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Alarm Bells Ringing: Behind The Smoke And Mirrors Of The European Banking System

Tyler Durden's picture




 

Submitted by Erico Matias Tavares of Sinclair & Co.

Alarm Bells Ringing - Behind the Smoke and Mirrors of the European Banking System

Alarm bells in the European banking system have been ringing for quite a while but nobody seems to be listening. The roaring capital markets are just too loud.

But we have been keeping track of a few things.

Private sector lending is dropping sharply in the Eurozone. The latest figures have just been released and the picture is not at all encouraging. Total private sector credit by Eurozone monetary financial institutions has accentuated its negative trajectory last June, with lending to households seeing the largest monthly decline since the height of the great financial crisis in late 2008. Uh-oh.

Periphery back in play? Very recently the second largest private bank in Portugal was caught in the bankruptcy of the Espirito Santo conglomerate, reporting the largest ever corporate loss in the country’s history just last Wednesday, and raising the specter that all might not be well in the Eurozone’s periphery. Now the Portuguese government may be forced to intervene, possibly using a very large chunk of the financial sector stabilization funds set aside during the country’s recent bailout.

BIS issues a(nother) warning. This should not be a surprise. In its 2014 annual report, released at the end of June, the Bank of International Settlements (“BIS”) warned that “banks that have failed to adjust post-crisis face lingering balance sheet weaknesses from direct exposure to overindebted borrowers and the drag of debt overhang on economic recovery”, with this situation being the most acute in Europe. It also stated that increases in government debt ratios in several cases appear to be on an unsustainable path. It appears that debt levels matter for (some) economists after all.

Bad loans rising. Before we had Fitch, the ratings agency, stating last May that in a sample of 124 Eurozone banks which participated in the latest stress test impaired loans increased by an average of 8% in 2013, with no less than 30 banks seeing an increase of 20%. This could have certainly contributed to the massive contraction in private sector credit that we are now seeing on its own. But there’s more.

Emerging dangers. Trillions more in fact. In February Reuters reported that European banks have loaned in excess of $3 trillion to emerging markets – a little less than the entire GDP of Germany, and more than four times the exposure of US lenders to those countries. Fitch chimed in saying that “a handful of large EU banks are materially exposed to more fragile emerging markets.” While direct risks might be manageable for these banks, any contagion might be another story. Is an Argentinean default truly contained? Are Turkey’s problems solved? What happens if the latest EU/US sanctions hit Russian banks or companies hard?

Where’s the capital? Another eye-opener came over a year ago. In April 2013, Jakob Vestergaard and María Retana at the Danish Institute for International Studies published "Smoke and Mirrors: On the Alleged Recapitalization of European Banks", a report partially funded by the World Bank. The title says it all. According to the authors, by using broad capital measures based on risk-weighted assets European banking regulators have overstated the banks’ soundness and resilience in their stress assessments. Accordingly, “recent increases in risk weighted capital ratios have been little more than a smokescreen.”

By focusing on leverage ratios instead, the authors reached some interesting conclusions. The least well-capitalized banking sector among the larger Eurozone countries is not the Spanish or Italian… but the German, closely followed by the French! According to their estimates, a five-fold increase in equity capital is needed in order to reach “adequate” levels of soundness. It is well worth reading the entire report, including the discussion on why regulators seem to be consistently behind the ball on bank recapitalization.

Figure 1: Eurozone Government Debt-to-GDP (Maastricht Definition)
Source: European Central Bank

Sovereign debt jumps. But alarm bells should have been ringing even before that. In the third quarter of 2012, the overall government debt-to-GDP in the Eurozone surpassed 90% for the first time ever, as shown in the graph above. Why is this number important? In “Growth in a Time of Debt”, after analyzing 3,700 annual country data points going back centuries under the most varied macroeconomic conditions (and the occasional spreadsheet error ;), Carmen Reinhart and Kenneth Rogoff found that in countries which are above that 90% threshold GDP growth is generally weak. In other words, from that point on the odds are firmly stacked against us seeing the growth rates necessary to smoothly reduce debt loads that even the BIS agrees are problematic. And several Eurozone countries are way past that level now.

And who were the buyers of bonds in some of the most indebted periphery countries? In April 2012 Bloomberg reported that Spanish, Italian and Portuguese banks increased their holdings of domestic sovereign debt by very significant double digits, mostly financed by the ECB. Much to the chagrin of bond vigilantes, the ensuing decline in the bond yields of these countries virtually up until today might not be a sign of strength and stability – but rather an impressive feat of financial engineering.

That Minsky moment. Over two decades ago, Hyman Minsky described in his “Financial Instability Hypothesis” the interplay between the financial markets and the wider economy, which according to him is at the heart of the business cycle in a capitalist economy with a sophisticated financial system. During the good times increases in asset values often lead to investment and speculative excesses financed through debt. At some point the resulting cash flows can no longer cover those debts, impairing loans and prompting banks to tighten credit availability, even to companies with good credit ratings. This in turn leads to a contraction in asset values and economic activity in general.

