Complete Eurocrisis Summary

Tyler Durden's picture

Confused by the latest developments, headlines, stories, counterstories, denials, counterdenials and rumors, but mostly prayers out of Europe? Here is your one stop shop of everything that has transpired in the Eurocrisis most recently.

Mostly via Citi:

  • According to Bloomberg, Merkel hardened her opposition to joint debt sharing in the euro region as President Barack Obama singled out Europe’s leaders for not doing enough to arrest the financial crisis: “under no circumstances” would she agree to Germany-backed euro bonds. Some “come along and ask for euro bonds, saying all we need are equal interest rates and everything will turn out all right,” Merkel said in a speech to members of her Christian Democratic Union in Berlin yesterday. Instead, what’s needed is an economic overhaul to tackle the lack of competitiveness in Europe, she said.
  • Dow Jones reports Spanish PM Mariano Rajoy saying that solutions for the Eurozone crisis will start to be found soon. “Spain is a factor in this situation, but one of many... I have good reasons to say that these problems of the monetary union are going to start to be solved in not very much time,” he said in a televised speech.
  • Perhaps Rajoy’s confidence is the result of a report in German newspaper Die Welt picked up by Dow Jones that, “the chiefs of four European institutions are in the process of creating a master plan for the Eurozone, the daily Die Welt reports Saturday, in an advance release of an article to be published Sunday.” It adds: “Suggestions targeting a fiscal, banking, and political union, as well as structural reforms, are being worked out by EU Council President Herman van Rompuy, EU Commission chief Jose Manuel Barroso, Eurogroup Chairman Jean-Claude Juncker and European Central Bank President Mario Draghi, according to the article.”
  • Reuters is among the news services reporting that the "Big Four" accounting firms KPMG, PwC, Deloitte and Ernst & Young will carry a full, individual audit of Spanish banks. First results are expected around mid-June.
  • Spain announced it will auction some 2- 4- and 10y Bonds on June 7. The FT describes the move as ‘defiant’.
  • The FT reports that Syriza aims to renegotiate the Greek bailout should it be in a position to form a government on June 17. “The left-wing party that came a surprising second in last month’s Greek elections has pledged to halt interest payments due on the country’s debt and revoke the terms of its bailout agreement if it comes to power in a re-run vote on June 17. Alexis Tsipras, leader of the far-left Syriza party, said he would also cancel EUR11bn of cuts due to be implemented this month, reverse promised labor reforms and raise taxes on the wealthy.” The article is here.
  • German tabloid Bild says in an editorial that Greece is fast reaching the end game. “Greeks are plundering their bank accounts, imports to the country are no longer guaranteed, rumors abound of drachma being printed and energy suppliers are no longer paid, Nikolaus Blome, Bild’s chief political columnist, said in an editorial in Saturday’s edition,” is how Bloomberg reports it.
  • The UK’s Telegraph has been a critic of the EUR since before its inception and it now smells blood. “Spain is in 'total emergency’, the EU in total denial,” is the title of an article published this weekend. “I’ve never actually heard the term ‘total emergency’ before, at least not in the context of global economics. It sounds like the title of a disaster movie. When it is uttered in sober tones by the elder statesman of an advanced democracy to describe his country’s financial condition, the effect is rather startling,” the piece begins. It says if Spain did leave the EUR, there would be nothing left for any other country to exit. The article is here.
  • Speculation of an ECB rate cut is starting to build. “The European Central Bank may cut interest rates again soon as the Eurozone debt crisis deepens, but it will continue to insist that it is up to governments to find a lasting solution, analysts say,” reports AFP. It adds though: “ECB watchers predict the central bank -- which will hold its regular policy-setting meeting next week on Wednesday instead of Thursday owing to a public holiday -- will not alter borrowing costs just yet this month. But it could act in July as deepening fears about Greece and possible contagion to other countries push the 17 countries that share the euro back into recession, the analysts predicted.”
  • France: French yield levels have gone mental, at some stage the 10y yield rallied by 22bps. And it   looked like around 100bps stops got triggered. As we write the colour the   spread is back up to 105bps vs. Germany. Apart from the wage cut action for himself and for the CEO’s for state owned companies (a bike ride away from communism,) I could not notice any substantial reform so far for France. Most likely we will not see any until the June election is out of its way. Surely France needs to do its homework, and if Mr. Hollande does not want to listen to the markets, at least he should go through the European Commission report, where France is asked to address risky imbalances in its economy.
  • Italy:   Berlusconi   comments that Italy should say “Ciao, EURO” even if it was a   “crazy idea”. How colourful… either way some positive, yes   we mean positive development. The GC short dates have re-traced from its   40bps lvls to now average 37bps in T/N, ending the day 36-35 on a good 5bn   volume. One week term traded at 35bps and 1-3M quoted around 38-33bps.   Specials space we are not seeing exceptionally expensive bonds. The most in   demand is the March 22s, trading close to 1bn in volume on S/N day to day and   followed closely by Aug 23s, both averaging around 8bps. Sept 22s that use to   hold value is now a jump GC since the tap, but if you are to look for term   trades especially for futures trade then you won’t get much liquidity.   
  • Last but not least, the usual dose of fire and brimstone from Ambrose Evans-Pritchard

And that, as they say, is that. At least for the next 2-3 hours when everything changes diametrically.

