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

Tyler Durden's picture


The primarily sovereign credit crunch in Europe, which has resulted in part due to the ECB's disastrous, and since reversed decision just like in 2008, to hike rates early in the year, only to go ahead and not only cut but expand its balance sheet by a record EUR 800 billion in the past six months, has finally started trickling down to the corporate, and more importantly financial levels, where as was just reported today, the broadest monetary aggregate, the M3, rose by a only 2.0% in November, dropping by a whopping 60 bps from October (keep in mind this is a huge amount on a number that is in the tens of trillions), which happened to be the biggest annualized contraction change since 2009. What is worse, and what confirms that the daily "near default" state Europe finds itself in every single day has sent shockwaves of uncertainty around the continent, is that the loans to private businesses grew at just a 1.7% rate in November, a plunge from October's 2.7% and missing expectations of 2.6% by a wide margin. Said otherwise, corporate credit (far more important than its sovereign equivalent) is being turned off. And as has been widely discussed without credit flowing, there is not only no growth, but the threat of imminent economic depression. Lastly, that this has happened even as the ECB's balance sheet has risen from EUR 1.9 trillion to $2.7 trillion in 6 months is truly humiliating from Trichet as none of the money he injected into the banks has made it to the broader public, and instead all has been used to prop up Europe's failing banks, something we know all too well here in the US.

A chart showing European M3, and the all too obvious downward inflection point:

And here is Reuters on the issue of why Europe is likely to not only lower rates to under 1.00% but also print, without sterilizing, thereby really dragging out the ghost of Weimar future out of the wheelbarrow boneyard.

Loans to private sector firms in the euro zone fell in November while growth in lending to households slowed, European Central Bank data showed on Thursday, adding to the case for an interest rate cut. The drop in funding to companies increased fears that the region faces a looming credit crunch, an issue of growing concern for the ECB as the worsening sovereign crisis makes firms and households increasingly wary about taking on debt, weighing on the economic outlook.

In an attempt to kick-start loan activity, the 17-country bloc's central bank conducted last week its first-ever three-year funding operation, which saw banks take up almost half a trillion euros. 


In November, loans to the private sector grew at a rate of 1.7 percent year on year, Thursday's data showed, coming in well below analysts' expectations of 2.6 percent and the 2.7 percent growth seen in October.


"They are a very soft set of numbers, Societe Generale economist James Nixon said. "If banks were to start to seriously shrink their balance sheets, that would be quite a significant negative for economic activity. The good news is we don't see that - yet."


The flow of loans to firms dropped by 7 billion euros after growing by a similar amount in October. The flow of mortgage loans rose by 8 billion euros after an 18 billion drop in October. The annual growth rate of mortgage loans remained at 3.0 percent.


Euro zone M3 money supply -- a more general measure of cash in the economy -- grew at an annual 2.0 percent in November, down from 2.6 in October and below expectations of 2.5 percent. Decreasing to 2.5 percent, the three-month moving average of M3 growth remains well below the ECB's reference rate of 4.5 percent, above which the bank sees dangers to medium-term price stability. Economists said the figures made it more likely the ECB would look to offer the struggling economy more support by cutting interest rates further from their current record low of 1.0 percent.


"The sharp slowdown in euro zone money supply growth in November reinforces belief that underlying euro zone inflationary pressures are easing and that the ECB has ample scope to cut interest rates again in the early months of 2012," IHS Global Insight economist Howard Archer said in a note to investors.

Of course, for anyone who thinks that Bernanke will let the ECB print alone, and send the EUR to parity with the USD, we have a CDO cubed collateralized by the Maginot line to sell them.


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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_
MillionDollarBonus_'s picture

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.


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.

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


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....





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

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! 


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.



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.


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


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

Maximilien François Marie Isidore de  Ro...

...n Paul.


... 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.

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


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..........................


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

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

Help defeat NDAA :!/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: 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!

Thu, 12/29/2011 - 11:50 | 2019243 Boilermaker
Boilermaker's picture

Market up a HUNDO with Bank and REITS SOARING!!!!

