European Credit Crunch Hits Broad Economy As M3, Private Loans Collapse

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Thu, 12/29/2011 - 11:44 | 2019220 FMR Bankster
FMR Bankster's picture

All these numbers will go negative as european banks scramble to delever. ECB's three year loans give them time to get their balance sheets in order and they will be forced to do it. Perfectly rational on a bank by bank basis but ugly for the european economy.

Thu, 12/29/2011 - 11:52 | 2019249 MillionDollarBonus_
MillionDollarBonus_'s picture

I WARNED about this REPEATEDLY, but was ignored and mocked by the zerohedge readership. We are facing the biggest collapse in aggregate demand in history and its time for central banks and governments to GET SERIOUS. We need BOLD monetary and fiscal stimulus programs to get people spending again or we risk a total cedit collapse and decimation of peoples' equity porfolios. Do you people realise how much exposure US banks have to Europe? Do you realise how leveraged their balance sheets are!? The world is crying out for LEADERSHIP and all we are seeing is indecision and impotence.

Thu, 12/29/2011 - 12:03 | 2019279 donsluck
donsluck's picture

We have had bold stimulus, albeit to the wrong people, and it has not stopped the collapse. It was baked in the cake a decade ago and it's too late. The central control of interest rates is a dismal failure. The authorities have only two choices, a deflationary depression or an inflationary depression. I vote for deflationary, at least my savings will be worth something. But what I want is irrelevant, we will have the latter, triggered by what is happening now.

Buy PMs now (or soon) and be patient.

Thu, 12/29/2011 - 12:07 | 2019301 Dr. Richard Head
Dr. Richard Head's picture

I agree with you there.  The one thing that the powers that be are fully aware of is that inifinite growth is the only thing that will keep the debt based money system moving.  Bold moves by the central banks or not, the outcome is guaranfuckingteed, as infinite and exponential growth are completely impossible.  Death of currency by inflation or death of currency by deflation - the death comes either way. 

Thu, 12/29/2011 - 12:38 | 2019411 kridkrid
kridkrid's picture

It really is that simple.  So why do so few people grasp this?  Over the holidays my best friend from HS stopped by my parents house with his 16 YO step son.  There are about 8 of us engaged in this conversation (what is money, what is debt based money, what does it mean, etc.).  About 5 minutes into the conversation the high school junior says, "so money is debt with interest... it must grow exponentially".  I wanted to cry.  Non of the adults got it.

Thu, 12/29/2011 - 22:56 | 2020876 jeff montanye
jeff montanye's picture

this discussion is very important and widely ignored.  not only that but much of the investment world is based on growth at an accelerating pace.  we are a hungry, overpopulated finite world running out of clean air and water.  rock and a hard place.

Thu, 12/29/2011 - 12:08 | 2019302 MillionDollarBonus_
MillionDollarBonus_'s picture

"The central control of interest rates is a dismal failure"

This is simply false. Our Federal Reserve has managed to keep interests rates at record lows despite this economic turmoil, which is a remarkable achievement.

Thu, 12/29/2011 - 12:10 | 2019314 donsluck
donsluck's picture

In that case, let's control all prices. Then all prices can remain low and we can all live like kings!

Thu, 12/29/2011 - 12:27 | 2019354 MillionDollarBonus_
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The world is not black and white. You have to accept the value of price controls or you are simply an extremist/purist. There is a time and a place for price controls, and a time and a place for liberty. Purist libertarians need to understand that THERE ARE NO UNIVERSAL PRINCIPLES.

Thu, 12/29/2011 - 12:30 | 2019372 pods
pods's picture

Funny but that is exactly what some jack boot is going to be saying to you with his boot on your throat.

pods

Thu, 12/29/2011 - 23:08 | 2020893 jeff montanye
jeff montanye's picture

i have read the term jack boot for years and never known its real meaning.  thanks to our information revolution i, in seconds without moving my wide ass, found out it refers to boots that are "jacked" or reinforced with chain mail to parry sword blows.  my new fave has wings like a late fifties/early sixties u.s. car's tailfins to protect the knees.  used by cavalrymen.  

the term is later used for the hobnailed, iron heeled german infantry boot where we get into the door kicking down/neck stomping mentioned above.

http://en.wikipedia.org/wiki/Jackboot

Thu, 12/29/2011 - 12:32 | 2019385 donsluck
donsluck's picture

I am not a purist. I am pragmatic. You are only supporting price controls for one item. Please tell me what other items should have price controls. The "time for price controls" (I assume we are still discussing interest rates) apparently has been almost 100 years now.

