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Overnight Summary: The Karlsruhe Konstitutional Knights Don't Say Ni(en) Yet
Overnight highlights via SocGen:
- ESM plaintiff bid over ECB program will not delay September 12 ESM ruling
- Spain PM Rajoy vows to not cut pensions, will consider conditions before requesting any aid
- German finmin Schaeuble: Spain doing well with its reform efforts, will not need sovereign aid
- Nikkei -0.70%, 10y Bund yield down 1.5bp at 1.53%
The key event overnight was the German constitutional court's announcement shortly after 8 am CET in which the Konstitutional Krimson Kardinals announced that, as largely expected by everyone except the EURUSD trading algos, there would be no delay in the September 12, 10 am CET injunction decision, as a result of the last minute bid by Peter Gauweiler. As Bloomberg reported, “It’s no surprise the court won’t change its plan,” said Christoph Ohler, a professor of European law at Jena University. “You cannot directly sue over the acts of European institutions in a German court, so it’s difficult to introduce these arguments in this case." The decision to press ahead with the ruling will probably bolster the German government’s faith that the bailout facility will get the court’s backing. German Finance Minister Wolfgang Schaeuble told students last week he was confident the ESM would be approved. “Europe won’t collapse on Sept. 12,” Franz Mayer, a law professor at Bielefeld University, said in an interview last week. “In the end, the court will allow Germany to ratify the ESM, but there will probably be some strings attached. The bigger issue than the actual ruling is what extra language the court will add to the reasoning on where the limits are in the future,” said Mayer. “The markets seem to be quite afraid the judges may spoil certain options for the future, like collectivization of debt within the euro zone." Which leads us to the quote of the morning when even Schauble it appears is channeling Clinton after he said that interpretations on the word "unlimited" can vary. No they can't, and this is precisely the issue that the judges will take offense with, if anything.
For all other overnight news we go to DB's Jim Reid:
In other European headlines, Spain’s PM Rajoy reiterated in an interview on state television that his team are “studying bailout conditions”. Rajoy added that he “will not accept that they tell us which are the concrete policies which we have to cut or not cut”, although Rahoy did express confidence that should his country request aid, it would indeed receive it. There were some more upbeat comments from German Finance Minister Schauble who was reported as saying to German coalition members in a closed-door meeting that Spain doesn’t need a full sovereign bailout. Schauble praised Spanish and Italian reform efforts and said that Spain doesn’t need to apply for a full program because economic and fiscal progress made since implementing reforms mean that a full bailout isn’t necessary (Bloomberg). Finally, Moody’s commented that the ECB’s OMT program will not resolve the European debt crisis and do no more than buy time. However the agency recognises that the program will support continued access to debt markets for peripheral sovereigns and banks.
Moving to overnight markets, Asian is trading lower led by the Nikkei (-0.8%) and Hang Seng (-0.6%). Chinese equities are also trading heavy (Shanghai Comp -1%) despite data from the PBOC showing RMB704bn of new loans in August, the highest level ever for an August and beating forecasts of RMB600bn. In response to the recent news of transport infrastructure project approvals in China, Jun Ma has commented that these plans are not new stimulus, but are in fact part of the government’s 12th Five Year Plan released in March 2012. Jun believes that the near-term impact of these projects on GDP is negligible.
Looking at the day ahead, the data docket will be relatively light with the only major release being the US trade balance for July (market is expecting the deficit to widen to -$44.4bn deficit vs -$42.9bn in the previous month). The European calendar is also light with the main data releases of interest being the UK’s RICS house price survey and July’s trade balance. We may also get further headlines from Greek PM Samaras’ meeting with Draghi today.
Finally, some interesting observations out of SocGen two days ahead of the FOMC decision:
The bond market is not behaving as if there is a strong conviction among investors that the Fed will announce more QE this week. Benchmark 10y rates and swaps in the US continued to back up yesterday and have added some 9bp since Friday's post-payrolls low. This is not to say that the Fed will not pull the trigger, but it shows that expectations are not overwhelming and there is a risk of disappointment that the initiative may not be as far reaching as hoped, in the sense of a flat Fed funds rate until 2015 and a sizeable ABS/UST purchase programme. Tracing back the more confident mood to the ECB, equity indices have nudged gains of 2.4% in the eurozone and the US since last Thursday, whilst commodities too have been given a lift, with the CRB index advancing over 310 and iron ore recovering to $95. Maybe we should not be fazed too much by what the Fed does or does not do this week. The impact of the operation Twist programmes and QE on currency and other markets has tended to wear off pretty swiftly and there is not much the Fed can do anyway to lift the participation rate.