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CrashisOptimistic's picture

Timely addition, Bloomberg's lead story this hour:


With Europe’s debt crisis cited last week for canceled IPOs, weaker-than-expected Chinese manufacturing figures and a rise in the U.S. jobless rate, Merkel rejected joint debt issuance in the 17-nation euro area as a solution, saying “under no circumstances” would she agree to Germany-backed euro bonds.


Pretty firm, and let's also call this 


Antifaschistische's picture

"Obama urges end to crisis"

Nothing is more prophetic than those words....tick, tick, tick.

CrashisOptimistic's picture

Somewhat less signif than the text in bold.

Soul Train's picture

BARRYMETRIC FORECAST FOR NEXT WEEK AND THE WEEK AFTER, June 4-17: "Change you can believe in - ES meltdown".

The Big Ching-aso's picture



A crisis of confidence in confidence makers appearing confident 2 the masses that currencies deserve their confidence.

Matt's picture

Somebody DO SOMETHING! Fix it! I have an election coming up! - attributed to Obama

StychoKiller's picture

When things things don't go to plan, management and government can be remarkably persistent.

This is otherwise known as - The Corporate Approach to Dead Horses .....

The tribal wisdom of the Dakota Indians, passed on from one generation to the next, says that when you discover that you are riding a dead horse, the best strategy is to dismount.  But in modern business (education and government), because heavy investment factors are taken into consideration, other strategies are often tried with dead horses, including the following:

1. Buying a stronger whip.

2. Changing riders.

3. Threatening the horse with termination.

4. Appointing a committee to study the horse.

5. Arranging to visit other sites to see how they ride dead horses.

6. Lowering the standards so that dead horses can be included.

7. Reclassifying the dead horse as "living-impaired".

8. Hiring outside contractors to ride the dead horse.

9. Harnessing several dead horses together to increase speed.

10. Providing additional funding and/or training to increase the dead horse's performance.

11. Doing a productivity study to see if lighter riders would improve the dead horse's performance.

12. Declaring that the dead horse carries lower overhead and therefore contributes more to the bottom line than some other horses.

13. Rewriting the expected performance requirements for all horses.

14. Promoting the dead horse to a supervisory position.


Can it be any clearer??

John_Coltrane's picture

My favorite comment of the day.  Thanks styco for your summary of central "planning".

12ToothAssassin's picture

Reminds me of 


"I believe in an America where millions of Americans believe in an America thats the America millions of Americans believe in. That's the America I love"

- Willard 'Mitt' Romney

TheFourthStooge-ing's picture

Antifaschistische said:

"Obama urges end to crisis"

Wait a minute. Do you mean for the last two years, through all of the emergency meetings, special committees, pantomime recapitalizations, Europocalypse charades, and bank bailouts passing momentarily through the conduit of Greece, that they've always had the option of just ending the crisis?



knukles's picture

Well, not really.
'Till now, Yomomma hadn't addressed the issue.  So now that....


Talk about eating your own, check out Maureen Dowd's latest NYT piece.

GOSPLAN HERO's picture

The debt crisis will end Obama's chances for reelection.

Obama is scared, real scared.




John_Coltrane's picture

Well, along with "hit with an ugly stick" Pelosi and Reid, no ones has helped to create more new debt than the Teleprompter in Chief.  As you sow so shall you reap.

Can't wait for his anguished cries  as the Supreme court throws out the individual mandate and thus Obamacare in a couple of weeks.

Michael's picture

I know this Murderer Obama discussion is from Huffington Post and MSNBC, but I deem it a worthwhile discussion to view.

Jeremy Scahill Says Obama Strikes In Yemen Constitute 'Murder' 

Terrorism is a tactic. There is no way in hell or on God's green Earth to win a war against a "Tactic".

long-shorty's picture

Thanks for the link. This is a war crime. Except, of course, the winner never gets charged with war crimes.

It's sad how many people can't see a basic truth when it pertains to their own group or gang or country. Unfortunately, Bush was, and Romney will be, if given the chance, every bit as barbaric as Obama in this regard. As I wrote to our partners recently:

"I look at Obama and Romney and I see one man (a Constitutional Law professor at a pretty good school) who signed into law the executive branch’s right to detain American citizens on American soil indefinitely without due process, in stark violation of several provisions of our Constitution, and another man who more adamantly supports the same provision and is likely to appoint Supreme Court justices who do as well. This election is between two men incapable of upholding the oath of office they take on day one."

Stackers's picture

Just watch out for the Lizards in the bar.

Conrad Murray's picture

Better wear some golf shoes.

NuckingFuts's picture

Fear and loathing in th eurozone. To bad HST is no longer with us, he would be there with a satchel full of "goodies" writing about it.

