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The Fed's Intervention Didn't Solve Anything... It Just Pushed the Collapse Back a Few Weeks
It’s now been two weeks since the Federal Reserve lead a coordinated effort to lower the cost of borrowing Dollars worldwide. While the markets initially hailed this move as a “solution” we’ve since seen that it was in fact an act of desperation/ cushioning of the coming European banking collapse.
The REAL implications of the Fed’s move are:
1) Europe was/is on the verge of its Lehman moment.
2) The ECB/ Germany/ IMF/ EFSF bailout options have all failed.
3) The Central Banks are growing truly desperate to prop up the system.
Europe was on the verge of its Lehman moment. I do not think that the coordinated Fed move has stopped this from happening… rather it’s merely pushed back Europe’s Crisis by a few weeks.
Remember, the situation in Europe is one of insolvency, NOT liquidity. Banks across Europe are leveraged at an average of 26 to 1. This means that they own 26 times more assets (read: loans made to consumers, businesses, etc) than they do equity.
At these leverage levels, if the assets fall even 4% in value, you’ve wiped out ALL equity, rendering the bank bankrupt.
Source: IMF data
The key item I want you to notice in the above chart is that French and German banks sport some of the largest leverage ratios of any banks in Europe. On that note, I believe it will prove to be France, not Italy that sees the first BIG bank failure. Indeed, we already see France moving to prepare for this:
The Agency for State Holdings (EPA), meanwhile, has been working for several days in a scheme that would allow the French to enter the capital of financial institutions.
But according to our sources, Paris is ready to act. If the level of European support-which must still be approved by some national parliaments, provides that the EFSF to recapitalize banks, the agency of state ownership (EPA), meanwhile, has been working for several days in a diagram that would allow the French to enter the capital of financial institutions. "It's just in case ..." said a source familiar with the matter. Unlike what happened in 2008, which had pushed Bercy that all banks should call the financial office that had opened so that no-it-is stigmatized, only "two or three banks "This time would be affected by the device. "We're not in the same situation three years ago," says another source. And today, some are not willing to "pay" for others.
Germany just formally passed legislation to permit it to nationalize large banks yesterday:
Commerzbank faces bail-out by state
The German government has begun preparations for a possible state bail-out of Commerzbank if it fails to present a convincing plan by January 20 to fill a €5.3bn capital gap identified by regulators.
German chancellor Angela Merkel’s cabinet on Wednesday agreed a bill to reinstate a state-backed bank rescue fund next year, a move that could pave the way for state aid to Commerzbank, Germany’s second-largest bank by assets.
http://www.ft.com/intl/cms/s/0/94e6388c-2652-11e1-85fb-00144feabdc0.html#axzz1gYUYyiYA
As I’ve stated before, going forward Germany will be focusing more on domestic bank issues rather than supporting the Eurozone. Put another way, Germany will look out for its national interests above everything else. This includes:
1) Not permitting the ECB to print money
2) Not permitting the issuance of Eurobonds
Germany will not tolerate price instability as it’s already experienced the tail end of it (Weimar). Secondarily, the issuance of Eurobonds goes against the German Constitution, which neither the German courts nor the German people will tolerate.
The reason for this is Germany has its own problems. German banks have yet to be recapitalized and need at a minimum over 100 billion Euros in Capital. With that in mind, Germany will be focusing more and more on its domestic issues and not moving to backstop the EU.
I want to be clear… Angela Merkel will verbally state that Germany wants to remain part of the Euro, but Germany’s actions (not putting up more funds for bailouts without demanding guarantees that are impossible to meet ) speak louder than her words.
Folks, the reality is that Europe is on the verge of systemic collapse. The proposed solutions have failed. And we’re heading into a situation that will be even worse
than 2008.
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 how to stockpile food (where to get it, what to buy, and how to store it) our reports cover this information in great detail.
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You would easily be the worst forecaster I have ever come across.
Your ramblings and waffle are astounding - you really need to think of a career change.
The sad thing here is that some people might actually not know that you are completely full of shit and dangerous to their financial health.
I feel sorry for any poor bastard who reads and believe this marketing spam bullshit that you feel the need to spam relentlessly on the website.
Please go somewhere and let a more credible contributor take your place (ie a syphilitic nematode would be better than you).
You are a blight on this website - please, please go away.
A different look at European "problems" , James Turk interview of a German banker.
http://www.youtube.com/watch?feature=player_embedded&v=jaeC8CEi1DU
Graham, you predicted martians would come down from Mars and eat all the babies 6 months ago! The record is broken!
And this is news?
The fact that Germany has just fast tracked it's own Notleidenden Vermögenswerten Hilfsprogramm and yet the eurosheeple do not even blink is a sad testament to the massive level of stupidity of a continent. There's no denying that european manufacturing is top notch. Manufacturing of debt slaves that is.
"Notleidenden Vermögenswerten Hilfsprogramm"
You're in fucking America!! Speak spanish.
And that level of ignorance is different from other continents, how? Of course you're right from a financial structures POV, it's going back to 0 sometime soon. psssssssssssssssccccccchhhh *poof*
However..
Compare 22% production/GDP of Germany with a stable internal market, to that of the USA...... Who's got the best chance to pull themselves out of the shit by their shoelaces AFTER the implosion?