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EUs fate in the hands of the KKK!
Knights implies they have some sort of morals and ethics. Last time I checked wasn't it the white knight who was supposed to come to the rescue?
Dressed in all red like that makes me think they're part of the Rothchild shield.
I'd love nothing more than for the rule of law to be upheld and Germany to go back to the DM.
One last thing "German finmin Schaeuble: Spain doing well with its reform efforts, will not need sovereign aid", yeah and subprime is well contained!
When things get serious you must lie.
They won't go against the banks and politicians. No matter what the people want. They won't rule by law, except the law of the banks. They will say "Yea" and then some stipulations. Though they should say Nein in total.
In other words, they'll provide the roadmap on how to circumvent the constitution like our Supreme (kangaroo) court and Obamacare.
This part makes me furious "collectivization of debt within the euro zone"
If those fucking idiot Germans sheeple want to pay for hasta luegos and africanized "workers" who just WANT WANT WANT WANT WANT WANT and never give anything back then fine.
But for the love of god let Germany bear this burden by themselves and leave the rest of us Euros alone! I am already paying 40%+ taxes to have africans and arabs sit around smoking and drinking coffe all day telling everyone who wants to listen how evil and dirty we unholy bastards are.
If this thing really go off, WW2 will be viewed as "the small war before the mega war".
If this happens, I offically pledge here that I will cease to work and go to the doctor and become a a "certified burnt out worker" and I will never again contribute to society. The rest of my life I will have to deal with the extreme stress I was under while working, so I am expecting rehabilitation to take at least ... eh.. well until the I don't have to pay for the parasites anymore.
It would be a 30-40% cut to my current salary, but I can live quite well on it =)
FUCK YOU, YOU NASTY, IMMORAL , DISGUSTING, FREEDOM HATING FUCKING SOCIALIST SWINES!
When I was a kid 40 years ago, my family over in Germany use to complain about the same thing. The more things change, the more they stay the same. Except at the time it was the Turks and a few other nationalities.
Just conveying my past experiences. I sympathize completely!
I see nothing.....I am not even here!
http://www.youtube.com/watch?v=34ag4nkSh7Q
Awesome! My mother use to HATE that show!! Being of long German descent, she hated how it made them look stupid. I loved the show though.
Thanks for the memory!
exactomonodo .. they will do what all courts & lawyers do .. line their own nest by creating work for themselves, they will come out with a document running into hundreds of pages agreeing to ESM but with some convulted conditions. Dont get your hopes up that anything material will come out of this .. seen this sort of shitshow over semantics play out many many times with no consequence.
europe is falling apart but the divisions will take many years if not decades to play out imho .. empires dont fall apart in months .. unlikely a single event in europe will cause a crash imo .. people like draghi are controlling the show and managing the markets with deliberate actions and statements. these technocrats are good at pulling the strings of the market.
Agreed, I think the true end game is confidence. If you withdraw your consent and money from the system, it will hasten the process. I've put my money where my mouth is BTW.
I want to see this shitshow overwith. If it's going down, let's just get it over with and move on.
Only greater collectivism and solidarity and turn around the eurozone; without that they'll be at the mercy of the capitalist class for good...Everything thats good about the eurozone came about due to solidarity.
“The purpose of human life is to serve and to show compassion and the will to help others.”
Albert Shweitzer
Fail! Sorry I take a more objectivist view. The purpose of human life is self-preservation. Helping others is optional, not mandatory.
I'm tired of the collectivist meme. There is no RIGHT that I must support someone else by my labor.
Need a sarc tag up there if you weren't serious.
Note: I didn't give you the red.
Thanks for the down arrows, I see Obama AND Nancy Piglosi surf the site too.
FOAD if you don't give me a reason.
Yes Colonel, we appear to have caught a bit of a progressive virus on ZH since MillionDollarBonus appeared
don't allow that to put you off, we like to have loony-left footballs on here to kick around during the day, keeps us entertained and gives us something other than popcorn to chew on
Thanks ZG, I understand this is fight club. But at least if someone is gonna get in my face, give me a chance to give you the beat down. And the progressive virus goes back much further than him.
