The Global Moral Hazard Dawns: Merkel Says "It Must Be Prevented That Others Come Seeking A Haircut" As Ireland Cuts GDP Forecast
Just about 48 hours after it was duly noted as the greatest threat to the Eurozone in the post bailout world, Germany finally grasps the enormity of what global moral hazard truly means. As we said before, the biggest risk facing Europe, and by that we mean undercapitlized French banks (all of them) obviously, is not Greece or what haircut is applied to the meaningless €100 billion in Greek debt when all the exclusions are accounted for. It is what happens when everyone else understands they now have a carte blanche to pull a Greece at will. And while until now we had some glimmer of hope there was a behind the scenes agreement for this glaringly obvious deterioration to not manifest itself, Merkel just opened her mouth and proved our worst fears wrong. As Reuters reports, "Chancellor Angela Merkel said on Friday it was important to prevent others from seeking debt reductions after European Union leaders struck a deal with private banks to accept a nominal 50 percent cut on their Greek government debt holdings. "In Europe it must be prevented that others come seeking a haircut," she said." Too late, Angie, far, far too late. Because, just as expected, here comes Ireland and literally a few hours ago, launched the first warning shot that will imminently lead to what will be demands to pari passu treatment with Greece. Next up: Portugal, Spain, and, of course, Italy, which however won't be faking its own economic slow down.
From Business Week:
Ireland's government may cut at least 1 percentage point off its 2012 economic forecast, as a global slowdown curbs the country's export-led recovery, according to two people familiar with the matter.
Finance Minister Michael Noonan said last month that the country may cut its gross domestic product forecast from 2.5 percent, published on April 29. The government details its medium-term budgetary outlook on Nov. 4 and may lower the forecast, according to the people who declined to be identified because the figures haven't been finalized.
“Work is under way on the medium-term fiscal statement,” said Eoin Dorgan, a spokesman for Noonan, declining to comment on the growth forecasts.
Slowing global economic growth and Europe's debt crisis is hampering the region's recovery. French President Nicolas Sarkozy said yesterday his country's economy will grow by about 1 percent next year, as he lowered an August forecast of 1.75 percent. In Ireland, Noonan has said the government may need more than the planned 3.6 billion euros ($5.1 billion) of budget savings, though “not an awful more,” to hit its 8.6 percent fiscal deficit target.
“Ireland is showing the characteristics which are required to put the economy back on the right track,” Brian Devine, an economist at NCB Stockbrokers in Dublin, said in a note on Oct. 26. “However, one must not forget that Ireland is recovering from the largest credit and housing bubble in OECD history.”
Indeed, Ireland is just the beginning in the global race to sequester what remaining global put funds remain, a race which will end with the ECB unleashing the printer, and, as Albert Edwards predited yesterday, with Germany making a decision whether or not to leave the Eurozone.
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WTF, how is Italy supposed to afford their Maseratis if they don't get a haircut too?
http://www.telegraph.co.uk/finance/financialcrisis/8856149/Italian-govenment-buys-19-Maserati-supercars-despite-austerity-cuts.html
This is to help car makers.
Got gold?
http://www.abc.net.au/news/2011-10-27/one-tonne-coin/3604466
Thank you - you just made me come in my pants.
OT ... you grabbed some FAZ ? Thx...
I was waiting for FAZ to hit 40.
I'm glad I didn't place that order as now I'm sure 35 is quite possible. However, with things moving as fast as they are, I might have to buy at the close today.
Yepp, thx ... Learned a lot from your hints.
Me dumb, but volume low and some of Berlusconis Banks didn't got a shot. ( Applause on the left arm frantic ). 36 is good enough, ( me not qualified, but trying )....
Easy, Bunga Bunga just promised, for realz, that he will raise the retirement age for some by 2 years between "now" and 2026.
Fucking charade. Discuss the relief of the symptom, too much debt, but not the cause, the disease, living way the fuck beyond ones' means.
See, nothing the fuck changes.
It's a grandstand of circle jerks.
Forget reading The Daily Platutude.
It's over, done, bad news, gone, beyoond redemption.
The fundamental raison d'etre for the EU has become ridicule.
