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It Just Went From Bad To Far, Far Worse As Germany Says Italy Is Too Big For EFSF To Save, Refuses To Carry Euro Bailout Burden

Tyler Durden's picture


Remember when we said (yesterday) that Germany will soon balk over the fact that it is pledging its entire economy to bail out an insolvent Europe? Well, that moment has come.

Dow Jones just hitting the tape referencing Spiegel

  • German Govt: Italy Too Big For EFSF To Save - Spiegel
  • German Govt: Doubts Whether Tripling EFSF Would Help It Save Italy
  • German Govt: Italy Must Make Savings, Reforms To Exit Crisis - Spiegel
  • Italy Debt Guarantee Could Raise Doubts Over Germany's Finances - Spiegel
  • German Govt: EFSF Should Only Help Small, Mid-Size Countries - Spiegel

As a reminder, yesterday's stopgap announcement by the ECB to expand its SMP purchases of secondary market Italian and Spanish bonds was merely as a precursor to full EFSF monetization until its comes fully online in September (or sooner) in a vastly expanded format (between €1.5 and €3.5 trillion).

If Germany is now against this, which appears to be the case, it pretty much means, well, game over.

Add the uncerainty over the unwind of the Europe rescue "gamechanger" as one of the more naive CNBC anchors said yesterday, and Monday is now guaranteed to be a bloodbath.

As for those saying China will gladly step in and fund a $5 trillion EFSF shortfall, they may want to read the following article from Reuters:

Italian Economy Minister Giulio Tremonti said on Thursday that Asian investors are reluctant to buy Italian bonds because it sees they are not being bought by the European Central Bank.


Speaking at a news conference, Tremonti also said it would be desirable for the central bank to follow the lead of the Japanese and Swiss central banks in taking expansionary steps to tackly the euro zone's crisis.


"I note that the Bank of Japan today launched quantitative easing and the Swiss cen bank cut rates to zero, we are waiting for decisions if possible, but desirable (from the ECB)," Tremonti said.


When you talk to Asia they say: "We don't understand what Europe is," he continued. "The second point is that they say 'if your central bank doesn't buy your bonds, why should we buy them"?

P.S. Time to unwind that Bund short we suggested yesterday. In fact, if true, it is time for a big rush to safety.

h/t London Dude Trader


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Sat, 08/06/2011 - 12:20 | 1530615 LawsofPhysics
LawsofPhysics's picture

Ha ha.  More puts for Monday?

Sat, 08/06/2011 - 12:44 | 1530719 Ahmeexnal
Ahmeexnal's picture

but...but...."the euro is freegold"

Sat, 08/06/2011 - 12:56 | 1530789 gmrpeabody
gmrpeabody's picture

And the jokes just keep on coming...

It's a laugh a second...

Please, give me a second to catch my breath!

Sat, 08/06/2011 - 13:17 | 1530885 Havana White
Havana White's picture

That twit "Simon" on cnbs was the one repeating "Gamechanger!  Gamechanger!" when news that Europe's troubles were over hit the tape and the Dow charged back from -200+ and still falling fast.

This "deal off" (in effect) news will play a more important role in Monday's tapes than many will recognize, as the Treasuries downgrade will dominate the news.

So, here's the beginnings of the "domino effect."  Monday could be a very ugly day.

(Disclosure: short all over the place.)

Sat, 08/06/2011 - 13:28 | 1530941 TruthInSunshine
TruthInSunshine's picture

Shit - finally, FINALLY - just got real, yo. It's finally on like Donkey Kong, bitchez (it's all been planned to some extent, but losing control does happen no matter how prepared they think they are):


Sun, 07/24/2011 - 15:47 | TruthInSunshine

Merkel knew this was coming, as does Sarkozy.
There have been many trial balloons floated by the EU as to who will bail out whom, when and how...
...ignoring the issue that absent massive printing of trillions in euros by the ECB, which is what must happen if the EU is to avoid sovereign defaults (Greece, Portugal and Ireland, together, are a fraction of the debt in jeopardy represented by Spain, let alone Italy...or....yep - France [I'd bet few know how awful France's own internal economic problems are]).
That's the problem. It's not that anyone necessarily wants to see anyone do badly in the EU, but saving those in trouble for the sake of holding the EU together is akin to placing a surcharge on Arizona, New Mexico and Washington State in order to bail California out.
Good luck to the governors of AZ, NM & WA if they were to do that.
A flood of EUR will either be produced in very short order or there will be defaults.
And Merkel is toast. She can't have her bratwurst (trying to represent Germans) and eat it to (imposing burdens on Germans so as to make PIIGS+UK+?France? bond holders whole - if even in devalued EUR).


Sat, 08/06/2011 - 14:12 | 1531177 bankrupt JPM bu...
bankrupt JPM buy silver's picture

Silver bears called this weekend on Friday at 3pm est when the vid was launched.  Epic.  Enjoy.

Sat, 08/06/2011 - 15:49 | 1531451 Ahmeexnal
Ahmeexnal's picture

Soros is about to break the BoE.


Sat, 08/06/2011 - 18:30 | 1531810 narapoiddyslexia
narapoiddyslexia's picture

This blog post is a little alarmist, as Der Speigel only states that German government "experts" say that the Italian debt is too big. As we have learned, no debt is too big. I think this is a warning shot across the bow, and Berlosconi has it within his power to avoid the consequences.

Moreover, from what I've been able to read from around the world, little is going to change on Monday morning, except that the Sun and gold will both rise.

Sat, 08/06/2011 - 18:41 | 1531839 Juan Wild
Juan Wild's picture



Moreover, from what I've been able to read from around the world, little is going to change on Monday morning, except that the Sun and gold will both rise.

Well, there was no news Wed evening. As a matter of fact all futures were in the green. Thursday the sun and gold rose......then....

Sat, 08/06/2011 - 18:55 | 1531870 narapoiddyslexia
narapoiddyslexia's picture

That's a good point, but I guess the Sun and gold always rise in the morning. At least for the last 10 years. . .

Sat, 08/06/2011 - 20:37 | 1532027 12ToothAssassin
12ToothAssassin's picture

and wood.


Too high brow?

Sun, 08/07/2011 - 02:45 | 1532310 BaBaBouy
BaBaBouy's picture


Looks like Merckel may have Found her Balls ...

Sat, 08/06/2011 - 19:48 | 1531956 ToNYC
ToNYC's picture


Get your facts straight please. The Sun never rises; the earth rotates on its axis and happens upon the life present. Gold  never rises either; the number may increase, however the dilution negates even that. Gold comes from a hole and then returns to a hole and one never need care for the confidence meter stick that it represents.

