RANsquawk 'EU Morning Call - Eurozone Unemployment Rate Preview': 02/04/12

Comments

[DrStrangelove]

http://www.breakthewrist.net/

The domino effect of a Euro zone sovereign nation default can be explained quite simply, the greater risk lies not in the debt itself or the default’s potential effect on Euro zone interest rates. The greater risk remains in the underlying insurance and speculative bets made in the credit default swap (CDS) market. The CDS payouts are triggered when the International Swaps and Derivatives Association declares that a default has occurred. Depending on what credit type event could happen and when, any single default could potentially trigger payments that certain counter parties may not be able to bear. This may act as a catalyst along the inevitable path of bankrupting many key over-leveraged institutions in rapid succession.

With this brief summary of the “domino effect” of a possible major default, in order to isolate the basic problem of the attempted solution(s) to support my “doom” prognosis. For the record we won’t define doom, but will point out the thoughts laid out by many others were essentially “doom” and “everything turns out fine in the end,” a bit too polarizing to be true.

Greece, who never should have been in the European monetary union to begin with, falters and is facing another default on it’s obligations. Since this is an EU country we are talking about, Greece was bailed out.

Provide Greece with a new line of credit and inject cash into their financial system, impose guidelines that must followed: reduce government spending, increase revenues, reduce unemployment and raise your GDP by X% by a certain date in the future. This must be performed only with Greek fiscal policy, because your formerly sovereign nation no longer has the ability to control it’s own currency or effectively produce monetary policy with Greece’s best interest in mind. In other words pre-EU Greece could simply devalue the Drachma and pay off it’s obligations in a situation like this (of course this is no long term solution either, but a temporary one).

Now we have seen that Greece is not meeting it’s obligations and will likely default again if not aided (“bailed out”) again. You can even impose more strict guidelines and legislate deeper austerity, but the economy will not grow within these guidelines.

Rinse, repeat… Portugal, Spain, Ireland, Italy.

So while the central banks and governments attempt to skew the end result, I say let it all fall down.

http://www.breakthewrist.net/

[BandGap]

OK, I guess you don't have to be physically attractive to be on TV anymore. But this guy is stretching it.

And the news is....bad here?

[AlvarezEarnestine7]

my best friend's sister makes $63/hr on the computer. She has been out of work for eight months but last month her pay was $18250 just working on the computer for a few hours. Read more on this site...   http://goo.gl/2tEsp