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On the Ground in Paris... It Ain't Euro Positive

Phoenix Capital Research's picture




 

 

With so much hanging in the balance, I went to Paris, France to witness the results of the French elections first hand. I arrived Sunday morning, May 6th, the day of the second round of the election, which pitted Socialist Francois Hollande against Angela Merkel’s right hand man, Nicolas Sarkozy.

 

Everything was relatively quiet until the late afternoon. But once the elections were announced, the became jammed. Literally. By the look of things, French youth are celebrating Hollande’s victory by picking up all of their friends and then driving up and down the streets honking their horns incessantly. Most cars were packed to the brim with passengers hanging out of every window and even the sunroof waving French flags, singing, or simply yelling pro-Hollande slogans.

 

Indeed, at times traffic intersections become gridlocked as some cars simply parked in the middle of the street so their passengers could get on top of the vehicle and hang out (a few of them even lit cigarettes like they were sitting on a terrace instead of the roof of a fiat).  

 

The Euro has taken the news much more poorly, gapping down sharply in the overnight session to below critical support at 1.30.

 

Stocks… are collapsing. The S&P 500 futures have gapped down from 1,360 to 1,346 as I write this Sunday night.

 

This shouldn’t be a surprise to anyone. Virtually every poll showed Hollande winning the election. And how exactly is the election of a socialist who proposed the following Euro-positive…

 

  1. Proposed raising tax rates on high-income earners from 41% to 75%.

 

  1. Wants to lower the retirement age to 60.

 

  1. Completely goes against the recent new EU fiscal requirements Merkel just convinced 17 EU members to agree to and has promised to try and renegotiate them to be looser.

 

Oh, and Greece also had an election which saw its Parliament swing in favor or anti-bailouts/ anti-austerity measures.

 

Remember, politics, not economics, rule Europe. What I mean by this is that most major decisions in Europe are determined by political agendas that ignore economic and financial realities.

 

This is at the core of the “welfare state” mentality that permeates Europe as a whole. The EU in general is comprised of an aging population that is more concerned about receiving the pensions/ health benefits/ social payouts that were promised to them by the system than anything else.

 

As a result of this, EU voters, who determine EU elections, don’t take action until what has promised to them comes under threat.

 

For this reason, EU political leaders will maintain their agendas regardless of whether said agendas go against financial or economic realities (or common sense for that matter) until these agendas begin to have real negative consequences for their political careers.

 

Well, we’re now at the point at which there are MASSIVE political consequences for the pro-bailout/ austerity measures political agenda. Which means… it’s only a matter of time before the EU in its current form collapses.

 

 

On that note, I fully believe the EU in its current form is in its final chapters. Whether it’s through Spain imploding or Germany ultimately pulling out of the Euro, we’ve now reached the point of no return: the problems facing the EU (Spain and Italy) are too large to be bailed out. There simply aren’t any funds or entities large enough to handle these issues.

 

So if you’re not already taking steps to prepare for the coming collapse, you need to do so now. I recently published a report showing investors how to prepare for this. It’s called How to Play the Collapse of the European Banking System and it explains exactly how the coming Crisis will unfold as well as which investment (both direct and backdoor) you can make to profit from it.

 

This report is 100% FREE. You can pick up a copy today at: http://www.gainspainscapital.com

 

Good Investing!

 

Graham Summers

 

PS. We also feature numerous other reports ALL devoted to helping you protect yourself, your portfolio, and your loved ones from the Second Round of the Great Crisis. Whether it’s a US Debt Default, runaway inflation, or even food shortages and bank holidays, our reports cover how to get through these situations safely and profitably.

 

 

 

 

 

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Mon, 05/07/2012 - 12:16 | 2403655 I am on to you
I am on to you's picture

Very deep analyse from Phoenix!

Offcource people care for thier pensions,they payed/saved all thier life to be secured,aint that obvisely clear.

They didnt expect to robbed by The Goldman Sachs gang,or other socalled risk managers,(or what other stupid name they barer),who is sitting sucking their wealht=Retirement,just beauce they CAN!

 

Easy money for nothing,and beside,somebody tricked(not Tricheeted)the dumb Europeans into some dumb wars,wonder who that might have Been,no not Mr Bean.

