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It's Official: There Is Not Enough Money To Bail Out Spain
It seems that the European bailout buck will stop with Portugal for one simple reason: when Europe created the EFSF it did not think it would need to serially bail out everyone; now the EFSF does not have enough money to cover a bailout of Spain. From Dow Jones: "The European emergency fund, promoted as having the financial firepower to douse a financial crisis in the euro zone, may not even have enough money to cover a bailout of Spain. "[The fund] will be very close to the line, it will be precarious and it won't leave anything for anybody else," said Whitney Debevoise, a sovereign-debt lawyer with Arnold Porter and former World Bank executive director." Of course, if and when Spain is bailed out, other bail outs will be irrelevant, as at that point the vigilantes will focus squarely on Germany. At that moment, nothing less than a complete dissolution of the currency union and an unmitigated monetization ala Weimar will save what is left of the productive powers remaining in Europe.
From Dow Jones:
The EU has EUR440 billion committed from member countries to its European Financial Stability Facility, the fund being used to extend bailout aid to Ireland. Requirements by European officials that the bailout bonds have a triple-A rating lowers the EU's lending capability to EUR250 billion, in addition to EUR60 billion available in the EU budget. The International Monetary Fund has said it will lend an additional 50% to European countries.
If Ireland requires between EUR80 billion and EUR100 billion--as officials indicate--and Portugal needs an estimated EUR50 billion to cover its sovereign debt refinancing needs, that barely leaves enough to cover Spain's sovereign debt rollover requirements over the next three years. Greece's EUR110 billion package was arranged before the bailout fund was set up.
The problem, said an IMF official, is that Portugal and Spain may also ultimately need to fund banks' recapitalization or wholesale liabilities, and the European bailout mechanism just doesn't have the capacity to cover those financing gaps.
"The [bailout fund] as it is currently structured does not have the firepower without a much, much larger contribution from the IMF," said Jacob Kirkegaard, a research fellow at the Peterson Institute for International Economics. "But how much does the IMF as a global institution want to be exposed to Europe as a region?," he said.
Although only Ireland has so far requested aid from the joint European Union-International Monetary Fund program, fears that Portugal and Spain may need external assistance have already spiked the cost of borrowing in both countries' sovereign and banking debt markets as perceived risks rise.
Both the EU and the IMF declined to comment for this article.
The last is not too surprising: an admission that the EMU is over due to lack of foresight to add one extra zero may not be to most politically correct thing to do. But luckily, there is always the IMF, which courtesy of its recent amendment now has infinite capital. And if Europe needs bailing out that means Europe won't be paying for that particular multi-trillion rescue. Which leaves guess who. Hopefully, Bernanke's foolproof plan of ultimately flooding the world with US dollars is starting to be perceived by everyone.
So what does happne when domestic sources of funds are exhausted? Nothing pretty:
Alternative funding could come through bilateral loans from countries heavily exposed to Spain or extra International Monetary Fund support. But tapping out the EU's emergency financing mechanism would leave nothing for other countries and may force Brussels to try to boost the funding cap to save the euro zone and leave Europe stretched critically thin.
Aside from direct bilateral loans, such as those being considered for Ireland from the U.K., Sweden and Denmark, Debevoise says EU countries may have to boost the cap on their bailout program, a politically difficult task for a raft of reasons.
"At that point, it will be to save Europe, saying, 'this is your political duty,'" he said.
Notice how they don't call it patriotic... Because don't forget that the EMU has been around for a decade: it a modestly difficult to engender patriotic affiliation with a monetary union, whose sole purpose just like the CNYUSD peg by the way is to keep the German "currency" undervalued, which everyone hates.
The endgame? Unbridled printing:
"The willingness of the political sector to overcome what I believe will ultimately be proven to be an irrational liquidity squeeze by the market cannot be underestimated," he said.
That commitment to the euro zone is so strong, Kirkegaard says, "The European Central Bank would purchase outright with printed money Spanish debt before the Spanish government was forced into a disorderly default."
