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Juncker Breaks Away From Propaganda Pack, Says Euro Default Will Lead To Contagion
That Europe has been unable to do the simplest thing, and come to a conclusion in its negotiation with Greek creditors, now running into its six month, is not very surprising. After all this is Europe, where nothing gets done before the deadline, only in the case of Greece the deadline also means the risk of runaway contagion. And as of today there are about 53 days left before the March 20 Greek D-Day. Yet the one thing European should at least be able to do is to have their story straight on what happens once Greece defaults. If nothing else, to show solidarity for optics' sake. Alas, it can't even do that. Because just overnight we have two diametrically opposing stories hitting the tape. On one hand we have Spanish economic minister Luis de Guindos telling Bloomberg TV in Davos that the euro region could withstand a Greek default. This is very much in line with the Jamie Dimon line of thinking that there will be limited fallout. Yet on the other hand, it is that perpetual bag of hot air, Europe's very own head propaganda master Jean Claude Juncker, who ironically told Le Figaro that a Greek default must be avoided at all costs as it would lead to Contagion (read tipping dominoes all over the place). Too bad that both Fitch and S&P said that a Greek default at this juncture is inevitable. And while Juncker's statement in itself is absolutely true, the fact that discord is appearing at the very core of European propaganda - the one place it can afford to stay united until the very end - is troubling indeed. Especially since Juncker also told Le Figaro that Germany can not be asked to do everything alone. Is that a quiet request for the Fed to keep bailing out Europe since the ECB apparently has no interest in doing so?
From Le Figaro:
Juncker: "We must avoid a default of Greece at all costs"
INTERVIEW - The President of the Eurogroup, Jean-Claude Juncker, appeals from the foot to the ECB before the European summit. He believes that we can not ask Germany to "do everything".
LE FIGARO. - The euro stood the test of Standard & Poor's, rates of debt subside, Europe will loop Monday his pact of fiscal discipline. The worst of the crisis happened?
Jean-Claude Juncker. There is a lull, unexpectedly for many, but we are not free from worries. All countries recognize the need to restore order in their public finances. Remains a serious flaw: we have no growth strategy at European level.
Do you agree with Christine Lagarde, and Joseph Stiglitz when they say adds austerity to austerity is the bed of the recession?
Yes, because obviously a pinch, if necessary or it will not solve the problems of the weakest European countries. No, because the gurus have used since 2008 to contradictory requirements. We must first correct the public finances. There is no example of sustainable growth based on budgets deliberately plunged into the red. It is also necessary to agree on a European level of rigor smart, that will not break growth.
Angela Merkel got what she wanted: a collective fiscal tightening. Are you disappointed that she now refuses to make room for maneuver in the German service of European growth?
Many Germans believe that release the brakes would lead other countries to relax the effort of fiscal discipline. But this is not to please in Berlin that the Netherlands, Austria and Luxembourg are less indebted than the Federal Republic. Italy, Spain and Portugal have also found a national and European interest to accept more discipline. The fear of Angela Merkel is not justified.
In the euro area, governments have fallen in series. In France,
Nicolas Sarkozy is in trouble. Are we not reached a point where you have
to offer hope to the voter, to prove that the austerity pay?
The problem is not to offer gifts to the voter. But to do everything now to control budgets and do not carry debt on future generations. This is the question at any responsible politician. It should also explain to the public.
What could push now the Chancellor to loosen the grip?
You can not ask Germany alone to do everything. Its room for maneuver is not as wide as they say. All of this is the economic government of Europe. There is no longer reserved for the national domain. If we can agree on who does what, when and how Germany will find its place.
The EU summit on Monday shows a dual purpose: employment and growth. With what means?
There is money, but it is poorly operated. At the top, there will be no sales or decision spectacular. This is to identify pockets of potential growth and to mobilize more funds to regional, social and European Structural. Perhaps he should also review all the flows.
Athens is again on the brink of bankruptcy. Do you think the problem confined to Greece?
Greece is a special case. I am not criticizing the Prime Minister Papademos. There is a real fatigue Greek political forces to continue on the road to reform. The recession is going beyond what had been expected the European Union. We ask the Greeks not to let go, to decide their priority of recovery in the days or weeks, in short, does not endanger the financial assistance coming from the EU and the IMF.
Greece can it fail without leaving the euro zone?
