The Latest Adventures Of Alice In Euroland

Tyler Durden's picture

From Mark Grant, author of Out Of The Box

"When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean ? neither more nor less."


"The question is," said Alice, "whether you can make words mean so many different things."


"The question is," said Humpty Dumpty, "which is to be the master ? that's all."

It is now quite obvious; the political elite of Europe are all now deeply immersed in “Alice in Wonderland.” This must be the case. The Spanish Prime Minister says one thing, the German Finance Minister says the exactly opposite thing and is joined by the Prime Minister of Finland and the caterpillar sits in the tree smoking his hookah pipe and they all must be joining him. It may be left or it may be right but I choose to believe those who are providing the money and not those who are in receipt of it. Rajoy’s “This is a great victory for Europe” speech may go down as one of the most audacious of the decade as it was surely written by the caterpillar or someone who had joined him in puffing away prior to the siesta.  Maybe Rajoy should start a new show on TV; “Huff and Puff” sponsored by Amigo (Bud) Light and Inquisition Light.

“As laid down in the ordinances of St. Dominica, the penitent, it was commanded should be stripped of his clothes and beaten from by a priest three Sundays in succession from the walls of the village to the gate of the church; he must not eat any kind of meat during his whole life; must abstain from fish, oil, and wine three days in the week during life, except in case of sickness or excessive labor; must wear a religious dress with a small cross embroidered on each breast; must attend mass every day, if he has the means of doing so, and vespers on Sundays and festivals; must recite the service for the day and night and repeat the patemoster seven times in the day, ten times in the evening, and twenty times at midnight. If he failed in any of these requirements he was to be burned as a relapsed heretic.”



The Wizard Posts a Serious Warning

With the Italian 10 year at a 6.15% and the Spanish 10 year at a 6.60% this morning; pause. My recommendation is to be out of all European sovereign and bank debt but if you have to own some because of your mandate or because you are attached to some Index then it is time to stop, look and listen. The Red Queen (Angela Merkel) and her minions are playing “off with their head” games and the situation is not a joke. The EFSF loans are going to be replaced by ESM money when the fund comes into existence and this means that your position as a senior bond holder will be subordinated to the IMF and/or the ESM. Any country including the existing troubled nations (Greece, Ireland, Portugal, Spain and shortly Cyprus) are going to have their debt replaced by the capital of the ESM so if you own any of these sovereign credits or any of their banks then you are going to be placed in a junior position by fiat. Then we have just seen what happens with “local law” bonds as demonstrated by Greece so that you need to swap out of any “local law” bonds ASAP and only own bonds governed by American, British or Swiss law. This would be for any and all nations on the Continent without exception. When it comes to bond holders versus taxpayers the taxpayer will always win so you must protect yourselves now rather than having your head handed to you later. There is no joy in finding your head on some silver platter I assure you and you must make the changes now and not later. I cannot stress this enough and I hope you are paying attention!

The final consideration is a matter of the currency; what if Europe does blow up? If you own good old American names such as IBM or DuPont that are denominated in Euros; what if there is not a Euro any longer? This may have been an outlier question several years ago and you may be in the camp that “everything will be just fine” but what if you are wrong? The currency issue is not an outlier consideration any longer. It is then a question of how much risk you wish to take or have your clients take and it is an issue that surely can be ignored no longer. Consequently I place it squarely on the table for you to ponder and vote on; one way or the other.

Europe is behaving badly. There is no apparent game plan besides shifting with the tides. From one day to the next it is not apparent what they are going to do or how they are going to do it. The Continent is a mess and will likely worsen as their troubles increase. The European banks are in never-never land, leveraged to the hilt, financial statements without the ring of truth and lied about by the nations that govern them. Fantasies of some silver bullet or of Germany rolling over are hookah induced dreams in my view and moving everything down the road just makes the walking more difficult until the traveler stumbles under the burden that he has accumulated and then falls. The purported financial wall that was to protect Spain was little more than a puff of hot air on a summer afternoon and the notion that Italy would also be protected has just been shot with holes courtesy of Marino of Madrid.

The markets, as demonstrated by the 4.4 hour relief rally that quickly went south, are beginning to get the joke and institutions all across the world are heading for the door as a matter of the loss of faith and the imposition of seniority that could eventually apply not just to the sovereigns and the banks but to any and all asset classes in Europe. The Socialists demand, the Germans refuse and the winner, always the winner, are those with the money and not those that demand that it be shared. If you want a weighting then the bailed-out nations get a “1” and the socialist countries needing money get a “2” and Germany gets a “10” and that is how I would weight their statements in terms of what actually will get done.

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RyanW525's picture

Pass the popcorn....Wish my family/friends understood how funny, yet fucked up this whole thing is...

financial apocalyptic contagion's picture

none of them do, which is why people like us have to make the smart decisions for our family and watch as friends stumble, fall and die

AmCockerSpaniel's picture

This whole thing is like a bad joke.

