Jul 28

greece

Greek Economy Faces Total Collapse As Doctors Flee, Retail Sales Plunge 70%  (ZeroHedge, July 28, 2015):

Back in May we outlined the cost to the Greek economy of each day without a deal between Athens and creditors.

At the time, a report from the Hellenic Confederation of Commerce and Enterprises showed that 60 businesses closed and 613 jobs were lost for each business day that the crisis persisted without a resolution.

Since then, things have deteriorated further and indeed, with the imposition of capital controls, businesses found that supplier credit was difficult to come by, leading to the very real possibility that Greece would soon face a shortage of imported goods, something many Greeks clearly anticipated in the wake of the referendum call as evidenced by the lines at gas stations and empty shelves at grocery stores.

As a reminder, here’s what WSJ said earlier this monthContinue reading »

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Jul 27

Quadriga

– Goodbye Troika: Germany Rides Into Its Greek Colony On The “Quadriga” (ZeroHedge, July 27, 2015):

With creditors’ motorcades having officially returned to the streets of Athens in the wake of Greek lawmakers’ approval of the second set of bailout prior actions last Wednesday, tensions are understandably high.

After all, these are the same “institutions” which Yanis Varoufakis famously booted from Greece after Syriza swept to power in January, and they’ve come to represent the oppression of the Greek people and are now a symbol of the country’s debt servitude.

Although an absurd attempt was made to rebrand the dreaded “troika” earlier this year, the new and rather amorphous moniker – “the institutions” – never really stuck and perhaps because everyone involved felt the need to put a new name to the group that Greeks regard as the scourge of the Aegean in order to make negotiators feel safer on their trips to Athens, creditors have now added the ESM to their collective and rebranded themselves “The Quadriga.” 

Apparently (and unfortunately), this is not a joke. Here’s MNI: Continue reading »

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Jul 26

–  Greek Capital Controls To Remain For Months As Germany Pushes For Bail-In Of Large Greek Depositors (ZeroHedge, July 26, 2015):

Two weeks ago we explained why Greek banks, which Greece no longer has any direct control over having handed over the keys to their operations to the ECB as part of Bailout #3’s terms, are a “strong sell” at any price: due to the collapse of the local economy as a result of the velocity of money plunging to zero thanks to capital controls which just had their 1 month anniversary, bank Non-Performing Loans, already at €100 billion (out of a total of €210 billion in loans), are rising at a pace as high as €1 billion per day (this was confirmed when the IMF boosted Greece’s liquidity needs by €25 billion in just two weeks), are rising at a pace unseen at any time in modern history. Continue reading »

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Jul 22

Define Irony: Greek Banks Refuse To Buy ESM Bonds To Fund Greek Bailout (ZeroHedge, July 21, 2015):

In the latest example of what happens when circular funding schemes begin to trip over each other, National Bank of Greece has refused to participate in an auction for paper issued by the bailout fund which is set to recapitalize the Greek banking sector.

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Jul 04

Greek dominos

The Greek Bluff In All Its Glory: Presenting The Grexit “Falling Dominoes” (ZeroHedge, July 4, 2015):

Earlier today, Yanis Varoufakis reiterated his core thesis driving the entire Greek approach from day 1 of its negotiations with the Eurogroup: “Europe [stands] to lose as much as Athens if the country is forced from the euro after a referendum on Sunday on bailout terms.”

This is merely a recap of what we said 4 years ago when in July of 2011 we explained “How Euro Bailout #2 Could Cost Up To 56% Of German GDP“, recall: Continue reading »

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Apr 13

The Entire Economy Is a Ponzi Scheme (ZeroHedge, April 13, 2013):

Bill Gross, Nouriel Roubini, Laurence Kotlikoff, Steve Keen, Michel Chossudovsky, the Wall Street Journal and many others say that our entire economy is a Ponzi scheme.

Former Reagan budget director David Stockman just agreed:


YouTube Added: 10.04.2013

So did a top Russian con artist and mathematician.

Even the New York Times’ business page asked, “Was [the] whole economy a Ponzi scheme?

In fact – as we’ve noted for 4 years (and here and here) – the banking system is entirely insolvent. And so are most countries. The whole notion of one country bailing out another country is a farce at this point. The whole system is insolvent.

As we noted last year: Continue reading »

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Mar 28

Watch the video here:

‘This isn’t going to stop with Cyprus’ (RT, March 28, 2013):

The Cyprus liquidity crisis will only lead to violence, Wide Awake News founder Charlie McGrath has told RT. The journalist warns that the Cyprus solution may serve as a model as the wider EU deals with the financial crisis.

RT: The authorities have promised to reopen the banks on Thursday – do you think Cypriots can sigh with relief now?

Charlie McGrath: No, not at all. And let’s examine the word reopen, because they are not really reopening. They are putting on all these capital restrictions on the people of Cyprus, 300 euros is the max withdrawal they can make. They can only take 3,000 maximum amount if you are going to travel. You live in Cyprus and you have relatives that live in the United States and the UK, wherever and you want to send them money – you absolutely cannot.

The so-called establishment media is talking about, there’s been enough time that has passed since the announcement of this deal that they don’t think there’re going to have a bank run but the real reason they don’t think they’re not going to have a bank run is because they are really not opening the banks. They’re going to have all type of guards and police and very limited funds that the people of Cyprus can take. So, I don’t think they should be relieved at all, nor should Europe nor the rest of the world for that manner.

RT: At this point – how do you convince panicked savers across Europe that the EU won’t dig into their accounts, next? Continue reading »

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Mar 10

Germany’s Rising Anti-Euro Sentiment (ZeroHedge, March 10, 2013):

In recent days, FX desk chatter has been of rising concerns over “Germany’s New Anti-Euro Party.” ‘The Alternative for Germany’ party is set to run in the upcoming parliamentary elections in September with a clear goal: “the dissolution of the EUR in favor of national currencies or smaller currency unions.” It also demands an end to ESM payments. As evidenced by the recent vote in Italy, voting intentions in Europe are not just ultra-left or ultra-right wing anti-European, but increasingly mainstream. Democracy is eroding. The will of the people regarding (decisions relating to the EUR) is never queried and is not represented in parliament. The government is depriving voters of a voice through disinformation…” Ultimately, as Der Spiegel notes, however, the party’s success will likely have more to do with the state of the common currency as the election approaches. Should the crisis flare up, so too could anti-euro sentiment. That sentiment in Germany now has a political home.

