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EU Goes From Monetary Union To Suicide Pact

Tyler Durden's picture


Via Peter Tchir of TF Market Advisors

As alleged details are leaked about an alleged proposal to leverage the EFSF all I can do is cringe. I'm waiting for some actual details, but as far as I can tell, Europe is attempting go all in. It is going to make leveraged bets on itself. If it doesn't work, the senior debt holders will own Europe if the BRICs buy the senior tranche and will end in a fast and furious death spiral if the senior tranche is owned by the ECB or European banks. We may get a lift on the news. We are trying to rally on the back of the news right now. But if this plan goes ahead, even the slightest cold in the future will turn into the plague. There will be no strong countries left as they will have tied themselves to the PIIGS anchor with a Gordion Knot that will never be untied in time.

Haven't they seen what happens to SIV's? Are the so confident in an economic recovery that will risk it all at this time? If they get it wrong and it doesn't work, there will be no fall back.

All I can hope is they are tired and too happy with the late night "solution" and the markets initial reaction that after the initial euphoria, cooler heads, like Schaeuble, will prevail. This has the makings of an Epic disaster in the making.

The plans to ring fence Greece, to erect support for banks and other countries all made sense. Painful, but made sense. If this even manages to avoid pain, it ensures the next crisis won't be manageable.

I do like the idea that the EFSF is going to become an "investment bank". At least it is consistent with solving every problem with more of the same.  The best part will be when they pay up to poach talent from the banks that they are bailing out. With Gardening leave in Europe it should take about 6 months before the first employee can start.

I will take a look at the details but in meantime, for first time in this crisis, am worried that not only are they doing something that won't work, but something that will make the problem intractable and ensure that the crisis ends worse than anything we had post Lehman.


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Mon, 09/26/2011 - 15:21 | 1712435 fyrebird
fyrebird's picture

It's the pirates' motto: one hangs all hang. Good to see plundering Europe returning to its roots.

Mon, 09/26/2011 - 15:35 | 1712497 sqz
sqz's picture

This and any other similar proposal is a terrifying solution. It is basically leverage on kicking-the-can, tying the fortunes of the structurally and nominally strongest to the dregs of the EU, increases the systemic impact of shocks and imbalances of any kind, and provides no incentives at all for the primary beneficiaries to restructure themselves, but continue with more of the same.

I never thought it would happen, but for the first time I'm actually sorry for the hardworking and frugal German people. The pain and changes that will ultimately be coming to your lifestyles will be an enormous shock. Unfortunately, the solution your government will have accepted will take all the rest of us down with you too.

Mon, 09/26/2011 - 15:32 | 1712498 trav7777
trav7777's picture

show me a society that didn't plunder.

Mon, 09/26/2011 - 15:35 | 1712520 MarketTruth
MarketTruth's picture

The last official act of any government is to loot the country/nation.

Mon, 09/26/2011 - 16:20 | 1712743 JW n FL
JW n FL's picture




A Government Loots the Nation the Entire Time..

The Last Act! is to take the Last of the Money / Wealth that a Country has to offer.

and it is not the Government.. it is the Lobby / Money Behind the Government.


Corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.


The only reason that America Owes Debt off shore is so that Banks on shore can collect fees..

So that the Share Holders of the Federl Reserve Bank can collect 6% on every dollar printed into circulation.

If America owed the Federal Reserve Bank $14 trillion in printed monies America would simply Not! pay the $14 Trillion.. so the debt has to belong to someone else other that ourselves.

The Fact that America has a 120% +++ amount of leverage on every U.S. dollar verse say the Chinese 1,200%+++ Leverage.. means that "We the People" are Transferring over 1,000% of our Wealth to China with every dollar they are allowed to invest into a U.S. Treasury (or other).

This is the biggest scam going and because the Value of the Yaun? is undervalued.. says Cable News in Heavy Rotation / 4 times an hour.. makes it so?

China services its debt or leverage on its Yaun / Renminbi thru production.

7 to 12 Cities a year are built that NO ON LIVES IN! and this is how China services its debt.

and the dumb ass people of America buy the story because it is repeated and repeated over and over again making China's Dollar "Strong like Bull!"

China's dollar is SHIT! and all of these Government Plants and / or STUPID Parrots should be rounded up and shot for Treason.


1. the Federal Reserve Bank that is OWNED by its Share Holders.. which are! Wall Street Brand Name Banks! are looking to gauge how much further they can push before the breaking point. And as dumb as the Populace is! I say they could bend things around Pluto and back more than once, without fear of upsetting the napping "Sheepish Consumers".

2. Wall Street communicated or transferred or moved ATLEAST! 11 Million manufacturing Jobs to China.

3. Wall Street which owns the Federal Reserve not only allows but promotes China's buying of America's debt with a Yaun or Renminbi that is Leveraged at over 1,200%.