2 men were hiking in the woods. They stopped for the night on the edge of a great meadow. One of them looks across the meadow and see's a big bear running toward them. He shouts to his friend, "look a bear is running straight at us. His friend grabs his sinkers and starts putting them on. Seeing this, the first guy says; "What are you doing? We can't out run that bear!" His friend replies; I know that! I just have to out run you... Good buddy. 


We all know who the bear is these days.

Gief Gold Plox's picture

I wish that too, but that's what I come here for.

noses's picture

What is fucked up about this? They always promised "the market will take care of regulating everything" and now that the market really does its job, people are unhappy too. Make up your mind. If you want socialism, order it from the menu. If you want responsibility and reason, act like it.

juangrande's picture

Is that Marla?? Where have you been, you naughty, naughty........

RyanW525's picture

The implosion of industrial society...thats whats fucked up.  You can take your politics and shove'em.  i don't follow anyone's "religion"

Ben Bermonkey's picture

It reminds me of airship LZ 129 "Hindenburg" making its last turn around Lakehurst before going down - in flames!

Bagbalm's picture

And American, British and Swiss are different how? Is that GM bond holders I hear laughing at you?

financial apocalyptic contagion's picture

and the soda appropriately sized 

westboundnup's picture

When will there be a bond auction that fails?  To me, that's the critical question.  Once that occurs, all bets are off (so to speak).

williambanzai7's picture

Been there done that...


Merkel is playing her part
Austerity Queen has no heart
A Greek execution
Is her cold solution
She's ripping the EU apart

The Limerick King

lolmao500's picture

Austerity... PLEASE. There's not fucking one country in the euro-zone doing REAL austerity.

Real austerity : STOP THE BAILOUTS, BALANCE THE BUDGET, RAISE THE INTEREST RATES, LET BAD DEBT GET FLUSHED, WHOEVER IS TO GO BANKRUPT, LET THEM GO BANKRUPT...  not one country has done that... not one country has done what NEEDS to be done.

TWSceptic's picture

Austerity in euroland = no exponential spending. And they can't even do that.

kridkrid's picture

I agree that nobody has come close to austerity... that's the big joke.  And even if they did... the only purpose would be to make minimum monthly payments on a debt that those of who will be paying had little to do with creating.  

But I disagree with austerity being what NEEDS TO BE DONE... the reset button is what needs to be done.  Austerity assumes maintaining the current system.  The system is the problem... money created as debt with interest.  Stop the life support... the patient is dead (and should be).

Ethics Gradient's picture

WB7? What are you doing to the thing that they did to Marla? That's Tyler's main squeeze!

Hang on. I think it's time for my medication.

Lucius Cornelius Sulla's picture

Personally, I think Merkel is the best of the rotten bunch in Europe.  The Germans have been relatively responsible with their budget and actually produce something for a living.  So why should they hand out charity to a bunch of profligate spenders?  I applaud her for standing up for the interests of the Nation she is representing.

Baron Robber's picture

She is standing up for no one but the banks. There is not a political "leader" in the developed world that is looking out for anyone but themselves (their next "job") and the banks

GMadScientist's picture

The Cheshire Cat sits in a tree. The Caterpillar sits on a giant mushroom.

If you're going to use a popular piece of literature as your metaphor, the least you can do is familiarize yourself with it first.

"those with the money and not those that demand that it be shared."

I think you mean those with the debt...and best of luck with that. LOL

hnaparst's picture

You're right of course.  I had written a note congratulating Mark Grant on finally not butchering world literature, but I guess he did it again.  I have redacted my note below.

HardwoodAg's picture

You didn't listen to the doorman.

hnaparst's picture

redacted by me.

GeneMarchbanks's picture

You've dropped another treasure on us!!

The Socialists demand, the Germans refuse and the winner, always the winner, are those with the money and not those that demand that it be shared.

Problem is, if you hold money(debt) you're a creditor. Now, what's a creditor without a counterparty debtor? Are the 'Germans' extending credit elsewhere?

bank guy in Brussels's picture

Do the Germans really 'have the money', as this article says?

As ZeroHedge has well covered, German (and French) banks, insurance companies, and pension funds are all set to explode from the debt of the GIIPS countries that they hold. Not to mention a near trillion euros already in TARGET2 liabilities, etc.

If the Mediterranean countries call the bluff. and menace to exit the euro, default the debt - and thus blow up the German banking system - and force the German government to tell its people that half their retirement and pension money has 'vaporised' -

Who really has power here? The idea that Germany 'has the money', or is the 'frugal, responsible, hard-working, hard-saving' country - instead of a country with banks levered up 60 to 1, that sold billions of euros worth of submarines to Greece and then 'financed' the sale with dodgy loans - is just another one-sided myth in this euro-mess.

All of Europe needs re-structuring, Germany included, their role as 'masters' is just one more illusion ... currently being upheld for bankster benefit. It is an illusion that needs to be punctured, the sooner the better.