And where are we now in the Eurozone? We have already seen the general increase in asset values, so check. And now we can also check bad debts rising and private sector credit contracting. If Minsky was right, what follows is not pretty.

Whether governments and central banks have the power to push back or avoid that fateful moment remains to be seen. But equity markets in Europe are already smelling a rat.

Figure 2: Ratio of Developed Europe Financial Services Stocks to FTSE Developed Europe Stock Index (Monthly)

The share prices of financial services companies in developed European countries have been lagging the general index for developed Europe for some months now, with the ratio dipping below its 10-month (simple) moving average last May – typically a bad omen for the sector and the markets in general.

With so many concerning signs developing since the last financial flare-up in the Eurozone, we can make the case that European banks should have been taking much more proactive steps in recapitalizing their balance sheets, especially with such robust equity markets. But it seems nobody likes to spoil a good party.

Alarm bells should not be dismissed so easily. They are there for a reason. Regulators, politicians, bank managers and investors should all be paying attention.

 

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Sat, 08/02/2014 - 16:13 | 5038388 Gunter
Gunter's picture

After many years overseas I returned to Germany and had some last century-like cash with me. Trying to exchange that I learned from the bank girl behind the counter: We don't handle cash here. (And nobody knows what is a cheque is around here any more, except he is as old a myself.)

I am sooo old. Still thinking banks were about cash and money.

Tomorrow morning I will check out a bakery. Will the girl behind the counter say: We don't handle bread rolls here. Let's see.

Sat, 08/02/2014 - 19:04 | 5038878 bilejones
bilejones's picture

Any banking transaction in the US requires ID.

Sat, 08/02/2014 - 14:56 | 5038159 SpanishGoop
SpanishGoop's picture

Try to do it in Greece.

They won't have change for 500.

 

Sat, 08/02/2014 - 20:09 | 5039004 Kirk2NCC1701
Kirk2NCC1701's picture

It has nothing to do with their faith in 500 EUR notes. 

It has everything to do with the US pressuring them into this, to counter the popularity of 500 EUR Notes over $100 Notes in the DRUG trade. 

When dealing with large sums, they are preferable (bigger denominations, and at 1 EUR ~ 1.4 USD, this get amplified – resulting is a smaller pile of “cash” to transport).  It's just the FED fighting for Market Share.  It's just the FED fighting for Market Share.

Sometimes, how you see the problem, is the problem.  ;-)

Sat, 08/02/2014 - 14:06 | 5037998 Atomizer
Atomizer's picture

BIBI, never second guess when we defund killing children and people who have no idea about this war. I dislike Obama and you BIBI. In time, the global community will find your both working for the bankers. Those handlers have a assassination call on their heads. Cease fire. Let's keep calm minds to work together. I have repeated asked, what are demands? Published it. Then we can work with Hamas and Palestinian demands. Fuck the White house efforts. Let's do this as a American and you. No more killing and harm. Tell me what is pissing you off. Again, just a American who wants this shit to end. Please reply. 

 

Sat, 08/02/2014 - 14:11 | 5038014 Bokkenrijder
Bokkenrijder's picture

As of July 1st, Luxembourg already restricts 'cash' withdrawls of >€10000.

If you want to withdraw >€10k cash from your account, then you'll be presented with 2 options; accept a cheque or give them a different bank account where they can wire your fiat currency to...

Original story here in German: http://www.wort.lu/de/business/wachsende-kontrolle-ueber-geldgeschaefte-...

Google translate here: https://translate.google.com/translate?sl=de&tl=en&js=y&prev=_t&hl=en&ie...

Remember that old joke about the world's 3 biggest lies?

1) "I love you"

2) "the cheque is in the mail" and

3) "don't worry honey, I won't cum in your mouth"

Sat, 08/02/2014 - 19:31 | 5038941 knukles
knukles's picture

Just tell the good looking teller; "I don't wanna cum in your mouth.  I wanna cum in your cash drawer."

Sat, 08/02/2014 - 20:01 | 5038992 Kirk2NCC1701
Kirk2NCC1701's picture

NP ('Nema Problema')*, no problem...  You deposit the cheque** into your account, then you start taking it out in Notes.

Then deposit in Bank of Serta, Sealey or Posturepedic.  Or the EU equivalent of these American private banks.  ;-)

p.s. Bokkenrijder, you're a 'Backrider'?  I don't dare to ask more.

* Famous quote from Slobodan Milosevic

** It's spelled the British way in the EU.

Sun, 08/03/2014 - 09:43 | 5039816 Bokkenrijder
Bokkenrijder's picture

Haha, no I'm definitely no 'backrider.' 

Here's a link explaining my nickname, I'm from that area in the Netherlands where this gang used to roam in the 18th century:

http://en.wikipedia.org/wiki/Buckriders

It's amazing how, throughout the centuries, nothing has changed with regards to 'the establishment' (the local pastor, warlord/mayor, and nobility in those days) trying to ridicule and tarnish elements of society that it perceives as threats or a hinderance. Just claim that the Bokkenrijders made a deal with the devil which allowed them to fly through the sky on bucks, in order to scare the masses not to revolt against the feudal society's statusquo.