Like any actual fundamentals matter anymore.  We are way way past that now.

Thu, 12/29/2011 - 12:15 | 2019321 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The main driver of fundamentals is that the currency market is and has been experiencing high swings of velocity.  With all Central Bank interest rates tied together at near zero, this is only going to increase.  Watch as all prices rise over the next year.  Thank you Bernanke, for he's a jolly good fellow!


Thu, 12/29/2011 - 12:15 | 2019323 HarryM
HarryM's picture

Come up with something new

Thu, 12/29/2011 - 11:50 | 2019244 xcehn
xcehn's picture

“Try to wrap your mind around the amount Draghi gave away just last week; nearly $600 billion! Apart from TARP, this is the biggest heist on record, and yet, people still can’t figure out what’s going on. I’ll tell you what’s going on. The people are getting fleeced bigtime. How much more do you need to know? But this was a bond bubble, pure and simple; brought on by easy lending, unregulated capital flows, and poor risk management. And now the bubble has popped, which is why the banks are sinking fast. They bought this crap (bonds) from Greece, Portugal etc. to make a few more bucks and failed to see the risks. And, they got burned. So what? That’s capitalism, right? “You pays your money and you takes your chances”. No whining. But banks and bondholders are not allowed to lose money anymore, right? Even if they’re the ones who inflated bond prices to begin with, and even if they’re the one’s whose balance sheets are presently underwater due to their own stupidity. So, we have to change the whole system to accommodate them, which is why their agents–like Draghi–occupy all the positions of power, so reckless speculators won’t have to suffer the consequences of their poor choices. This is what we’re up against; a small group of obscenely rich people who have totally rigged the system and who are grabbing more and more of the wealth for themselves while they preach austerity to everyone else. Even so, it’s pretty amazing when people get ripped-off for $600B and it doesn’t even make the headlines.”

Thu, 12/29/2011 - 11:52 | 2019251 RobotTrader
RobotTrader's picture

Most of yesterday's losses erased.


"Like It Never Happened"

Many Dow stocks still charging up to new 3-year highs.

Treasuries still well bid.

Chain-selling of commodities continues.

100% control of the "Financial Market Miracle" by Bernanke and Geithner, the greatest of all time.

Thu, 12/29/2011 - 11:54 | 2019256 Tsar Pointless
Tsar Pointless's picture

At least we know who one of the fascists are on ZH.

Thanks for revealing yourself as such, RoboTraitor.

Thu, 12/29/2011 - 21:37 | 2020762 Mesquite
Mesquite's picture

Or one of the great comedians on ZH... 

Thu, 12/29/2011 - 12:08 | 2019308 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The greatest of all

Thu, 12/29/2011 - 12:11 | 2019318 SheepDog-One
SheepDog-One's picture

DOW nowhere near where it was 4 years ago, silver and gold 3x-4x baggers over the same time....sucker.

Thu, 12/29/2011 - 12:19 | 2019333 donsluck
donsluck's picture

Agreed. This is a rare buy opportunity in a secular bull market in PMs.

Thu, 12/29/2011 - 12:31 | 2019380 WonderDawg
WonderDawg's picture

And even after all the trillions and trillions of stimulus, TARP, back-door bailout bullshit that's been going on for 3 years, the DOW is still 14% below it's all time high.

Thu, 12/29/2011 - 11:54 | 2019252 Ignorance is bliss
Ignorance is bliss's picture

Declining M3 is a direct result of all the monies going either to defunct banks or broke sovereigns. The result is the economy being strangled on the vine. Resources that would have found their way tothe economy have been redirected to banks and sovereigns. Only way out of this is to downsize govt and shutter the weakest banks. Otherwise the private economy will continue to contract, reducing tax revenues and eventually collapse upon itself.

Thu, 12/29/2011 - 11:53 | 2019253 Snakeeyes
Snakeeyes's picture

The US M2 is doing the same thing. See charts at end.

