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Suddenly, Nobody In Europe Wants The ECB Bailout

Tyler Durden's picture


It took the ECB a year of endless behind the scenes Machiavellian scheming to restart the SMP program (which was conceived by Jean-Claude Trichet in May 2010, concurrent with the first Greek bailout). The markets soared with euphoria that this time will be different, and that the program which is a masterclass in central planning paradox, as it is "unlimited" yet "sterilized", while based on "conditions" none of which have been disclosed, and will somehow be pari passu for new bond purchases while it retains seniority for previous purchases of Greek and other PIGS bonds, will work - it won't, and the third time will not be the charm as we showed before. Yet it has been just 48 hours since the "bailout" announcement and already Europe is being Europe: namely, it turns out that nobody wants the bailout.

On one hand there's Germany for obvious reasons - not only are they footing the cost, but it is for them that the threat of an inflationary spike as a result of "unlimited" bond buys is most acute. But on the other, just as we predicted all along, are Spain and France, the biggest beneficiaries of the bailout, and whose bonds soared on expectations the ECB may buy them, who overnight have had a change of heart and say they never actually needed the bailout. Why? Because its politicians have suddenly had a change of heart and realize they will be sacked the second they hand over sovereignty over to the Troika or whatever supernational entity is in charge of the country following the submission of the bailout request.

More importantly, and as explained before, as long as the yield on the bonds of insolvent European countries is sub 8%, not one country will demand a bailout. And as long as these countries reap the benefits of cheap rates, the policies of pseudo austerity will continue (as a reminder, nobody in Europe has actually implemented austerity), where nothing changes, where budget deficits continue to pile on, where sovereign debt continues to soar, where politicians continue making the same flawed policy choices, and where the European slow-motion trainwreck continues, only with a brief delay in the final inevitable outcome.

By now everyone knows about the ECB party that sent US stocks to 4 year highs. Now comes the aftermath. From the NYT:

Greeted with initial fanfare by investors and economic officials, the unlimited bond-buying plan that the European Central Bank president, Mario Draghi, announced Thursday ran into immediate political problems in the crucial countries of Germany, Spain and Italy.


In Germany, despite Chancellor Angela Merkel’s support for Mr. Draghi and the independence of the Central Bank, political and news media reaction was scathing, with accusations that the bank, in seeking to stabilize the euro currency union, was subverting its mandate to fight inflation and forcing debt upon euro zone members.


“A Black Day for the Euro,” “Over the Red Line” and “Pandora’s Box Opened Forever” were some of the German headlines, with the normally sympathetic Süddeutsche Zeitung headlining an editorial: “The E.C.B. Rewards Mismanagement.” Even the German Bundesbank, officially part of the European Central Bank, put out a statement commenting acidly that the plan was “financing governments by printing bank notes.”

Here is where it gets funny:

At the same time, the two intended beneficiaries of the Draghi plan — Spain and Italy — expressed reluctance to ask the bank for help, even if both might eventually have little choice but to seek aid. The governments in Madrid and Rome apparently fear the political impact at home of bowing to whatever demands for harsh economic policy changes might come with the aid.

And just as we predicted before...

They seem afraid that the medicine might prove worse than the disease, because Mr. Draghi made it clear that there would be no bottomless well of money made available without a program of greater spending discipline.


Those who did everything to have the E.C.B. help now say they don’t want it,” Ferruccio de Bortoli, editor in chief of the newspaper Corriere della Sera, said in a Twitter message. “Speculation will play on this contradiction.”


The disjunction between how officials seek to placate the lightning-fast markets and the reluctance on the part of the public and politicians to make further sacrifices and move at more than a glacial pace highlight why it has proved so difficult for Europe to overcome the challenges that still threaten to tear apart its 17-nation currency union.

All of this is just as we explained over a month ago: "In Order To Be Saved, Spain And Italy Must First Be Destroyed." We also explained why this will not happen, and that instead of being saved, Spain and Italy will ultimately be destroyed, by appearing to be saved first: as Mario Draghi kindly obliged us on Thursday. And all with the central-planners' and stats quo's blessing.

