Juncker Says Euro Overvalued, As G-Pap Willing To Consider Referendum On Bailout Measures

Tyler Durden's picture

It appears Jean-Claude Jun(c)ker has been sniffing hallucinogenic Spanish cucumbers again:


The tautological question of whether he is lying we leave to the logicians. What is apparent is that Europe is finally getting pissed they are dead last in the FX race to the bottom. Cue Tim Geithner's strong dollar policy.

And in far more important news, Greece's G-Pap says that he is willing to consider a referendum on the Greek bailout measures. If so, it's goodbye EUR: a referendum has a snowball's chance in a Comcast business channel in passing.

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Alienated Serf's picture

Get ready for competive devaluation, bitchez.


And what exactly is the limitation on the ECB that it just can't print?  Or is that just for eurozone national banks?

Mongo's picture

Jean-Claude Juncker is overvalued. I'd rate him junk!

GottaBKiddn's picture


So then, what did Butthead say?

Ahmeexnal's picture

Butthead just announced they will change for a third time their official story about the source of the E. coli outbreak:


The blatant lie about the source of the pathogen can no longer be hidden. The genetic fingerprint clearly indicates we are dealing with a man-made bioweaponized strain.
And there's no way to confine the genie once it's been left out of the bottle.

Expect Europe to be declared a quarantine zone in the next hours/days.
And now you know why Taylor is long the USD.


oogs66's picture

Credit, which seemed stable early today is now selling off pretty decently.

Cursive's picture

Looks like the secret that dare not speak its name is finally coming out of the closet.

Ahmeexnal's picture

Kinetic monetary action.

qussl3's picture






Cdad's picture

eh hem...that's a "soft reprofiling."

oogs66's picture



Racer's picture

A referendum? Wow the people get to choose for a change?!!!

Oh regional Indian's picture

Heck racer, people have always had choice, always, to suggest otherwise is to do great harm to the legacy of aristrocratic fairness. For example:

a) Rock - Hard Place

b) Frying pan- Fire

c) Shit-Puddle

d) hyper-Inflation_super-Deflation

e) Badder-Baddest

Like that. It's what we've come to for having ancestors who were generationally moulded into the current, obedient, slavish, sub-servient, mechanistic, sexual, apathetic, violent and generally degenerate creatures we have become, as a species.

Present company excluded. But of course. No? ;-)



Ahmeexnal's picture

ORI, I'd appreciate any thoughs on this note:



Seems this is about to happen soon. Like before august 2nd.

Black Forest's picture


Indeed. Between Italian Lira, Spanish Peso, Greek Drachma, French Franc, German Mark, etc.


hedgeless_horseman's picture

Ahh, the glory days.  Such is the price for peace.


hedgeless_horseman's picture

Ahh, the glory days.  Such is the price for peace.


Glitch in the Matrix?

Black Forest's picture

This is 2011. Neither 1991 nor 1933 nor 1914 nor 1618.

Another time, decoupling, open-ended.

oogs66's picture

Junker is just setting up for the spin that it will now be okay if Greece defaults!  He has to change his spin and step one is saying a weak Euro (which we would get if Greece defaults) is now good for Europe!

Bill D. Cat's picture

>>Willing to consider a referendum?

Weasel words at their finest .

alien-IQ's picture

I can't imagine the Bernank is too pleased with this.

fonestar's picture

Keep your powder dry!

...and more importantly demand everyone you know reject any new form of currency issued by the same old idiots.

Hondo's picture

If they rig the referendum I look for the immediate and certain over-throw of the government....possibly violence will pursue.

THE DORK OF CORK's picture

Does he want to fix the euro to the dollar or the dollar to the euro ? - does it matter ?

I for one will welcome the end of our current overlords, freefloating FX currencies - perhaps they can float relative to Gold but not against each other , you simply cannot invest for the long term in such a environment - the banks just keep taking all the cream at the expense of the physical economy.

Perhaps Gold will move relative to each continents interest rate policey......... shit this could get complicated again.............

Fuck it, just revalue Gold to $10000 and lets be done with it.

earnyermoney's picture

Maybe this is the event Mr. Taylor was referencing this morning on Bloomberg?

