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Spot The Odd Continent Out: Total Bank Assets As % Of GDP

Tyler Durden's picture


There is a reason why in Europe, no matter how much some want to deny it, the Cyprus deposit confiscation "resolution" has become the norm. Quite simply, as BofA summarizes, "Europe's economy struggles with too many banks, too much debt and too little growth. A long history of empire, trade, war and commerce means a long history of banking. The world’s first state-guaranteed bank was the Bank of Venice, founded in 1157, and the world’s oldest bank today is also Italian, Monte Paschi di Siena (founded 1472). In many European countries, bank assets dwarf the size of the local economy and are far in excess of other regions in the world. This is similarly reflected in the local stock exchanges: even now financials account for 42% of the Spanish stock market and 31% of the Italian stock market versus  ust 16% in the US."

Visually, this translates as the following dramatic chart, which shows why Europe no longer has a choice in kicking the can, and what we have said from the very beginning, a Mellonesque asset liquidation of bad "assets" is the only option:

It is in Europe that the biggest debt burden lies, and it is Europe that is desperate for the biggest inflation impulse to purge away the debt in the absence of liquidation, or a spike in asset quality. However, as we showed yesterday with Europe's €500 billion NPL timebomb, the asset quality of Europe's banking sector is imploding at an unprecedented pace, and is correlated most tightly to the surging unemployment in the periphery, which intuitively makes much sense: without jobs, consumers can't pay off their debt.


... compared to unemployment:

This means that the only resolution to a massively overlevered banking sector, where inflation just refuses to arrive and assist in the bad-asset "cleansing", is the start of liability impairment, which will allow the long overdue process of balance sheet restructuring, instead of merely can kicking, to commence. Whether this implies deposit confiscation, well that matters in which country one is, and how many NPLs have been accumulated.

And another problem: the reason why core inflation is gone from Europe is that not only is the hot central bank money not targeting European assets (except for new Japanese Yen chasing after peripheral bonds for as long as there is a carry trade arb, which at this rate won't last long), but because credit creation in the private sector is dead: as the chart below shows, even credit growth in Germany is now negative:

So what is the only option for a continent in which there are simply too many encumbered assets (recall that unlike the US the bulk of credit in Europe is secured - perhaps the starkest difference between the two credit systems) and in which the private sector credit creation pipeline is clogged: simple - the ECB has to join the Fed and the BOJ in monetizing assets, and creating "credit growth" de novo. Alas, as the past three years have shown, when it comes to outright monetization in Europe, not only does it have to be sterilized to appease the (correctly) inflation-weary Germans (i.e., the SMP; the terms of its replacement, the OMT, still technically don't exist), but most likely has to come in the form of a structured debt vehicle or an extended loan, like the ESM or the LTRO.

In fact, none other than former ECB member Lorenzo Bini Smaghi told Goldman's Allison Nathan in a recent interview that QE by the ECB - an outcome most expect once the impact of BOJ QE fizzles - is unlikely. The reason why:

Lorenzo Bini Smaghi: QE in Europe would likely entail the ECB purchasing a representative basket of Euro area government bonds. And so they would probably have to buy large quantities of German and French bonds, rather than the bonds of countries that could use more support; the impact on spreads would not necessarily be in the right direction. So from a technical point of view, the case for QE in Europe is less clear cut.

Needless to say, his outlook on Europe is less than optimistic:

Lorenzo Bini Smaghi: In 15 years I'm a bit more confident because I think the adjustments will have been made. Europe will become more competitive and stronger. So I am a long-term optimist. But I am also a short-term pessimist; the near-term adjustment is maybe a bit too tough and too front-loaded so the next five years are going to be very difficult.

And to think all of this could have been avoided if the Mellon advice of liquidating bad assets, which have accumulated in massive proportions in Europe (and in the shadow banking system in the US, but that is the topic of a different post), had been heeded, as we suggested, from the very beginning. To quote Andrew Mellon:

The government must keep its hands off and let the slump liquidate itself. Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. When the people get an inflation brainstorm, the only way to get it out of their blood is to let it collapse. A panic is not altogether a bad thing. It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people.

Of course, the time for liquidation will come sooner or later, only this time the pain and suffering that will accompany it will be order of magnitude greater than had the system been purged in the dark days following the Lehman collapse.


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Sat, 05/18/2013 - 11:18 | 3575739 Yen Cross
Yen Cross's picture

     The tiny one that exports terrorism? I'm sorry (caugh caugh) Oil.

   There's lots of demand out there. (sarc) Commodities are screaming sell sell sell.


Sat, 05/18/2013 - 14:16 | 3576094 RockyRacoon
RockyRacoon's picture

Thanks for that nasty-ass chart.  Real "wealth" is being slaughtered, whereas, paper wealth is being flung about like crap in the monkey cage.   I think Mellon's sentiment is right on but those who will lose the most are the ones in control (for now).  They are not going to let go of their freshly printed currency and are more than willing to print up loads of new paper to inflate their way out of their predicament.  This coming crash is going to dwarf anything yet in recorded history -- except perhaps for the Dark Ages.  It's not a new Depression that's coming, it's the age of dis-enlightenment.

