Romania

One European think tank which has been spot on in its skepticism over the past two years, is OpenEurope. Below they share their views on the next steps for Greece.

Greece is on its way to becoming a "new, critical fragile state," and the ECB and EU will have to keep it on life support for years after it exits the common currency.

Just a phase....

No one likes paying taxes. You’d think.

All you need to read and some more.

The other Chairman (of the fermentation committee) provides his unique color on the market's ability to shrug off the terrible news of the last few days thanks to the lesser-Chairman (of the Fed's) commitment to 'catch us if we fall' which has extended this rally for its fourth day-in-a-row so far. Critically UBS' Art Cashin opines on the tension between an entirely independent Fed and the pending election and the somewhat shocking statements from European Parliamentary President Schulz on the possible collapse of the European Union.

• Obama budget defeated 414-0 (Washington Times) yes, the Democrats too...
• German Central Banker: ECB Loans Only Buy Time (AP)
• Baku grants Israel use of its air bases (Jerusalem Times)
• Japan May Understate Deflation, Hampering BOJ, Economist Says (Bloomberg)
• BRICS flay West over IMF reform, monetary policy (Reuters)
• Five Portugal Lenders Downgraded by Moody’s (Bloomberg)
• SEC Registration Captures More Hedge Fund Advisers (Bloomberg)
• EU Nears One-Year Boost in Rescue Fund to $1.3 Trillion (Bloomberg)
• Consumers plot emergency oil release as Saudi decries high prices (Reuters)
• Japan Plans to Draft Stopgap Budget for First Time in 14 Years (Bloomberg)

How did we get here? An argument can be made that miscalculation, accident, inattention and the like are why things go bad. Those elements do have a role, but it is minor. Potential catastrophe across the board can't be the result of happenstance. When things go wrong on a grand scale, it's not just bad luck or inadvertence. It's because of serious character flaws in one or many – or even all – of the players. So is there a root cause of all the problems I've cited? If we can find it, it may tell us how we personally can best respond to the problems. In this article, I'm going to argue that the US government, in particular, is being overrun by the wrong kind of person. It's a trend that's been in motion for many years but has now reached a point of no return. In other words, a type of moral rot has become so prevalent that it's institutional in nature. There is not going to be, therefore, any serious change in the direction in which the US is headed until a genuine crisis topples the existing order. Until then, the trend will accelerate. The reason is that a certain class of people – sociopaths – are now fully in control of major American institutions. Their beliefs and attitudes are insinuated throughout the economic, political, intellectual and psychological/spiritual fabric of the US.

It was a bad week for freedom loving people, but I believe there are enough patriots left in this country to change our course. We are being buried under a blizzard of lies on a daily basis. We have a choice. We can support the existing corrupt crony capitalist establishment (Obama & Romney) or we can declare war on lies, deceit and misinformation by rallying behind the only person who would truly attempt to reverse decades of corruption, sleaze, incompetence, bloat, debt accumulation, and a warped version of free market capitalism – Ron Paul. He is the only public figure willing to level with the American people and tell them the truth. Will we let the concept of truth fade out of the world? The choice is ours. 

“In our age there is no such thing as ‘keeping out of politics.’ All issues are political issues, and politics itself is a mass of lies, evasions, folly, hatred and schizophrenia. The very concept of objective truth is fading out of the world. Lies will pass into history.” –   George Orwell

• Angela Merkel casts doubt on saving Greece from financial meltdown (Guardian)
• Germany Rejects ‘Indecent’ Call to ECB on Greece, Meister Says (Bloomberg)
• Obama Calls for Higher Taxes on Wealthy (Bloomberg)
• Fed set to push back timing of eventual rate hike (Reuters)
• Recession Looms As UK Economy Shrinks By 0.2%, more than expected (SKY)
• King Says BOE Can Increase Bond Purchases If Needed to Meet Inflation Goal (Bloomberg)
• When One Quadrillion Yen is not enough: Japan's first trade deficit since 1980 raises debt doubts (Reuters)
• Sarkozy to quit if he loses poll (FT)
• U.S. Shifts Policy on Nuclear Pacts (WSJ)
• ECB under pressure over Greek bond hit (FT)

As of Q3 2011, the citizens of less than 20% of the countries involved in Nielsen's Global Consumer Confidence, Concerns, and Spending Intentions Survey were on average confident in their future economic confidence. Not surprisingly, Nic Colas of ConvergEx points out, six were in Asia, the least confident were in Eastern and Peripheral European nations, and furthermore overall global consumer confidence remains 9.3% below 2H 2006 (and 6.4% below Q4 2010) readings as the global economy still has a long way to get its 'mojo' back. Colas points to the fact that 'confidence is an essential lubricant of any capitalist-based system' and one of the key challenges that worst hit Europe (and other regions and nations) face is capital markets that are assessing the long shadow of the Financial Crisis of 2007-2008 and the ongoing European sovereign debt crisis impact on the world's Consumer Confidence.

Fitch joins the Hungary "junking" parade, which centers around the country's former unwillingness to yield to the banking cartel regarding its central bank, which as of today is no longer the case: "The downgrade of Hungary's ratings reflects further deterioration in the country's fiscal and external financing environment and growth outlook, caused in part by further unorthodox economic policies which are undermining investor confidence and complicating the agreement of a new IMF/EU deal."

Several days after the Romanian parliament passed a law to cut pensions by 15% in order to qualify for a critical $20 billion IMF loan, the Romanian Supreme Court found this law was not only unconstitutional, but unappealable (along the lines of what our own SCOTUS will do once the Fed's transparency appeal gets to the very top, resulting in confirmation once and for all that American laws are only made for the benefit of the Federal Reserve). The decision was reached hours after dozens of Romanian citizens stormed the presidential palace "to get an audience with President Traian Basescu." As a result of the Constitutional Court's decision, the IMF loan "may now be delayed, and this will be a big blow to the government of Prime Minister Emil Boc, the BBC's Nick Thorpe reports." Also as a result, Romanian (and by association, neighboring Bulgaria) CDS blew up today and closed +30 to 410 for Dracula's host country, and +20 to 360 bps for the country that served as the reverse engineering center of the former Communist Bloc.

Earlier we predicted that the dirt in Eastern Europe is about to clog up Bernanke's liqduity swap Hoovermatic, but had no idea we would be proven quick so fast. Romanian website zf.ro reports that in a 600 million lei auction conducted earlier, the "Public Finance Ministry has rejected all bids submitted considering them an unacceptable level of offer price." In other words, the Romanian government now thinks it is Greece and it doesn't need money it finds too expensive. In yet other words, this means a failed auction. This follows the news of a semi-failed auction in Hungary earlier today, and a busted auction in Germany two weeks ago. Does anyone know if there is an iPad app that magically makes direct bidders appear whenever and whereever needed, leading to a 10x Bid To Cover at 0.00% for any bond auction? If Jobs can come up with that, we would immediately bet the concrete bunker on AAPL stock.