The bottom line here is that Europe is still the richest place on earth, and we owe the bad debt to ourselves here. We can re-structure it, or re-float it for a while re fake printed money if we want to kick the can.

If there is 'master and servant' it is not Germany vs screw-up countries, it's financial banksters vs common people. The current German regime is just their tool.

If the European Ponzi is going to be re-floated for another few years of can-kicking, it needs to be done in a Japanese-style way, with everyone playing along and no unfair 'austerity' savagely depriving the lower classes.

But we maybe should collectively as Europe, do at least a semi-Iceland ... restructuring while making sure the poorest are not brutalised.

GMadScientist's picture

Precisely. Germany can act tough, but at the end of the day, their ass is in the sling too.

I'm with Mr. Panos.

Lucius Cornelius Sulla's picture

The one thing the Germans do have that the rest of Europe is lacking is the industrial capacity to work their way out of the hole.  I don't understand why people think they are obligated to do anything about Greece, Italy and Spain.  Especially when, as you mentioned, they are in a bind themselves. 

lolmao500's picture

All this shit will be over in a week.

ChacoFunFact's picture

If I borrow a little bit of money and don't pay, I am fcuked. If I borrow a LOT of money and don't pay, you're fcuked.
-Donald Trump

GMadScientist's picture

If I borrow a LOT of money and don't pay, we're both fcuked.

eddiebe's picture

In the end it all boils down to credibility does it not? Appearantly the Germans have more of it than the PIIGS, and I would say rightly so. At least that is til the ponzi of fractional reserve and derivative games becomes as incredible as it in fact is. Then it's game over, and a new scam starts.

StychoKiller's picture

Perhaps they should consider "The system of Dr. Tarr  and Professor Feather."

The Third Man's picture

From the Alan Parsons Project album. Still listen to it today.

paint it red call it hell's picture

along the enforcement of Sheriff Noose and Deputy Gallows

overmedicatedundersexed's picture

the movie 2012 ( very bad) but the image of all the worlds elite building the ships that they run to as the world emplodes and the tax slaves die in the billions.. is somehow  reality..anyone know were the NWO elite are building the safe escape zone? some say the new denver airport. if you do not know ,well it's secret and there is only so much room.

kridkrid's picture

Certainly some interesting mythology built around the Denver Airport.  People like to talk about how popular culture provides sneak peaks at our future.  I don't buy into it much... seems a little "out there".

Olympia's picture

The greatest private fraud of human history.
Who are the great fraudsters who are becoming the murderers of the human kind? How does the economy "illness" threaten Democracy and the freedom of people?
By knowing what happened in indebted Greece, where loan sharks created “bubbles” and the current inhuman debt, one can understand the inhuman plan in total ...understand where this plan started just to bring all states at the same end ...understand how this type of plans are established...


Sudden Debt's picture
Bundesbank says 'NEIN' to Bankunion!





LULZBank's picture


Sounds like a trick we used to do when I was in school. If someone had a crappy lunch, we'll try to talk someone into lets share our lunches. You get half of what I have and I get half of what you have... Its only fair! LOL

Sudden Debt's picture



They even feared us in the higher grades :) at age 10 I was beating up kids that where 15 :)

 Diplomacy just didn't work for me back than... still doesn't actually...


tongue.stan's picture

Priceless insight into the psyche of those orchestrating this farce. Kudos SD.

luckylongshot's picture

The amazing thing about watching this systemic collapse unwind is the incredible lengths the politicians have gone to in order to steal what little remaining wealth the public have and give it to the Rothschilds. How much more chest beating and claiming that the problem of too much debt can be solved with even more debt must we listen to before someone realises the logic is contradictory and starts replacing their politicians with ones that are not owned by the Rothschilds.  Is there a point in this farce where the Rothschilds get made to pay?...I hope so because they are both ultimately responsible for the crisis and have the wealth to instantly fix it.

LULZBank's picture

"How deep does the rabbit hole goes?

Its not deep, you're just going in circles."

Stock Tips Investment's picture

All signs indicate that the economic situation in Europe is much worse than it seems and what is being said. One by one the countries of the Eurozone are falling. Everyone is looking for the "rescue" as the alternative to the adjustments that would have to do. But these bailouts will be for naught if you do not face the source of problems. And they do not want to do? because this involves recognizing that there were "so rich" as they thought. Because the economy means to adjust prices in the right place. That is, lower wages than they have today, lower subsidies, higher interest rates, increased recession for several years. Very soon we will see the true gravity of the crisis.

mpyre's picture

Where the hell is Krugman?

FunkyOldGeezer's picture

Even this advice is surely flawed? What good is any law of any country, if there are armed government ranks telling you you can't have your money back and that is the ultimate end-game. Law only works (sic) in normal times.

Paper / Rock / Scissors anyone?

mrktwtch2's picture

i think that the radicals win in greece on sunday then they say we want the sapinsh dea lor we walk..and they will turn the tables on the ecb and have them by the balls and not the other way around.."this is sparta!!"