The biggest myth about current economic problems is that historical precedents have much value for understanding them. The next biggest myth is that the problems primarily have to do with difficulties in the financial system. The other big myth is that they are part of some short tem business cycle. The reality is that the post World War II era is winding down in a period of unprecedented change. Several different threads of that change that are difficult to factor are the primary agents creating global economic problems. Certainly the role of automation in ushering in post industrial society is one big factor. So is the global competition from the arrival of most of the world's population into the industrial age. Another factor is less certain, but perhaps more basic. That is the possibility that endless economic growth is not really a human priority. Japan may be the more realistic model of human behavior that is satisfied with some level of reasonable economic well being....After the goldrush: between the 1970s and now there has been almost no growth in real wages, whilst the growth in returns on capital have been almost exponential. People felt their standard of living was rising because of almost unlimited credit. That credit has gone. This has left industries, both manufacturing and service, that are in effect crack addicts. Nobody will borrow personally again until growth returns.. People need to be paid more. That way they'll spend all that money on the wonderful things the rich get richer by making and doing. Companies can either strip costs until their markets are dead, or invest in their wet skills through higher pay....

Of course we need to fix the causes of this crisis, but that is going to do bugger all in the short-medium term to fix symptoms. "The attempt to solve a crisis caused by credit with even more credit has, predictably enough, proved a failure. It has been a bit like the motorist desperately pumping air into a tyre with a slow puncture: it works for a while, but eventually the tyre goes flat again."

Nonsense. A fallacy in place of a reasoned argument.  'Debt caused the problem so debt can't solve it' is based on the fallacy that all debt is equally bad. The problem is not the amount of debt but who holds it - governments with their own currencies paying record low levels of interest vs private individuals and businesses who are depressing the economy by all de-leveraging at once. The former is absolutely sustainable at much higher levels than at present - and the use of this debt to produce stimulus the only obvious way out of this crisis that doesn't take years and condemn millions to the scrapheap. (Of course, if you're unlucky enough to be under the Euro, you are doubly screwed: not only is this path not an option - as the ECB won't back your debt sufficiently to make it sustainable - you can't even devalue.)

At the summit of the Group of 20 leading economies in Los Cabos, Mexico, Mr. Rajoy told his counterparts that it was necessary to "break the link between risk in the banking sector and the sovereign risk," a Spanish official said. Officials in Brussels cautioned the momentum hasn't moved in favor of making such far-reaching changes to the Spanish bank-aid plan. But they said at least one issue is back on the table: putting bank rescue loans on equal footing with government bonds held by private investors. Germany has insisted that official loans should have a preferred status, meaning they shouldn't suffer losses even if private bondholders are forced into a restructuring.

Some analysts have blamed this prospective subordination of private creditors as contributing to the retreat of Spanish bond markets since the bank-bailout plan was announced 10 days ago. Others argue investors should assume official lenders will have preferred status anyway....putting the ESM on equal footing with regular bondholders would only resolve part of the problem—assuming that investors would actually believe a statement to that effect by euro-zone leaders, said Guntram B. Wolff, deputy director of Brussels-based think tank Bruegel.

The much bigger issue remains the country's growing debt load, he added, for which no institution has offered a credible solution so far. Spain's demand for direct capital injections for its banks rather than lending the money first to the government is being supported by the European Commission, the EU's executive, and some other EU governments, but is still being resisted vehemently by Germany, officials said. One EU official, however, said that "it is still early days" and that the exact structure of the aid hadn't been decided yet.

....I am beginning to wonder just who is more insane....the so called leaders or the sheep following

Monday 27 February: Belgian bond auction, Italian T-bill auction. German lower house extraordinary session to vote on Greek bailout.

Wednesday 29 February: Allotment of ECB three-month, three-year long-term refinancing operations. Finland due to vote on Greek bailout.

Thursday 1 March: Euro-zone finance ministers meet. Euro-zone February manufacturing PMI data. Spanish and French bond auctions.

Thursday 1 March 1 to Friday 2 March: E.U. leaders' summit.

Wednesday 7 March: German bond auction.

Thursday 8 March: ECB interest rate decision.

Monday 12 March: Euro-zone finance ministers meet. Greece aims to complete PSI by this date.

Tuesday 20 March 20: €14.4bn of Greek government bonds mature.