4. The U.S. Dollar is Leveraged ATLEAST to 120%.. So China is picking up a 1,000% at par pricing plus, PLUS!!! Interest! FUCK YOU!

Now if this shit ain't Treason against the Sheepish Consumers of America! I don't know what the FUCK YOU COULD CALL TREASON THEN!




They all have to go... the system is corrupt and one man can NOT save it.. only "We the People" can bring back the rule of law..

Wall Street has NO LAW! and No Sworn Law Enforcement is capable of really putting in an honest day's Work!! and harassing poor people while Wall Street Steals Trillions and Washington DC send a HUGE portion of our Tax Base to China for Lobby Dollars does NOT COUNT!!

$16 Trillion Dollars???


Wall Street Aristocracy Got $1.2 Trillion in Fed’s Secret Loans


SEC Covering Up Wall Street Crimes?


How about the $2.5 Trillion in Social Security Bailouts??

here is the latest!

A former vice president for Citigroup pleaded guilty Tuesday to embezzling more than $22 million from the company and funneling the money to his personal bank account.


Mon, 09/26/2011 - 15:43 | 1712530 narnia
narnia's picture

there's no real enforcement mechanism on this.  if someone tries to march into greece or italy or spain with a piece of EU letterhead paper to take over a water system or land...  he or she going to be met with a bullet or a torch or a guillotine.

the EU is backed by nothing, just like the Federal Reserve Note is backed by nothing.  

this is a con job.  exchanging worthless for worthless with whipped cream & a cherry on top is not a solution.  this is just a means of defaulting via inflation rather than deflation & hope to get a little more out of this stupid system.



Mon, 09/26/2011 - 15:44 | 1712578 SheepDog-One
SheepDog-One's picture

I dont see the Germans just shrugging it off and allowing this.

Mon, 09/26/2011 - 16:11 | 1712713 gmrpeabody
gmrpeabody's picture

They will be sharing the same pain that the average tax paying, money saving, payment making,working American will be feeling. IMO

Mon, 09/26/2011 - 19:52 | 1713329 CompassionateFascist
CompassionateFascist's picture

Ultimately, there are just three ways of dealing with runaway debt (Us + EU):

1) Pay it off. Not going to happen, given power of mass group entitlements and pluotocrat special interests.

2) Default. Not just yet, when you can still

3) Extend the Universal Ponzi by piling on more debt/funnymoney. Until you get....back to #2, with a far more destructive Crash. Probably summer 2012, which will co-incide with run-in to US elections, for an econo-political Perfect Storm.   

Mon, 09/26/2011 - 22:26 | 1713671 Buck Johnson
Buck Johnson's picture

This is a horrible idea, truly horrible.  When this finally implodes, it will take Germany and France and even Britian with it.  As you said, they tied the stronger economies to the anchor of the insolvent ones.  There thinking is if they go down we all go down.  The problem is that when the person or persons said that they didn't believe it would happen, this time it will happen. 

Mon, 09/26/2011 - 16:16 | 1712731 Mr_Wonderful
Mr_Wonderful's picture

Yeah, good point.

In our time European mafia dumping toxic waste off the shores of failed states sans government control like Somalia destroys the livelihood of fishermen thus turning them into pirates. Unchecked criminally dysfunctional behavior breeds more of the same obviously.


Mon, 09/26/2011 - 15:22 | 1712439 TruthInSunshine
TruthInSunshine's picture

"When you multiply one piece of dog shit by a much larger number it becomes an edible, nutritious & delicious delicacy."


--ECB Proverb

Mon, 09/26/2011 - 15:22 | 1712441 Forgiven
Forgiven's picture

Once formed, the new SPV will be called EURON.  Recycle the Enron logo, but with the euro format e.

Mon, 09/26/2011 - 15:22 | 1712446 Forgiven
Forgiven's picture

Williambanzai7 can really go nuts with this trick of theirs.

Mon, 09/26/2011 - 16:12 | 1712718 williambanzai7
williambanzai7's picture

The doomsday weapon.

Mon, 09/26/2011 - 16:48 | 1712871 Forgiven
Forgiven's picture

Euron - The Doomsday Weapon SIV/SPV - You could really get a lot of play out of that imagery.

Mon, 09/26/2011 - 23:49 | 1713778 I did it by Occident
I did it by Occident's picture

You can use th pic of nuclear artillery.  !

Mon, 09/26/2011 - 15:27 | 1712465 Gene Parmesan
Gene Parmesan's picture

Beautiful. They don't even need to replace the n with a u, they can just flip it over.

Mon, 09/26/2011 - 15:28 | 1712477 Piranhanoia
Piranhanoia's picture

The currency can be the Eurine.  

