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Europe. Is. Finished.

Phoenix Capital Research's picture




 

Thus far, my analysis of Europe has focused on the super-leveraged banking system (26 to 1). At these levels, even a 4% drop in asset prices wipes out equity. That alone warrants concerns of systemic risk.

 

The situation is not much better at non-Financial European corporations. Indeed, the debt situation is so endemic to Europe as a whole that corporate Debt to Equity ratios for ALL of the PIIGS as well as the supposedly fiscally conservative countries of France and Germany are TERRIBLE.

 

 

What I’m trying to point out here is that Europe’s debt problems extend well beyond Greece’s debt. Indeed, the entire European banking and corporate system is over-burdened with debt.

 

The situation is no better for European Sovereign states themselves, which are facing their own debt roll over issues at a time when investors are rapidly losing their appetite for sovereign debt.

 

To wit, Spain, Portugal, and Italy have all relied heavily on the ECB to buy their debt at recent auctions. Germany actually just had a failed debt auction this morning.  And in this environment , these nations need to meet the following debt roll over obligations:

 

 

And this is just maturing debt that’s due in the near future: it doesn’t include unfunded liabilities.

 

Jagadeesh Gokhale of the Cato Institute puts the situation as the following, “The average EU country would need to have more than four times (434 percent) its current annual gross domestic product (GDP) in the bank today, earning interest at the government’s borrowing rate, in order to fund current policies indefinitely.”

 

As I said before, Europe is finished. The region’s entire banking system is insolvent (with few exceptions). European non-financial corporations are running massive debt to equity ratios. And even EU sovereign states require intervention from the ECB just to meet current debt issuance, to say nothing of the huge amount of sovereign debt roll over that is due over the next 14 months.

 

Again… Europe. Is. Finished.

 

The Great debt Implosion will hit Europe within the next 14 months and likely much much sooner. When it dues, we will see numerous debt defaults and restructuring on both the corporate and sovereign levels. We’re also very likely going to see significant portions of the European banking system collapse “Lehman-style” along with subsequent HUGE losses of capital.

 

The impact of this will be global in nature. The EU, taken as a whole, is:

 

1)   The single largest economy in the world ($16.28 trillion)

2)   Is China’s largest trade partner

3)   Accounts for 21% of US exports

4)   Accounts for $121 billion worth of exports for South America

 

So if the EU banking system/ economy collapses, the global economy could enter a recession just based on that one issue alone (ignoring the other issues in China, Japan, and the US).

 

So if you have not already taken steps to prepare for systemic failure, you NEED to do so NOW. We're literally at most a few months, and very likely just a few weeks from Europe's banks imploding.

On that note, if you’re looking for specific ideas to profit from this mess, my Surviving a Crisis Four Times Worse Than 2008 report can show you how to turn the unfolding disaster into a time of gains and profits for any investor.

 

Within its nine pages I explain precisely how the Second Round of the Crisis will unfold, where it will hit hardest, and the best means of profiting from it (the very investments my clients used to make triple digit returns in 2008).

 

Best of all, this report is 100% FREE. To pick up your copy today simply go to: http://www.gainspainscapital.com and click on the OUR FREE REPORTS tab.

 

Good Investing!

 

Graham Summers

 

PS. We also feature four 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 my proprietary Crash Indicator which has caught every crash in the last 25 years or the best most profitable strategy for individual investors looking to profit from the upcoming US Debt Default, my reports covers it.

 

And ALL of this is available for FREE under the OUR FREE REPORTS tab at: http://www.gainspainscapital.com

 

 



 

 

 

 

 

 

 

 

 

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Mon, 11/07/2011 - 17:59 | 1854838 falak pema
falak pema's picture

american graffiti is now american self delusion. I think Indiana Jones had a good whip and a great director. But right now the atlantic pond needs a good whip of sour cream to survive the debt mayhem, both sides un-sunny side up. I bet my money on dim sum.

Mon, 11/07/2011 - 07:02 | 1852354 fredquimby
fredquimby's picture

As I said before, Europe is finished.

blah blah blah

Again… Europe. Is. Finished.

blah blah and more blah.

 

Please bin this tosser Tyler. He is just a self promoting wanker.

I, and judging by most of the comments, many others, are sick of seeing this tool spouting his "come purchase my free advice" shite.

Cheers!

Mon, 11/07/2011 - 02:36 | 1852204 silverscouseparis
silverscouseparis's picture

oh the world is going to end tomorrow but quick!buy me!..my Surviving a Crisis Four Times Worse Than 2008 report can show you how to turn the unfolding disaster into a time of gains and profits for any investor.

europe is a political project to end war in europe.get it.