LOL, Milliondollaboner is just an anti-troll in disguise. I think whomever it is, is really on our side too. Call me crazy. There's no way his schtick isn't pure sarcasm.
I'd generally agree with down arrow persons at least having the decency to post their opposing views ...but i find myself often doing it not being arsed to post a view because of time contraints (i already spend too much time posting, it could double the workload!)
regards MDB i sincerely believe he's not a plant though he is quite unbelieveable in his views. Remember Democrats believe the US debt is a sign of wealth? Well MDB is that twisted (and over-confident) on almost every topic
He thought Michelle 'chubby' Obumma jet-setting to the London 'bankrupt' Olympics to tell other peoples children how to diet was an act of patriotic brilliance. Seriously who could make this stuff up for mere pay?
Agreed, I've done the same in the name of time constraint and sometimes I just don't feel like arguing with idiots. However it appears as if I have a stalker. It's nice to be popular! But General Burkhalter is going to be pissed that I've been spending time on here and not watching the prisoners.
A pleasant morning to you ZG.
the rule of written law is not needed by an honest man..but crooks and lawyers / judges..must have them.
only "wise judges" know when the law is not the law and to whom they must serve..next!
Humans are made to live in tribes, not on their own
guns, gold and food stocks are good to survive but friends are better
if humans stop to help each other humanity will end soon
I would say the truth is somewhere in the middle. The problem isn't being compassionate, it is being compassionate to the point of dependency that creates the problem. The dilemma isn't about having money or politicians reign supreme as they are both inextricably intertwined.
The problem is the self-preservation of the status quo, their ability to do it and people's inability to understand what is going on.
Too many people will read that and think you're serious.
Albert Shweitzer sounds like a communist or socialist (ie. a tosser)
http://www.bloomberg.com/news/2012-09-11/esm-ruling-won-t-be-delayed-germany-s-top-court-says.html
That explains the moves in the DAX last night. Apparently the algos were not pleased with this decision.
http://blog.quantsig.net/2012/09/11/dax/
I doubt that this court will do anything to protect the German people at the expense of bond holders or banks. I'd love it if they actually did their job but that is just idealistic thinking. The trend today is to ignore laws, treaties and constitutions and slowly bring us all to boil hoping we don't notice and knowing we won't seriously revolt.
Therefore, by this time tomorrow or maybe a little bit later we will all remember the following:
"What did you expect from these assclowns?
Who has put these traitors in position and who is controlling them.....?"
The frog is already medium well but no one notices till they ask it to get out of he hot tub for the 15 min break. Frog, frog, FROGGGGG!!!!! Oh shit!!!
The fix is in. Welcome to the new world order baby!
DAS DEBT !
Uh, das BOOT....stepping on your neck!
Un, das thieving hand in your pocket
you pay tax to 'improve' your country, the politicians piss it away on foreign debt-binging socialist losers
Amen brotha! Only thing you can do is stop feeding the system. I've gone Galt.
i had to look up "Galt"
you're either referring to the Greyhound Adoption League in Texas or the John Galt charcter in Ayn Rands book, Atlas Shrugged who "symbolizes the power and glory of the human mind."
By deductive reasoning I assume you're refering to the greyhounds then and are looking to adopt them as a tax brake against the massive tax (thieiving) hikes coming in next year?
Ah as in John Galt. I stopped working a few years ago out of protest, took my money from the financial system, and started enjoying my own time again. Fuck the corrupt government wasting our money.
Less they truly have to spend the faster this thing comes apart. They may be able to force me to pay taxes, then can't force me to work.
'SNAP'
i did the exact same a few years ago myself... though i still have my toe in the markets
Fuck the Govt indeed... nice to see them doing it themselves too
Funny you mention SNAP, that may be my next avenue to bleed the system dry. I do live in "poverty" by the way. And I'm homeless too!
Nein,
Get that ei sound and writing in your brain once and for all yanky boys.
Golstein is not Goldsteen or Goldstien, it's Goldstein ! sounds as in 9, nine, without the first N
Watching more Monty Python is not hazardous for your health.