Mon, 09/26/2011 - 15:39 | 1712539 TruthInSunshine
TruthInSunshine's picture

And the Germans and any other solvent Europeans cry out "Don't piss on our heads and tell us it's eurin."

Mon, 09/26/2011 - 15:32 | 1712496 TruthInSunshine
TruthInSunshine's picture

Forgiven - "Once formed, the new SPV will be called EURON.  Recycle the Enron logo, but with the euro format e."


It should carry the 'Ask Why' motto that Enron utilized, also; very appropriate:


Enron Commercial - Ode To Why
Mon, 09/26/2011 - 16:56 | 1712916 sqz
sqz's picture

€URON™ - "Ask Why, Germany, Why?"

Mon, 09/26/2011 - 15:22 | 1712445 Deadpool
Deadpool's picture

I said on another post, it's a hit not a suicide pact (and I meant it). The Fed or china will come out with all the EU gold and that's check mate. there will be blood.

Mon, 09/26/2011 - 15:24 | 1712453 SheepDog-One
SheepDog-One's picture

Right, did people really think China was buying Euro debt because theyre such nice and generous guys?

Mon, 09/26/2011 - 15:45 | 1712582 Drag Racer
Drag Racer's picture

it's the old 'monkey trap' idea.

Mon, 09/26/2011 - 16:07 | 1712689 Ghordius
Ghordius's picture

+1 good one

Mon, 09/26/2011 - 16:17 | 1712734 trav7777
trav7777's picture

they can certainly roll some gold into this CDO if they want to find least it then has some recovery value lol

Mon, 09/26/2011 - 15:23 | 1712447 wombats
wombats's picture

A suicide pact?  I guess that's about what we should expect from the mind numbed mental midgets of the EU leadership at this point.

Can I have the Eifel Tower after they go bust?

Mon, 09/26/2011 - 15:51 | 1712615 Henry Chinaski
Henry Chinaski's picture

You say that now, but it's all fun and games until the Grand Canyon goes up for auction.

Mon, 09/26/2011 - 15:23 | 1712449 SheepDog-One
SheepDog-One's picture

Suicide pact indeed...Europe is now like a Mission Impossible team, if one gets caught then everyone bites the cyanide capsule hidden in their tooth.

Yea this should end well...sure.

Mon, 09/26/2011 - 15:27 | 1712462 wombats
wombats's picture

I can't help wondering if Ben and Tim have secretly bought in on this pact?

Where is Goldman?  Surely they have fingerprints on this one too.

Mon, 09/26/2011 - 15:33 | 1712507 Ghordius
Ghordius's picture

"Europe is now like a Mission Impossible team, if one gets caught then everyone bites the cyanide capsule hidden in their tooth"

Like the TBTF 4/25 banks and their web of derivatives?

It starts to look like a surprising experiment of institutional psychology.. long as I am not alone it's all right..

Mon, 09/26/2011 - 15:39 | 1712532 Nascent_Variable
Nascent_Variable's picture

Right now, there is a man in Germany shouting to a crowd in a beer hall about irresponsible foreigners bringing the once-prosperous country to ruin.  Most people are laughing, but some are listening.  A short time from now, when he and others like him are proven to be right, and Germany's economy is in shambles, we'll find out if history indeed does repeat itself.

Mon, 09/26/2011 - 15:48 | 1712601 fyrebird
fyrebird's picture

All true, except it is an out-of-work factory worker in Detroit doing all that.

The Germans know better. They'd kill that guy in an alley the next day. Americans, not so wise.

But we'll learn. Oh yes. Come back in 15 years and see how much we've learned.

Mon, 09/26/2011 - 16:18 | 1712740 trav7777
trav7777's picture

uh...about the only people left in detroit are black

Mon, 09/26/2011 - 19:50 | 1713326 lynnybee
lynnybee's picture

you forgot all about the large iraqi population in DEARBORN.     i live on the other side of the state of michigan.    the stories that i hear about DEARBORN garages .......... slaughtering & the bleeding of goats in suburban garages in DEARBORN, MICHIGAN so they can eat them.     Can't they just go to the grocery store ! ?    ......... no, it's NOT ALL BLACK in the DETROIT area.     BUSH certainly did a nice job assimilating iraqi population & showing them what democracy was all about.    people on the west side of MICHIGAN don't even dare go to that area.

Mon, 09/26/2011 - 22:29 | 1713677 TruthInSunshine
TruthInSunshine's picture

I'm not weighing in on the whole ethnic/religious/political aspect of what you wrote, as I restrain my comments on ZH and elsewhere to economic matters, however...

...if you eat meat, the animal does have to die first, and in most parts of the world, it's done precisely this way.