You know as well as I that price controls of anything reduce production. The reduction of production of capital leads to depression and destroys banks (obviously).

Thu, 12/29/2011 - 23:59 | 2020987 jwthomps
jwthomps's picture

Stupid is a UNIVERSAL PRINCIPAL.

The fact that we were manipulated rather than educated is a UNIVERSAL PRINCIPAL.

The fact that ill founded policy will eventually fail and that many will suffer is a UNIVERSAL PRINCIPAL.

The fact that almost all people follow and that very few are independent thinkers is a UNIVERSAL PRINCIPAL.

The fact that all leaders and schools of thought will eventually be found wanting is a UNIVERSAL PRINCIPAL.

The fact that people falsely assume that thinking about their beliefs is thinking is a UNIVERSAL PRINCIPAL.

The fact that people live in their status quo, that they don't see beyond that status quo and that they don't know that they aren't seeing that which is beyond is a UNIVERSAL PRINCIPAL.

This is just a start.  We should not expect to see UNIVERSAL PRINCIPALS from within a status quo.

I intend no personal malice in this rant.  I am simply not happy with a world that raises us to be blind.

 

Thu, 12/29/2011 - 12:10 | 2019316 bnbdnb
bnbdnb's picture

This is remarkable too. Watch me type....

.

.

1.00%

 

Thu, 12/29/2011 - 23:43 | 2020964 VegasRage
VegasRage's picture

Yes, and lets not forget the $244 plus TRILLION in derivatives on the banks books.  Financial bets sitting on the table 20 times greater than all the money in the world markets. If even a fraction of these collapses, the next crash will be game over. Read the chart on page 24

 

Office of the Comptroller of Currency

OCC Quarterly Derivatives Report Q1/11

http://www.occ.treas.gov/topics/capital-markets/financial-markets/trading/derivatives/dq111.pdf

Godzilla is at our door, and all the politicians think they can get away with painting its toenails.

 

Thu, 12/29/2011 - 12:06 | 2019284 SheepDog-One
SheepDog-One's picture

RIGHT MDB! Got to get people SPENDIN again!

Might I suggest buying more 'Forever Lazy's'? Cant ever have enough of those 'consumer neccessities', hell look at the thing, dont even have to take it off to take a dump! 

BUY MORE FOREVER LAZY!! Save the WORLD BANKSTERS! FOREVER LAZY COMMERCIAL - YouTube

Thu, 12/29/2011 - 12:06 | 2019294 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Forever lazy....this would be a good slogan for a campaign on going braless.

Thu, 12/29/2011 - 12:30 | 2019374 ucsbcanuck
ucsbcanuck's picture

After my recent trip to Florida, I'd have to say that would be a mixed blessing. The older ladies would lap it up, the younger ones not so much.

Thu, 12/29/2011 - 14:01 | 2019710 walküre
walküre's picture

I just gots me 5 of dem sets for da hole family!

Thu, 12/29/2011 - 12:05 | 2019287 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

So in terms of monetary policy, what do you recommend?  If we create more credit, we assume more future debt issuance.  If we increase the debt, the affect of real growth (GDP) will be decimated by the increase in taxes to fund the debt, and interest on the debt.

Thu, 12/29/2011 - 12:16 | 2019326 MillionDollarBonus_
MillionDollarBonus_'s picture

Taxes do not have to be increased, as we can simply borrow the money. Interest rates will not rise for two reasons:

1. China depends heavily on our consumption of their exports and so they must conitnue to finance American spending

2. Our Federal Reserve is able to buy our government's debt and bid up treasury prices, which is also known as quantitative easing

Thu, 12/29/2011 - 12:37 | 2019352 Dr. Richard Head
Dr. Richard Head's picture

1. China and Japan are actively dumping the dollar (alongwith Russia) and creating trade agreements that do NOT depend on the dollar.