Ahmeexnal's picture

Confirmed greek default? Could be, but read my post above about the E. coli official story being changed again. Just like the Osama raid story.

Krawallnix's picture

"sniffing hallucinogenic Spanish cucumbers"

lovely, just lovely.

Yen Cross's picture

 Will the ECB raise rates?  I'm on the aud cash rate (statement) and German retail/factory numbers out later. OPEC, is the blind leading the blind.

Black Forest's picture

They won't dare to raise it, in my opinion. It would be another shot in the neck of the EURO construction.

Yen Cross's picture

  BUY the Fact! Trade well B/F. Yen

delivered's picture

Just a quick question but I was wondering what organizations/entities wrote the CDS's on countries like Greece, Ireland, etc? Greece is damn near a default (although the definition of default is another story) and when it finally does bite the bullet and tell the large European Banks that they are SOL, the issuers of the CDS's (alla AIG) are going to have to come up big. Or maybe, they will just look to the ECB to bail them out similar to how GS convinced Washington and the Fed to make good on AIG paper so GS could reap the rewards. Any thoughts?

oogs66's picture

Last I saw there was about 4 billion Euro of net Greek CDS exposure, so if a Credit Event occurs, the damage should be manageable as it has been spread out somewhat. I have to believe banks are now net short via CDS and it is hedgefunds and insurance companies that are long credit via CDS.

CrashisOptimistic's picture

The last you saw, you saw maybe 1/100th of the paper, or not.  They are clearly terrified of it and may have non public totals.  There is no transparency to you on this.

From day one this has been all about the swaps.  It will remain so right up to the moment that the ECB chooses to GIFT, not loan, Greece whatever it takes to avoid the swap trigger.  It has been astonishing to me that Greece, Ireland and Portugal don't understand how strong their hand of cards is.

They can demand a bailout, in the form of GIFT, not loan.  And they'd get it.

Yen Cross's picture

  I'm all over that rumor (sarc on)   It seems some of the {Capital Hillbilly} squad is getting caught with their ( SUSPENDERS) Pun intended!  Around their ankles.

qussl3's picture

Juncker just claimed the EUR was overvalued. Don't think Trichet is willing to make an ass out of him so soon lol.

slewie the pi-rat's picture

referendum = terrorist threat

even juncker doesn't know, for sure.  he is on the teleprompter.  forever. 

USA!USA!  race to bottom. 

yellow jersey, BiCheZ!

Yen Cross's picture

  Hello my Friend! What's the good news? Other than Oscar Meyer on my feed right now.

Yen Cross's picture

  I'm sure DSK is in his self imposed auditorium, saying the same think. The ( FROGS) AKA: North Africa and the Middle East!

johngaltfla's picture

The charts are saying the same thing. This sucker should be trading at 125-130....

jmc8888's picture


Junker says.....Euro needs to print, and they know exactly where it should go...cough....greece (if allowable..which no...right now...until rabbit out of the hat rule change or interpretation)...cough..spain...cough portgual...cough insert all others in line.

ROFL@ ZH's call (with you laugh) that Timmay would use this as a way to accomplish a strong dollar policy....in the minds of the idiots. Stronger dollar through others' policies.  Damn that's a proactive way to do it.  Really get your hands on the issue Timmay. Don't let someone else's printing go to waste.

I wonder how many votes they'd make Greece do?...two and counting for Iceland.

unununium's picture

Timmie?  Is that you?


"Geithner wagged his finger at the largest banks, which play a big role in influencing policymaking in Washington ... Those of you who run major U.S. institutions, you should be champions, and not opponents, of getting stronger persons into these positions"

Ah, same old Timmie.

"over time," Geithner said.


Miles Kendig's picture

JCJ should end those runs to Angie's for snacks. 


Quinvarius's picture

Looks like everyone was set for that strong dollar based on the debt ceiling and no QE.  They will get a lesson in the economics of debt based currency ponzi popping instead.

steve from virginia's picture


A big EU problem is the overriding concerns of 'style' over 'substance'. Nobody wants to do anything dramatic: any action that would scare the horses. That's why all the talk of 'bail-ins' and soft restructurings; the endless meetings and soothing bureau- speak. Perceptions are what matter, not reality which is simple.