Its all the same game,where are the easy money,the ones you get,just by flasing a diploma,from some damned institution called a Business school,and then you are suddently intelligent:

I just learned economics at the school of hard work and the university of the street,not to be robbed by the Can dooos with a high degree in nothingness:Whitewaters Fab Fours Widdows and Orphans Jp,s Goldmens Buffets Mungers Bushs Chenyes Rockenfellers the ex Germans,or Rotschilds The Royal familys the list goes on for ever.

We the workers are the Machine who build this world,the Money Changers just robbed us,cause the were allowed by the corrupted politicians:Just a point of wiew!

The world aint New,and it certaintly Aint Brave,and the human race only has one direction:Me ME and Me!Thats the sick part of it!It aint lack of wealth,its the division!

Mon, 05/07/2012 - 11:44 | 2403532 Jack Sheet
Jack Sheet's picture

Graham you could spend weeks in Paris but it would not improve the qualty of your posts

Mon, 05/07/2012 - 11:14 | 2403401 HoofHearted
HoofHearted's picture

At least all the kiddies in France didn't destroy the city this time. I had to be down close to the Bastille column the Monday after Sarkozy's election, and there were busted up bust stops (now new and improved..without glass) and writing on the column in orange spray paint...

Let's see how those bitchez are reacting in a year or so when SHTF.

Mon, 05/07/2012 - 11:04 | 2403360 dinastar2
dinastar2's picture

France has best wines, best cheeses, best meat,best bread, best best perfumes, higily styled blue blood princess who know how to make love, and 85 million turists per year who just dream of tasting a llttle bit of this Franch charm ;so what's the hell with all your monetary angst ?  You americans are fat beer drinkers, your women are either country slobs or nevrotic gaunt skinny fashion models.We don' t care if you americans sell your home made rope to the chinese hangman for a an extra buck.

Mon, 05/07/2012 - 12:21 | 2403676 Imminent Crucible
Imminent Crucible's picture

France also has: most transsexual prostitutes, worst body odor, most burning Citroens, most Nazi collaborators and worst of all, no Sierra Nevada Torpedo IPA.

Q: Why did the French plant trees on both sides of the Champs-Élysées?

A: So the Nazis could march in the shade in both directions.

Welcome to ZeroHedge, Jean-Pierre. You've watched Smokey And The Bandit too many times. You know nothing about the USA.

Il est temps pour votre salle de bain, mon ami.

Mon, 05/07/2012 - 10:18 | 2403221 TalkToLind
TalkToLind's picture

Hope and Change has a new friend.  Sing along, bitchez:  
http://www.youtube.com/watch?v=xEkIou3WFnM 

Mon, 05/07/2012 - 09:14 | 2403042 PulpCutter
PulpCutter's picture

The Merkozy bailouts were to keep the big European banks (Commerzbank, BNP Paribas, etc.) from bearing the consequences of their foolish wagers. 

Frantic screaming by the corporate media to the contrary, the bailouts had nothing to do with some mythical welfare class.  Europe has had the same tax and social structure for decades with minimal disruption - the problems only cropped up when we deregulated the bankers.

Mon, 05/07/2012 - 10:09 | 2403196 DOT
DOT's picture

Rob Peter, pay the Banksters.

Paul gets his EBT card refilled and couldn't care less.

Mon, 05/07/2012 - 08:32 | 2402934 Widowmaker
Widowmaker's picture

"Remember, politics, not economics, rule Europe."

Economics is 100% fabricated bullshit, dripping in homosexual fraud fiat.

Lets see how the bearded finance-faggot/government central fraud-collusionists handle this one -- oh wait -- MORE FIAT PRINTING!

QE3 by Friday -- it's the only racket in town.  

Fuck savers, fuck the elderly, fuck the youth, fuck the resonable and prudent, fuck sound money, fuck high-employment, fuck the average Joe, fuck your Social Security (spent), fuck creative destruction, fuck the common good -- record bonuses for God's faggots and incorporated racketeering.

"We saved the banks but lost America" -- Traitor Tim Geithner


Mon, 05/07/2012 - 08:40 | 2402962 chunga
chunga's picture

The righteous shall rejoice when he seeth the vengeance: he shall wash his feet in the blood of the wicked.

Mon, 05/07/2012 - 08:36 | 2402944 rsnoble
rsnoble's picture

Yep.