Via Der Spiegel,

Anti-euro political parties in Europe in recent years have so far tended to be either well to the right of center or, as evidenced by the recent vote in Italy, anything but staid. But in Germany, change may be afoot. A new party is forming this spring, intent on abandoning European efforts to prop up the common currency. And its founders are a collection of some of the country’s top economists and academics.

Named Alternative für Deutschland (Alternative for Germany), the group has a clear goal: “the dissolution of the euro in favor of national currencies or smaller currency unions.” The party also demands an end to aid payments and the dismantling of the European Stability Mechanism bailout fund. Continue reading »

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Jan 08

So Japan will ‘stabilize’ itself by monetizing European debt.

Now that makes perfect sense …

… if one belongs to those Keynesian lunatics.

You can’t make this stuff up!

Related info:

Japan: Presenting Shinzo Abe’s ‘Super-Secret’ Devaluation Plan – Double-Down

Japanese Ministry of Finance To Japanese Bondholders: YOU’RE SCREWED!!!

Bank Of Japan Increases Asset Purchases By Y10 Trillion, Total Program Now Y80 Trillion, Total Debt Still Y1 Quadrillion


Japan to Buy ESM Bonds Using FX Reserves to Help Weaken Yen (Bloomberg, Jan 8, 2013):

Japan will buy bonds issued by the European Stability Mechanism and euro-denominated sovereign debt, a strategy that Finance Minister Taro Aso said will help weaken the yen and support Europe.

The transactions will be funded by Japan’s foreign exchange reserves, Aso told reporters today at a briefing in Tokyo. The purchase amount is undecided, he said.

“The financial stability of Europe will help the stability of foreign exchange rates, including the yen,” Aso said. “From this perspective, Japan plans to buy ESM bonds.”

Continue reading »

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Nov 21

The Latest Greek “Bailout” In A Nutshell: AAA-Rated Euro Countries To Fund Massive Hedge Fund Profits (ZeroHedge, Nov 21, 2012):

With constantly changing variables in what will be the fourth and not final Greek bailout, it has been relatively difficult to pinpoint just what the “fulcrum security” is in the ongoing restructuring that is not really a cramdown bankruptcy but kinda, sorta is, and more importantly where the money will come from. A big issue that Europe has discovered with a two and a half year delay (pointed out here first, but anyone with capacity for rational thought could have grasped it at the time), is that Greece has hit the inflection point where without more, and substantial, debt forgiveness it is unviable entity, and will certainly not hike the Troika’s hard line target of 120% debt/GDP by 2020. In other words, Greece can no longer layer more debt to pay down debt. Continue reading »

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Nov 17

Kyle Bass: Fallacies Such As MMT Are “Leading The Sheep To Slaughter” And “We Believe War Is Inevitable” (ZeroHedge, Nov 17, 2012):

Below are some of the key highlights from Kyle Bass’ latest, and as usual, must read letter:

On central banks and the final round of global monetary debasement:

Central bankers are feverishly attempting to create their own new world: a utopia in which debts are never restructured, and there are no consequences for fiscal profligacy, i.e. no atonement for prior sins. They have created Potemkin villages on a Jurassic scale. The sum total of the volatility they are attempting to suppress will be less than the eventual volatility encountered when their schemes stop working. Most refer to comments like this as heresy against the orthodoxy of economic thought. We have a hard time understanding how the current situation ends any way other than a massive loss of wealth and purchasing power through default, inflation or both. Continue reading »

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Nov 03

Friday Humor: The ECB Explains What A Ponzi Scheme Is; Awkward Silence Follows (ZeroHedge, Nov 2, 2012):

From the ECB’s Virtual Currency Schemes, aka the “Bash Bitcoin Boondoggle” (p. 27):

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity

Considering that this elucidation comes from the very same entity that launched the SMP, LTRO, OMT, EFSF, ESM, oh, and of course, TARGET2, and whose head said to not short the EUR as there is “no risk” whatsoever in holding said currency, one would expect that this definition is absolutely spot on…

* * *

And as an added bonus, here is the part in which the ECB appears to be so worried about BitCoin taking over as legitimate “legal tender” from the EUR (which the ECB’s Coeure said two days ago is as “solid and longlasting as a diamond”) it dedicated an entire report to bash the recently conceived electronic currency: Continue reading »

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Oct 15

Stuttgart (the capital of Baden-Wuerttemberg) who has been run by Merkel’s CDU for decades has just voted for a Green Party mayor.

There has to be a second round of voting though, because he didn’t get enough of the votes during the first ballot.

The biggest sign on the first pic reads: Stop World War 3!

The people are continuosly chanting: “GET LOST!”

Stuttgart should be a HOME-RUN for Merkel’s party, but Baden-Wuerttemberghas been taken over by the Green Party.

Now watch this!!!


After Starting Riots In Greece, Merkel Booed In Germany Next (ZeroHedge, Oct 13, 2012):

What does an iron chancellor have to do to be loved these days? After scrambling 7,000 members of the Greek police force out of an early prepaid retirement for her brief, still inexplicable 6 hour visit to Athens last Tuesday, which caused the now usual Syntagma square rioting, Merkel next took the stage in a rainy Stuttgart, in a show of support for the local mayor candidate Sebastian Turner, which promptly devolved into 14 minutes of continuous booing.Watch below.

More pictures from the same rally, where people apparently were not too keen on WWIII:


Continue reading »

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Sep 24


German TRAITOR Finance Minister Wolfgang Schäuble is in favor of leveraging the ESM. Here, during his 70th birthday celebrations last week.

Up to Two Trillion: Europe Plans to Leverage Euro-Zone Bailout Fund (Spiegel, Sep 24, 2012):

Officially, the ESM permanent euro-zone bailout fund is worth 500 billion euros. That, though, might not be enough, which is why euro-zone governments are now planning to introduce levers that could mobilize up to 2trillion euros, SPIEGEL has learned. Finland, though, is skeptical of the idea.