My humble opinion - The tragedy of Europe is that German's are continually propelled to a leadership position due to their discipline, organization and industry but have proven themselves fundamentally ill-suited for the role at every turn due to their narrow-mindedness and inflexibility. Contrast that with the ease with which Americans (although reluctantly at times) over the last century have taken on the role of global leadership. I have never been able to understand how most people simply cannot, not before and not even now, see these degenerate filthy crummy scum in Brussels for exactly what they are...They are no different to other murderers, thieves, pedophiles, child molesters, bank robbers, mafioso, gangsters or any other label you might add to criminals. They are all that, just on a bigger scale, but other than that they are absolutely unequivocally and irredeemably criminals, in every sense of the word. No other citizen in any country on the face of the planet could do what they do and have a hope in hell of getting away with anything less than life imprisonment or hanging or frying in an electric chair. Why is it that people listen the these disgusting common criminals and still let them rum amok wreaking havoc everywhere....Why is that these insane cretins are not all lined up in pine boxes waiting their turn for the furnace doors to open again. Just how many millions of lives do they have to trash before people see the reality of what they really are. Or are most people so stupid and naive to think its just an accident.
And these are just nice people doing their best....I am beginning to wonder just who is more insane....the so called leaders or the sheep following

European Union negotiators have yet to settle key elements of a complex bailout and debt-restructuring package for Greece

Tomorrow's meeting to discuss the second Greek bail-out has been called off amid accusations that a top politician in the debt-stricken country has failed to sign off agreed austerity measures....Tomorrow, Samaras is expected to deliver a letter agreeing to adhere to the Troika (German) plan. And pigs may fly!

Which will it be:

1.- The letter does not arrive in time (lost in the mail)
2.- A further letter is dispatched but to the wrong address
3.- The letter arrives but is ambiguous and is rejected by the EU - (my most likely outcome)
I think the letter is not ever written but there is enough talk about it for the can to travel down the road for another day......The head of the eurozone countries has downgraded an eurozone finance ministers meeting on Wednesday, saying Greece has not yet given the necessary assurances about its austerity plan. Ministers, who had demanded Greece find an extra 325m euros of savings, had been set to meet in Brussels. But Eurogroup President Jean-Claude Juncker said the talks would be replaced by a conference call. He said technical work with Greece was still needed "in a number of areas". .... Finance ministers had not received assurances from leaders of Greek political parties on a programme of proposed cuts, Mr Juncker was quoted as saying by Reuters news agency. He said that "against this background, I have decided to convene ministers to a conference call tomorrow in order to discuss the outstanding issues". There is pressure on Greece to make progress, as the country will not be able to pay debts due on 20 March unless it can qualify for more bailout funds by satisfying its European partners. By that date Greece needs to repay 14.5bn euros to lenders. When and if eurozone ministers are convinced Greece is making progress on cuts, and if the German parliament agrees to the bailout (as it must under national law), then any new bailout could be signed off in early March. Meanwhile, an official report on Tuesday showed that the decline of the Greek economy accelerated in the final three months of 2011.

Joe Ackermann of Deutsche Bank is confident of a settlement

French TF2 ... with a special appearance by Sarkozy to explain the current state of the French economy. He has been talking for over an hour now with two TF2 newscasters and an invited audience is present. He has said that the finance sector is past the danger stage but it's now job losses and lack of jobs for young people that are the danger to the French economy. (Britain has the same problem - the increase in youth unemployment - as we know). Re the UK, Cameron's speech and opinions voiced by him at Davos have been described in some of the German media as "deplaziert" - out of place. A headline in one German paper today asks "Where are the good capitalists?" - and goes on to report from Davos that it is now socially acceptable (salonfähig) to criticise the "present system". A major news item is that Berlin is demanding control over Greece's budget. This sounds like the "Treuhandanstalt solution" by which a "Treuhandanstalt" type of organization was specially set up to reorganize the way East German economy was run, to turn it from a command economy into a free market economy. In effect the West German government took charge of a collapsing East German economy from 1990 until 1994 when the task was completed. Seems to me the Greek economy is in the same state of near-collapse right now and the Treuhand solution would work (and more rapidly imo) with Greece. For one thing, in Greece there is not the communist/command economy mentality as in East Germany, but on the other hand, corruption and nepotism (in East Germany it took the form of jobs for Communist party members) is endemic in the Greek economy. One result would surely be that foreign capital would be more confident about investing in the Greek economy, which is necessary for economic growth. Regarding opinions on who will take what size of a haircut in a settlement on Greek debt, I saw a comment from a banker that "psi" can also mean "public sector involvement". At any rate, top banker Joe Ackermann of Deutsche Bank is confident of a settlement - at least he said that a couple of days ago.