No but fighting against the banks, TPTB, and telling the truth most certainly is!
Speaking of new world order:
How about a couple of privately owned companies (owners of Sycti are unknown) who will be responsible for counting the votes all over the world!
(Multinational) 7/12 - ELECTRONIC VOTE-COUNTING INCREASINGLY BY GLOBAL PRIVATE VENDORS - A press release today about the planned expansion of Unisyn into more USA locations renews attention on foreign ownership of corporations selling voting systems into the United States.
Unisyn is owned by a Malaysian gambling outfit. Another major elections industry player, Canada's Dominion, purchased the massive Diebold Election Systems division (which it shares with ES&S); Dominion also owns Smartmatic, which handles electronic vote-counting in the Philippines and Belgium. Military voting is now handled in several states by Barcelona, Spain-owned Scytl. In January 2012, Scytl acquired the largest election results reporting firm, SOE Software.
Accenture, now based in Dublin Ireland (formerly headquartered in tax-haven Bermuda), claims copyright over the massive electronic voter registration/voter history databases used in several states, including Pennsylvania, Tennessee, Colorado, Wisconsin and Arkansas. Accenture purchased its voter registration unit from Election.com, a Saudi-owned company based in the Cayman Islands.
Because a computer will only do what it's programmers and administrators tell it to do, whoever issues the commands gains ultimate control over how it receives, counts, and reports votes, voter registrations, and voter histories.
UNISYN: According to Barry Herron (formerly of Diebold Election Systems), now Director of Sales for Unisyn, "Unisyn and our business partners are actively supporting installations in the States of Missouri, Iowa, Indiana, Mississippi, and Virginia. We intend to expand into other states in late 2012 and early 2013."
Unisyn also recently made inroads into Puerto Rico. Another Unisyn election product called "Inkavote" is used in 4 million-voter Los Angeles County (Calif) and in Jackson County Missouri.
THE MALAYSIAN GAMBLING CONNECTION:
Link to rest of story (about midpage): http://www.blackboxvoting.org/
Accenture, Accenture....where have I heard that name before? OH that's right, the old corrupt Arthur Anderson!!!
GOT IT! And I'll raise you a Diebold.
He was not in the least bit fraid to be mashed into a pulp...
"German Finance Minister Wolfgang Schaeuble told students last week he was confident the ESM would be approved."
Merkals 'tough stance' facade collapses ...she's a suicide socialist like the rest
If Merkel is supporting the ESM, socialist is more than a bit mild. Some interesting snippets from an on the ESM draft charter at the Slog (http://hat4uk.wordpress.com/2012/09/09/the-esms-articles-todays-must-read/):
THE ONLY ELEMENT THAT WE SUPPORT FROM THIS ARTICLE GIVING ITS FACTUAL NATURE IS THE COMMENT MADE BY MOODY'S...<WONT SOLVE THE PROBLEM AND BUYING TIME>...HENCE WE REITERATE OUR BULLISH VIEW ON GOLD AND CURRENCIES LIKE USD, CHF, MXN AND CAD BUT CONTINUE SEEING FURTHER DETERIORATION IN THE EURO AREA THUS WE ARE BEARISH ABOUT THE EURO CURRENCY, AUD, GBP...AND OF COURSE US EQUITY MARKETS IN PARTICULAR FINANCIALS AND THE US HOUSING SECTOR AND STOCKS WITHIN IN...
Sorry couldn't read that, could you type in all CAPS please, then BOLD?
Uh, whoever is down arrowing me....you missed one!
And since we're having a bit-o-fun. May many fleas from a thousand camels infest your crotch and eat!
Colonel, my advise is if you get lots of green arrows you're obviously right, and if you get lots of red arrows you're clearly ahead of the herd pushing the envelope of understanding (and therefore yet to be proved right)
Fuck...you retard, you still missed one! It's two levels above. Since you appear to be so stupid, would you like a flashlight and a map? Sorry but you'll still have to provide both hands yourself.
It's all good ZG, I'm just having fun with all this. Almost time for bed at 5am. Like I said before, I love having my own time back. I already spent my 25 years working. I've been on long term vacation! I've been boating for the past 2 months, but I've seemed to lost all my PM's in 1500 feet of water.
Well now what the hell am I supposed to do with this shrubbery, damnit?!