Don't worry. Our finance minister just discovered 24 bn Euro by accident. We will pay for it. An unfortunate miscalculation over at Hypo Real. Accounting error - happens basically every day...what a clown show.
http://www.spiegel.de/wirtschaft/soziales/0,1518,794694,00.html
Blutorgel -.-
they found the 40 billion bucks missing in Iraq. GPS has a trace on Bin Hidin in the Indian Ocean. Nasa has found evidence of other odd footprints on the Moon, some on top of those of our honkeys, The swiss have found part of the 400 billion stolen from citizens of Deutschland from 33 to 45, in an old vault of course. Amelia Earhardt is back from her vacation. The Beatles 84th album goes Uranium selling 100 trillion copies.
I get my news from the Onion. At least they tell you its BS upfront. Too bad it ain't.
LOL - now it is not only 24 bn - Spiegel just informed readers in an update that it is now 55 bn - out of nowhere. Just appeared.
This gets better and better.
Egemen Bagis, Turkey’s chief negotiator with the European Union, has criticized Germany, along with France, for seeking to sell military equipment to Greece while pressing the government in Athens to make drastic public spending cuts as a result of its dire financial crisis.
http://www.nytimes.com/2010/03/30/world/europe/30iht-turkey.html
Damn! I thought Greece would buy some frigates made in Italy, as usual!
Nope its France. Israel and the U.S. are in the game too.
According to information obtained by SPIEGEL, France wants to deliver two to four new frigates to the Greek navy and to allow the highly indebted nation to postpone payment of the €300 million ($412 million) purchase price per ship for the next five years.
http://www.spiegel.de/international/europe/0,1518,792189,00.html
Is Greece readying to spend millions and millions of dollars to buy advanced weaponry from Israel despite the economic crisis? According to reports coming from Tel Aviv and Washington, the answer is “Yes!”. Executives of Israel’s defense industry are reportedly talking to Greece’s Armed Forces about a possible multimillion-dollar sale of advanced weaponry in Athens and Greek military officials talk in Tel Aviv about the purchase of unmanned aerial vehicles.
http://www.keeptalkinggreece.com/2010/12/14/is-greece-buying-weapons-from-israel-despite-the-economic-crisis/
Daniel Cohn Bendit- president of European Greens/ European Free Alliance Summarizes it nicely. We're Hypocrites!
http://www.keeptalkinggreece.com/2010/12/14/is-greece-buying-weapons-from-israel-despite-the-economic-crisis/
Italians are good dressers. For high defense officials Maseratis go very well with their 7-stars military uniforms.
Ireland should have done an Iceland and told the Banks to fuck off. Instead it decided to bail out the Banks and shaft its own people. Having got the taste of that, if they can also shaft the German people as well, so much the better..................
So only Greece gets any debt relief? That seems completely fair.
In other news, the European Union (EU) is changing its name to the Federation of Undeserving Countries Killing the Economy of Deutschland (FUCKED).
Fitting acronym redpill
Isn't it possums that play dead ?
PIIGS play Possums (sounds like the title of a great new reality show)
Greece is done, it's down to PIIS.
dude, the germans played a role in getting their eurozone counterparts in the debt mess to begin with. their hands are not clean. and i dont just mean the shit on their hands from all that ass fisting they do over there.
You are totally clueless.
eurogold
To Whom are you refering?.
If me, you sir are the one without a clue.
Right you are! Now Italy, Spain, Portugal will be knocking at the door with their hands stretched out!
Germany must leave the EMU and tell everyone to go fuck themselves!
What are you, a divorce lawyer?
Nah, he's just been married for over an hour.
First soft, first that was served.
kinda like Obummer's new housing plan which will only be available to people with underwater mortgages held by Fannie and Freddie...fuck everyone else, right?
Just be patient. We will all have our opportunity at his program by the time he is done.
More like a buzz cut.
More like a decapitation.
Flowbee. Do it yourself at home!
stole my line , SERF!
or is it get in line and haul out the clippers bitches.
3X long
powder wigs.
Oh yeah, and Ireland was supposed to be SAFE money- LOL!!
This is gonna be priceless- literally.
Nobody, but NOBODY, could have predicted that other cash-strapped countries would want similar
haircuts ; )
Make mine a Tony Curtis!
