Merkel Is Baaaaaaack

Tyler Durden's picture

Hold on tight boys and girls, cause Merkel is back from vacation, and she is not happy despite that healthy Santorini due diligence-inspired tan (as deputy-Chancellor Fuchs telegraphed earlier today, when he made it quite clear what his boss thinks about Greece, and about more printing). Per Bloomberg: "German Chancellor Angela Merkel returns to the front line of the European debt crisis this week as the bloc’s leaders squabble over measures including bond purchases to relieve concerns the single currency may fragment. Merkel ends her summer vacation and travels to Canada Aug. 15-16 for talks with Prime Minister Stephen Harper as a spiraling euro crisis threatens to constrain the global economy. With the region’s leaders awaiting a German high court decision on bailout funding next month, they’re struggling to smooth divisions over a European Central Bank plan to buy the bonds of indebted nations."

Bloomberg proceeds to recap what we already have explained over and over: the lack of an impetus by soon to be bailed out governments to act if they are bailed out, coupled with the impetus to cheat and do nothing, as well as the inevitable arrival of the German referendum.

"It makes no sense for the ECB to start financing” Spain and Italy, ECB Governing Council member Luc Coene said in an interview with newspapers De Tijd and L’Echo published on Aug. 11. “It would only lead to the ECB taking on the whole public debt of Spain and Italy onto its balance sheet.”

 

The possibility that Germany’s high court will demand greater elector participation in euro decisions raised the prospect of a referendum in the euro area’s biggest economy, placing the country’s commitment to the currency in the hands of voters at time that polls show rising discontent with the costs of the crisis.

 

The policy maker said the central bank’s experience a year ago demonstrates why the ECB is reluctant to step in. 

 

"We haven’t forgotten what happened in August of last year: We bought Italian bonds and right after that the Italian government reneged on its pledges,” Coene was quoted as saying. “The conclusion is clear: When you take away the market pressure, you take away the pressure on politicians to act.” 

 

While Merkel has resisted the notion of a referendum, Rainer Bruederle, the parliamentary caucus leader of her Free Democratic coalition partner, told Hamburger Abendblatt last week that Germany’s role in the crisis might need to be put to a vote.  

 

“We may come to a point where a referendum about Europe becomes necessary,” Bruederle told the newspaper. “The future development of the debt crisis will show how much the EU countries will be asked to give up sovereignty.”

Finally, just because it has not been on the front pages in over a month, does not mean that Europe's basket case, Greece, has been fixed. Far from it.

The monthlong wait for the ESM decision will be paralleled by anticipation on whether Greece continues to receive euro rescue funds. Greece’s troika of international creditors -- the ECB, the European Commission and the International Monetary Fund -- will return to Athens in early September to resume talks as Greek Prime Minister Antonis Samaras seeks to hammer out 11.5 billion euros in budget cuts for 2013 and 2014.

 

German Vice Chancellor Philipp Roesler, who drew international criticism last month for resurrecting the possibility of a Greek exit from the euro, told Focus magazine that such a scenario would be “manageable,” echoing a statement by Luxembourg Prime Minister Jean-Claude Juncker.

 

“Hardly any of our offers have been taken up by the Greeks,” Roesler told Focus Aug. 11, referring to economic support put forward by the German government and industry.

 

The ECB’s Coene said a Greek exit “would be the worst solution,” adding in the interview that “it would raise a question about euro membership for everybody, not only for Greece.”

Oh well - the vacation was fun while it lasted. And now, as a complete tangent, here is a montage of Hitler repeating "nein" for 10 hours straight.

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Dareconomics's picture

No one is letting any of these countries default, because no one wants to be blamed for the catastrophic depreesion that would follow the exit or default of a member. The logic in my two posts on Greece applies to all of the countries.

dareconomics.wordpress.com/2012/08/11/greece-is-insolvent/

dareconomics.wordpress.com/2012/08/11/greece-is-insolvent-ii/

AbelCatalyst's picture

What do you mean, letting someone default? These are sovereign countries who can choose to stop paying whenever they want... That is why interest rates rise to cover this risk. At some point one of these countries will say screw it and stop paying... They just need to suffer sufficiently and realize that default will result in the least amount of pain... That day is approaching...