....which is one thing Bernanke will not allow. And should there be a liquidity crunch, every single European bank will need dollars. Many trillions of dollars. Which will be unavailable in the open market, leaving just the FRBNY's FX swap as a viable option. Of course, should Europe pursue a monetary policy in true independent isolation, and should the tsunami of dollar buying actually occur, the resulting historic surge in the USD may just end up being the most poetic end to the currency bottom...
As for those who still may be confused by how the various bailout mechanisms in Europe operate, we present to you this useful infographic by the Guardian.
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they can just print more!
Exactly. Why dodnt i think of that?
HAHAHAHHAAAAAA!
Too funny. The humourous assertion is merely, "I have decided that your actions to leave my monetary system are irrational."
Hilarious. The fact that the market can make money by showing how these braniacs have cooked the books never crosses their minds.
This is a failure of central planning, not of individual countries or political parties.
Individual states need to dismantle the central control of the EU, the US federal government, the UN, the IMF and the central banks. There is no other solution ... central planning was a ridiculous experiment that was doomed to fail from the start.
The Founding Fathers knew this at the start. Everyone else since seems to have ignored it.
The "Founding Fathers" knew this because it is exactly what they did to the States, forced a centralized government on them.
I agree with you to the extent that the FFs were not of one mind.
Some, like Jefferson, were intent on limiting the Federales to [militarily] protecting the States, while the States were supposed to protect all other rights of their individual citizens.
Others, like Hamilton, were intent on setting up a private central bank and expanding the powers of the Federales.
The Constitution was a compromise ... and, like all compromises, it ended up satisfying nobody. "A camel is a horse designed by a committee".
That's why I'm a voluntarist opposed to ALL statist governments. Private groups, supported by voluntary donations and natural contract law, can fully satisfy society's needs for regional defence, arbitration and care of the needy.
Jefferson, you mean, that guy who bought Louisiana from the French, with people on it? Sure, sure, good reference.
Delusion or duplicity?
Yes, the same guy who freed those citizens from the centralized french govt, providing them freedom to choose their local govts, that guy.
"Individual states need to dismantle the central control of the EU, the US federal government, the UN, the IMF and the central banks."
And just how the fuck are the " individual states" going to do this. Those institutions are the state........therefore gun control laws
... by seceding. Each of the 50 US states can constitutionally do this, either individually or en-masse. So can the individual 27 states of the EU.
Once the EU and US have been dissolved, all of the powers ceded by them to the grand central committees of them all -- the UN (WTO, FAO, UNESCO, etc) and IMF -- would also be null and void.
By withdrawing from the various central planning "unions", they can each issue their own currencies [again] and get back onto a sensible trading basis [again] with each other. Entrepreneurship and social equality of opportunity would flourish [again] without all the central planners.
It's never too late to admit a mistake ... and remedy it.
attempted nullification before secession. things should be done in their correct order.
To quote the previous poster, "how the fuck do you expect to achieve that?". Those in the US Congress and European Parliament who ceded their powers to the UN and IMF (and pressure their individual states to stay in line, as is happening with Ireland and Pennsylvania now) will never nullify any of the treaties they voluntarily signed (in return for bribes or pressure from the oligarchs).
Indeed, there is no reason to suppose that they won't sign over even more powers to the UN and IMF before issuing a world currency and implementing martial law over the whole of Europe and the US in the interests of "an orderly market, world peace and eternal prosperity!".
too bad they don;t have the FED, as some idiot said in fall 2008, the FED's balance sheet is infinite
http://www.youtube.com/watch?v=u-qcy0-7ngw
Stock up on olive oil
THAT'S A GREEK COMMODITIE!!
GO LONG CALAMARES!!
looooooooool
"GO LONG CALAMARES!!"
and
short solars!
Opa!
Better yet ouzo.
No printing press has ever run out of money :)
Currency, not money.
Big difference.
And Zimbabwe managed to, as I recall.
No but they have run out of ink before.