With the launch of the permanent common-currency bailout fund, the European Stability Mechanism (ESM), just around the corner, euro-zone member states are looking into ways to leverage the €500 billion ($647 billion) available to the fund, SPIEGEL has learned. But with Finland still concerned about the leveraging plans, it is unlikely that they will be initially included when the ESM is launched on Oct. 8.

The plan envisions the continuation of leverage instruments currently in use in the temporary euro bailout fund, the European Financial Stability Facility (EFSF). Should they be applied to the ESM, the permanent fund could be able to mobilize up to €2 trillion instead of the €500 billion lending capacity it currently has — a size that would make it easier to provide emergency aid to countries as large as Spain and Italy, for example.


Google translation (Original article in German down below.):

Quadrupling of the euro rescue fund: ESM should be leveraged to two trillion euros (Focus, Sep 24, 2012):

The euro countries prepare before one allegedly leverage the ESM permanent bailout fund. To save even large countries like Spain and Italy, as opposed to its planned 500 billion euros will be available two trillion euros.

Whether to increase the financial cushion reported the news magazine “Der Spiegel” on Monday. Model for the leverage of aid accordingly, the provisions of the predecessor fund EFSF. There are two tools in which the bailout fund with public money can only take on the most risky parts. The rest of the money will come from private investors, which must go into limited risk. However, the concept was the EFSF not apply because there are no private investors found.

Continue reading »

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Sep 23
OMT IS ILLEGAL AS IT VIOLATES ARTICLE 123 (1) OF THE TFEU, WHICH CLEARLY PROHIBITS THE ECB FROM ESTABLISHING A “CREDIT FACILITY … IN FAVOR OF NATIONAL GOVERNMENTS.”

Draghi’s Coup D’Etat And Why OMT Is Illegal (ZeroHedge, Sep 22, 2012):

According to Mario Draghi, OMT, or Outright Monetary Transactions, is a program of conditional bond buying targeted at specific countries to restore the perception of the euro’s irreversibility and stability, and repair a broken monetary policy transmission mechanism.  Once launched, OMT has no ex ante limits, it is within the ECB’s price stability mandate, and it can be halted or interrupted based on achievement of its objectives or non-compliance with conditions imposed upon the targeted national government.

I would posit that OMT is much more than what the party line states.  Here are some alternative interpretations for your consideration.  I challenge you to refute the logic of any of them. Continue reading »

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Sep 19


YouTube Added: 17.09.2012

If Nostradamus were alive today, he’d have a hard time keeping up with Gerald Celente.
– New York Post

When CNN wants to know about the Top Trends, we ask Gerald Celente.
– CNN Headline News

There’s not a better trend forecaster than Gerald Celente. The man knows what he’s talking about.
– CNBC

Those who take their predictions seriously … consider the Trends Research Institute.
– The Wall Street Journal

A network of 25 experts whose range of specialties would rival many university faculties.
– The Economist

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Sep 12

And the bailout party goes on (… until there is nohing left).

Euro, Stocks Climb as German Court Approves Bailout Funds (Bloomberg, Sep 12, 2012)

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Sep 12

Karlsruhe Decision: German Taxpayer Pillage Can Continue (But With EUR190bn Cap) (ZeroHedge, Sep 12, 2012):

UPDATE: EURUSD unsure – but seems like ‘Unlimited’ ECB Bazooka’s trigger (ESM) is now capped at EUR190bn from Germany.The Kardinals of Karlsuhe kame through. As somewhat expected, they declined the complaint that, simply put – and among many other things, the ESM structure (i.e. German payments into it) stretches German constitutionality and can proceed to a broader vote next year – but basically – in a nutshell – there’s no coming back now. As expected there are conditions though – that the market seems perturbed by:

  • *GERMAN COURT ALLOWS ESM RATIFICATION WITH CONDITIONS :13347Z US
  • *GERMANY MUST SET CAP FOR LIABILITY UNDER ESM WEHEN RATIFYING
  • *GERMANY MUST MAKE SURE ITS ESM SHARE IS CAPPED AT EU190 BLN

Limited ESM (primary market) vs Unlimited secondary bond market buying (OMT). Go figure it out Continue reading »

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Sep 12

Germany Can Ratify ESM Fund With Conditions, Court Rules (Bloomberg, Sep 12, 2012):

Germany’s top constitutional court rejected efforts to block a permanent euro-area rescue fund, handing a victory to Chancellor Angela Merkel, who championed the 500 billion-euro ($645 billion) bailout facility.

The Federal Constitutional Court in Karlsruhe dismissed motions that sought to block the European Stability Mechanism, while ruling Germany’s 190 billion-euro contribution can’t be increased without legislative approval. The court said Germany can ratify the ESM if it includes binding caveats that it won’t be forced to assume higher liabilities without its consent.

“We are an important step closer to our goal of stabilizing the euro,” German Economy Minister and Vice Chancellor Philipp Roesler told reporters in Berlin after the ruling today. “It has always been the goal of this government” to establish a “clear limit and to include parliament in all important decisions.”

Continue reading »

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Sep 11

The proposed rescue fund for Europe not only breaches German law and EU treaties but could condemn a generation


The euro currency sign in front of the European Central Bank headquarters in Frankfurt . Photograph: Alex Domanski/Reuters

Germans could be consigned to serfdom to save the euro (Guardian, Sep 9, 2012):

Some commentators have taken to referring to this Wednesday as “the day that could make or break the common currency”, and they’re not far off the mark. On that day, Germany’s constitutional court will announce its verdict on the legality of the European Stability Mechanism, the permanent rescue fund for struggling eurozone countries. If implemented, the ESM’s share capital of €700bn would be provided by all 17 eurozone members in proportion to their economic size. Fourteen have so far ratified the treaty – Estonia, Italy and Germany are the only ones remaining.The German government has defended the ESM treaty, claiming it would fix Germany’s maximum liability at €190bn, and that the Bundestag would retain control over the grant of further assistance. Either German politicians have not read the treaty they have signed, or they do not understand its small print, for there is little in the document that supports their interpretation. Because the ESM is plainly unlawful.

