With Europe Broken Again, Sarkozy And Lagarde Are Back To Begging

Tyler Durden's picture

What a difference a month makes. About 4 weeks ago the European crisis was "over" - French President Sarkozy exclaimed that: “Today, the problem is solved!” Christine Lagarde, former French finance minister, and current IMF head following the framing of DSK, added that “Economic spring is in the air!”... Fast forward to today when following the inevitable end of the transitory favorable effects of the LTRO (remember: flow not stock, a/k/a the shark can not stop moving forward), the collapse of the Spanish stock market, the now daily halting of Italian financial stocks, the inevitable announcement that shorting of financials in Europe is again forbidden, and finally the record spike in Spanish CDS, Europe is broken all over again. Which brings us again the Sarkozy and Lagarde. The Frenchman who is about to lose the presidential race to socialist competitor Hollande (an event which will have major ramifications for Europe as UBS' George Magnus patiently explained two months ago), no longer sees anything as solved, and instead is openly begging for the ECB to inject more, more, more money into the system to pretend that "problems are solved" for a few more months. Incidentally, so is Lagarde, for whom in an odd change of seasons, economic spring is about to be followed by a depressionary winter. The problem is both will end up empty handed, as the well may just have run dry.

From the FT:

In effect ripping up a deal to shelve public differences over the ECB reached in November at the height of the eurozone crisis with Ms Merkel and Mario Monti, the Italian prime minister, Mr Sarkozy said the matter of ECB support for growth was “a question we cannot avoid”


He said: “If the central bank does not support growth, there will not be enough growth . . . I know the difficulties that surround this subject but we have the duty to reflect on it because it is a major problem for the future of Europe.”


Mr Sarkozy said: “Europe must purge its debts, it has no choice. But between deflation and growth, it has no more choice. If Europe chooses deflation it will die. We, the French, will open the debate on the role of the central bank in the support of growth.”

In other news, remember that so very "friendly" relationship between Merkel and Sarkozy? Kiss that goodbye.

And while Germany may or may not have had enough of bailing out everyone (between the ECB funding all peripheral banks, and TARGET2 funding all peripheral current account deficits), the IMF just can't get enough. Unfortunately, unlike the ECB, it does not have its own printer. Enter panhandling. Literally:

Holding up her Louis Vuitton handbag, the new managing director of the International Monetary Fund (IMF) turned to her fellow power brokers in one session and said: “I am here, with my little bag, to collect a bit of money.”



The joke broke the ice and the room rippled with laughter. But, beneath the disarming charm, Lagarde was deadly serious. For months now, the IMF has been trying to coerce its 187 members into committing as much as $600bn (£378bn) more to the fund to build what she described at the Brookings Institute in Washington last week as a “global firewall” to defeat once and for all the European sovereign debt crisis.

The problem, as is glaringly obvious, is that the IMF's piggybank really is the US. And no US, no "big bazooka", no "giant firewall"

Ever since “the Greek problem” flared up again in July last year, the talk from Brussels to London to Beijing has been about “big bazookas” and “giant firewalls” – a vast bail-out fund available to rescue any struggling nation from bankruptcy.




It has been a baptism of fire for Lagarde, France’s former finance minister who was appointed after the disgraced Dominique Strauss-Kahn stepped down in the wake of rape allegations. Just nine months into the job, she has the unenviable task of trying to build a co-ordinated global strategy on the shifting tectonic plates of domestic politics.


At the IMF’s key spring meetings in Washington this week, she faces her first real test. If Lagarde can strike a big deal on resources, she will be garlanded with praise. If she can’t, the jury will remain out. Either way, the pressure is now on.

Sorry, but with a US debt ceiling fiasco due in 4 months just ahead of a critical presidential election, the fire is about to be turned up a notch. Or ten... and be sulfur based. Because the math no longer works... And it never did.

Tellingly, all the US Treasury could muster in response to the eurozone agreement was the weak recognition that it “reinforces a trajectory of positive efforts to strengthen confidence in the euro area”. UK sources said that, privately, the US was bitterly disappointed, and adamant that no further US taxpayer money would be put at risk of more euro bail-outs.


Normally, US opposition would be enough to kill any plan to increase resources. But Lagarde has other ideas. She hopes to corral the rest of the major non-eurozone players – the UK, Canada, Japan, Australia, China and India – into a joint agreement. But she has already begun managing down expectations.


Having previously indicated that she wanted as much as $600bn more, she said at Brookings: “The needs now may not be quite as large as we had estimated earlier this year.”


UK sources said she would be lucky to secure $400bn. Of that, the eurozone members have committed to contributing €150bn – on top of their own bazooka – leaving just $250bn to be gathered from other members.