There is much excitement in Financial circles at reports coming in from NORAD.

In short : European leaders have been criticized for failing to take meaningful action to address the region's debt crisis. However, the European Central Bank’s decision to lend to banks is being applauded by many who had predicted doom, including euro bear Carl Weinberg, chief economist at High Frequency Economics. Weinberg consistently warned that the sovereign debt woes facing Europe would lead to a banking crisis and depression, CNBC reported. But following Wednesday's long term refinancing operation by the European Central Bank (ECB), Weinberg believes the eurozone and its banking industry finally have something to celebrate. Yahoo’s The Daily Ticker reported that the ECB kicked off its new borrowing facility with a bang Wednesday, lending $645 billion to 523 banks at 1 percent for up to 3 years. Both the dollar volume of loans and the number of banks seeking funds exceeded expectations. According to Bloomberg, the banks borrowed enough cash to refinance almost two-thirds of the debt they have maturing next year amid concerns that markets will remain frozen. This may not be enough in the end, but it is a significant step in the right direction, he added. The injection of liquidity converted bear into an optimist. And, according to Forbes.com, the news gave European stocks, especially financials, and the euro a boost. But not everyone agrees that it is time to break out the champagne. Skeptics said the high level of demand for loans is a sign of how desperate European banks are for financing, says the Daily Ticker.

There is much excitement in Financial circles at reports coming in from NORAD. First reports indicte that Father Christmas is closing in on planet earth with an unusually large sack. Rumpy von Lickspittle ( the much derided EU stooge) confidently predicts that santa is bringing a couple of Billion Euros to bung at indebted countries in the EU. Rumpy has gone on the record as saying that a policy of relying on Father Christmas was a darn sight more credible than any other policy the EU has yet formulated!!

So,....The ECB is buying...

Spain auctioned bonds due in 2016 at an average yield of 4.023pc, compared with 5.276pc when securities of a similar maturity were offered on December 1, the Treasury said. It priced bonds due in 2020 at 5.239pc, compared with 5.006pc in September, and sold an April 2021 bond, the current 10-year benchmark, at 5.545pc, less than the 5.696pc on the secondary market before the auction. After the auction, Spanish bonds erased declines. The yield on the five-year benchmark fell 27 basis points to 4.69pc with the 10-year yield declining 16 basis points to 5.53pc, the lowest in more than a week. That narrowed the gap with German equivalents to 359 basis points from as high as 382 basis points before the sale. The auction marked the second time in a week that Spain managed to sell more bonds than targeted, easing concern that the spread of the region’s debt crisis would make it harder to finance the country’s rising debt. Prime Minister-elect Mariano Rajoy pledged “important decisions” next week at his first Cabinet meeting to tame public finances and end the country’s three-year economic slump. Demand for the 10-year bond was 2.16 the amount sold, compared with 1.76 in October, while investors offered 1.99 times the amount of the four-year bonds sold, compared with 2.83 on December 1, and the bid-to-cover for the April 2020 notes was 1.52 compared with 2.01 times in September.

" A senior German official" has been talking to Reuters. The unnamed official has said they are "not sure if summit will reach conclusion on using IMF funds in eurozone crisis" and "can't forsee running EFSF and ESM simultaneously". They have also said they are "more pessimistic than last week on overall summit deal". Well, that's reassuring....Meanwhile : The ECB said banks asked for $50.7bn in 84-day dollar funds and $1.602bn in the 1-week tender in the operations, in which they are guaranteed to get all funds they requested. The demand was well above the $10bn median forecast in a Reuters poll of money market traders. Traders attributed banking strains in countries mired in the debt crisis as the main reason for the high amount allocated. Remember that liquidity boost last week? Reuters reports that banks took more than $50bn from the European Central Bank today in its first offering since slashing the cost of borrowing dollars, a sign that some euro zone banks have problems finding dollar funding as the region's debt crisis intensifies.www.ziaruldeinvestigatii.ro

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.

Federal Reserve "coordinates" with ECB and Bank of England to allow banks cheaper access to dollar.