Zero Govt's picture

there is a very old saying that if a fat lady sits on your head the priority is not to understand the motivations of 'why' she got there but 'how' to get her off your face before you suffocate

(ok it's not an old saying, just cooked it up)

with the Eurozone sovereign and banking debt crisis/problem the priority for the yawning masses is therefore how to get these bankrupt fat cats off our faces before they suffocate to death what's left of the real economy not already ruined by 80 years of socialism

X.inf.capt's picture

june 17th...

its on...


Sudden Debt's picture

That's a sunday.... Doesn't work for me because I've got a BBQ planned than...

X.inf.capt's picture

sorry about the bbq...

but theres an election in greece,....and egypt...and in both countries THEY ARE SERIOUSLY PISSED...

i dont think this story will end with...'and they lived happily ever after'....

IAmNotMark's picture

Sure it will!  It's just there's a lot of story between 'They are seriously pissed...' and 'they lived happily ever after'.

My question:  Is the movie going to be a comedy, a tradegy, a horror, or a war flick?  I'm thinking a RomComZomDram...with a throw-up inducing intermission by Obama.

Winston Churchill's picture

Remake of Love Story.Leads played by zombies.

Whole new meaning to eating pussy.

Bastiat's picture

I don't remember that scene in Love Story -- must have been the director's cut.

I am Jobe's picture

then Sunday Night TV and must watch TV program . Yeah the Amerikan Way.

macholatte's picture

Was that an American Flag soaked in Hopium?

I am Jobe's picture

American flag made in China.

Spitzer's picture

Hey why don't they just print money like the US does ?

Then there wouldn't be any problems at all.

CommunityStandard's picture

Germans afraid of another Weimar.

Dismal Scientist's picture

Mistakenly afraid. Little chance of inflation for a while with declining velocity of money. Its coming eventually of course, but not for a few years.

LawsofPhysics's picture

Riiiigghht, because the velocity of money always has to increase in order for hyperinflation to occur.  FAIL.


I see that we have some folks who don't understand basic eCONomics.  "Money" is chasing lots of things (real assets, a decent return, essential consumables, etc.)

There are two sides to the equation morons.   Even when the "velocity" of money is low, some things can get very expensive very quick.  Eespecially if an item (such as food, water, or fuel) is in short supply.   Morons, complete morons., the U.S.S.A. deserves the "leaders" it has and the people deserve what is coming.

Dismal Scientist's picture

I said inflation, not hyperinflation. Thats a collapse of confidence in a currency, and is something entirely different.

I'd be prepared to think we have biflation now, ie: some inflation and some deflation simultaneously. But we are nowhere near the environment you think, as the demand side of the equation is slowing. Seen the price of oil lately ?

As for what the people deserve in the USA, wouldn't presume to comment. But then am not a total muppet like you...

CommunityStandard's picture

You are correct.  Neither LTRO nor QE entered the economy.  The money printing is disappearing into banks' fudged balance sheets.

LawsofPhysics's picture

Capital (and resource) mal-investment and mis-allocation.  It is called a "liquidity trap" and it always leads to a deflationary crash followed by hyperinflation and war.  Wake the fuck up.

CommunityStandard's picture

Yes.  Short timeline = deflation.  Long timeline = inflation.  What were we arguing about again?

LawsofPhysics's picture

If by "longtimeline" you mean less than five years, then you are correct.  Shorttimeline is now less than 18 months.

Dismal Scientist's picture

CS, the guy's read a bit of history and is seemingly obsessed with hyperinflation. Leave him to his infantile wish for very bad outcomes.

5880's picture

If you're in debt you want to print

If you have money printing just dillutes your wealth

Germany has money

scatterbrains's picture

Cant we hit the Germans with economic sanctions for not playing nice?  When do those threats kick off ? I can picture the liberal editorial cartoons already. Merkel alone in a lifeboat filled with gold bags, slapping and swiping away with her paddle at the rest of the drowning Euro country characters gasping for a life line.  Evil Germans

Spitzer's picture

Bah, that was the 30's man. If Bernanke was around then, he could have stopped Weimar in 15 minutes.

Matt's picture

Increase interest rates from 0 to 20 percent in fifteen minutes. Because that wouldn't cause any nasty side effects at all. Like a massive sale by UST holders, perhaps?

LawsofPhysics's picture

Sale?  What the fuck are you talking about?  People holding UST paper would finally get a return.  Now it might be a bit challenging for the U.S. government to service the debt. Big fucking difference.

zhandax's picture

No, people buying UST paper would finally get a return.  People already holding UST paper would get a 40% haircut.

LawsofPhysics's picture

People who are holding UST paper are already paying Uncle SAM to lose their money. You are correct, but the real problem would still be the ability of the government to service the debt.  What is the interest at now?  Something like 500 billion?  Go ahead Ben, "fix it in 15 minutes"  I dare you.

knukles's picture

If they don't print that much money then all's they'll have is a little weiner.

Get it, weiner?
Ha hah ha h a hahah aha ah ahaha ha ha hahah aha ahah ah


(maniacal laughter)