Is 6% The Point Of No Return?

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Mon, 11/07/2011 - 12:54 | 1853545 Ethics Gradient
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Possibly, but almost irrelevant to Italy. 6.67 is quite a lot over 6.

Mon, 11/07/2011 - 12:57 | 1853568 Ahmeexnal
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Euro implosion scheduled for 11/11/11 at 11:11 hrs (Vatican time).


Mon, 11/07/2011 - 12:59 | 1853590 franzpick
franzpick's picture

TCHIRS to that.

Mon, 11/07/2011 - 13:00 | 1853602 Ethics Gradient
Ethics Gradient's picture

I'll try and remember you said that and quote you on it.

I'll either berate you for your continuing nonsense or enquire as to your funguses of choice. Not long to find out.

Mon, 11/07/2011 - 13:01 | 1853605 aleph0
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11/11/11 11:11 

LOL .. Exactly when the German Fasching ( Carnival ) starts ... on the second !

Mon, 11/07/2011 - 13:38 | 1853776 Schmuck Raker
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I recommend Jiffy Pop. Pretty good popcorn.

And, best of all, every package includes it's own built-in Tin Foil Cap.

Mon, 11/07/2011 - 12:59 | 1853591 WestVillageIdiot
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It looks like Ireland is still at 7% or so.  That seems unsustainable with how much debt they have taken on to guarantee their banks.

Does anybody have a good update on Ireland?  Are they actually enacting true austerity measures, unlike Greece?  Will they be allowed to maintain that advantageous tax structure for foreign companies?  I can't remember the last time a good article was put out on Ireland.  Perhaps no news means good news. 

Mon, 11/07/2011 - 13:44 | 1853798 sqz
sqz's picture

The difference is that culturally the Irish have demonstrated they can take on very harsh austerity measures (more than 13% of GDP) for four years already and they recently announced even more. Yet, even with that they have managed to produce two quarters of more than 1.5% inflation adjusted growth this year. Contrast that to Greece with extreme civil unrest that could escalate even further, coupled with appalling public finances and other strong political risks.

The market reaction? In short, despite a level of public debt comparable to Portugal and the highest private hosuehold debt in the whole of the developed world (190% of GDP), Ireland's long end debt yield has plumeted well into single figures while Portugal's is above 12%. Ireland and, even the UK, are good indicators that market does respond to those who at least try to seriously put their hosue in order.

Ireland is a restructuring outperformer both within the EU and internationally IF the EZ developments do not escalate to break-up levels. However, of course they will suffer more than the most diverse economies if there is a strong global recession or depression due to their lack of consumer spending. But at least they have demonstrated a level of committment and it is to a not completely defensive economic trajectory. That way, they can benefit if the broader economic situation does start to look up or merely stagnates slowly.

Mon, 11/07/2011 - 15:14 | 1854149 orgonor
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it pays to get fucked in the ass

Mon, 11/07/2011 - 16:14 | 1854444 AldousHuxley
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That's what a job is.


These days, you get it from your slave owner and then some more from government leaders...mostly old fucks.


When boomers die, your path better life would be determined by (1) whether you leave ponzi America or (2) your parents were top 1% during past 20 years.


Kiss meritocracy good bye



Mon, 11/07/2011 - 12:54 | 1853547 Long-John-Silver
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6.66% ?

Mon, 11/07/2011 - 12:56 | 1853566 Ethics Gradient
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And everyone in the UK is on the hook for £666 of new IMF contributions.

Mon, 11/07/2011 - 12:57 | 1853570 agent default
agent default's picture

Ah, so that's what the number of the beast is about.

Mon, 11/07/2011 - 12:55 | 1853551 GeneMarchbanks
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Don't look to Greece for comparison and take a look at the ones due in 2012.

Is Draghi's next step in any doubt?

Mon, 11/07/2011 - 12:55 | 1853555 Hard1
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The point of no return with their growth prospects and debt/GDP level was 5%, but what the heck, there is always the tooth ferry

Mon, 11/07/2011 - 13:01 | 1853610 WestVillageIdiot
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I am picturing a boat heading across the Hudson filled with teeth.  That would be pretty interesting.  I hope they know they don't use gold in those fillings any more. 