I hear Lexmark's ink is cheaper than the rest :) /end sarcasm
wouldn't it be funny, if the ink we print money with, was made in china?
Go long ink.
Don't think the EU will miss it's chance tommorrow to bust a turkey trot on the USD. USD/EUR gimme wood. Ok Norwegian wood. EU fails next week.
Hmmm, I wonder if the Euro/$ might just wait til the US market closes prior to black Friday to show it's true feelings about the EU situation??? Wonder why the sudden disconnect from Euro/$ to US equities today?
EURUSD to ES disconnect has been evident for the past few weeks or so.
Even on potential short term correlation (<1hr) the sudden moves to the downside with EURUSD don't match with the (lack of a) ES dump.
Who will be the first to bolt ?
Germany?
Britain?
Switzerland! Oh yeah, they never bought in.
Actually, the Swiss did try to defend the Euro there for a little while. And lost money doing it.
Germany's acting oddly already.
Britain can't bolt as they never fully adhered, what with their GBP and all...
No necesitamos un plan de rescate. (Spain)
Non abbiamo bisogno di un salvataggio. (Italy)
Nous n'avons pas besoin d'un plan de sauvetage. (France)
Wir brauchen nicht ein Rettungspaket. (Germany)
Nós não precisamos de uma ajuda. (Portugal)
We don't need a bailout. (Irish)
We don't need a goddam bailout. (USA)
Cock-a-doodle-do x3 (Rooster)
ewe t'don dnee a mgodda tbailout. (Pig-Latin)
Nos non necessitatem denarius (Vatican)
As Bill McBride at Calculated Risk so perfectly summarized it:
Right now this is a European problem and I see little impact on the U.S. in the short term.
Agree 1000%.
HW,
you are on fire with good stuff today. Yes, that's right, we live in a decoupled world and euro/$ spiking has no impact on US equities. Only moved from $1.38 to $1.33 in 3 days...expect lots more to come as ugly dollar looks good to "beergogle" wearing euro holders. Unfortnuately Harry, that's not good for pretty much all dollar denominated bonds and equities.
+1. I wonder what is the color of the sky in Harry's world?
Rose colored, like everything else the twat gazes on...
now i find myself looking for harrywanger posts.
Correct me if I'm wrong, but EUR/$ is not spiking, it's tanking. $ is getting stronger relative to EUR which means denominator is getting larger which means overall quantity is getting smaller - therefore, no spike. Maybe you meant to say $/EUR spiking...
Global trade doesn't have an input into your brilliant equations? European meltdown and US meltdown side by side doesn't constitute... oh wait, you do not think the US is having difficulties, even though the bottom third of the workforce is destitute, the middle third is sold down the river, the upper third don't know their ass from a hole in the ground, the US produces nothing of value except food, and the Federal Reserve, which America is chartered to fund, holds only toxic paper, except for 8000 tonnes of what could turn out to be tungsten.
Harry,
Why the preclusion to being so trollish? Defending your beliefs with posts to other blogs really isn't moving the conversation along. It's just more digital lumps in the electronic sewage processing plant.
I hope you have a good Thanksgiving, nonetheless. Just be sure you don't injest any small turkey bones, as I can't wait to hear how you're making a perpetual fortune buying AAPL.
There is no "preclusion to being so trollish". It's important to have a dialogue with both sides of a discussion. Bill is a much more eloquent blogger than I and I happen to think he has one of the absolute best economic sites out there. No bullshit, just analytical studies and conclusions based upon FACTS set before him. His viewpoint is rather unbiased and just factual. That bothers you?
Happy Thanksgiving to you as well. I'm a vegan so I won't be worrying about ingesting any small turkey bones as Tofurky is 100% boneless.
Vegan...my food craps on your food.
And while we are on the subject of crap, has the FDIC gone AWOL? When is the last time the Bair Patrol took down a Bank?
the FDIC closed three last friday, right on schedule ...
http://www.fdic.gov/news/news/press/2010/index.html
Thank you,...
