Art Cashin On The Latest Eurozone "Remedy"

Tyler Durden's picture

As always, the most pragmatic read thru of what are now day to day rescue efforts out of Europe, which in its own words has effectively given up on seeking a long-term remedy, comes from UBS' Art Cashin who as usual cuts right to the bone of the deluge of essentially hollow endless chatter out of Europe whose sole purpose is to once again baffle all the algos with binary bullshit.

From UBS Financial Services

The Eurozone “Remedy” - Stocks on both sides of the pond are having a dizzying rally as first light hits New York.

Details of the “agreement” are still a bit sketchy and are beginning to vary slightly, depending on which leader is outlining them.

In broad terms, a few things seem consistent. New loans to Spanish and Italian banks would get no priority standing. The loans would go straight to the banks and not through the sovereigns. Banks would not have to be in a “program” to get such a loan.

It seems that some of these loans would require unanimous approval. That would give everyone a veto and could become cumbersome. Further, the program may hinge on the appointment of a European bank supervisor. That’s not due till yearend.

Also, as our astute London associate, Paul Donovan, wonders, what about retroactivity. Could a country like Ireland, which took on the debt of its banks deconstruct the process to take advantage of the new plan?

So far, there is little comment in Frankfurt and Berlin. How it plays there may be critical…..very critical. A test vote might come as early as today.

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battle axe's picture

SOOOO no one knows what the hell is going on....

Winston Churchill's picture

Its the Dance of the Seven Ponzi's.

Will Merkel be revealed in all her natural glory at the end ?

falak pema's picture

what would you expect in a head up its ass market and HFT controlled farts and tarts. Until the Squid decides how to slant the deal nobody moves. 

rabbitusvomitus's picture

And, much like you, I too see this "new" revelation as an Absolute........SHOCKER! 

SeattleBruce's picture

"Further, the program may hinge on the appointment of a European bank supervisor. That’s not due till yearend."

Oh, now that's a reason to pump the markets!  I know I'm excited...oh brother.

midgetrannyporn's picture

I don't believe this rally is news driven.

LULZBank's picture

True, its the fundamentals.

midgetrannyporn's picture

my hunch is that this rally will end mid afternoon today as it often does when the maggots need to ensure their eoq bonus.

JackT's picture

I don't understand how anyone can think this will work.  THERE ISN'T ANY MONEY LEFT -- IT'S ALL DEBT.

Poor Grogman's picture

Debt can be repaid by newly created money.
Just create the money and Poof the debt is gone.
The way this ponzi is being set up to run is that the people have the debt, and the elite have the only legal means of extinguishing it.
Now isn't that just brilliant...

SeattleBruce's picture

"Just create the money and Poof the debt is gone."

And because it's debt based money they're minting - Poof there's more debt than there was before...that's why the house of cards will fall.  Trust is an essential element to any working economy.  That's what they're destroying.  Which counterparty can you trust?

Poor Grogman's picture

Look if USG has 100bn debt and the fed "Creates" 100bn and gives it to the govt with no strings attached.

then the USG has no more debt...NADA....nil... nothing.


The fed has now "expanded its balance sheet"  but so what?

the fed cant tax you? It has just used its power to create money out of thin air.

This is the "Other Purposes" in the Feds charter.

My point is, its all funny money, it can be created and destroyed at the whim of someone somewhere,or even just by accident.

Don't let the matrix blind you to this simple fact.


Edit. If you really want the debt to disapear just force the fed to pay off all debts public and private worldwide.

Then simply close up the fed, auction off its assets, and turn it into a museum.

It is within the feds power to actually do this...if they wanted to...

This type of thought experiment is useful because it shows us other ways that the ponzi could possibly be "wound down" with minimum global devastation.


vast-dom's picture


Socialized Losses's picture

We just happen to have this clip of Monti's advisor fielding a phone call from the Itallian president shortly before this latest EU summit statement was released

from the "Heist"

Bergman: Everybody needs money. That's why they call it money.

eclectic syncretist's picture

This is an area around which central banks have intentionally created a lot of confusion.

The truth is that all the so called "money" in existence under a fiat system is debt.  In other words, central banks don't print money, they issue debt (or credit created out of nothing, if you prefer).  When Zero Hedge and others claim the central banks are printing money that is incorrect.  They issue credit/debt based on nothing at all.