IMF, BIS, Fed, BOJ, SNB currency swaps complete the global conundrum. Make Peace with your devils and make your local arrangements.  That is the best currency that avoids it.


Sat, 08/06/2011 - 20:38 | 1532029 narapoiddyslexia
narapoiddyslexia's picture

Ok, then. The Earth always rotates, and the dollar always sinks.

Same result.

Sun, 08/07/2011 - 05:04 | 1532381 hungarianboy
hungarianboy's picture

That'd be nice!

Sat, 08/06/2011 - 15:19 | 1531406 DaveyJones
DaveyJones's picture

"but losing control does happen no matter how prepared they think they are"

you said it and I'd feel good about their disappointment if we all weren't so screwed

Sat, 08/06/2011 - 16:20 | 1531517 macholatte
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Peter Schiff Video Blog

Sun, 08/07/2011 - 06:49 | 1532429 The Shootist
The Shootist's picture


Sun, 08/07/2011 - 08:06 | 1532480 Zero Govt
Zero Govt's picture

TruthinSunshie, "Mekel is toast"

Yes indeedy. CNBC's German talking head, Helga or Hatti (!), said couple months ago the threat German taxpayers would vote against continued German Pro-EU bailouts was "dreaming". She then stated as matter of fact all of the German political parties were Pro-EU and none were anti-bailout so German voters had no choice in the matter (ie. same old Multi-Party = 1 Party State we see everywhere).

She then enthused the EU must remain together, there is no alternative... of course not Helga/Hatti, we must keep idealism alive and kicking no matter what cost and how stupid it is... our Western institutions are afterall based on vacuous ideaology rather than productivity


Sat, 08/06/2011 - 15:21 | 1531411 Fazzie
Fazzie's picture

Your avatar should preclude the need for the disclosure.

Sat, 08/06/2011 - 16:27 | 1531539 bayoutrader
bayoutrader's picture

Allow me to use your post to comment that the addition of Cramer was the last straw. Rick Santelli more than offset Liesman and the other fools as well as dropping Art Cashin's comments. But adding Cramer is an insult to any educated person. If Bloomberg or Fox business would team Jeff Macke and Rick Santelli for an hour before and an hour after the open CNBC would be history.

Sat, 08/06/2011 - 13:19 | 1530899 Pure Evil
Pure Evil's picture

I don't get it.

They were hell bent on taking over Europe back in the 30's and 40's.

And, now that they have the chance again without firing a shot, they draw up short like Little Timmah on a Friday night out with the girls.

At least Hitler and his henchmen knew how to 'Dream the Impossible Dream'

Sat, 08/06/2011 - 13:48 | 1531032 narapoiddyslexia
narapoiddyslexia's picture

Looks like The Big O is startin' to dream big.

Travel Warning
Bureau of Consular Affairs


August 5, 2011

The U.S. Department of State urges U.S. citizens in Syria to depart immediately . . . 

Sat, 08/06/2011 - 16:16 | 1531506 jonjon831983
jonjon831983's picture

Let's not invoke Hitler in this... don't think the current German gov't is a bunch o Nazis...

Anyways, why take over now when everybody is just starting to panic and rushing for the doors?  Why not let them feel the fear and desperation for a while? Then start backing up the truck when things are much cheaper so they are more maleable and ever more desperate to accept assistance?  That is how lasting peace is made, when you are accepted with open arms.

Sat, 08/06/2011 - 20:42 | 1532033 Silver Dreamer
Silver Dreamer's picture

Nope, they're just national socialists like Mr. Obama.  There's nothing to be concern about.  Move along.  Didn't you get the memo?  They haven't been called "Nazis" in a long time.

Sun, 08/07/2011 - 01:41 | 1532270 TK7936
TK7936's picture

If they and Obama are anything then its Marxists, definatly not National socialists.

Sun, 08/07/2011 - 04:41 | 1532354 Pay Day Today
Pay Day Today's picture

Nope, the people who run the US are not Marxists. They are certainly not socialists. They are kleptocrats.

Sat, 08/06/2011 - 13:37 | 1530974 THE DORK OF CORK
THE DORK OF CORK's picture

This makes freegold more likely as the Fiscal authorties are saying Fuck off we don't want this shit.

Therefore its up the CB....................... if they back down then its even more dollars all the way $$$$$$$$$$$$$$$$$$$$$$$ & dollar Bitches win again.

Sat, 08/06/2011 - 14:16 | 1531200 zorba THE GREEK
zorba THE GREEK's picture

I picked a hell of a week to stop sniffing glue...but it gives me a warm fuzzy feeling being all in PM's

Sat, 08/06/2011 - 19:44 | 1531949 Freewheelin Franklin
Freewheelin Franklin's picture

Now that's funny!

Sat, 08/06/2011 - 13:00 | 1530814 Id fight Gandhi
Id fight Gandhi's picture

You'd think, but the rigged fed market will likely pump emergency POMOs and start qe3 as soon as next week if things keep getting worse.

Hey it's election season you know...

Sat, 08/06/2011 - 13:33 | 1530952 Pure Evil
Pure Evil's picture

Monday will just be one more drop in the barrel of excuses that the FED will use to announce QE3 at some later point. Does anyone really believe that the FED has stopped any/all POMO operations?

Announcements like QE3 are for the sheeple only. It makes it more palatable for the little people that have been brainwashed to accept ever more government programs that has been going on since the days of Hoover/FDR.

The Bernank is itching to start QE3 and will do anything and everything to manufacture a crises that can be taken advantage of.

Sat, 08/06/2011 - 16:10 | 1531490 tictawk
tictawk's picture

The FED is not the market.  Nobody is bigger than the MARKET.  The emperor has no clothes and SnP had the balls to point it out in a small way.  We ARE INSOLVENT.  Think about it.  The Fed PRINTED hundreds of billions to bailout the markets.  And the deficit spending continues unabated.  YOU CANNOT PRINT WEALTH, you can print currency but WEALTH has to be EARNED. 

Sat, 08/06/2011 - 16:32 | 1531550 Taku
Taku's picture

QE3 won't work.
It would only say they won't allow markets to go down.
The sheeple have learned.

If QE3 plays, there could be 100% of Americans on food stamps, yet markets would still go up.
QE3 = hyperinflation, as it means QE4, 5, N.

...and if they do QE3, then I predit that QE6 hits in time for the iPhone 6 release.

Sat, 08/06/2011 - 17:46 | 1531714 j0nx
j0nx's picture

Good luck passing that inflation on to your salary in a world filled with people who will do your job for 1/20th of your pay. When this is good and going you will wish for the good old days of hyperinflation. We get what I refer to as hyperbiflation. Ridiculously exploding commodity costs, stagnant or dropping wages and things you own dropping in value. On the bright side the things you want but don't need will be cheap but you will be too broke from buying food and gas and being taxed to give a shit about those things. Hope you bought ammo, guns, dried food, potable water and PMs.

