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The PIIGS Fleecing Of Europe Continues Even As Italy Promises To Implement Another "Austerity" Package Imminently
The first Italian austerity package has not even properly failed yet (despite labor union protests to the contrary which for some odd reason believe that it has some chance of passing), and already Italy is preparing for a new round of "austerity" to appease those naive fools from the ECB so they buy Italy's otherwise bidless bonds for a few more weeks. From Bloomberg: "Italy may need a new budget- adjustment plan next month because a 54 billion-euro ($76 billion) austerity package to be voted on today won’t convince the European Central Bank to continue buying the nation’s bonds, the chairman of the Senate Finance Committee said. “How long can the ECB continue to buy Italian Treasury bonds?” Mario Baldassarri said in an interview in Rome today. “We may need another adjustment in three, four weeks which will be the real answer to the European Commission and to markets.” Because this time, unlike a month ago, it will be different. Berlusconi promises. As a reminder, Italy will vote on the current massively watered-down plan which is anything but austere later today, in a vote largely expected to pass. Said passage, however will do nothing to please Trichet, who will continue to remind Italy just who calls the shots now (oddly enough the ECB thinks that would be them... which explains the loving relationship between the Central Bank and a electorally challenged Angela Merkel). None of this changes the underlying dynamic which has become all too clear: the PIIGS have called Europe's bluff, and Europe blinked. Going forward expect much barking from the ECB and Luxembourg, warning the periphery to get its house in order... and absolutely no bite. Because everyone by now realizes that the balance of power is entirely on the insolvent countries' side. Europe can threaten to kick out a country, but as UBS demonstrated on Monday, the consequences of such a move, which would end the euro, would be up to and including that Keynesian wet dream: war.
More:
A revised austerity plan passed by Prime Minister Silvio Berlusconi’s Cabinet last night faces a confidence vote in the Senate at 8 p.m. The package includes an increase in value-added tax by one percentage point to 21 percent, a 3 percent levy on incomes over 300,000 euros and a higher retirement age for women. It amends a plan passed by the government last month to balance the budget in 2013, which was drafted to convince the ECB to buy the country’s bonds amid a surge in bond yields.
To ensure ECB continued, Italy may have to pass another package with more “spending cuts and not tax increases, structural reforms in terms of liberalization, privatizations, sales of public buildings and so on,” Baldassarri said.
The current plan relies excessively on projected proceeds from the fight against tax evasion, the lawmaker added.
“You cannot say ex-ante how much tax revenues will be, you can say that only ex-post, in three or four years, whenever you get evaders and you make them pay taxes,” he said.
And therein lies the rub: just like all Keynesian programs, which are based on inbound cash now, and outbound promises later, the same thing applies to Italy: just give them the money, or in this case monetize the bonds, and all shall be well: they really mean it this time.
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As the Greeks and Italians head for the beach...."Suckas!" Party on Garth!
yeah, FX would have solved this shit long ago. The euro is a pipe dream trying to get the southerners to behave like the northerners. It ain't gonna happen. Those greasy wops with their olive oil dago ways aren't gonna put the nose to the grindstone like the krauts.
And no their won't be any fuckin war if someone is kicked out of the Euro...wtf is Italy or Portugal or Greece gonna do about it? Jack shit.
Butt, butt, Trav, these are all white people. Caucasians. How can white people be in so much trouble Trav? I'm sure you count your own ancestry there, don't you? You aren't Cherokee or some such are you? SOmetimes you sound black and niggardly.... butt......
Or does your theory of white superiority hold onnly in America? hmmmmmm, Trav? All those smart white folks in trailer parks, bretheren or sisteren not so long ago to the same Eurozonies. So many brilliant white Italians emigrated, no? And brilliant white Irish too? Right?
V
And so the wheel turns
trav7777: "Those greasy wops with their olive oil dago ways aren't gonna put the nose to the grindstone like the krauts."
Now you confused me...
I thought you were one of them complaining about the "Krauts/ECB fleecing the EU Periphery". Perhaps I'm mistaken. ZH was full of them. Where are they gone?
Anyway, you do see some itsy-bitsy-teeny-weeny difference between Greece (who will default), Spain (who might have huge troubles) and Italy (who might get in even deeper troubles, most probably only if the first two default), don't you?
By the way, the Euro is just a currency. Take off your Dollar-Centric-Glasses and you might see that it has nothing to do with "pipe dream trying to get the southerners to behave like the northerners" BS.
Take a break and travel a bit before you comment about olive oil dagos...
Tyler: "...the consequences of such a move, which would end the euro, would be up to and including that Keynesian wet dream: war."
I know, I know, it's not nice to challenge Tyler Durden. Still, do you realize what you are writing here? If I understood you properly, you are saying that
one or two sovereign defaults would
A) End the Euro and then
B) WAR !!!