It's just like calling gold a barbarous relic... ;-)

p.s. "NP ('Nema Problema')*, no problem...  You deposit the cheque** into your account, then you start taking it out in Notes."

Yes, it IS a problem because the money that that cheque represents WAS already in your account to begin with. That's why they gave you a cheque in the first place, because they reserve the right to refuse to give you cash/notes when you make large withdrawals from your deposit...

Sun, 08/03/2014 - 15:19 | 5041074 CHX
CHX's picture

Open several accounts with different banks, wire 9999 to each each month and withdraw 9999, and hope the big BOOM comes after you got all your cash withdrawn... Good luck.

Sat, 08/02/2014 - 22:09 | 5039290 falconflight
falconflight's picture

Guess I was lucky about number 3, I always told em that I wanted to, some even said please and thank you. 

Sat, 08/02/2014 - 16:27 | 5038433 Goldilocks
Goldilocks's picture

Red Ice Insight - Anchorman 2 Review & The Politics of Will Ferrell
http://www.youtube.com/watch?v=cqDuKaCEEdw (1:00:22)

@52:40
Michio Kaku, Theoretical Physicist
Mouthpiece for the world government scientific dictatorship

Sat, 08/02/2014 - 16:38 | 5038468 HardlyZero
HardlyZero's picture

Portugal <--> Spain <--> Italy   have their own financial riggings before it gets to France or Turkey or Eastern Europe.

Sat, 08/02/2014 - 16:53 | 5038534 TVP
TVP's picture

I believe I have found the solution to all of our problems.

 

It's called....

 

EBOLA!!!!

 

All your financial woes evaporate, upon severe hemoragghing.   

Sat, 08/02/2014 - 19:45 | 5038949 813kml
813kml's picture

*Student loans excepted from this limited-time offer.

Sat, 08/02/2014 - 17:16 | 5038593 Ban KKiller
Ban KKiller's picture

Buy debt hand over fist? Or just shit the bed? 

Sat, 08/02/2014 - 19:20 | 5038918 Keyser
Keyser's picture

option 3, buy precious metals...

Sat, 08/02/2014 - 19:32 | 5038942 knukles
knukles's picture

Then shit the bed.

Sat, 08/02/2014 - 17:35 | 5038632 falak pema
falak pema's picture

If french banks are most exposed in Russia then they should get first bite at earning from Putin's cut in China's gas deal.

Which means they collect down payments and use it to pay off their exposure to Esperito santo and other shit that will hit the Euro fans.

I don't think Putin will agree to that but what other solution does he have to avoid the banks of his friends, Germany, France and Italy, from going down from anglo sanctions ripple effect? 

We are all in the same boat, but some are more straddled between many boats. 

I wonder who gets hit in the Argentinian wind down? 

Banks are now looking so fragile. The French government just rubbed a judge's ruling into the ground. Concerning toxic lending to Municipalities by Dexia. 

In order to protect Dexia and its recap. by previous Sarko govt and other back up obtained from sister banks, the government, totally incestuous in its dealings with banks, has just told the municipalities to "fuck off", reversing the judge's decision by a DECREE which makes municipalities and their tax payers responsible for any increased pressure resulting from those toxic debts, instead of the banks as the Judge had decided--by putting a cap to the interest due on those loans which were indexed to market rates--Dexia's credit rating is now way out of line. 

This could lead to municipalities going bankrupt down the road. Or having their tax payers to cough up huge amounts. 

The municipalities will take up this case in front of the european courts as they are really mad. So much for state sector consolidation... its all smoke and mirrors and the banks hold the govt. by their nuts. 

Crack, ouch ! 

Sat, 08/02/2014 - 17:40 | 5038633 HardlyZero
HardlyZero's picture

Thank you for the article Tylers, that 92.5% debt/GDP ratio chart is a shocker and shows how there is no more 'room' for credit expansion.

 

I'm 50% into precious metals and 50% short (SRTY).

Let's see where this goes for the remainder of 2014.

There are half-dozen major exogenous crises that could cause massive financial contagion.

I see Argentina and Portugal as the financial tipping points.

Argentina will probably 'go BRIC'.

Portugal will be a massive ECB test...and its a tossup what happens after.

Sat, 08/02/2014 - 19:44 | 5038971 Tall Tom
Tall Tom's picture

The USA is over 100%

 

They have a long way to go to catch up with us.

 

/snark

Sun, 08/03/2014 - 00:05 | 5039550 HardlyZero
HardlyZero's picture

Yes.

But Europe (excluding UK) has a less developed fiat financial credit market and central banking system (EU playing catchup).

EU still has many 'family owned' central banks.  Italy, Spain, Portugal still have many special banking arrangements.