Will the Grecian Formula work and how many doses are needed!
Clyde Clyde .................
save them Slovenia!
Slovenia, Slovakia... What's the difference?
..
Simple ... from the day one was Slovenia paying in and Slovakia getting checks from the €U...
In the meantime r both fucked.
Makes a difference to them. Check out a map.
Good luck with that Merkel. Give one participant a free ride while telling the others that they are stuck. If there is anyone left toiling away to pay their mortgage, regardless of country, you now know exactly what a sucker you have been. Crash the system already and let's find out exactly who's labor is of any value. I promise compensation will find it's way back to people who are actually worth a shit.
Come on dude, you know the score just as well as Merkel and everyone else in position of authority. Not one person didn't see this coming; on the contrary, they all knew it was coming, but proceeded apace regardless.
Since CogDis is apparently taking a (brief) hiatus, I shall paraphrase something he was fond of quoting, to wit "we exchanged a heart attack for cancer". IOW, every day is another day to live. It doesn't matter about other falling dominoes, such as Ireland, et al lining for some 'Greek style treatment'.
It only matters that the system lives another day. The day market facts finally force acceptance is when the system actually dies. It can't possibly survive the degree of deflation explicitly built into such a mountain of debt. So it will fail.
With that in mind, all this day-day news flow & analysis is just BS. It's a binary problem for the PTB- die now or die tomorrow. So, why not live another day? The day it dies is when real competition, real value-add, real cost/benefit analysis begin once again. If you're a money-changer, why would you ever want to get down into the gladiator pit and fight for survival?
Living just fine. Best line in any movie "get busy living or get busy dying". Chance will always favor the prepared mind, period, and as you point out, it really is up to chance. This is a trading site by the way, and when the market swings like this, you can bet your ass that it becomes important to those who make a living doing it.
Quoted from Shawshank Redemption. Yes an excellent movie... Time tou view it again soon.
Dyin ain't much of a livin.
http://youtu.be/C3Oa2tLrWqY
Exactly...just how are they going to do that? Answer: they are not. Just more platitudes from an intellectually bankrupt group of politicians.
Smoothing is applied to everything.
Pain will be avoided everywhere and for as long as possible in every segment of society.
It's human nature, and hope.
Couldn't have said it better. Good one.
Couldn't have said it better. Good one.
cant wait for the Amerikan haircut
you'll be waiting forever. with Europe looking like this treasuries are the only game in town. global liquidity of $100 Trillion has only one place to go: UST and US$. No matter how bad we look they look worse.
I can think of lots of other places for it to go, silver, gold, beans, oil, natGas, bullets. Shall I continue?
go ahead, but your LawsofPhysics doesn't include lawoflargenumbers and if $100Trillion chased beans we'd all be eating sand. fact remains NOTHING on Earth or Moon or Uranus (your's too) can accommodate $100T except US$. Doesn't make it good, just makes it so.
You assume that prices have to stay the same. Don't get angry DP, articulate better.
Look. Everyone knows that gold and silver are not backed by the Fed. They said it on TV.
for now the world wants fed backed paper.
If debt obligations were trued up today, how many of those $100T (pick a number) would be free from lien, Mr. Superhero, Sir. All debts must be settled (by someone). Once you get that basic tenet straight, you'll realize what is meant by the market levitating on false hopium.
The only reason there are ANY dollars available to chase the Risk On paradox is because the can-kicking has prevented them from being called home.
'nuff said.
zero. you're off topic, he asked for US T haircut. won't happen. all cash is loaned into existance. called fractional reserve banking and we're drowning in it. Hyperinflation is on the way, but UST won't be haircut, just inflated away.
Misread. Regrets.
IMHO, there will be no effective difference between a hyper-inflationary collapse and a hyper-deflationary collapse. In neither will the current fiat survive.
When Money Dies.
See traderjoes comments, the endgame is the same, you (or I) simply won't recognize the "sell-off" when it happens, the paper will simply be dead, the "price" will be irrelevant. I guess I should have said the value of the paper goes to zero.
I can absorb any number of trillions $, I issue doodoos in exchange, will you be my first client?