Sat, 08/06/2011 - 18:39 | 1531834 granolageek
granolageek's picture

Naah, bought a farm, got to know the neighbors. Everybody bought a little ammunition, nobody had to buy a ton. And it works on coyotes too, which we have right now today.

Also, being a geek rather than a money moron, I'm watching the corporate slimeballs trying and failing to replace me for a tenth my hourly rate, let alone a 20th. They actually can't beat a fifth, plus paying overhead for getting third shift workers.

OMG, they're in danger of paying me a living wage.

Sat, 08/06/2011 - 18:02 | 1531758 bankrupt JPM bu...
bankrupt JPM buy silver's picture

If QE3 doesnt work....what will?

Sat, 08/06/2011 - 18:23 | 1531794 Juan Wild
Juan Wild's picture



QE only helped Wall Street. That's all. In the end it will kill Wall Street too. But not before the whole world is in a deep depression. So why the hell is everyone hoping for more QE? So fuckin' AAPL can go to $900? While everyone else is moving into cardboard boxes? Just what the flying fuck is going on here?

Sat, 08/06/2011 - 18:58 | 1531873 I did it by Occident
I did it by Occident's picture

Bet all those people will be sporting the newest iJunk, no matter they have no food, they have aapls to eat.

Sat, 08/06/2011 - 18:58 | 1531874 I did it by Occident
I did it by Occident's picture

Bet all those people will be sporting the newest iJunk, no matter they have no food, they have aapls to eat.

Sun, 08/07/2011 - 05:45 | 1532394 Smiddywesson
Smiddywesson's picture

What is going on here is they are destroying all fiat and stacking gold for the end of the can kicking.  That will also destroy the value of all the loans the banks have, but I expect them to step in and replace all our paper before the USD hits zero, or try to engineer some legal trick to keep us on the hook.  Anyway, they benefit from inflation as long as they can keep inflating slowly, because they are the only ones who can outrun it.  If we get run away hyperinflation, the banks still win because they will hold all the gold.  If we don't, and we keep kicking the can and inflating slowly, the banks will be better prepared for the end.  Either way, they win.

They will do anything in their power to slow down the collapse.  It allows them to stack more gold, call in more loans, and to make more money off of inflation.

Wouldn't it be typical if the USG taxes as income any balance of your mortgage you escape due to the destruction of the currency?  I wouldn't be surprised.

Sat, 08/06/2011 - 19:12 | 1531899 Gold Man-Sacks
Gold Man-Sacks's picture


Sat, 08/06/2011 - 16:29 | 1531544 Sudden Debt
Sudden Debt's picture

I'm beginning to doubt.

A QE could very well have a totally different effect as QE2. It might really implode the stockmarkets all over the world.

Unless QE3 will be hughe, and by hughe I mean AT LEAST 4 TRILLION because once they start a QE3, China will be dumping and Russia as well.


It was pretty clear friday that you just needed to get out of the markets. The "analysts" said that it will rally but the chance of bad news was to high.

Bad news won...

Monday, there'll be a lot of markets going to close down!




2. Europe, US


Sat, 08/06/2011 - 17:22 | 1531667 DoChenRollingBearing
DoChenRollingBearing's picture

Sudden, you raise an interesting point.  For  hours since the S&P US Downgrade I have been looking at various articles here at the Hedge.

The interesting thing is, there is essentially NO CONSENSUS I have been able to find!

Markets CRASH and CLOSE or not?

Treasuries UP or DOWN?

Gold UP or DOWN?


Will something BIG happen?  Or nada?

Uncharted waters here, even the longest veterans I see commenting don't know either.  I have NO IDEA what is going to happen, but I will be manning my Battlestations starting Sunday night (US ET) to see what Asia sez...

SJGR, Bitchez!

Sat, 08/06/2011 - 17:34 | 1531691 Rodent Freikorps
Rodent Freikorps's picture

Maybe all the above. The US has never been downgraded before. We are off the map. There be monsters.

I think the old hands will try to whistle past the graveyard, but the herd will choose what happens. Try to be first to see what direction is begins moving as a single mass.

Sat, 08/06/2011 - 21:54 | 1532139 Sancho Ponzi
Sancho Ponzi's picture

DoChen: If history is a guide the downgrade will be a non-event. Japan's soverign credit rating was downgraded by S&P to AA- earlier this year, and little changed. 

Sun, 08/07/2011 - 01:24 | 1532258 Terminus C
Terminus C's picture

Yes but... Japanese debt is owned by the Japanese people who will likely care little about what an American rating agency says about them and will likely have believed their government when they said "nothing to see here, move along, move along." They believe their government for Fuku ffs, a downgrade would be peanuts to a propaganda machine.

U.S. debt is held, in large part, by foreigners and they will care what a U.S. rating agency says about them.

Sun, 08/07/2011 - 02:15 | 1532295 Quixotic_Not
Quixotic_Not's picture

There be monsters.

Sums it up nicely...

I've been saying this, more or less, for about 15 years...

Downgrading the U.S. debt should have actually happened about 2008 Q4, guess those relying on Fraud St. to give them info missed the boat, in comparison to those of us that ca$hed out of U$D for PMs LONG before!

Let them eat cake indeed!  LOL

Sat, 08/06/2011 - 17:49 | 1531704 Sudden Debt
Sudden Debt's picture

I've never said this in a weekend... BUT I WISH IT WAS ALREADY MONDAY! :)


It's pretty simple actually. Banks buy US AAA bonds to back thing up. Collateral.

Now this collateral isn't that secure anymore. Whaterver the seller says, the rating DOES matter.

SO: Some owners will need to sell and look for other collateral. YES PM'S will do! But not paper, and the price is set through paper so there is the PM problem.

There will be A LOT OF FUNDS who will need to back their portfollio up with gold up to 10%!

Currently, THEY HAVE 0,1% in gold assets! I've already posted this a few weeks ago.

Gold could go X40 and silver X160 because of this within 3 years. (2015 is the doomsday for a lot of western countries)

AND THEY WILL START TO ADD PM'S TO THEIR PORTFOLLIO but not the paper, so once the price will start to rise it will go really fast. And only after the paper markets go bust. And that will also happen. When? I don't know but it will.

And this is the main reason why PM's are so cheap right now.


Second for PM's:

If you had 5 billion you wanted to buy gold and silver with... it would take you quite a long time to do so!

500 million in silver of gold isn't a piece of cake. That's pretty hard, imagine doing the 5 billion.