Of course, we have automated turnstiles that decapitate our cattle and hogs on Big Agra Factory Farms now, except when the blades miss the mark (as they often do) and just lop off the snout or some limbs.

Mon, 09/26/2011 - 16:52 | 1712894 caconhma
caconhma's picture

In spite of all the post-WWII propaganda, looking at old documentaries, one can see that German people indeed loved A. Hitler. Apparently, he has done some good things for Germany and German people.

Yes, the NAZI Germany has lost the WWII. Consequently, Hitler was responsible for the WWII defeat since, after all, he was the NAZI leader. No doubts, he was poorly educated and has made many serious strategic mistakes.

Once again, (the involvement into and the execution of WWI and WWII) Germany makes a terrible geopolitical blunder. The only good thing for Germany is that they will not have a war on two fronts since Russia is close to a collapse.

Unfortunately, for the last 300+ years, England has been the primary force responsible for the endless European wars. It is of interest that Hitler tried to make peace with England but Stalin has always considered England as his number one enemy.


Tue, 09/27/2011 - 01:31 | 1713867 Peter K
Peter K's picture

You think The Feuher might have gotten a bad rap since the end of the "you know what"? Just askin.......

Mon, 09/26/2011 - 15:57 | 1712638 macholatte
macholatte's picture

Who knows what to believe anymore. The EU & IMF have become really bad propaganda machines. They publish semi-positive BS Mon-Friday that gets contradicted Mon-Fri while they have a crises on the weekends or whenever NYSE is closed. If the Swiss weren't holding up the Euro it might be eighty cents by now. Are they actually looking to the BRIC's for financing? Isn't that like Russia and China conquering EU simply by buying it? I can see Putin riding into Paris, through the Arch de Defeat, standing in a convertable while the crowd cheers. The only problem for Russia and China is all the Europeans. But maybe they have some ideas on dealing with that issue.   JMHO

Mon, 09/26/2011 - 15:24 | 1712452 dr.charlemagne
dr.charlemagne's picture

Attention KMart shoppers. Silver clearance sale ending soon.

Mon, 09/26/2011 - 15:25 | 1712457 Hero Protagonist
Hero Protagonist's picture

In the US we look at the ratio of Debt Service to Tax revenues.  I wonder what is the equivalent in Europe...that is, the sum of each countries debt service versus the sum of each countries tax revenues.  The last time I looked in the US it was +/-300 B debt service to +/-2 Trillion in tax revs.

Mon, 09/26/2011 - 15:26 | 1712460 Hansel
Hansel's picture

"I'm waiting for some actual details, but..."

LOLZ, wish in one hand and shit in the other.  Rumors are much more effective without details.

Mon, 09/26/2011 - 15:40 | 1712540 SheepDog-One
SheepDog-One's picture

More daily rumors of a 'new plan'...they probably have NO clear plan at all, as they realize putting out the carrot and stick daily is far more effective than any actual plan or solutions.

Mon, 09/26/2011 - 16:17 | 1712738 Mugatu
Mugatu's picture

It's that damn Hansel! He's so hot right now.

Mon, 09/26/2011 - 15:27 | 1712463 Peter K
Peter K's picture

I guess deperate times demand desperate measures. But the glaring thing about this is the degree of the deperation:))))They have really deluded themselves into thinking that the world will end if they don't save the Euro. Mind boggling!

Mon, 09/26/2011 - 15:27 | 1712464 carbonmutant
carbonmutant's picture


If this bank collects most of the bad EU paper it could be used as a bad bank.

Mon, 09/26/2011 - 16:36 | 1712814 oogs66
oogs66's picture

They are all already bad banks this would be worst bank.

Mon, 09/26/2011 - 15:28 | 1712468 youngman
youngman's picture

They still have not fiqured out who will buy it and who will rate least now its know the Greek bonds you are buying are they will hide it....and one more item...when the governments find out that they can get more money...are they going to cut expensies or just use more will triple their debt overnight.....what a joke..and Gold and Silver are Econ 101 has failed me with this...there is no sanity in the markets anymore...

Mon, 09/26/2011 - 15:28 | 1712470 adr
adr's picture

And 11,000 gets broken again. Seriously adding all the ups after the downs of the past two months probably add up to over 10,000 points. The entire history of the Dow in a month.

I guess we'll see 11,500 by Wednesday and by the following Wednesday 10,700 will come again.

Mon, 09/26/2011 - 15:46 | 1712587 SheepDog-One
SheepDog-One's picture

HAS to be at least 10,000 DOW points cumulative over just the last few months.

