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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
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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WARM & Fuzzie ( PIGGS)?
I never lie " HULK" Those interbank feeds will be on /Time/
YEN
Oh well, everyone knew the Germans were gonna have to clean everything up again.
http://youtu.be/9QyQ9PsOj6A
It's getting harder and harder to find 200 white Russian soldiers for those military parades ? ... If that Chinook that was shot down with 30 special forces and seals was on an urgent rescue mission.....what happened to the soldiers in need of rescue......over run ? Details hard to come by ! The Chinook helicopter is a scary piece of shit ! All the money for defense and we get Ospreys and Chinooks and AR15s ? Monedas 2011 Comedy Jihad Nervous Laughter World Tour
Can I pound some ""PREACIUS"" dirt?
it was never the plan of Germany to bail out Italy, Spain or France. Germany agreed to help the smaller economies on a limited base and thats it
Germany s first interest is the Euro, Second, the Euro and third the Euro. It will never allow the ECB to print money like the Fed nor allow Eurobonds.
The reason: The Euro is the former money of Germany. The DM simply became the Euro and the other EU countries accepted this as their money too. So forget about Euro bonds, forget about QE by the ECB.
The ECB has only one job and that is fixed in their statutes. To maintain the buying power and the trust in the Euro. This is the soul of the Euro and is inherited from the DM.
The ECB can more or less only fiddle a bit with interest rates and so on. The capital of the ECB is limited, excessive printing is outlawed and nor Germany nor France or any other country have the plan to inject fresh real money into the ECB. its that simple. A Euro is and stays a Euro because it is an independent money but backed by the German, Dutch, Austrian, Belgian, France, Italian etc. economies. Since Germany accounts by far for the biggest chunk first Germany has to sink before the Euro is sinking.And this is not so easy to arrange as one can see now. Its more likely that the UK and the US are economically going down the drain.
The Euro or former DM is the trusted money of Germany and others have trust in it too as the growing amount of Euros as reserve currency shows. And nobody can force the Germans to give up their money but on the other side each Euroland country can decide on its own if it wants to leave the Euro behind and return to French Franc, Lira, Drachma etc.
It would not help them at all. In the opposite it would be a total desaster. Germany would be not that much affected over time. It would be just another shift in policy. Then Germany would be forced to concentrate even more on its Eastern markets. They will be greeted with open arms.
you are supposing that the casino has no impact on the real economy. If this were the case, you would be right. But the casino has a tremendous impact on the real economy. You know what happens when all banks need liquidity at about the same time. The bold German / north European industrial sector only extends the problem, it cannot avoid the fall of the EURO/DM. Right, the ECB does not print as the FED does, but the EURO is the same fiat as all currencies, collateralized by nothing.
Tremonti isn't Merkel, he has nothing to offer the CCP, nothing but regular raids on hunanese seatshops in italian cities, the current Italian PM is pesona non grata in CCP land, no surprise there won't be a chinese bail out for these lovers of bungas (and their tango-loving latin cousins of Club Med incl France). The CCP now probably has only 1 condition to back the euro/EFSF: Germany guarantees the expanded EFSF and whatever reserves needed now in treasuries would be switched over to EFSF. If Germany fails to deliver the expansion, the May 2010 agreement with Merkel to back the euro is off. The bottom line is CCP views euro as salvageable right or wrong, whereas the US is not. Thanks to Ben/DC/Dimon &Co desire to see the nano-shrinkage of the toilet currency and the great idea of "financial repression".
Tremonti isn't Merkel, he has nothing to offer the CCP, nothing but regular raids on hunanese sweatshops in italian cities, the current Italian PM is pesona non grata in CCP land, no surprise there won't be a chinese bail out for these lovers of bungas (and their tango-loving latin cousins of Club Med incl France). The CCP now probably has only 1 condition to back the euro/EFSF: Germany guarantees the expanded EFSF and whatever reserves needed now in treasuries would be switched over to EFSF. If Germany fails to deliver the expansion, the May 2010 agreement with Merkel to back the euro is off. The bottom line is CCP views euro as salvageable right or wrong, whereas the US is not. Thanks to Ben/DC/Dimon &Co desire to see the nano-shrinkage of the toilet currency and their great idea of "financial repression".
Looks like it has come down to another euronate contest. USD wins
Am I being a simpleton here but as far as I can see the ones who are going to lose out in the debt debacle are bondholders.
