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Trichet's "Quantum Leap" About To Create Tremors In Europe
More fireworks out of Europe, following in the footsteps of the disclosure about Deutsche Bank's dramatic underfunding and need to raise capital, is JC Trichet's stunning announcement that Eurozone members that break the region's rules on public finances should be excluded temporarily from Europe’s political decision-making, according to the FT. Obviously, where there is smoke there is fire, and the ECB president has sufficient reasons to make this demand. It can only mean that major European political turbulence is imminent, precisely as we had been expecting. That it coincides with the end of vacation season is also right in line with our expectations. In essence, JCT's proposal will make a the explusion of member countries symbolic - they won't be fully thrown out, but for all intents and purposes, will be (while still lacking their own monetary independence: the worst of all worlds). That this will not inspire any confidence in Europe is beyond any doubt. Somehow we don't expect a massive surge in the EUR any time soon (and predict a very stressful week for Phillip Hildebrand who will soon be battling with USDCHF parity and a EURCHF in the mid 1.20s).
More from the FT.
Greece’s spiralling public debts, which erupted into a full-blown crisis in May, called into question the long term future of the eurozone. The ECB has been in the forefront in lobbying for tougher rules – backed by sanctions – and the independent monitoring of public finances.
The Frankfurt-based institution has rejected the idea of a eurozone member ever being thrown out. But Mr Trichet said that the “temporary suspension of voting rights is something that should be explored”. His proposals could run into trouble, however with member states – especially as it is not clear that the withdrawal of voting rights would be possible without changing EU treaties.
Mr Trichet said the eurozone’s resilience had been underestimated. “I don’t think that the euro area was close to disaster at all – seen from the inside.”
He went on: “I know how Europe functions. I know how the constellation of authorities functions … Seen from the outside, I would say that it’s always difficult for external observers to judge and analyse correctly the capacity of Europe to face up to exceptional difficulties.”
The ECB president also suggested gloom about the US economic outlook might be overdone. “There is a mood which seems to me too negative. That’s my own personal feeling.”
The ECB president travels this weekend to Basel, Switzerland, were he will chair talks on new “Basel III” capital rules for banks. He refused to comment in detail ahead of the meeting, but warned banks that they could not in future expect the world’s taxpayers to put at stake such huge sums in rescue packages as in the past three years. “We cannot do that twice. The people in our democracies would not accept that.”
He also said that “we need the same rules at the global level” and described the rise in importance of the Group of 20 summits, which also include China and India, as “one of the major structural transformations of global governance over the last three years”.
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No political input if you don't meet the economic rules?
Why not just call it "Germany"? Somewhere in hell the nazis are kicking themselves. That's all we had to do?!?!
You're assuming they aren't alive and well, and firmly in control of the EU and US.
I guess they edited the ending of the Last Crusade to make it look like the Nazis lost.
http://www.youtube.com/watch?v=36WEn-9zs1U
He chose...well.
The game was rigged from day one.
We fucked you. Now service your debt denominated in Euros and shut the fuck up. Because you have no say.
It's all over except for the rubbing of noses in the shit to make sure they are sorry for breaking the rules. I loved the following arrogant declaration, which I modified slightly.
How about calling it "Luxembourg"?
Deutsche Bank´s "dramatic underfunding" ? So what ? A couple of billions more needed to strenghten Tier 1 ? Takes them 24 hours. Done.
Yeah, I'm not getting this whole "underfunding" thing. Isn't Deutsche Bank on the list of the foreign banks Bernanke secretly gave hundreds of billions (or was it trillions? So hard to keep track of what the Fed is doing with my money) to under the table ...?
Machinations Bitchez!
What's even more amusing is the idea being floated that countries that violate budgetary rules will be fined. Uh, how do you collect from the insolvent?
The EU equivalent of double secret probation?
Interesting timing. Greek restructuring cannot be too far away now...
DoA ... France & Italy will block this as they weren't under Maastricht rules anyways for several years
Lots of news here at ZH about Europe lately. This will be an interesting Autumn over there. If they have problems, then I expect we will have our own (with California kicking them off).
After one last trip (it is our 25th Anniversary), my wife and I are going into lockdown mode. No more trips to Europe until our accounts start going up. I will have to ask my (very few) European friends for their anecdotes...
We two boomers are digging in. We are OFF the ship.
Fuck you. I really, really despise you boomers. You allowed the current economic shitstorm to become this bad, when you should've done something about it when you were my age (22).