There are many flies in the ointments.

92.5% is plenty bad for EU...they can't handle much more since they don't have Federal banking system, their banking remains 1800's.

{note: i'd never defend pure fiat or any type of fiat FED, except it got billions humans here and now}

Not that fiat and FED is 'advanced'...just complex and fantastic.  (...there it is).

Dismal. 

Sat, 08/02/2014 - 17:33 | 5038641 Jack Burton
Jack Burton's picture

There are more than a few European banks that are totally fucked. The ECB will try to print more to save them. All this world wide printing to save bankers has distorted prices and equities to make life for ordinary people hard, but the 1% can feast off of ZIRP liquidity. I'de love to see a series of EU banks fail, but ECB will print to infinity to rescue them.

Sat, 08/02/2014 - 22:14 | 5039304 TeraByte
TeraByte's picture

Were not the Deutsche in a deep trouble Germany would break this printing malice, but the bank´s  size make them domestically totally impossible to let fall and yes ECB are consented to print until to the bitter end.  Thereafter witnessing so many suddenly losing money, that actually never really existed would be an ultimate bliss. A quick scenario: Ebola cases emerge in the West. Panic follows and closed borders. And it´s done, before you can deliver the Lord´s Prayer.

Sat, 08/02/2014 - 17:48 | 5038679 crazybob369
crazybob369's picture

What I can't figure out is why the Euro is still worth anything. Is it because as measured against the $ tis the lesser of two evils?

Sat, 08/02/2014 - 17:54 | 5038703 Escrava Isaura
Escrava Isaura's picture

So you saying the dollar should be worth nothing?

Sat, 08/02/2014 - 19:25 | 5038930 Keyser
Keyser's picture

Every currency on the planet is a fiat currency, all worthless paper, backed by nothing but faith in the issuers of the debt... On another note, you really are a strange bird... 

 

Sat, 08/02/2014 - 19:44 | 5038970 Escrava Isaura
Escrava Isaura's picture

Keyser

So help me out of this cage:

Monday I will ask my boss to pay me in hard currency.

Once at, I’ll tell him to go 'Socialistic' and sell the company to us, the employees...

Sat, 08/02/2014 - 19:53 | 5038982 Tall Tom
Tall Tom's picture

How much were Tulips worth after the Crash of the Tulip Market in Holland?

 

The only reason why, at this point, that the Fiat Currencies have any value is because most people believe that they do.

 

When they finally wake up and ask the question, "What in the Fuck???", then the game is pretty well over.

 

It is not a question of if it going to happen. It is. The question is , "When?" And when it does you really do not want to be stuck holding any of those. You want, ideally, something of VALUE, or, CAPITAL. (I have referred to it as UTILITY)

 

ekm1 is correct. Capital is productive assets.

 

Gold is probably the next best item as it will purchase productive Capital post collapse.

Sat, 08/02/2014 - 20:17 | 5039029 Escrava Isaura
Escrava Isaura's picture

Tall Tom, I understand all your points. But we live in a finite world.

Saudi Arabia 'Tulip' productive assets: Oil

In a post-collapse world, why would Saudi Arabia sell its oil?

Sat, 08/02/2014 - 20:35 | 5039066 Tall Tom
Tall Tom's picture

What else can it sell? Sand?

 

Saudi does not produce much of anything else. Even if they did then who do they sell it to?

 

How do they feed themselves?

Sat, 08/02/2014 - 20:52 | 5039113 Escrava Isaura
Escrava Isaura's picture

Tom, I said it before:

a) We live in a finite planet. By 2027 humanity, as we know now, is finished

b) Gold will be the last 'and short-lived' bubble before society realizes there's NO more oil and coal to grow the economy.

You best asset, starting in about 10 years, will be:

Farm land with water reservoir under it.

Sub-tropical weather (for food and animals)

And electricity

Sat, 08/02/2014 - 21:27 | 5039183 Tall Tom
Tall Tom's picture

Did you miss what I wrote in the opening of this exchange???

 

Gold is probably the next best item as it will purchase productive Capital post collapse.

 

I believe that the Economy will collapse before the Natural Resources will expire.

 

You trade your Gold for productive land, for productive Capital, IN THAT BUBBLE. You get the best bang for your Ounce.

 

You buy when everyone else is selling. Then you will have it to sell when everyone is buying.

Sat, 08/02/2014 - 21:51 | 5039249 Escrava Isaura
Escrava Isaura's picture

No. I did not missed what you said, Tom.

Agree that financials and commerce collapses first. Followed by political collapse.

I just don't think you will be able to buy resources, then. Because we will be facing the next collapse: Societal collapse.

Sat, 08/02/2014 - 23:38 | 5039515 Tall Tom
Tall Tom's picture

...as everyone is scrambling for Gold...

 

BTW...I am not junking your posts...

Sun, 08/03/2014 - 08:41 | 5039947 Escrava Isaura
Escrava Isaura's picture

If you have ‘Physical’ gold, keep it!