I do not reason in those terms. There is no default without contagion. It is in the interest of all to avoid a default of Greece.
Should the ECB get their hands in their pockets?
The question arises, but it would not be wise for the President of the Eurogroup urges the ECB to steer policy in one way or another. It remains a fact. Other creditors have a role rather anecdotal ...
Do you think the UK will return in the European game?
In December, faced with the obstinacy of David Cameron, we had no choice other than a fiscal pact without Britain. Today we see put in place a European architecture distorted. In the medium term, a Europe at twenty-six that's called a construction defect.
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The ECB's policies are working in the short run, but the Greek meltdown will lead to contagion IF every marginal country starts demanding haircults OR unorderly default.
Spanish Unemployment Rises to 22.9%, Greece “Close” to Deal, Italy Lowers Borrowing Costs
http://confoundedinterest.wordpress.com/2012/01/27/spanish-unemployment-rises-to-22-9-greece-close-to-deal/
The ECB's policies are working in the short run
BWAHAHAHAHAHAHAHA!
Printing money "works" in the short run... Go figure!
Yea contagion as if it is a disease and not an obvious existing condition.
Metastasize is a better choice of words
Is that a quiet request for the Fed to keep bailing out Europe since the ECB apparently has no interest in doing so?
Of course it is. And helicoptor Ben will only be too happy to oblige. After all, can't let the USD get stronger. Manufacturing miricle and all that:))))
a Europe at twenty-six that's called a construction defect.????
I love the smell of fear in the morning...
...and the glint of the morning sun reflecting off of my shiny phyzz.
Watch the wording...the actual Greek loss will not destroy the world...but if the CDS is triggered...that will destroy the world.....I think that is what they are saying or trying to say....the CDS trigger is the key......IMHO
actually if you read Bloomberg story this morning, a CDS trigger is suddenly a good thing::)))these guys are smoking something...actually the break up of EU is a good thing, I expect them to say in the next few months...
http://www.bloomberg.com/news/2012-01-27/greek-debt-wrangle-may-pull-default-trigger.html
if you wanna laugh, that is..
For those of us still somewhat confused as to the when/if/how CDSs are triggered when a credit event takes place read here:
http://www.bloomberg.com/news/2012-01-24/binding-greek-deal-would-trigge...
If nothing else it demonstrates that that no one body has the authority to decide this...if only because the herd may not recognize the so-called "authority."
This will be fun to watch...from a safe distance. I'll get the popcorn.
"Treasury Secretary Geithner calls for a bigger financial firewall in Europe at his talk in Davos. He reasons that a more "credible" system of protection will draw in the support of the IMF and nations."
"Other Nations"....that is code word..not very cody by the way...but code word for the USA bailing out Europe....you go girl
I hereby nominate Geithner as a "human firewall"... A human shield to stand there against that fire and say... "Go back! Go back you fire!"...
We'll truck him down to the seashore next, he can show Canute how it's done. After we chain him to a rock at low tide of course..
Beginning to look like the Greek PSI deal will go through...buying the Euro a bit more time.
If they try to bail out Europe, Congress and the people will go bat shit. No way is Obama that dumb, not in an election year, he would hit a brick wall.
I think you are in for a surprise my friend.
Agreed. Congress will find out three years after it happens. There will be a hearing or two with sharp, witty remarks from the congressmen. The chairman will eventually get tired of the charade and give everyone the finger as a heavily armed FED security contingent floods the chamber. Bullets will fly. In the aftermath, you will hear the chairman mutter 'this was going nowhere anyway' just before he pulls out a gun and shoots the CSPAN camera.
The transfer of power will then be complete.
Whoops. . . went off topic there a bit. . . sry.
I don't know guys, I think to try to do something like this under the radar, given how many eyes are watching the Fed these days would be impossible. But you could be right, stranger things seem to be happening all over. Hell the whole thing will be Moot when the US/Israel/Iran war starts.
Why they bailed out Europe once already?
UBS, Switzerland’s largest bank, was the biggest borrower from the Commercial Paper Funding Facility, tapping the program 11 times for $74.5 billion.
Six European banks were among the top 11 companies that saccumulated the most debt overall -- a combined $274.1 billion .
Dexia tapped the US government for $53.5 billion. Other European users included Barclays Plc in London at $38.8 billion; Royal Bank of Scotland Group Plc at $38.5 billion; and Paris-based Natixis at $27 billion.