Instead, you just kept riding the easy gravy cruise ship, enjoying classic mustangs, the beatles, and all of the glory days of America.
What do I get? State owned motor companies, "musicians" such as flo rida, and a crumbling empire.
One last trip to Europe, huh? I haven't even had the opportunity, because I've been working my ass off just to make enough money to survive. I doubt I will EVER have the opportunity, because of YOU.
This sort of attitude will become more and more prevalent amongst young people as the situation worsens. Rounding up energetic, able bodied, restless youths and pointing them at you old fuckers will be extraordinarily easy.
Do us a favor, save us some trouble, and just shoot yourself now. You've had your chance in the world, and you have fucked it up beyond belief. It's our turn to run the world, and if you will not go peacefully into that good night, you will be forced.
Dont trust anyone over thirty.
You're correct. We over 50 years of age boomers fucked things up good. So when are you going to burn the place down? Where are the riots and protests? Where is the civil disobedience and text book burnings? Where is the rebellion? I don't see shit from those under 30. Nada. Zip. Zilch!!!
If we're going to generalize here, all I see are a bunch of narcissistic naval gazing teens and twenties bitching and complaining, but doing nothing to change the system. You're caught up in the same corrupt system we are. We're already fucked and by our own hand. If it goes down, it's taking you and your iPod with it.
What are you going to do about it? I'm trying to fight the system from within by waking some minds. You should be fighting the system from outside by burning the fucker down. Where the fuck are you?
Amen, brother.
Faith without works is dead.
+1000 the 20 something pukes don't have the motivation or focus to pull off real change...Pretty sorry ass bunch of college 'thinkers' we have out there to let all that has happened in the past 2 years pass without some sort of call to stop the banksters....oh yeah, what they really want is to work at GS, JPM etc any way and F#$& grandma and grandpa....
Listen, I'm sure you enjoyed that little rant that you wrote. I hope it made you feel macho and cool... After all, your generation was well known for rebelling and trashing the f-ingplace when you didn't like something. Did you ever think, perhaps, our generation has a different way of dealing with things? A unique way.. our way. It is the insane passion you are promoting that has fueled the rise in short term thinking on all levels that put us where we are.
Our generation will be lucky if we escape with half the opportunities and quality of life your generation was fortunate enough to have. We are facing SEVERAL headwinds that will insure our relentless uphill battle for many years to come. (that I don't think we deserve) Lastly, we will be paying YOUR social benefits... benefits I can guarantee we will never see.
Sadly, we are all in this together as we are all citizens of this country. (for U.S. readers) You calling 20 somethings "pukes" doesn't get us to where we need to be. A little more respect would be appreciated (on both sides). We are running out of time.. if we haven't already! We need more coming together of ideas and making of plans and less... blind hate.
It's fine, Costa Rica is a rather nice place to live. You should take a look at moving there.
Did you ever think, perhaps, our generation has a different way of dealing with things?
Yeh - If really, really, angry, your generation will use Ipods to write a flurry of angry messages on Twitter and Facebook, then cower in fear for days worrying about the HR department at the cubicle farm where you pretend to work picking them up!
Pussies get fucked over!
Good one!
a-fuckin-men... and im 24.
jerk! ;)
- silver bitchez.
"Where the fuck are you?"
He's standing on a street corner, IPOD fully charged, one hand keeping his pants from dropping to his ankles, trying to send a message to ZH about how it sucks living in his Boomer grandfathers basement because his parents kicked his worthless ass out on the street.
I think ;-)
I am working three jobs (in the hopes that I can earn enough dollars to buy everything I need [food/ammo/gold, mostly ammo] before dollars become worthless). I have no time for iPods, iPads. I don't own a smartphone. I don't have a facebook. No myspace. (The above qualities are the result of a lack of college "education").
I can do nothing at the moment, except work. My opportunity is not here yet; it is not yet profitable to shoot at rich, old fogies such as yourself. However, you are collecting gold nicely, which is much easier to appropriate than electronic $.
What am I going to do about it? Have you ever read Machiavelli's The Prince? How about Sun Tzu's Art of War? I'm waiting for Fortuna to bless me with her presence; I will be fully ready for her graces when the opportunity presents itself, ie, when the iPod toting, living in Wall-e world on facebook 24/7 members of my generation start rioting.
