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Only In Europe
While skimming the latest draft of the "TREATY ON STABILITY, COORDINATION AND GOVERNANCE IN THE ECONOMIC AND MONETARY UNION" or the EU fiscal draft in short, which is supposed to give Europe reason to rejoice as it says something about the ESM potentially being levered more than €500 billion (not absent additional funding of course, and we have seen how good the EFSF is in procuring capital), we have found the only two clauses worth noting. Which unfortunately show just what a farce this whole process truly is.
For the purposes of this Article, definitions set out in Article 2 of Protocol (No 12) on the excessive deficit procedure annexed to the European Union Treaties shall apply. In addition, "annual structural balance of the general government" refers to the annual cyclically-adjusted balance net of one-off and temporary measures. "Exceptional circumstances" refer to the case of an unusual event outside the control of the Contracting Party concerned which has a major impact on the financial position of the general government or to periods of severe economic downturn as defined in the revised Stability and Growth Pact, provided that the temporary deviation of the Contracting Party concerned does not endanger fiscal sustainability in the medium term.
Article 8 empowers the Court of Justice to verify the transposition of the balanced budget rule at national level. Reflecting the agreement in principle reached by the ad hoc working group, the current draft gives the Court the authority to impose financial sanctions (not exceeding 0.1% of GDP) in case a Contracting Party was found by the Court not to have taken the necessary measures to comply with its judgement.
But hold on, according to Keynesian theory everything that is not in an upward growth trajectory is an Exceptional Circumstance and by definition thus a "temporary measure" as is all the incremental debt needed to bring the system to equilibrium. Remember: voodoo 101, just like the rating agency models, does not accept contraction, and thus deflation, as a stable state, and leads Keynesian economists to immediately #Ref! out. Thus the trillions in debt injected, and recycled infinitely via a vicious rehypothecation repo loop, at any given moment are merely there to restore prior growth trendlines, regardless of just how ludicrous the imminent mean reversion driven by 30 years of untenably cheap credit is. Like the once we are currently are experiencing.
Said otherwise: the entire fiscal treaty is toothless from the ground up as every breach of deficit targets will always be attributed to "exceptional circumstances." And don't forget - the SMP, or the ECB's sterilized monetization program, which is about to turn 2 years old, was "temporary." As was the Greek reliance on the ECB's Emergency Liquidaty Assistance (ELA) cash, which is now the only thing keeping the Greek banking system from imploding. But fear not - "it's a liqudity, not a solvency issue."
Which brings us to point two: in the impossible event that a country is found to have breached deficits due to non-exceptional circumstances, what does the EU do? Why it punishes the country by making the deficit even bigger, by up to 0.1% of GDP. Because there is nothing like teaching a deficit transgressor a lesson, than by forcing what caused the punshiment in the first place to get even worse...
Only in Europe.
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"Because there is nothing like teaching a deficit transgressor a lesson, than by making the deficit even bigger..."
A dog chasing its tail comes to mind. What happens when it catches it? Which further brings to mind the phrase "All fall down."
It is bullshit with a Euro twist.
The dog can't chase its bobbed tail, only if it imagines it. Trader volume concern may be valid to where market makers want retail traders to chase their tail, and they might have cut that tail off.
It may be possible that the world could be on fire and market will hold at least 10,000. They show they have the technology.
Didn't Ouroboros originate in Europe... Greece to be exact...
Euroboros?
Paging Dr. William Banzai ... Dr. Banzai ...
I have been looking at this and I am speechless. Better do a picture...
You should iook at Eschers other drawings ...
Do you really think I don't know Escher's stuff?
The mighty MC Escher.
Have a look at the never-ending river Waterfall and water-wheel; exactly how Super Mario Draghi reckons he can save the Euro by recirculating the money for ever and ever, so you can never stop it long enough to count.
I think we just lost the war.
I spotted the week link and it's me.
The dog ate article eight and took such a deficit shit, she can't even find her tail.
Everyone is trying to figure a way out without any pain or blame and it's not possible. The spider has woven a web so complex that it can't get out of it and that is what has happened to the banks and the western economy. They can't get out.
in bizzaro world, this is bullish!!!
It is truely fascinating to try to comprehend how any of this will be able to work after it's published in how many languages/dialects and all the various parts have to sign off on it and then might argue what the hell it meant in their version. I hope they at least had an agreement that one language would govern any interpretation.
Political language... is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.
George Orwell
The beatings will continue until morale improves
LOL. Now that was green arrow worthy.
Laws are now simply amendable suggestions.
What do you mean 'now' ? Its been this way for some time already.
Assuming that fiscal compact actually works in making the system sustainable-- their best case scenario doesn't do anything to bring down necessary levels of debt to gdp.
