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When "Unique And Special Cases" Aren't
Submitted by Mark J. Grant, author of Out of the Box,
Unique and Special Cases
Greece was a unique and special case. Cyprus is a unique and special case. One wonders, and with good reason, what or who will be the next unique and special case. The one thing we all know for certain is that when you are tagged with this moniker that it is not good. The other thing we know is that Europe, at any time, is ready to create unique and special cases to further their own interests. Perhaps, to be fair, it might be better to say that Germany will lord over this dynamic because it is generally the German interests which are to be furthered.
There was a time, early on in the European Union, when there was much more democracy and even handedness in the policy making of the various nations. That has long vanished. Subscribe what motives you like, but Germany has wielded its financial capacity to dominate the Continent. All roads now lead to Berlin with Brussels but a waypoint on the journey. To read the roadmap correctly then you must understand that each decision made by the European Union will be to protect Germany and her interests and that is how things will be decided because Germany controls everyone's purse strings and is doing its best to gain more control. Domination not with guns but with money. A much more pleasant endeavor than last go round; at least no one is being killed.
Standing back from the fray, however, leads me to be more than circumspect. In the first unique and special case of Greece they changed the bond indenture retroactively which violated the agreement made between bondholders and the issuer with a vote and the flourish of a pen. Then they said it would never happen again.
In the case of Cyprus the Germans demanded, by all accounts, that the private bank depositors in all of the banks in Cyprus have part of their money confiscated. They called it a "tax" but that is rather like calling the Eifel Tower a marshmallow. You can say it all you like but you only look stupider each time you make the statement. Then they said it was a unique and special case once again.
When unique and special cases are the order of the day then they cease to be either. If changing the Law to suit your fancy is no longer unique and special then I submit that the Law has been minimized and while still waved around like some banner to mislead people that it is no longer a functioning scheme for the sovereign nations in Europe. The law may still apply to people but it no longer applies to the desires of Germany. Money has toppled legality. The German trump card will win every hand.
When playing the Great Game you must have a firm grasp of the reality of the playing field or you will lose your way and so I point out that Germany is now the judge, the jury and the Court of Appeals. Every major decision that comes rolling out of the European Union will be written in German and then translated for the rest. Now the Germans pay lip service, they have long schooling in this, but they have all of the respect for the people in Italy, Greece or Cyprus that they do for the people of Madagascar which is why they could care less about confiscating people's money in some small nation because, to them, it is irrelevant and a triviality. It is not France's, "Let them eat cake" but a matter of disdain so that oats and wild mushrooms are good enough for those schweinhunds. "Eat what we give you and say thank you." Then they are appalled and outraged when someone like Cyprus says, "No."
Consequently the most likely outcome to Cyprus will be some sort of vengeance. They will convene and decide how much damage might occur if a country leaves the European Union and this may temper their decision but, I assure you, vengeance will be what they are after as that is how they perceive control to be exercised. In the Bible vengeance may belong to the Lord but in the European Union it belongs to the Germans.
The purpose of today's commentary is to provide some pause for thought. The special case of Greece has transpired. The much trumpeted denials have been shown to be a reality. The unique situation of Cyprus is in the process of transpiring but we all know now what was demanded and there is a second dose of reality. Therefore when unique and special cases have become the order of the day then the risk factors for investing in Europe have grown dramatically and must be honestly considered. The greater fool theory is expecting different results when performing the same actions again and again. Europe may be fine for hedge funds, for gambling upon events, but for investors; perhaps not so much.
Caveat Emptor, let the buyer beware, has taken a step forward; Buyer Beware!
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A little unfair on the Germans, I think: Sure, their politicians are up to no good, but the people are a bit sick of being labelled as Nazis, when most of them weren't even alive in Hitler's time.
This whole article is utter crap , a clueless and purely anti-german rant. Germany has become enslaved by Italy, France and Spain. The Bundesbank has been defeated. There is a reason why Draghi heads the ECB. Germany is getting raped and robbed blind by its own politicians who do everything to stay in power and thereby sell the German population out to the bankers of the core and the periphery alike.