Even at $400bn, the extra resources would be a retreat from earlier ambitions. Lagarde wanted to increase the IMF’s available resources from the current $400bn to $1 trillion, while global policymakers had hoped for a total bazooka of €2 trillion to allay concerns about Europe. The IMF and the eurozone’s combined funds will fall well short of that.

Forget bazooka: IMF will be lucky to get a peashooter. In the meantime, Spain will not wait:

As markets have lost faith in Spain, questions have resurfaced about whether the eurozone firewall is big enough. According to CEPS, “even if the [firewall] only had to cover half of the financial needs of Spain and Italy”, it would need another €400bn.


Even securing €250bn from non-eurozone members excluding the US could prove difficult.

So now that Europe is broken all over again, and with elections, riots, strikes, tumbling markets, hundreds of sovereign bond auctions, and no promise of free liquidity from anyone despite daily rumor otherwise... what happens next?

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blindfaith's picture




Hum yes...civilized societies don't chop off heads.  But, we do have instutions which do long term drug assisted research on abnormal or indefendable behavior.  Well...for some anyway.

The slogan.."bad judgement' is a Wall Street creation for defense.

Mad Mad Woman's picture

They are but pawns in this huge chess game being played by the bankers and the Bildabergers. They are just following orders and hoping for the best. They are all idiots!

QQQBall's picture

Holding up her Louis Vuitton handbag, the new managing director of the International Monetary Fund (IMF) turned to her fellow power brokers in one session and said: “I am here, with my little bag, to collect a bit of money.


One day this elitist humour will be met with pitchforks. Stand on a street croner in Athens and say that and see what happens.

Madcow's picture

Blythe Masters recently asserted that JPM has $76 Trlillion of physical silver somewhere in a vault in Manhattan.  


Can't they just sell a tiny fraction of that and solve this whole Hyler-Deflation mess once and for all ??




jcaz's picture

Sell it?   They can only do that if they OWN it.....

Wait for the inevitable "confiscation"-  it's happened before......

El's picture

When has silver ever been confiscated?

graspAU's picture

In the US staring in 1934 by virtue of an FDR executive order. It was confiscated by charging very high seniorage/coinage fees (started out at about 61%)." less a deduction of 61 8/25 percent thereof for seigniorage, brassage, coinage, and other mint charges". Turn in silver, they take 61 percent and give you 39% back after coined.

FDR believed that gold was for governments and silver was for circulation as money. Read his private letters (published 1950) as well as the books containing his public letters and addresses.

Executive Order 6814 - Requiring the Delivery of All Silver to the United States for Coinage August 9, 1934: http://www.presidency.ucsb.edu/ws/index.php?pid=14741

Another great source of information on this subject is author Edwin Viera's, Pieces of Eight which was reprinted recently. Worth its weight in gold in terms of monetary history from colonial times forward in the U.S.

In addition, right click and download this. This was testimony by the Treasurer of the U.S. in the Congressional record, presenting a list of silver hoarders known to have >=50,000 ounces in their possesion: http://www.silver-investor.com/charlessavoie/hoardersofsilver.pdf




El's picture

Very interesting. I was not aware of that. Thanks!

Village Idiot's picture

"Once and for all!"  Carry a CHANEL next time - you look cheap.

Caviar Emptor's picture

Let's ask Japan how they're doing with their serial bazookas that they've been firing at their two-headed monster since 1991

Atomizer's picture

My balls are hanging on the clothes line for the US Basel III Central Bank success.


Seizing the Moment – Thinking Beyond the Crisis <<<<<---- Bag holder speaks on behalf of IMF.

azzhatter's picture

Christine and Sarko sharing a bong?

TBT or not TBT's picture

A dildo is probably more apt here, given what is in store for Zeropa.

tom a taxpayer's picture

Christine and Sarko also share a thong. Sarkozy's balls have shrunk in recent weeks as he senses denouement of his power in next election. At the same time, Lagarde's vulva has engorged and swelled as she wields power as head of IMF. A liaison to swap spit is too dangerous, and so, these Francophiles bond for La Belle France by sharing a thong that fits shrunken balls and swollen vulva.


JustObserving's picture

"or months now, the IMF has been trying to coerce its 187 members into committing as much as $600bn"

What will $600 billion do?  Postpone the problem by 2 months? Or 3 months?  The US is running deficits of $200 billion a month (February and March) and is supposedly doing much better than Europe. Of course, no one talks of the $550 billion a month growth in US unfunded liabilities.

Europe requires a couple of trillion dollars not just $600 billion.  And even then, it will be a tempoarary fix.

jcaz's picture

Just long enough for her to get out of town.....

Caviar Emptor's picture

Yes, all true @JustObserving. 

But the real tragedy is the stark reduction in newly minted billionaires coming off the Wall Street/City/Euro Bank assembly line. It's depressing to all the wannabes sitting at home staring at their own unpayable debts

cranky-old-geezer's picture



Europe requires a couple of trillion dollars not just $600 billion.  And even then, it will be a tempoarary fix.