You seem to enjoy generalizing; unfortunately, it will work far better for me than it will for you. I will simply point the rioting dimwits in your (baby boomers') direction, and profit.
I do not want to "burn the fucker down." YOUR generation has burned it down for me. All of the decisions, mistakes, and paths taken that led to our current situation were made when the sperm/egg cells that produced me did not even exist yet.
I was born into hell, an empire already suffering the slow burn of hellfire. Because of your mistakes.
Nice try though, CD. Now do us intelligent, ambitious, clear sighted youngsters a favor, and off yourself now.
The zerohedge responses to my initial post have been encouraging. Slight generational antagonism is already present. This will erupt into full-blown rage as soon as food is scarce. Beautiful, simply exquisite.
come on ! get off your high horse, thats a total crock.You think it didnt seem the same way to the boomers when they were young? ( hmm nuclear war sure beats a lower standard of living) If you have the chops, you will survive and prosper----if not, its your fault, not someone else`s. At least you are angry and thats a start---now quit whining and get out and produce.
What makes you think I'm unemployed? Don't make assumptions, you are far too stupid to assume correctly.
Chin up you whiney punk. Chaos = Opportunity. Stay alert and work smart.
Lots of companies and innovations happened in the great depression when the big players crippled themselves and were too busy fighting change.
Don't bite the hand that feeds you. It is easy to judge the baby boomers. But if you were in their shoes you would have done the same thing. If some big haired blondie offered you some blow and a quickie in the disco bathroom.....you'd have done the same thing.
For the record I an too young to be a boomer and too old to be an Yer.
Our rebellion is creating, not destroying....some examples, snowboarding, home video games, the current iteration of the internets
LOL. You are myopic on many levels.
I think your issue, willy, is not that the boomers fucked everything up, but that you didn't get the chance to enjoy the "Golden Age" that was 1980-2008. I have to agree with CD, that what I mostly see from the 20-30 crowd is disbelief that their Gender Studies degree won't provide them with a cushy job at a non-profit somewhere. When the going gets tough, your generation buys a new iPhone and moves back home with Mom and Dad.
Yes, that is the current prevailing attitude. Things will change quickly, though.
You know, I hope you're right. Change won't come from the boomers. There are a few exceptions, but the prevailing attitude is they want their benefits (social security, medicare, etc.) in full and screw the next generations.
Yup. That is why I feel no remorse for planning on shooting them and taking their gold.
The constant carping about the "boomers" just reveals how powerful the MSM is, and how little people think about costs and demographics: It isn't the boomers who hit paydirt, but the SILENT GENERATION, those too young to fight in world war II, but born before 1946. THEY are the ones who've received the fat pensions, extravagant returns on SS and Medicare 'con-tributions' and housing price returns. Just as the boomers reach SS and Medicare age, the money is gone! They (we) will see nothing but service cuts, SS cuts, housing-price falls, and private pension shrinkage. But does anyone ever point to the Silent Generation? The ones that let Vietnam rage, while not taking part but instead sending us? The ones who made the big money off the '60's 'youth culture' BS? No.
Good points; however, from a youthful point of view, all you old timers look, speak, and act the same.
I foresee great anger towards anyone over the age of 40, in 5-10 years.
"Silent" or "boomer," it doesn't matter. I entered this world and found it entirely fucked up. Who is to blame? No one but previous generations.
The ECB president also suggested gloom about the US economic outlook might be overdone. “There is a mood which seems to me too negative. That’s my own personal feeling.”
Glad to know financial assessments are done via 'feelings'.
Paulson kept going on about fannie and freddie being in no bother despite their own team of accountants taking years to pore through the books but he could wave his hand and say it was all okay... until shortly afterwards it came crashing down.
Words are just that for policiticans... hot air with no substance, Hopium for the masses, they are just massively overpaid drug dealers
Deutsche will raise capital for acquisitions/bolstering Tier 1. This is perhaps a sensible move to get in ahead of other contenders for raising capital, and before a market correction. Its not necessarily indicative of a 'problem'.
http://noir.bloomberg.com/apps/news?pid=20601087&sid=aUIxOxM14LQ8&pos=1
As for Trichet's comments, what else was he going to say ? 'OMG, we're so fucked !'. No, its a non comment, I think. A bit of sabre rattling for the periphery to keep them trying to adjust and take the pain. Nothing to see here, move along.