Sat, 05/18/2013 - 14:59 | 3576203 Yen Cross
Yen Cross's picture

       Paper profits= moar silver and platinum. And some Tips via Knuks advice...

Sat, 05/18/2013 - 14:16 | 3576099 rotagen
rotagen's picture

"people will work harder, live a more moral life"  When an economist starts talking about morals I get instant nausea.


Here's a guy whose career involves studying a system which is 100% corrupt in design and implementation, talking about F-ing morals, and somehow equating them with being an ignorant slave.

Sun, 05/19/2013 - 10:38 | 3577712 dunce
dunce's picture

Some people get upset when "anybody" talks about morals, is that your problem?

Sat, 05/18/2013 - 11:15 | 3575742 BarnacleBill
BarnacleBill's picture

Not a bad summary, if I say so myself. There is a savage confiscation schedule ahead of us - maybe starting in Europe, maybe not. The ABN-AMRO precedent is more worrying than the Cyprus one, I think.

Sat, 05/18/2013 - 11:50 | 3575804 bank guy in Brussels
bank guy in Brussels's picture

Something indeed is going to snap here in Europe.

Good question whether before or after the German election in September.

Was interesting watching Jim O'Neill, the retiring 'BRICs' guru of Goldman Sachs the Squid, on financial telly the other week. In the long interview O'Neill happened to reveal what the Goldman network, including such as the ECB's Mario Draghi, was telling him about Europe.

O'Neill basically said everyone in Europe, including the Germans, really understand that the current euro-zone mess is non-sustainable, but fixing it was on hold till Merkel's chance at re-election.

After that, O'Neill said there was going to be a big euro-zone soul-searching and attempt to 'fix' the whole crisis, either by making a 'U S of Europe' with pooling debts, inflating etc. ... or by the euro-zone breaking up.

O'Neill said he really didn't know the outcome, but he was a little inclined to think EU political consolidation would be implemented ... he didn't give a figure but he seemed to be placing the odds at about 55 %.

My view is more the opposite ... I think the populist anger of European peoples, against the EU, is past the point of no return. I think the euro-zone will break up and we will have a giant shite-storm of banking collapses and bad debt defaults and liquidation.

May be a good thing in the end.

Sat, 05/18/2013 - 12:15 | 3575837 Rustysilver
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Bank Guy,

For Europe to integrated "more" the treaties have to be amended ever so slightly (which would take years). France and German would never have a referendum because it will not pass.

Merkel, if she wins, will be weaker and won't be able to do much (whatever she was doing up to now).  I see a slow degradation not a big reset.

Sat, 05/18/2013 - 14:01 | 3576059 andrewp111
andrewp111's picture

You would be amazed at how fast things can happen in an emergency. You might see a whole new EU Constitution written in the dead of night and rammed through the Parliaments before the sheeple even get to read it.

Sat, 05/18/2013 - 14:19 | 3576108 RockyRacoon
RockyRacoon's picture

That really would be a new "US of Europe"!  Passing legislation before anyone gets to read it.

Sat, 05/18/2013 - 14:00 | 3576056 Wile-E-Coyote
Wile-E-Coyote's picture

I see mass social unrest in Europe starting in the crucified southern countries. Why the people of Greece arn't burning their parliamnet down is a mystery, are they putting something in the water? Watch France it is sliding into a shit storm, if it gets bad watch out. There will be NO USE. The people of the UK badly want a vote to get out of Europe, when not if the UK leaves it is game over.  That's why O'Barmy has been sticking his fat nose into UK politics recently. The Euro dream is over but the unelected politicos in Brussels won't go without a fight, but go they will.

Sat, 05/18/2013 - 14:23 | 3576118 RockyRacoon
RockyRacoon's picture

Many European countries have unassimilated "citizens" in enclaves of their own.  Yet another "US of Europe" scenario:  Watts Riots!  Cops wouldn't even go into Watts, and even the military won't go into some of these European areas when they ignite.  The world will get to see how effective "gun laws" are when folks come out fully armed from every parapet.

Sat, 05/18/2013 - 18:51 | 3576577 Wile-E-Coyote
Wile-E-Coyote's picture

You don't need guns to fight urban war, anything heavy will do. Create a spiders web!!

Sat, 05/18/2013 - 14:15 | 3576089 el Gallinazo
el Gallinazo's picture


I cannot see an intensional break-up of the Eurozone by the Eurozone as it is such a pillar of the NWO global takedown.  This has been in the works for well over a century.  They knew when it was planned that it would lead to an economic disaster which is now appearing before our eyes. However, the "solution" is a United States of Europe.  As David Icke puts it, "Problem, Reaction, Solution.  Rinse and repeat."  Problem - the economic disaster of the Euro.  Reaction - the people of the EZ becoming totally desperate.  Solution - the United States of Europe (with the loss of all national sovereignty).


As to "popular opposition," they will meet that when it comes either with fraudulent election results or suppression by armed military force, probably NATO with various units acting in countries with different cultures and languages than their own and with some historical cultural antipathy, such as Turkish NATO forces in Greece or the Balkan countries.  This is not to say that the Eurozone will not break up.  It is just to say that it would not be a voluntary move by the cabal behind the current governments and could only happen through individual national revolts that could not be successfully suppressed.