 These people simply aren't that stupid to keep playing kick the can like this.

It isn't kick the can.  It's looting.  With sovereign debt needs as a cover story.

It's running the printing presses to loot the people, plain and simple, transferring as much wealth as possible from the people to the government, which eventually ends up in bankers' pockets.

Mad Mad Woman's picture

There simply isn't enough money in the world anymore to paper over all the problems. It's time to pay the piper.

Zombie Investor's picture

I think your translation is incorrect.  She said: "This bag is fake leather!  This I know, just look at my face.".

monopoly's picture

Will this ever end? Will the planet ever reset so we can start over....from the beginning.

CrashisOptimistic's picture

Can't reset oil that's already been burned.

cranky-old-geezer's picture



Yes ...but plan on starting over in 3rd world conditions.

Be careful about that reset you hope for.  It'll be so bad you might not live thru it.  Or wish you hadn't.

jools's picture

I'm french.
They clearly don't represent us anymore.
Sarkozy, Lagarde, Draghi, Monti, Papendreou, Papademos, Merkel, Cameron, Zapatero, Von Rompuy, Barroso...
These men and women don't know their job, so they just do what they're asked to by the .01%
They lie, they lie and sometimes, they lie, to us, to you.
Because it's crystal clear:





choose -> war/hyperinflation/megadeflation/default

The "no-way-to-pay-this-amount" is true for Europe, but also for USA and even BRICS...

Caviar Emptor's picture

They could actually pay the debts....and make a loaf of bread cost 1Million Euros. 

So these geniuses are falling back on the old playbook: how can we create a shiny new speculative bubble that we can channel quadrillions to? Should we drill for minerals on the moon (shades of the South Seas and Louisiana bubbles of centuries before)? Should we grow gluten-free crops on exoplanets? Maybe a tunnel to China originating in Kokomo Indiana....

TBT or not TBT's picture

We'll get there fast and then we'll take it slow

StychoKiller's picture

TBT or not TBT FTW!  The best comment in the thread, hands down! :>D

FischerBlack's picture

Her bag is made from the same leather as her face.

phungus_mungus's picture


That redhead in the Snoorgie's Tee Shirts add on the main page is HAWTTT 

Acorn10012's picture

All I'm getting is the kilo coin.

TWSceptic's picture

Deflation bad - inflation good. Morons. Will they ever learn?

Agent P's picture

If you owed 10x more than you could ever hope to repay, which one would you favor?

Barry McBear's picture

This flow vs stock argument by the fed is baffling.  I don't understand how they can think it's the stock of their holdings that holds up the price.  If it was a rare commodity that was being bought up, say silver, then I agree that it's the stock that matters (ie Hunt brothers).  But when it's garbage paper that is constantly being produced at a record pace (Treasury debt) that is being bought up, stock means nothing.  If anything, the price of treasuries/mbs should go down even further if the market was going to price in the excess supply that would hit the market if the fed were ever going to unwind their holdings... but the market is smart enough to know that is never going to happen.

PaperBear's picture

It would have been too obvious if she had been wearing a mask and holding a brown paper bag in one hand and a gun in the other hand.

Ahmeexnal's picture

I see an old ugly bag and an old ugly hag.

TBT or not TBT's picture

And now, speculation about what is in her bra!

hairball48's picture

A two-headed monster? I don't really want to know what's in there.

css1971's picture

Wow, and yet they just keep making it bigger. As if a bigger problem is bettern than a smaller one.

slewie the pi-rat's picture

the ojSimpson trial was about louisVuitton, who was also acquitted

the cookie dough ice cream went down

Snakeeyes's picture


Lagarde is begging over here. And she is pitching OBama's line of principal reductions.

NOBODY wants to cut government spending.

StychoKiller's picture

They dare not cut spending, read this to see why:

"The Creature From Jekyll Island, a Second Look at the Federal System", 5th Ed., G. Edward Griffin, ISBN:  978-0-912986-45-6

booboo's picture

if they had it they would have used it, they ain't got it. Just a bunch of people clinging to their fiat religion and printing press.

GeoffreyT's picture

It's all just part of The Spectacle - the perennial ebb and flow of absolute bullshit from the layer upon layer of parasitic bullshit-artists the suck the life out of the productive segment of humanity. 

Vermin like Le Roi des Nabots Méchants (with his heel lifts and Just for Men) will keep declaring that he and his partners in crime have 'solved' the problem... time and time and time again. And the media will continue to re-broadcast the Elysée's press releases as if they were not laughable at first glance.


The key thing that ZHers fail to grasp, is that 95% of the public gets their financial news from the TV.Expecting them to understand that they're being hosed and gang-raped is almost unfair.

