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.
Access Investments-Building Awareness - European Union-ROMANIA
Wednesday, September 26, 2012
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.
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12 comments:
Why is this blog called Eurozone Crisis Live? Unless I am mistaken, the eurozone crisis is over. Mario Draghi fixed it with his pledge to "do whatever it takes" while assuring us that "it will be enough".
Oh, that and the pledge to buy an unlimited amount of bonds starting with Spain (and possibly beyond) up to the three year point (and possibly beyond).
A Very European Break Up: Satire on Greek-German Relations
It is not secret that relations between Germany and Greece are very troubled. If the two countries were a married couple, they would have certainly have to seek professional counseling, should they want to save their marriage. Bob Denham , a young British director, describes with humour not only the troubled Greek-German relation but also the economic and ‘national’ stereotypes within the European Union.
Plot
The Greek (Greco) husband is lavish and unproductive, the wife, Germaine, while she is hardworking and a saver.
Germaine finds a mountain of unpaid bills and the dispute begins. She asks him to sell his properties (PC, guitar, TV-set) and accuses him of “not making money.”
“You don’t let me earn money,” he fires back and accuses her: “For every new problem, you invent new rules!”
They argue and the marriage is about to break up.
Their Spanish neighbor intervenes, telling Germaine that she needs the support of Greco in order to earn money.
Furious Germaine shouts “PIGS!”
A British neighbor tries to help things out, he urges them to stray together as he is phlegmatic but very worried.
Things are serious. the marriage seems to be over.
But when the Spanish neighbor asks him, if he still loves his blond wife, he replies…?
Lagarde said that the €11.5 ($15bn) in more spending cuts and revenues increases demanded by Greece's rescue lenders, including the IMF, might not be enough to get the massive rescue and reform operation back on the rails. So she still thinks paying tax is a good idea, for other people.
Fairly stupid comment. Anyone who works for a fully international body gets paid at a net tax rate, ie at a level of what their take home pay would be. If she paid tax to her native country for example then all the other countries would be donating money to one country.
If she did a similar job for a France she ould get more money but pay tax, zero sum. Somthing which will be totally beyond you public sector workers pay no tax. The govt just keep some of their funds supposedly as tax. Look at Greece exclude the tax they already had anyway, take a look at true tax collection?
The IMF and co are, your right, are just pandering to Greece. This change of attitude by Merkel of allowing Greece more time to get their finances in order has made me believe that Greece will finally default. AFTER the US elections. Greece Will miss miss its targets... It is impossible for anything else to happen. There will be no more bailouts and the country will have no option but to default... Over the coming weeks we will continue to hear comments of flexibility ect.... buying time if you ask me.
Elections in the US over, then the plug Will be pulled, sending the euro zone into a downward spiral. What happens then is anyones guess
nocolours
25 September 2012 9:10AM
SZ reports today (Greek Aid Program teeters on the brink, SZ, German), based on sources in Brussels and "central banks" all confirming that Greece has a €30bn funding gap from the planning in Bailout II. Yes. Then we had the 20M budget shortfall the other day in Spiegel. A Greek paper says "Berlin does not verify ..." the claim of 20M missing. Right/wrong figures does not matter. Do you think there is a softening of public opinion relating to a Grexit? :-)
Greece isn't the word now. What happens there doesn't matter as long as they do it quietly. The politicos are that pleased with themselves over the Draghi deal, that they don't want anything disturbing things.
Spanish bailout could be squeezed through but Italy and France are queuing up next. All they do is slow the train crash up.....................
http://ftalphaville.ft.com/blog/2012/09/25/1175661/the-greek-budget-shortfall-gets-bigger/
From FT Alphaville.
First Greece has failed on it's program, followed shortly by Portugal (the arguing there is intensifying) and Ireland.
God only knows how bad Spain will miss either it's own or any dictated targets by (if it ever agrees to any that is)...
It's all semantics about who takes how much pain. But the pain is unavoidable.
This will not end quickly. This will not end well...
Germany's concession gives more momentum to previous calls from French politicians for a centralized budget for the euro zone, but significant differences remain between the bloc's two largest economies.
Berlin wants to use the budget to help finance policy overhauls designed to make a country's economy more competitive, according to two officials. Those transfers would be tied to meeting strict targets, one of the officials said. That would fall in line with Germany's general approach to the crisis, whereby financial support has always been contingent on economic reforms such as changes to pension and labor laws.
French Finance Minister Pierre Moscovici and Benoît Coeuré, the French member of the executive board of the ECB, meanwhile, have advocated giving the euro zone its own resources to fund a joint unemployment fund—a position that French officials backed in last week's talks, according to one of the officials.