If all the debts in these countries were paid off then there would be no money at all left in the system, because all the "money" was created as debt issued by the central bank, and would have been sucked back into the nothingness it was created out of.  When you understand this you have a fundamental understanding of how the global financial system operates.   (apologies for bolding, but this is an important point)

So the point is, there never was any real money in the first place in a fiat system, only debt.  It's a debt based system that allows the banksters to skim profits, and governments to access seemingly endless amounts of financing without looking like they are just printing it in some back room. 

And central banks can always increase the amount of debt in the system since all they have to do is type in numbers on a computer and print some officious looking papers.

And all of this is legal under our current system.

mrktwtch2's picture

i think we give back half the gains today but still end in the week could be interesting..

GeneMarchbanks's picture

A test vote might come as early as today.

Why in the hell would you want to jeopardize this perfectly rational and timely rally?

ArrestBobRubin's picture

Gold up 3%, silver up 5%

They ain't buying the bullshit.

Kriya144's picture

Truer words never spoken...

vast-dom's picture

the key is what will gold and silver do when this hopium headfake settles back into reality?

q99x2's picture

Bankers are off from the EU to Singapore in search of work if that is any indication. I guess the City of London is nearly broke too.

Itch's picture

Nice one Germany, i never thought i would say this, but im actually starting to like you.

the not so mighty maximiza's picture

End of the month/quarter amature acting.

Cognitive Dissonance's picture

Just get the damn market to print a green quarter ending statement for crying out loud. We'll deal with Monday next quarter.

adr's picture

Teacher! Billy has gum and he isn't sharing with the rest of the class!

Billy, what have I told you. Unless you have enough for the rest of the class, you can't have any at all.

Aww, man. This sucks, now I won't have any gum for me.

Where's my gum Eurocrats? I won't be satisfied unless I get 1 bilion pieces.

azzhatter's picture

Simple question- Do the loans have to be repaid?  If so, nothing has changed

Meesohaawnee's picture

today is the last POMO day of OT... i dont know but look at the chart last year what happened when it ended 6/30  is this the grease da boyz get for the ramp?? just sayin...

Cursive's picture


Brian Sack is stepping down today.

spanish inquisition's picture

The loans would go straight to the banks and not through the sovereigns. Banks would not have to be in a “program” to get such a loan.

Interesting, looks like the new form of Facism is starting to take shape by eliminating the middleman (Gov't) from dispersal. Brussels gives directly to banks and wants approval on all government expenditures through a budget (from pensions to road repair). It looks like government can still collect taxes, but I am guessing that will soon be going into a sweep account.... I expect that will need to be invested somewhere.... I am sure they will be vouched for and trustowrthy.. old European money managers and all that....

CrashisOptimistic's picture

Merkel folded.  About the only thing left in her Iron Lady pretense is the Eurobond refusal, and when these measures fail, she'll abandon that refusal, too.

You might think the German taxpayers will abandon her and declare her a betrayer, but the opposition in Germany is MORE interested in doing bailouts.  She is the most reluctant of all the German players to hand this money away, and she's folding each time there is pressure.

They will do ANYTHING to keep the wheels turning. 

Poor Grogman's picture

The ponzi cannot be destroyed,
Except through Hyperinflation.
There is simply no stomach for a deflationary collapse
And printer ink is too cheap.

CrashisOptimistic's picture

In a world of oil scarcity, there can't be anything other than deflation.  If the engine can't get enough fuel, it cannot run and grow.  Deflation is the only possible result.

It is oil that will take it all down.  It is the only thing they can't create whimsically.

Poor Grogman's picture

Incorrect. ..
As things get scarcer, more money will be thrown at " solutions"
And people will not be working as much,
This non sterilized flow of new money will make things worse, requiring even more "solutions".
We are starting to see it now,
Nothing is allowed to fail or liquidate.
Money is always there at the last moment.
Throwing petrol on the fire till the house burns down.

CrashisOptimistic's picture

You're right and wrong at the same time.

Yes, they will flail in the face of declining economic activity and throw money at it, but the activity will still decline.  It is not inadequate money that is the cause of the decline.  It is inadequate fuel supply.

This is all derived from the ongoing failure of terminology.  Oil demand is not the same as oil consumption.  Oil consumption is falling.  Globally, it is in freefall.  Economic activity is far below what it was in 2006.  It's not money scarcity that is the reason, and throwing more money at the situation won't stop the decline -- which is somewhat by definition, deflation.