Mon, 11/07/2011 - 01:07 | 1852091 The Trade Group
The Trade Group's picture

This guy just doesn't give up.... Well, Graham, keep posting...eventually you will be right. Unfortunately, most of your subscribers will be out of money by then.

Sun, 11/06/2011 - 23:14 | 1851893 Yen Cross
Yen Cross's picture

 Europe, " My Little" ,  CONVEX FRIEND.   Is far from finished>

Sun, 11/06/2011 - 21:37 | 1851755 smoked
smoked's picture

Browning  corporations are ruinning massive p/e to equity ratios

Sun, 11/06/2011 - 21:26 | 1851728 Ralph Spoilsport
Ralph Spoilsport's picture

Arizona New Red Sweater

break break

Sun, 11/06/2011 - 11:52 | 1850445 joshtree
joshtree's picture

His Private weath advisory service has an awful record.   The advice is worthless. 

Sun, 11/06/2011 - 11:47 | 1850435 Chartist
Chartist's picture

This moron isn't even right.......Since when does the club med countries represent Europe, unless you're planning a Med cruise? 

One thing I want to add is, if everyone is in debt, then no one is in debt.  Everyone with an ounce of gold knows we have to inflate our way out of this.

 

Sun, 11/06/2011 - 21:27 | 1851732 Nate H
Nate H's picture

wrong

there are two layers to debt: 1)for every debtor there is a creditor - the stress here is only social equality (not an insignificant stress), 2)the ENTIRE amount of debt relative to underlying natural resources - viewed from this lens, the OECD financial world is the creditor and the natural environment, ecosystem services and latent chemical and kinetic energy in fossil fuel stocks are the 'debtors'.  Jubilee either forced or by natural forces will happen on both..

Mon, 11/07/2011 - 00:19 | 1852029 nowhereman
nowhereman's picture

Ah debt, what happens when I refuse to take their call?  

I spoke to my lawyer, there's nothing they can do.

You can't get blood from a stone.

And I'm stone cold broke.

Mon, 11/07/2011 - 01:17 | 1852105 sun tzu
sun tzu's picture

Millions of savers and retirees are wiped out. They no longer have money to spend. The economy goes into the toilet. It's going to be painful either way

Sun, 11/06/2011 - 21:35 | 1851750 Eeyores Enigma
Eeyores Enigma's picture

"Jubilee either forced or by natural forces will happen on both.."

 

I would be very interested in seeing this concept fleshed out. Have you, or do you anyone who has written about what jubilee on this scale would look like?

 

Cheers!

Sun, 11/06/2011 - 11:32 | 1850408 Fuh Querada
Fuh Querada's picture

This is sensationalist tabloid crap at its worst. And the "free reports" are just a cock-teaser for the pay-only products.

Sun, 11/06/2011 - 09:34 | 1850285 Nate H
Nate H's picture

This is such crap.

 

If Europe implodes the way you say (and I think there is a fair chance ), there will very soon BE no market. The fact that people are trying to 'profit' from unwind of industrial civilization shows they only see a very small piece of the whole picture.  To be fair I havent bought your pdf (and won't), so if in there you recommend building social and human capital to replace financial markers, buttress supply chains on regional national level to replace imports for basic goods, and the psychology of how to live with less under periods of more volatility and elevated cortisol levels among myriad new social outgroups, then I apologize.

Sun, 11/06/2011 - 22:18 | 1851820 Tater Salad
Tater Salad's picture

"there will very soon BE no market"

Here's where I don't agree, there will always BE a market, perhaps a smaller, blacker one!

 

 

Sun, 11/06/2011 - 08:17 | 1850217 WakeyWakey
WakeyWakey's picture

I know this guy probably helps fund ZH but I wish he would stop with the doomsday selling technique.

The report is free but go to the report and its "All you need to do is take out a subscription to my Private Wealth Advisory newsletter."

I agree there is going to be a collapse, but one of the causes of the crisis is hard sell techniques like this. House prices can only rise, your losing out if you dont jump on the bandwagon, easy affordable payments for the first two years if you sign today....except now its paint a doomsday scenario showing how you will be affected, then pressure you into signing up because time is running out.

The problem is the doomsday scenario will wipe everyone out, including anyone daft enough to think this guy will protect them. Whats the point of having cash when cash is worthless, or assets to trade when everyone is fighting for survival and is unlikely to trade. Food, Water, Power and Shelter will be the only things people need and lots of guns and ammo to protect themselves from the idiots who didn't see this coming.

