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Europe is Following the 2008 Pattern to a “T”… Guess What’s Next?
Bernanke and Hank Paulson must have mailed their “2008 Play Book” to Europe because the ECB is following their moves to a “T.”
We’ve already had the Bear Stearns minor player collapse/ bailout. We then had the Hank Paulson Bazooka tactic of throwing a large enough sum of money around to scare the markets into submission (the European mega-bailout fund).
This leaves the “Lehman event” or collapse of an institution that then drags the rest of the market down with it. Judging from the look of things, it will be coming from Spain or Italy.
According to the Bureau of International Settlements, the total exposure worldwide to PIGS (Portugal, Ireland, Greece, and Spain) debt is over $2.5 TRILLION. Most of this is in the form of derivatives. And 70% of it is from foreign entities (banks and firms located outside of the country).
Let’s focus on Spanish debt worldwide exposure to Spain is north of $1 TRILLION. In this situation, Great Britain is on the hook for $51 billion. The US is on the hook for $187 billion. France is on the hook for $224 billion. And Germany is on the hook for a whopping $244 billion.
Remember, the BIG players in the EU Crisis always were Spain and Italy. With GDPs of $1.46 trillion and $2.1 trillion respectively there literally is NO WAY the ECB can bail these countries out. Which is why Europe is now facing the End Game.
Indeed, the Fed has reopened FX swap lines to Switzerland. The Fed ONLY does this when things are on RED ALERT.
It’s now only a matter of time before a big bank goes down and takes the European banking system with it. Forget al the headlines, the ECB and regulators over there have lost control.
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Good Investing!
Graham Summers
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Bloody hell, change the record mate.
Mr Summers,
i've signed up to your Newsletter... the first one can't shut up about recommending/plugging ETF's as the best way to short the collapse... that's if the ETF's (aren't they paper thin derivatives?) don't actually collapse themselves! ...I do hope your next of numerous instalments has better advise
the FED defends global play to infinity; the vigilantes want blood immediately, who will eat, beat whom...Maths are on the side of Vigilantes, Power on the side of globalists. ZH says stay neutral and sterlises your potential gains into PMs as they bleed and neutralise the fiat inflationary ponzi. Gold play is essentially deflationary. It probably is required to clean out the current mess.
For the gold bugs, here is an interesting summary of what the Austrian school thinks of the gold standard.
http://www.huppi.com/kangaroo/L-gold.htm
Or.... the fact that the Fed opened the SWAP window means the FED is going to provide the extra liquidity that the ECB can't; hence the liquidity problem can be: kicked down the road...?
Since the FED is defacto doing this, what are the risks to the USD and the US? In 2008 the FED did this to some degree behind closed doors - now that its more in the open, will markets react negatively to further USD dilution?
Who said something recently about Spain "probably" being able to weather this crisis?
Yeah.
Spain.
no, no, no, no, noooooo ...Trichet has "stopped contagion" ...his words... nothing to worry about at all
Yo, gangrene is NOT contagious! Sticking MORE bandaids over it though, is NOT a cure!
The number of people who are starting to realize this is the Euro endgame is getting pretty big.
To bad not all of them already know they should cover their asses with PM's even as all the newspapers are recommending it 24/7
Yeah, wait until they go mainstream when there is a good chance its the last bit of air in the bubble. Good one. I saw a lot of dodgy gold ads when I was in NY a few months back.
Here's what is next: Record fucking bonuses as the public is looted from top to bottom in the name of "corporations shitting down your neck is good for you."
Are the euro-trash going to finish swallowing the American dream in the name of fascism and incorporated robbery, too?
Wheres Krasting to tell me how good it is for young parents and the unployeed that we award failure and feed the common man/women to the fucking dogs of fraud.
Record bonuses, you heard it here first.
Go for it Euro-fags, no one will see it coming!
Hey Graham what is your exact investing track record?
His RFOA is up ca. 230% in 2011 http://goo.gl/CHy2m
everything?!