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Germany Ruling CDU Rejects Direct Spanish Bank Aid
Just when Spain thought that by admitting it is broke, Germany would finally turn a blind eye and let it have whatever money it requested directly at the bank level, instead of boosting its sovereign leverage even more, thus putting it at risk of long, long overdue Moody's and Fitch downgrades, here comes the Germany, adding insult to humiliation. From the FT: "The parliamentary leadership of Germany’s ruling Christian Democrats – the majority party in Angela Merkel’s centre-right coalition government – has flatly rejected the use of eurozone rescue funds to recapitalise Spanish banks directly. Instead they called on the Spanish government on Tuesday to decide urgently whether it will seek money from the €440bn European Financial Stability Facility according to the fund’s normal rules, requiring agreement on a proper rescue programme negotiated with its European partners." In other words Germany has laid out the choice: bail out your banks with our help, and be downgraded, pushing Spanish sovereign yields into the 7%+ range, or do nothing, and prepare to hand out an infinite amount of Spiderman beach towels.
And for those hoping that Germany is acting counterproductively to its own interests, which for those confused, are to have Europe at the edge of chaos, keeping the EUR low, and its Debtor In Possession targets amenable to any terms, three words: nein, nein, nein.
There was no sign in Berlin, however, of more urgent emergency measures being contemplated to prevent contagion in the current crisis spreading from Greece to Spain and beyond. Instead, the timescale for Germany’s proposed reforms would stretch until the spring of 2013.
Wolfgang Schäuble, German finance minister, held out the prospect on Tuesday of medium-term reforms, such as a “banking union” to provide deposit insurance for cross-border financial institutions, and even jointly guaranteed eurozone bonds – but only once a fully fledged “fiscal union” had been agreed for the whole eurozone.
In an interview with Handelsblatt, a business newspaper, he said that it was important to distinguish between immediate measures to resolve the present crisis and longer-term reforms to prevent its recurrence.
Both Greece and Spain, he said, must put their own economies in order.
It was up to Greek voters to decide for themselves whether they would remain members of the eurozone, he said. But he admitted that uncertainty over the outcome of the forthcoming Greek election had caused contagion to spread to Spain.
“The Spanish are doing everything right, and yet they are still facing pressure in the markets because of contagion from Greece. We must deal with that.”
At the end of the day, what will make Germany amenable to any plan, is if the PIIGS pledge their thousands of tons of gold to a German "pawn shop" as explained last week.
Oddly enough we have yet to see them lining up with, and presenting the ultimate collateral.
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hmmm, must be bullish...ES just doubled. stupid f'ing algos.
Winds of WWIII blowing....
Venus transit means only one thing.
Yes they are, but no need to worry. BEnron Shalom Bernanky will print all the money Spain needs and all the problems of the 21st and 22nd centuries will be gone!!
So Schäuble, the sly fox is saying: You guys want EuroBonds so badly that soon you are going to put some EuroBonds pinup pages on the FT and on all socialist newspapers of the continent, and you guys want a banking (insurance) union so badly you'll do everything for it, including selling your firstborns, let's put a fiscal union first, the only proposal out of the three that Germans might grudgingly agree to... see if you can sell it in the other electorates. Of course, the european taxman would be modeled on the German...
I shudder.
You can say what you want about Wolfi, he is the very best of the lot. Never underestimate him.
Absolutely. Schauble has rock solid moral foundation and big balls to back it. He makes the rest of the EU kleptocrats look like the buffoons they are.
Yup. Lunatics come out and start posting rabid nonsense.
Hahah!
Transits of Venus (harmless):
1639 - Harvard University is named.
1761 - An earthquake in London breaks chimneys
1769 - James Cook arrives in Tahiti
1874 - Aston Villa Football (soccer) club founded
1882 - Standard Oil of New Jersey founded
2004 - A Whale explodes in Taiwan
2012 - The Scream sells for $120m
The Ford Transit (a portent of DOOM!):
Mk1 - 1965 - Start of the Vietnam War
Mk2 - 1978 - Afghan Civil war starts
Mk3 - 1986 - Challenger explodes
Mk4 - 1991 - Operation Desert Storm
Mk5 - 1994 - Civil War in Yemen
Mk6 - 2000 - Floods in Mozambique kill 800
Mk7 - 2006 - Israeli troops invade Lebanon.