Vegan?
If we're not suppose to eat animals, why are they made of meat?
Youre vegan?
Ok thats why some of your posts make ZERO sense.
Even i tend to disagree with some of the doomsday mongers here, but man, come on. The EURUSD having "1000%" no effect on Americans? Dude, get some good red meat proteins in you. Trust me, its Thanksgiving, you can take one for the team. Maybe it'll let you re-think your thesis.
Bill is a much more eloquent blogger ... Good then butt fuck Bill instead of us! Better yet for ultimate Wanger pleasure, core out a Granny Smith APPLE and jack off with it.. Here is some fresh smut you can read Harry to help you along!
Stocks Bounce Back Ahead of Holiday for Wall Street- Reuters
Economic data, which boosted stocks after two days of losses, bode well for the holiday shopping season, analysts said. That period traditionally kicks off on Black Friday, the day after Thursday's Thanksgiving holiday.
I like CR too...but when he called a bottom to the housing market over a year ago I knew he was wrong then just like I know he is wrong about the effect of the Euro now...but I can see the appeal of his words to you Harry..."short term".
Vegan? Are you looking for a housemate?
http://www.dontevenreply.com/view.php?post=78
funniest thing that i've read all week. thanks for that.
OMG, I am still crying from the laughter, "my brother thought they were beans", F'in hilarious! Many many thanks EscapeKey
My sides, head and stomach hurt.
Most excellent.
Hilarious!
Epic hilariousity!
Vegan? Suffering from a little dementia there chief.
http://en.wikipedia.org/wiki/Vitamin_B12_deficiency
Vegan? How cool! Happy Tofurky Day!
Sucker.
Sorry Harry, but Tofurky sounds nasty.
Tofurky sounds like something I'd put on the zipline... Yeah strap that 2 pound piece of nothing into the harness and let er rip. Probably get 30 rounds in on the 12 gauge and maybe 8 rounds on the 10 gauge side by side. Sorry Harry, there's nothing left to eat? Better yet there's nothing left to even distinguish that it was a TOFURCKY!
lack of animal protein just makes you retarded.
Harry, really? Ireland may not be a big deal, but Spain is. Think about California vis-a-vis USA. Spain is populous and has been an economic engine. Ireland was an economic engine too. Add in Greece, Portugal, possibly France, Hungary, Ukraine, Austria, Poland, Romania, and Slovenia of EU and then contagion to Serbia, Croatia, Turkey . . . and you still think just a bitsy impact on the US? Really?
Hungary, Ukraine, Poland, Romania, Slovenia are totally insignificant. They're not contributors and/or not full members yet.
All correct - besides Poland.
Central EU superpower in the making. + GDP growth when noone in the EU had. 4-5% GDP growth over next years. Also, full membership should be in 2012 - unless they choose to withdraw based on current conditions!
...Greece, Portugal, possibly France, Hungary, Ukraine, Austria, Poland, Romania, and Slovenia ...
CC, Think of these countries as mountain climbers on a sheer cliff face. One of them falls, each will be plucked off the side. After a couple of them, it doesn't matter what each weigh, the momentum will pluck everyone off....
Wheeeeeeeeee
Wait till Congress refuses to pony up 20% of the bill. It'll be an American problem real soon.
Calculated Risk hasn't been the same site since the great Tantra (RIP) passed.
Wanker did you believe that sub-prime was contained at $200B?
If the financial crisis or 2008 taught one anything it is that there is NO decoupling, there is never one cockroach, and once the domino's start collapsing, the whole world goes no bid in about 90 mins.
So trade the market you have, but be mindful of the fact that the domino's will fall again, and when they do you won't get out in time. None of us will.
Sincerely, Happy Thanksgiving.
Wang believes that there will be a chair with his name on it when the music stops.
Scratch that, I really don't think wang even hears the music playing.
If the Euro weakens substantially risk will be shunned and the recent big move in equities built on quicksand (low volume and gaps) will be swallowed quicker than you can say "Harry Wanger".