Poor Grogman's picture

The money that will be thrown at the problems will encounter a smaller supply of resources as you correctly point out.

More money chasing less resources year after year compounding will give us hyperinflation eventually without a shadow of a doubt.

CrashisOptimistic's picture

You point is entirely valid, but we run into issues of definition.

They will add money, but they will get no increase in economic activity.  That's the core sentence.  What if there is monetary expansion and no result?

If there is no growth that is deflation.  Then we get into extreme results, where people start to die.  A declining population requires even less money supply.

I think the core of our disagreement is your presumption that monetary expansion will continue forever as economic activity declines.  There would be no point in that, and I think we saw Bernanke acknowledge that last week.  There was widespread call for QE and he refused.  It's pointless.  He's smart.  He knows it.

Poor Grogman's picture

That could well be possible, the only way the PTB could keep control of everything through a prolonged decline in economic activity is to modulate the flow of new funds to attain a form of
" controlled deflation" TM.
This may well be the the aim of the game, but can it be actually achieved?
We live in a world of political reality and I haven't seen too many people voting for austerity recently.

Perhaps this is even part of the illusion? The PTB need there to be enormous and obvious government debts so that people will hesitate to vote for more spending?

And let's face it , if TPTB wanted they wouldn't even need to tax us to have a welfare state now would they?

The enormous debt ( which could be erased if need be before the markets close today) plays it's part in our psyche just as the other parts of the ponzi do.

hamstercheese's picture

One thing being lost here is when debt goes bad the money supply shrinks.  I can't recall where I heard this but supposedly in 2008 the world, due to debt going bad, lost between 40 and 60 TRILLION dollars worth of purchasing power. There's your deflation, and as we saw it mostly diminished the equity markets, home prices and employment. I'm not sure bailouts, net net, create new money when they are designed to replace debt that will otherwise go bad.

Also, I don't understand the point 'oil demand does not equal oil consumption'. What does Crash mean by this? Does oil demand equal future consumption?  Plus once it's consumed its gone.

The Final Countdown's picture

It's not as black and white as 'supply push means deflation, demand pull means inflation, and vice versa'. I thought we figured that one out a few decades ago already.

The economy can grind to a halt and you could still have high inflation in the bare necessities to support life, such as energy and food. Oil scarcity will only add to this effect, since oil price affects food production, energy costs, transportation costs, production costs, and so on. In addition to that, when cheap oil gets increasingly rarer, large investments will have to be made to fund alternative energy sources and to economically get the more expensive oil out of the ground.

At the same time, prices of many other less essential things will deflate, because everybody is spending most of his money just to stay afloat. Real estate, electronics, cars, etc. If you've been paying attention you could have seen it happening already over the past 20 years or so.

The abstract thing we call 'the economy' may go down the drain, but that doesn't mean the ~6 billion people living on planet earth all of a sudden disappear with it. I don't think the economy in Zimbabwe or Argentina was doing very well when hyperinflation hit them.

azzhatter's picture

I'm buying a 75 ft yacht. Of course I have no money but my neighbors popped on the news

John Law Lives's picture

How many millions of sustainable new jobs does this create in EU-member nations?  If not, this is another charade meant to buy some time with the hope for an economic miracle that is not coming.

slewie the pi-rat's picture

of course there is no long-term remedy

they had no option but to kick the can;  i've called this nonsense for weeks

the EU hasn't cracked either;  bingo!

if this were a marksmanship contest...   i'd go home with a turkey!  L0L!!!

The Count's picture

Another day, another bullshit fest.

SwingForce's picture

What most people are missing is that ITALY has been assumed to apply for bailout money. They accept that news, but do you know how big Italy is? (Wait until the ether wears off on this one).

luckylongshot's picture

We need some sort of Oscar award for the best "We have rescued the Euro" statement (which is of course utter rubbish) of the week

azzhatter's picture

Certainly the best scene would be Nigel Farage beating the living shit out of Herman Von Rumpoy. Sell it as a pay per view

Dave654f's picture






JohnKozac's picture

"ODD" is what too many ZH readers are suffering from:


"Oppositional defiant disorder (ODD) is an increasingly popular diagnosis for children and teenagers. The official symptoms of ODD include, “often actively defies or refuses to comply with adult requests or rules,” and “often argues with adults.” An even more common reaction to oppressive authorities than the overt defiance of ODD is some type of passive defiance...."