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

Thu, 12/29/2011 - 11:55 | 2019255 ElvisDog
ElvisDog's picture

It's truly amazing to me that the most important element of economic activity, the one that all central banks and governments are in a panic to increase, is how much money people and businesses are willing to borrow. If only everyone was willing to once again increase their debt levels, we could breath a sigh of relief that we were on the road to recovery. I must have time-traveled from an earlier age, because I have the quaint notion that economic activity involves people making actual things.

Thu, 12/29/2011 - 12:27 | 2019363 clawsthatscratch
clawsthatscratch's picture

That truly is a quaint notion....when did it ever actually work that way ? ;)

Thu, 12/29/2011 - 12:49 | 2019445 ElvisDog
ElvisDog's picture

Ummm, up until 1913? Isn't that when the Fed was established?

Thu, 12/29/2011 - 11:58 | 2019264 youngandhealthy
youngandhealthy's picture

Well,well....European banks have not been aggressive Bond issuers during the fall of 2011, thats for sure

Thu, 12/29/2011 - 11:58 | 2019265 RobotTrader
RobotTrader's picture

3-mo. T-Bill yield now negative

Paper Rules!!!

Thu, 12/29/2011 - 11:59 | 2019266 YesWeKahn
YesWeKahn's picture

Bail out works. Oops it works only for a few (1%?).

Thu, 12/29/2011 - 12:09 | 2019267 falak pema
falak pema's picture

What amazes me is to hear the astonishment in US circles about the current collapse of Euro/UK zone. Sanctimonious "we told you so" BS. Forgetting the incredible under the carpet fall out of the previous US tsunami, hidden into the folds of EUro shadow banking ponzis and watered down on Euro banking official balance sheets. Its all part of the same unravelling collapse of 2008 world financialised capitalism, as the hidden under the carpet status of shadow banks now gets exposed as the edges of the cover up blanket start to thread like over-used linen. As we all know in London 2009 meeting Gordon Brown preached of becoming the virtuous game keeper of G20 gathering of impotent world leaders; all the while Brown, the poacher, allowed CIty to ramp up further the crazy financial ponzi; trying to recover lost virginity and deflowered maiden head from bunga-bunga capitalism binges all through 1990 to 2008! Cameron is on same page and Merkozy have been lost in transalation from day ONE? back in early 2009, looking the other way or not knowing financial banking shit from shine hole, which is of course worse as judgement. As Talleyrand is supposed to have said : That was a Crime,  but this is worse its a Political Fault! 

You can punish crimes but political faults take you over the nation or civilization...And now three more years have passed and not only nothing done, worse, the fault has deepened.

"As thou shalt sow so thou shalt reap." Let us all now weep. As the "reaping" is getting deeper and deeper into safe, clean money havens... 

Thu, 12/29/2011 - 14:40 | 2019839 viahj
viahj's picture

yeah, karma is a bitch

Thu, 12/29/2011 - 12:01 | 2019273 bpom
bpom's picture

Euro Credit Crunch - Bitchez.

Thu, 12/29/2011 - 12:01 | 2019275 RobotTrader
RobotTrader's picture

Shopping Mall REITS hittng world record highs today.


Huge 3-year run, perhaps the greatest ever in history.

Thu, 12/29/2011 - 12:55 | 2019467 Richard Head
Richard Head's picture

STFU with your "world records." You sound like the biggest douche.

Thu, 12/29/2011 - 12:05 | 2019288 Quinvarius
Quinvarius's picture

Honestly, we have paper money because we can print it.  Gold is for savings.  They should just shoot the bazooka and get it over with.  No one in the US has any money anyway.  Who cares if it loses 90% of its value.  Pretending paper has some intrinsic value and manipulating markets to enforce that charade have been the death of America.  Fix the banking rules so it can't happen again.  Then just shoot the GD bazooka.

Thu, 12/29/2011 - 12:06 | 2019289 RobotTrader
RobotTrader's picture

Yum Brands at lifetime highs.

Restaurant stocks outperforming again.

Where is the recession?

