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"
8 comments:
"In August Mr Draghi raised market hopes by saying the ECB was prepared to
re-start its bond buying programme to bring down Spain and Italy’s borrowing
costs - but only once the countries formerly asked for help."
The word you were looking for is "formally", DT, not "formerly".
I do wonder, in the middle of a recession, with banks foreclosing on companies left right and center and themselves being insolvent, most governments having huge debts and low reserves... how would the huge amounts of money needed, probably in the order of a trillion euros be sterilized? I just can visualize how that could be done... perhaps someone can enlighten me on this... let's put aside this for a moment, what would be the effect of taking 1 trillion out of circulation?...
I do wonder, in the middle of a recession, with banks foreclosing on companies left right and center and themselves being insolvent, most governments having huge debts and low reserves... how would the huge amounts of money needed, probably in the order of a trillion euros be sterilized? I just can visualize how that could be done... perhaps someone can enlighten me on this... let's put aside this for a moment, what would be the effect of taking 1 trillion out of circulation?...
Talk of euro break up has two effects, one good, one bad.
The good effect is downward pressure on the euro.
The bad effect is upward pressure on peripheral yields.
Draghi is dealing with the bad effect.
When that is sorted, it is easy to keep the euro competitive - just continue talking about euro break-up.
Higher yields compensate investors for risk and insure the worthless bonds are bought. This is good free market action. Why should tax payers buy the worthless bonds without proper rewards?
Mario Draghi's bond-buying scheme is rumoured to be called the “HyperInflation”* plan. Outlined in brief a month ago, today's meeting will allow the ECB governing council to consider its merits in detail before Germany, Holland, Finland and Austria totally reject the idea as absurd.
As well as being 'unlimited', the scheme is also apparently 'sterilised' – meaning the ECB will not create more money to pay for the bond purchases; instead it will take the equivalent amount of money out from other parts of the system if possible, then Print the money anyway.
The ECB would also reportedly surrender its right to be first in line for repayment in the event of a sovereign state defaulting otherwise no-one would even consider the scheme, thus bankupting future generations to bankroll the Banks/States in trouble now.
NEW YORK (AP) - Investors finally got what they wanted from the European Central Bank: a concrete plan to support struggling countries in the region by buying up large amounts of government bonds. That set off a global market rally and sent U.S. indexes to four-year highs.
The Standard & Poor's 500 index jumped to its highest level since January 2008, just one month into the Great Recession. European markets also surged. Treasury bond prices and the dollar dropped as traders sold low-risk investments.
The gains were extraordinarily broad; 98 percent of the stocks in the S&P 500 index rose.
"There's just a sea of green," said JJ Kinahan, TD Ameritrade's chief derivatives strategist. "It's pretty fun."
At a long-awaited meeting Thursday, Mario Draghi, the ECB's president, unveiled a new program to buy government bonds from the region's struggling countries with the aim of lowering their borrowing costs. Draghi said the program will have no set limit on how much it can buy.
Kinahan praised Draghi for two details in the plan. He didn't declare a limit for the bond-buying program and also said it wouldn't put itself first in line in the event of a default, something investors had been clamoring for. Both details should make other investors more willing to buy government bonds along with the ECB.
"In a situation where it was easy to have a slip-up, it seems like he did everything right," Kinahan said.
The S&P 500 index jumped 26 points to 1,429 shortly after noon. The Dow Jones industrial average surged 233 points to 13,281. The Nasdaq composite index jumped 62 points to 3,131.
European stock markets also jumped in response to Draghi's announcement. Germany's DAX and France's CAC-40 each soared 3 percent.
The gains were even bigger in Spain and Italy, the two largest countries to become caught up in the region's long-running government debt crisis. Spain's benchmark index soared 5 percent, Italy's 4 percent.
The interest rates on their government bonds also fell sharply. That's a sign investors anticipate a surge in demand for them as the European Central Bank starts up its bond purchase program. Spain's benchmark 10-year bond yield fell to 6 percent from 6.39 percent. Italy's comparable bond yield fell to 5.21 percent from 5.43 percent.
Traders shifted money out of U.S. Treasury bonds, considered one of the world's safest places to stash money, and the drop in demand lifted yields. The yield on the 10-year Treasury note rose to 1.67 percent, up from 1.60 percent late Wednesday.
In an encouraging sign for the U.S. job market, a report from the payroll processor ADP said businesses added 201,000 jobs last month, the most reported by the survey since March.
Separately, the Labor Department said the number of people applying for unemployment benefits fell by 12,000 last week to 365,000. That figure won't affect the August jobs report, due out Friday, but could be a sign of a better hiring this month.
NEW YORK (AP) - Investors finally got what they wanted from the European Central Bank: a concrete plan to support struggling countries in the region by buying up large amounts of government bonds. That set off a global market rally and sent U.S. indexes to four-year highs.
The Standard & Poor's 500 index jumped to its highest level since January 2008, just one month into the Great Recession. European markets also surged. Treasury bond prices and the dollar dropped as traders sold low-risk investments.
The gains were extraordinarily broad; 98 percent of the stocks in the S&P 500 index rose.
"There's just a sea of green," said JJ Kinahan, TD Ameritrade's chief derivatives strategist. "It's pretty fun."
At a long-awaited meeting Thursday, Mario Draghi, the ECB's president, unveiled a new program to buy government bonds from the region's struggling countries with the aim of lowering their borrowing costs. Draghi said the program will have no set limit on how much it can buy.
Kinahan praised Draghi for two details in the plan. He didn't declare a limit for the bond-buying program and also said it wouldn't put itself first in line in the event of a default, something investors had been clamoring for. Both details should make other investors more willing to buy government bonds along with the ECB.
"In a situation where it was easy to have a slip-up, it seems like he did everything right," Kinahan said.
The S&P 500 index jumped 26 points to 1,429 shortly after noon. The Dow Jones industrial average surged 233 points to 13,281. The Nasdaq composite index jumped 62 points to 3,131.
European stock markets also jumped in response to Draghi's announcement. Germany's DAX and France's CAC-40 each soared 3 percent.
The gains were even bigger in Spain and Italy, the two largest countries to become caught up in the region's long-running government debt crisis. Spain's benchmark index soared 5 percent, Italy's 4 percent.
The interest rates on their government bonds also fell sharply. That's a sign investors anticipate a surge in demand for them as the European Central Bank starts up its bond purchase program. Spain's benchmark 10-year bond yield fell to 6 percent from 6.39 percent. Italy's comparable bond yield fell to 5.21 percent from 5.43 percent.
Traders shifted money out of U.S. Treasury bonds, considered one of the world's safest places to stash money, and the drop in demand lifted yields. The yield on the 10-year Treasury note rose to 1.67 percent, up from 1.60 percent late Wednesday.
In an encouraging sign for the U.S. job market, a report from the payroll processor ADP said businesses added 201,000 jobs last month, the most reported by the survey since March.
Separately, the Labor Department said the number of people applying for unemployment benefits fell by 12,000 last week to 365,000. That figure won't affect the August jobs report, due out Friday, but could be a sign of a better hiring this month.
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