For example, article 25(2) of the treaty states that members are jointly liable for any losses arising from loans made by the ESM. That means if one or more of the ESM members fail to meet their agreed financial contributions, the other members are liable for the shortfall. That situation is already a reality, because Greece and Portugal are unable to make any contribution.

Continue reading »

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Sep 08

Commentary:

In case some of you still think that politicians and central banksters won’t lie to you:

Flashback: Quotes from the Great Depression

In other news:

Financial Markets Cheer The Death Of The Bundesbank (Welt, Sep 6, 2012) – Bundesbank Text: Weidmann Reiterated Bond-Buy Criticism

Hyper Mario Draghi: ‘Euro Is Irreversible’ – ECB Announces Sweeping Program For Buying Bonds, Giving The Bank Potentially Unprecedented Power

The ESM Violates The Law And EU Treaties (Welt, Sep 4, 2012)

War Is Peace!

… and …

Printing Money (QE) Is Saving The Euro!

Quantitative easing (QE) = printing money = creating money out of thin air = increasing the money supply = inflation = hidden tax on monetary assets = theft!

The ECB will just delay the coming (necessary) collapse for a while. This will be EXTREMELY beneficial for the elitists and the banksters …

… and the middle class and the poor will be totally and utterly destroyed:

“When a country embarks on deficit financing and inflationism you wipe out the middle class and wealth is transferred from the middle class and the poor to the rich.”
– Ron Paul

Here is, AGAIN, where elite puppet Draghi is coming from:

Mario Draghi (Wikipedia):

Draghi was then vice chairman and managing director of Goldman Sachs International and a member of the firm-wide management committee (2002–2005). A controversy existed on his duties while employed at Goldman Sachs. Pascal Canfin (MEP) asserted Draghi was involved in swaps for European governments, namely Greece, trying to disguise their countries’ economic status.

The ECB will have to monetize TRILLIONS of bad debt!!!


Got physical gold, silver and a remote farm (food, water, etc.)?


Central bank governor Mario Draghi overcomes Germany’s fears over inflation to announce new intervention in debt markets


ECB president Mario Draghi was careful to address German objections in his presentation of the unlimited bond-buying policy. Photograph: Alex Domanski/Reuters

ECB introduces unlimited bond-buying in boldest attempt yet to end euro crisis (Guardian, Sep 6, 2012):

The European Central Bank (ECB) unveiled its boldest attempt yet to stabilise the battered single currency on Thursday when its president, Mario Draghi, announced a new programme of open-ended, unlimited buying of distressed government bonds.

The scheme is aimed at depressing the costs of borrowing for Spain and Italy and countering the risks of a fragmentation of the eurozone and the unravelling of the single currency.

But Draghi also set strict terms for triggering the bond-buying programme, putting pressure on the eurozone’s political leaders to request help, enter austerity programmes, and agree on direct bailouts for struggling governments before the ECB will act.

Draghi brushed aside strong resistance from Germany’s powerful Bundesbank, which lodged the only vote against the new policy in the ECB’s 23-strong governing council, to come good on his pledge in London six weeks ago that the central bank would do “whatever it takes” to save the euro.

Continue reading »

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Sep 07

“Spain Requests Bailout On September 14” – Goldman’s Definitive Post-Mortem On Europe’s Third Bond Buying Attempt (ZeroHedge, Sep 6, 2012):

Yesterday, when Bloomberg leaked every single detail of today’s ECB announcement, which thus means today’s conference was not a surprise at all, yet the market sure would like to make itself believe it was, we noted that everything that was leaked, and today confirmed, came from a Goldman memorandum issued hours before. Simply said everything that happens at the ECB gets its marching orders somewhere within the tentacular empire headquartered at 200 West. Which is why when it comes to the definitive summary of what “happened” today, we go to the firm that pre-ordained today’s events weeks ago. Goldman Sachs.Perhaps the most important part is this: “September 13-14: Spain to make formal request for EFSF support at the Eurogroup meeting. With a large (and uncovered) redemption looming at the end of October (and under pressure from other Euro area governments), we expect Spain to move towards seeking support.” In other words, Rajoy has one more week before he is sacked and the Spanish festivities begin. Continue reading »

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Sep 04

18 Indications That Europe Has Become An Economic Black Hole Which Is Going To Suck The Life Out Of The Global Economy (Economic Collapse, Sep 3, 2012):

Summer vacation is over and things are about to get very interesting in Europe.  Most Americans don’t realize this, but much of Europe shuts down for the entire month of August.  I wish we had something similar in the United States.  But now millions of Europeans are returning from their extended family vacations and the fun is about to begin.  During August economic conditions continued to degenerate in Europe, but I figured that it wouldn’t be until after August that the European debt crisis would take center stage once again.  And as I wrote about last week, if there is going to be a financial panic, it typically happens in the fall.  The stock market has seen quite a nice rally over the summer, and many investors are nervous that we could see a significant “correction” very soon.  The month of September has been the absolute worst month for stock performance over the past 50 years, and it has also been the absolute worst month for stock performance over the past 100 years as well.  Of course that does not guarantee that anything is going to happen this year.  But things in Europe continue to get worse.  Unemployment rates are spiking, manufacturing activity is slowing down, housing prices are crashing and major financial institutions are failing.  What is happening in Europe right now appears to be an even worse version of what happened to the United States back in 2008. Continue reading »

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Sep 04

Is Spain Running Out Of Cash? (ZeroHedge, Sep 3, 2012):

Some hours ago Spain finally bit the bullet, and after months of waffling had no choice but to hand over €4.5 billion (the first of many such cash rescues) in the form of a bridge loan to insolvent Bankia, which last week reported staggering losses (translation: huge deposit outflows which have made the fudging of its balance sheet impossible). As a reminder, in June Spain formally announced it would request up to €100 billion in bailout cash for its insolvent banking system, which subsequently was determined would come from the bank rescue fund, the Frob, which in turn would be funded with ESM debt which subordinates regular Spanish bonds, promises to the contrary by all politicians (whose job is to lie when it becomes serious) notwithstanding. And while Rajoy has promised that the whole €100 billion will not be used, the truth is that considering the soaring level of nonperforming loans in Spain – the biggest drain of both bank capital and liquidity – it is guaranteed that the final funding need for Spain’s banks will be far greater. As a further reminder, Deutsche Bank calculated that when (not if) the recap amount hits €120 billion, Spanish total debt/GDP would soar to 97% in 2014 from an official number of 68.5% in 2011 (luckily the endspiel will come far sooner than that). But all of that is well-known, and what we wanted to focus on instead was the fact that bank bailout notwithstanding, Spain will have no choice but to demand a full blown rescue within a few short months for one simple reason: its cash will run out. Continue reading »

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Sep 04

Google translation here: The ESM Violates the Law And EU Treaties (Welt, Sep 4, 2012):

The Federal Constitutional Court rules on 12. September on the constitutionality of the European Stability Mechanism (ESM) . The European Court verifies that violates the euro bailout of EU law. The Constitutional Court has already made clear that a new Euro Treaty and further financial support to weaker euro-zone countries do not cancel the Budget Law of the Federal Parliament must.

