Infinite Unknown

- This Is How A Country Ends: Not With A Bang, But A Bailout (ZeroHedge, March 26, 2013):

Curious how in the New Normal a nation is brought to its untimely end without a single shot being fired? Dimos Dimosthenous, who has worked at the Bank of Cyprus for over 30 years, explains:

“That will be the end. Our jobs, our rights, our welfare funds will be lost and Cyprus will be destroyed.”

In short: not with a bang, but a bailout.

… But at least it still has the symbol for all that is wrong with the broke(n) status quo: the €

First, however, much more pain, because as Cyprus’ FinMin Sarris said a short while ago, uninsured depositors in the second largest bank Laiki which is now pending lqiuidation, may lose 80% (read 100%… or more), and wait up to seven years for a payout. Of course, with the majority of the “evil, tax-evading Russians” long gone having used the chaos and assorted loopholes in the past week to get out of Dodge, the only people punished are assorted local hard workers, and domestic businesses, now set to liquidate as soon as they can afford the bankruptcy filing fee.

Finally, speaking of getting out of Dodge, it is surprising that while professing its love for all man-made bubbles and going all in stocks no matter the fundemantls, the firm that is the shadow overlord of Wall Street, BlackRock, is doing just that.

From the WSJ:

BlackRock Inc. the world’s largest money manager, has cut holdings of Italy and Spain government bonds over the past three months. The firm may shed more if the euro-zone’s growth outlook deteriorates.

“We have been less enthusiastic about euro-zone sovereign debt compared to three to six months ago,” said Rick Rieder, chief investment officer of fundamental fixed income and co-head of Americas fixed income at BlackRock. “If growth continues to deteriorate in the euro zone, due in large measure to weak private-sector lending from a deleveraging banking sector, we would further reduce our positions in the euro zone, such as in Italy and Spain.”

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Tags: BlackRock, Collapse, Cyprus, ECB, EU, Europe, Italy, Spain

- El Pais Retracts Article Alleging “Merkel, Like Hitler, Has Declared War On Europe” (ZeroHedge, March 24, 2013):

What does it take for the Spanish “first amendment” journalistic override to kick in? Apparently, in the case of local media leader El Pais, putting up the following in print: “Merkel, como Hitler, ha declarado la guerra al resto del continente, ahora para garantizarse su espacio vital económico.” For the Spanish-challeneged this translates as follows: “Merkel, like Hitler, has declared war on the rest of the continent now to secure their economic living space.” Ah yes, the touchy verboten topic of German “Lebensraum” – its invocation, and ostensibly the unflattering Merkel comparison (seen so often in Greece) were enough to get the article by Juan Torres López in the Andalusia version of El Pais titled simply enough “Alemania contra Europa” taken down.Is it perhaps because unlike in Greece, where articles like that are a daily occurrence, Spaniards still have something to lose should they also lose the good graces of the German chancellor? Something that is more than one Spiderman towel per depositor in the nation’s just as insolvent banking system, where apparently unlike in Cyprus, the ESM actually does work to preserve liquidity and stability?…

A cached version of the article:

In its place one only now sees the following: Continue reading »

Tags: Angela Merkel, Dictatorship, El Pais, EU, Europe, Fascism, First Amendment, Germany, Global News, Government, Journalism, New World Order, Politics, Society, Spain

- 17 Signs That A Full-Blown Economic Depression Is Raging In Southern Europe – Is The U.S. Next? (Economic Collapse, March 14, 2013):

When you get into too much debt, eventually really bad things start to happen.  This is a very painful lesson that southern Europe is learning right now, and it is a lesson that the United States will soon learn as well.  It simply is not possible to live way beyond your means forever.  You can do it for a while though, and politicians in the U.S. and in Europe keep trying to kick the can down the road and extend the party, but the truth is that debt is a very cruel master and at some point it inevitably catches up with you.  And when it catches up with you, the results can be absolutely devastating.  Greece, Italy, Spain and Portugal all tried to just slow down the rate at which their government debts were increasing, and look at what happened to their economies.  In each case, GDP is shrinking, unemployment is skyrocketing, credit is freezing up and manufacturing is declining.  And you know what?  None of those countries has even gotten close to a balanced budget yet.  They are all still going into even more debt.  Just imagine what would happen if they actually tried to only spend the money that they brought in?