Everything is now starting to make sense to me at least. The Federal Reserve is trying to bail everyone out and this will produce a lot of downward pressure on the US dollar. Eventually the pressure will become too great leading to a collapse of the currency.An international reserve currency will be organised in the aftermath with an international Central Bank probably led by the IMF.This bank will 'prevent' the bank runs that are taking place at this very moment. The carbon tax scheme will then be the instituted worldwide with the proceeds going to the international bank. I may be wrong but it looks like this may happen....However : the next step in the "Hollywood script", soon the USA will own and control all of europe, and they will get us paying for their defense budget, but i said this almost a year ago, but i am simple. Another step towards the super dollar. ...IN REAL LFE : Greece will see another general strike tomorrow, with ferries and public transport disrupted, schools closed and state hospitals running with reduced staff. The cause, again, is the painful package of austerity measures that the state was forced to take on in return for bail-out cash. Just yesterday eurozone leaders approved the next €8bn payment. Ilias Iliopoulos, deputy leader of the civil servants' union AEDEDY, spoke to AP television: They are creating a situation that can no longer be tolerated, can no longer be endured. Unfortunately people are in a state of somewhere between poverty and despair. The measures are supposed to improve the country's financial situation, but the country is getting deeper into debt, unemployment is rising, and the recession - unprecedented in recent times - is worse than anywhere else in Europe. People are falling apart.

Eurozone finance ministers are scheduled to discuss significant increases to the bailout packages for indebted countries in Brussels on Tuesday. But policymakers remain divided over the best way to finance the bailout schemes, including the EU's main rescue fund, the European financial stability facility (EFSF). After crisis talks in October, Angela Merkel and Nicolas Sarkozy said they hoped to expand the €440bn (£377bn) EFSF to around €1 trillion: large enough to cope with the prospect of possible bailouts for Spain and Italy. But recent attempts to construct a bigger fund have failed, leaving ministers scrambling to find alternatives. Some leaders want the European Central Bank to take an active role, but new central bank boss Mario Draghi has ruled out buying large amounts of Italian and Spanish government debt to stabilize their borrowing costs. Rumors circulated over the weekend that Spain was preparing to make a bid for EFSF funds after Madrid saw the cost of its borrowing reach 6.7%. Sources close to the incoming government of Mariano Rajoy denied that he had made a request for bailout funds from Brussels, although they refused to say whether he was considering making such a request. Analysts say the situation is complicated by calls in Ireland and Portugal for a Greek-style debt write-off. Dublin and Lisbon are expected to take their case to the finance ministers' meeting on Tuesday, arguing that they should also enjoy the 50% reduction on their debts that was negotiated for Athens.

"If you want a vision of the future, imagine a german boot stamping

A total of £36.2bn was wiped off the UK's biggest companies on Monday as the FTSE 100 dropped 2.6pc. European markets lost more. The Stoxx Europe 600 index fell 3.2pc; the French CAC and German Dax sank 3.4pc each; Italy's MIB dropped 4.7pc and Spain's Ibex fell 3.5pc. US markets also fell, with the deadlock on plans to cut America's debt driving the declines. The costs of insuring Spanish, Italy and French debt rose. The International Monetary Fund (IMF) said global growth was "slowing down". Min Zhu, IMF's deputy managing director, said: "Last year the world had 5pc GDP growth rates by IMF PPP measures, we forecast this year 4.4pc, with the downgrade in October it became 4pc. And I can tell you even that number becomes too optimistic. If we further adjust that, it can only go down, particularly for the advanced economies."Investors were shocked by the rapid downward revision of the Bundesbank's prediction: five months ago, the central bank forecast growth of 1.8pc in 2012. On Monday in its monthly bulletin it said Europe's powerhouse economy could suffer "pronounced" weakness if the euro zone debt crisis continued. The Bundesbank sharply lowered Germany's growth forecast for next year to 0.5pc - savagely knocking confidence in Berlin's ability to solve the rapidly intensifying crisis. Meanwhile there were fears that France would succumb to spiraling borrowing costs as Moody's warned that the country could lose its cherished AAA rating. The doubts pounded confidence in Europe's fragile rescue mechanisms. The ability of the European Financial Stability Facility (EFSF) to raise debt would be seriously damaged if France lost its credit rating. The bail-out fund - designed as Europe's €1trillion "big bazooka" - has already struggled in the bond markets while leaders deliberate over the funds structure. How many times do we have to say it. We will not print money. Every German knows the history of the Weimar Republic. A better solution is an expanded EFSF combined with austerity. The markets need to give us time to adjust our constitutional constraints to allow for a further commitment to the facility.