If you have kids, send them to Paraguay for a year as exchange students or, having them spending time with the Amish, in Pennsylvania. The idea here is to get these kids out of this infantilism America mindset of perpetual distraction and fantasy.

And buy some farm land in South America, not in Brazil.

The arrows down I take as complement. After all, we live in a large society. The arrows up, I see that there’s hope.

Sat, 08/02/2014 - 21:49 | 5039242 falconflight
falconflight's picture

There are hundreds of years worth of proven coal reserves, although through the perversion of law, a president and his allies can literally destroy an industry and punish its citizens with skyrocketing energy costs to subsidize the evil bastard's ideology and his corporate friends who seek to enrich themselves beyond our imagination building their "renewables" industry on the backs of the TaxPayer.

Sat, 08/02/2014 - 22:46 | 5039395 Escrava Isaura
Escrava Isaura's picture

falconflight,

Earth will never run out of coal and oil. The problem is diminishing returns: We will be extracting less and less energy while having to spend more and more energy extracting it.

Chris Nelder:11 years’ supply of natural gas may be optimistic.”

http://www.slate.com/articles/health_and_science/future_tense/2011/12/is_there_really_100_years_worth_of_natural_gas_beneath_the_united_states_.html

Roland Horne:Canada requires 200 Tcf of natural gas to burn its tar sands. But Canada’s total reserve: 58 Tcf.”

https://www.youtube.com/watch?v=KTsYjRqPmNA#t=46m35s%E2%80%9D

Sat, 08/02/2014 - 18:09 | 5038738 CHX
CHX's picture

Because a large part of the global population has no clue what's going on and they think of fiat currencies - EURO, USD, Pound, Yen et al. as a store of value - the dream of being rich one day, or winning the lottery and all is fine and dandy for the rest of their lives. 

Sat, 08/02/2014 - 18:17 | 5038768 Escrava Isaura
Escrava Isaura's picture

CHX,

Can we copy what you are doing?

Sat, 08/02/2014 - 19:09 | 5038891 CHX
CHX's picture

Please do, if you wish. x

Sat, 08/02/2014 - 19:47 | 5038974 Escrava Isaura
Escrava Isaura's picture

So, again, what is the secret?

I have total confidence on you that you know what's going on... don't you?

Sun, 08/03/2014 - 05:36 | 5039804 CHX
CHX's picture

I'm happy with what I have and do, and I don't piss on other's peoples legs.

Sun, 08/03/2014 - 10:49 | 5039921 Escrava Isaura
Escrava Isaura's picture

You made the statement that people are clueless. So I was asking you for some insights.

Sun, 08/03/2014 - 11:43 | 5040303 CHX
CHX's picture

E.g.: Ask 100 random people how interest rates are determined and check back with me, k ?

Sun, 08/03/2014 - 12:03 | 5040367 Escrava Isaura
Escrava Isaura's picture

Again, not clichés!

Your insights!

Sun, 08/03/2014 - 14:32 | 5040897 CHX
CHX's picture

Crazybob aseked a question, I gave an answer and you keep on pissing on my leg. Maybe you intend to do that, maybe not, but to me you seem like an annoying fellow. Maybe you're not, but I won't bother to find out either way. CHeers.

Sat, 08/02/2014 - 17:53 | 5038697 Quaderratic Probing
Quaderratic Probing's picture

Trouble is debt is real and GDP is not. Dividing real by unreal does not produce meaningful values.

Sun, 08/03/2014 - 00:17 | 5038802 HardlyZero
HardlyZero's picture

Yes.  Debt is not tangible.  GDP is not tangible.  But today these have a value and consequence.

Fiat is not tangible.   Define tangible as having actual intrinsic value.

However, credit markets, credit default swaps, money markets, central banks, and sovereign debts...all depend on debt and GDP to determine their viability and ability to get their next (non-tangible) credit assignment.

 

If we return to tangible or merchant banking, then only tangible assets have worth.

 

If fiat currencies collapse then merchant banking will emerge.

 

Some would argue that Debt is fiat and false, while GDP is actual product and real and tangible.  

Merchant banking (tangibles) was practiced during previous reserve currencies (porturgese, spanish, dutch, french)

Sat, 08/02/2014 - 17:53 | 5038698 Quaderratic Probing
Quaderratic Probing's picture

Trouble is debt is real and GDP is not. Dividing real by unreal does not produce meaningful values.

Sat, 08/02/2014 - 18:08 | 5038734 Karaio
Karaio's picture

Might explain a few things about Europe. 

1 - Coca-Cola 300ml in Madrid-Spain = 06 (six) Euros; 

2 - Coca Cola 300ml in Sao Paulo-Brazil = 2.50 (two fifty) Euros (five Reais). 

In both places are human who sells the bottles and the liquid is the same, until the cover. 

Europe got used to import food. There are exceptions. 

Portugal, Spain and southern Italy are caring people, giving passports to the descendants today occupy abandoned villages inside. 