Unique and special cases are but a symptom of the problem being a void of ethics and morals.
Well I sleep better at night knowing I am a unique and special case.
pods
Larry Fucking Fink's buying Europe hand over fist! What are youse guys, poooossssieessss?
What's that? I can't hear you over the sound of the swap lines opening.
Germany has become enslaved by Italy, france and Spain.
So what's the problem? They still have the Autobahn.
So what's the problem? They still have the Autobahn.
all of which are in a poor state of repair. The funds for infrastructure have already been used to bail out the Greek banks.
You may have a point. Germany has the most to lose and consequently they need to be kept alive at all costs. The rest of europe knows this, so chopping off some toes to save the foot is in nearly everyone's interest. Whether it works or not im sceptical. If Germany goes, europe goes, then the whole financial world slides into a blackhole of derivative based nothingness.
This sounds familiar.
My family never owned slaves (hell, they were Irish slaves themselves) and yet have all this minority guilt to deal with. And my representatives and president will do anything to get re-elected, too.
Sigh.
Yes but it's a union so every single bank account should be taxed that's the way a union works.
I will admit the authour doesn't appear to know the diffrence between the EU, the Euro and Europe though.
German taxpayers have Tax Fatigue and Bailout Fatigue, from having been told by their politicians (Chancellor Helmut Kohl) back in 1989 that their re-unification with East Germany would require a "Solidarity Tax" for about 5 years. To help them ramp up closer to West German standards. Well, that 5 year deal (to no one's surprise) is still going on, over 20 years later.
No doubt that these Mediterranean countries are hurting financially, but this is not German's or France's doing. The French and German banks simply 'bought into' into their sludge-bonds, even though they avoided the CDS sludge that these countries bought from the US -- thanks to, you guessed it, Goldman Sachs (GS).
It's time to stop the false-flag arguments and diversions. Time to get back to the Vampire Squids at GS, who did to EU banks what JPM did to Lehman -- set them up for failure. All this shit was going on when the US, EU and others were being diverted with Afghanistan, Iraq and the housing bubble.
The GS chickens have come home to roost. Now you know why these MF'ers have a vested interest in their henchmen mucking the books and playing FinMin games all over the EU. And guess who has a full circle around Obama: GS. Wake up to this reality.
None of this 'marching' bullshit! It's time that Americans do what the French do: Drive their trucks & tractors into DC, and to 1600 Pennsylvania. Cause total gridlock for a couple of days, while force-feeding The Truth to the lame-ass and hijacked MSM.
It’s time to present, define and frame The Argument to the blissfully ignorant American masses.
Remember that they actually never even begun paying for their WW2 wrongdoings, and then weight that against their current high horse, holier than thou attitude.
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Current entire financial system is unique and special case.
I priced some tungsten yesterday for a project. That shit has gone sky high and keeps rising every day. Let the buyer beware indeed.
About 7 hours ago......on Twitterland.....
Manoj Nathani @nathani_manoj
Cyprus is like Ireland, like Greece, Iceland, Spain, Portugal.......but why do people forget that these problems are not over yet! Globally!
6:21 AM - 20 Mar 13CNBS has one "expert" after another yesterday assuring the sheeple, uh hem, VIEWERS, that Cyprus is insignificant and will mark no bearing on the rest of the world.
Nothing like this could EVER happen in these United States...
Ya, tell that to the MFG customers, et al.
This morning, I dropped an exceptionally large corn shit, and proceeded to wipe my ass with this article.
Don't worry though, it was a special case.
is that the same as a "country shit"?
Wonder how Germany would like a good old fashioned bank run on one of it's own, say Deutsche bank?
My guess is nein.
pods
Another US or UK based self styled expert on European affairs, farting into his leather seat cushion as he writes. LIke Graham Summers and Muck to Market. Why don't you get some real news from nearer the source. Learn fucking German, read original sources and report back on those.