Mon, 11/07/2011 - 14:18 | 1853956 KickIce
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Sounds to me they need to start hanging around rugby fields.

Mon, 11/07/2011 - 12:56 | 1853559 Vergeltung
Vergeltung's picture

the pace of things seems to be accelerating!

Mon, 11/07/2011 - 13:03 | 1853619 WestVillageIdiot
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And then it slows down and we wonder what is going on.  The markets rally and the CNBC crowd trumpets "all is fixed" in the world.  Robo does another update about the Gazillions being made in specialty retailers (until one of them falls off a cliff).  Then a few days later the abyss stares at us again. 

Mon, 11/07/2011 - 13:19 | 1853700 kaiserhoff
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escape velocity?

Mon, 11/07/2011 - 12:56 | 1853561 Oswald Spengler
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I thought Italians made you offers you can't refuse.

Mon, 11/07/2011 - 13:04 | 1853627 WestVillageIdiot
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And the Chinese make you offers you can't understand. 

Mon, 11/07/2011 - 12:56 | 1853563 Innocent Bystander
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With that Italy takes the lead

poor Greece hungry for attention is is left behind in the dust.. Trodden and forgotten


Mon, 11/07/2011 - 12:57 | 1853572 Oswald Spengler
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Buggered and battered?

Mon, 11/07/2011 - 13:05 | 1853635 WestVillageIdiot
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"Mommy, mommy, look at me.  I'm over here.  Look at me.  Mommy, look at me, I'm Greece, you fuckin' bitch.  Look at me." 

Mon, 11/07/2011 - 12:56 | 1853565 Oh regional Indian
Oh regional Indian's picture

Italy can go to 9%, it will be back-stopped. It's the mafia, the global enforcers of the Vatican bulls(hit).

Nothing will happen. It is Spain. Spain. Pain in Spain.



Mon, 11/07/2011 - 13:39 | 1853778 falak pema
falak pema's picture

Ori, the rain in Spain falls mainly on the 33 rd parallel plain. Pity its in Africa...Why don't we move it a few degress north. Then it hits both Spain and Italy!

Mon, 11/07/2011 - 13:44 | 1853796 Oh regional Indian
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Falak, Check out the figure in my grand thesis.

The vertical passes through Barcelona. And Ireland and Toulouse.....


The horizontal is the 33rd and it's ON FIRE.


Mon, 11/07/2011 - 15:07 | 1854114 Hephasteus
Hephasteus's picture

That's a pretty fascinating blog post you got there.

Another event for the thing is Sarah Palin bought a house on the 33rd paralell and it brought out some systemic corruption. The tyler aggregate busted that one out though.

Mon, 11/07/2011 - 15:38 | 1854314 Oh regional Indian
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Thanks Heph. And yes, we discussed Sarah in Arizona here, next to McCain some months ago, Scottsdale I think?

Her house was ON the 33rd or right thereabouts.



Mon, 11/07/2011 - 15:42 | 1854336 RobertMugabe
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You know that Dan Brown writes FICTION, right?

Mon, 11/07/2011 - 12:57 | 1853577 SheepDog-One
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Satanic hand gesture from BurlySconi in 3....2...

Mon, 11/07/2011 - 13:03 | 1853583 hedgeless_horseman
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Because a rising tide floats all boats, it would be nice to see this chart with real rates (adjusted for inflation).  Alas, we are unlikely to have real inflation data in our lifetimes, no offense to John Williams.  This is why the spread to Bunds is so much more informative.

Prestidigiflation, bitchezzz!!!

Pay no attention to the central banker behind the economic data!

Mon, 11/07/2011 - 13:00 | 1853596 vegas
vegas's picture

The politicos can't even schedule a press conference without messing it up. The same asshats that brought you Greece, now go for ACT II with Italy. Expecting a different result with incompetent Merkozy et al is a complete stretch.

If there ever was a back swan event, it would be they could fix Italy and make it productive. Not holding my breath on that one.