Thu, 12/29/2011 - 12:08 | 2019307 bnbdnb
bnbdnb's picture

Food stamps.

Thu, 12/29/2011 - 12:08 | 2019309 YesWeKahn
YesWeKahn's picture

Send the charts to Bernank and tell him that all is well, and nothing to be worried about.

Thu, 12/29/2011 - 12:16 | 2019327 CvlDobd
CvlDobd's picture

X, ANR, BAC, every international index. Copper prices.

Need I continue?

Thu, 12/29/2011 - 12:59 | 2019482 High Plains Drifter
High Plains Drifter's picture

your witness akak..........

Thu, 12/29/2011 - 13:20 | 2019572 blueridgeviews
blueridgeviews's picture

It's certainly not in DC. Take a stroll along anytown US and you'll see the depression all around you.

Thu, 12/29/2011 - 12:07 | 2019303 bpom
bpom's picture

Sell high - buy low.

Thu, 12/29/2011 - 12:08 | 2019305 RobotTrader
RobotTrader's picture

Utility stocks are screaming higher again today.


Same with pipeline stocks, MLP's, etc.

Thanks to near zero interest rates.....

"Animal Spirits" in action again.

Thu, 12/29/2011 - 12:13 | 2019319 Killtruck
Killtruck's picture

Your mom is in action again.

Thu, 12/29/2011 - 12:26 | 2019360 donsluck
donsluck's picture

Negative real interest incourage capital expenditure and depress employment due to the relative ease of borrowing for capital compared to payroll. Unfortunatly, it eventually leads to stagnation, the macro result. Investing in capital intensive industries at this point is risky because of the late stage, but may pay off if you exit in time.

I play the macro, much less work and stress, much less risk.

Buy PMs.

Thu, 12/29/2011 - 12:48 | 2019418 stormsailor
stormsailor's picture

yeah robo, you're right.  only 300 points off the all time high in the /es.  i've lost about 400k this year fighting the "animal spirits".


i think that this economic malaise could go on forever, but i'm not sure the corporation i own will be a part of it.  business has been down for 3 years and seems to get worse.  employee health care cost is exploding and no one seems to know how the new health care laws will affect small business, or how best to position for them.  my employees have not had raises in 3 years yet i still have them all, although the smart move would have been to lay off many of them.

i am tired of trying to do the right thing.  i think i may sell my insurance offices and lay on the beach and sail for the rest of my born days.


Thu, 12/29/2011 - 12:52 | 2019457 ElvisDog
ElvisDog's picture

no one seems to know how the new health care laws will affect small business

I think I can make a guess. Health care costs have been going up around 10% a year since the early 1990's. The so-called health care reform bill does nothing to reduce costs but probably increases them due to the various mandates. I think small business can expect their health care costs to continue to increase by at least 10% a year until the system breaks down.

Thu, 12/29/2011 - 13:22 | 2019578 blueridgeviews
blueridgeviews's picture

Anyone with a clear head knows that healthcare costs \have gone up BECAUSE of Gov't. Now we expect a Gov't run program to make it cheaper? Sounds insane to me.

Thu, 12/29/2011 - 12:17 | 2019329 Jlmadyson
Jlmadyson's picture

The house of cards falls one by one.

Thu, 12/29/2011 - 12:19 | 2019336 RobotTrader
RobotTrader's picture

The CRB Index is still collapsing.


Funny how many "hard asset" funds are getting Amaranthed this month.

And that ends up providing a huge "tax cut" for the consumer as basic necessities are getting cheaper and cheaper by the day.

Ergo, XRT only about $3 off lifetime highs during the worst economy in decades.


Thu, 12/29/2011 - 12:30 | 2019371 tao400
tao400's picture

Dude, if I knew this was the bottom, I would be buying silver and gold. And I don't mean that because I would make a profit but that they are going lower. My finger is on the trigger. Monex rep at the ready. Just waiting to make a guess on how far down it is going. I can't wait to have that silver in my safe in my house with no counter party risk.