Funding at least part of short-term unemployment insurance centrally could help take pressure off national budgets when unemployment jumps during an economic downturn that hits some parts of the euro zone harder than others. Such divergences have been particularly apparent during the current crisis: unemployment in countries like Germany and Austria has fallen to multiyear lows of 5.5% and 4.5%, respectively, while in Spain and Greece one in four workers is without a job. However, even partial unemployment insurance would likely require much more money than financing economic reforms.
Officials warned that last week's bilateral talks, which included diplomats in Brussels and officials from national finance ministries, were preliminary and wide-ranging, and that several other euro-zone countries, including the Netherlands and Austria, weren't in favor of setting up any kind centralized budget. The talks didn't go into details, for instance on the size of the budget or even whether it could be implemented under the EU's current treaties.
Ministers and officials in Athens believe the IMF has been stalling on negotiations for a new €12bn package of cuts because it wants European governments to agree to a debt writedown to make Greece's debts sustainable. European governments and the ECB are strongly opposed to taking a so-called "haircut" on their holdings of Greek debt.
Despite the haggling, the coalition government in Athens remains hopeful that an agreement can be reached in the next week that will give the recession-ravaged country more time to implement its deficit-reduction strategy. Greece's economy has shrunk by 20% in three years, and Antonis Samaras's administration is looking for an extra two years in order to ease the pain of austerity and thus defuse mounting public anger.
In Madrid, the government is expected to announce cuts to pensions, green taxes and levies on stock market transactions in an attempt to pave the way for an appeal to Europe for financial assistance.
Speaking in Berlin, Draghi urged Angela Merkel to drop her opposition to unlimited bond buying by the ECB. Jobs, trade, and investment in Europe's biggest economy were all dependent on a thriving single currency, Draghi said as he warned member governments that they had to make good use of the breathing space in the crisis.
But in a statement issued after a meeting of their finance ministers in Helsinki, Germany, Finland and the Netherlands set out the terms under which they would be willing to allow the eurozone's permanent rescue fund, the ESM, to recapitalise at-risk banks.
Greece, facing an eighth general strike today, has narrowly escaped losing its advance nation status, by being demoted to emerging market status by the FTSE Group. The equity index provider said Greece has escaped a demotion to "advanced emerging markets" status but could still be on the chopping block in the future after a three-year-old debt crisis has left the country reeling.
Elsewhere in Europe protests, probably violent, are expected in Spain again today as the eurozone crisis continues to build as a political, rather than fundamentally a financial, crisis. There's a picture gallery of yesterday's violent protests here. At the same time the European Parliament will debate plans for a eurozone banking union with concerns likely to be raised over the future of regulation and the increase in Brussels power.
I am getting tired of this sudden realisation by every tom, rick and harry that central banks can print money as it is being used as a reason for financing every mad scheme going. Obviously it is drivel and shows a complete lack of understanding of basic economics, but when has ignorance ever got in the way of opinions.
Switzerland can print an infinite amount of Swiss francs if it wants, but that would be worse than the currency rising. As Switzerland prides itself on its financial probity it would never do this. I will give you two points if you can tell me why?
There are very few cases where the central banks have beaten the markets, actually I cannot think of one, and the Swiss will not be the first.
The only reason that the markets have given the Swiss a breather is because the Euro has stabilised a bit and the Euro is a fudge of a currency that includes the Germans. As soon as there is a bit of bad news, or a small weakness, the hedge funds will use this as the excuse to destroy the Swiss central bank.
Shares have fallen across Europe, as the protests in Spain last night send jitters through the financial markets.
FTSE 100: down 52 points at 5807, -0.9%
German DAX: down 81 points at 7343, - 1.1%
French CAC: down 45 points at 3466, - 1.34%
Spain's IBEX: down 183 points at 7991, - 2.25%
Italy's FTSE MIB: down 301 points at 15630, -1.8%
As Michael Hewson of CMC Markets explains, the sight of protests on the streets of Madrid have added to the uncertainty over the situation in Spain:
Investors are becoming unsettled at what appears to be unfolding....
In a country that has an unemployment rate of 25% and a contracting economy it was a reminder, if any were needed, that Spain is swimming against the tide as it struggles to meet its obligations, and balance its budget. It can only be a matter of time before Spain is forced into a bailout request and it might need an external catalyst to provide it.
Spanish police have fired rubber bullets and baton-charged protesters attending a rally against austerity.
The clashes broke out as protesters tried to tear down barriers blocking access to the parliament in Madrid.
Spanish media reported that at least 20 people had been arrested and more than a dozen injured. The protesters dispersed after MPs left the building.
The "Occupy Congress" protest came as the government prepares to unveil further austerity measures on Thursday.
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