Greek Finance Minister Evangelos Venizelos submitted on Friday the budget plan, which would provide the course of the country before PSI program and objectives on revenue, expenditure and deficit after the haircut of 50%. In the afternoon, the budget plan will be presented to the Troika senior officials, who arrive in Athens to meet with Prime Minister Lucas Papademos and FinMin Evangelos Venizelos. The General Index of Athens Stock Exchange recorded a 2011 low on Friday, while the net trading turnover marginally exceeded €27 million. In a weak session, the General Index moved into negative territory throughout the trading session with intraday losses of 2.02%, recording a 20-year low. It finally ended down 1.68% at 712.63 units, a 2011 low. Cumulative losses for week amounted to 5.69%. Although Greek banks attempt to keep on positive grounds, the banking index ended at the session low (281.19 units) with losses of 3.71%. Banks lost 15.72% for the week. The growing concern, which reflected daily in the bond markets by increasing borrowing costs, has minimized any positive dynamics created by the agreement of Greek political parties, said Beta Securities in a report, adding that the domestic market moves more and more aligned with the foreign bourses. On Friday, approximately 46.57 million units of total value €36.37 million traded. Excluding a transaction for a 3% stake in MIG of total value €9.24 million, net turnover stood at €27.13 million. A total amount of 78 shares moved downwards, 60 rose and 137 remained unchanged. Marfin Popular Bank and MIG topped FTSE20 with profits of 1.44% and 1.14% respectively. Viohalco rose by 0.99%, while Piraeus Bank and Coca Cola 3E posted minor profits of 0.46% and 0.08% respectively. Ellaktor and PPC remained unchanged. On the other hand, Hellenic Postbank and Titan suffered the heaviest pressures with losses of 8.74% and 6.08%, while National Bank and Alpha Bank fell by 4.76%. Eurobank’s losses also exceeded 4%, while OPAP, Bank of Cyprus and Hellenic Telecoms declined by 3.63%, 3.38% and 2.37% respectively.

Fitch: Italy is already in recession

Italy's new prime minister, Mario Monti, said the euro zone's third-largest economy faces an emergency, and he promised sweeping but fair reforms to dig the country out of a major financial crisis. Monti's government of technocrats must pursue fiscal and structural economic reforms but the downturn in Italy and Europe will complicate his job, Fitch said"Italy is likely already in recession and the downturn in activity across the euro zone has rendered the task of the new government much more difficult," Fthe ratings agency said in a statement. Fitch, which downgraded Italy to A+ from AA- with a negative outlook last month, warned it would cut the country's ratings to the low investment grade category if it were unable to borrow at sustainable rates on the markets. "Sustaining political and public support for structural reforms and austerity will be challenging in the face of rising unemployment. Convincing investors that the reforms will be effectively implemented and will boost economic growth over the medium term will be equally if not more challenging," it added. Italy's borrowing costs hovered close to euro-era highs on Thursday, with yields on 10-year bonds touching 7.1pc early in the day - past the levels that forced its smaller neighbours Greece and Portugal to seek a bail-out. The country has to refinance €312bn (£267bn) of debt next year. Fitch said Italian bond yields had risen to a level which, if protracted, would place public debt on an unsustainable path.

The newly appointed Italian Prime Minister Mario Monti has named a government entirely composed of unelected figures, just days after a technocratic government was installed in Greece, where the presence of far-right figures linked to the military junta are raising hackles. Monti, an ex-EU-commissioner, was appointed officially on Wednesday by the president of the republic. The new Prime minister has in turn also appointed himself finance minister and, in a move likely to amplify criticisms that a regime of bankers has been imposed on Europe’s southern flank, Corrado Passero, the CEO of Intesa Sanpaolo, the country’s largest bank, has been awarded the industry and infrastructure job.All ministerial posts will be held by technocrats, soldiers and diplomats. Along these lines, the Italian ambassador in Washington, Giulio Terzi di Sant’Agata, has been made foreign minister while an admiral in the navy, Giampaolo Di Paola is now defence minister, eliminating civilian command of the armed forces. "The process of forming a government has taken a radically unorthodox and rushed route after Silvio Berlusconi - under pressure from markets and other EU leaders, resigned as the country’s economic position grew ever more precarious and threatened to pull the entire eurozone down." writes the EUobserver. Meanwhile in Greece - Far-right MPs with links to the Greek Junta appointed ministers. The imposition of the technocrats in Rome comes just days after former vice-president of the European Central Bank, Lucas Papademos, was placed in the top office in Greece, where he too has appointed an administration of technocrats, complimented by members of the far right - the first time Athens has seen such figures in government since the fall of the military junta in 1974.