The simple reality is that already the grand plan is fizzling, which was to be expected. After all politicians are involved. Recall that Goldman, who basically force fed its alum Mario Draghi the play by play (after leaking the ECB playbook hours in advance) now "predicts" (and by predicts, we mean demands) that Spain demand a bailout as soon as next week. Well, Spain PM Mariano Rajoy, who promised Spanish banks will never need a bailout one week ahead of the Spanish bank bailout announcement, already is digging his feet in. As Spanish El Economista write, Rajoy is "tempted" to delay the Spanish bailout request until after the Galician elections, i.e., until October 21. At the earliest. In other words, while the market has already front-ran the Spanish bailout demands, suddenly Spain will conduct at least 6 auctions between now and October 21, during which time bond buyers will be praying that eventually Spain will demand a bailout. Ironically, it is these same "bond buyers" who swallowed hook line and sinker the plan that Draghi et al laid out for them, namely to assume a bailout, and buy bonds, when by doing so, a bailout becomes unnecessary. Did we say bailout? We meant trap.

So what happens in the meantime? Well, Spanish bonds can languish in the 6%, 5%, or even 4% range, which in turn will embolden the insolvent Spanish government to issue even more debt, thus making its fiscal situation even more untenable (recall the Spanish financial system is broke for one simple reason: too many (soaring) bad loans predicated by the endless collapse in the Spanish housing market). And issue bonds it will have to: recall that as we first explained, and as Nomura subsequently understood, Spain is on the verge of running out of cash!

But suddenly now that the market pretends all is well, following the most recent bout of central bank intervention, no Spanish politician feels the urge to sign their own career death warrant and request that the ECB funds these purchases which Spain simply will not have the money for. Instead, the theater that "all is well" will continue until Spain does run out of cash (the record outflow in Spanish bank deposits makes that a certainty) at which point the transition chaos will be unprecedented as instead  of arranging for an orderly transition, the panic in the Spanish government will be epic. Even the NYT now understands this dynamic:

Spain must pay back 20 billion euros, about $25.6 billion, in bond redemptions in October. And some analysts suggest that Mr. Rajoy will need to seek help to satisfy half of Spain’s 180 billion euro financing needs (about $230 billion) over the next year. “The Spanish fear is that they become another Greece — that they will have to chop off their right arm for a blood transfusion,” said Mark Cliffe, chief economist at ING Bank in Amsterdam....Mr. Rajoy is already losing popularity rapidly, and no one wants further political instability in Spain to add to continuing anxieties over Greece.

And this is only Spain. Throw Italy into the mix, which the NYT admits has been even worse at implementing reforms, and one can see why even the once intelligent bond market has demonstrated surprising stupidity with its ramp in peripheral bond prices last week (which really has been just a massive short squeeze).

But the piece de resistance, which readers of Zero Hedge know too well about, is that while jawboning will continue to yield results as long as reality finally demands an intervention, and Spain running out of cash will be just such an jawboning-event horizon, is that once the ECB is forced to begin buying, as up to now nothing has actually been done by the ECB which has merely taken rhetoric, promises and threats to a next level, it is all downhill from there:

There is a further uncertainty about the survival of the euro zone, which the Central Bank is mandated to defend. Once the Central Bank loads up further on Spanish and Italian bonds — it has already bought more than 200 billion euros ($256 billion) of European bonds, including 50 billion euros ($64 billion) from Greece — it will find it very difficult to stop its bond buying even if countries do not keep to their promises of reform. To do so would be a form of suicide, because it could set off market panic and force countries to exit the euro, beginning a process with no clear end.

Yesterday we explained why the Fed will do everything in its power to avoid enacting more LSAP-based QE (it simply does not have the capacity for the kind of massive program that everyone expects, and even an "open-ended" monetization will force everyone to do the math). Today, we learn why it is the ECB that also will do everything it can to not hit the buy button. The biggest paradox is that up to now, the fear of central banks, which is there in part due to their (rapidly dwindling) credibility, is what forced investors to "not fight the Fed/ECB"... and the banks took advantage of this by not doing anything, but merely talking. The time for talk is over, and for one reason or another, the time for action has arrived. Such action will very quickly demonstrate that the central-planning emperor was, indeed, naked all along, and the ramp across all risk assets was for naught.

It also means that the next time when the central banks attempt a comparable jawboning of risk, they will be taken far less seriously, if at all. At that point one may expect the PBOC to finally admit just how much gold it has acquired in the past 4 years, and that anyone who wishes to give a totally new and still quite credible monetary authority the chance, is invited to do so.