Tiptoe, through the window
By the window.......
Harry, Harry, Harry.
Oh shit, Now what. It dosent matter. Happy Thanksgiving. Hopefully it wont be my last.
We don't have an extra $800 trillion to send over?
Sounds ominous. But the people trading the US stock market just don't give a damn. They think the market is attached to a rocket ship with the fuse lit. Given todays performance on tiny volume, this must be true.
Is There an EU Timmay?
Then that EU wanker better roll out Plan B...
.
So damned if they do damned if they don't. Spain will get a bailout,they will not allow Spain to fall because of the size of its economy,foreign bank exposure,and this will lead to a major stock market crash. However if Germany decide that it will leave the euro then a euro collapse will happen and we will have a major stock market crash. I guess we might have deflation soon.
SPX
Close, Ben, but no cigar.
http://99ercharts.blogspot.com/2010/11/spx_4325.html
http://www.zerohedge.com/forum/99er-charts
Have a great Thanksgiving, folks!
Be better if tha balls in tha graphic bounced.
I'm surprised ZH missed the significance of the tipping point (which had to come): we are past the point when bailouts create confidence. Now we are in the stage at which bailouts destroy confidence. What this means is that the largest economy--the U.S.--is in the crosshairs of the bond vigilantes.
This in turn means that every development has meaning ONLY in terms of the U.S. You see this in commentary turning away from Portugal, even away from Spain, even away from Germany, even away from the EMU.
It is only the U.S. which counts now. The economic crisis has turned into a political crisis. And what are the policies? This is when the doctrinal disorder starts feeding back into the economy. Not disagreement, mind you: disorder.
It means the U.S. regime has fallen. Not will fall: has fallen.
you speak the truth
RIGHT DavidRicardo! Bailouts mean nothing anymore, only create a certification of certain demise.
Look at UST's get crushed today. Off significantly from the anticipatory QE2 highs.
@ DavidR
Absolutely right. NONE of the causes of our troubles have been resolved. There is no easy way out of the box. This will not end well.
But, the next question is when? Soon? 2012?
Best be getting ready...
Excellent comments.
Web bot technology indicated we have passed the tipping poing and are within weeks of something major. By January, there is a 90% collapse in language tension surrounding the USD, world currencies and parobolic movement in precious metals.
Either things are going to get really, really great (due to collapse in release language), or something really, really ugly is coming.
You take your pick.
I am not associated with the web bot people.
I think Clif was right. We have passed the point.
It's all release language(and actions) now kids.
The roller coaster has just crested the BIGGEST freakin crest, and (starting last weekish) we have eased over the hump and it's going to be a wickedly wild ride down.
David, I agree and disagree. Yes, the US has significant problems and nothing has been solved. In the end if our politicians made up their minds to do the right thing (debt defaults, debt forgiveness) the country could move on without the majority of the world. We have the land, people and resources. Europe does not. This is the big difference.
If you have the time and inclination, listen;
http://www.youtube.com/watch?v=vDDkNixytd0
Thanks Rusty
Nightmare scenario for the Fed re QE2 and USD.
Meanwhile CNBC yucks it up with mall channel checks while they perp walk some MBA intern.
If this scenario were to get rubber on the road before Monday am, the US equity market will be smashed in hours.
Black friday indeed !
It's actually a sign to go long on the Euro :)
Last time America did it, the dollar rose 10%
Illusory money for Illusory Wolfpacks.
heh
One could also start to wonder how long it takes for Germany and France to run out of money to fund this joke.
So if Spain bails out Ireland, does Ireland participate in the Spanish bailout? And do they contribute to the IMF-piece?
It's all just a circle jerk - besides China, some other Asian and ME countries, no one has any money. Everybody's just flat broke - both morally and financially.
IIRC once your borrowing rates go above 5% (was it?) you're excused from EFSF duty. Not sure about the IMF chunk.