Well: They own about 35 trillion. 10% of 35 trillion, is 3.5 TRILLION IN PM's!!!


Gold 60000$

Silver 4500$

And that's without the inflation.

So what everbody needs to do is: PUT AT LEAST 10% OF YOUR PORTFOLIO IN GOLD OR SILVER.

Like you where told to do at school but nobody ever did.


Sat, 08/06/2011 - 18:16 | 1531779 tekhneek
tekhneek's picture

I'm of the "put all your eggs in one basket, but watch that basket very carefully" mind lately as in... this past year or so.

Silver specifically is about 90% of my savings and gold about 10%. I don't save US dollars anymore, haven't for some time.

I moved a bunch of my "cash" position into AGQ on Friday. I'm anxious to see if I should buy more Monday, or watch it sail up.

We shall see.

Sat, 08/06/2011 - 18:50 | 1531861 DoChenRollingBearing
DoChenRollingBearing's picture

Interested in writing an article on silver for my blog?

Send me a gmail at my name if so.

Sun, 08/07/2011 - 01:48 | 1532150 Founders Keeper
Founders Keeper's picture

[I'm of the "put all your eggs in one basket, but watch that basket very carefully" mind lately...]---tekhneek

Hi tekhneek.

All the traditional investing strategies we all know today are wrong for today.  Actually, the opposite is correct for investing in today's paradigm.

The OLD investing strategy:

  1. Diversify
  2. Dollar-cost average
  3. Stay fully invested in mix of stocks and bonds
  4. Think long-term, invest it and forget it
  5. Plan for strategic retirement withdraws

The NEW investing strategy:

  1. Invest in few age-old assets with intrinsic value.
  2. Make your move soon while you still can
  3. Divest yourself of all paper assets with counter-party risk, e.g. stocks, bonds, etc.
  4. Think short-term.  Pay attention and be nimble.  Rapid changes are coming soon.
  5. Staying alive today may soon be your every waking moments concern.  Food, water, shelter, etc. 

After a number of years, maybe a generation or so, it will be time again to trade the "NEW" investment strategy back to the "OLD" investment strategy.  You may even live long enough to trade the OLD back to the NEW again.  And so it goes?


Sat, 08/06/2011 - 17:49 | 1531722 Highrev
Highrev's picture

A non-event.

Price discovery and a few folks take some haircuts if necessary.

No-one, not one financial institution/bank of importance here in Europe fails. Not one.

Really now, if the euro zone were to break up, so what? I'm not suggesting it will - in fact, I say it's highly unlikely - but for argument's sake, what if it did? The number of FX crosses would go up again and that's about it. Okay, those crosses would revalue, ahem, that is to say, there would be some more price discovery, and haircuts.

And yes those haircuts mean credit events, and that in turns really fucks the CDS writers.

Big deal unless you're a chump whose still exposed.

But counterparty risk? Forget it. The FED and the rest of the world's central banks have made clear that liquidity will be there and there will be no systemic failure. (That's the one and only thing that's been fixed in the U.S. - the gargantuan backstop is in place, but this time it'll be private capital and not tax payers who do the funding.)

Oh, and that's the worst case scenario. I expect something much more on the "lite" end - something like finishing up the job of shaking out weak hands and then back to business as usual.



Sat, 08/06/2011 - 21:03 | 1532068 CompassionateFascist
CompassionateFascist's picture

You're dreaming. DOW down 800 points quickly, PPT intervenes desperately, then another lurchdown. Trading suspended. I had hoped the Universal Ponzi would last 'til mid-2012. But this looks like a Perfect Storm. In fact I'm going to run my local ATM tomorrow. If it's not already MT.  

Sun, 08/07/2011 - 06:06 | 1532402 Smiddywesson
Smiddywesson's picture

I think we can all agree TPTB, which have spent trillions to delay the inevitable, and risked their reputations, are going to throw everything they have at this to prevent a cascading collapse.  The game is to slowly inflate and debase fiat, squeezing the taxpayers.  They don't want a fast collapse.  Where we can disagree is how long they can hold off that collapse.   I don't know, but it is getting closer.

Sat, 08/06/2011 - 17:55 | 1531742 High Plains Drifter
High Plains Drifter's picture

one thing is for certain dochen, it has never happened before in our history. it is embarrassing and imho, it is a warning and a harbinger of the coming shit storm..........they are being nice to us. they are giving out warnings. we should heed them. people should get out of fiat as soon as they can. abandon the status quo financial system. save your stuff and save your families and save your wealth...........the time is short.......

Sat, 08/06/2011 - 18:14 | 1531777 Dapper Dan
Dapper Dan's picture

The answer to all you're questions ..................... 42


So long and thanks for all the fish!

Sat, 08/06/2011 - 20:12 | 1531985 Motley Fool
Motley Fool's picture

Markets CRASH and CLOSE or not? Highly likely.Severity depends on whether Der Spiegel's rumour turns out to be true. 

Treasuries UP or DOWN? Magic 8-ball says single rating will not matter and market chaos will send flows to UST. Where else is the big money going to flow.

Gold UP or DOWN? Up, up and away.

US$ UP or DOWN? Err. Long term down of course. :)


Sun, 08/07/2011 - 05:53 | 1532397 Smiddywesson
Smiddywesson's picture

The downgrade was inevitable

That means it was baked into the price

But nobody believes in this market anymore, they are just trying to time the manipulations by the Fed and the inevitable collapse

So the downgrade becomes important again because it sychronizes the watches of the timers and gamblers.  

It is a signpost on the road to ruin.  I expect a huge anount of selling, offset with the both barrels of whatever the banksters have left to prevent it.  IF we ever wanted to see a demonstration of exactly how much power the Boyz have, Monday will see them using it all.   

Sat, 08/06/2011 - 17:30 | 1531679 deadparrot
deadparrot's picture

Close down, or close altogether?

Sun, 08/07/2011 - 13:37 | 1533082 Tom_333
Tom_333's picture

BTW - How are things going with Dexia? What´s up in Belgium? The two part still stick together or have they split up?

Sat, 08/06/2011 - 13:16 | 1530881 slaughterer
slaughterer's picture

" laut SPIEGEL-Informationen "  Says it all.... do not trust this source.   This is a rumor.  It is true that there is opposition--like always in Germany--at the ECB.  But what else can they do?

Sat, 08/06/2011 - 13:24 | 1530922 midtowng
midtowng's picture

What else can they do? Nothing is what they can do.

I believe the rumor because it makes perfect sense. If they were balking at bailing out Greece, do you really think they would try to bail out Italy? Italy is too big. I never believed this bailout would ever happen anyway. It was all about calming the markets over the weekend and buying a few days.

