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Tomorrow Is The 6 Month Anniversary Of S&P's Threat To Downgrade Belgium "Within 6 Months"
While everyone is focusing on the by now default (pardon the pun) assumption that Greece will default, it may be time to redirect attention to the core of the Eurozone, where tomorrow will mark the 6 month anniversary of S&P's threat that it will downgrade a still government-less and AA+ rated Belgium. From December 14: "If Belgium fails to form a government soon, a downgrade could occur, potentially within six months." Newsflash, at least for S&P which appears to need reminding of what garbage it has published in the recent past: tomorrow is the 6 month anniversary of this report. And the conditions for the downgrade are still there. So instead of continuing the "high and mighty" charade with now weekly downgrades of Greece, perhaps it is time to really throw the Eurozone in a loop and remind the world that the line between the PIIGS and the "developed" nations is relaly non-existent.
And in other worthless news, the San Fran Fed has just burned through more thousands of dollars to come up with the brilliant conclusion that according to the Taylor rule peripheral and core Eurozone countries deserve different interest rates.
Figure 3 compares the paths of rates recommended by the Taylor rule for the euro area’s core and periphery with the actual ECB policy target rate. As noted earlier, the ECB’s actual target rate seems to be in line with the Taylor rule recommendation for the euro area as a whole. But things look very different when the Taylor rule is applied separately to the euro area’s core and periphery. The policy target rate recommended by the Taylor rule for the peripheral countries remains negative. The ECB’s actual policy rate is well above the rate recommended by the Taylor rule for the periphery, but below the Taylor rule recommendation for the core. This is not surprising. The core countries are well along the path of economic recovery. But the peripheral countries are still struggling to recover from the sovereign debt crisis. They are implementing a range of reforms and fiscal adjustments, which have impeded overall economic recovery (see Nechio 2011). It is uncertain whether the peripheral countries will be able to grow fast enough to generate the income they need to service their sovereign debt obligations. Increases in interest rates may make reaching such growth levels even more challenging.
Strikingly, Figure 3 shows that a divergence between the ECB’s actual target rate and the rate recommended by the Taylor rule for the peripheral countries is not new, but has reversed itself. Before the 2008 crisis, the ECB target rate lay below the level predicted by the Taylor rule for the peripheral countries. In fact, from the inception of the euro to the 2008 financial crisis, the actual ECB policy rate was below the rate predicted by the Taylor rule for the peripheral countries and more in line with Taylor rule recommendations for the core euro-area countries. During the financial crisis in 2008, the peripheral countries fell into deep recession, which was followed by a debt crisis from which they have yet to recover. By contrast, recovery in the euro-area core has been more robust. These events reversed the historic pattern and positioned the ECB policy rate above the Taylor rule recommendation for the peripheral countries.
When members of a monetary union are experiencing different macroeconomic conditions, a single policy rate is unlikely to fit circumstances in all countries. Currently, the ECB’s target rate seems to be in line with a Taylor rule recommendation for the euro area as a whole. However, economic differences between peripheral and core euro-area countries are sharp. The core countries are recovering, while the peripheral countries still have large unemployment gaps. Thus, the ECB target rate is not in line with Taylor rule recommendations for the peripheral countries.
Yes: this is the quality of content US taxpayers get in exchange for giving the Fed the privilege to print infinite amounts of paper on a whim.
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Moody blues bitchezz
Good music for watching a slow moving Belgian train wreck.
It's only a matter of time until Belgium splits. Then the question is who will pay the tab from the past. I can just see them fighting over the bill in their patriotic fervor to do the right thing - not.
No government? What a strange idea. Who will take care of them?
Belgium has the right idea. Today's governments are merely tools of the elites used to enslave nations. Let the banksters rot in piles of their own AAA excrement. Tomorrow is flag day. Tomorrow is the beginning of #opESR. Burn a flag, burn an effigy of your favorite pigmen.
http://ampedstatus.org/activists-to-occupy-financial-districts-liberty-p...
I disagree. The same was said by my belgian friends.
There IS a government, they just didn't vote for it.
I think Belgium will be split up in the next decade. The northern people (Vlemings - Vlamingen) are going an opposite direction as the south (Wallonians - Wallons). They have a different language, different ideas, and are economically on a different course.
We still have a few in the regions and they are still taking taxes........
Von Rompuy! the eternal Bilderberger designed belgian round about.
Is no government Belgium's version of Austerity? Are the people thriving?
Maybe Greece should try it. Maybe everyone should.
If someone from Holland is Dutch, and someone from Deutchland is German, then is a person from Belgium a Belch?
Just asking.
Belg, or Belge, depending where you are.
Thriving? They're so used to corruption and incompetence and OTOH the "grandeur" of the ruling class that they're ok. They live their lives. But it's not really a coherent country, like France, or Portugal even. It's a collection of somewhat different areas.
One time I was trying to access an ATM in the centre of Brussels. This was in the daytime, normal working day. It took me half an hour, because they only activated one of the 5 machines there. They don't give a fuck, money has been coming in through the EU anyway. Lots of expensive cars (Porsches, Range Rovers) too, but no money to fix the potholes in the highway.