These countries are screwed for years anyway. Deflation in wages is the only way for them to regain competitiveness versus Germany. I doubt the Germans care too much as long as they get to export at an artificially depressed exchange rate for a while longer.
"Deflation in wages is the only way for them to regain competitiveness versus Germany."
Seriously, I don't care if all they get is a bowl of rice and a cup of soup a day, there is no way I am going to buy a car made in Greece..
The deflation in wages is not about making them competitive, but rather making them solvent.
I was merely thinking about whats needed for a whole host of imbalances to be fixed within Europe, and wage deflation in the periphery is the obvious answer. Plus maybe producing something people want, other than tourism. As for solvency, they have got NO chance at all. Default, restructure and civil unrest is the future for Greece.
Deflation in wages is the only way for them to regain competitiveness versus Germany
Q: How will the current mess of bank loans and rising taxes needed to pay sovereign debts get paid with falling real wages?
A: They will not!
If Greece desire to be "competitive", they should just buy CDS on their own debt and default; An added bonus is that this will hurt the Germans and the French a lot more than it will Greece.
They could raise corporate taxes on higher sales volumes at more competitive prices. But its irrelevant, just theoretical. I cannot see a way out for them other than default either.
Europe issues? The machine will fix the problem. Rally on.
I seem to recall that France was one of the first ECB countries to ignore the rules on government deficits. And that Germany followed a bit later. I wonder which countries haven't broken them.
"we need the same rules at the global level"
(our rules everybody follows mmmkay?)
It worked sooooooooo well here, we might just extend it to everybody!
No political voice.....
Seems our friends across the pond've forgotten about our relationship with Great Britain some 200 years ago.... something about taxation without representation.
I usually like to be measured, but this takes the biscuit. I feel a rant coming on - for which I apologise in advance.
I'd like someone to tell me if I've got my facts wrong here:
Trichet is the unelected president of an organisation put in place to control a currency that no-one voted for.
This is organisation is the tool of a self appointed government that most Europeans don't really want and held together by a constitution people voted against.
That government has a president who also isn't elected, but by being Belgian is very low profile.
Now Trichet says "You know that slightly warm and fuzzy democratic feeling you have because some of your politicians can turn up to that useless facade of a EU parliament - well, fail my rules (whatever they are today) or else you lose your self determination.". I'd be surprised if he later slips out with: "Hey! Don't get upset with me, it was Rumpey's idea!".
What a bunch of idealistic, ignorant, arrogant Donald Ducks who have no place managing coffee shop let alone a continent.
And breathe.
As a prior ex-pat who's lived amongst "them" for an extended time, I'd say youse gots it spot on!
+ Bazillion Drachma when reissued.
Well put! I just dont think they are ignorant. They are fully aware and complicit in this crime. The sooner the Euro and the EU get terminated the better.
Thank you. I usually try to be a bit more coherent than that, but it was difficult to put together a decent post whilst swearing and bashing the keyboard in disgust.
I had the displeasure of discussing Trichet's perverse plan with a German just now: "How else would you persuade those countries to behave properly".
Mind you, his parents were part of the generation that in 1938 supported the German national call of: "Czecho, yeah, part of that's ours - but we might as well take the lot and give them all a proper government. And while we're out and about playing Jeux Sans Frontières, those Austrians could do with a bit of German Chancellorship as well".
Anyone got any spare hopium? I'm fresh out.
Good rant, however, you breathed too soon, check this out - http://www.telegraph.co.uk/news/newstopics/politics/7958202/Surge-in-Britons-exported-for-trial.html
The EU is an incredibly insidious organisation.
Blunkett was the consequence of an equal opportunities policy gone too far. He must have been. On reflection I'm surprised they didn't make him an air traffic controller.
Thats so bad, I can't even begin to think how to make fun of it. Goddamn Eurofaggots.
Judging from the junk you got, it would appear that you upset a religious gay Europhile with no sense of humour. I'm sure you'll get over it.
To me, the old Europe died the day the Irish ratified the Lisbon treaty, I figured the Irish would be tougher to swindle than most of the rest of the EZ. The death of the EZ at the hands of it's own will be ugly and have many unintended consequences that will effect nearly everyone on the planet. That so few people are willing to stand up and say the emperor has no clothes and the Lisbon treaty is a farce of a document that dooms once great cultures is a testament to how successful the UN dis-education and propaganda campaigns have been against rational economic and social policies worldwide. It took the slaughter of the 10s of millions of innocents in 2 world wars to sufficiently confuse and scare the populations of europe to accept the UN and EZ and IMF/BIS control, I wonder what it will take to wake up any remaining rational populists in the streets of the EZ to muster an viable alternative to the Facist Idiot Egomanics in Brussels...