ATHENS—Greece was paralyzed by a massive two-day strike Wednesday as groups ranging from civil servants to pharmacists and bakers walked off the job ahead of a key parliamentary vote Thursday on new austerity measures. Across the country, public services were frozen, with central and local government offices closed, schools and courts shut, and hospitals operating at bare minimum staff levels. A couple walks by pilling garbage during the second week of a strike by municipality workers and garbage collectors in Athens on Wednesday. Transport services were disrupted as ferry operations were suspended by a dockworkers' strike, while national rail services ground to a halt, and Greece's two major airlines—Olympic Air and Aegean Airlines canceled dozens of flights owing to a 12-hour walkout by air traffic controllers. Tens of thousands of Greek retailers and small businesses joined in, shutting their shops in protest over recent tax hikes and government cuts that have pushed the country deep into recession and led to a dramatic rise in the number of businesses declaring bankruptcies. The 48-hour strike, called by private-sector umbrella union GSEE and its public-sector counterpart ADEDY, is the second time this year that the two unions have called a two-day walkout over government austerity measures. It follows weeks of almost daily strikes, demonstrations and sit-ins, as well as a two-week-long protest by municipal workers that has left uncollected garbage piling up on the streets of Athens and other cities. "We have reached the limits of our endurance and, what is worse, is that there is no ray of hope," said Stathis Anestis, spokesman for GSEE. "We want to send a message that these austerity policies have been a catastrophe for Greece." Under pressure from its international creditors, Greece's government this month submitted legislation that would further cut public-sector jobs and wages, slash pensions for high-income earners, curtail collective-bargaining rights for workers and enact a new levies on taxpayers, among other things. On Thursday, Parliament will vote on the bill just days before a Sunday summit of European leaders that is expected to produce a comprehensive solution to the bloc's debt crisis, and which will also decide whether to release badly needed aid for Greece. At stake is an €8 billion ($11.0 billion) tranche of aid from the European Union and the International Monetary Fund that Greece needs in the next few weeks. The government has said that without the funding, it will run out of money by mid-November.

And they shall vote until it passes..." how about that?!

Slovakia's parliamentarians failed to ratify the expansion of the €440bn (£385bn) European Financial Stability Facility (EFSF). Opposition politicians in Slovakia, which is the only member of the eurozone not to have ratified the changes, have said they will approve the EFSF - but not without the removal of prime minister Iveta Radicova and her government. Richard Sulik, the rebel leader of the coalition's minority member, the Freedom and Solidarity Party, abstained from the vote. He told the parliament: "I'd rather be a pariah in Brussels than have to feel ashamed before my children, who would be deeper in debt should I back raising the volume of funding in the EFSF bail-out mechanism." Separately, the troika auditors - officials from the European Union, the European Central Bank and the International Monetary Fund (IMF) - reported that Greece's fiscal targets for 2011 were "no longer within reach". After weeks of scrutiny, the officials said that the Greek "recession will be deeper than anticipated"; that there was "no evidence of improvement in investor sentiment"; and that the structural reforms, though taking place, were "uneven".

It is not for the first time Slovakia has been against major eurozone policies since it adopted the currency in 2009. Last year, it rejected providing its 800 million euro share of the 110 billion EU bailout plan for Greece. That rescue went ahead without Slovakia, but another exemption for the country would cast doubt over the eurozone's credibility and ability to function as a bloc.

Nonetheless, many analysts are surprised at the power the small country wields. As Greg Anderson of Citigroup put it: "it seems somewhat unfathomable that a country that has not been a member of EMU for even three years could be the one leading to its unravelling."Slovakia prepares for a fresh vote on the eurozone bail-out fund and international lenders buy time for a broader response to the debt crisis with hints that Greece is likely to get a key loan next month."