FUBAR
Don't forger there already are rules that govern public debt and deficits (Maastricht rules). Germany has violated those several times. All of them did.
I got the feeling that if the market keeps going up, this site will have to post a bunch of posting about social issues or even military situation rather that sticking with bearish market prediction. I hope I am wrong on that. hahaha
We try to help even our most troubled, and illiterate, "readers":
Bizarro Market Winning Strategies 101: Go Long The Most Hated Stocks
every now and then there is something to discuss "buying", but no one can deny this site in the last year has been decisively bearish and bashing the market when it gets the chance. And it is just my observation that lately, stuff outsdie investment have come up a lot. My guess would be it is just too hard to say one thing when the market was completely (or insanely) moving the other way.
judging by the down arrows I got, I already confirmed what I knew which is many readers have the confirming bias, so they come here to only read bearish stuff.
I got this one,
This is a NEWS site, not thestreet.com which will tell you what to buy and discuss options strategies.
Tyler provides news, insight and commentary, and while I dont always agree with Tyler, he has some very good points and if you cant see that, perhaps you should read into it a bit more.
While I wish Tyler would post more comments (he has been more active lately, I enjoy when he engages readers), you cannot bash the news article above by saying that Ty was wrong on the bearish sentiment. In fact, if you listened to Ty and went long gold in the overnight sessions then sold, you could have made a nice (gold) coin off that one too.
I think that when people come to a financial site, they go for stock tips; this isnt that site. Just because you arent hearing what you want to hear, or if you are trading what you hear, you are missing that this website itself has informed you of several things; the market is rigged, your money is without worth, the world we know it is unsustainable.
If you know all of this, and you trade against the market you will likely lose.
Just saying.
are you kidding me? providing news is equal to being neutral? have you heard of CNBC, Bloomberg, MSNBC, CNN.... they all provide "news" while make some people like me disgusted because as any TV, radio, website, if you want to lean to one side over the other, all you need to do is to post "news"..... selectively!!!!
btw, no one is trading against anyone. That is the winning strategy. I have been trying to find some site that is really open to a lot of different stuff and opinion. but so far, i feel this site is clearly biased or shall i called it being "ron paul"ed - nothing wrong with that though. I actually like him in many ways.
Uh, dude? Maybe you should try some of Tyler's "Suggested Reading" (lower R side of home page). But start with their (non) policy on disclosure / conflicts of interest: http://www.zerohedge.com/node/13972.
Yer welcome -- Sager
The policy should be a mandatory read for new accounts.
There's no crying in fight club.
Notice I never hit you with reds,
If you read what I wrote, I said this is a NEWS site, not thestreet.com. What that implies is that this is a reality site, not a controlled media site.
As for this site being biased, in the manifesto he clearly states his basis for belief on the market, and posts these articles which support his view. Newsflash, you are on a website that isnt telling you to go buy the whole market and sit on it til you are 100 or try and trade it. Despite what Tyler says there is a market, even if it is broken. So long as there are two sides to a trade, one will exist even if they are machine or governments swirling around the same hypothecated funds, someone is still getting rich off of it.
-R
?clearly biased or shall i called it being "ron paul"ed?
Eh? Buddy? See the avatar? I'm Not an US Citizen, not been in the US since decades, this is a Trash Europe Thread, I think that TD has definitely to have some vacations here in the EU to set some of his crazy ideas straight - and I still come here because you can literally feel that Some Of What Has Not Been Yet Discovered is being unearthed here. Some nuggets of truth in the dirt.
And some Other Funny stuff, ok, including your political antics...
Ghordius : I do not share all the value systems that ZH editorials express, notably the tilt on Europe, and the leaning to Ron PAul, aka the internal political US scene. But I respect other people's value systems. I respect even more the honesty of the information gathering and transparency of ZH reporting. Facts are facts and as such they are so uniquely presented here. As for interpretation and analysis that's another matter, of the prism through which we look at them. But there is consistency and sincerity here on ZH. Even if the bashing of Eurozone may appear excessive and tilted relative to the reality, as perceved by some like myself, which is different to ZH's take. There is nothing comparable that I know of in Eurozone where all information is more selectively sieved out to start with making the discussion biased as the information base, unlike here at ZH, is less transparent.
That in itself is a blessing.
Nice post falak, very balanced.
What market?
You know...the one mangled and maintained by government force...duh
You are long Kodak?
TD : difficult to reconcile a deep rooted contrarian belief at odds with the general trend : that we live in a corrupt corporate and political environment, with day to day advice for some, not all, 'red necked', information hungry traders. There is a paradox there. EIther ZH is a blogsite for the hottest financial news straight off the press, presented in editorial terms that express your belief systems, or its purely a day trader's advice bureau, RobotTrader type news : follow the herd, buy the dip; without the deeper, analytical belief system values.