That's the only thing the Feds printing of money can buy...and that's just a little more time....
Fiat currency makes an ineffective painkiller. From time to time, articles about national gold reserves pop up. That is the real story, hidden behind the speeches and press releases. The debt crisis is the strong arm tactic in this war of economic conquest.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
SPAM nigger
http://chasvoice.blogspot.com/2011/12/outstanding-video-nazi-banksters-c...
p4 repeated
cause there's never enough nazis 4use-xcuse-alibi-lies
as nauseating as it is excruciating, a year here on this most sickening of sites belies what specific financial knowledge has already contributed to our very own Truth Commiseration --yes. we sheeple herein have seen fit to form what's yet another committee, where the truth goes to die-- as we further and further continue to use our assumed exclusivity and its do-nothing humor to remove ourselves from incrimination . . . our own private little nation of fools
Living In Fear. all while and in the meantime afraid of Whom: a very small ethnocracy of jews, whose actions not just speak louder than words but, holophrastikos, do in fact silence an entire occident from saying the one word which is here as everywhere its own very simple explanation of all such hurt and harm: ROTHSCHILDT: The City Of London, whose very active do-doers shit wherever they want and all over us
while in the meantime here still yet again left reading such swallowed shit as this:Enough of anonymous corporate or governmental lables...we need names...names.
reply
Wed, 12/14/2011 - 03:13 | 1977826 4horse
take a wild fucking guess
corzine.paulson.bernanke.geithner.dimon.blankfein . . . mere hirelings
United States . . . ? . . . this is the Ukraine: fin de seicle PNAC < 19th . . .
where the same blueprint by the same few jews is being followed right down to its T-- TERROR --and how soon the removal of yet another 30million people in a Holodor here everyday joked about in our branded black humor as just more mere FEMA material over already missing americans ridiculed like just bounced CHEKA out of their financialfunnies of that funniest DHS __cancelled__ one-by-one being stripped right in front of us, of their humanity, while an xhumanties' man like myself quote the great minds behind this self-same suffering of What Is To Be Done and What Then Must We Do . . . ? . . . To Who
a few jews: whose written history is the hidden history of all our own hiding away from their last hundreds-of-years of full-spectral dominance
geithner.dimon.blankfein.Rubin _stein. Safir _s. Gold _men. Silver _steins. Diamond _mines. The Family Jew_els
denying, denying, denying the obvious, as each and every one of these foreign apparats defy us to our face-- yeh. like whatcha gonna do about it
Charge Them. CHARGE THEM. Charge them with their crimes: INDICT each and every individual Roth's Child for what each treasonous trader of american value for International Jewry is doing right here/right now right-before-our eyes every single hour of every single day . . . . . . and do so, each individual jew, before these few again, despite all their present searching-surveillance-and-dhs, again sacrifice ALL of their innocent own along with whoever else gets in their way of again successfully accomplishing such massmedia massmurder worldwar slaughter as is only their own arsenal from Antisemitisn to Zionism
this now completed full year here has made me as sick of myself as everybody else: all along and altogether for the want of one word, holophrastikos, that is the imperative of just this one simple single verb: DO
needing use, hapex legomenon, only once
.
enough.
too much.
verbiage
NIGGER spam, take your spam fry it in a pan and cover that shit with american cheese. fuckin spammer
promises, promises
Yes and unless you have perfect timing or insider info from a congressman, as soon as you go all short the "next" --we solved the problem--solution will kick your ass and be the best thing since sliced bread for another 2 weeks. Just like the last 500 or so times so far.
The only thing im sure about is that they'll be preaching 'massive recovery' while 80% of the population is integrated from a high wage job and benefits to tent city.
Some asshead senator just proclaimed "people don't need government assistance because they're still living in descent size houses and have a flat screen tv." There may be legitimate viewpoints to that but that pretty much is a sign that our standard of living is certainly expected to go down.
On the flip side........the government voted in free trade, then more free trade, then billions on wars, then billions to foreign countries, then probably trillions to banksters and then the people are told not to rely on the government for a handout?????? They destroyed EVERYTHING, in a sense we just all file a class action lawsuit against the US gov't and bankrupt their fucking asses and dissolve them. Oh wait, when you're the one in power bankruptcy doesn't matter.
without reading this, "IS THIS AN ARTICLE WRITTEN in 2007?? Ehhhh"
i would love to see said collapse but the entire wealth of the state must be mobilized to bailout frat boy psychopathic banksters....
can you say broken record
In "normal" times it would have been possible to cushion a shortage of the capital of a bank by having a large base of small, relatively inactive deposits. In the worst case, the banks may be permitted to carry (temporarily it is hoped) negative capital. If assets were properly valued, this is, no doubt, the case of many banks right now. For this reason, the big four - JPM, C, BOA and Wells - would be better able of survive than the, recently opportuned, Morgan and Goldman.
More Doom Porn from Mr. Summers...
My nipples are gettin´hard Brucie babe
More nonsense from Graham Summers.
Collapse in a few weeks?
My ass. Years maybe?
Ever notice that its not the pessimists that have all the power and money?
Don't forget, the acorn only hit Chicken Little on the head.