Call us back when your doodoo is backed by the FED.
either the USSA debt gets a haircut with a chainsaw, or the fed will just print into hyperinflation zimbabwe-style. dont count on "austerity" to reign in deficits, you can see how effective that approach is in europe
Yep. Hey, at least now real estate will make a rebound as anyone with any capital to spend makes a dash to more survivable areas or areas that will not be so cluttered with riot traffic.
False dichotomy.
The USSA is way beyond the point where a haircut, even with a chainsaw, would do any good. Decapitation wouldn't even be enough for debt of this magnitude - it has to be cut down at the knees.
Comay Mierda
Comay, EITHER one of those have only one outcome.
War in the streets.
Americans will not accept it......................period.
FAR too many have seen the graft,theft and corruption to simply eat shit and die.
The Internet has made that 100% a certainty.
November 23rd is the next red letter day. US side of the pond. We'll see just how feasible it is for our little super committee to hack away at entrenched debt interests.
When the US gets it's haircut there will be hair flying all over the place
That is the truth.
That is why the whole world has agreed to make the dollar the worlds kife preserver.
The PIIGS are racing to wipe off the lipstick.
Step right up and get yer 50 - 75% off soveriegn debt savings coupon!!! Hurry! Supplies are limited and only available on a first come first serve basis!!!
It really is amazing to watch this disaster playing out. History in the making.
Frame by frame. Like Inception level 3.
Totally agree. I don't think anyone could write a better script than the reality we're living in. I always have to pinch myself to remember that I'm NOT sleeping.
You re not sleeping, but the 99+% of the sheeple are dreaming of humans hopping fences..
Wow! This is such a joke! It would be much funnier if hundreds of millions of people's financial futures were not being tossed around like a new yo yo!!!!!!!!!!!
Stop the government price control on stock market. Class action lawsuit. Many here who rightly short market would have claim.
"Veterans Win $7.4 Million Settlement in Federal Debt Collection Class Action
Washington, DC: A $7.4 million settlement has been reached in a class action lawsuit brought against the United States government by military veterans.
The suit alleged that the government's methods of recovering debt owed by veterans for purchases made on military bases was not acceptable because the debts incurred had reached the 10 year statute of limitations.
In 2007, Julius Briggs, a disabled army veteran, filed the lawsuit after the US government kept about $2,300 in tax refunds to pay down a $1,857 debt he incurred buying uniforms and other items on base in 1993.
According to media reports, some 6,700 former military will receive $10,000 each from the settlement, which was approved in court Thursday, January 28th.
The Wall Street Journal has reported that the class action is the first to challenge a federal agency's debt collection tactics.
Ummm...who would arbitrate that claim? And how would a judgment rectify the underlying problem? Take your time...
Mr Julius Briggs asked same question, but he have courage. Not status quo mayhem_korner who needs his government support in stock market.
Mr. Briggs didn't just get mad on blog, he filed suit against government, and now in short time he won and money paid out to other veterans in his same situation. He did good job.
Sorry, I thought I was conversing with someone logical. Move along.
You try to discredit because you obviously need government to keep bailing you out.
My brothter in law is attorney and class action lawsuit is possible. For those interested in pursuing it...One way for lawsuit against SEC, collusion and fraud.
whstlblwr
They will damn sure let you die and kill for them, but pay righteous benefits, and money stops the show.
All the while we have given Trillions to Foreign Aid, and we still do not take care of our own soldiers.
I wish they would all go on strike, and say we quit, come on home.TAKE us home.
Wouldn't tpiss off anyone excepct the .gub.Gotta be the sorriest SOB's on the planet, make Bankers look good.
Sister-in-law and husband, new baby, hard working savers in Central Europe almost ready to buy a house..."financial advisor" told them to go for a big loan as they won't have to repay the loan when the banks fail...hubby wanted to buy gold but it's very expensive now, he was told.
None of us are in Kansas anymore.
what the shit? Take a out a big loan and buy gold.. you'll get 100x the house later, when the banks fail :)
XLF now down $0.009 per share on the news.
Government manipulations
Discrimination? Or maybe Merkel just has a Greek fetish.
Edit: ick.
Dammit. Why did you do that? Do you know how long that image is going to stay in my mind?