There is masses of liquidity out there sloshing around and, Ricardian equivalence, part of it goes to fill the hole created by the bondholders' losses.
But at the end of the day there will still be plenty left over for buying real assets and what do equities have to lose if they represent enterprise, resources, energy and solid companies?
Its a great and salutory lesson for all those in the bond world who thought they had risk free investments, thousands of fund managers, insurance and pension investment mangers with their robotic life style of long lunches and little real work with the grey cells.
The ones would lose are the pensioners, that's who. And with the world aging, they are simply not going to let that happen. Which is why this is all jawboning bullshit and the bailouts will continue.
the people in germany are highly suprised about the alleged new imperialistic ambitions of their country.
It needs to be said that capitalism has visibly failed, demonstrably imploded and finally succumbed to its obvious contradictions.
What remains is for revolutionary and counter-revolutionary forces to joust over the beginning of a new system of exchange, of production, of work and of compensation for services rendered.
For all we know, nothing much will happen in world markets on Monday. Even if a few exchanges open limit down, suspend trading or whatever, we are still seeing just another cog in the demise of capitalism.
It's capitalism, stupid.
Saying it doesn't make it true. What has failed is a bastardized version of capitalism in which banker and corporate cronies have usurped the power of the government from the people for their own ends. While Marxists will no doubt attempt to institute a wealth redistribution scam based on the faulty logic that "capitalism has been tried and has failed," what really has failed is democracy, because what the last 100 years has shown is that people are too stupid to vote in a manner that protects them from bankers and corporations. Any economic system that does not have, as its basis and overarching theme, a profit motive and a reward based on effort system will fail, and we don't need to see the U.S. become a full-fledged version of the Soviet Union and fail to reprove that axiom.
Hate to break this to all you idealistic young types who have found religion and discovered a higher form of morality, but there is nothing else, other than CAPITALISM. Or to put it another way, socialism/communism/keynsianism/thirdwayism/obamaism es muerte ;)
Oh, and national socialism/peronism/fascism and Universal Unitarianism es kaput too;)
Perhaps our respective "ideologies" are showing in a context where never the twain shall meet. What impresses me is that if you do a search of the words "ammo" or "guns" or "gold" in this thread, you will then be able to judge, anecdotally of course, the extent to which the claim "capitalism has failed" is a true statement. Capitalism is a failure because it encompasses, indeed depends upon, human greed and because it fails to acknowledge, let alone encourage, human sharing, let alone 'right sharing' of resources.
The Marxist concept of 'to each according to their need and from each accoring to their means' represents a far, far better and more highly evolved conception of economic well-being than does 'stockpile guns, gold and grain' or howsoever that self-centered and fearful conception may be variously phrased.
The profit motive that the post to which this one replies is outmoded, destructive and counterproductive.
This is what the coming revolution and counter-revolution will have to settle.
To even mumble the phrase "to each according to his need and from each according to his means" with any contemplation that it bears any hope of working is an admission that the mumbler has no familiarity with basic human behavior.
Marxism is simply the veneer on top of basic wealth redistribution. The theory really is - "there are more of us than there are of you, so we're going to take some/all of what you've got." The "to each, from each" silliness is thrown in so that it doesn't appear that the theory depends entirely on theft. It doesn't matter who has the money, how they got it, and so on. All that matters is that the majority are willing to take it by force.
Regarding the "revolution" and "counter" thing - read Animal Farm. It's really quite simple. The absolute best the downtrodden masses can hope for is a transient improvement in their lots. They are, in the end, way too G-d Damned stupid to hold on to any power they might stumble into at the end of a revolution, and that's why I always think folks who espouse Marxism are either manipulators or idiots.
Things are getting set up for Turkey to intervene. Just watch.........
Things are getting set up for Turkey to intervene. Just watch.........
But when the impact of transient factors is removed it becomes clear that the underlying narrative of U.S. manufacturing in the new millennium is mostly a story of decline. Competition from China is rapidly eroding the industrial foundations of American economic power.
That trend has now progressed to a point where the U.S. intelligence community has become concerned.
DUHHHHHH...
http://blogs.forbes.com/beltway/2011/02/14/intelligence-community-fears-u-s-manufacturing-decline/
It's over, to be real it's over. Germany has finlly said enough and won't do it.
Z/H your servers are pathetic! Cisco is " Firing"!
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