Sun, 11/06/2011 - 22:22 | 1851828 Tater Salad
Tater Salad's picture

"The problem is the doomsday scenario will wipe everyone out, including anyone daft enough to think this guy will protect them."

So if technically, central banks can print to infiniti, why would one belive we'll see the proverbial collapse in our life times?  I'm starting to think this will be a saga for generations long after we're gone.  They will print, and print, and print...

 

Sun, 11/06/2011 - 12:51 | 1850573 besnook
besnook's picture

in every total economic breakdown barter and pms serve as the medium of exchange. like chocolate and cigarettes in jail food and pms will decide who lives. so those who grow food and stash pms will live.

Sun, 11/06/2011 - 08:13 | 1850211 Lord Peter Pipsqueak
Lord Peter Pipsqueak's picture

BigDuke6

Belgium for the beer and chocolate!

Mon, 11/07/2011 - 02:07 | 1852180 BigDuke6
BigDuke6's picture

I did think of those but at the weekend I am often overcome with melancholia and thought of reasons not to be charitable.
The chocolate suits the female of the species and is only tasty when one is high on appetite stimulants
The beer "Stella" is fairly pleasant but remains noteworthy due its property of it's effect of sending you more loopy than other beers when 10litres or so are ingested, therefore gaining a following among the plebs as a 'wife beater' beer
You can understand me can't you old bean?

Sun, 11/06/2011 - 01:57 | 1850056 besnook
besnook's picture

never happen, for two reasons. one is bernanke will pump the world with so many dollars there will be too many to burn for heat this winter and much of it will end up in garbage dumps and two the samson option is to draw china and russia into a cage match to the death, no tap out. both scenarios will send the masses to the dumps digging for dollars.

Sun, 11/06/2011 - 09:12 | 1850266 mind_imminst
mind_imminst's picture

I agree with the theory that CBs will print incredible amounts of money. It will be terrible for commoners like myself, but it will save the banks. The key is that they will have to manage the trillions of new dollars adeptly in order to avoid hyper-inflation. The CBs can probably keep most of the population in check/satisfied if there is only modest inflation year-over-year. Most people will still be getting screwed by the resulting inflation but they will tolerate it as long as it happens slowly.

Sun, 11/06/2011 - 12:45 | 1850565 besnook
besnook's picture

the frog in the warming pot theory is the  best outcome here. i think desparation will force the bankers to panic and overplay the situation with massive printing to jolt inflation by 20-30%. they don't intend to save the little peopl. they really don't care what happens to eaters.

 

the second part of my thesis is the worst crase scenario. an act of desparation so craven,  millions of people will have to die so the 1%ers can keep their billions and the status quo.

Sun, 11/06/2011 - 01:02 | 1849962 Sigma X
Sigma X's picture

Not with a wimper, but with a bang in this case.

Sat, 11/05/2011 - 22:52 | 1849777 CompassionateFascist
CompassionateFascist's picture

When Ben can no longer afford the electricity, ink, and paper, the printing stops. Not long now.

Sat, 11/05/2011 - 22:44 | 1849765 Buck Johnson
Buck Johnson's picture

I agree with the timeline as a whole, but I think that it will start alot sooner than that.

Sat, 11/05/2011 - 22:42 | 1849759 lo574
lo574's picture

Sabra 1

Wow, following stories in a tabloid.  Yeah, that credibility ranks right up there with 3-headed baby stories.  lol

Sat, 11/05/2011 - 22:10 | 1849718 DoChenRollingBearing
DoChenRollingBearing's picture

Yes, OK Europe is done.

I take advantage of this opportunity to pimp my blog (it's free!).  If you would like to take a look, please gmail me at my name.  Just reviewd Barron's, whose Cover Story this week is about Brazil.  Nice column on platinum too.  And much more!

Sat, 11/05/2011 - 22:49 | 1849769 Hook Line and S...
Hook Line and Sphincter's picture

If you are locked into the USSA, and feel you deserve a broader global perspective, then DCRB's site is a great place for those with Au/Ag fetishes and concerns.

 

Sat, 11/05/2011 - 21:06 | 1849626 bugs_
bugs_'s picture

agree its over for them.  the curiosity is how the euro is so strong when everything that backstops it is vapor?

Sat, 11/05/2011 - 21:18 | 1849648 Oswald Spengler
Oswald Spengler's picture

Fiats are derivatives of debt. Debt is usually satisfied in the currency in which it is denominated. To settle Euro debt, assets are sold in their respective currencies which has the effect of bouying euros which must be bought to satisfy euro denominated debts.