Sat, 08/06/2011 - 14:35 | 1531270 A Man without Q...
A Man without Qualities's picture

What else can they do? The only option they have is to print....

Sat, 08/06/2011 - 16:31 | 1531553 Sudden Debt
Sudden Debt's picture

printing is not really a option.

It's the suicide pill and they all know it.


Sat, 08/06/2011 - 14:52 | 1531337 24KGOLD FOIL HAT
24KGOLD FOIL HAT's picture

Spiegel seems to be both a relief valve for Deutsch anger at paying for socialist excess and a little bargaining power- ala "we want a little more for our rescue money, so lets let them squirm till about 15 minutes b4 Asia opens on Sunday.  Smart negotiating. 

Slaughterer is right; they can do nothing but guarantee the toilet paper.  ECB will have Fed offering it infinite $'s.

If not.........GAME over, kaput, sayonara...

Sat, 08/06/2011 - 16:05 | 1531477 A Man without Q...
A Man without Qualities's picture

This is spot on.  Der Spiegel is a voice of sanity in a crazy world, but this is nothing more than forcing Italy to agree to wide ranging commitments, in advance of the ECB buying. They need to print and they need to essentially retire debt, in the same way the Fed has.  Will it work?  It seems doubtful that anything works in the longer term, but we've been living day to day for a few years now, and they can keep it up a little while longer...

Sat, 08/06/2011 - 16:32 | 1531554 edotabin
edotabin's picture

Also, despite appearances to the contrary, Spiegel was right about the Greek situation as it was unfolding.  They were so right that GPAP was calling the prosecutor on them.....

Sat, 08/06/2011 - 16:47 | 1531596 Caviar Emptor
Caviar Emptor's picture

Same tune they sang before each Greek bailout

Sat, 08/06/2011 - 16:51 | 1531605 kridkrid
kridkrid's picture

I think this is right... and I actually am beginning to think that they can keep it up for a little while longer than a little while.  Everyone wants to continue, right?  I mean people are willing to engage in some sort of magical thinking that allows them to believe that anything that has been done in either Europe or the US can actually work.  It will end badly, of course, but not yet, I think.  Of course now that I believe this... after 3 years of thinking that the end is tomorrow... the end will likely be tomorrow.

Sat, 08/06/2011 - 17:02 | 1531631 slaughterer
slaughterer's picture

The ECB will print to buy Italian bonds.   There is opposition to this move, certainly, and Der Spiegel gives them opportunity to voice their criticism.  But it will not matter, because the ECB will print, and the ECB will buy Italian bonds, as long as Berlusconi fast-tracks and front loads austerity measures.  Word from Rome is that Berlusconi will comply.  I work two hundred meters from the ECB.  I know the people there.  I know how the game is played.  DO not rely on Der Spiegel for you investment decisions.  They are giving voice to a minority opposition.  That is all.  The system needs an Italian bailout and the system gets what it wants.  Sorry.  Do not look for the "Schroeder NO" to Afghanistan.  This is CDU/FDP land  Sorry. Deutsche Bank/Commerzbank was not positioned for the recent DAX collapse.  They need relief.  Berlin and ECB will provide it.   Anyone who believes otherwise is living in the sane juvenile idealism of "the right thing."  The ECB will, in the end, just do the wrong thing to save time and sway markets in the direction of the books of the powerful on Europe.  It is not right.  But: Nobody wants a collapse here.  Sorry.  Germany/ECB is not NeroHedge.   Make the adjustment in your perception and see both sides.   Otherwise be disappointed by the cynical, untrue, unidealistic "ways of the world." (Hegel)  

Sat, 08/06/2011 - 19:50 | 1531923 Seer
Seer's picture

That people don't want a collapse matters not in light of the fact that the REAL underlying support -PHYSICAL RESOURCES- is the ultimate arbiter.  Mother Nature has the call.  ECB = BIG = FAIL!  US = BIG = FAIL.  China = BIG = FAIL.  And on and on...

The rates of consumption necessary to keep the game going can no longer be maintained/attained.  I have yet to hear from ANYONE just how this growth-till-you-blow system can operate with ZERO/NEGATIVE growth for here on out...

Disclaimer: I'm NOT close to all these stinking piles (ECB, D.C., Wall Street), therefore I'm NOT infected.

Sun, 08/07/2011 - 02:14 | 1532293 Founders Keeper
Founders Keeper's picture

[The ECB will print to buy Italian bonds.  There is opposition to this move, certainly...]---slaughterer

Thanks for your post, slaughterer.

So, I guess the question we're asking ourselves is: Will Germany allow another Weimar experience?

IMO, tragically, yes.

They always print.  That's all you need to know.  They always print.  Prepare accordingly.


Sun, 08/07/2011 - 06:15 | 1532406 Smiddywesson
Smiddywesson's picture

If they stop printing, everything will collapse and they will be left with a bunch of worthless, non-performing loans and the gold they have stacked to date.

If they print, they will eventually have to face the inevitable collapse and the destruction of those loan assets, but they will have more gold on hand.

Which option would you take?  They will print.

Sun, 08/07/2011 - 11:19 | 1532520 Founders Keeper
Founders Keeper's picture

Hi Smiddy.

Yup.  Damned if they do, and damned if they don't.  They've trapped themselves again.

Dishonesty undoes itself. 


Sat, 08/06/2011 - 13:59 | 1531106 DormRoom
DormRoom's picture

Hugh Hendry: 5B  rest of the world: -5B

Sat, 08/06/2011 - 16:17 | 1531449 Taku
Taku's picture

Hugh was only 'wrong' because enter the Bernank & Timmah.

And it's not really a double dip, unless someone can explain 46 million Americans on food stamps as a 'green shoots' recovery.

Sat, 08/06/2011 - 18:00 | 1531747 saulysw
Sat, 08/06/2011 - 14:13 | 1531187 Stoploss
Stoploss's picture

See?? Lie your ass off Friday didn't even make it 24 hours. Time to get paid monday..

Sat, 08/06/2011 - 14:17 | 1531206 In Fed We Trust
In Fed We Trust's picture

It appears that Navy Seals who killed Osama have now been killed in a chopper cerash.

If yoy go to this article please note that it is a real time poll being conducted by the gov to see if the people are still buying this bullshit and if they need to changed the flavor of the bullshit.

In fact most of the articles hosted on the Drudge Report are real time polls being conducted by George sOROS AND MATT DRUDGE.


tHINk  ....."theory of reflextitvity.... 

and of course killilng the seals is like killing the firefighters at 911.



Sat, 08/06/2011 - 14:48 | 1531324 Pain Train
Pain Train's picture

"None of those killed in the crash is believed to have been part of the SEALs mission that killed bin Laden, but they were from the same unit as the bin Laden team."