Apartheid Israel is certainly a 'special case,' as Obama shows up to kowtow to his superiors:
http://www.nytimes.com/2013/03/21/world/middleeast/obama-arrives-in-israel-for-two-day-trip.html?hp&_r=0
Socialism, collectivism and unionism doesn't fucking work!
History has proven this time and time again.
And the lessons of history will not be forgotten this time. The internet and the digital age is the game changer.
This is the beginning of a return to smaller and smaller countries, states and regions, and the end of the state.
The future's bright, the future is anarcho-capitalism!
Maybe Minarchist Libertarianism; I don't see people going about with zero government anytime soon.
None of the EZ member states are "unique and special" cases. That's just EU political elite claptrap to get themselves off the hook.
The underlying truth that the likes of Germany choose to ignore is that the Eurozone was, and remains, a fundamentally flawed concept from Day One. Like everything else in the EU, it is a political construct driven by political elites to create a new empire: the EUSSR.
If the EU elites refuse to allow the euro to die it will bring deepening economic disaster and poverty to its members and to the rest of the world.
Then we're all in for a rough time,because these fucktards are never going to admit to the mistakes they made in admitting some countries to the club,and not letting them go again when they should have.
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Quite so. There was a time that when the Euro political elites went mad and rampaged across Europe destroying everything in sight, the Brits called in the Americans to sort it out. They gave the Europol elites a good bitch-slapping and things got sorted eventually.
Nowadays it seems the Obama crowd have also been afflicted with the same madness.
So who the hell is there left to sort it all out? Only We The People.
There's a lot more pain to come methinks.....
Just do it already!
An elderly man once told me that Germans do not dance.
' Oh" I replied. "what do rhey do?
"they march" he replied with a look of concern on his face.
Of course the Germans are not Nazis, but it is in their national psyche to be very methodical, industrious and planning oriented. In different periods of history this has manifested itself in different ways but its always the same qualities underlying the facade.
These attributes create resentment amongst other nations because inevitably Germany gets the upper hand financially.
This is another reason the Euro is doomed. Too many differences and no mechanism to alleviate conflicting interests.
It is in their national psyche to have a work ethic.
I guess you've never been to an Octoberfest or danced at a German wedding. If you did, you know you need to be in shape.
A black swan a day keeps the...uh...white swan away.
I think that Germany is a unique and special case....in its unique and special way.
IMHO, Eurozone lacks political unity as well as fiscal unity/responsibility while desiring monetary union.
Additionally, a 'marriage' or a partnership between 27 mostly unequal partners was doomed from the start. They were born to disagree! Even the monetary union between 17 nations is totally disastrous being so dissimilar in their ultimate aims as well as languages and cultures or even trade. Imagine a Greek behaving like a German!
It all worked while the GDP was rising and 'in comparison' to other not so developed countries, they were doing fine. As soon as the first crisis arrived, they started unfolding miserably. Now again 'in comparison' to other countries, they are not doing well.
Sad, but they brought it upon themselves in their quest to be second to the Americans as a group of nations since they could not do it individually.
Unless a formula can be found whereby the weaker countries (PIIGS and Cyprus etc) can devalue their output with a different 'Euro' or old currencies, they will never be able to stand on their own 2 feet. The higher EUR in terms of their biggest competitor, the USD, makes the weak countries even weaker. The stronger ones can muddle through but the weaker ones either must die politically (as in give way to their autonomy by submitting to the stronger partners such as Germany and suck it up) which is totally unpalatable to the citizens of Cyprus, Italy, Greece and Spain who have openly revolted and protested.
The only formula in sight is to exit, which is politically unsellable but a must do in order to recover while looking ahead into the future for the Cypruses and Greeks of the world.
I hope China is listening where they are talking of an ASEAN block as well as GCC in the Middle East where monetary union could not be achieved despite the best of times in the past 10 years. Monetary union is like a partnership and most partnerships do not last very long for various reasons unless one of the partners submits to the whims of another.