I have some friends who went to these villages but need to work on the farm. 

The soil was stony use of both unfeasible in most instances. 

The guys gave up after two winters and returned. 

Indebted. 

Europe today boils down to: 

- overpopulation. 

- excess unemployment. 

- excesss-cost. 

It can be a place to stroll, not to reside. 

It's like California.

Sat, 08/02/2014 - 18:11 | 5038742 Escrava Isaura
Escrava Isaura's picture

Karaio,

Tudo bem?

Sat, 08/02/2014 - 18:30 | 5038798 Karaio
Karaio's picture

Slave Isaura: 

By far so good, still worried about Ebola in Goiania. 

:-)

Sat, 08/02/2014 - 18:37 | 5038814 Karaio
Karaio's picture

Slave Isaura: 

 

This here reminds Weblog (PD) at the time of dialed access in 2006/7.

Has Surf, has Mordachai, has a lot of people who write the same. 

You look like Gwyn who lives in UK. 

:-)

Sat, 08/02/2014 - 18:50 | 5038838 Escrava Isaura
Escrava Isaura's picture

Not UK. I live in DC.

Not sure about the other names.

Interesting comment about "Lots people that write the same." Tell us more.

Any case of Ebola where you live?

Sat, 08/02/2014 - 20:01 | 5038975 Karaio
Karaio's picture

Slave Isaura: 

Slave Isaura: 

I live in Annapolis, a city of 450,000 inhabitants, distant 58 km from Goiania, capital of Goias, Brazil (140 km far from Brasilia (capital of Brazil)). 

Many Americans believe that the capital of Brazil is Buenos Aires Kkkkkkkkkkkkkkkkk. 

I hope it's not your kkkkkkkkkkkk case. 

Sorry for the joke. 

As for Ebola, only the first report in the Journal of seven TV-thirty in the morning, was given as false. 

Do not rely on government, when the news was given to believe that there is no error. 

We are waiting for the next 20 days to learn, we are already prepared in my family. 

I commented on this in another post. 

Oh, I like cats as well as Paul Craig Roberts & vineyardsaker blogspot. 

:-)

Sat, 08/02/2014 - 20:18 | 5039039 Escrava Isaura
Escrava Isaura's picture

Karaio,

already prepared in my family.

How so?

Sat, 08/02/2014 - 20:28 | 5039058 Escrava Isaura
Escrava Isaura's picture

Karaio,

What are you hearing on the blogs about Ukraine flight?

Sat, 08/02/2014 - 22:37 | 5039368 Karaio
Karaio's picture

Slave Isaura: 

Ukrainians fighters strafed a civilian aircraft. 

It's that simple. 

There are two photos that show the Network, one shows the entry of projectiles near the cabin, another shows traces of projectiles near the wing. 

There was no missile thing! 

A Dutchman who speaks Ukrainian pilot and is knocked the pictures which were promptly deleted but another German driver posted what was on file. 

When they found the black boxes that the Air France plane that crashed in Brazil, in three days it was known that the problem was in the pivotal speed that link clogged ice, detonated in flight. 

When that Airbus skidded off the runway at Congonhas Airport overshot the runway and toasted, we knew that in three days the onboard computer crashed. 

A black box plane is like a stick, you put a bit of energy and connected to some equipment, save what is there. 

I believe that the Russians did it before submitting the two. 

The Russians are just waiting for the CIA, NSA, MI5 and other soups letrinhas loose their version and, hence, the Russians show their cards. 

Jaque Mate.

procure no FB tiadalvatel

Sat, 08/02/2014 - 18:14 | 5038757 Dre4dwolf
Dre4dwolf's picture

Just print some numbers and ignore it wtf is the problem?

Sat, 08/02/2014 - 18:27 | 5038790 Karaio
Karaio's picture

The only good thing is the Euro Swiss Franc. 

hehe.

Sat, 08/02/2014 - 18:52 | 5038845 Oldwood
Oldwood's picture

I thought the ringing I was hearing was my tinnitus. Now I'm really confused

Sat, 08/02/2014 - 18:57 | 5038859 Karaio
Karaio's picture

Doom unfortunately, always be better in the last post and find people known men or women. 

Only recognize these two genres do not ask to explain because I'm not politically correct, might offend someone. 

One interesting thing in commenting on blogs is to find an insane amount of information.

Sat, 08/02/2014 - 19:17 | 5038910 Karaio
Karaio's picture

Write in Blog, as a commentator, is an Art. 

The keyboard is like the eyes, the window to the soul of the person who is writing. 

No use search Google you will not find that quote is mine, can use. 

Same reading in Russian, German, French, it is easy to identify who is paid to do reviews. 

Look, I just read, I do not write. 

Maximum write a good Portuguese, Spanish, French badly and very badly. 

Do not dare comment on oriental languages ??(good damage already done in some places). 

Interesting is that those who receive to make comments, are not new in the Network. 

Most come from the Echelon Project. 

It's almost two generations of people paid to screw Blogs and email accounts. 