Sat, 08/06/2011 - 15:07 | 1531386 Hearst
Hearst's picture

The report continues.."President Barack Obama mourned the deaths of the American troops, saying in a statement that the crash serves as a reminder of the "extraordinary sacrifices" being made by the U.S. military and its families. He said he also mourned "the Afghans who died alongside our troops."


This is beyond disgusting.  And to think his administration in all likelyhood gave the order to frag their own to continue the never ending quagmire of lies and bullshit. 

Sat, 08/06/2011 - 18:52 | 1531866 Mike in GA
Mike in GA's picture

...and of course this statement of condolence originating from Camp David where the CIC's birthday celebration weekend continues.


Sat, 08/06/2011 - 16:11 | 1531492 Pizza spaghetti...
Pizza spaghetti and mandolino's picture

If Italy doen't pay for its share of the Greek bailout the Italian budget is already balanced or positive. So, if the Merkel and the Sarkozy guys wish to pay tough, they'll be in trouble with their own banks. BNP Parisbas and Deutsche have been lending to the Greeks and the others thanks to the GS and JPMorganChase derivatives. If you look at total debt, public plus plus regional plus household private plus corporate private plus unfunded liabilities plus GSE Italy fares way way better.

Dear Tyler on these parameters the USA is at over 800 % debt to GDP.

Mind your own steps. The last time Italy defaulted was about eighteen centuries ago.

Sat, 08/06/2011 - 17:31 | 1531683 gmrpeabody
gmrpeabody's picture

Chill out, Pizza. You're preaching to the chior.

Most here at ZH, including Dear Tyler, know exactly where the USA debt to GDP really might be.

So.., add a little more wine to your glass, and the sauce, and put the pasta in. We're on your side.

Sat, 08/06/2011 - 17:55 | 1531739 Highrev
Highrev's picture

That's right. Good comment Pizza.

Sat, 08/06/2011 - 16:11 | 1531494 johngaltfla
johngaltfla's picture

More puts?

Hell, I expect shorting the market to be a felony by 8 p.m. Sunday evening.

Sat, 08/06/2011 - 16:34 | 1531559 Sudden Debt
Sudden Debt's picture

Nop, they have to give everybody at least a 5 day window to close them all down.

And all it takes to crash the stockmarkets is 1 to 2 more days.

Monday a -8% and it breaks beyond repair.

Sat, 08/06/2011 - 18:00 | 1531749 Highrev
Highrev's picture

On that much we agree.






Sat, 08/06/2011 - 18:19 | 1531787 WmMcK
WmMcK's picture

Did you forget the THEN and END IF?

I prefer JUMP (USD) to zero.

Sat, 08/06/2011 - 18:50 | 1531860 kito
kito's picture

@SD--you cant seriously think they wont unleash a tsunami of money by tomorrow? are we expecting them to not do what they do best, pump the market full of opiate currencies so that the asian markets open highhhhhh? have we not learned anything here on zh?

Sat, 08/06/2011 - 17:56 | 1531743 Highrev
Highrev's picture

I don't know what's worse, a felony or the premiums you'd have to pay.

Sat, 08/06/2011 - 20:16 | 1531992 Atomizer
Atomizer's picture

It is very funny. Ratings agencies are so scared. No one gives a fuck about a downgrade. The agencies are a front for central bankers. Downgrade everyone, cuz you already lost 1.8 T from the market. Lets pull another 2T this week. Shall we?

Sat, 08/06/2011 - 12:21 | 1530621 TempFlashback
TempFlashback's picture

The boot can no longer kick the can with the help of Germany.

Sat, 08/06/2011 - 12:27 | 1530637 caerus
caerus's picture

das boot!

Sat, 08/06/2011 - 12:37 | 1530681 Manthong
Manthong's picture

Reality's a bitch, ain't it?

Sat, 08/06/2011 - 12:40 | 1530699 Rodent Freikorps
Rodent Freikorps's picture

Dunnno, but she always bats last.

Sat, 08/06/2011 - 12:47 | 1530745 ping
ping's picture


Sat, 08/06/2011 - 12:40 | 1530701 malikai
malikai's picture

In the next scene of this tragic comedy, the IMF steps in with $1,000,000,000,000,000,000,000.00 to save us all.

Sat, 08/06/2011 - 13:06 | 1530842 cossack55
cossack55's picture

Except Iceland, which just re-remarked "Fuck the IMF and the dead-assed horse it rode in on".

I love Iceland.

Sat, 08/06/2011 - 13:42 | 1530998 malikai
malikai's picture

Iceland is a real country. Ironic, isn't it, considering that it is so small? They sure did give me a good laugh when they gave the finger to the suckers and banksters. I suddenly had the urge to apply for a visa when I heard about that.

Sat, 08/06/2011 - 17:35 | 1531694 Temporalist
Temporalist's picture

If there was a way to steal their geothermal energy they'd have been bombed already.

Sat, 08/06/2011 - 13:47 | 1531030 snowball777
snowball777's picture

I'd have respect if they hadn't run up the debts in the first place...standing up to the bully after shaking their hand is a wash, at best.

Sat, 08/06/2011 - 18:22 | 1531792 DCFusor
DCFusor's picture

FYI, "they" the Icelanders didn't run up the debts.  A tiny minority - the bankers - did.  "They", the country as a whole, never had an obligation to do anything, and alone among governments - they took the people's side and didn't back the bad banks -- and rape their marjority of good citizens.

Sat, 08/06/2011 - 14:28 | 1531242 JimBowie1958
JimBowie1958's picture

God bless Iceland.

I used to think Ireland had some balls too till they....well, nevermind. Thats another story.

Sat, 08/06/2011 - 16:15 | 1531509 JoeSexPack
JoeSexPack's picture

Visiting Iceland for 1st time on 8-15, for a week.


Will jump in hot springs, go fishing, view volcanos & have a few beers.


Like to support their financial independence with my vacation $$$.


& this


Sat, 08/06/2011 - 16:22 | 1531527 JoeSexPack
JoeSexPack's picture

Photo didn't post


Sat, 08/06/2011 - 18:53 | 1531867 mt paul
mt paul's picture


dead assed horses....

Sat, 08/06/2011 - 13:09 | 1530856 pesamystik
pesamystik's picture

Nah man, Sarkozy will get Merkel alone again and convince her to sell her country out. That man has mind control powers. 

Sat, 08/06/2011 - 13:18 | 1530890 Two Towers AU AG
Two Towers AU AG's picture

Maybe Merkel and The Good Germans were waiting for this moment when they get to F*** the french all over again at the expense of the European nations.. Payback time bitchesssss...

After all the french have more at stake than the germans.. and the peripherial european nations ( I assume) dont really care what finally happens to their creditors..