This is simply absurd. At several levels. I don't even know where to start...
he's referring to the UBS report. they discussed potential bad results, explicitly.
thanks
I know he is referring to the blasted UBS reports, I've read it.
what I am challenging is the verbatim reproduction of this UBS-BS as if this would be in any way of-this-world. perhaps he was feeling bored and needed some giggles, and I just react a bit grumpy when people write that casually about war
it's written like this "...as UBS demonstrated on Monday, the consequences of such a move, which would end the euro, would be up to and including that Keynesian wet dream: war". Demonstration? Don't think so...
which just reminds me that UBS produces two kind of reports, the green ones full of BS from their investment bank and the black ones from their wealth management.
institutional schizofrenia - they contradict themselves in nearly every way.
my advice: don't even read the green papers
Yes It's those lazy Italians. The problems in Italy have absolutely nothing to do with municipalities being on the wrong end of a big steaming pile of CDS.
"Si, si ! Austerity measures will be forthcoming, my German friends. Scout's honor !"
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/drag...
Junk Paper
....Taking a victory lap....: I told ya all a Big jobs package was coming along with other Big fiscal stimulus
Mortgage refi package, business tax cuts and extensions, infrastructure etc gonna be a trillion worth
Don't let GOP "outrage!" fool ya either. They're on board and they will pass it.
And oh, by the way, no QE3
debt ceiling? Who's gonna buy the bonds? The Fed may have enough reserves stuffed into the pipeline to buy this year's deficit but such a bill will push the YoY headline past $2T
debt ceiling? Who's gonna buy the bonds
Get serious. They have a machine they call a printing press I hear. And anyway, have you ever seen them Not spend recklessly and get away with it before? Hint: they Love It! Hint 2: It's how they get elected and stay elected Hint 3: he who is closest to the spigot gets his full
Thats why I ignore all this WWF bullshit and just pile up gold and silver. Their only answer is to print more, and PM's will respond by climbing far higher, doubles on both easily pretty soon.
Right on there bro. When the world got tired of their monetary stimulus (QE) and money straight into Wall Street hands, they switch the story, put on their "Men Of THe People" hat and make it fiscal stimulus instead. All paid for in the same way. All having the same effect in the end when the dust settles (half life of trillion dollar stimulus packages is getting mighty short). Only gold will protect your mangled buying power which gets crushed each time they do this. And gold will remain the go to as they pay the price in geopolitical unrest
Its Them or Us, and theyre quickly reaching their endgame. We already see it in Europe with the 'solution' being discussed a bigger Eurounion, built around cobbled together zombie banks. Theyve got to make themselves too big to fail, but societies around the world can totaly fail no problem, as long as they control it.
Yup. All interconnected zombie banks (including in the US). The zombies will be out in full force by Holloween, eating any money they can find in your wallet, in your taxes, in your standard of living. And they'll run their own fascist style politicians next to make sure they get their share of what's left of the pie. Crumbs for the plebes.
Gold is how we will survive this, buying and holding physical gold. Yes, there will be messy bumps along the way (see gold off some $60, yep, right after I bought yesterday), but the long term future of gold is much brighter than ANY of the currencies.
Crumbs for the plebes... Yes. I'l take gold to help me feel better about my crumbs.
"too big to fail = "too big to bail"...
uh...you just said "no QE3" dumbass...so who is gonna buy the bonds again?
Your Uncle Sugar, that's who. Aka Uncle Gorilla, depending on which day it is and what's the occasion.
Its all a dream Trav, people think they got this all figured out, but theyll be real surprised by late fall.
Come on Germany! Hurry up with this EuroBond idea, I dare you!
Caligulitis. Italians are famous for bad promises. They also make fast cars with 5 gears... just for reverse.
Why just a Eurobond.....why not a world bond......yeah thats it....a world bond...all is good..George Soros
Yes, but don't introduce Universum bonds, because those green nymphoalienbitches gonna kick our asses.
Send out the pope in a box. That'll fix it. Bullet proof glass encased popes can fix anything.
The Pope is going to adress the German Parliament on Sept 23rd. Divine intervention is next (Eurobonds).
I feel sorry for the Europeans, they cannot even kick the can down the road properly.
Austerity is a word, the real deal is found in the unemployment rates. Who has a real job in Italy?
'Not enough' is the correct answer but the 'buy fuel, put in car, drive in circles' program doesn't create jobs but takes them away, one Italian job for every Chinese robot.
The EU can buy time: it can whip up a 'fiscal union' that offers a product to the international bond markets, something to compete with the US Treasury.
It needs to take the time gained in this way to restructure itself away from wasteful consumption (that is, all consumption) and end the drain of capital overseas and out the tailpipe.