I have always said that the next wave of the economic collapse would start in Europe and that is exactly what is happening.  So keep watching Europe.  What is happening to them will eventually happen to us.

The following are 17 signs that a full-blown economic depression is raging in southern Europe…
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Tags: Bonds, Collapse, Debt, Economy, EU, Europe, Global News, Government, Great Depression, Greece, Italy, Politics, Society, Spain

- Fed Injects Record $100 Billion Cash Into Foreign Banks Operating In The US In Past Week (ZeroHedge, March 9, 2013):

Those who have been following our exclusive series of the Fed’s direct bailout of European banks (here, here, here and here), and, indirectly of Europe, will not be surprised at all to learn that in the week ended February 27, or the week in which Europe went into a however brief tailspin following the shocking defeat of Bersani in the Italian elections, and an even more shocking victory by Berlusconi and Grillo, leading to a political vacuum and a hung parliament, the Fed injected a record $99 billion of excess reserves into foreign banks. As the most recent H.8 statement makes very clear, soared from $836 billion to a near-record $936 billion, or a $99.3 billion reserve “reallocation” in the form of cash – very, very fungible cash – into foreign (read European) banks in one week.

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Tags: Banking, Ben Bernanke, Bonds, Debt, ECB, EU, Europe, Fed, Federal Reserve, Germany, Global News, Italy, Quantitative Easing, Spain

- Italy Is Not Spain – It’s Worse (ZeroHedge, Feb 28, 2013):

With Rajoy quietly gloating at his political fraud being off the front-pages thanks to Italian elections, it seems the more we dig into Italian reality, the weaker the story becomes. The meme of the last few years has been that “at least we’re not as bad as Greece” and rightly so, for as Bloomberg’s Niraj Shah notes today, Greece’s poverty rate is a stunning 31% (against Holland’s 15.7%). However, while all eyes have been focused on Spain’s dismal economy, the sad reality is that Italy is worse than Spain in that its poverty rate is a breath-taking 28.2% (relative to Spain’s 27%) – even though the unemployment rates in the two nations are vastly different (Spain 26% and Italy 11.2%). Given this fact it is perhaps not surprising that the ‘people’ voted against austerity and furthermore, that Italy’s CDS has pushed above Spain’s for the first time in over a year.

Chart: Bloomberg Briefs

Tags: Economy, EU, Europe, Global News, Greece, Italy, Poverty, Spain, Unemployment

- Nationalized Bankia To Post Largest Corporate Loss In Spanish History (ZeroHedge, Feb 21, 2013):

Just in case anyone is confused about how fixed Europe is, insolvent Spanish TBTF megabank, which F’ed last year and had to be bailed out by the government, will post earnings (and in this case we use the term very loosely) next week at which time it will report the biggest corporate loss in Spanish history. From Telegraph: “On Thursday Bankia will report full-year earnings, including a €12.6bn provision taken at the end of last year. The writedown is a result of the lender moving assets into Spain’s “bad bank” at heavy discounts. Bankia, which is seen as a symbol of Spain’s financial woes, was created through the merger of seven smaller savings banks before being listed on Madrid’s stock exchange. When the company failed, hundreds of thousands of people who had been sold shares saw their savings wiped out. The collapse forced Spain to ask Europe for a bailout for its banking sector, which has meant the lender is subject to tight controls.  Bankia is trying to sell its 12pc stake in International Consolidated Airlines Group, the parent company of British Airways, which is valued at about £510m, and 5.3pc of the power company Iberdrola, which is worth about €1.24bn.”