GS-DickinDaMuppets's picture

Well, I see in the beginning of the article it mentions "...as deputy-Chancellor Fuchs telegraphed earlier today,...", and I wouldn't be a bit surprised if the Head Chancellor fuchs too.  For that matter I'm pretty sure Merkle fuchs if you get a few beers down her, and while I have your attention I think the whole EU and all of it's crony politicians fuch.  They ALL FUCH!

Oh WTFuch!  I always wondered how the Europeans spelled that word....

 

...doing GOD's work...GS-DickinDaMuppets

Caviar Emptor's picture

Yes, yes, the Germans "are angry". LOL. They will bail, and bail again and then again. All the "anger" and "outrage" is the stuff of high-school drama class. Reality is they will never ever vote to disturb their cozy little arrangement for the sake of an ideal, a theory, a slogan or a philosophy about what's "right and wrong". 

disabledvet's picture

at 6 percent unemployment "so far so good." the "sucks to be you" recovery.

Dollar Bill Hiccup's picture

Panzer tank, Stuka dive bomber, V2 rockets.

Sometimes it just gets really weird and cozy had little to do with it.

The vision of where the money is to be made becomes hazy.

Wakanda's picture

Angie is back from summer holiday and not looking rested or relaxed.  Will she be able to string the markets along until the end of August?

Adolf says nien.

 

vertexa's picture
CNBC Stand-In Reporter Admits Financial System Changeover: “They’re Going to Put the Old System In a Coma”!

Separately, I have personally heard from several different sources in the past two days, that big things are about to happen this coming week with regards the world’s financial system. A good weekend indeed!

lolmao500's picture

She's sexually frustated... all she needs is a good fucking... now the difficult question... who wants to tap that?

booboo's picture

ask the crew after about 12 beers and two minutes till last call, "She leally wooks nery vice"

Tijuana Donkey Show's picture

In America, there is always some black guy ready to holla at that. Aw SNAP benefits baby!

canardo's picture

Venizelos maybe? Earn his keep so to speak?

Cabreado's picture

There is a big huge disconnect between Merkel's relative power and her behavior.

That's what happens when false leaders end up in the driver's seat, enabled by lies, and driven by aspirations unbefitting real needs...

and now, awaiting orders from those who of course have no answers.

 

Atomizer's picture

 

 

Clearly, Ménage à trois is in full Global effect. Largarde, Merkel and Janet Napolitano. Who is wearing the strap on. Inquiring minds what to know? 

Update on the Middle East with IMF Managing Director, Christine Lagarde

caimen garou's picture

I would guess they all are, playing odd man out.

Dollar Bill Hiccup's picture

Zee summer is over my friends. Now let the real games begin ...

 

km4's picture

New CIA paper: Goal of US-UK Mossadegh overthrow in  was to protect UK currency reserves. Wow.  cc:

BudFox2012's picture

You forgot to mention that he was being interviewed by Lauren Lyster on Capital Account.  That alone would be worth 50 up arrows on your comment...

 

bigkahuna's picture

Thats a pretty good channel for the most part. Keep in mind that RT is the Russians airing everyone elses dirty laundry.

Sandmann's picture

Not a bad policy when the Corporatist Channels in the GE, Time-Warner, Murdoch, etc stables all air WHITEWASH

bigkahuna's picture

Agreed. Just saying that the people behind the channel are not necessarily the most benevolent themselves.

Sandmann's picture

I wouldn't mind Lauren Lyster either - we have a lot to discuss

slewie the pi-rat's picture

is that the face of risk0n?

sell, BiCheZ, sell!

disabledvet's picture

She just needs to channel her inner "Evel Knievel" and my view is "it's all good from here." You don't even need to stick the landing...per se...but boy it look's good when you do:http://www.youtube.com/watch?v=hZoz9-LEIDo&oref=http%3A%2F%2Fwww.youtube...
they didn't call him "the last gladiator" for nothing. they say during the Portland jump...probably one the greatest spectacles in history...that a bunch of biker gang Hell's Angel types tried to take over the facility and start charging people money they didn't have...at least until Evel told the crowd the kick their ass...which is precisely what the crowd did! Pin the Edelweiss Angela...now is not the time to be squishy.http://www.youtube.com/watch?v=IUdDm_6gQxc

monopoly's picture

 the ECB, the European Commission and the International Monetary Fund -- will return to Athens in early September to resume talks as Greek Prime Minister Antonis Samaras seeks to hammer out 11.5 billion euros in budget cuts for 2013 and 2014.