Its a difficult task that ZH sets itself. Fortunately for those who care, you do have a mission statement that makes it clear. But on a day to day basis the editorial tone, which btw is spread out fast and furious straight off the press, something we all appreciate, but as a result lacking in consistent focus; a minor weakness to my line of thinking; can fool the more impulsive and impatient. ZH deserves, rather merits, to be understood. That's what I'm getting at, and its editorial and guest blogger inputs are far better quality than those gut feelings harangues, often offered as critcism, expressed by those who visit it and post on its forums.
The fact that you do not censor these often obnoxious, off the mark, comments is to your further credit. TY ZH. KEEP it up.
the snake swallowing its tail comes to mind and if the snake is debt and it eats its entire tail..all the way up to the head..then the problem is solved..wait...how can a head swallow its own head...hmmm...ponders....
Ouroboros - http://en.wikipedia.org/wiki/Ouroboros
Tyler, thanks for parsing this--I do not think the HFT algos--let alone the bank analysts--are smart enough
Man I hate government.
pods
but you hate oligarchs more, right?
The wording in this Euro Union Contract/Treaty adddendum reads like something pilfered straight out of a document that The Legion of Doom, of DC Comics™ notoriety, would have in their files.
Legion of DoomFrom left to right: Black Manta, Giganta, Toyman, the Riddler, Bizarro, the Scarecrow, Lex Luthor, Captain Cold, Cheetah, Solomon Grundy, Gorilla Grodd, Brainiac, and Sinestro.
the current draft gives the Court the authority to impose financial sanctions (not exceeding 0.1% of GDP) in case a Contracting Party was found by the Court not to have taken the necessary measures to comply with its judgement.
0.1%?
Fuck them.
Let's break every rule they make up.
Rilly. We're reaching the point where everything not prohibited will be mandatory.
OT:
If The Tylers should favor us with a graph of the latest ECB Deposit Facility Usage data release I shall swoon with nervous gratitude.
That's a much, much higher base than usual at the start of a new reserve maintenance period.
Of course it is. And the difference just happens to be the net amount of the Dec 21 LTRO, if not bigger.
Slightly off topic ... Do you have any suggestions or ideas on how the extraordinary number of Treasuries being dumped by Japan and China have essentially had little to no effect on price. I would love to hear the explanation other than the Fed is buying. Any insight would be appreciated.
Don't forget Russia. I have been asking that question for a month. The best answer I got was the banks are buying them. With a longer explanation.
China and Russia are not enough to overwhelm demand for the world's favorite repo collateral. See MF's repo-to-maturity laddered timebomb. The combined balance sheets of the world's private banks and insurance companies dwarf these holdings.
SNB and BOJ were buyers recently, IIRC.
the buyers are not so many nowadays. Maybe we will see updates. Great article! turkey yacht charter
European thinking at its best..
US thinks like this too. Don't know for sure who got it from who. Though Ponzi's name is a more recent historical development, Ponzi is unbounded by time or place.
Look at this market. These guys are just elbowing each other right now laughing and saying "make it go higher make it go higher!"
Nothing ever changes except perception.
the current draft gives the Court the authority to impose financial sanctions (not exceeding 0.1% of GDP) in case a Contracting Party was found by the Court not to have taken the necessary measures to comply with its judgement.
"Contracting Party"?
Who do these fuckers think they are?
Goldman Sachs?
Fuck the people who drafted this.
Any fuck their sons and daughters for the next five hundred years.
"Who do these fuckers think they are?
Goldman Sachs?"
You´re on to something, Tonto...
now that is a curse all dressed in purple silk velvet lined with ermine.
Paging Franz Ferdinand, paging Franz Ferdinand. A scapegoat is needed for another euro meltdown.
I´d rather have a toothless fiscal treaty over a treaty with bite any day. Remember Tyler, we have to abide by the mandates frpn The King of Brussels Herman I...
100 trillion euronotes bitchez!!!!!!!!!!!!
(they're not just for Zimbabwe anymore)
With this kind of "pull the wool over their eyes" bullshit, they deserve the depression that will come to them...as someone said, perhaps this goes on through the election or perhaps for another 3 years...one day we will wake up to the first of the dominoes to go which no amount of Fed intervention will stop.
What makes you think they just go on until 1 day when they can no longer? You ever think they just have some date in mind to pull it down when everyone least expects it?
They all deserve spankings.
Weasel Clauses...
You mean like the Easter Bunny?
You better watch out
You better not pry
Better not shout
I'm telling you why
Weasel Clause is comming, to town.
Their making a list
Redacting it twice;
Wonder which country is naughty or nice?
Weasel Clause is comming, to town.
They see the debt you're heaping
They know just what's at stake
They knows if you've been bad or good
Pretend to be good for goodness sake!