Mk8 - 2013 - The suspense is killing me.....
Now can you just shut up about this Venus thing?
That Venus will be on the other side of the sun?
Imho in the stricter sense Venus is falling into or dropping through the sun. But as in other fields of human endeavour, astrology is also something you make up as you go along.
"Barbarians" and even 20th century philosophers of language have a difficult time seeing that planet as a single star / entity.
The astrology chart for the Venus transit at its peak in NYC has a pattern of 2 crossed swords at its base. I've never seen this before, and its not a pattern I could find any astrological reference to on the internet. The crossed swords are pointing up, which in heraldry means en garde. :-O.
Two of Swords (crossed) - Confusion; two opposing choices. indecision.
http://www.tarotteachings.com/two-of-swords.html
War requires weapons, Europe has none. No war. Two was enough to create the EU, they'll take the project from here peacefully (or, well, what passes for peace in an authoritarian, socialist dystopia). ; )
Transit of planet means just one thing? ....
Let me guess ... Planet orbits the Sun?
All indices up, yet FB rapidly approaching a 25 handle
$ or c?
If Germany pays this bill it will always pay!. The PIIGS are not trying to sort themselves out they just want to get their pay and pensions and if that means the Germans have to work till thay are 100 who cares. The so called best boy in the class Ireland has recorded an increase in export revenue (thats good right), but they also have increased Government spending by half that amount (thats not so good) The so called best boy cannot and will not control its spending and if the Germans step in well everyone will bleed them till the end of time. Time the markets got a little bit real this is going to end badly and the markets and bankers created this
THERE WILL BE BLOOD
There is nothing new under the Sun. In this case, it is but divide and conquer.
"Lets you and him fight!"
But who drinks the milkshake?
Qui milkshake?
(hint: it's not pensioners in Latin Europe)
Shocking.
War is coming.
When was it not here?
Might be a little difficult if you can't even pay your ammunition bills.
There is always a "friendly" banker willing to finance your war.
This won't be a US assbackward war, this one will be old school where the winner keeps the spoils. When you loot the nation you conquer you can pay your bills...
Popo. How can they fight when no one can afford the gas or bullets needed to travel to the other guys place and attempt to lay a smack down. The Euro is the only global currency that has NO MILITARY backing behind it. The Germans couldnt even stop a genocide 3 exits away from them and they're gonna start a war?
In WW2 German air borne divisions filled the skies with air planes and the roads with Panzers
Underestimating Germans? Good. Allways the best way for one´s extermination.
brooklynluu:
In theory, germany has the production facilities to quickly ramp up production, and if it would default as well, there'd be no problem with money, and it has a very "obedient" workforce as well..... the problem with germany starting a war currently, instead have to do with the consequences of WW2:
1. It has no population willing to engage in a war of aggression, and especially not other european nations. Despite of its (relatively) large military complex and military exports, it has a population that has been pacified for 60+ years... and in addition to this a highly anti-racist programming... only starting this year, has MSM begun to spread racist propaganda, primarily targeted against greece. Bottom line: Germany produces military equipment, and lets others do the fighting.
2. It has a foreign army stationed inside it, that rivals its own army.
http://hat4uk.wordpress.com/2012/06/05/breaking-eurozone-monthly-sales-trend-ten-times-worse-than-expected-15/
Yeah, it's all Greece's fault.
So if Greece hadn't gotten into a shithole finacially, Spain's finances would be better, or is it that no one would have noticed, at least for a little while? This logic completely escapes me. Sort of a den of thieves type thing.
Germany will get a much better deal if it holds out until the collapse shuts down the electricity and water.
I like Putin better than Stalin. (short Poland)
So now Spain joins Greece standing at the edge of the abyss while Germany stands at the other side of the chasm and throws them a line everyone knows can't handle the weight.
Deep down Schauble knows Greece is a lost cause. See e.g.,
http://greece.greekreporter.com/2012/06/05/french-experts-quit-over-gree...