Mon, 05/07/2012 - 08:51 | 2402975 Widowmaker
Widowmaker's picture

Fuck justice, fuck the rule of law, fuck truth, fuck freedom, fuck anything not-incorporated, fuck anything that isn't nailed down from government sponsored robbery through inflation.  Crisis after crisis to "Rob the poor and give to Gods workers."

But hey, those without sacrificed to save the fraud-banks, destroyers of everything but 1% wealth.

There is a reason economics ain't worshipped in Europe, and it's called FASCISM!

Anyone not putting con-nomics and incorporation before politics gets the meat grinder.

Mon, 05/07/2012 - 09:11 | 2403035 Vendetta
Vendetta's picture

"Remember, politics, not economics, rule Europe. What I mean by this is that most major decisions in Europe are determined by political agendas that ignore economic and financial realities."  This is stated in the 'article' as if it is different in the US and the decisions made by US politicians have been horrid, solving nothing.

Indeed, all of that has occurred these last 20 years in the US has been fascist, not socialist.  Some must believe hitler's political party was 'socialist' because they called themselves 'socialist'.  In similar fashion, the demopubicans call themselves 'for the people' and republicrats call themselves conservative and 'pro-business'.  Both are lying, they are 2-headed hydra.

 

 

 

Mon, 05/07/2012 - 10:50 | 2403309 smb12321
smb12321's picture

Thanks for pointing out that a political economy is ALWAYS a failure because economic decisions are not made for market reasons.  Either a failing enterprise is kept afloat, politically-connected folks are given breaks or laws are passed that fly in the face of reality.   As for the socialist/fascist distinction, I view it as minor.   Most socialist states now accept that companies are more efficient and productive than government.  They simply want ownershipcontrol.  In wielding economic power, there is little difference between the two since both long for power.

Mon, 05/07/2012 - 08:21 | 2402915 zippy_uk
zippy_uk's picture

This is a great election result - for the UK. I can see all these French business people liquidating their stocks and booking first class tickets on the Eurostar to London.

Better still this is leading us close to the break up of the Euro - More FX trading for London and a bit more bond issuance I think too. (Plus one or two legal disputes over bond defaults). All good for the UK. If there is a big enough break up we might even get back our fishing industry too. 

Given "old colonial" economies are booming, perhaps it will also pursuade our elite to go back to the furture and forget Europe and it useless federal socialise financier lead state soviet.

Mon, 05/07/2012 - 08:12 | 2402892 Sudden Debt
Sudden Debt's picture

isn't that a cliff in front of us?.... looks deep...

FOLLOW THE LEADER!! FOREWARD!! LET'S ALL RUN IN A STRAIGHT LINE AND CLOSE OUR EYES!!!

FREE MONEY FOR EVERYBODY WILL SAVE US ALL!!

 

Mon, 05/07/2012 - 08:20 | 2402910 Zero Govt
Zero Govt's picture

Yep, nothing like socialism to 'save' a nation 

You can't make this crap up if you tried

Mon, 05/07/2012 - 09:59 | 2403164 DOT
DOT's picture

Everybody for President!

Mon, 05/07/2012 - 08:06 | 2402882 Mr Kurtz
Mr Kurtz's picture

The 57-year-old Socialist has openly admitted that he "does not like the rich" and declared that "my real enemy is the world of finance"~ UK Independent.

 

Translation: Take your austerity measures and shove 'em!

Mon, 05/07/2012 - 11:08 | 2403374 Augustus
Augustus's picture

Perhaps he is so extremely stupid that he does not know who provides the funding for his deficit finance.  He can learn it from observing Greece, or get the painful message from first hand exxperience.

Mon, 05/07/2012 - 09:38 | 2403113 Seize Mars
Seize Mars's picture

Which means, of course, that he is a bank puppet. He will continue the party line: inflation! Spend! Free money! Tax! Redistribute! Command and control. Wage and price controls!

This is exactly what the bank cartel wants and has always wanted.

Mon, 05/07/2012 - 07:30 | 2402839 Bahamas
Bahamas's picture

"

This is at the core of the “welfare state” mentality that permeates Europe as a whole. The EU in general is comprised of an aging population that is more concerned about receiving the pensions/ health benefits/ social payouts that were promised to them by the system than anything else."

I believe Europenas have paid for those benefits, since large part of their salaries are taxed for the mentioned programs.