You better watch out
You better not pry
Better not shout
I'm telling you why
Weasel Clause is comming, to town.
Nigel Farage will be busting multiple nuts over this farce du jour.
Got (had?, past tense) to make it look good, for the show.
Sounds alot like our own FASB.
The whole idea of "sterilization" is a SHAM.
It is the equivelent of the "red headed kid" no one talks about.
Like "off the books" vehicles it is a way to make bad things look not so bad by LYING.
Harks back to Gordon Browns 'Golden Rule' for his running of the UK economy. No need to remind me how that turned out...
anyone wanna tell me why i am getting the euro up my ass but they still havent solved any of their problems??????????
Your name suggests this is a rhetorical question.
i guess the last .03 cents down were just extreme dont worry everything is ok with the eurozone now
Financial sanctions not exceeding 0.1% of GDP... How draconian! I'm sure that will work!
They should add a clause that any country whose deficit or debt exceeds certain limits is not allowed to have any members on the ECB governing board.
OT: Anyone else notice that the last 30 min of the movement in USO was a little...well strange.
Any system that accepts fiat instruments as valid, or has any fractional-reserve practices whatsoever is exactly equivalent to ANYTHING GOES. And is pure fraud.
Dow finishes at HOD.
Hmmm, sadly, it all seems so Smashing Pumpkin-esk:
"Despite all are rage we are still just rats in a cage"
HEADS I WIN, TAILS YOU LOSE....I WIN, YOU LOSE...PERIOD.
KEEP UP THE CHARADE....
Noone has read that agreement..noone....really...its like Obamacare...whatever..
I'm looking forward to that 10 trillion LTRO, which will give a relief rally as never before. No collapse. Bernanke will put on the printing press of course, otherwise the dollar will skyrocket. Nonetheless: eurocrisis solved. Mark my words.
Exactly, next time it will only be $400 trillion. Then, $60 quadrillion. Then....yeah.
Unless behavior is stopped, this just fleeces you and I.
I've marked your words in red turkey, O Oracle; but tell me how print and reprint solves the problem of debt on more debt, insolvent as ever. Its not by having a harem of women, piled double decker, one on the other, like a big mac cheese, bacon, double portions of beef burger; strung out between two buns of burnt bread, that you can satisfy them with multiple thrills each, on rumble tumble vibrant waterbeds. Thats humbug. To give satisfaction you have to be solvent. And Euro zone AINT solvent. No more than greenback zone. Its more green soylent then green solvency if you know what I mean.
So you better have a good plunger to delve into your turkey dinner to solve that pile of insolvency.
Over and out...your words marked to market disbelief. Its all a question of time before the cookie crumbles and the world rumbles.
What do the banks need? Money. Well, they're gonna get it by the buckets full. Problem solved.
Currency != Money
thats not economics that Monopoly, LWZ, Weimar style Monopoly! And, solvency is not the same thing as liquidity. Hmmm, don't leave that turkey in the micro wave too long!
So now they're counting on their army of lawyers to jawbone their way out of a hole of their own making.
Plan B is what? War?, Alien invasion?, Tungsten for all?
is europe now a worse place than the ussr ever was?
was Hitler right about everything after all?
You are one sour baby. Must have colic.
Here’s your soother. Suck it.
your too generous; whip him he'll love it.
have you ever been to europe? Come visit, you'll find it different to your vison of things.
I have nothing to say. Im just happy to be here today.
you can say that again!
Like it or not, Europe rules. As always. Yeeeehaw :p
Europe is not worse than US,and definetly not worse than UK .SO When every body is throwing mony like a drunken sailor, I`m leanig back and take 17% on increasing Pm`s...
The game is rigged for a select few - the rest of us are offered the lure of potential winnings if we play along and thus support the "game". I feel like I have been sold a bill of goods for many years by my banks and investment group - everytime they open their mouths its like listening to a broken record and when you try to say anything alluding to alternatives such as PM's or cashing out of markets they look at you like your crazy. Most of them have not a clue as to what is really propping up most of the world economy and that scares me.
Politics and Economics. The Euro currency is a political construct, no more. They, European leaders, want the miracle of the mkt to pay for all their various political agendas. Funny thing they are destroying the thing that keeps them going! What the fuck is a Euro backed with? Another Euro? The complete lack of respect of money, the mkts, value and confidence in the currency is shocking, we need no more proof than we've been getting that the only way this ends is with Massive New Rules but someone will have to take the hit.
Thanks for skimming!!
you mean eurabia right?
http://expose2.wordpress.com
It's a confidence problem, ok?
And besides, the laws of physics do not apply in Euroland. How else can you explain the 500bE LTRO with another 1tE (to 10tE) coming next month, and the Euro levitating. Maybe we need to revisit Newtons Theory of Gravitation:)