Here's how I see the current situation:
Everybody has as much money as they want ... if they have a central bank, period. Also, there is an undeniable, annoying little fact: The quantity of money has to increase to service all the debt (unless the quantity of debt decreases). Furthermore, the rate that the quantity money to HAS to increase (to prevent widespread liquidity driven debt default) must be equal on the interest rates landscape versus quantity of debt ie: "every existing debt" * "Interest Rate of that debt".
Two things can be used to control that flow:
1- Interest Rates of rolling over and new debt
2- The quantity of debt
Some pertinent info is needed here:
1- What matters is not the absolute interest rate, but the rate of change. So lowering the interest from 10% to 5% has the same effect as from 1% to .5%.
2- Because the the system has a built-in antisymmetry, decreasing the quantity of debt is dangerous. There is a cascade risk due to leverage. Also, a lot of that debt was created fairly recently by banks playing the derivatives game, and a lot of debt is collateralized by some other form of debt. A failure of that pyramid would cause lots of problem. It would require nationalizing most big banks worldwide.
What the Fed is doing here is preventing a debt collapsed by 1- lowering Interest rates and 2- increasing the quantity of money with QEs. The first round of QE was to stop, temporarily, the collapse of the derivative beast. The second round the private sector. Since they can`t simply give ppl money (what would the Sheeple say?), they create inflation by not sterilizing the QE2 POMOs. Prices go up, global debt burden decreases and we start the bubble cycle all over again. Who knows Jubulee might actually happen given enough political support.
QE to infinity? Only if the economy doesn't recover and we don't get inflation. But I really don't see why we need to have a nightmarish scenario. It can work. Things might be volatile for a while till we get used to the increasing level of the rate of change in debt, but the game can be controlled by strategically forcing certain pool of debt to default.
My take on things is that China will have no choice but to ease on the peg, and things will slowly get better, but volatile in the short term. This time might not be different after all. But the fascinating conclusion to all this is that in most scenarios, gold bitchez!
Swap lines...roll it bitchez!
There aren't enough tax payer pockets, or treasure contained within them to make the creditors money good. The time is approaching when that zipper is gonna rip when someone sits down and then it'll interesting. The monetary union can break up, but that doesn't deal with the cross border institutions or the shadow system.
If the peripheral nations were smart they would all default en mass and remove the stigmatization associated with default. This goes for those nations in Europe that are not part of the monetary union as well. If these folks do it then the rest would have to follow.
lira also wrote a piece on this issue
Sure there is enough... haven't you heard of the FEDERAL RESERVE's "FOREIGN TARP PROGRAM"?
13.3 allows the Federal Reserve with 'Bennie and the Ink-Jets' to print away... but remember, it's always through secondary means to launder the counterfeited money to the Central Bankster Cabal.
Just added 9 ZEROS... <return Key> there, fixed!
hey - there is an idea for a new word for the new numbers:
how much do you want to borrow 9, 10, or 11 zeros?
that way none gets confused w/ 10 thousands billions or 10 million billions, or 1 quadrillon...or who knows what is next if we became Weimar...
keep it simple!
"Foreign Tarp Program", FTP or "Funds Transfer Protocol"?
This is so utterly #uckin frightening that you better pray this doesn't happen.
i am praying but i am not sure it will help...
Looks like the shills are in full on damage control mode: http://www.cnbc.com/id/40353870
Nigel Farage (UK Independent Party) has a rather strongly worded opinion on this matter
http://www.youtube.com/watch?v=UcdnUE4LRMA&feature=player_embedded
In the most unparliamentary language, fuck you EU, fuck you.
Farage is #uckin firebrand of the first order. Last month, he ripped the EU President to shreds.
Man, we need this #ucker over here to shake things up.
i would like to know how so many smug conceited self-important lavishly educated assholes could screw up so badly.
this engineered financial crisis is as much about sociology, psychology, and politics as it is about finance and economics even if the latter were of the voodoo variety.
Actually... it's been well documented for the last 2,000 years. It's called Original Sin.