Thu, 12/29/2011 - 12:35 | 2019397 Sudden Debt
Sudden Debt's picture

Why not let the euro reach parity with the dollar? It will make it more easy to convert to the new currency!

Thu, 12/29/2011 - 12:37 | 2019405 High Plains Drifter
High Plains Drifter's picture


ron paul's speech last night. best damn speech i have ever heard i think from a elected my lifetime...........except maybe jfk

Thu, 12/29/2011 - 12:56 | 2019474 High Plains Drifter
High Plains Drifter's picture

ron paul said last night as he has said many times. we should not fight a war unless we declare war through a congressional action etc . this is not constitutional in and of itself.  the only time we should have war is when our country is physically attacked ........that is the only time. now one can construe that the term "our country" can be extended to include our ships vis a vis the laws of admiralty and the international laws of the seas........but that is about it. to wit, the actions taken by jackson with the barbary pirates etc...........which i think were a tad overdone in and of themselves.....our soldiers should never have set foot on african soil. this set a very dangerous precedent......this action created the silly notion of us needing a marine corps etc..........and the military industrial complex was born..........remember,  problem, reaction, and solution....and the our enemies were there all along as they are now.......inside of our country then and now......

Thu, 12/29/2011 - 12:57 | 2019475 High Plains Drifter
High Plains Drifter's picture


Thu, 12/29/2011 - 23:38 | 2020957 Mesquite
Mesquite's picture

Ok..I watched it..In a word: WOW..(and no teleprompters..!)

Tnx for the link.. Folks, there is a chance..Seize the opportunity..!!

God Bless Ron Paul..!!

And pray for his safety..!!

Thu, 12/29/2011 - 12:46 | 2019434 entropos
entropos's picture

I want to take MillionDollarBonus behind a middle school and make him pregnant.

Thu, 12/29/2011 - 13:24 | 2019569 SillySalesmanQu...
SillySalesmanQuestion's picture

Money, money, everywhere...billions, trillions, quadrillions and zillions printed out of thin air...and yet very few...certainly not me or you....can get our fair share...

Thu, 12/29/2011 - 13:40 | 2019631 MFL8240
MFL8240's picture

" truly humiliating from Trichet as none of the money he injected into the banks has made it to the broader public ...”


Not so!  The Jewish CEO's of the banks made millions in bonuses off this fraud on the taxpayers. No different than in this country. And trust me, Trichet doesn’t understand what the word humiliation means and doesn’t care enough about people that it would matter if he did know.

Thu, 12/29/2011 - 13:58 | 2019702 TRN
TRN's picture


There comes a moment in time when the only solution is a massive write off of bad debts.

We are at exactly that point in time. A massive write off of bad debts is now inevitable.

I go on record with the forecast of a severe world depression before 2012 is out. We have no other options left at this point in time. The actions of the Central Banks will not and cannot help.

Thu, 12/29/2011 - 14:13 | 2019759 walküre
walküre's picture

World war before jubilee is not my preference but my prediction.

The bankers are holding the world hostage - AGAIN. The banker's wealth has been built by the financing of wars - on both sides. The massive Rothschild wealth is a wealth of war loans. They are the Eunuch advisors whispering into the ruler's ears that a war will bring great profits and more power.

Europe and the US are under the death grip of bankers. The rulers know this and they will most likely play along as they always have. There was one ruler who tried to cheat his nation out of the death grip. It didn't work.

Thu, 12/29/2011 - 14:53 | 2019886 FinHits
FinHits's picture

This is a good article.

Thanks for posting on the M3 decline as opposed to the "parabolic growth" of the ECB balance sheet. Between those two one can possibly observe a moderate development of a ECB FIAT system which may actually make more sense than the actions of FED, BoE or BoJ.

Thu, 12/29/2011 - 15:20 | 2019987 pineyard
pineyard's picture

I happen to view a fall of M3 Money as a POSITIVE thing !

Theres far to much money in the system already .. its GOOOOOD that this paper money system

contracts. Then the moneybase hopefully can catch up with the underlying volume of REAL ASSETS

one day !

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Gelir's picture

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