Maybe playing along for last 18 months was a Long con. :)

Sat, 08/06/2011 - 13:40 | 1530987 pesamystik
pesamystik's picture

Well, if the Euro breaks up, everyone gets screwed. It will be a meltdown. Plus, if Germany gets back to the mark, their exports will cost more. It was a bad bad idea to begin with, but here we are.

That being said, I think we're at the point where no matter what happens, we are facing disaster, but extending this mess further is the wrong option. Bring on the breakup and everyone hang on.

Sat, 08/06/2011 - 13:49 | 1531040 snowball777
snowball777's picture

Yeah, they'd never be able to figure out how to devalue a mark. /sarc

Sat, 08/06/2011 - 17:28 | 1531675 Fred Hayek
Fred Hayek's picture

They'd never be able to devalue it as low as the lira and other southern european currencies will be. They don't compete with each other in a whole lot of ways but in any way that they do the Germans are getting a benefit from the italians, spanish and others being stuck with a currency of the same value as germany's.

Sat, 08/06/2011 - 17:56 | 1531744 snowball777
snowball777's picture

No doubt, but even with a hypothetical lira in play, I don't see people lining up to buy Fiats over BMWs and VWs. It would be a great deal worse for German farmers though.

Sun, 08/07/2011 - 03:51 | 1532344 Yen Cross
Yen Cross's picture

  Someone old school edit..{ with me} PUSSIES aplentie! SP:


        &&&/777 you  have  MY. Vote!

Sat, 08/06/2011 - 13:18 | 1530893 Two Towers AU AG
Two Towers AU AG's picture

Maybe Merkel and The Good Germans were waiting for this moment when they get to F*** the french all over again at the expense of the European nations.. Payback time bitchesssss...

After all the french have more at stake than the germans.. and the peripherial european nations ( I assume) dont really care what finally happens to their creditors..

Maybe playing along for last 18 months was a Long con. :)

Sat, 08/06/2011 - 13:51 | 1531049 Bob Paulson
Bob Paulson's picture

Selling out Germany? Germany is taking over Europe in a way Hitler failed to.

Sat, 08/06/2011 - 16:30 | 1531551 kaiserhoff
kaiserhoff's picture

Mein own people are very stubborn.  Gotsidank.

For those who don't know the culture, Spiegle is what the Saturday Evening Post used to be in the States.  Almost universally read, and far more reliable than anything currently in the American Celebrity Kulture.

Sat, 08/06/2011 - 17:30 | 1531677 Fred Hayek
Fred Hayek's picture

Thank you for providing some context.

Sat, 08/06/2011 - 14:00 | 1531109 RiverRoad
RiverRoad's picture

Hmmmm, if he gets her alone agiain who knows WHAT he might try?  Gotta watch those Frenchies.

Sat, 08/06/2011 - 16:50 | 1531603 Caviar Emptor
Caviar Emptor's picture

Just come on down, take what you thik you need

Sat, 08/06/2011 - 12:58 | 1530803 Cursive
Cursive's picture


The boot can no longer kick the can with the help of Germany.

SJGR (Shit Just Got Real)

Sat, 08/06/2011 - 13:15 | 1530877 MsCreant
MsCreant's picture


Sat, 08/06/2011 - 13:18 | 1530894 Doña K
Doña K's picture

It is appropriate to start a new financial era:

Here is the new financial anthem:

Also sprach Zarathustra:

Appropriately written by a German

Sat, 08/06/2011 - 13:54 | 1531069 snowball777
snowball777's picture

"Do you believe I am ever, in any of my actions, guided by the thought that I am 'German'?

Do you suppose Mozart was consciously 'Aryan' when he composed?

I recognise only two types of people: those who have talent and those who have none."


Sat, 08/06/2011 - 18:26 | 1531803 WmMcK
WmMcK's picture

And I recognize these 2 types: those who put people into 2 types and those who don't.  False dicotomies, bitchez.

Sun, 08/07/2011 - 06:25 | 1532411 Smiddywesson
Smiddywesson's picture

"I recognise only two types of people: those who have talent and those who have none."



I recognise only two types of people: those who have pms and those who don't.

Sat, 08/06/2011 - 12:23 | 1530623 caerus
caerus's picture

how do you say boom! in german?

Sat, 08/06/2011 - 12:33 | 1530661 sunny
sunny's picture


Sat, 08/06/2011 - 14:34 | 1531262 Raphio
Sat, 08/06/2011 - 12:34 | 1530667 Everyman
Everyman's picture

lärmen, Krach machen

Sat, 08/06/2011 - 12:36 | 1530673 margaris
margaris's picture



or Ka-Wumm!


The "Ka-" is internationally accepted.

Sat, 08/06/2011 - 12:47 | 1530742 WonderDawg
WonderDawg's picture

Epic times, Caerus.

It's bittersweet. I'm grateful that I'm awake to see what's happening, and to try to prepare for it, but what we are soon to see is not going to be pretty, for any of us. Even the folks who have done their best to prepare for what's coming are going to be surprised, I think.

On one hand, it feels good to be validated. My family and friends have all looked at me funny when I've tried to explain what's happening and try to help them see what's coming. I get it, from their point of view, I was one of them until about 3 years ago. I woke up, not sure why I did and my friends and family didn't, they saw the same shit I saw. Whatever, it feels good to be validated, but at the same time, I fear for all of us.

This catastrophe has been in the making for a while now, and events are speeding up. Confidence and optimism are crumbling, and the outcome is inevitable. It's going to be ugly.


Sat, 08/06/2011 - 12:52 | 1530768 caerus
caerus's picture


Sat, 08/06/2011 - 12:56 | 1530790 WonderDawg
WonderDawg's picture

So, having prepared the best way I know how, I'm going out on the lake and live life while I still have all my options. Golf tomorrow. Then tomorrow night, I'll be watching the asian markets and trying to get a feel for what's going to happen Monday. Might be an all nighter, never know.

Have a good 'un.

Sat, 08/06/2011 - 13:02 | 1530822 caerus
caerus's picture

you too buddy

Sat, 08/06/2011 - 14:34 | 1531264 grey7beard
grey7beard's picture

>> live life while I still have all my options

I cashed out of the system and moved to he sticks last year.  It took  about five years to get it all done.  I sold three city properties, bought 10 acres out in the sticks and closed my business.  After getting to that point I decided to take a trip of a lifetime before the final hunker down.  After five mothns and 14,000 miles I'm about 2 months and 7,000 miles from home.  It's been a great run but it's sure starting to look iffy on the return.  Life is an adventure.