Mon, 09/26/2011 - 15:28 | 1712471 mechawreck2
mechawreck2's picture

no need to poach any employees..they'll just outsource the activity to the bailed banks themselves.  DB and GS's Q4 just got a nice pop syndication fees

Mon, 09/26/2011 - 15:28 | 1712472 SheepDog-One
SheepDog-One's picture

'Are they so confident in an 'economic recovery' that theyre willing to go all-in and risk it all this time'?

Everyone knows you never go full retard. Europe just went full 'I am Sam' dont come back from that.

Mon, 09/26/2011 - 15:29 | 1712478 The4thStooge
The4thStooge's picture

suicide pact or mexican standoff?

Mon, 09/26/2011 - 15:29 | 1712479 economics1996
economics1996's picture

Uncle Ben will be disapointed in you Zero guys.

Mon, 09/26/2011 - 15:29 | 1712480 Bansters-in-my-...
Bansters-in-my- feces's picture

Erect support for banks...?????



Fuck the banks.!

Mon, 09/26/2011 - 15:37 | 1712526 SheepDog-One
SheepDog-One's picture

Fuck the banks, eat the rich. Motto for 2012.

Mon, 09/26/2011 - 15:29 | 1712482 TradingJoe
TradingJoe's picture

Well, we might as well move to a deserted island and grow bananas, we have lots of experience in this field, ladies and gents! But, as I mentioned in a previous thread, it's end of month/quarter bonus time, again! So no surprise there, markets almost 11K on DJ and 1155  on S&P volume of course nowhere to be found but we know this all to well also!

I suggest, physicals, lots of ammo, food and a few "willing" chicks,(if one is not married!) and stay tuned for the BIG innevitable, coming soon to a doorstep near you :)))!

Still, Germans can't really be that stupid, ODER?!

Mon, 09/26/2011 - 15:33 | 1712509 SheepDog-One
SheepDog-One's picture

This 'plan' will probably be refuted by the Germans this evening after market close.

Mon, 09/26/2011 - 15:30 | 1712483 Critical Path
Critical Path's picture

This has the makings of an Epic disaster in the making.

Wise words once uttered 20+ years ago.

Mon, 09/26/2011 - 15:30 | 1712487 Corn1945
Corn1945's picture

Double down on stupid.

Mon, 09/26/2011 - 15:31 | 1712492 economics1996
economics1996's picture

Now its time to teach Austrain economics to my students and get the staff all pissed off.  They hate me.


Du hasst...
Du hast mich...
Du hasst...
Du hasst mich...
Du hasst...
Du hasst mich...
Du hasst...
Du hasst mich...

Du hasst...
Du hasst mich...
Du hasst mich...
Du hast mich gefragt...
Du hast mich gefragt...
Du hast mich gefragt, und ich hab nichts gesagt!


Mon, 09/26/2011 - 15:32 | 1712501 SheepDog-One
SheepDog-One's picture

OK so now that Europe is 'fixed' and euphoria abounds all over the Eurozone (for today anyway)...back to the far worse US depression collapse again? 

Mon, 09/26/2011 - 15:37 | 1712523 Deadpool
Deadpool's picture

all currency is toilet paper. America's happens to be two ply and quilted.

Mon, 09/26/2011 - 15:32 | 1712502 JLee2027
JLee2027's picture

Not surprising. If the ship goes down, the politicans and banksters do too, so absolutely all in. Anything to prevent reality from occurring. Can't imagine they buy more than a few months though. 

Mon, 09/26/2011 - 15:35 | 1712519 SheepDog-One
SheepDog-One's picture

If that. All these 'plans' now seem to have a lifespan of 24 hours or so now, or as soon as the first person realizes this screws them.

Mon, 09/26/2011 - 15:44 | 1712573 centerline
centerline's picture

Rumor floating is reaching a critical mass. Seems to me it is a desensitizing exercise to reduce panic (mitigate the domino effect) that is sure to otherwise occur.

At this point it seems we have been shown all the curtains and now we are just waiting to see which one they select!

Mon, 09/26/2011 - 15:32 | 1712504 Cone of Uncertainty
Cone of Uncertainty's picture

Upvote me if you secretly are a little giddy at the prospects of an even bigger EU implosion once this plan fails.

Mon, 09/26/2011 - 15:51 | 1712617 Smiddywesson
Smiddywesson's picture

Hee, hee.  Guilty!

Mon, 09/26/2011 - 15:33 | 1712505 Byte Me
Byte Me's picture

Utter Franco-German hubristic claptrap.

Monetary Union for Dummies (part 41)

Mon, 09/26/2011 - 15:33 | 1712506 ddtuttle
ddtuttle's picture

There are many desperate Eurocrats trying to save their precisous dream.  They will prospoe ANYTHING hoping beyond hope to save it.  So I suspect the kool-aid free officials will balk at nonsense proposals like these.  The problem is the whole thing looks like a headless chicken that will run around for a minute then collapse. 