The ESM can buy directly from euro zone countries to provide them with government bonds or loans. This allowed the ECB officially not the EU Treaty. However, it emphasizes the federal government sees the ESM prior to a cap of 700 billion euros and limited the German share of it applies to “only” 190 billion euros. Apparently reading the Parties from politicians not or do not understand the details. The ESM is clearly illegal.

Original article here: ESM verstößt gegen Gesetz und EU-Verträge (Welt, Sep 4, 2012):

Das Bundesverfassungsgericht urteilt am 12. September über die Verfassungsmäßigkeit des Europäischen Stabilitätsmechanismus (ESM). Auch der Europäische Gerichtshof prüft, ob der Euro-Rettungsschirm gegen EU-Recht verstößt. Das Verfassungsgericht hat bereits klargestellt, dass ein neuer Euro-Vertrag und weitere finanzielle Unterstützung für schwächere Euro-Staaten das Budgetrecht des Bundestages nicht aufheben dürfen.

Der ESM darf direkt von Euro-Zone-Staaten Staatsanleihen aufkaufen oder diesen Kredite gewähren. Dies darf die EZB laut EU-Vertrag offiziell nicht. Allerdings, so betont die Bundesregierung, sieht der ESM eine Haftungsobergrenze von 700 Milliarden Euro vor und begrenzt den deutschen Anteil daran eindeutig auf “nur” 190 Milliarden Euro. Offenbar lasen die Politiker den Vertag nicht oder sie verstehen dessen Details nicht. Der ESM ist eindeutig rechtswidrig.

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Aug 29

Judgment Day For The Euro And What’s At Stake (ZeroHedge, Aug 28, 2012):

Hans-Werner Sinn – Judgment Day For The Euro

Hans-Werner Sinn is Professor of Economics at the University of Munich and President of the Ifo Institute for Economic Research. He also serves on the German economy ministry’s Advisory Council. Hi… Full profile

Europe and the world are eagerly awaiting the decision of Germany’s Constitutional Court on September 12 regarding the European Stability Mechanism (ESM), the proposed permanent successor to the eurozone’s current emergency lender, the European Financial Stability Mechanism. The Court must rule on German plaintiffs’ claim that legislation to establish the ESM would violate Germany’s Grundgesetz (Basic Law). If the Court rules in the plaintiffs’ favor, it will ask Germany’s president not to sign the ESM treaty, which has already been ratified by Germany’s Bundestag (parliament). Continue reading »

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Aug 28

With September Knocking, Here Is An Annotated European Event Calendar (ZeroHedge, Aug 28, 2012)

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Aug 19

“The Euro Crisis May Last 20 Years” – The European Headlines Are Back (ZeroHedge, Aug 18, 2012):

In Europe, the “no news” vacation for the past month was great news. The news is back… As is Merkel.

  • “The Euro Crisis May Last 20 Years” – Welt

The first five years of the global crisis are over, investors flee from complex financial products and into gold, silver and commodities. Experts warn against a false sense of security. “We should not give us the illusion that the crisis will soon be over,” says Patrick Artus of the French bank Natixis. Years of negative developments such as the growing debt, or the de-industrialization of specific sectors should now be reversed. “Such a process takes time.” Arthur looks to get politically and economically unstable savers years. “Investors have to live with depressed markets and considerable fluctuations learn.” In his view, it must not remain in a lost decade. “The euro crisis may also last 20 years,” says Arthur.

  • German finmin: no new aid programme for Greece – Reuters

German Finance Minister Wolfgang Schaeuble said on Saturday that there were limits to the aid that could be granted to Greece and said the crisis-stricken country should not expect to be granted another programme.”It is not responsible to throw money into a bottomless pit,” Schaeuble said at a government open day in Berlin. “We cannot create yet another new programme.”

  • Euro Countries Plan Strategies to Prevent Break-Up: Sueddeutsche (via Bloomberg)

Euro-currency area countries are evaluating a multitude of reform options, Sueddeutsche Zeitung reports, citing unidentified people with knowledge of the plans.

These are to be whittled down into a coherent strategy in the “coming weeks”. If Greece exits, members will boost plans to support other vulnerable countries. Options include increasing aid to Ireland and Portugal. ECB would consider supporting Italy and Spain through bond purchases. Greece’s new start would be supported by EU funding. These questions will be discussed “in the autumn”.

  • Deutsche Bank Among Four Said to Be in U.S. Laundering Probe – Bloomberg

Deutsche Bank AG (DBK) is among four European banks being investigated by U.S. regulators for alleged money-laundering violations, according to an attorney with knowledge of the matter. Federal regulators, including the U.S. Treasury’s Office of Foreign Assets Control, the Federal Reserve, the Justice Department and the New York District Attorney’s office are all involved in the probe of Deutsche Bank and three other European banks, said the attorney, who asked not to be identified because the investigations are confidential.

  • German Industry Group Head says No Place for Greece in Eurozone: WiWo (via Bloomberg)

If Greece doesn’t meet IMF and EU requirements, it must leave the euro, Hans-Peter Keitel, president of Germany’s BDI industry federation, says in an interview with Wirtschaftswoche magazine. Keitel previously said Greece must stay in the euro at all costs: WiWo

Keitel says clear progress is being made in combating the euro crisis. The German federal government is not ambitious enough in its savings program, Keitel says.