Sun, 05/19/2013 - 15:02 | 3578119 dunce
dunce's picture

The central dogma of socialism is central planning by genius technocrats rather than freely elected representatives. They often call them selves progressives without really defining their goals. Lots of soaring generalities, fraternity, equality, world peace as described by beauty contestants. They are half way there in Europe with the bozos in Brussels. They could be planning a huge crash to have a crisis to exploit and present their plan as the only way out of the mess they have made. They are  ones that said never let a crisis go to waste. They are all evil people so there is no reason to believe that anything they fashion will be the least bit good.

Sat, 05/18/2013 - 11:17 | 3575744 css1971
css1971's picture

Except. Socialist parties won't let it happen. They'll devalue their way out. Even the Germans.

Sun, 05/19/2013 - 01:57 | 3577349 All Risk No Reward
All Risk No Reward's picture

Do you really think "socialist parties" are in control and not the banksters that lend the nations money and finance the campaigns of their operatives into positions of power so they can pretend to be socialists?

If so, you are most certainly wrong.

Napoleon understood this 200 years ago!

“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.”
? Napoleon Bonaparte

Sun, 05/19/2013 - 12:08 | 3577856 ootofthehoos
ootofthehoos's picture

The bankers are socialists. I think they are not pretending. The NAZI party is national socialism. It was financed by bankers. The communist USSR revolution was financed by bankers and so was Mao China communist revolution. Bankers implement communism/socialism because it is a method to control all goods and services in an economy and thus guarantee the profitability of their banks' investments and their place at the top of the pyramid. You are watching the same banker/communism partnership being implemented via EU, USA, IMF and ECB and global banking to preserve their world banking empire.



Antony C. Sutton

Fri, 05/24/2013 - 01:38 | 3595025 All Risk No Reward
All Risk No Reward's picture

oot, we have to define terms.

the word socialist has a meaning:

1. Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy. 2. The stage in Marxist-Leninist theory intermediate between capitalism and communism, in which collective ownership of the economy under the dictatorship of the proletariat has not yet been successfully achieved.

Neither of those definitions described the Nazis or Mao or the Banksters.  "Oligarch authoritarians" is a much better term.

A wolf cloaked in sheep's clothing is not a sheep.

I get where you are coming from, thbough, as every implementation that called itself "socialsim" or "communism" was, in fact, an oligarch authoritarian governmental structure.

The problem is that the social engineers bastardize the language so that we talk past each other without actually transferring meaning that might highlight the true criminals - the authoritarian oligarchs.

When we are aware that language is being manipulated, we can be very careful to define terms and use them consistently so that we can actually transfer real information in an effort to identify and solve real problems.

Sat, 05/18/2013 - 11:21 | 3575753 Smegley Wanxalot
Smegley Wanxalot's picture

Why isn't Israel on that bar chart? 

I see UAE, Egypt, and Saudi, but not the most advanced economy in the region?


Sun, 05/19/2013 - 01:21 | 3577310 Colonel Klink
Colonel Klink's picture

Because we're not allowed to talk about the wankers.

Sat, 05/18/2013 - 11:21 | 3575756 orez65
orez65's picture

Liquidation is not going to happen through default, it'll have to be done through inflation.

A friend just explained it to me, "... if we had liquidated after Lehman's collapse, people would have suffered"

The sheep are truly clueless!!

Sat, 05/18/2013 - 14:39 | 3576160 RockyRacoon
RockyRacoon's picture

...people would have suffered.

Define "people".  Bankers and rent-seekers are not people.  They are a subspecies of leeches and other parasites.

They SHOULD suffer.

Only problem being that they are the ones calling the shots.

Sat, 05/18/2013 - 11:25 | 3575760 Charles Wilson
Charles Wilson's picture

I notice that there is, in the first graph, a label named "Saudi".  I don't find that on any map.

If the graph was large enough, would there be a label with "Kim Jong Un" on it?

What do we call  a region where the family is the name of the area?

A "Slave Holding State"?



Sat, 05/18/2013 - 15:22 | 3575985 SafelyGraze
SafelyGraze's picture

it's good to be Sa'ud

An essential part of family wealth is the Kingdom in its physical entirety, which the Al Saud view as a totally owned family asset.

Sat, 05/18/2013 - 11:30 | 3575772 Fuku Ben
Fuku Ben's picture

I'm sure the emergency G7 meeting this weekend will straighten everything out

Sat, 05/18/2013 - 11:53 | 3575810 Kayman
Kayman's picture

Gentlemen.... we have too many dikes, not enough fingers.  Please remove your shoes and socks...

Sat, 05/18/2013 - 16:22 | 3576342 Dave Thomas
Dave Thomas's picture

Drop those spiderman underpants while your at it.

Sat, 05/18/2013 - 11:45 | 3575794 Inthemix96
Inthemix96's picture

Where is Isreal?

Or is that taboo on here now?  Seeing as you lot give them some 3 billion a year why are they not represented here?  And fuck knows how much we give them?