2. Fed buying government debt and treasuries is a game of pass the buck.  Interest rates cannot remain low forever.  At this point in the game a small incremental increase of interst rates will push debt/GDP ratios up like the EU.

Taxes will be increased on the people through higher prices of goods because of cost-push inflation created by QE.  Borrowing money from oneself is impossible to keep going forever.  I can't see how taking money from the left hand and passing it to the right hand will make me whole while the debt still remains and grows.

Thu, 12/29/2011 - 23:13 | 2020907 jeff montanye
jeff montanye's picture

are we certain that mdb is not teasing us?

Thu, 12/29/2011 - 12:06 | 2019291 Non Passaran
Non Passaran's picture

I am short, actually, so not everyone minds current developments!

Thu, 12/29/2011 - 12:26 | 2019361 tao400
tao400's picture

But why should people go out and buy crap that they don't need. Why do you have to have an apple 4s when you already have a 4. It is ridiculous. And guess what, no amount of money sloushing around is going to get people to do that. That mentality is over. The whole system needs to reset. The bankers will try to inflate and do what you say but people won't buy in to it. The next result, a brutal crash and high inflation. I am so close to pulling the trigger on silver I can't stand it. The only thing stopping me is that it looks like it will go down more. It's incredible. The PMs will be one of the few things standing at the end of the day in a couple years.

Thu, 12/29/2011 - 12:34 | 2019391 High Plains Drifter
High Plains Drifter's picture

the world is crying out for leadership?  

Thu, 12/29/2011 - 13:09 | 2019523 blueridgeviews
blueridgeviews's picture

milliondollarbonus, Germany had people just like you just after WWI.Does Weimar ring a bell?

 

You can't dig your way out of a hole.

 

Europe is collapsing under it's own socialist weight. Europe and America have kicked the can as far as it will go.  Time to pay the piper.

Thu, 12/29/2011 - 14:03 | 2019726 walküre
walküre's picture

You're mistaken. Weimar wasn't a failure in itself. The fact that Germany had to bleed dry to pay the bankers who made the war loans killed Germany financially. The only way out for Germany, then so called Weimar Republic was to print and pay the bankers with diluted shit.

We could all live well and prosper if we took the bankers out behind the wood shed.

Thu, 12/29/2011 - 14:01 | 2019709 asteroids
asteroids's picture

I have also warned REPEATEDLY, but also ingored, that there is far too much credit and debt, and an asteroid full of CDS' flying above our head. Bold leadership would outlaw CDS's. Drastically bring down credit, and have debt haircuts. Only then will the world enter a new era of peace, harmony and progrogress.

Thu, 12/29/2011 - 14:01 | 2019711 asteroids
asteroids's picture

I have also warned REPEATEDLY, but also ingored, that there is far too much credit and debt, and an asteroid full of CDS' flying above our head. Bold leadership would outlaw CDS's. Drastically bring down credit, and have debt haircuts. Only then will the world enter a new era of peace, harmony and progrogress.

Thu, 12/29/2011 - 11:51 | 2019250 Oh regional Indian
Oh regional Indian's picture

But seriously, why call it Money Supply? It's Debt supply.

In fact, between those two words, both the Eu's and the world's problems lie. Supply side greed and debt-money.

Try this experiment. Call your cash Debt Notes. And your Credit Card a Debt card. I suggest that a sharp slowdown in spending might ensue.

Hwo will you pay for that?

a. With my debt card

b. With Debt notes

Changes everything. Relaguaging Debt into Credit and Money have left us blinded to their real meaning.

ori

/world/

Thu, 12/29/2011 - 12:17 | 2019331 pods
pods's picture

Gets even worse if you look at a "paycheck" and realize that you are being paid other people's debt for your time and energy.

pods

Thu, 12/29/2011 - 11:44 | 2019221 vast-dom
vast-dom's picture

Rasputin!

Thu, 12/29/2011 - 13:59 | 2019699 NoClueSneaker
NoClueSneaker's picture

Maximilien François Marie Isidore de  Ro...

...n Paul.

:-P

... con usual lo tec hw.