Europe could melt down in two weeks — three tops — and take the world down with it, IMF adviser and Harvard economist Robert Shapiro says.
The fate of the industrial world's economy lies in European policymakers' hands.
"If they cannot address [the financial crisis] in a credible way I believe within perhaps 2 to 3 weeks we will have a meltdown in sovereign debt which will produce a meltdown across the European banking system," Shapiro tells the BBC, as reported by Zero Hedge. "We are talking about the largest banks in the world, the largest banks in Germany, the largest banks in France, that will spread to the United Kingdom, it will spread everywhere because the global financial system is so interconnected. All those banks are counterparties to every significant bank in the United States, and in Britain, and in Japan, and around the world."
Greece has been teetering on the brink of default for a while now, and European officials have been working with the country to keep it in the eurozone via aid packages. A default on its debts could damage the European banking system since banks across the continent are either directly or indirectly exposed to Greek debt.
U.S. banks exposed to Greek banks will feel the heat as well should Greece default and spark a crisis similar to the Lehman Brothers collapse in 2008.
"This would be a crisis that would be in my view more serious than the crisis in 2008," Shapiro adds.

London, 07 October 2011 -- Moody's Investors Service has today downgraded the senior debt and deposit ratings of 12 UK financial institutions and confirmed the ratings of 1 institution. This concludes its review of systemic support assumptions from the UK government for these institutions initiated on 24 May 2011. The downgrades have been caused by Moody's reassessment of the support environment in the UK which has resulted in the removal of systemic support for 7 smaller institutions and the reduction of systemic support by one to three notches for 5 larger, more systemically important financial institutions. According to Moody's, announcements made, as well as actions already taken by UK authorities have significantly reduced the predictability of support over the medium to long-term. Moody's believes that the government is likely to continue to provide some level of support to systemically important financial institutions, which continue to incorporate up to three notches of uplift. However, it is more likely now to allow smaller institutions to fail if they become financially troubled. The downgrades do not reflect a deterioration in the financial strength of the banking system or that of the government.The rating actions include a one-notch downgrade of Lloyds TSB Bank plc (to A1 from Aa3), Santander UK plc (to A1 from Aa3), Co-Operative Bank plc (to A3 from A2), a two-notch downgrade of RBS plc (to A2 from Aa3) and Nationwide Building Society (to A2 from Aa3); and downgrades of one to five notches of 7 smaller building societies. The ratings of Clydesdale Bank were confirmed at A2 (negative outlook).

As outlined in the May press release, we have reviewed the standalone ratings of all entities prior to concluding on the debt ratings. A separate announcement today covers the upgrade of the standalone rating of Co-Operative Bank to C- (mapping to Baa1 on the long-term debt scale) from D+ and earlier announcements cover the upgrades of the standalone ratings of Santander UK, Nationwide, Yorkshire, and Principality Building Societies. A detailed summary of the rating actions and the current levels of systemic support for UK financial institutions is available here http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_136526.
Separate announcements will follow on entities included in the May 24th review, but not concluded in this action: this includes certain subsidiaries of RBS and Lloyds, as well as Bank of Ireland (UK).

This post for oct. 05. 2011

We seem to be entering dangerous new territory here, on the one hand we have the European commission following it's agenda to create a European superstate trying to introduce European wide taxes and regulations and now we have the Euro Zone headed by France and Germany trying to build a state within a state excluding the 10 members who are not in the Euro from decision making but requiring them to follow regulations made by them. Merkel and Sarkozy are taking Europe down a dangerous road rather than create a stronger more co operative Europe their actions could lead to the breakup of the Union and armed conflict. History will not thank or forgive them.Everyone, all of them, to a man (and increasingly, to a woman) are fighting their own national corners. Sarkozy and the French are determined that Greece will not go under. Not in the interests of the Great European Brotherhood of Nations, but to protect the French banking system which dies along with Greece. Merkel and the Germans will sell their grandmothers if it will ensure the survival of the Euro. Not for the Great European Dream, but because the Euro is grossly undervalued for the Germany economy, allowing them to export competetively. Something they would find it very difficult to do with their own currency. Barroso the Cork Salesman is an ardent European, not because he loves waving the Star Spangled Sphincter, (he would much rather be waving the Bright Red Worker's Flag) but because he knows that without it all that is left for him and his bankrupt country is destitution, ignominy and a return to third world status. The list goes on, but somehow seems to miss the United Kingdom, which is woefully short on British interest.

I suspect money is secretly being printed and moved around to prop up Greek banks and maybe other European banks too. The Fed's enforced audit published recently shows they already disbursed at least $16 trillion (some reports claim as much as $23 trillion) to various establishments around the globe. Merkel et all look much too smug to me and they know public anger is growing, particularly in America, is growing by the hour.