Mon, 11/07/2011 - 13:01 | 1853607 mn2
mn2's picture

Oh my G. the world is ending again, sell euro sell the market what are we to do!!!!!  give it a rest....euro at 1.45 by end of year and market above 1300.....just keep those negative articles coming boys hahah

Mon, 11/07/2011 - 13:08 | 1853647 TheLooza
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not all negative articles mean that one should double down a short position. everyone here knows that a negative article must be offset by the knowledge that governments and other powerful financial bodies have an insatiable desire not to have economic collapse, and that they will constantly intervene to attempt to avert the same.  The central thesis here is that sooner, rather than later, tools will be exhausted, core missteps will be made, and there will be a collapse.  Evidence that that is happening is overwhelming -- but it doesn't mean that on this or that day the market won't surge because of yet another can kickng event.

Mon, 11/07/2011 - 13:09 | 1853654 WestVillageIdiot
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You might be right mn2.  But if you are correct an even easier, less dangerous play, seems to be buying bullion.  AU has acted like kevlar for the bears the past 10 years. 

Mon, 11/07/2011 - 13:39 | 1853779 Oh regional Indian
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"Kevlar for the Bears", Auuuu...

Very Good WVI. It's a t-shirt at least, a call to arms maybe!


Mon, 11/07/2011 - 13:02 | 1853611 TheLooza
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This is going to be epic.  Berlusconi is Qadaffi with worse hair.  There is no backing down with him, because that would mean an instant perp-walk.  


Mon, 11/07/2011 - 13:26 | 1853731 Bicycle Repairman
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Berlusconi is going to get immunity.  This isn't about blood.  Not yet anyway.

Mon, 11/07/2011 - 13:04 | 1853628 HD
HD's picture

Mama Mia that's one spicy meataball!

Mon, 11/07/2011 - 13:15 | 1853679 hambone
hambone's picture

Spain is worse off than Italy - give it a little time and Spain should retake the bond collapse lead from Italy and looks set for an exciting finish to the Euro!!!

Mon, 11/07/2011 - 13:17 | 1853688 Piranhanoia
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My silly answer to the question would be;   That someone else has purchased what they thought was a stake in your nation, and now expects to dictate policy until you throw them out.

Mon, 11/07/2011 - 13:26 | 1853722 Marco
Marco's picture

Ireland didn't turn anything around ... it had a fundamentally solid economy which required little change (ie. no trade deficit). The high interest rates were because the financial class was waiting to see how the population would react to being sold out by their government (no better modern example of odious debt than Ireland). They said thank you may I have another sir, so interest rates could go back down.

Greece and Portugal have fundamentally unsustainable economies requiring massive shifts in consumption, production, education, wellfare etc. Italy could probably turn it around, they still have a decent industrial base.

Mon, 11/07/2011 - 14:26 | 1853984 LawsofPhysics
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" they still have a decent industrial base."

okay, so let's extend your logic...  if everyone in the EU is going to produce something, then who is going to be the consumer?  Moreover, does it really matter if NO ONE wants to be the consumer OR all the customers are actually broke?

Same logic holds for the WORLD, no one wants to be the customer and everyone wants to be the producer, good luck with that.

Mon, 11/07/2011 - 15:30 | 1854084 Marco
Marco's picture

Everyone produces that which they have comparative advantage in and consumes as much as others are willing to offer in trade. Perhaps putting some export tariffs on local natural materials low on the value chain, handing out some subsidies to knowledge intensive industries etc. because of the future value of keeping production and R&D local ... value not reflected in the direct income the products can generate.

To do otherwise requires wealth redistribution, doable inside a country ... but generally not for long between countries (with the US being the exception, although that too will come to an end).

Mon, 11/07/2011 - 13:29 | 1853744 Bicycle Repairman
Bicycle Repairman's picture

When do countries realize they cannot service these high bond rates or tire of austerity and sell of chunks of their national sovereignty?  Or will that be done on the QT? 

Mon, 11/07/2011 - 13:55 | 1853858 AndrewJackson
AndrewJackson's picture

It would be interesting to see this same compairson except with bund spreads.

Mon, 11/07/2011 - 14:32 | 1854001 youngman
youngman's picture

I think the Bond vigilantes are back.....they have been quiet for the last few years...if I was teh USA...I would be worried......they are licking their chops on our bonds..

Mon, 11/07/2011 - 15:08 | 1854130 Peter K
Peter K's picture

Nice picture. BTW, are you trying to reinforce stereotypes? :)

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