They won't, they refuse, they're stupid and deserve the inevitable bankruptcy and system collapse.
Steve,
The last sentence, "stupid"? Who holds the bag in default? Hint: it's not the debtor!
Yes Steve - I am afraid you are right - they are taxing the wrong things in Ireland too - until I see middleclass people carpooling and buses & trains full here we will be in constant trouble.
But to state the PIIGS are not in extreme pain is dubious - they are just cutting off our legs here when they should have severed the Gangrenous arm - me thinks the entire austerity package is about saving the German car industry.
If America experienced the fiscal "adjustment" that Ireland has gone / is going through it would have been quite a spectacle.
Irish expenditure on personnel transport equipment
Max 2007 : 4282 million euro
2008 : 3742
Min 2009 : 1988
climbing again..... 2010 : 2416..........
Figures do not include running costs which in 2006 was 4181 million euros and in 2010 was 4161.............
The Arabians can buy more concubines on the back of this stupidity.
Well, the unemployment rate in Italy is 8% and considering black economy is some 20-25% GDP, the real unemployment may be at some 4-5%.
shhht!
don't mention facts to those who know better.
and don't mention the few millions of illegal immigrants, including from China, that work in the "black economy" and don't show up in any statistics.
just shut up while your betters who probably never have been and worked in Italy have their fun poking the "PIIGS". their mind is set, let them trade accordingly...
What is most funny is all the lemmings rushing to buy stocks today.
Yeah everything is positive for stocks again
By lemmings, you mean the institutional traders and HFT algos, right? Because the lemmings (retail) are pretty much out of the market.
All the lemmings I know are buying gold and silver. It's the Wall Street shmucks that are swapping paper.
Hey any German people out there....please, just bend over the barrel one more time. Italy needs some more of your arse.
*knirsch*
*grmml*
*grrrrrrr*
I'm going to make the plebs an offer they can't refuse.......
Honestly who the ferk would be buying stocks just as Eurpoe is approaching a collapse, except TPTB.
It is obvious stupidity and just tells how totally fucked all markets are. Yes Bernanke has ferked every market on the planet.
Austerity is just another word for demand destruction and is primarily imposed via explosive devices.
In other news, the Italian people say 'Yea, I dont think we're going along with austerity, shove it'.
Discovery says consumer confidence survey of customers with credit is at lowest since March 2009
I've lived in since 1991 and they just don't get. Italy is stuck in 1989: corruption, clientelism and myopia.
They want the lira back so they can devalue at will and continue to live blissfully in the underground economy.
The country is beautiful, but demografically and mentally is's old and tired......baci ball anyone??
Chianti & spaghetti please....no worries......and a slice of that pizza.....
Today is probably the biggest monetization day in ECB's sad history. Italy's bond market started chrashing again and 10yr yield went over 5,5% this week. Heard from many sources that ECB was buying all across the curve today with big size at least in Italy, Spain and Portugal. It's amazing how they can just monetize the toxic waste without anyone asking questions. This must end well...
Trichet, game is over. Bunga bunga is pissing on your face while Zapatero and Barrosso are clapping their hands on the background yelling MORE!
OT: Anger grows in Finland. One economics professor interviewed today in one of the local papers is saying Greece should be kicked out of euro immediately. Says EU and ECB have failed in their attempts to save the eurozone. Attached to the story is a quick poll for the readers. Q: Should Greece be kicked out of euro? Answers so far totalling almost 20 000 out of which 98% says YES and 2% says NO. Good luck for the Finland's PM Jyrki Katainen. It might be his new government wont see the xmas.
OT: Anger grows in Germany. One economics professor interviewed lately in one of the local papers is saying Greece should be kicked out of euro immediately. Says EU and ECB have failed in their attempts to save the eurozone. Attached to the story is a quick poll for the readers. Q: Should Greece be kicked out of euro? Answers so far totalling almost 20 000 out of which 98% says YES and 2% says NO. Good luck for Germany's PM Angela Merkel. It might be her government wont see the xmas.
... change a few words and here is your new post.
I know. =) It's nice that we have these responsible and trustworthy politicans representing the people's will isn't it.
The Spanish Treasury summons 22 fixed income market makers to ... well it can't be to share a beer
http://www.expansion.com/2011/09/07/mercados/1315350066.html
the packages implemented allow for everyone to hedge themselves accordingly and as the risk genie comes out of the bottle you get "shared" sacrifice" among the sovereigns. not magic, just the way it works. everyone is hedged on greece by now, so when it fails, markets will go up and not down. REPEAT for some smaller countries. others who are "stronger" simple inflate the debt away for those who control printing presses. not rocket science.
We Italians will default and repudiate the debt.
German banks can suck it.
Paulie