That's a nice succinct summary of where the EU is at, to which I might add:
Whatever mighty principles may have existed when the idea of a united Europe was first tabled, it quickly became dominated by wannabe power-hungry socialist control-freaks and gravytrainers. These people are not known for having any real clue about free market capitalism (many of them actually despise it because it represents a challenge to their ultimate supremacy) nor of how human psychology works in a free market environment. But why should they? ... because their long held strategy is to progressively take control of everything important that happens in Europe and for markets to become the servants of the masters in Brussels, who will subject markets to whatever controls and manipulation they see fit to satisfy their own agendas.
It is long overdue for the global political elites to understand that a successful future for mankind is for smaller, viable nation states which have control over their own economies, currencies and to freely compete in free markets. That is what preserves cultures, drives ideas and progress, not central planning by apparatchiks of the State.
Please send my reagrds to HRH Sheik Mohammed, a great guy who has done much good for Dubai.
Let's face facts. They have been ignoring reality, morality and good sense for a long time. When governments become dependent on deficit spending and banks push fractional reserve lending to its limits the end can only be disaster.
Greece, Cyprus, perfectly logical results of policies pursued for the last 20 years or more. The shocking part is that they are prepared to tear up every law on the books and ignore every principle of honesty to keep their scams alive.
Even this is hardly news.
What everyone should pay attention to, is that every country in the world is in the same basic situation. None of them are doing anything to turn away from disaster. All will eventually run over the same cliff or another one just as bad.
The European Union and Euro could have worked if everyone had been honest. But too many saw the new system as a chance to run the same old scams they have been working for hundreds of years. Except now, they had the "guarantee" of the Euro behind them which meant they could push the scams farther before the suckers got suspicious.
What they don't seem to have considered is that it also meant they could not devalue or default their way out of their obligations as they always had before.
So now they are caught in a trap of their own making.
Sorry I really have to disagree.
The Euro and EU could never have worked.
The financial differences between all nations but especially between the northern and southern negate the possibilty of having the same currency.
Simply impossible.
You're right in saying that what happened was what was sold to the EZ member states...viz carrying on the same old same old profligate spending scams as always but now the debts being backed by the German economy. ho-ho.
But as Brit_Abroad rightly says "it could never have worked."
It was nothing more than a fantasy peddled by Brussels and northern European elites, especially France.
Have to say one thing for the German people. After knowing what hyperinflation looks like those fuckers are some gold accumulators.
Average amount owned in 2008 = ~3/4 oz
Average amount owned in 2010 = ~3 oz
http://www.steinbeis-research.de/pdf/KLEINE%20Financial%20Study%20-%20Go...
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Caveat Vendor!
Let the Seller BEWARE!
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V-V
Germany never holds any responsibility for rule breaking.they broke debt to GDP rules set down in the Maastricht treaty as far back as 2003.low interest rates were all the rage in Europe when nobody needed them as much as Germany so they could paper over historical cracks with their eastern annex.
But hey ,let's all blame the countries who are in the shit right now.when this tide goes out we will see what kind of underpants Germany really wears.
Well, cases, like children, are each unique in each one's special way :)
The need here is for consistency and rule of law. The EU has stated multiple times that deposits in the banking system up to E 100K are protected. It's similar to the US guarantee from the FDIC of up to US$ 100K deposits insured.
The EU needs to reframe the solution as a controlled bankruptcy of some banks. Various parties will take losses. Because there are so few bondholders and stockholders in the Cypriot banks, the depositors will take a hit too. But each depositor's first E 100K will be exempt. That's the start of a euro-based bank deposit and resolution system. It's the same way the US system works. Here in the US, depositors with more than $100K do sometimes take losses on the residual above 100K when their bank goes under.
What's the problem? It seems they don't want to actually use the "B" word (bankruptcy). So they engage in arbitrary power grabs. It's the lack of honesty and willingness to state plainly: various parties WILL take losses, and we'll do it in an orderly and legal way -- end of story.
We don't live in a gold standard world any more. The financial system is based on trust and confidence alone. Stuff like this threatens to up-end any trust and confidence in the eurozone banking system, start deposit runs, etc. If they keep this up, the eurozone is f'ed.