Sat, 05/18/2013 - 12:08 | 3575830 Floodmaster
Floodmaster's picture

I dare you to speak against our organisation,

Sat, 05/18/2013 - 13:58 | 3576053 andrewp111
andrewp111's picture

They are simply too small to appear on that chart. Most countries aren't there either.

Sat, 05/18/2013 - 14:06 | 3576070 Wile-E-Coyote
Wile-E-Coyote's picture

You just got yourself banned you can't mention Is.......... any more, shit I nearly fell into the same trap, and if you want to get droned just go for the J.... word. Fuck me a drone has just started circling my house.

Sat, 05/18/2013 - 11:46 | 3575795 rlouis
rlouis's picture

If they really wanted inflation they would let the price of gold rise.

Sat, 05/18/2013 - 14:02 | 3576028 andrewp111
andrewp111's picture

Hell, they could drive up the price of gold by buying it. It would take a lot less printed money than $85B/mo to do that. It wouldn't create real inflation, though. Real inflation is wage-price inflation. If wages do not rise, commodity inflation tends to be very temporary, and gets reversed in a crash. There are only 2 ways to get real inflation. One is a return to global protectionism, as in Smoot-Hawley everywhere. Another would be a global Treaty to set minimum wages, grant union rights, and impose severe sanctions against countries that did not comply, and that would require a global sovereign entity to enforce it.

Sat, 05/18/2013 - 14:02 | 3576066 Wile-E-Coyote
Wile-E-Coyote's picture

Soros is investing in Gold, watch out.

Sat, 05/18/2013 - 11:53 | 3575809 A Man without Q...
A Man without Qualities's picture

The problem with this data is it is using different accounting standards.  US accounting standards for JP Morgan show 40% less than if under IAS.  It's all about how you compare gross and net derivative exposure...

Sat, 05/18/2013 - 11:55 | 3575812 Tyler Durden
Tyler Durden's picture

Hence this: "to think all of this could have been avoided if the Mellon advice of
liquidating bad assets, which have accumulated in massive proportions in
Europe (and in the shadow banking system in the US, but that is the
topic of a different post)

Sat, 05/18/2013 - 12:08 | 3575829 Bay of Pigs
Bay of Pigs's picture

"The vast majority of the difference stems from the way JPMorgan reports derivatives. On a net basis, the company showed $70.6 billion of derivatives on the asset side of its balance sheet. Meanwhile, the gross value was $1.53 trillion. U.S. accounting rules let banks offset huge chunks of their assets and liabilities against each for financial-reporting purposes -- hence, the big gap between the gross and net numbers."


Sat, 05/18/2013 - 13:09 | 3575925 falak pema
falak pema's picture

By not integrating in the above official figures the shadow banking statistics isn't the financial world just pulling the wool over its own eyes?

Who are they kidding?

And why don't the governments of these shadow banking dominated financial institutions acknowledge that? 

Its now five years that the one eyed banks lead the blind politicians; who pretend to have "everything under control".

And here is a typical sample of this latest official hopium, blue sky propoganda type spiel (if you believe the math of the contrarian threads) :

THIS GUY SHOULD KNOW THE TRUE SCORE...a world where financial arithmetic is an obscurantist art.

Sat, 05/18/2013 - 13:52 | 3576042 andrewp111
andrewp111's picture

No one knows who is truly swimming naked until the tide goes out. A lot depends on which order the dominoes fail, and thus who collects and who doesn't.

Sat, 05/18/2013 - 15:02 | 3576210 falak pema
falak pema's picture

thats the whole purpose of this article and printing those charts!

To show up who is most likely to be naked when the tide goes out; UNLESS the data is cooked without derivatives included.

My point is aren't we in this game of : lies, damn lies and ....?

Sat, 05/18/2013 - 12:40 | 3575883 Yen Cross
Yen Cross's picture

    I just had a conversation with the guy at my local 'Bottle Shop', re. shadow inventory, and how the banks are holding back supply to inflate prices. He's thinking about a purchase, so I let him have it. NINJA loans and all.

   He's a biology major, so hopefully some Darwinism sunk into his cranium. (not to be confused with Cramerism)

Sat, 05/18/2013 - 12:18 | 3575840 screw face
screw face's picture

....bullish...really like this part....."generally accepted accounting principles".


Sat, 05/18/2013 - 11:57 | 3575816 Floodmaster
Floodmaster's picture

Banks have valuable?

Sat, 05/18/2013 - 12:01 | 3575819 Pairadimes
Pairadimes's picture

Somewhere to the right of the lines on several of those charts is an exchange of gunfire.

Sat, 05/18/2013 - 12:03 | 3575821 q99x2
q99x2's picture

Is Greece going to default?

Sat, 05/18/2013 - 12:11 | 3575825 Aurora Ex Machina
Sat, 05/18/2013 - 14:19 | 3576111 trader1
trader1's picture

best song off that phoenix album...

Sat, 05/18/2013 - 19:11 | 3576397 Aurora Ex Machina
Aurora Ex Machina's picture

[Personal Post]

Since you keep spamming me with personal requests to chat, I'll set you a test. Unpack exactly and all of the references I made in my three word snark, outline their network resonance in a readable response and I'll talk to you. It's a fair test, since I only spent ~5 mins on it, and it's not designed to be sneaky.