* * *

P.S. The initial phrasing of this article's title was "Suddenly, Nobody Wants The ECB Bailout." We then added "In Europe" because there is at least one person in the US who is absolutely delighted by the ECB "bailout." The US president.


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Sat, 09/08/2012 - 14:04 | 2774863 Enneadeka
Enneadeka's picture

Right on cue......Spooky dude Soros weighs in on Germany's role:

Sat, 09/08/2012 - 14:55 | 2774956 Cult_of_Reason
Cult_of_Reason's picture

Germany is so damaged by the single currency that it can no longer pay for the eurocrisis.


Charles Dumas of Lombard Street Research (an independent London firm of economic analysts):


"It is a myth that Germany can hold the euro together simply by subsidising Club Med, while the Mediterranean countries adjust their finances. Their savage fiscal deflation is slashing spending and income, and hence tax revenues, so that budget deficits scarcely improve.

Ordinary Germans have not had much economic joy over the past 13 years, despite the drum-beat of propaganda about Germany’s economic success, financial strength, etc. The reason is simple: such success and strength as there is, they have paid for, and continue to do so. This has been done not just without reward, but with substantial penalty, compared to other countries’ citizens.’

Mr Dumas then shows a chart illustrating increases in real personal disposable income per capital since 1998 for citizens of Britain, America, Germany, France, Italy and Spain. The Germans are second from the bottom. Only the Italians (whose per capital disposable income has actually fallen in this time) have gained less than the Germans. ‘It does not require a long look at the chart to see that ordinary Germans have plenty to complain about.’

Mr Dumas sums up his findings this way: ‘It is a myth that the Germany economy has gained from euro membership. Its growth has decelerated. Its growth of productivity has halved. Its citizens have accepted severe wage restraint without the former benefit of a rising currency, leading to negligible gains in consumer welfare. The undervaluation granted by their wage restraint has benefited producers artificially, and weakened the incentive to cut out waste – hence lower productivity growth."

Sat, 09/08/2012 - 15:00 | 2774961 machineh
machineh's picture

If TARGET2 were listed on the Deutsche Boerse, its superb growth rate would put Apple to shame.

Go GO, Draghi B. Goode!

Sat, 09/08/2012 - 15:03 | 2774962 Cult_of_Reason
Cult_of_Reason's picture

Dumas: 'Without euro exit, Germany will soon be in big trouble'

A new analysis by the totally excellent economist Charles Dumas of Lombard Street Research has just dropped into my inbox. It suggests Germany should not, perhaps cannot, afford the euro.

The report is a meaty 35 pages, so for now I'll just give you the summary. I may be able to write more at the weekend.

According to Dumas:

Eurosymbol wikiIt is a myth that the German economy has gained from euro membership.

Its growth has decelerated. Its growth of productivity has halved.

Its citizens have accepted severe wage restraint without the former benefit of a rising currency, leading to negligible gains in consumer welfare. The undervaluation granted by their wage restraint has benefited producers artificially, and weakened the incentive to cut out waste – hence lower productivity growth.

It is a myth that Germany can hold the euro together simply by subsidising Club Med, while the Mediterranean countries adjust their finances. Their savage fiscal deflation is slashing spending and income, and hence tax revenues, so that budget deficits scarcely improve.

Only with reversal of their excessive relative cost build-up vis-à-vis Germany can growth return. But without depression in Club Med that can only occur within the euro if Germany accepts a wage/price inflationary spiral, as well as prolonged subsidy payments.

Recent recovery, dependent on grotesquely distorted Chinese policies, is subsiding, so overheating and inflation (which Germans anyhow hate) could require large budget deficits.

Alongside major understatement of the unavoidable disasters of keeping the current euro membership goes the myth that leaving the euro would make Germany seriously uncompetitive and unable to grow.

German consumers need the lower import costs that a rising currency would bring, to raise their spending power without wage inflation, and German businesses need the discipline of a higher real exchange rate to enforce productivity gains.

Without euro-exit, Germany will soon be in big trouble. With it, growth can return.

Sat, 09/08/2012 - 15:24 | 2775003 Oh regional Indian
Oh regional Indian's picture

OT, but only just, really.

Canada F'kin loses it.

Or rather proves once and for all that it IS truly controlled by zio-puppets... Clearly one little step for a foolish nation... ill-winds indeed.