Know what I mean, I have 52 years old and mei first computer was a "286".

Mon, 08/04/2014 - 04:19 | 5042815 w a l k - a w a y
w a l k - a w a y's picture

"The keyboard is like the eyes, the window to the soul of the person who is writing."

 

That one fits in, so I stuck it on my blog.
(I'm 64, but 1st was a 286 box also)

Welcome to ZH! 

Sat, 08/02/2014 - 19:25 | 5038928 Peter Pan
Peter Pan's picture

For those of you that are amazed by the financial sstem still standing, you only have to compare it to a human body.

A human can survive on no kidneys thanks to dialysis. No spleen, no gall bladder, no eyes, no limbs, faulty heart, etc etc. ans with each loss of function the body becomes weker and less productive but somehow manages to keep going.

The human being is however in a termial condition and so is our system.

Timing is not an issue if you are prepared. And that implies leading a productive but careful life.

Sat, 08/02/2014 - 20:04 | 5038996 tahoebumsmith
tahoebumsmith's picture

This chart is similar to that of the Federal Reserve, Our Federal Deficit and the debts of most nations. The genius's decided to fight a debt crisis with more debt. Since 2009 globally there has been over a 30 TRILLION dollar injection and it has only bought the global financial ponzi scheme more time and more debts and bets... You don't need to be a science rocket to see the writing on the Wall for the US and it's Western allies... Fucking idiots bailing out a corrupt banking system to protect the 1% and the Corporations they run... Look it up in the fascism and Totalitarianism book.

Bitchez

Sat, 08/02/2014 - 20:23 | 5039044 bid the soldier...
bid the soldiers shoot's picture

 

Why all the fuss and bother?

By the time the first anniversary of the Nuland Revolution in Ukraine rolls around, all the conomic woes of the West will be blamed on the West's sanctions on Russia.

Of course, Russia will be especially denounced for making the West sanction it.

And Russia will have to be punished for causing the collapse of the Western economy.

How?  Why more sanctions, naturally!

Sat, 08/02/2014 - 20:30 | 5039061 crzyhun
crzyhun's picture

Watch rising Eu-libor rates for clues. When the melt-down occured last time, therein was the tell.

Sat, 08/02/2014 - 21:23 | 5039176 ekm1
ekm1's picture

SHADOW BANKING AND REAL ECONOMY

 

If ECB recycles infinitely euro into european sovereign bonds into stocks into FX and start over, this has zero effect into the real economy.

 

Money and money like financial assets do nothing positive when they are swapped with each other.

 

Swapping euros for bonds for stocks for fx, does not and will not increase output.

 

Manipulating the financial system has never increased output for all. It has simply redirected output.

 

Manipulating finance, without doing anything else with real economy, leads always and at anytime to lower output, hence economic contraction.

Sat, 08/02/2014 - 21:33 | 5039203 ekm1
ekm1's picture

Let me put it in a different way.


If the financial system no longer mirrors the real economy but it is decided by people warring via computers like video games at insane leverage, then.........

 

.....manipulating finance to fix the economy is like manipulating Playstation4 console to fix the real economy.

Sat, 08/02/2014 - 22:21 | 5039311 Tinky
Tinky's picture

Good to have you back, ekm1. Your input, and especially your ability to crystalize certain issues, is valuable.

Sat, 08/02/2014 - 22:42 | 5039385 ekm1
ekm1's picture

thx a lot

Sat, 08/02/2014 - 21:40 | 5039215 falconflight
falconflight's picture

Serious question, what's to say that this artificial levitation of the financial market/economy won't end even in our lifetimes?  The Soviets managed to maintain a bundle of lies for decades.  Our standard of living will slowly whither, except for the bureaucrats that enforce the will of the pols and their corporate partners.  The pols will blame other pols, confirmed by the media industry whom supports a particular party, and the other party will acquiesce just enough to insure that their lifetime political office is maintained.  

Sat, 08/02/2014 - 22:22 | 5039315 Tinky
Tinky's picture

Dream on. It has been unravelling for some time now, and won't last much longer, let alone "lifetimes".

Sat, 08/02/2014 - 21:49 | 5039240 Theremustbeanot...
Theremustbeanotherway's picture

How nice of Ali Ba  Ba sorry BIS to come out with some "helpful" advice.......

Sat, 08/02/2014 - 23:12 | 5039465 Karaio
Karaio's picture

In world's biggest democracy, the people did not vote for President. 

This is absurd! 

Here in Brazil you arrive on election day, walks into a school room, presents the identity, will sign a paper for an electronic ballot and VOTE! 

Vote for president, governor, senator, congressman, mayor etc. .. 

What the fuck do you have democracy? 

hehe.

Sun, 08/03/2014 - 00:08 | 5039559 Karaio
Karaio's picture

When that shit happened smash banks and Europe was almost pro bag, wrote a Portuguese blog called Mad Money Economy: 

- Would be no shame in Portugal join Brazil as a state from overseas, such as Haiti and Alaska are to the USA. 