We keep talking as if more QE-style bailouts would save the day if only the Eurocrats could get their shit together. But we KNOW bailouts won't work. Damned if you do and damned if you don't.


Mon, 09/26/2011 - 15:42 | 1712558 TruthInSunshine
TruthInSunshine's picture

The failure of the EU will be a big, red mark and black blemish for those pushing a one world government.

If they can't manage to get part of a continent to run smoothly, in an integrated fashion, for more than 15 years, how in the hell are they going to implement such a unholy and evil scheme on the entire world?

Mon, 09/26/2011 - 15:49 | 1712608 SheepDog-One
SheepDog-One's picture

OR, this is actually a vital part of the One World Govt plans, totaly tying the troublesome Eurozone together as one so when it goes down this time, theyre all chained together tighter than a Houdini straight jacket.

Mon, 09/26/2011 - 15:33 | 1712508 bania
bania's picture

Jonestown, baby!

Mon, 09/26/2011 - 15:34 | 1712511 Tense INDIAN
Tense INDIAN's picture

I just need 70-100 Nifty UP move tomorrow...n I will be out...come one Europe ...more leveraged rumours

Mon, 09/26/2011 - 15:35 | 1712512 shazbotz
shazbotz's picture

well...if you're going to FAIL, you might as well FAIL BIG


go big or go home bitchez

Mon, 09/26/2011 - 15:48 | 1712599 wombats
wombats's picture


Mon, 09/26/2011 - 15:35 | 1712518 Deadpool
Deadpool's picture

from 30,000 feet (or Mars; take your pick) all this ado is about using tax payer money to try, yet again, to save banks so they can extend credit and keep the party going. Not going to work. the Economic hitmen have killed everyone like the bar scene in "Dawn to Dusk".

Mon, 09/26/2011 - 15:42 | 1712553 TradingJoe
TradingJoe's picture

Yeah, big tit Salma, what a movie, always knew she was a dangerous vampire, now she's sucking a french guy, heheheh!

Mon, 09/26/2011 - 15:37 | 1712522 There is No Spoon
There is No Spoon's picture

Is this an attempt at a controlled debasement of the Euro? Similar to what the Fed is trying to do here, are they trying to default by debasing?

Mon, 09/26/2011 - 15:40 | 1712542 centerline
centerline's picture

The net effect seems like it would be the same.  Of course, that would also imply we are almost ready for the hot-potato toss back to the US.  Would play perfectly into the recent strengthening of the USD.  Central bank circle-jerk goes on, waiting for China to implode.

Mon, 09/26/2011 - 16:03 | 1712667 Smiddywesson
Smiddywesson's picture

Yes, they are taking turns debasing the currencies, and the hot potato is soon to come back across the Atlantic.  The dollar couldn't strengthen forever, so now we know why gold and silver had to be forced down.  They had to go down before the dollar took its turn to tank so that gold prices would stay below that critical $2000 level.  This is looking like a nice rally in PMs is coming.

Mon, 09/26/2011 - 15:42 | 1712551 Deadpool
Deadpool's picture

no, they are too dumb for that (that's the Fed's play). they are trying to avoid default and unintended consequences is debasement. Switzerland did it on purpose as did Brazil (maybe more then they expected), but the Eurozone is desperate for salvation to avoid repeats of pre WWII hyperinflation/post WWI depression, which, again, they will get anyway. they want there banks to survive, but they are zombies already, but AGAIN, European socialists are to stupid to notice.

Mon, 09/26/2011 - 15:49 | 1712609 centerline
centerline's picture

The nature of unchecked politics creates a sort of manifest destiny within the design of the current monetary scheme (greed, power).  The byproduct is a dumbed-down, dependant society.  Nail in coffin.  Absent the rug being pulled out from everyone's feet, the course has been plotted and laid-in. 

Mon, 09/26/2011 - 15:39 | 1712534 Zeff
Zeff's picture

United we stand so together we fall. Europe, just said it.

Mon, 09/26/2011 - 15:41 | 1712546 Bam_Man
Bam_Man's picture

The ECB will obviously be the equity (bag) holder.

This "solution" provides breathing room for the ECB in that they will not have to "print" until their equity tranche of the CDO tanks. And that will take a while - perhaps as much as 2 years.

This has accurately been referred to as a "Hail Mary pass". And when it fails, the ECB will be left with no other choice than to print their way back to "solvency".

This is nothing more than a time-delayed form of Quantitative Easing, hidden behind the opacity of a complicated financial structure.

Mon, 09/26/2011 - 16:21 | 1712748 trav7777
trav7777's picture

yeah...and the Fed has the negative cash rate to chase excess reserves into bonds, thus eliminating QE need for at least a year.