Otherwise, I view you as potentially dangerous honeypot. Completion of said task will up your danger level, but will get you a 1-2-1.



[edit: hours later, no response. Fuck off, Winnie the Poo.]

Sun, 05/19/2013 - 02:46 | 3577381 trader1
trader1's picture

i'm as dangerous as you perceive me to be.  

you jump to conclusions!  sorry, as much as i'm addicted to ZH, i do need my sleep...did it occur to you that i live in a later time zone than you?

now, i'not sure so about that 1-2-1 any case, because i enjoy a good game i'll take your test - but with the caveat that you can choose to fail me in spite of an adequate interpretation of the snark.  (and it seems you've already made the choice whether you want to have a 1-2-1 with me...)

Europa will prevail = europe is going bankrupt, but who will survive?

  • with a band called europe and the song name "final countdown", the obvious statement is that europe is in the last stage of its descent into bankruptcy. quite fitting for a swedish band to make such a call...


  • the walled garden with the naked lady could be interpreted two ways.
    1. it symbolizes merkel and her economic "miracle" germany.  germany has arguably been increasing its defenses to a potentially bankrupted EU (i.e., plans for a return to the D-Mark), but will germany prevail is another question...then again, does europe = germany? ;-)
    2. queen elizabeth and the UK, which is clearly trying to wall itself up against the contagion of a pending EU bankruptcy


  • while the tune is one of my favories, phoenix is a french band = france, who is saying that their banking system is bankrupt already.


exciting times indeed


Sun, 05/19/2013 - 12:00 | 3577762 Aurora Ex Machina
Aurora Ex Machina's picture

Close, but not nearly close enough.

"Europa Will Prevail". ~ As the poster above you noted, it's a pastiche of "England will prevail" from the comic / movie "V for Vendetta", as well as a nod to the infamous quotation from Draghi: "They vastly underestimate the amount of political capital that has been invested in the Euro". It also uses Europa, the EU's matron Goddess, as a signifier. Europa was a moon Goddess, and in the Illiad is the daughter of the Phoenix. (You'll spot the narrative arch immediately if you know who she is).

I'll not include the geographical stuff, since you got parts of that, I'll just mention things you missed. You'll also get some milage out of knowing who/what the 18th overture was written for and it's current significance for what's actually going on behind the scenes. I represent neither side.


EUROPA - Swedish Band Europe's UK #1 single "Final Countdown" 1986, reaching #1 in 25 countries, including Germany, Sweden, Ireland and Italy.

The lyrics are as follows:

We're leaving together,
But still it's farewell
And maybe we'll come back,
To earth, who can tell ?
I guess there is no one to blame
We're leaving ground
Will things ever be the same again?

It's the final countdown...

We're heading for Venus and still we stand tall
Cause maybe they've seen us and welcome us all
With so many light years to go and things to be found
I'm sure that we'll all miss her so.

I'll let you put those lyrics against Europe's fate. I suggest reading her mythology, you'll note she was kidnapped by Zeus disguised as a Bull, there's also a famous documentary about the Nazi looting of art & treasures from Europe named after her.

Translation: Predominantly Bull Market is taking Europe to get raped. There may-or-maybe not be Fascists behind the political attacks on Europe (Spoilers: They are Fascists, at least some of them). There's also a hidden dog-whistle to our Star loving friends about the grand plan, and of course, Venus is the Goddess of Love. I've highlighted the Krugman Plan for you.

First movement: spoken voice. Art is debatable, but they've only got Abba to compare to, so we'll give them that label.


WILL - a photograph of artwork in the walled Garden of The Grove Hotel, Hertfordshire, ancestral seat of the Clarendon family and host to this year's Bilderberg meeting. Europe as a walled garden in terms of trade, immigration and NATO is a common enough image, but I must admit I cheated here. I couldn't locate anywhere who or what the statue is actually of (Nathalie Decoster as artist is a potential, but doesn't seem to fit her aesthetic), so I used the Statue to represent the Goddess Europa. You'll note that she is flanked on either side by Sun rays (hidden dog-whistle #2 to our Star loving friends). Given the ambiguous identity of the statue, we can do a bit of sleight of hand and have her represent Venus at the same time as Europa, just to make sure we're continuing the love theme.

Translation: The Bilderberg group will obviously discussing many things, but one can assume that there will be thoughts on the will required to stand fast and make the EU project a success. Whether or not they worship the idea of Order and stability in Europe isn't doubted; the question is how far they will go to protect it.

Second movement: visual art.


PREVAIL- Phoenix's new album (the father of Europa, if we follow the Illiad), and of course I've picked Bankrupt! merging into Love like a Sunset for the obvious humor that you have to pay the ferryman with, since we're using Greek mythology. I'd urge you to read the critical reception to their new album, to get the comparison I was making between the band and Europe. The piece is purely audio aesthetic with a light show that mirrors our first band's (80's fireworks vrs 2010's laser lights) so I'm not going to break it down too much. Dog whistle #3 is Sunset, which of course is when our Moon Goddess Europa rises.

Translation: I'm sure you're getting the hang of this by now, it should be obvious.

Third movement: audiovisual art, no voice.