As long as the governments are borrowing at less than the true inflation rates they are getting ahead. This brings up the question of what the true inflation rates are. It's not like the nations are going around buying housing.
the euro is not going to survie the math doesnt allow it..1 plus 1 is 2 and not 6 or 7 like some euro bureaucrat would have you to believe..just get it over with already!!
When I read THIS line: "The Spanish are doing everything right,....." I thought I was going to cough up a lung. With this sort of self delusional thinking going on, the EU and the euro are absolutely finished.
Good thing the US recently did its stress tests and found all US banks are ay okay, I'd be a bit nervous if I hadn't been assured that the US has decoupled...
"the EU and the euro are absolutely finished."
Correction: "the [people of Europe] are absolutely finished."
...the folks who created the EU and the euro in the first place will do just fine.
Last time trying to get an answer to this one....
Does anyone know the answer to this? When the US supplies dollar swaps to Europe, are the dollars supplied newly created dollars or existing dollars? If they are newly created dollars then the US taxpayer pays interest on them. Then they "loan" those same dollars to Europe and earn more interest? Is that how it works?
The swap isn't a dollar print action in and of itself. If the Fed funds the swap via sales of Treasuries, then no new dollars are created. Buiter calls this qualitative easing; i.e., high quality assets (Treasuries) are exchanged for what could be considered a lower quality asset (Euros).
Alternatively, the Fed can engage in quantitative easing for the express purpose of funding a swap. Any quantitative easing results in an expansion of the Fed's balance sheet (i.e. new dollars).
Thanks alot BB...appreciate the explanation.
Blame Greece for Spains bad debt and banks . He took a page from the Oblamer adm. . When you are clueless blame someone in the headlunes.
Blame Greece for Spains bad debt and banks . He took a page from the Oblamer adm. . When you are clueless blame someone in the headlines.
Blame Greece for Spains bad debt and banks . He took a page from the Oblamer adm. . When you are clueless blame someone in the headlines.
It's not just Germany who says Nein, Nein, Nein to all those crazy ideas about burden sharing that will only lead to moral hazard. It's Germany, Finland, the Netherlands and Austria and that's roughly 100 percent of the eurozone's bailout money.
Ben 'Rainmaker' Bernanki is already in the basement, dusting off his printers, hugging and kissing them passionately. One money drop will be in USA to ensure Obummer's re-election and the other in Europe to keep their Ponzi running for couple of more months. We all will end up paying for his madness through the inflation...It comes from our wallets ultimately.
He is the weirdest guy at the Fed in 100 years of their history.
I wonder how long it will take for Spain to start playing Hardball...?
Blame Spain? Got it.
Where iz zey Gold?
LOL...what will the history books say in 100 years about the birth of the European superstate? O right, no more books, so nothing (or should I say doubleplusunsomething?).
...Anyway, quick summary (in the voice of a Russian beatnik who forgets his articles?): no conflict between Germany and Spain (as if there were sogvereign nations in Europe?), or any others. Conflict between rulers (of EU = of all nation-states) and people. Rulers need people to accept (de jure, de facto already here) elimination of sovereignty, i.e. the EU superstate. People don't wanna! Rulers must scare people, crisis must get worse (ala "riots on the street if you don't give the banks $700 billion NOW!!!" ...lulz, sheep = fleeced, ha!). So, what's this about? Spanish bank crisis insufficient. Need Spanish State crisis. More debt good, less debt bad, because final KABOOM must be sufficiently shiny and amazing, even shocking and awing, or sheep aren't sufficiently scared. Dig? Bombs are being planted. Dig? And meanwhile, bad actors distract sheep as they walk unknowingly into abattoir.
...the big-con is too simple for most people to understand.
"The great masses will more easily fall victim to a big lie than to a small one" A. Hitler (or rather, the Hitler)
...that just can't be true, right? ; )
What Spain wanted is a bailout without oversight because that of course is a nuisance. Hello. Yes, let's through money in a bottomless pit without any clue what happens to that money.
Through = throw
SPX rally warning & USDX retracement warning now confirmed & good (counter trend) equity upside expected.
http://www.zerohedge.com/news/2012-12-24/market-analysis