You're basing that statement on the assumption they were trying to "do the right thing." I think that's where the wheels come off. Most everyone over the past 20 years was trying to "get theirs." There was no sense of sacrifice, delayed gratification, reward for ones labor, etc. Just gimme gimme gimme.
So here we are, and there you go.
As a whole, our culture promotes delusionary thinking; overselling yourself, with selfish 'gimme gimme gimme' grabs in life. It stinks, but that's the way the herd goes.
This says much about a society and human nature when they're a superpower, or allied to a superpower for a few decades and then they implode.
I have no hope that any future generations will be any better: this is what we are, this is what we'll be. Being human is a bitch; we're so goddamned flawed, huh?
While the Inflationist are crying about a dollar crash; Europe is falling, country by country.
So? You think European instability is going to HELP us?
If Europe falls, there will be no way to stop the fall of the US.
How about we foreclose and evict?
Not the Little Red Hen.
bailouts are good for all of us. They are good for Goldman, Central Banks, and PD's. What's not to love? So the slaves gotta send more money into pay all that interest. BFD. The disaster has no impact on world currencies, trade, or whether or not the slaves could travel here or buy our shit.
I knew this guy who choked to death on tofu chicken. Best looking corpse I ever saw.
print some more money... its just that EASY
And could you print a bit more, so that it eliminates the need for me to pay my tax bill?
Gee, does that mean there's not going to be enough money to bail out the US?
It's Official: There Is Not Enough Money To Bail Out Spain
"No problem"......Archduke Ferdinand to the rescue.
...I will arrange a State Visit and Parade in Barcelona where the Barcelonians will welcome me with open arms.
That is, if I survive Dublin or Tehran where I visit first.
Everyone loves and adores the Austrian Royal family.
...But I had a dreadfull time in Sarajevo in 1914.
hrh ADF
Thinking of arranging a parade for ya, ever hear of Dealy plaza? The theme's gonna be Mexican fiesta (or is it Mexican standoff?) :>D
The Guardian's chart is complete bullshit.
The exposure to "Ireland" includes exposure to Irish public companies (like Guinness) and especially all the IFSC offshore companies, foreign bank subs, etc. which makes up the majority of exposure by far. This exposure is not really at risk. It is the Irish bank zombies and sovvie debt (same thing these days) which is at the 80-100bn level.
bottom line, though, Spain debt is bigger than EFSF, but that is not an issue. The question from IMF is "how much do we want to be exposed to Europe" is nonsensical, because the answer clearly is "as much as it takes..."
Anyone who is trading on the reversal of the Euro and some kind of default I will continue to,very happily, take your money. Thanks!
Diageo's not an Irish public company, is it? You're apparently right about the Guardian inappropriately counting the IFSC though.
Weber agrees with you about infinite credit.
One (at least) of default, grants or inflation seems certain to happen, no matter how much expensive credit is provided in the meantime. Possibly not for a couple of years yet, but given the skill and grace with which the EU is handling the Irish negotiations I wouldn't bet my life against a more immediate rip.
Axel is the Augustus Gloop of the financial world.
That craving for interest income to satisfy his enormous appetite will sooner or later lead to a unfortunate accident.
www.youtube.com/watch?v=FdSORiSaRW8
The Arrogance of the whole EU setup is quite simply embarrasing,if you have no one to hold you to account or tell you,you are wrong,the result is quite simply catastrophic.No doubt as usual no-one will go to prison again,thats for the underlings / sheeple /serfs.Absolutely laughable if so many lives were not being ruined.
"The Arrogance of the whole EU setup is quite simply embarrasing (sic). "
Why be so selective?
I repeat more gold please
There's not enough gold.............. in my vault.
Make Spain the 51st State!
Was looking at trends in German export growth and Domestic growth GDP contibutions yesterday, and domestic naturally follows and lags export growth ... and the export growth is dropping.
Yet every one there thinks things are going just great.