Sat, 08/06/2011 - 17:13 | 1531653 WonderDawg
WonderDawg's picture

Dude, I think I'd be making plans to get home quickly. The pace of these events is accelerating. If you don't bail on your adventure, at least have a plan to bail if need be. You don't sound like the type to not have a plan, so I'm sure I'm not telling you anything new, but I want the people with some vision to make it through this shit. We're going to need you.

Sat, 08/06/2011 - 13:06 | 1530834 Idiot Savant
Idiot Savant's picture

I was one of them until about 3 years ago. I woke up, not sure why I did and my friends and family didn't, they saw the same shit I saw.

A lot of people woke up in 2008. I can only assume those that didn't lack common sense, are incredibly narcissistic, or are in denial.

Everything about the American way of life is unsustainable (read: economy, energy use, pollution, etc.). I find it surreal that we're reaching Peak Everything all at once. A perfect storm indeed.

Sat, 08/06/2011 - 13:19 | 1530897 mtomato2
mtomato2's picture

I have said, time and time again, to so many people, that I would not know me now, three years ago.


I made fun of me.  But no more.  Breakneck speed.  I used to think Rand's three-year scenario of destruction in Atlas was a metaphor.  Now I see it is all too possible to tear the whole system apart that quickly.  Granted, it's been years in the making, but it hasn't been "too late" until just recently.


As to the doubters?  Hey.  All you need is a basic understanding of human nature and a sixth grade math education to see the certainty of our demise.  The doubters are not stupid, they are deluded.  Normalcy bias at its absolute worst.  The minutia of the circumstances are the bread and circuses of our day.  It's real simple:  1.) you can't spend more than you make.  2.) People spend more than they make.

Nothing has ever ended well, simply because of these two simple axioms.

Sat, 08/06/2011 - 13:44 | 1531010 unununium
unununium's picture

That's a little too simplistic. Society does produce lasting value over the centuries. But far too much of that value has been harnessed and misdirected.

Sat, 08/06/2011 - 18:10 | 1531768 Temporalist
Temporalist's picture

"It's real simple:  1.) you can't spend more than you make.  2.) People spend more than they make."

It's funny that you say that.  I watched Bill Maher Fri night and Christina Romer was on.  It is amazing that so many think that if the rich are just taxed more everything will be okay or that if there were just more money printed earlier it would have been better.  She says "swing for the fences" but that sounds more slogan than solution.  But it still amounts to print money, find a way to pay people something just to keep the shithouse propped up with no fix for the underlying problems.

Romer said one thing that made everything clear - that the economic "science" of printing to stave off recession is what is taught in schools.  Keynesianism is not only accepted by these madhatters it is UNDENIABLE TRUTH; an absolute!  And according to Romer it is proven to work and that the "facts" bear it out.  This is Keynesianism working for you!

The U.S. has demonstrated to the world that they can reneg on debts, "temporarily" (of course) going off the gold standard was default, and then run deficits until infinity.  Other countries have followed suit and so the people have also.

So it would seem that people not only think they can spend more than they make they are taught that and the idea is nurtured, with many "real world" examples to follow. 

Sat, 08/06/2011 - 20:14 | 1531989 Pay Day Today
Pay Day Today's picture

"It's funny that you say that.  I watched Bill Maher Fri night and Christina Romer was on.  It is amazing that so many think that if the rich are just taxed more everything will be okay"

Well, not everything would be OK. The problems are widespread and they are particularly deep in D.C.

However, the fact that every dollar of tax you do not collect from multi-millionaires and billionaires and corporations is another dollar you have to borrow from China or the Fed is one part of the picture.

Sat, 08/06/2011 - 22:29 | 1532158 nmewn
nmewn's picture

"However, the fact that every dollar of tax you do not collect from multi-millionaires and billionaires and corporations..."

Funny how the target always changes with a prog. It seems like only yesterday anyone earning over 250k was "rich"...well, actually, I guess it was just

And you do realize any increase in corporate taxation is just passed through in the form of higher prices to the consumer, right? Yes...of course you do ;-)

As an aside, Christina Romer had no genuine credibilty when she was appointed, so she and Bernstein lost nothing personally when they quit as abject failures...they have always been completely clueless. Now they both can go back to doing what they do best. Tenured professors, standing in front of the chalkboard, poisoning the minds of young people with an interesting but failed economic theory.

We will be out here waiting on these poor souls to show them how their time was a complete waste of energy and their money bought them nothing but a five dollar picture frame.

Sun, 08/07/2011 - 04:49 | 1532372 Pay Day Today
Pay Day Today's picture

"And you do realize any increase in corporate taxation is just passed through in the form of higher prices to the consumer, right? Yes...of course you do ;-)"

That's never been demonstrated. Just like its never been demonstrated that corporates drop prices to consumers when you lower their taxes. In other words its a fear meme spread by corporate lobbyists.

Sun, 08/07/2011 - 07:37 | 1532460 nmewn
nmewn's picture

LOL!!! if it's as you say "never been demonstrated" clearly the government should tax them at 100% as there would be zero effect on the consumer.

We currently have one of the highest corporate tax rates on the planet at 40%. Even someone as incompetent as Obama has had to do a "hard pivot" toward that reality.

Lets do it this way...from the other end of the scale. Lets say an hourly wage earner has just got a pay cut = less profit.

Would you say they have just been induced to be more productive or less productive?

Sun, 08/07/2011 - 08:09 | 1532479 Pay Day Today
Pay Day Today's picture

Seeking fair tax rates which allow a society to be run does not imply a 100% tax rate.

You are also lying about the 40% corporate tax rate, federal corporate income rates are lower than that. And they are definitely lower than the 48%-52% rate of the 1960's and 1970's.

Further, when you look at many of the US largest corporates, few of them pay corporate income tax at anywhere near the headline rate. Check out GE for instance.

As for your worker pay cut example. We've actually seen in real life what happens in the economy when you give workers an effective pay cut. They have to work more jobs and longer hours to make ends meet. So to answer your question - yes they are forced to work harder for longer.

Tax cuts give corporates more money for doing the same job and they get lazy.

Sun, 08/07/2011 - 11:07 | 1532502 nmewn
nmewn's picture

"You are also lying about the 40% corporate tax rate, federal corporate income rates are lower than that."

I don't take kindly to being called a liar. You had better put up a link (mine was from Cato) to support your slander or your 10% credibility just went to fucking zero. As for GE...who is the CEO of GE? Thats right, Immelt. An Obama czar.

Give me your link on corporate tax!

Sat, 08/06/2011 - 22:28 | 1531995 Dapper Dan
Dapper Dan's picture

No country can consume more than it produces,      how simple is that?


Science is the enemy of freedom.   not so simple. 

Do NOT follow this link or you will be banned from the site!