Sat, 11/05/2011 - 22:42 | 1849761 Hook Line and S...
Hook Line and Sphincter's picture

Arr mate, that's the sensible explanation. There's an unsensible one 'swapping' the deck out there.

Sat, 11/05/2011 - 20:19 | 1849573 GiantVampireSqu...
GiantVampireSquid vs OWS UFC 2012's picture

4% Pfffft just mark to unicorn, who gives a shit about falling values.

Sat, 11/05/2011 - 20:12 | 1849563 CH1
CH1's picture

ECB just asked for German gold, 8% of all wealth above 500K and 1% of wealth annually.

The descent into central state fascism began in Europe today.

Sat, 11/05/2011 - 20:19 | 1849572 knukles
knukles's picture

Where'd you find that?

Sat, 11/05/2011 - 22:47 | 1849767 CompassionateFascist
CompassionateFascist's picture

And wherz the other half of Germany's gold? In Jew Yawk. And wherz America's gold? In Ft. Knox? I'd bet Greenspan sluiced it off to Israel. Now it all fits together, & explains why the Israelites do not fear Iran War------------------>dollar collapse. They've got our gold, and Germany's. 

Sun, 11/06/2011 - 00:14 | 1849879 IronShield
IronShield's picture

Yes, Israel is such a mighty country.  The US could never get it back from such a powerful country if we wanted it.  Now where did I put that fooking sarc tag...  Ah yes, here it is...  /sarc

Sat, 11/05/2011 - 21:18 | 1849649 Hulk
Hulk's picture

In his synapses, no link possible...

Sat, 11/05/2011 - 20:09 | 1849558 Sudden Debt
Sudden Debt's picture

Just buy PM's, that's all the protection you need. And a 3 to 4 months of cash supply. I'm even thinking about getting some dollars for the stash to, just in case.

Sun, 11/06/2011 - 01:21 | 1849912 BigDuke6
BigDuke6's picture

I shall miss europe in subtle little ways.

France - for the Krug i am drinking now

Holland -  for Armin Van Buuren that i am listening to now

Germany - for their cars

UK - for the soccer

Italy - for the bunga bunga

and Belgium..... er .. umm ...

Sun, 11/06/2011 - 23:00 | 1851880 Snidley Whipsnae
Snidley Whipsnae's picture

If all the wars fought in Europe didn't wipe the place off the map a bunch of theiving bankers isn't going to either.

Some of the actors will change, maybe some of the boundries will be redrawn, hopefully some of the pols and bankers will be hung from lamp posts and their will be skirmishes and perhaps wars... but Europe will still be there.

This isn't the first rodeo for Europe. I think Buffalo Bill's Wild West Show was there and even that bs reproduction of the 'wild west' didn't make Europeans run for the exits, wretching in disbelief.

Sat, 11/05/2011 - 18:46 | 1849439 max2205
max2205's picture

Damn it you forgot to say some will lose EVERYTHING. At least be consistent!

Sat, 11/05/2011 - 16:29 | 1849155 DavosSherman
DavosSherman's picture

Glad we're at 11% manufacturing.  Wonder what that'll equate to when the exports stop?  Maybe we can get a tube of toothepaste.  

Sun, 11/06/2011 - 22:53 | 1851873 Snidley Whipsnae
Snidley Whipsnae's picture

"Maybe we can get a tube of toothepaste"

..................................

Use baking soda... no sugar, tastes terrible, real cheap. Why spend money on toothpaste... that shit didn't exist prior to 1892. It hasn't been around long enough to prove it's worth. If you want foamy baking soda add a little hydrogen peroxide.

Better yet, stop brushing your teeth and let the damn things fall out. Who needs teeth? You will get used to gumming your food and your jaw muscles will be strong enough to bite off an ear... if you want an ear.

You will be amazed how much time you will save when you don't have teeth to screw around with.

My cousins moms brother in law has no teeth and he has lots more time to work the NY Times crossword. I caught the sob looking up words on the internet once... so, he definitely cheats.

Toilet paper is another waste of money... but I will save that for another post.

 

Sat, 11/05/2011 - 21:35 | 1849674 CrazyCooter
CrazyCooter's picture

Global war will completely re-write exports/mfg. To bet or play that market right now is a fools errand without inside information.

Only fucking idiots are in the market right now.

Regards,

Cooter

Sat, 11/05/2011 - 16:23 | 1849143 digitlman
digitlman's picture

All the guy wants to do is sell his silly report.  Fuck this guy.

 

My money is under my matress.

Sat, 11/05/2011 - 16:33 | 1849160 cbxer55
cbxer55's picture

The report is FREE. Doesn't anyone ever read that part?

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