Brazil was colôniade Portugal when Napoleon invaded Portugal Brazil hosted the Empire, in my concept is nothing more convenient when it comes to history and wants to save her ass. 

I was naive placement, no answer of "Mad Money" and talking to a Portuguese who owns a machine shop here where I live, I identified to such nonsense. 

The Portuguese said: - We are Europe, we have the Euro, you are underdeveloped. 

I asked what he was doing in Brazil, because it was here. 

He was silent. 

I asked why he was not sent to the U.S., was silent. 

This European pride will even give shit. 

I'll be happy if the Ebola disrupt airplanes between Europe and Brazil.

If agarar shit, just come to swim or boat, it is easier to hit with a club. 

No, do not pity us and petulant, I'm not politically correct. 

Fuck the Europeans.

Sun, 08/03/2014 - 02:35 | 5039701 hedgiex
hedgiex's picture

Which means that you become part of BRICS. At least for the Y Gen you get to smell the roses that Brazil and China give to each other. Go for it.

Sun, 08/03/2014 - 03:03 | 5039709 hedgiex
hedgiex's picture

Bond Vigilantes are not sleeping, they just fear the ECB Printing Press.

Financial Engineering is based on the concotions of ideas into products. Ideas do not thrive in illiquid spaces.

Anyway, there still liquid gooses in the global kitchen to roast so  you can give EC a miss but keep it on the radar.

Sun, 08/03/2014 - 03:26 | 5039728 no more banksters
no more banksters's picture

A new message from the international bankers to Greece

Banksters demand "political stability"

http://failedevolution.blogspot.gr/2014/08/a-new-message-from-internatio...

Sun, 08/03/2014 - 05:45 | 5039809 free_lunch
free_lunch's picture

There is a lot of distraction going on in the world..  but:

German MEP Helmut Scholz explains why the GUE/NGL group in the European Parliament is calling for an immediate end to negotiations on the Transatlantic Trade and Investment Partnership (TTIP).

Read the article:  http://www.euractiv.com/sections/trade-industry/backroom-talks-dangerous...

Watch the video: http://www.youtube.com/watch?v=vnOTyOjV4I4 

 

 

I don't know how much of this (NWO -Free Masonry - conspiracy) video is truth or fantasy, but it at least stimulates critical thinking:

Illuminati ..NWO..Freemasons for Dummies video

 

Law abiding citizen

Sun, 08/03/2014 - 07:06 | 5039858 trader1
trader1's picture

SEPA has been implemented for credit transfers and direct debits in the euro area, following 15 years of work to complete one of the largest financial integration projects in the world.

The migration to and implementation of SEPA from its inception has been monitored by the Eurosystem, which consists of the ECB and the national central banks of euro area Member States. Open dialogue has been facilitated between all parties, which includes banks, corporates, consumers, public authorities, governments and SMEs, which is said to have has contributed to the successful completion of SEPA for credit transfers and direct debits in the euro area.

A single bank account will be available for consumers and businesses to use for all euro credit transfers and direct debits anywhere in Europe, which will enable businesses to expand into new markets without extra payment costs.

According to ECB, over 2 billion credit transfers and direct debits in new standardised formats are expected to pass through SEPA each month.

In addition, SEPA will improve consumer protection for direct debits, with new rules being implemented for the facilitation of refunds. European businesses will also be given the opportunity to grow and widen their reach in Europe as a result of a single system and set of accounts for all their euro trade. The provision of a standardised framework means that costs will be lower for all their payments.

http://www.financial-news.co.uk/23310/2014/08/ecb-implements-single-euro...

Sun, 08/03/2014 - 07:54 | 5039905 free_lunch
free_lunch's picture

SEPA will help kill what's left of small and local business and replace it with one of the multinationals that are owned and controlled by the filthy rich. It opens the gates for big capital to come in and finish the small business by means of higly uneven competition (virtually unlimited financial means and supporting lawmakers against a small family owned business)

How can small local business owners compete with Billion-dollar corporations who have the bankers (money-printers) and the lawmakers on their side?

One step closer to a communist like NWO, where the party leaders and their minions (a handful of bankers and Billionaires), are the only ones living in wealth, owning and controlling all

The only possible outcome of this present system is a handful of people owning everything, even Einstein knew and wrote about this: http://monthlyreview.org/2009/05/01/why-socialism/

That's not a political opinion, it is simple mathematical logic.

Sun, 08/03/2014 - 09:05 | 5039979 trader1
trader1's picture

"one step closer to a communist like NWO"

"the only possible outcome of this present system is a handful of people owning everything"

 

we're already one step past the possible outcome.

 

but, there's hope.

Sun, 08/03/2014 - 09:23 | 5040002 basho
basho's picture

going to blame it all on RU and Putin

Sun, 08/03/2014 - 10:52 | 5040155 Aussiekiwi
Aussiekiwi's picture

A hockey stick graph....at last, progress!!

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