Still... the women have class and the beer is amongst the best in the world.
Long llive the Taylor Rule !
What would we be without it ?
Only a shadow of ourselves.
If you're going to San Fran Cisco.
Happy people with flowers in their hair !
All across the natiooon !
There's a strange vibratioooon.
People in motion, PEOPLE IN MOTION !
There's a WHOLE generation.
With a new explanatioooon !
Granola crowd...
What's there to live for
Who needs the Peace Corp
I think I'll just drop out
Ill go to Frisco buy a wig and sleep on Owsley's floor
Walked past the wig store.
Danced at the Filmore
I'm completely stoned
I'm hippy & I'm trippy
I'm a gypsy on my own
I'll stay a week & get the crabs &
Take a bus back home
I'm really just a phony
But forgive me
'Cause I'm stoned
Nice.
You blinded me with poetry.
Hey Punk, where you goin' with that flower in your hand?
Hey Punk, where you goin' with that flower in your hand?
Well, I'm goin' up to Frisco to join a psychedelic band.
I'm goin' up to Frisco to join a psychedelic band.
Hey Punk, where you goin' with that button on your shirt?
Hey Punk, where you goin' with that button on your shirt?
I'm goin' to the love-in to sit and play my bongos in the dirt.
Yes I'm goin' to the love-in to sit and play my bongos in the dirt.
Hey Punk, where you goin' with that hair on your head?
Hey Punk, where you goin' with that hair on your head?
I'm goin' to the dance to get some action, then I'm goin' home to bed.
I'm goin' to the dance to get some action, then I'm goin' home to bed.
Hey Punk, where you goin' with those beads around your neck?
Hey Punk, where you goin' with those beads around your neck?
I'm goin' to the shrink so he can help me be a nervous wreck...
Maybe the rating agencies are realizing that somebody needs to be rated AAA in order for them to exist. I mean there is no reason to have rating agencies if everybody is junk, as it seems most of the west is. This grading system is a joke within a farce.
The rating agencies are, themselves, a farse. A sick, corrupt, joke.
Any honest rating agency would be shut down within days.
I liked it better when Moody's and S&P were downgrading each other. At least that was entertaining.
Me 2
its allways better to have someone else do your downgrading........
Will Obama invade Belgium? You just know that if the Greeks don't suck the big one, that the US marines will be waving the IMF flag at the Acropolis.
I'm gaining more respect for Ghadafi every day.
Ghadafi is a petty ME dictator so are the assholes running Iran, but I must say if it's between them and the zionists I pick them(temporarily)
You know how I became a so called 'holocaust denier' ? Well Ahmadinejad made me(sort of) I never really looked into this story and believed of official version like everybody else, but than Ahmadinejad came out saying it didn't happen, so I think Wow a president of a country is saying this, he would not simply make a total idiot out of him self, so I went online typed 'holocaust denial' in Google and I was a convert after reading a few(donzen) pages .. so I can't say those people are all evil they have their uses
It's good to have 2 sides of a story, all am saying
The notion of evil is relative in mortal world. The secret is to make your enemy look more vile than yourself. It is this game that the US Oligarchy is losing: as Hillary so aptly said, we are losing the media war to AL Jazeera! Now in Libya, the alternative to Q-daffy, dug up by the west in Benghazi are the same two stooges who in 2007 condemned 8 Bulgarian nurses with trumped up charges for having infected hundreds of Libyan children with the aids virus. Whereas all evidence pointed to pre-infected blood samples bought by Libyan health ministry from doubtful international sources. Convenient fall guys those nurses. Now four years later we pull out the usual suspects, ex Q-daffy henchmen, inquisition leaders, upgraded as saviors of Libyan democracy! This is a stage managed CIA farce which is a classical play of "engineered game change" since sixty years and an insult to due diligence and Libyan self rule.
Now this machine is gaining momentum...SO you are right ...the USA is going rogue again..and the ex-Oligarchs who resist them begin to look clean, as US might is so rule bending and elephantine in china shop!
He (Obama) doesn't have to. The NATO headquarters (administration) is there.
BTW, Belgium will not be downgraded, simply because too much power is concentrated there, and they can't have some meddling yanks embarrass the EU elite. Quelle blamage!
Sadly a whole system built upon flawed thinking and rapacious aristocratic ego centric entitlements.
With a dash of KKK for good measure.
You're breaking the lemmings' hearts, man!!!
"If you have to ask, you can't afford it" -Propaganda meme circa 1983
Debt downgrades are boring and meaningless (Especially since they never get anything right).
They just monitor the CDS spreads and follow the crowd in delayed action mode.
But the banksters like it. Last time Spain was downgraded the tbtf-brigade was very excited because the rater left the outlook stable. So immediately after the downgrade yields on spanish gubbermint bonds headed south. Then followed the uber-rosy "research" reports telling it's all golden now and what not. Well, the honey moon didn't last long as we know but it's just one illustration how utterly dysfunctional the so called market is nowdays.