 

Oh good. They will be talking, now I feel much better that all will be solved in September. As long as they talk.

Yen Cross's picture

 The Spanish 10 year note is .005 bps from 7%. I hope Draghi loaded up on anal lube...  He's gonna need it with Fraulein Merkel back in town!

 I was expecting a little follow thru from Friday into the Asia open. The fact that China didn't do a RRR cut today, and those crappy #'s with the dead cat bounce today, is starting to look like a nice shorting opportunity.

JR's picture

And now, as a complete tangent, here is a montage of Hitler repeating "nein" for 10 hours straight.

Chancellor Andrea Merkel is not a Nazi; she does not wear insignias with swastikas; the use of Nazi symbolism with modern Germany has become synonymous with the Zionist message:  You know what? These are GERMANS, that’s who they are. They are a special kind of people, they are not even quite human. In fact, they are monsters; therefore, it’s only right to demonize them and take their private property.

I pray God Merkel says “nein” to the greed and grasp for power of these bankers who are devastating the peoples of Europe, where millions of the unemployed now haunt the streets both in Europe and America.

This is what happens when the prerogative over the issue of money is usurped by international bankers and they entangle you oh so harmoniously into a banker-contrived "union" – into a bankerzone. They are parasites that destroy their hosts.

Nein! Nein! Nein! If only Obama or Romney would say "nein" for 10 hours straignt.

sabra1's picture

"Nein! Nein! Nein! If only Obama or Romney would say "nein" for 10 hours straignt."

Obama does! c'mon who wants to play nein holes today? 

Sandmann's picture

It is the Morgenthau Plan Mk II - a form of predatory Neo-Colonialism waged by New York and London against any group that resists Financial Strip-Mining

Spastica Rex's picture

That picture is awesome!

tenpanhandle's picture

typical passport picture, whats the big deal.

ptolemy_newit's picture

Dear Ms Merkel, I have made a similar face when I think of the US federal reserve (WMD).

I think you are powerful , attractive and it would be my pelaseure to hold your hand, walk in the park and open the doors for you.

Call on me anytime!

John

 

tenpanhandle's picture

you sir are a brave lad.  What would you do if she showed up at your door?

jhm's picture

May i add that this man Michael Fuchs is not at all deputy chancellor, but only deputy chairman of the Christian Democratic Unions (CDU) parliamentary group at the Bundestag, the German Federal Parliament. He is one of 10 (ten) deputy chairmen- and women in the parliamentary group of the CDU. He is responsible for economy, Mittelstand (small and medium sized businesses), tourism and petitions. What he states publicly surely is at least as important as what the chairman of the federal german rabbit breeders association has to say.

Sandmann's picture

This has been mentioned before by GERxit on another thread. It seems ZH is simply unable to learn from feedback and is ignorant of the political structures in a major European nation and economic power. It suggests the analysis is completely wacko.

Ghordius's picture

+1 this was here 2698804 and I second that. without at least a cursory understanding how parliamentary multi-party systems function it's very difficult to make a sensible analysis.

-----

to repeat a recent rant of mine: we, in the Western World, just had 40 years of economy like never before. and this time is finishing. what you are witnessing is the return of the Political Economy, as all classical economist knew and took for granted

witness the hedge fund managers quitting in despair because they can't understand what drives politics, particularly in europe.

lots of young "financials" that grew up in a world where politics was not important for the markets will have to adapt. including trying to understand why parliamentary systems are important, if only because they are important to some

Sandmann's picture

Very good comment !  It is clear that Political Economy is back after a few decades of pretending to be "Scientific" in a sort of Capitalist Antithesis to "Scientific" Marxism. This is an excellent book to reflect on -

http://www.amazon.co.uk/The-Jewish-Century-Yuri-Slezkine/dp/0691127603/r...

because it shows how fake the dichotomy really was and how much it was part of a particular era rather than having permanent features. Once the fake dichotomy is dropped it can be seen just how far off course Political Economy has veered

 

Ghordius's picture

happy that you liked it. the meme is not from me, "Political Economy" is spreading a bit (google it) since a few years. The best way I have to explain the facts: governments, led by the US, did not have to economize like before (gold standards), and so had less reason to importune markets and the private economy (and no reason to be alarmed about private households following the example).