Mon, 05/07/2012 - 07:37 | 2402853 spinone
spinone's picture

if you give politicians money to save for you for later, you're an idiot to expect to get it.

Mon, 05/07/2012 - 13:28 | 2403948 JeffB
JeffB's picture

Of course it's really more of a pyramid scheme than "savings" it would seem to me.

The governments set up entitlement programs based on need, such as disability, retirement, unemployment etc. and have the taxpayers fund it. The presumption, of course, is that the will and ability of the government, through the taxpayers is sustainable and guaranteed in perpetuity. If and when the current taxpayers fall into the categories/groups of people who need government assistance, it will be there for them.

Of course those assumptions are hardly guaranteed. People should have realized off the bat that debt and deficit levels were unsustainable. Demographics makes things even worse. With birth rates far below replacement levels the current generation will necessarily be supported by an ever shinking taxpayer base.

 

Mon, 05/07/2012 - 07:06 | 2402804 eddiebe
eddiebe's picture

I wonder if Hollande can pull off fucking the people and making them believe they like it?

Mon, 05/07/2012 - 09:23 | 2403076 Arthur Borges
Arthur Borges's picture

Ever since 1945, every time the Left has come to power, it in France is because the national economy was headed for a nosedive and it suited the Right to have it that way on the principle that only a Leftie could look sincere imposing outrageous austerity credibly: "Hey guys! I'm one of you so if I'm tellin' ya we needs to cut back on healthcare and raise income tax on the poor, it's because there is no other choice", is the way the rhetoric goes.

Then too, the Right enjoys recovering power whenever the next post-electoral horizon promises a bit of economic & financial sunshine to bask in.

But yeah, in context, the viability of the euro looks threatened now: at the very least, airlines and smurfs running suitcases for the druglords will love extinction of that currency because the advent of EUR 500 banknotes divided the number of round trips by five or so and were that much more efficient to move around than the USD 100 Benjie bill.

And hey, isn't it all about creating new jobs after all?

Mon, 05/07/2012 - 09:56 | 2403161 DOT
DOT's picture

AB,

Left and Right, as political distintions are meaningless. Might as well say the "6" and the "jello".

The descriptors fail to keep-up with the always changing back and forth within a homogeneous political class.

Mon, 05/07/2012 - 08:22 | 2402903 Zero Govt
Zero Govt's picture

Govt has been doing that for millenia and keeps getting away with it

maybe a Great Depression with 50% unemployment will give the masses enough time on their hands to work out how the Great Depression came about (ie. Govt theft of productive peoples wealth, destruction of free markets and liberty)

Mon, 05/07/2012 - 08:45 | 2402979 ItsDanger
ItsDanger's picture

US had high tax rates during post WW2 as well.  Go look it up.

Mon, 05/07/2012 - 11:52 | 2403556 JeffB
JeffB's picture

What's your point?

1. High taxes don't hurt an economy?

2. High taxes don't cause unemployment?

3. Something else?

Mon, 05/07/2012 - 09:15 | 2403050 Zero Govt
Zero Govt's picture

every Cent the Govt takes/thieves out of productive peoples pockets goes to waste

there is no such thing as good tax (theft)

Mon, 05/07/2012 - 09:45 | 2403136 ItsDanger
ItsDanger's picture

Ahh, hyperbole, nice go to move.

Thu, 05/10/2012 - 14:10 | 2413982 Zero Govt
Zero Govt's picture

not "hyperbole" but simple facts

...not that your leftie Nobel Prize winning economists (cough) can even work that out

Here's a calculation for Paul Krugman: $3 Trillion of stimulus / 0.00% GDP rise

Mon, 05/07/2012 - 06:55 | 2402790 XtraBullish
XtraBullish's picture

Same old same old since 1060 on the S&P - keep crying "Wolf!" long enough and in due course, there will appear a wolf. Anything that happens is CTRL-P-friendly, so as long as it takes a unit of rotting currency to own shares in a publicly-traded business, the per-rotting-unit-share cost of ownership will only increase and if it takes more rotting currency units to own a good business, then that is by definition, a bull market. To more accurately grasp how to protect yourself from Atlas Shrugging more violently, you can subscribe to my newsletter http://www.scaretactics.com or simply buy Ayn Rand's book. We both charge the same.

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