  • German Taxpayer Association Head Criticises ESM: Euro am Sonntag (via Bloomberg)

Rainer Holznagel, head of German taxpayer association, says payment of Spanish bank debt would require 3% VAT increase in Germany, Euro am Sonntag reports, citing interview.

ESM reduces the rights of the German parliament and the independence of nation states, Holznagel says: Euro am Sonntag

  • Bundesbank Vice-Head Opposes Schaeuble’s Banking Proposal: WiWo (via Bloomberg)

German Finance Minister Wolfgang Schaeuble’s proposal to separate traditional banks from their investment banking units isn’t possible, Bundesbank Vice- President Sabine Lautenschlaeger tells Wirtschaftswoche magazine.

Both types of banks would still be dependent on market confidence, Lautenschlaeger says. Lautenschlaeger favors an investigation into the relationship between lenders and those banks which trade in unregulated financial products.

  • Westerwelle Opposes Relaxing Greek Aid Terms: Tagesspiegel

Relaxation of the agreed on terms for Greek assistance would be misunderstood by countries such as Spain, German Foreign Minister and FDP member Guido Westerwelle told Tagesspiegel am Sonntag in interview.

Spanish prime minister would have difficulty passing reforms in parliament if terms were eased for Greece, Westerwelle says. Westerwelle gives his “solidarity” to the people of Greece. Greek Prime Minister Antonis Samaras to visit Berlin on Friday

And just to prove that Europe’s beggars continue to refuse to get the memo…

  • Spain says there must be no limit set on ECB bond buying – RTRS

The European Central Bank must take forceful and unlimited steps to buy sovereign debt to help Spain reduce its refinancing costs and eliminate doubts over the euro zone’s future, Spain’s economy minister said in comments published on Saturday. “There can be no limit set or at least (the ECB) can’t say how much they will use or for how long,” when it buys bonds in the secondary markets, Luis de Guindos told Spanish news agency EFE.

and:

  • France Favors Greece Rescue Package, Opposing Germany: Welt (via Bloomberg)

France and southern European nations are in favor of a third rescue package for Greece should it prove necessary, Welt reports, without saying where it got the information. Germany rejects a new rescue package. Germany opposes giving Greece more time to enact cost cuts. Preparations underway for Greece possibly leaving the euro. Main consideration is how to protect other euro crisis countries from the fallout.

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Aug 13

New Lawsuit Filed Against ESM Threatens Further Bailout Fund Delay (ZeroHedge, Aug 13, 2012):

Just as we were complaining about lack of newsflow, here comes Germany, coincidentally just as Merkel comes back from vacation, with an update from Karlsruhe that the Constitutional court, which may reject the ESM as is in its September 12th decision, will likely be delayed even more following the filing of a brand new lawsuit challenging the constitutionality of the ESM.

From Handelsblatt, loosely google translated:

The Constitutional Court in Karlsruhe has received a further appeal against the euro rescue package, which could upset the timetable for the euro rescue. According to information from Reuters Online, a group of plaintiffs to the € critic Professor Markus Kerber has filed a constitutional complaint, including an emergency petition. The key message is: Since the last ten days at the European Court in Luxembourg, the complaint is similar to an Irish MPs to decide, the German judges would wait until the spoke on the matter higher court judgment. The original date expected for an announcement, the 12th September, at which they would decide on the fast track in terms of admissibility of ESM and Fiscal Pact was likely untenable.

Continue reading »

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Aug 12

Sep. 12 (Bundesverfassungsgericht ruling on the ESM) is the date to watch!!!

Let’s see if Germany walks its talk, because that would mean the end of the euro.

Got physical gold and silver?

See also:

Greece Now Prints It’s Own Euros, The ECB Approves, The Bundesbank Nods: No One Wants To Get Blamed For Kicking Greece Out


Germany Has “Reached Its Limit” On Greek Aid (ZeroHedge, Aug 11, 2012):

While Frau Merkel remains beach-bound somewhere, hence the lack of ‘Neins’ recently, her deputy chancellor Michael Fuchs made it unequivocally clear this morning in a Handelsblatt interview that Germany had “reached the limit of its capacity” over additional EFSF payments to Greece and reiterated the double-whammy that the ESM should NOT receive a banking license and that the ECB should NOT act as “money printing press in disguise” by extending emergency loans and bypassing EFSF/ESM. A decision about whether Greece should be given the second tranche of its loan will not be made until October, after the Troika finalizes its first review of the second rescue program in September. However, BNP Paribas notes that there have been a couple of developments worth noting over the past week and more are likely in the coming weeks. Continue reading »

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Aug 04

In Order To Be Saved, Spain And Italy Must First Be Destroyed (ZeroHedge, Aug 4, 2012)

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Aug 03

Spain And Italy Are Toast Unless Germany Allows The ECB To Print Trillions Of Euros (Economic Collapse, Aug 2, 2012):

The financial chess game in Europe is still being played out, but in the end it is going to boil down to one very fundamental decision.  Is Germany going to allow the ECB to print up trillions of euros and use those euros to buy up the sovereign debt of troubled eurozone members such as Spain and Italy or not?  Nothing short of this is going to solve the problems in Europe.  You can forget the ESM and the EFSF.  Anyone that thinks they are going to solve the problems in Europe is someone that would also take a water pistol to fight a raging wildfire.  No, the only thing that is going to keep Spain and Italy from collapsing under the weight of a mountain of debt is a financial nuke.  The ECB needs to have the power to print up trillions of euros and use that money to buy up massive amounts of sovereign debt in order to guarantee that Spain and Italy will be able to borrow lots more money at very low interest rates.  In fact, this is probably what European Central Bank President Mario Draghi has in mind when he says that he is going to “do whatever it takes to preserve the euro”.  However, there is one giant problem.  The ECB is not going to be able to do this unless Germany allows them to.  And after enduring the horror of hyperinflation under the Weimar Republic, Germany is not too keen on introducing trillions upon trillions of new euros into the European economy.  If Germany allows the ECB to go down this path, Germany will end up experiencing tremendous inflation and the only benefit for Germany will be that the eurozone was kept together.  That doesn’t sound like a very good deal for Germany.