Self interest will win the day.
As people in the south become more desperate they'll elect more extreme politicians. Eventually they'll leave the EZ and the EU will look pointless. You are right to say that it will affect a lot of people.
It's just a shame that no-one will ever be accountable for the carnage their naive dream will bring about.
All too eerily reminiscent of pre-War diplomacy in the 1930s where small countries get all too easily fed to the sharks to allow the bigger countries to party on. Imagine the consequences of a "quasi-expulsion": doing business in such a place becomes a nightmare as a fog of uncertainty descends. Big political risks too.
Bottom line: any threat to globalism, any sign of strain on the frozen smile of governments threatens all other economies, particularly those that are in debt up to their eyeballs. If anybody in the green wall of silence starts to get grouchy, then there's a chance that all bets are off and the hourly recycling of the mountains of debt stops. And that, folks, is the 21st Century equivalent of The Bomb Paranoia of the late 20th Century.
When there's even the slightest hint of a soupcon of a chance that the global system could unravel, that triggers huge anxiety because all the big banks are broke, all the governments are in huge debt and all citizens are feeding on the teat of money printing to support the debt.
There's just not a lot of wiggle room left. Gold is clearly the favored safe haven because there's no telling which currency could blow up. Even those of creditor nations like Japan and Switzerland could get hurt if their trading partners and political cronies are in the soup. They'd have to face a brave new world alone.
And a weak 30 Yr Bond auction today isn't helping boost confidence in the debt system. Were are the troops when you need 'em?
It is not fair putting these two countries in the same sentence! Switzerland is a true creditor to foreigners and its own citizens. Japan may be a creditor to foreign nations, but owes its own citizens 200 % of GDP. Japan is screwed, Switzerland less so.
Quote du Jour
Merde, alors.
-JCT
...and that is why the PIIGS need to secede the EU, the euro, issue their own currencies and default on all their debts. The PIIGS screwed up, agreed. They ran too much debt, agreed. But now are hog tied in a system that guarantees their insolvency and makes them slaves to German Banks and German monetary control. Hmm, smells like reverse post WWI Germany to me. This is a situation were European bureocrats and German bankers are fleecing everyone and are not afraid to establish an open dictatorship to get their way. The PIIGS are now slaves to the rest of the EU. Only two possible outcomes, the PIIGS secede, default and start over or they declare war against the northern EU countries and invade them for land and resources. Although I don't think the Greek army would be much of a challenge to the Bundeswer, the mere threat of violence might get the EU to back the hell down and let them reset.
Let's get that #uckin firebrand that was on yesterday (Farage), working on helping Trichet. I'd bet he'd take a buggy whip (or a Pole) and chase those temporary countries out of the room - mp3 players and all.
Global governance... only in the mind of the sick and perverted Mr Trichet and his "enlightened" insiders.
Don't forget that in order to rebel and drive societal change, they will have to put down their game controllers and come out of the basement. Ounce for ounce at age 22, boomers were far more ready to kick establishment's ass. Tours in Vietnam made you learn how to pray and made men out of you.
You got to pray to God, we get to pray to the Establishment. One never follows through, and the other never follows through and bankrupts you.
We are an ignorant bunch though, I'll give you that.
Glad. It hastens the demise of the Euro and the appreciation of gold.
can i just say that Trichet made similar comments in late June? this isn't news.
Everytime I go to short a currency, the problem is always "Against what?"
The Weekend at Bernie's schedule picks right back up where it left off .. well .. almost
If Greece has its voting rights taken away, it may take offence and walk out of the EZ.
Maybe that's what Trichet et al. are hoping for/conniving at?
Better they should walk than that a hard-to-engineer consensus be forged to push them out.
Whats going on with eur/chf this morning? Did we have some intervention or what? Pair is getting gunned like a mother f'er.
You think you,ve got it bad in the US,the EU is totally talentless and out of control,trouble is no one can force any actions unless they stop paying.What with a "Low Grade Bank Clerk" and "Everything,s Bright and Beautiful" Trichet its a total tragic comedy more like a Punch and Judy show but with ultimately tragic consequences.
Thank u, i found this for a long time.
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