Sudden Debt, pls drop me a gmail at my name. You are hereby invited to read my blog, and I would REALLY LIKE a Guest Post or two from actual Europeans.
All is cool in Belgium ... a wonderful place, life is sweet here, new government delayed or not. It is the land of wonderful hot waffles with whipped cream.
We don't need no stinking Standard & Poor's.
You left out beer.
Both of you guys invited too. The reason for all the convolution is that I use my real name at my blog.
I heard that Belgium threatened to embargo Trappist beers...so S&P is having second thoughts
and we provide Europe with much needed battle fields. Really what would they do without us? that's why nobody is worried
don't foget the ales...hic!
It would be entertaining and ironic to watch an EUR rally in response to S&P publishing more garbage.
S and P Is probably wishing they hadnt made that six month comment now.
did you ever think you would have the best news site there was?
thanks Tyler, the place rocks.
I'm willing to invest in a country which has no government. Now that's AAA business.
The fact that the rating agences are linking the absence of government with negative outlooks shows that they are political organisations rather than financial ones.
Kudos to TD for the effort to get in front of the news and "call out" those pussy's. Tomorrow's post titled from TD will read: "As Mentioned Here Yesterday, S&P Cuts Belgium Ratings".
Come on baby!
I tought all those cirminal organizations are not the rating agencies... They only supply their opinion and not the ratings. ( according to senat hearing)
They forgot?
The Outlook reminder triggers at 12am Eastern, expect it tomorrow morning.
Greece is a Millstone around the EU's neck...
Or is it vice versa...
And the EU is a millstone around the neck of all who live within it.
Look, Ben has it all planned out, all under control...if all the countries in the world go into excruciating debt then nobody can get in trouble. And if they don't print? Then we send in the Marines to run the printing presses for them. They'll wear regulation IMF uniforms and logos when they parachute in
By the way it appears that Italians have said 'stuff it' to Berlusconi in the little matter of resuming nuclear power in Italy. So you can add Italy to Germany and Switzerland in the Big Nuke Ban-Wagon of 2011....
http://www.nytimes.com/2011/06/14/world/europe/14italy.html
http://www.swissinfo.ch/eng/swiss_news/Protesters_urge_swift_closure_of_...
In contrast, on the other side of the globe, there's a different wind ablowing.
http://ex-skf.blogspot.com/2011/06/fukushima-i-nuke-accident-dairy-farme...
and
http://enenews.com/head-fukushima-health-study-100-msvyr-pregnant-moms-e...
Unfortunately, Belgium still has a caretaker government plus six other governments and a gazillion of public servants to run the show.
yeah, but those other governments are feeling the heat and want out.They know pretty well whats going to happen.
Rating Agencies are the buggy whip in the advent of the car (Internet).
Long moules frites and belgian beer!
Apparently belgium is doing just fine without a government...
Sounds like a plan to me.
Our Belgium government solved this problem weeks ago.
Talking about the Belgium debt problem has become Taboe in the media, thus it's fixed.
And for the government, it's already decided that they'll wait for the 2012 elections to try again.
We also had a 20 billion austerity plan for the next 2 years 12 months ago, which has increased to 32 by now but untill the government can't appoint a comité to look into the options to make another comité that can do the research what would be the right thing to do in our political climat and who should lead the taskforce for the comité on how to do the austerity plans, there won't happen that much.
We're small in size but we can blow up the entire banking industry in Europe with the mess we created in the derivatives market.
Like our former president once said: A PROBLEM ONLY EXISTS WHEN IT OCCURS.
So there's still time to try to fix it untill there isn't anymore.
It's actually a very sound logic which I also use in my work. Just ignore the problem untill everybody forgets about it or untill something else happens that takes away the attention.
Our finance minister also had a luminous idea. Just generate another 30 billion revenue source next year without increasing taxes.... on a 10 million populations thats 3000 euro per head. I have 2 kids, 1 wife so that would be 12000 euro next year for my family... good luck doing that I'd say....
Come on S&P, downgrade this shithole of a country already. Beer is the only good thing we have.
Why not. I'm pretty fascinated to see it happen to.
We deserve this shit to happen to us.
Bring it on, there is no other choice. Any attempt to clean up Belgian govt spending would trigger waves of protests against "Anglo-saxon neoliberal plans" and evil speculators. Do you see any group of experienced politicians who have sufficient backbone to see this through? No, because the majority of them are weak 30-something fils-a-papas who have seen nothing in life except for their political student club and the salons and restaurants of Brussels. They're all lawyers and social science students and they all think they do a good job when a newspaper gives them 8/10 for "good communication style" or "good selection of trendy issues". Even daddy has been winning elections for 5 decades on colonizing the center of opinion and handing out inflated money.
OT: June 19th the next date for new mass protests in Spain
http://www.elpais.com/articulo/english/May/movement/packs/its/bags/but/p...
I live nearby and I'm sure of two things: one, if they do form a government, it will not last, two: they will split in two state, wallonia and flanders. No way around it. We have a saying here: there is only one Belgian left in Belgium, the king.
Belgium is going to split, just watch.
Didn't Van Rompuy once said that the only things that keep the country together are
beer and football?