now that parts of the private economy (yes, my pet hate MegaCorps and so also MegaBanks) have put the public economy in a corner, there is a backlash coming. particularly since the "public households" are quite substantial and concern quite a lot of people.

this might even lead to a reconsideration of how limited the liability of a limited liability corporation should be - as seen from the governments' and public point of view

tried to put it as neutral as possible (though I'm used to the bastard "statist" call, here)

i-dog's picture

 

"though I'm used to the bastard "statist" call, here"

 ... with good reason! I just gasp in amazement that you can make the following unfounded assertion with a straight face, given the massive deficits racked up by overspending governments that now account for around 50% of developed economies (compared to just 5% during the time of the "robber barons" and "industrial magnates"):

"now that parts of the private economy ... have put the public economy in a corner"

WTF!!! Your "megacorps" and "megabanks" are simply catering to the deficit spending - on employees, dependents and armaments - of BIG GOVERNMENT!!!!!!!!

If governments weren't borrowing, then the banks wouldn't be lending to them. If governments weren't bailing out bad bets by the banks, then the banks wouldn't be making bad bets!

What exactly do you smoke, Ghordie?

Sandmann's picture

Yes but what are they spending it on ? There are huge pork barrel projects for private corporations - just think of the US Defence Budget and Lester Crown over decades. Think of Texas Instruments and why GE wanted  RCA and Raytheon wanted Hughes Aircraft. Then look at the huge spending on Subsidies - Corporate Welfare.  When you break down the Spending of Sovereign States you see most flows to certain favoured groups - nowadays it is BANKS, BANKS, BANKS who have had more Subsidy that they have had Profits in the history of the world.

The biggest spending by Governments came in two World Wars neither of which were necessary.

The Robber Barons Era was unstable and protected by Tariffs - try McKinley Tariff 1890 that boosted the profits of US corporates at the expense of Consumers - especially since it covered items the US did NOT even produce. The history of US Capitalism is of Special Interest Groups getting Tariffs and Import Controls to boost pricing power - it still exists in Oranges, Cotton, Peanuts, Steel and a whole slew of products that US producers lobby to protect. How much does Wall Street spend on lobbyists ? How much is Hollywood spending to force ACTA on the world ?

How much of GM does the US Government own ?

Who says Banks are lending to the US Government ? It issues its own Bonds - noone has to buy them. It issues Bonds because people won't pay taxes in the same way Corporations use Debt instead of Equity because it is tax-favoured.

i-dog's picture

I think you have merely re-stated my own position ... that governments are over-spending on employees (excessive regulation and crowding out of the private sector), dependents (welfare payments and as well as corporate subsidies) and armaments.

Ghordius's picture

I thought my comment was neutral: "governments, led by the US, did not have to economize like before". ergo governments did not economize - according to you since mid sixties, though I like to point out the qualitative difference that Nixon's decision of 1971 made on all graphs, followed by this other change 1994/5 that still puzzles me.

I only write this comment for a different angle: you mention the debtor's responsibility in knowing how much he is supposed to ask. Interestingly, our common culture seems to be currently shifting on blaming the creditor for not "knowing the customer" and giving to the inconsiderate (and who is more inconsiderate than politicians?). ;-)

i-dog's picture

 

"according to you since mid sixties"

Where did I say this?

The US began running up a national debt beginning in 1913 (what a coincidence)!

One-third of the $23bn debt built up in 1917-19 to fight WWI was repaid with small surpluses during 1920-1930, but from 1931-1946 it was deficit spending every year that saw the federal debt rise 15-fold to $240bn by 1946. Though this was reduced by just 11% to $214bn by 1957, it has been backs-to-the-wall debt accumulation by the US ever since - with just 2 years of small surpluses in 1960 and 1969, and another 4-year token reduction of the total debt during 1998-2001.

Other than Clinton, no US administration has reduced the accumulated debt during their term since Warren Harding's 8-year stint in 1922-29!

On your other point, we voluntarists believe in enforcement of valid contracts ... both the social contract of a politician's promise (via electioneering) and the voters' acceptance of that promise (via the ballot box), and the personal contract of a creditor's offer and the debtor's acceptance of that offer. It would seem that "the good old days" of due diligence and subsequent strict enforcement of contracts are long gone under this New World Order of moral relativism and blatant fraud by all parties to every contract.