Mon, 09/26/2011 - 15:41 | 1712550 Arie L Ultra
Arie L Ultra's picture

This isn't a bad-bank but a mad-bank

Mon, 09/26/2011 - 15:42 | 1712555 New_Meat
New_Meat's picture

"There will be no strong countries left as they will have tied themselves to the PIIGS anchor with a Gordion Knot that will never be untied in time."

The Gordian Knot was never untied.  It was unravelled, though, by an impatient fellow from the neighborhood.  Cut through the bullsh ... er ... nonsense, so to speak.

- Ned

Mon, 09/26/2011 - 15:42 | 1712560 russwinter
russwinter's picture

EFSF Plan in Europe is no free Ride

Mon, 09/26/2011 - 15:43 | 1712562 Belarus
Belarus's picture

I know, I know....Europe is a big deal. But why does it feel like a big distraction for the state-of-well-not-being of the United States? I, mean, Europe is solved then not solved. U.S. markets are just trading on that news alone....up/down, up/down, which begs the question? What about the United States? 

You know, the place where the collective citizens don't believe the banks are solvent? With BAC, C, JPM and PD's all selling at abyss type price to book values? And where if one bank goes down the whole state of well being will not be all that well. And to think, we're propping GDP with 1+ trillion annually in unfunded defict spending, while the states are also more than broke....along with pensions, along with the American Spirit that is bankrupt and have spiraled down to a New Dumbness that reaches new nadirs of morbid curiosity. 

Yet, the Dow, the proxy for all is good, skyrockets because Europe might look like AIG on steroids at the height of our financial crises?

The world is insane. Period.

Mon, 09/26/2011 - 15:52 | 1712620 SheepDog-One
SheepDog-One's picture

Like I wrote that the insolvent Eurozone is awash in euphoria on news that its tied itself to a tree and has a blindfold it now time to turn back the attention to DEPRESSION USA once again?

Mon, 09/26/2011 - 15:43 | 1712563 tekhneek
tekhneek's picture

Move along... nothing to see here...

Mon, 09/26/2011 - 15:43 | 1712567 bbq on whitehou...
bbq on whitehouse lawn's picture

Step 1: spend money.

Step 2: ????

Step 3: Profit.


Mon, 09/26/2011 - 15:43 | 1712569 Deadpool
Deadpool's picture

this is lend-lease + Marshall Plan + Kelly's Heros...Fed is ripping the face off of Europe while the smoke is still in the air before China does.

Mon, 09/26/2011 - 15:44 | 1712572 HpDeskjet
HpDeskjet's picture

This is all bs... Funny how all these rumours come into the market via countries that A) are about to default B) have a huge interest in some sort of "solution" (= kicking can)... NOTHING CAN/WILL BE ACCOMPLISHED IN EUROPE... There is no agreement, no unity, no solidarity, no political support, no sense of urgency, no creativity, no knowledge, no "balls". Just rumours and bullshit

Mon, 09/26/2011 - 15:53 | 1712624 SheepDog-One
SheepDog-One's picture

I dont see Germany agreeing to tie itself to these millstones.

Mon, 09/26/2011 - 15:58 | 1712645 HpDeskjet
HpDeskjet's picture

Of course... But markets take anything for truth as long as it is positive. Just wait. The drama will get much worse before there is any chance something constructive is open for discussion. Constructive = 40-70% haircuts for Greece/Portugal/Ireland + serious austerity in Spain/Italy/France + unwind of ECB portfolio + fiscal unity/eurobonds.

Mon, 09/26/2011 - 15:47 | 1712590 BurningFuld
BurningFuld's picture

Not to worry everyone. When this starts to implode...PRINT PRINT PRINT. If you print it they will come.

Mon, 09/26/2011 - 15:54 | 1712631 SheepDog-One
SheepDog-One's picture

Well we've also had 3+ years of print print print and that has done nothing either. 

Mon, 09/26/2011 - 16:10 | 1712709 Smiddywesson
Smiddywesson's picture

It's done nothing to fix the system.  But it's done everything to reward the wicked, bail them out, and give them time to move onto another scam. 

Yawn, more can kicking. 

Mon, 09/26/2011 - 15:51 | 1712614 PulauHantu29
PulauHantu29's picture

Barry will never get re-elected.

Stock market plunging....

Unemployment soaring...

Zero interest on savings...

Strong dollar smashing exports....



Mon, 09/26/2011 - 16:06 | 1712670 Dick Darlington
Dick Darlington's picture

EU-dictatorship in full retard panic. They haven't even managed to ratify the enlarged EFSF in all the national parliaments. And now this, uh huh. Is anyone really that stupid to buy this nonsense? The numbers are growing each week while they claim there's really no problem. That they just want to guarantee ze stability and "growth". Wow, just wow, and you thought there was a limit for stupidity. It's a death trap destined to fail if it ever even sees the light of day. But it really confirms that EU/euro is not for people, it's for power hungry sociopaths who want to control the world.