Canada closed its Tehran embassy on Friday and ordered Iranian diplomats be expelled, in a damning severance of ties in which it accused the Islamic Republic of being the biggest threat to world peace.





Sat, 09/08/2012 - 16:33 | 2775086 Pseudo Anonym
Pseudo Anonym's picture

the additional irony to this:

An estimated 120,000 people of Iranian origin or descent live in Canada, according to official 2006 census data, and thousands of their relatives in Iran visit them every year.

is that the Bruce Nuclear Power plant in Tiverton, ON ( ) employs hundreds of Iranians that can hardly speak english; figure that out...

btw, those indian babes in the right hand column of your link are bloody hot..especially Alia Bhatt

Sat, 09/08/2012 - 17:21 | 2775145 FranSix
FranSix's picture

Oh well, there goes all the hashish.

Sat, 09/08/2012 - 21:59 | 2775445 Slack Jack
Slack Jack's picture

Oh regional Indian says: "Canada F'kin loses it. Or rather proves once and for all that it IS truly controlled by zio-puppets..."

Apparently, the Canadian Prime Minister (Stephen Harper) is a Jew.

Sat, 09/08/2012 - 22:15 | 2775472 Slack Jack
Slack Jack's picture

“As long as I am Prime Minister, whether it is at the UN or the Francophonie or anywhere else, Canada will take a stand (of unwavering support for Israel) whatever the cost (to Canada).”

Stephen Harper; November 08, 2010.

Sun, 09/09/2012 - 00:15 | 2775654 Oh regional Indian
Oh regional Indian's picture

Hmmmm..... I suppose that really sez it, doesn't it?


Sun, 09/09/2012 - 01:33 | 2775725 Slack Jack
Slack Jack's picture

Yeap, sez it all;

(Canadian Prime Minister, Stephen) Harper raised concerns about the anti-Israeli movement even at universities.

(Canadian Prime Minister, Stephen) Harper said while steps have been taken at home to combat anti-Semitism, the fight must taken offshore. “We must be relentless in exposing this anti-Semitism for what it is,” he said.

Yeap; Canadian PM, Stephen Harper, is a Jew.

Sun, 09/09/2012 - 07:31 | 2775880 GetZeeGold
GetZeeGold's picture



The CDC has released the following statment...


These zombies don't seem to be thinking rationally.


If you find yourself surrounded....just sit tight and wait for FEMA.


Sat, 09/08/2012 - 18:40 | 2775238 Radical Marijuana
Radical Marijuana's picture

Canada is particularly paradoxical due to having lots of natural resources, compared to its population size. Therefore, being better off than most other countries enables Canada to be one of the worst countries in the world, as far as sublime, abstract, politics goes. BECAUSE the material things are so good, the social and political things are enabled to get worse.  Canada has both resources and technology, but also still one of the most colonial systems on the planet, with all that entails. Relatively speaking, the Prime Minister of Canada, in a majority government, has far more power than the American President. In the past, the Prime Minister of Canada has tended to be a relatively friendly dictator. Now that is no longer true.  Canada is doing more and more of what it always was, but faster than ever. Canada is catching up to the rest of the world, as fast as possible. Canada used to have a low level of income inequality. That has become a medium level, and the rate of change to become highly unequal is faster than almost anywhere else. With more drug war at home, and more foreign wars abroad, etc., Canada is rushing towards becoming integrated into the global system, which means the old balance the distribution of ownership of what the poor own compared to what the rich own, which was roughly 25 to 75, is headed towards 1 to 99, as fast as possible!

The whole world is a globalized, privatized, runaway fascist plutocracy juggernaut, dominated by an Anglo-American (Zionist) empire. Canada was always part of that. The only difference is that is picking up speed, faster than ever!  Canada, meanwhile, paradoxcially continues to be one of best off countries, from a material point of view, which continues to enable it to be one of the worst from the sublimely abstract sociopolitical points of view. Since Canadians are relatively comfortable, they are also some of the most brain dead sheeple on the planet, whose sociopolitical systems are the most hypocritical and unbalanced. Canadians never noticed that much before, BUT, they are just starting to.

MEANWHILE, the paradoxes of the ECB bailouts are expressions of the overall psychotic breakdowns of the established systems. Nobody wants the insanity that they are stuck inside. However, it is practically impossible to get out of that situation.