Right now, the yield on 10 year Spanish bonds is above 7 percent and the yield on 10 year Italian bonds is above 6 percent.

Those are unsustainable levels.

The only thing that is going to bring those bond yields down permanently to where they need to be is unlimited ECB intervention.

But that is not going to happen without German permission.

Meanwhile, the situation in Spain gets worse by the day.

An article in Der Spiegel recently described the slow motion bank run that is systematically ripping the Spanish banking system to shreds….

Capital outflows from Spain more than quadrupled in May to €41.3 billion ($50.7 billion) compared with May 2011, according to figures released on Tuesday by the Spanish central bank.

In the first five months of 2012, a total of €163 billion left the country, the figures indicate. During the same period a year earlier, Spain recorded a net inflow of €14.6 billion.

If those numbers sound really bad to you, that is because they are really bad.

At this point, authorities in Spain are starting to panic.  According to Graham Summers, Spain has imposed the following new capital restrictions during the last month alone….

  • A minimum fine of  €10,000 for taxpayers who do not report their foreign accounts.
  • Secondary fines of  €5,000 for each additional account
  • No cash transactions greater than €2,500
  • Cash transaction restrictions apply to individuals and businesses

How would you feel if the U.S. government permanently banned all cash transactions greater than $2,500?

That is how crazy things have already become in Spain.

Continue reading »

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Jul 30

Eurogroup Head Confirms “It Has Become Serious”, As He Is Back To Lying (ZeroHedge, July 30, 2012):

The insolvent banana continent is back. Recall back in May 2011:

When it becomes serious, you have to lie.” Jean Claude Juncker

Ergo, things in Europe are very serious again because the Eurogroup’s head, who until recently promised he was quitting his post because “he had gotten tired of the Franco-German interference in managing the region’s debt crisis”, only to spoil the fun and say he was lying about that too, is back to doing what he does best – lying. To wit: “the euro countries are preparing together with the bailout fund EFSF and the European Central Bank to buy government bonds if necessary clip euro countries.” And now cue Schauble: “Federal Finance Minister Wolfgang Schaeuble has rejected speculation about impending purchases of government bonds by Spanish EFSF and ECB.”

From Suddeutsche Zeitung:

“No time to lose”: The chairman of the €-group sees a crucial point of the debt crisis has arrived. Jean-Claude Juncker supports plans by ECB chief Draghi for the purchase of government bonds – and Germany are partly to blame for the crisis. Berlin treats the euro area “as a branch.” Also called “chatter on the withdrawal of Greece” is not helpful.

Juncker confirmed that the euro countries are preparing together with the bailout fund EFSF and the European Central Bank to buy government bonds if necessary clip euro countries. Because there is no doubt, he said. “It is still necessary to decide exactly what we will do and when.” This depended “on the developments of the next few days and from reacting as fast as we need.”

And to think only yesterday the only person whose opinion matters, Germany’s Finance Minister,  “denied plans for a new aid program for Spain, according to newspaper Welt am Sonntag, after the media reported European Union leaders aim for Spanish government bond purchases by the European rescue fund and the European Central Bank.”

We leave it up to readers to figure out which of the above two is telling the truth, but in the meantime, here are some other soundbites from the man who is back to desperation pleading with markets: Continue reading »

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Jul 25

Six Reasons Why Spain Will Be Forced To Request A Sovereign Bailout (ZeroHedge, July 24, 2012):

Just as the summer finally arrives in Northern Europe, the Eurozone crisis is heating up once again. With an increasingly flat (heading to inversion) yield curve, and spreads at record wides,  Spain appears to be in a downward spiral of market turmoil that might require a full-fledged TROIKA bail out. However, as UBS points out, rather than taking the country off the market, the program would have to allow Spain to keep borrowing from private investors. Any bail out of Spain would have to be designed in a way that would also be applicable to Italy. Spain has been the most recent crisis focus, and looks to intensify further with nothing immediately in sight that could reverse the trend. We, like UBS, have argued for some time that a full-fledged TROIKA program will ultimately be unavoidable and the following six reasons briefly explain why anything else is a pipe-dream.

Via UBS FX Strategy:

The Eurogroup last week formally approved a €100bn bank bailout but as our banking colleagues have argued, the programme generates no equity and no funding and is thus unlikely to make any lasting difference either to the limited market access of the banks or to the credit crunch affecting the country. Also, the decision at the June EU summit to take a first step towards a banking union has done very little to ease the pressure. The market initially assumed that the €100bn would be offloaded from the sovereign balance sheet to the ESM by the October or December EU summits once an ‘effective supervisory mechanism’ had been created.

However, subsequently it became clear that: Continue reading »

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Jul 12

Dummies Guide To Europe’s Ever-Increasing Jumble Of Acronyms (ZeroHedge, July 12, 2012):

It seems every week there are new acronyms or catchy-phrases for Europe’s Rescue and Fiscal Progress decisions. Goldman Sachs provides a quick primer on everything from ELA to EFSM and from Two-Pack (not Tupac) to the Four Presidents’ Report.

Rescue Programs

EFSF
European Financial Stability Facility. A temporary special purpose vehicle financed by members of the euro area to address the European sovereign debt crisis by providing financial assistance to euro area states in economic difficulty. The ESFS can issue bonds or other debt instruments in the market to raise funds needed to provide loans to euro area countries under financial stress, recapitalize banks (through loans to governments) or buy sovereign debt; these bonds are guaranteed by the Euro area member states. Euro area member states’ capital guarantees total €780 billion and the facility has a lending capacity of €440 billion. Since it began operations in August 2010, money has been lent to Ireland, Portugal, and Greece and is in the process of being lent to Spain and Cyprus.