That should keep you going, I'm sure you can tie the three movements into each other as mirroring & heightening the effect, and know why I used a triptych, as the central panel is the most important one. Final Countdown - Bilderberg - Europe Rises, but off-set by our V for Vendetta flavoring to suggest that there's ways and means of doing this, will they pick the right one, or will they go for draconian oppression? I used a Swedish band to suggest my preference for the way forward, but I don't run the world, so who knows.


But now I'm bored of ZH for at least a week, too many spooks following links and killing free information, grumble grumble grumble.



p.s. I'm afraid no soup for you. As for crazy - nope, just a bit faster than the average reader. Lions, Tigers and Bears. Dr Who has been a joy to watch this season by the way, looking out for a Clara Oswald myself, pip pip.

Sun, 05/19/2013 - 15:18 | 3578083 trader1
trader1's picture

thanks for elaborating.  i need to invest the time into all the content you've provided. that is the least i can do for someone who spent the time to educate me ;-)


i completely understand your desire for privacy.  i've been following your posts the last few weeks.  you integrate an interesting dose of philosophical insight with humor, art, music, and cinema.  it's a really a pleasure to read your posts.  there's something about you that is intriguing...


don't take too long a hiatus from zh.  you're one of two people on this site that actually makes me think.


thanks for introducing me to that black mirror series. great stuff

Sun, 05/19/2013 - 17:39 | 3578338 Element
Element's picture

ROFL ... "oh Aurura, you're such a genius, blah blah blah", is that what you want from zh? Fawning sycophantic agreement with your laughable bullcrap? Please get the dipstick in you're brain-stem checked while you're having your little rest in induced deep-sleep-therapy, or whatever program you've been sectioned into, it would be terrible to see you slip from merely sprouting assorted drivel and delusions, to completely and deeply batshit-freak-out, but I suspect that's there this little mental rail-line terminates.

But while you're resting from your arduous inquires, maybe we'll get together as a community, and petition Tyler to make zh safe for you, from all the baddies interfering with your message of truth, it's the least we can do, ... for your pending second-coming 'n all ... will there we trumpets in the heavens 'n stuff, or just you posting more paranoid delusional drivel, and mixing it up with irrelevant zen and Greek philosophy crap, as a META-intellectual trojan-bovine, or something?

We're sure living in interesting times and very fortunate to have your profound insights, into the scarcely hidden (but hidden nonetheless) future of all things big-ish, written in the sacred clues that only >you< know how to unravel.

Thank fuck for you eh?

Have a nice nap ... LOL

Sun, 05/19/2013 - 18:19 | 3578379 Aurora Ex Machina
Aurora Ex Machina's picture

You've missed the point, but I agree with the sentiment (perfectly happy to take the piss out of myself). The above was an honest explanation of what I meant, nothing more; it's Art & a joke, nothing more, mixed in with a bit of reality that you won't get from the MSM. If you don't like it, ignore my posts, simple as. Feel free to fact check them to see if I'm making any of it up (I'm not).

Don't look to me for people aiming for the second coming or the real Messiah, I don't run the world, and have been repeatedly honest about my influence (Zip. Zero. Nada.). But the people who do run the world, might be looking.


<That's the joke>


Try grokking that, and understanding meta. It's never about what's on the tin. (Now off for a rest, enjoy the show, I sure ain't running it, you all are.).



p.s. It's fine you don't get what I was saying in the Japan thread, but your level of anger / threat is showing your knickers dear. Hint: past a certain point, it was a parody / satire of the current CyberWar security culture in the USA. If you really think that "we're ordering one bog roll and a thousand latex gloves" is anything BUT satire of the MIC, you're more lost than I thought. Monty Python; sad America never had their own version during the 60's / 70's (I might be unaware of your version if it does exist).


Although, strangely, things are happening in Japan. Guess I should buy a lottery ticket, eh?

Sun, 05/19/2013 - 18:29 | 3578433 Element
Element's picture

Fine, I'll ignore then, though you do post some funny shit ... sometimes.

Sun, 05/19/2013 - 18:40 | 3578471 Aurora Ex Machina
Aurora Ex Machina's picture

Yeah, I have boundary issues when drinking, I can admit that, and it gets me into trouble. (Always hated the whole "things you can never say" part of this world). +1 Greened for truce.


I'd hate to have to start using <SRSLY> tags when I'm not having fun though; my input is nothing more than who I am.

Sat, 05/18/2013 - 12:05 | 3575826 Racer
Racer's picture

Assets?? They have assets????

Sat, 05/18/2013 - 12:44 | 3575875 Central Wanker
Central Wanker's picture

Our assets = your ass etc.

Sat, 05/18/2013 - 12:18 | 3575841 miker
miker's picture

Someone explain to me how letting the system correct through default wouldn't lead to a massive depression; perhaps even collapse of the system.  There is so much debt out there that once the defaulting starting, it would cascade into an avalanche.  What am I missing here?

Sat, 05/18/2013 - 14:47 | 3576176 RockyRacoon
RockyRacoon's picture

You appear to have a right and proper grasp of the situation.  Why do you think that so many of us here at ZH are talking about gold, gardening, guns, and ... whatever.  It's coming down, like it or not.  Past the point of it being done painlessly as you seem to desire.  The party's over, it's 5AM and those who have real jobs are all gone home, but that doesn't keep the host(s) from spiking the punch more and more.