But follow the trajectory forwards 6 to 9 months and you get a double-dip in Germany. The whole of Europe is going to go sour during 2011.
i.e. this will occur just as they need to accommodate the next major wave of loan refinancing, renewed national belt-tightening, plus furnish emergency 'loans' (for pigman’s brown paper bags to politicians).
What are the chances of this, in Recession?
And that is where the EU 'bailout' circus will finally be forced to capitulate ... and then the ECB does the rest.
All ‘bailouts’ do is increase the pigman’s later claim over bankrupt’s assets, when the inevitable buzz-cut comes. Who cares if the Euro is trashed?
"Was looking at trends in German export growth and Domestic growth GDP contibutions yesterday..."
Yes, had seen that the most recent report had their GDP and exports declining. Against this backdrop, Merkel's recent comments re the bailouts and Euro start to make a lot more sense. Not sure that it is all Weimar-phobia versus helping jawbone a currency down to a level that is beneficial to Deutschland. If the Euro goes away, so to likely will a lot of their exports into neighboring EMU countries, at least for a year or two.
Remember the Greek crisis - when Merkel hemmed and hawed and spoke out against bailouts, only to essentially cave in the end? It's a very rational playbook for the Germans, and they are probably working on a repeat. However, the ground looking more unstable now than then. Not sure the play will stick to the script this time around.
In May this year I 'calculated' the EU had another ~18 months before the money ran out and the shish really hit the fan (i.e. end of 2011). Those extra 18 months change a lot of things for Merkel and EU.
I also remember 'calculating' back in May, that if either Ireland or Spain went belly up, in the interim, then it’s all downhill (more quickly) as Germany and Co. goes bad.
Funny thing is, when Greece was rioting in April and upsetting Angella in May, and everyone was talking about the PIIGS being basket-cases, NOBODY was pointing to or even talking about Ireland going bad. Ireleand was considered the least risky of the PIIGS back then. The one country that was taking its lumps and 'doing it right', via initiating its own austerity and depression, without prompting (like a good, civilized and responsible little country).
Boy, did that change!
(and now Spain is the one people are less concerned by?)
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Anonymous-
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The dollar/euro fiat amounts are, of course, interesting but , at the end of the day, its political. How much austerity are the Greeks, Irish, et al, willing to endure?
Once there are elections, my guess is its all over for the Euro. People won't stand for ECB/IMF/EU rule.
Yes, exactly, well said: "How much austerity are the Greeks, Irish, et al, willing to endure?"
That Guardian dot chart tells it all. Five hundred billion pounds of foreign exposure to Irish banks. This bailout of 80-100 bllion Euros looks like a drop in a leaky bucket.
wtf - they approved 1T, so you think it should have been 10T?
Bernanke is warming up the rescue helicopter again. No worries!
http://www.youtube.com/watch?v=Fyq7WRr_GPg&feature=player_embedded
Nigel Farage tells it as it is.
All monies are a farce. Some think they can play the game, but frankly only the big guys who manipulate behind the scenes are the real players. We are just pawns used in a game we have no control of. FRN's, PM's, etc. will soon be worthless, yet the government will make damn sure that what evere takes their place will be the only "cog" in the machine. I know for a fact that the powers that be have already drafted contingencies that will effectively ban ALL PM's or other forms of "currency" not within the scope of the approved currency.
Remember this: when the shit goes down you only have 3-6 hours to get out of any urban environment before complete lockdown comes. Don't think this is coming? There are lots of people scared shitless about what comes...
https://www.gunsgrubandgold.com/forum/index.php
So, I can take my European Vacation on Jan 14-16th?
The dollar will max out then? For 48 hours?
The infinite CDS blackholes must be "cleared", which they made impossible to do. All the money in the world, cannot be continuously poured into these "banks" CDS, Sorry!
Stop all CDS margin calls now. Declare all CDS Null and Void. Good Luck.
Make Dec 23rd the day we all sue Ben in small claims court for 2 years of interest lost on money market and savings accounts. I think it'll send the right message