Mon, 09/26/2011 - 16:09 | 1712701 Translational Lift
Translational Lift's picture

but as far as I can tell, Europe is attempting go all in. It is going to make leveraged bets on itself. If it doesn't work, the senior debt holders will own Europe

the senior debt holders will own Europe..... Yea....sure....the EU will pull an Obummer and confiscate/seize the assets, the senior debt holders will senior bag holders....


Mon, 09/26/2011 - 16:09 | 1712705 pauhana
pauhana's picture

Not to worry.  Won't happen because, as Gartman says, "the good burgers of Germany won't allow it."

Mon, 09/26/2011 - 16:41 | 1712836 darkpool2
darkpool2's picture

Depends if they 1) are properly informed of the consequences and 2) get chance to vote in time

Mon, 09/26/2011 - 16:52 | 1712895 Peter K
Peter K's picture

And these folks should know all about Faustian Pacts :)

Mon, 09/26/2011 - 16:28 | 1712775 metastar
metastar's picture

EU doesn't need to solve it's crisis. It merely needs to outlast the US reaching it's crisis.

But, we all go down together.

Mon, 09/26/2011 - 16:30 | 1712785 zorba THE GREEK
zorba THE GREEK's picture

There are so many voices coming out of Europe and they are all saying different things.

They are no closer to dealing with the problem now then they were last year when the

Greek problem popped it ugly head up. There is no real union in place in the EZ or the EU,

only a cluster of various groups without clearly defined authority to act on behalf of all

the separate countries. In the U.S. even the two political parties can't agree on how to

deal with the debt problem or the jobs problem, and they speak the same language and

share the same nationality. What hope is there for Europe to come up with a solution to

their complicated problems in time to avoid a meltdown? Slim to none. The politics of

the world have made the world's problem unsolvable, so I guess we just wait and brace

for the collapse.

Mon, 09/26/2011 - 16:35 | 1712810 english serf
english serf's picture

Fuck the germans! they bombed my grannies chip shop!

Mon, 09/26/2011 - 16:36 | 1712816 arizona11912
arizona11912's picture

Euro-bonds will be announced soon.

Mon, 09/26/2011 - 16:38 | 1712817 falak pema
falak pema's picture

While Zh laments, all of MSM exults as does WS about the good news of an EFSF miracle EU investment bank, to solve all problems, Eureka!


EU Official Says New EFSF Plan Is 'Well Advanced', Awaiting Approval

Read more:


Read more:

Wait n see the miracle unfold!!

Mon, 09/26/2011 - 17:46 | 1713040 robertocarlos
robertocarlos's picture

Where did all the money goethe?

Mon, 09/26/2011 - 17:59 | 1713072 Clint Liquor
Clint Liquor's picture

They spenteth.

Mon, 09/26/2011 - 18:08 | 1713092 TruthInSunshine
TruthInSunshine's picture

Dust to dust

Ashes to ashes

We know Central Banksters are asses

Mon, 09/26/2011 - 23:54 | 1713782 tip e. canoe
tip e. canoe's picture

ask Faust, he knowethe.

Mon, 09/26/2011 - 17:54 | 1713057 tomreagan
tomreagan's picture

My favorite headline today...Greek finance minister refutes rumors over 50pct haircut. Last week they were HIS rumors! Like an alcoholic that says " I promised to do what"??? I guess we can rule out the euro as a viable reserve currency. Amazing how these rumors always arrive the week italian or spanish debt is auctioned....and if the fed is reading....this is only a movie idea

Mon, 09/26/2011 - 18:40 | 1713154 virgilcaine
virgilcaine's picture

Kick the can the size of an oil drum.


Mon, 09/26/2011 - 22:22 | 1713574 honestann
honestann's picture

The speed of light has supposedly been exceeded, but the degree of craven corruption exhibited by politicians and banksters has definitely exceeded infinity.  Amazing.

Mon, 09/26/2011 - 22:10 | 1713646 xtop23
xtop23's picture

These guys are frigging nuts. They send Geithner packing because he was selling leverage.

Then they propose to lever up.

This would be hilarious if it wasnt so damn tragic for the people that are going to get royally assraped by this.

Tue, 09/27/2011 - 00:20 | 1713809 tom a taxpayer
tom a taxpayer's picture

Yes. Geithnergate.

Tue, 09/27/2011 - 01:21 | 1713861 Peter K
Peter K's picture

What it does is show just how desparete these folks are. If you haven't paniced up to now, start thinking about it:)

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