The Fed listed borrowing for Paris-based BNP Paribas at $41.8 billion.
Commerzbank of Germany borrowed $350 million at the Fed’s discount window.
Even though I constantly read how wonderfully prosperous the Germans, Swiss et al happen to be.
BTW the radical muzzie vs the evil zionista war started already,
Iran has been waging war against the US for decades.
They just don't wear uniforms that say Iran on them.
add what would/could stop a cds trigger?
serious question...
and where to take cover?
and these motherfuckerS continue to fuck EVERYONE...
so in the end we hope our pm holds.
jmfo
Draft of ESM treaty as of Jan. 23 in German language, inofficial translation:
http://eurodemostuttgart.files.wordpress.com/2012/01/120123-esm-vertrags...
to say the least, things are getting out of control. i read the bloomberg article and i see about 1000 chefs in the kitchen trying to put together a menu to satisfy a bunch of fucking pigs worrying about their next fucking feast..
all while 99 percent are worring about where there next meal will come from.
the fucking bastards...
A CDS trigger would not be bad at all. Not even in terms of payout between counter-parties. This is not 2008. This is not Lehmann. There really is no AIG financial here. The CDS underwiters have their liquidity now.
What would be bad however is other peripherals, not wanting to suffer through German/IMF-led austerity slave programs, going the Greek default direction. And, of course, depending on where the ECB lands, the resulting subordination structure in sovereign debt market.
For traders: ride the PSI rumor pop, and then short it to hell.
Hmmm....
http://www.fxstreet.com/fundamental/market-view/european-crisis/2012/01/...
My favorite line--
miscreant--I admire proper use of vocabulary.
Would you accept that PSI rate?
This is coming apart. What's your timeframe?
Y 2012; with 7.6 T to refi and 10 T to finance totol, tell me how that is going to play? going to need a hell of a lot of new cash to keep this ponzi gig in play...lender of last resort won't be prudent investors and pensions, but then again if you new that your buddies have access to the creation of more backstopping, you just might keep playin the game.
"lender of last resort" = Benny's inkjets
(unless you happen to have $10T lying around somewhere... I happen to be a dime short at the moment, can you spare one?)...
How about something lyrical?
Let's have a war
So you can go and die
Let's have a war
We can all use the money
Let's have a war
We need the space
Let's have a war
Clean out this place
It already started in the city
Suburbia will be just as easy
Let's have a war
Jack up the Dow Jones
Let's have a war
It can start in New Jersey
Let's have a war
Blame it on the middle class
Let's have a war
We're like rats in a cage
-A Perfect Circle
lets have a war
you take the door
I'll take the back window.
Lets have a war
you take the bank
I'll take the woman
Lets have a war
You take the Sheikh
I'll take the oil cake
Lets have a war
You carve the arab
I'll carve the israelian
Lets have a war
I'll make the front break
You drone the civilian
Lets have a war
I'll dirty the innocent
You sanctify the opressant.
Lets have a war
Lets sing encore!
I think the original is much better...
http://www.youtube.com/watch?v=yJAlIHsXcLY
you should know so I bow to u...man of means.
Very pessimistic words, from a top eurocrat, who knows all the knitty gritty of Euro bank fractal faults and sovereign potential defaults. This is not good for Merkel's "austerity or no deal" Dictat. If the contagion spreads to Portugal we will see what this fire wall ESM can achieve; not much IMO. Greece is now in final breakpoint, UNLESS Merkel gives ECB/Eurozone a massive nod for "print and spend to kick start growth whatever the consequences" mantra mind set.
EUrope can withstand a Greek default? Just like the U.S. markets were "resilient" and failure of Lehman wouldn't impact the other banks? Or that a fall in housing wouldn't be wide spread? Do they also not see that austerity measures are driving their economies underground?
who knows all the knitty gritty of Euro bank fractal faults and sovereign potential defaults. This is not good for Merkel's "austerity or no deal" Dictat.
they have two options; let the market forces play out one ugly scenario now, or push the same scenario into the future...
"a Europe at twenty-six that's called a construction defect."
Defectively constructed union of disparate cultures and economies, he got that right. However, that will not stop him and the uber' elite in Europe from trying to force fiscal integration to keep the power and gravy flowing to Brussels.
Juncker: "The fear of Angela Merkel is not justified."
The anger of German citizens probably is.
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