Sat, 05/18/2013 - 12:20 | 3575843 FreedomGuy
FreedomGuy's picture

"Lorenzo Bini Smaghi: In 15 years I'm a bit more confident because I think the adjustments will have been made. Europe will become more competitive and stronger. So I am a long-term optimist. But I am also a short-term pessimist; the near-term adjustment is maybe a bit too tough and too front-loaded so the next five years are going to be very difficult."

Which part of this do you read and respond to? Let me help with an analogy.

In fifteen years I think the weather will be good. I think different temperature zones will be adjusting and more predictable. So, long term I am an optimist on the weather. However, short term, today, it looks like rain developing into severe thunderstorms. From the radar it looks like possibly epic proportions with tornados. So, close in I think we are about to have a rough go of it. The next few days might be very severe. But in 15 years, I think the weather will be good! Take action accordingly.

Central planners are impressive only to themselves, their true believer lemmings, those who do not pay attention and most of the proletariat who have god-like faith in government. To anyone with a brain, a shred of rationality, even one toe in the reality pool, these prouncements are circular, imbecilic nonsense.

How about we stop the collectivist experiment in government? Leave religious faith to the religious not the statists.

Sat, 05/18/2013 - 13:01 | 3575936 Aurora Ex Machina
Aurora Ex Machina's picture

In 15 years the weather is going to be positively wild, there's absolutely no chance otherwise, so I'm not sure your analogy survives.

It also depends on what he defines as "adjustments"; if he means "business as usual" then I need to point you to Eygpt, and the source of De Nile.

Sat, 05/18/2013 - 16:51 | 3576381 FreedomGuy
FreedomGuy's picture

You seem to get only half my point. My point is that no one knows what the hell the world will look like in 15 years even though many claim to. The predictions that matter and have more weight are the close in the weather.

Mon, 05/20/2013 - 03:48 | 3579535 trader1
trader1's picture

they don't always get the weather right...

Mon, 05/20/2013 - 14:00 | 3581044 trader1
trader1's picture

Some of the most extreme predictions of global warming are unlikely to materialise, new scientific research has suggested, but the world is still likely to be in for a temperature rise of double that regarded as safe.

The researchers said warming was most likely to reach about 4C above pre-industrial levels if the past decade's readings were taken into account.

That would still lead to catastrophe across large swaths of the Earth, causing droughts, storms, floods and heatwaves, and drastic effects on agricultural productivity leading to secondary effects such as mass migration.

Sat, 05/18/2013 - 12:31 | 3575857 roadhazard
roadhazard's picture

It's going to be partly cloudy with a chance of showers here tomorrow.   

Sat, 05/18/2013 - 12:41 | 3575887 JR
JR's picture

The more we have monopoly, the more we’re going to have economic failure. Monopoly is government.

The Rise of Finance by Evan Soltas 02/24/2013  (from a post he was working on for Bloomberg, sans graph)

“The…financial industry now makes roughly half of all nonfarm corporate profits in the U.S., a share which has risen five-fold since the end of World War II.

Other things to note… (1) there is clearly a secular component to the rise; (2) the variance around the secular trend seems somewhat cyclical, but not enormously so; and (3) the financial sector's share of total profits has continued to increase through the recession and financial crisis.

Part of this is the expansion of the financial sector within the American economy. Employment in the broadly-defined financial industry has risen from roughly 4 percent of payroll employment to 6 percent.

But most of it is a huge increase in the profit per man-hour worked in the financial industry. Making some rough approximations about the financial industry's share of payroll employment, I can estimate that the average hour worked in the financial industry generates nearly 30 times the average per-man-hour profit in the rest of the economy. That's up from six times the average in 1964.

This could very well be a question of global comparative advantage, but I find that hard to believe on the basis of the employment figures. It seems substantially more likely, rather, that the financial sector's profitability comes from the implicit and explicit subsidies of a market with high barriers to entry.

Let's run though the explicit subsidies: the mortgage-interest deduction and other homebuyer credits, student loan aid, federal guarantees on debt, the preferential tax rates on capital gains and dividends, interest on reserves at the Fed, and the FDIC guarantee. The financial industry also benefits from substantial implicit regulatory subsidies such as "too-big-to-fail."

I worry that our response to the financial crisis and the recession -- providing a "backstop" for the financial industry -- has amounted to little more than an increase in both forms of subsidy. That doesn't do very much for financial stability.

Sat, 05/18/2013 - 12:55 | 3575923 FreedomGuy
FreedomGuy's picture

Nice post, JR. I have seen analyses that explain this phenomenon well. The gist of it is that money is cheap, not to mention, often guaranteed. Making things is difficult, expensive and full of risk. Therefore, it is easy to make money, playing with money than make money making real things.

This is the legacy of artificially low interest rates, artificial money supplies, as well as subsidizing and protecting the financial sector. In the last crisis they should have crashed and bankers should have had to flee to avoid being killed by their depositors and investors. That tends to make the next crew more circumspect.