Thu, 12/29/2011 - 11:44 | 2019222 knight99
knight99's picture

I think within the next 3 months there is going to be 1 week where the Euro will lose 800 pips + and it still wont be the bottom. I will look to cover around the 1.10 area

Thu, 12/29/2011 - 11:46 | 2019234 knight99
knight99's picture

No way for Ben to print unless Oil drops to 60-70 dollar range. Bens got one more year in office then Ron Paul kicks his ass out and hopefully charges him for treason.

Thu, 12/29/2011 - 12:04 | 2019285 Wolf-Avatar
Wolf-Avatar's picture

Unfortunately, knight99 , that will only be the situation in a sensible world and, as we are all aware on ZH, we live in frickin' Bizzarro world.

What will, more likely, happen is that the current POTUS will be re-elected and keep Helicopter Ben in because of the 'marvellous' job that he's been doing so far.

Thu, 12/29/2011 - 11:44 | 2019224 vegas
vegas's picture

Of course lending is collapsing. Who the hell is going to expand a business [or start one up] in an environment where the entire social order is collapsing thanks to the idiots in charge? Europe is a basket case of regulations that hassle business to death. Fuck you technocrats.

 

http://vegasxau.blogspot.com

Thu, 12/29/2011 - 12:22 | 2019343 Teamtc321
Teamtc321's picture

Vegas, 

You are exactly spot on, small business that drive employment are either slowing, shrinking or outright closing on purpose. They are tired of fighting the up hill battle of fraud, corruption, regulation, law suit's, margin squeeze, cost of business etc. 

All this fine central planning has created a fine environment to do business in, "Hope, Hope and Change" you will go broke in.  




Thu, 12/29/2011 - 12:32 | 2019387 pods
pods's picture

I could not imagine trying to run a business over there.  

It is tough enough to merely ship something INTO the EU.  

Now where did I write down that harmonized code..........................

pods

Thu, 12/29/2011 - 11:45 | 2019228 Snakeeyes
Snakeeyes's picture
After all the monetary stimulus they have thrown at the banks and Italy, it is like that "And all I got was this t-shirt." Italy Bond Sale Malaise And The 7% Solution

http://confoundedinterest.wordpress.com/2011/12/29/italy-bond-sale-malai...

Thu, 12/29/2011 - 11:46 | 2019231 lolmao500
lolmao500's picture

Help defeat NDAA :

https://wwws.whitehouse.gov/petitions#!/petition/veto-national-defense-authorization-act-2012-several-provisions-bill-pose-threat-civil-liberties/GLfhBn6D

Thu, 12/29/2011 - 12:15 | 2019317 donsluck
donsluck's picture

Try this link:

http://www.whitehouse.gov/webform/comment-legislation?billname=H.R. 1540 - National Defense Authorization Act for Fiscal Year 2012

It's more direct.

Edit - oops, wrong issue...

Thu, 12/29/2011 - 11:46 | 2019233 cherry picker
cherry picker's picture

What is to be expected when politician's whose only real expertise is selling themselves for votes are controlling something they know nothing about?

They refuse to balance their books, which most households are capable of.

They hire "expert" consultants who are really manipulating for their own gain as people forget that Goldman helped Greece hide their true financial status when they entered the Euro.

This whole system needs an overhaul as we cannot continue to allow ourselves to be led by incompetence and self interests.

Thu, 12/29/2011 - 11:46 | 2019235 alien-IQ
alien-IQ's picture

there's nothing wrong with banks, both European and American, that can't be easily fixed with a few gallons of gas and a match.

Thu, 12/29/2011 - 12:06 | 2019295 Wolf-Avatar
Wolf-Avatar's picture

alien-IQ , with the price of gas what it is at the moment ...

 

Maybe a couple boxes of matches and some old newspapers.    :-D

Thu, 12/29/2011 - 12:33 | 2019384 ucsbcanuck
ucsbcanuck's picture

Yeah let's not go around wasting some fine gasoline now. 

Thu, 12/29/2011 - 11:47 | 2019236 achmachat
achmachat's picture

any real assets look cheaper and cheaper when you read these!

Thu, 12/29/2011 - 11:47 | 2019238 Irish66
Irish66's picture

Petroplus told this story 2 days ago

Thu, 12/29/2011 - 11:47 | 2019239 SheepDog-One
SheepDog-One's picture

Dang! ANOTHER centrally planned central banker money printing FAIL? 

Well....guess theyll just have to try that yet AGAIN!

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