EFSM
European Financial Stabilization Mechanism. An emergency funding program for EU member states in economic difficulty, which is reliant on funds raised in the financial markets and guaranteed by the European Commission (EC) using the budget of the European Union as collateral. The fund has the authority to raise up to €60 billion and has made loans to Ireland and Portugal (in conjunction with the European Financial Stability Facility (EFSF) since its May 2010 inception. Continue reading »

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Jul 10

Will A German Constitutional Court Delay Today Cripple The EUphoria? (ZeroHedge, July 10, 2012):

While early news are still abuzz with last night’s largely irrelevant FinMin meeting, which came up with nothing new, but merely regurgitated the June 28 summit decisions in a way to send Peripheral bonds modestly higher, however briefly, the real news this morning will be out of Karlruhe, where the German Constitutional Court – which holds the fate of the European bailout mechanism –  has already said there will be no final decision on the constitutionality issue. The question now is whether the Court will issue a temporary injunction, which however, the court itself admits “will be interpreted by the foreign press as ‘euro-rescue is halted.” Instead, what will likely take place is a two step process. As Market News reports, “Judges during the hearing suggested a two-part decision was likely, first on the injunction in about three weeks, and then in early 2013 on the broader constitutional question.” Obviously, the court is not in any rush to come up with a definitive judgment. The problem is that Spain is. As is Italy: unless the ESM is able to promptly roll out its rescue functionality, the entire bailout mechanism will be halted and all the “progress” achieved so far will be for nothing. Sure enough, “a delay could have “serious economic consequences” for the Eurozone as well as Germany, and in turn would risk placing the entire euro project “in question,” Schaeuble warned.” Yet not even the German FinMin will dare to tell German’s constitutional arbiters to hurry up. Which is why keep a close eye on those Red flashing headlines out of Germany: they can make or break both the Euro, the PIIGS bonds, and broadly risk, if there is indeed a major delay, and certainly, if the court does order an injunction. Continue reading »

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Jul 09

The Perfect Storm – Santelli Meets Farage (ZeroHedge, July 9, 2012):

The undisputed champion of European political ranting (UKIP’s Nigel Farage) discussed the sad reality of Europe’s inevitable demise with the reigning US chief of non-hype Rick Santelli in a no-holds-barred cage-match of like-minded skeptics. From Rajoy’s incompetence to the ‘genius of mutual indebtedness’, Farage explains the problem is ‘bedeviled with complexity’ as, for example, the last summit left “the Finnish and Dutch finance ministers leaving with a very different perspective on what happened than the rest” and now even Merkel is arguing domestically what she has and has not agreed to. From the simple self-referential idiocy of Spain’s EUR100 billion bailout – that creates vicious circles on all the peripheral ‘bailing’ nations; to “the same bundle of money going round and round in circles” leaving Nigel tempted to describe it as “a giant ponzi scheme”; Santelli, not to be outdone, explains how the US is just such a money-circulating ponzi scheme as “one part of the government issues debt as another part is buying”. The ECB, of course, is becoming plagued with more and more of the ponzi-like peripheral paper and as Farage notes “the day Greece leaves the Euro – and it will – the ECB is left with a massive paper loss” leaving the ECB under-capitalized – which in all its wonderful craziness means “it has to go and get fresh capital from the other countries that themselves have been bailed out and are in fact in trouble”. A farcical perfect storm as the “medicine is killing the patient”, and he fears if the nettle is not grasped (Euro break-up) now then the markets will overwhelm the whole thing this summer.

If the clip is not working (since it seems CNBC has been a little flaky with this embed – perhaps due to its rough content) – here is the link to the clip.

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Jul 07

Spain’s Not Getting a Bailout… Neither is Italy… It’s the END GAME Folks (ZeroHedge, July 7, 2012):

Spain got a “bailout” or so the media claimed. Because I cannot find any entity in Europe with the funds to actually bailout Spain (the EUFN is tapped out, the ESM has major political issues, and Germany is risking a credit downgrade and insolvency based on its backdoor EU props).

As one would expect in this situation, things are rapidly going into hyper-drive in Spain. The weekend before last the country implemented capital controls including

  • A minimum fine of  €10,000 for taxpayers who do not report their foreign accounts.
  • Secondary fines of  €5,000 for each additional account
  • No cash transactions greater than €2,500
  • Cash transaction restrictions apply to individuals and businesses

Does this sound like the actions of an economy with a sound banking system?

On a related note, Italy is once again back on the brink: in the last 2 weeks Italy’s Prime Minister Mario Monti has said that the country is “flirting with economic disaster… [and] in a crisis.” He, like Spain’s PM Rajoy, has pushed for the ESM to buy sovereign bonds. He’s also asked the ECB to implement a mechanism through which it would buy Italian sovereign bonds whenever the spread between them and German bunds grows too large (a type of bailout).

Indeed, things are so desperate that he invited German Chancellor Angela Merkel, French President Francois Hollande, and Spanish Prime Minister Mariano Rajoy to an emergency meeting in Rome over the weekend. His goal was to convince EU leaders to allow Italy to receive funding directly from the EFSF and ESM.

The ECB and Germany have already rebuked this idea: Continue reading »

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Jun 21

The ESM is totally unconstitutional, but who cares?


German court may delay bailout fund ratification (Reuters, June 21, 2012):

Germany’s constitutional court said on Thursday it will need time to study the euro zone’s permanent bailout mechanism after its expected approval in the German parliament next Friday, which could delay its scheduled start date on July 1.

Angela Merkel’s government and the centre-left opposition reached a deal on economic growth measures on Thursday which should enable parliament to ratify Merkel’s fiscal pact and the European Stability Mechanism (ESM) on June 29.

The ESM cannot come into effect without ratification by Germany, the biggest economy in the euro zone. But a spokeswoman for the top court said the ESM is so complex it expects head of state Joachim Gauck to delay his signature of the text approved by parliament until the court has had time to study it.

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Jun 20

And Now We Ramp On This Latest Non-News (ZeroHedge, June 20, 2012):

This is just getting ridiculous:

  • MERKEL SAYS BOND PURCHASING BY BAILOUT FUND A POSSIBILITY

Uhm… that whole point of the bailout fund (ESM/EFSF) is to BUY BONDS. Basically Merkel just confirmed that the whole point of the ESM, which by the way still does not exist, and whose sole purpose is to buy bonds… is to buy bonds. You can’t make this up. Yes they will subordinate existing bondholders in the case of ESM, and in the case of EFSF Finland and soon Germany will demand collateral via negative pledges (as in the case of Spain – or did the market forget all about that already), but apparently that is now merely an irrelevant detail. And the EURUSD ramps on this, once again proving that nobody has any idea what is going on in the market but flashing red healines = usually good.

From the ECB itself:

esm

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