Sat, 05/18/2013 - 13:27 | 3575975 falak pema
falak pema's picture

If you think that government is the biggest threat to individual liberties just read this :

This is a much more comprehensive and efficient model based on controlling the world via data accessing : consumer and advertising revenues as opposed to tax revenues seems a better bet in tomorrow's world. 

Sat, 05/18/2013 - 13:48 | 3576033 andrewp111
andrewp111's picture

Google is a close partner with the Government. That is the real threat.

Sat, 05/18/2013 - 15:00 | 3576205 falak pema
falak pema's picture

whose the tail and whose the dog; you barking government doesn't make it the dog if it wags like a tail. 

Sat, 05/18/2013 - 12:50 | 3575907 Pretorian
Pretorian's picture

Something is false with France BofA chart regarding bank liability as % of GDP. I have calculated bank by bank for majors in France and it is below 150% not 500%.That chart is not true if audited financial statemants of France banks are to be trusted. 

Sat, 05/18/2013 - 13:47 | 3576031 andrewp111
andrewp111's picture

France has 100% State owned banks. Are you including those?

Sat, 05/18/2013 - 13:06 | 3575929 THE DORK OF CORK
THE DORK OF CORK's picture

Its very easy to create inflation if you don't consider double entry stuff real.


Trouble is the banks would be seen for what they are - extractors of wealth.


The pirates of Genoa & Venice have had their day (thousand years ~) in Europe  -they have moved on - leaving a disaster zone in their wake.


But there is no need to embrace them any longer - they cannot bring plunder to these shores anymore - only grief.


The printing of national Treasury money would in short order rebalance global & inter european trade.

You don't need to be German or Chinese to produce basic secondary products.

It can be done anywhere near a old coal plant.

Sat, 05/18/2013 - 12:59 | 3575935 Atomizer
Atomizer's picture

The Lisbon Council seems to have everything worked out. heehee...

Sat, 05/18/2013 - 13:02 | 3575938 WTFUD
WTFUD's picture

i don't know, all of this 'serious' analysis regarding one large ponzi cesspool of global shite while we await merkels victory speech in september and that after awaiting O'BallsUp's re election the previous 12 months. Incredulous, Sad Mad and Pathetic. We are Screwed and might as well close up shop and begin the TRIALS.

Sat, 05/18/2013 - 13:02 | 3575939 PaperBear
PaperBear's picture

Europe definitely has to be the first to take deposits.

Sat, 05/18/2013 - 13:43 | 3576022 andrewp111
andrewp111's picture

They already have, in Cyprus. It remains to be seen if they have to balls to take deposits of any really big banks in Germany or France.

Sat, 05/18/2013 - 13:13 | 3575956 Atomizer
Atomizer's picture

Over the years, it’s funny to watch the GlobalEurope Lupe Report change their animal stripes.

GEAB N°75 is available! Systemic crisis 2013: with record stock exchange highs, the planet’s imminent plunge into recession

Sat, 05/18/2013 - 13:41 | 3576011 andrewp111
andrewp111's picture

The ECB does NOT have to buy mass quantities of German bonds in a QE operation. That would make no rational sense. All they have to do is to declare a maximum spread for the entire Union of say 2%, and buy PIIGS bonds whenever their rates exceed German bonds by more than 2%. They only have to buy German bonds if German rates creep up beyond a declared ECB threshold of say, 1% on the 10 y.  As devaluation of the Yen is pressuring German exports, the ECB may have to buy foreign (Yen and Dollar)  bonds to competitively devalue the Euro.

Sun, 05/19/2013 - 19:12 | 3578599 Element
Element's picture

+1 ... oh boy ... we're really in the shish-bowl when it's become all about identifying the best way to competitively devalue, just to say afloat.

Sat, 05/18/2013 - 13:41 | 3576015 Stuck on Zero
Stuck on Zero's picture

With regard to: Bank Assets vs. GDP.  It's an unfair comparison.  First off, the line between banks and financial houses is very blurry in the U.S.  Second, does the chart include Central Banks?  Third, are these assets marked to market?  Fourth, what about derivatives, hedges, and interest rate swaps? Fifth, what about maturities?


Sat, 05/18/2013 - 15:10 | 3576220 Atomizer
Atomizer's picture

Sound like a ass puckering yawn Zero. You better whip up another SIV to save your sorry soul.

Sat, 05/18/2013 - 16:13 | 3576320 Stuck on Zero
Stuck on Zero's picture

The only SIV I need is an armored SUV as a bug-out machine.


Sat, 05/18/2013 - 16:40 | 3576363 Atomizer
Atomizer's picture

If you could see this sinister bullshit from my eyeballs, you would develop a high degree a sarcasm. No fowl, no harm my friend..

Sat, 05/18/2013 - 15:53 | 3576289 Seeking Aphids
Seeking Aphids's picture

Highly unlikely that Europe will be allowed to fall apart...much more likely that, after the German elections in the fall, there will be a bunch of announcements regarding further integration of the EU banking system and the creation of a new bureaucracy to oversee the creation of a kind of super finance ministry of the EU which will oversee national budgets, etc. This is the future of Europe...and the world. We are moving towards greater integration, not less. Get used to it.......

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