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Tags: Banking, Global News, Government, Politics, Spain, Taxpayers

- Germany, Spain Set To Pull The Plug On Green Energy (ZeroHedge, Feb 14, 2013):

Over ten years ago, when Europe was a bright and shining example of experimental monetarist “brilliance”, and when the money was flowing, the continent decided to do the ethical thing and actively promote the pursuit and development of renewable energy through countless government subsidies. As a result, Germany and Spain became the undisputed leaders in the race for a green future, and both created similar laws to encourage the development of renewable energy. There were two problems: i) green energy, while noble in theory, is about the worst idea possible when it comes to profitability and capital self-sustainability and constantly needs governmental subsidies, and ii) it was the end consumers who would pay for the government’s generosity, in the form of a surcharge on electric bills. In Germany, for example, as the industry grew (in size, and thus in losses) demand for the subsidy increased, driving the surcharge higher. In January, the surcharge, which amounts to about 14% of electricity prices, nearly doubled to 5.28 euro cents per kilowatt hour.

And, as the WSJ so deftly explains, “that means ordinary consumers shoulder the lion’s share of the costs for what the German government calls its “energy revolution.” And here is where a third problem comes into play, because while German and Spanish consumers were happy to pay a surcharge in the golden days of a Dr. Jekyll Europe when everything was great, soon Europe become a doomed Mr. Hyde-ian Frankenstein monster, with imploding economies, 60%+ youth unemployment and resurgent neo-nazi powers. In short: the German and Spanish consumers have had it with funding an infinite money drain (even bigger than Greece), when cash flow is scarce and getting worse, and have just said “Basta” and “Nein“, respectively. Continue reading »

Tags: Energy, EU, Europe, Germany, Global News, Government, Politics, Spain, Technology

- Greek Youth Unemployment Tops 60% (ZeroHedge, Feb 14, 2013):

Optimism it seems is all that matters (or is all that is allowed) as we are battered by dismal data left, right, and center. Of course, a reflection on the markets tells any ‘smart’ person that it all must get better – or why would stocks or sovereigns, or EURUSD be where it is? However, the 6 out of 10 15-24 year olds in Greece (61.7% to be exact) would beg to differ with that view of the world (as their economy grinds to a halt) – and with Spain reaching new highs at 55.6% (as well as the Euro-zone over 24%), all the bureaucratic lip-service in the world won’t stop the revolt that is coming we fear.

Tags: Economy, EU, Europe, Eurozone, Global News, Greece, Society, Spain, Unemployment

- The Pain In Spain Falls Mainly… Everywhere (ZeroHedge, Feb 14, 2013):

European GDP and Spain – where it’s going?

Europe Q4 GDP declines 0.6%, and economy contracts 0.9%. No one should be surprised at the latest disappointing European GDP numbers, but they hide important trends – Germany’s Q4 0.6% GDP drop was worse than expected, although the expectations remain for growth later this year. France is going to miss the 3% GDP deficit target because of low growth. For the rest of Europe the numbers were generally worse than expected – and no one credible is talking about significant growth prospects. (Sure, the Euro Elites are telling us they see growth tomorrow.. but tomorrow is always tomorrow..) Continue reading »

Tags: Collapse, Economy, EU, Europe, GDP, Global News, Government, OMT, Politics, Spain

From the article:

“So if you have not already taken steps to prepare for systemic failure, you NEED to do so NOW. We’re literally at most a few months, and very likely just a few weeks from Europe’s banks imploding, potentially taking down the financial system with them. Think I’m joking? The Fed is pumping hundreds of BILLIONS of dollars into EU banks right now trying to stop this from happening.”

- WARNING: the EU Crisis is BACK and Will Be Worsening in the Coming Weeks (ZeroHedge, Feb 12, 2013):

I want to issue a major warning to investors: the EU Crisis is going to get worse in the coming months.

I realize that most investors and analysts believe that the EU Crisis is over. Then think that because the S&P 500 is closing in on its all-time highs that things are fine in the system.
They are wrong.

The only item that held Europe together in 2012 was the credibility of EU politicians and ECB President Mario Draghi. Please note that nothing fundamental improved for the EU’s financial system: EU GDP has since re-entered a recession and EU unemployment has a hit a new record.

Indeed, the only reason things even looked better was because various Government engaged in massive interventions. In the case of Spain, this included raiding 90% of their social security fund to buy Spanish bonds so that yields would fall.

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Tags: Banking, Bonds, Collapse, Debt, ECB, Economy, EU, Europe, Fed, Federal Reserve, France, Global News, Government, Italy, Mario Draghi, Politics, Spain