Both Greece and the EU are broke.

A change in strategy is desperately needed, but style constraints interfere. Effecting the wrong change will accelerate the ongoing Greek bank run. It is hard to see from here what actions that will not push euro deposits out of Greece (and into Swiss banks/francs. Go over and look @ those futures chartz).

PMs are being supported by flight, too ...

Bank runs are contagious and they snowball. A weaker euro is counterproductive as it amplifies German mercantilism which is the 'why' behind the PIIGSs' problems in the first place. Why did Greece & Co. become grossly indebted in the first place? So as to buy German luxury products and build German- friendly resorts. The German banks did not complain about the dodgy money they were making from loans to Greek businesses or the government. Greece has defaulted repeatedly, why the surprise now?

A Greek referendum would accelerate the stampede out of Greek banks and government collapse. Greek government is between a rock and hard place.

Put another way, Greece is broke, but it maintains a certain illusion. This issue is whether and how costly to continue w/ the illusion? That is what the 'lower euro'- speak is about ...

Boop's picture

European Banks’ Capital Shortfall Means Greece Debt Default Not an Option

Bloomberg, By Aaron Kirchfeld and Elena Logutenkova - Jun 6, 2011 7:01 PM ET

A failure by European regulators to make banks raise enough capital to withstand a sovereign default is complicating efforts to resolve Greece’s debt crisis.

The “fragilities” of Europe’s banking industry mean a Greek default isn’t an option, European Union Economic and Monetary Affairs Commissioner Olli Rehn said in New York last week. By delaying a decision some investors consider inevitable, policy makers risk increasing the cost to European taxpayers and prolonging Greece’s economic pain.

“European officials are trying to buy time for the troubled economies to get their house in order and the banks to be strengthened,” said Guy de Blonay, who helps manage about $41 billion at Jupiter Asset Management Ltd. in London.

While estimates of the capital shortfall vary, the vulnerability of European banks to a sovereign shock isn’t disputed. Independent Credit View, a Swiss rating company that predicted Ireland’s banks would need another bailout last year, found in a study to be published tomorrow that 33 of Europe’s biggest banks would need $347 billion of additional capital by the end of 2012 to boost their tangible common equity to 10 percent, even before any sovereign default.

Boop's picture

European Central Bank risks being 'wiped out' by bail-outs

The European Central Bank is "looking increasingly vulnerable" and may face "hefty losses" as a result of propping up indebted eurozone countries, a leading think-tank has warned.

The Telegraph, By Louise Armitstead, June 6

The International Monetary Fund's partner in the recent international bail-out missions is itself in danger of becoming a liability, Open Europe has argued.

In a report published on Monday entitled A House Built on Sand?, Open Europe has calculated that the ECB has a total exposure of about €444bn (£397bn) to "struggling eurozone economies".

The bank is now "23 to 24 times levered" as a result of bailing out Greece, Ireland, Portugal and Spain.

The London-based think tank argued: "Should the ECB see its assets fall by just 4.23pc in value . . . its entire capital base would be wiped out."

Open Europe said: "Hefty losses for the ECB are no longer a remote risk." It added: "The ECB is ultimately underwritten by taxpayers which means there is a hidden – and potentially huge – cost of the eurozone crisis to taxpayers buried in the ECB's books."

Observers in the City said the views were alarmist. One analyst said: "The ECB is backed by all the central banks in Europe, as well as taxpayers."

Urban Redneck's picture

The FED is backed by all the regional banks in USA, as well as taxpayers.  Same shit, different continent, with a transitory difference in their respective laws about monetization of debt. 

What is the leverage employed on the FED's balance sheet, and since it uses a mark-to-myth market value on assets, what is the notional value of exposure?   


topcallingtroll's picture

Junker is probably tired of the whole shebang.

At least with a referendum it is over with, and Junker cant be blamed.

He is rich anyway, so this wont affect him. His zeal in the matter has not been out of personal financial interest and I am sure he is ready to.call it quits.