian German rulers such as Hitler and Communist leader Erich Honecker. "System M," as Ms. Höhler describes the chancellor's governing style, "is establishing a quiet variation of authoritarian power." Ms. Höhler's extreme views of Ms. Merkel aren't shared by many conservatives. Yet she is not alone in accusing the chancellor of abandoning conservative ideals in the name of political expediency and for purging the party's senior ranks of anyone who could challenge her authority. While frustration with Ms. Merkel's governing style has been palpable for some time within her conservative base, the chancellor is more popular than ever with Germans overall. That broad popularity—Ms. Merkel enjoys the highest approval ratings of any elected German leader—has made it nearly impossible for her internal critics to gain traction....(source WSJ)

The eurozone is grappling with sky-high debt levels

Slower economic growth is making it harder for governments and central banks to control the debt crisis in Europe. Shrinking economies make it more difficult to get the public finances into shape. Lower output dents tax revenues while forcing up the cost of social benefits. “The big picture is that the economic growth required to bring the region’s debt crisis to an end is still nowhere in sight,” said Jonathan Loynes, chief European economist at Capital Economics. For those countries at the front-line of Europe’s debt crisis, the figures make for grim reading. Unsurprisingly, Greece is faring the worst -- its economy is 6.2 percent smaller than a year ago and back at the level it was in 2005. Portugal, which has also been bailed out and enacting the tough austerity medicine, suffered a big 1.2 percent drop in output in the second quarter, compared with the previous quarter’s modest 0.1 percent drop. Italy and Spain, the eurozone’s third and fourth largest economies, shrank by 0.7 percent and 0.4 percent respectively in the second quarter. Both countries are struggling to convince markets they have a strategy to get a grip on their debts. Spain has even acceded to a bailout of its banks. Alexander Schumann, chief economist at The Association of German Chambers of Industry and Commerce, urged Europe’s indebted countries to carry on with their reforms and that it won’t be long before they start reaping the rewards. “We need to be patient but there are positive signs that in 18 or 24 months we might see light at the end of the tunnel in Portugal, Spain, Italy and Greece, “he said. “We can get there if politicians don’t block the tunnel with ideas that add new uncertainty.”...The eurozone is grappling with sky-high debt levels and record unemployment of 11.2 percent. Compared with the year before, the eurozone’s economy is 0.4 percent smaller. Without Germany continuing to post solid levels of growth, the eurozone would officially be in recession. Europe’s largest economy grew by a quarterly rate of 0.3 percent in the second quarter. Though down on the 0.5 percent recorded in the first quarter, the advance was a little more than expected -- most economists thought Germany would only grow by 0.2 percent.

In theory, Europe's leaders created...bla,bla, bla - in fact the concoring of Europe !

In theory, Europe's leaders created the temporary euro rescue fund, the European Financial Stability Facility (EFSF) and its successor, the European Stability Mechanism (ESM), both headed by Germans (though some have different citizenships but the same origin) precisely to support countries facing financial bottlenecks. But providing more help for Greece would be a very tough sell for Europe's politicians. Chancellor Angela Merkel would have to get the consent of the German parliament, the Bundestag, which could prove tricky. And Merkel's junior coalition partner, the conservative Bavarian Christian Social Union (CSU), has been adopting an increasing shrill tone against Greece lately -- meaning that the government could plunge into crisis if the chancellor supports more aid for Athens. For some weeks now, it has been clear that the Greeks would run out of money this summer. And there is no emergency backup plan in place. Everyone has instead counted on the ECB. For his part, ECB chief Mario Draghi seems to have accepted this and allowed the leaders of the euro-zone countries to force him into the role of the pragmatic emergency helper. ... For now, the priority for Greece is to keep its head above water until it receives its next planned bailout payment. The troika overseeing Greece's aid package, comprised of the European Commission, the ECB and the International Monetary Fund (IMF) and headed by Horst Reichenbach, The German Governor of Greece is expected to decide on the payment of the next tranche of €31 billion in September. In terms of communication, it appears that the troika is already trying to pave the path for a "yes" on the tranche payout. Recently, it gave unexpected praise for an agreement that would see Greece introduce additional austerity measures worth €11.5 billion in 2013 and 2014. "Talks went well, we made good progress," the IMF's mission chief for Greece, Poul Thomsen, told reporters. And the troika has stated that progress has been made with Greece's plans to privatize state-owned assets. The Greek government is claiming it will have binding offers for the sale of state gas company Depa and the gas grid operator DESPA by the end of September. The message is meant to be that things are moving forward. Meanwhile, Greek Prime Minister Antonis Samaras wants to do a bit of hustling before the governor of Greece Mr Horst Reichenbach issues his decision. He is planning visits to Germany and France at the end of August. The Greek media have already reported on his plans for the trip: Samaras wants to ward off Greece's "quick euro death."....well there is no "troika" - there is a 4th Reich however and Greece is a test site for what it is to follow for Europe.

I bet even the IMF has no idea how much the game is going to change.

President Mario Draghi admitted his eurozone rescue plan was a work in progress. ... First there was light at the end of the tunnel - now there is just work in progress meaning that they are thinking of trying to locate where they are in the tunnel but they haven't got a clue what to do. Euro is just a shamble the biggest political failure of all times, the biggest wealth destroyer the humanity has ever known. Congratulations to the europhiles for making the world a poorer place. You're in a big hole and you're still digging.... There is a need for the europhiles for an apology for all the misery they piled onto the people and start urgent negotiations on how to get rid of the euro. We will forget all your sins. It is up to you to put your hands up and say sorry. wELL :The elephant in the room is losing it's grip on the ceiling light flex? Stand by for the mass stampede through doors and windows and walls. The IMF is as informed as manuel as to the whole picture, the truth is nobody can know the extent of the desolation bankers and financial whizzkids have visited upon us and anyone who can be convinced otherwise has little appreciation of the shortcomings of human nature. It's likely that from top to bottom they were all behaving with the mindset of the shoplifters during the riots, driven mad in their bonus rush, many also under the influence of cocaine?
Over four years some of the known truth has been drip fed out, it's rumsfeldt's unknown unknowns (as it were) that will lock in the longest depression yet, as we especially seem stuck with the present establishment using the austerity argument totally dishonestly for dogmatic gains and repression.... I SAY : The economic shock from the eurozone crisis has not yet hit said the IMF- AND That's because it ISN'T a "eurozone crisis", it's a crisis of western consumer 'growth' capitalism, mainly caused by a bubble stoked by profligate bank lending activities, reckless and stupid corporate borrowing and a disastrous corporate 'globalisation' process which saw the biggest transfer of wealth across the globe in human history - oh, and diminishing conventional oil reserves.

Top bankers messed up, top business leaders gave away the wealth of the west for short term profit and dumb politicians didn't understand what was going on. Those that did, were easily 'persuaded'.  They're all sliding down the mountain side, using ice picks for brakes but kicking the Eurozone ahead of themselves, so that they have someone to blame....it called for a "policy game changer"

I bet even the IMF has no idea how much the game is going to change.