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Market Plunge Guaranteed With Critical German Vote Tomorrow; Merkel Warns Of EMU Failure If Bundestag Vote Doesn't Pass

Tyler Durden's picture




 

Just like two Thursdays ago the market plunged to give Europe a heads up on what will happen if the $1 trillion bail out contemplated that weekend is not passed, so in advance of tomorrow's critical Bundestag vote to ratify the European aid package we will likely see another unprecedented market collapse. Why critical? Dirk Schumacher from Goldman explains.

Merkel warns of failure of EMU - Bundestag to vote tomorrow on help package. In yesterday's debate in the Bundestag of the €750 billion help package chancellor Merkel warned that "a failure of the Euro would be a failure of Europe" and that the current crisis is "existential" and that "this test needs to be passed". No doubt that these dramatic words are meant for those coalition MPs that haven't been fully convinced yet to approve the help package in the Bundestag tomorrow.

The ruling coalition of CDU/CSU and FDP has 332 seats in the Bundestag while the opposition has 290 seats. Several MPs from the coalition said that they will vote against the bill but we see only a very small risk that the bill fails in the Bundestag on Friday. Note, that a majority of votes cast is sufficient for an approval, which means that any abstention from opposition MPs effectively counts as a "yes". Judging from yesterday's debate it is not clear how the opposition will vote, but we are sufficiently confident that MPs are aware of the seriousness of the situation. The Bundesrat, the second chamber of parliamanet, will also vote on the bill Friday afternoon. There is also only a very small risk that the bill will not be approved. FT Deutschland is citing the representative from Baden Württemberg saying that "there is little doubt that the bill will pass". Note, that the majority in the second chamber has not changed yet despite the loss of CDU and FDP in the state of NRW as the new NRW government has not been formed yet.

There will be a G20 conference in Berlin today on financial market regulation. No official statement will be published afterwards and most finance ministers from the G20 are missing, though French finance minister Lagarde and EU Commissioner Barnier will be present.

 

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Thu, 05/20/2010 - 08:48 | 362713 Kina
Kina's picture

No end of black swans now circling.

Thu, 05/20/2010 - 08:58 | 362741 LoneStarHog
LoneStarHog's picture

Maybe they can form their own racially-oriented caucus, as it would be so in vogue and total ecstasy for contemporary liberals.

Thu, 05/20/2010 - 08:59 | 362742 Cursive
Cursive's picture

Awesome imagery.  This would make a great gift from the ZH store.

Thu, 05/20/2010 - 09:09 | 362773 Whizbang
Whizbang's picture

Wait, isn't a second "black swan" event impossible?

Thu, 05/20/2010 - 09:33 | 362818 mephisto
mephisto's picture

If a market crashes in 10 minutes and recovers in 5, did it crash at all? If it didnt, was it a black swan?

Dont know the answer, just throwing it out there. 

Thu, 05/20/2010 - 11:02 | 362972 Nearing Coleman
Nearing Coleman's picture

Certainly not if all the trades are cancelled. Just stand that index right back up and re-root it.

Thu, 05/20/2010 - 08:55 | 362732 SignsAndWonders
SignsAndWonders's picture

Another factor: suits on capitol hill need another boost from the market to get past the impasse on fin reg.

 

 

Thu, 05/20/2010 - 08:58 | 362733 Sudden Debt
Sudden Debt's picture

people need consistency in their lives

It's time for me to go trash the yahoo board again, it's part of my anger management course :)

Thu, 05/20/2010 - 09:01 | 362744 TBT or not TBT
TBT or not TBT's picture

The euro on the other hand, they didn't need, it turns out.   Au contraire.

Thu, 05/20/2010 - 09:04 | 362754 Sudden Debt
Sudden Debt's picture

C'est la vie. Mois j'ai déjà transférer mon argent dans des comptes en dollar depuis 4 semaines.

Bien bien :)

Thu, 05/20/2010 - 11:58 | 363111 Pope Clement
Pope Clement's picture

Soyez pas con ! De L'or chiennes !

 

 

Thu, 05/20/2010 - 09:05 | 362755 Caviar Emptor
Caviar Emptor's picture

Think some here are underestimating how close to the precipice even the US really is.

Thu, 05/20/2010 - 09:07 | 362765 LoneStarHog
LoneStarHog's picture

Close?  We have already gone over and in the proverbial sense saying, "So good, so far!", as we plunge toward the bowels of Hades.

Thu, 05/20/2010 - 09:26 | 362801 Sudden Debt
Sudden Debt's picture

It reminds me of a movie where that cowboy riding the bomb when it falls out of the bomber while yelling JJIIHhhhaaa!! :)

Thu, 05/20/2010 - 09:38 | 362829 mephisto
mephisto's picture

Dr Strangelove.

Blankfein in a 10gallon hat? Weird image.

Thu, 05/20/2010 - 09:35 | 362824 mephisto
mephisto's picture

Not sure about that, the ZH'ers focus on gold is getting stronger as the precipice approaches, which makes sense, no?

Thu, 05/20/2010 - 09:05 | 362757 ZackAttack
ZackAttack's picture

Where have we heard that shit before?... "Pass TARP or they'll be fighting in the streets over rat meat."

 

 

Thu, 05/20/2010 - 09:05 | 362758 buzzsaw99
buzzsaw99's picture

predictable. goons.

Thu, 05/20/2010 - 09:09 | 362768 john_connor
john_connor's picture

Yeah and what happened after TARP was approved.  CARNAGE.

I'll never forget when Buffett came on TV and said to buy stocks, and then the market proceeded to drop about 20% plus over the course of a few weeks.

Thu, 05/20/2010 - 09:40 | 362838 ZackAttack
ZackAttack's picture

I thought it would've been much more helpful to the investing public if Uncle Warren had disclosed how many puts he'd sold against S&P 1500.

His giving advice to buy, given his conflict of interest, is like an older brother telling you not to smoke and drink because he has a cough and a hangover.

Thu, 05/20/2010 - 09:21 | 362793 Grand Supercycle
Grand Supercycle's picture

 

EURUSD buying support is still evident.

Updates here:

http://stockmarket618.wordpress.com

http://www.zerohedge.com/forum/latest-market-outlook-1

Thu, 05/20/2010 - 09:25 | 362797 John Bull
John Bull's picture

Does anybody know what time "zse Germans" will vote? 

Thu, 05/20/2010 - 10:44 | 362934 desgust
desgust's picture

How many languages do you speak, you asshole?
Mock your mother, fucker!

Thu, 05/20/2010 - 09:34 | 362820 Szydkid
Szydkid's picture

Is it me or are all the swans black this week?  And why is that squid holding a can of spray paint?

Thu, 05/20/2010 - 10:26 | 362910 Thoreau
Thoreau's picture

Merkel is saying one thing in public; but I can't help but suspect that she's singing a different tune behind the scenes. I mean, she's not stupid; certainly she sees the futility of pissing good, potential deutsche marks into the wind.

Maybe a surprise vote tomorrow?

Thu, 05/20/2010 - 15:32 | 363682 Grand Supercycle
Grand Supercycle's picture

 

For several days I have been warning of EURUSD buying support as detected by my indicators, and this has been confirmed by the recent break out.

The proprietary indicators I use can identify trend changes before they occur.

http://stockmarket618.wordpress.com

http://www.zerohedge.com/forum/latest-market-outlook-1

Do NOT follow this link or you will be banned from the site!