They (the 95%) are exhausted after a long day, and they sit in front of the TV and fall into a quasi-hypnotised state within ten minutes... then to be bombarded with infantile pseudo-analysis, false 'conflicts' and their equally-false 'resolutions'... and they (the 95%) have neither the energy nor the analytical skill to discern that this same shit has been sold to them, time and time again.

It would be sad if it wasn't so infuriating - and it's also not their (the 95%'s) fault: they are perennially exhausted, and also indoctrinated as deeply as North Koreans (especially Americans, who Pledge Allegiance to a stupid nationalistic piece of cloth during the period when their minds are most plastic - and in whose society you can be ejected from a ballpark for refusing to stand and remove your hat during the national anthem).


It's been something on which I've mused for almost a decade now - what if the 'unintended consequences' of policy, actually aren't (unintendend, that is).

What if it was abundantly clear, ex ante, that fluoridating water would lead to iodine deficiency (and thence to endocrine disruption as FL replaced I in the thyroid leading to inadequate T3 and T4 hormone production)? Lower T3 and T4-> feminisation, obesity (through downshifting of lipo-protein lipase), and behavioural changes.

What if it was abundantly clear - ex ante - that subsidising refined carbohydrate (and more so, refined fructose) and tilting the 'food pyramid' in favour of carb consumption was obesogenic? Obesity, far from being an effect of laziness, actually causes endocrine and metabolic changes that force the individual to become less active.

And on and on it goes - from Rumsfeld's replacement of the head of the FDA to get Aspartame approved, to the nonsense of Ancel Keys' lipid hypothesis... why do all the "Oops! Our bad!" events happen in only one direction? Can it possibly be coincidence that the "Oops!" direciton happens to be that which causes a subdued, compliant, ovine population?

What if it was understood - ex ante - that public education was a great means by which the State could encourage the acceptance of its right to act in loco parentis? What better way to get folks to believe that all their children are belong to the government, to do with as they please.

What if it was understood - ex ante - that subsidising reproduction (especially through direct tax tranfer payments, as is the case in Australia with the 'baby Bonus') would have its most profound effect on the bottom of the economic pile? That the lower is household income, the more impact a 'breeding bonus' would have (and the less capable of accurately forming an expectation of the actual costs of offpsringing, and the worse parents as a result).

What if it was understood - ex ante - that militarising police forces would lead to the rise of a psychotype within law enforcement that is anathema to their supposed role (as defenders of individual rights against unlawful aggressions)?

And what if it was understood - ex ante - that using government money to fund government-sponsored advertisements in print and visual media would serve as a device to creat dependence of media companies' revenue stream on government? What better way to ensure media compliance... if you don't run the government line on carbon taxation, you might not be at the table when we're doling out the ad budget for our 'new initiative'.


And lastly: what if this 'crisis' (a period of economic stagnation where - at absolute worst -  individual material REAL consumption will fall 25% from peak to rough over the next 15 years) is really about a deliberate effort to gull the public into accepting the transfer of yet more public (tax) money to the pockets of the REAL paymasters of the tax-parasites (the financial services sector primarily, but oligopolistic corporate cronyists generally)?

Chesterton was right (the full work is one of the most moving short poems ever written):

A war that we understood not came over the world and woke
Americans, Frenchmen, Irish; but we knew not the things they spoke.
They talked about rights and nature and peace and the people's reign:
And the squires, our masters, bade us fight; and never scorned us again.
Weak if we be for ever, could none condemn us then;
Men called us serfs and drudges; men knew that we were men.
In foam and flame at Trafalgar, on Albuera plains,
We did and died like lions, to keep ourselves in chains,
We lay in living ruins; firing and fearing not
The strange fierce face of the Frenchman who knew for what he fought,
And the man who seemed to be more than man we strained against and broke;
And we broke our own rights with him. And still we never spoke.

Our path of glory ended; we never heard guns again.
But the squire seemed struck in the saddle; he was foolish, as if in pain.
He leaned on a staggering lawyer, he clutched a cringing Jew,
He was stricken; it may be, after all, he was stricken at Waterloo.
Or perhaps the shades of the shaven men, whose spoil is in his house,
Come back in shining shapes at last to spoil his last carouse:
We only know the last sad squires ride slowly towards the sea,
And a new people takes the land: and still it is not we.

They have given us into the hands of the new unhappy lords, Lords without anger and honour, who dare not carry their swords. They fight by shuffling papers; they have bright dead alien eyes; They look at our labour and laughter as a tired man looks at flies. And the load of their loveless pity is worse than the ancient wrongs, Their doors are shut in the evenings; and they know no songs.
Caviar Emptor's picture

Disagree. Somehow the very average people I speak to are very much aware this time, more than I ever thought was possible. And being traumatized will do that to people. So does the internet