Everywhere expresses that differently, but the basics are the same. Since it is practically impossible for these systems to admit the basic truths about their realities, every "solution" put forward is always just more INSANE bullshit, that nobody wants. The runaway system of solving the problems of too much debt with even more debt, on an even larger scale, is not something that anyone wants. However, they are all stuck inside of those established systems anyway.

These systems are headed towards psychotic breakdowns, which is the inevitable end game of the triumph of huge lies controlling civilization. FRAUD KINGS ARE INSANE. None of the possible social psychiatry inside of that situation is working!

Therefore, we are headed towards psychotic breakdowns, and Canada breaking off diplomatic relations with Iran, while its government spouts all the Zionist absurdities for why, is just another little step towards an utterly irrational world war.  Unfortunately, that appears to be the only possible real outcome, which is what most people want the least, but which is what they most probably will get, since they otherwise refuse to face any of the fundamental facts about human ecology, and saner political debates are therefore practically impossible!

We are living inside of a Bizarro Mirror World Fun House, where everything is distorted and backwards, because the biggest bullies' bullshit became the dominant social stories controlling almost everything we do. Canada is just another example of that runway system, which was always there, but which relatively suddenly has become more noticable than ever before.

Sat, 09/08/2012 - 19:08 | 2775283 dogbreath
dogbreath's picture

+1 good post.  Can't figure out wh Bob Rae is intrim leader of the Lib's

Sat, 09/08/2012 - 19:10 | 2775288 trebuchet
trebuchet's picture

+1 to the article

Sat, 09/08/2012 - 19:09 | 2775286 Pseudo Anonym
Pseudo Anonym's picture

not anymore

Canadians are relatively comfortable, they are also some of the most brain dead sheeple on the planet, whose sociopolitical systems are the most hypocritical and unbalanced.

with the housing insanity just starting to collapse in vancouver, toronto, montreal, and soon in all  provinces, plus exports of raw mat'l nosediving, the ignorant canadian smile is being wiped off their face as we speak..

Sat, 09/08/2012 - 23:02 | 2775484 Haole
Haole's picture

Personally I can't wait for all the pompous grins to turn to furled brows and shattered realities.  I'd like to see bodies dropping from high places actually, making walking down the sidewalk a dangerous proposition.  I've downsized and took profits on my primary residence twice over the last seven years to prepare for this (among other things) and am still surrounded by narcicistic assclowns leveraged up to their eyebrows.  Even the lap dogs they take for a shit on the boulevard have smug faces and self-entitlement complexes... and we're governed by a bunch of zio-pandering sucklers to boot.  Sometimes I muse that it would be better to be an American because at least a segment of the population has a few synapses firing and is geopolitically aware of the real deal.  Canada has become a sick joke of it's former self in my lifetime.  Thank-you Mark Carney for setting-up a generation or two of stunned cunts for a lesson they'll never forget.  Your mentors will be proud.  Let the cull begin because I for one am ready for blood in the streets.  


Sun, 09/09/2012 - 11:17 | 2776101 Bay of Pigs
Bay of Pigs's picture

Haole, now there's a message that will be well received in Canada. LOL.

That Loonie @ $1.02 hides lots of problems doesn't it? Half the tourists in Maui now are Canucks, maybe higher. They are spending like drunken sailors (Californians) over there buying up RE with all their "equity".

Sun, 09/09/2012 - 00:10 | 2775644 Oh regional Indian
Oh regional Indian's picture

Very well said all arond RadMar. Shades of what you've said is happening all over the world now.

Circling the drain...


Sun, 09/09/2012 - 09:06 | 2775944 Bogdog
Bogdog's picture

What we have here is the frustrated ravings of a jew-hater, still pissed no one ever sent him his sequel to "The Elders of Zion". Try opening the windows in your fetid basement and let out some of that toke smoke. It's made you loony.

Sat, 09/08/2012 - 22:30 | 2775492 Haole
Haole's picture


Re:  "OT, but only just, really.

Canada F'kin loses it."

I don't know who would down vote you for saying what you did but take it as a compliment because apparently they are fucking imbeciles.  Thanks for the link.

Sat, 09/08/2012 - 23:17 | 2775560 philosophers bone
philosophers bone's picture

Canadians are just getting the fuck out before people die. Canada has always been a little queasy about that. Clearly they have been forewarned of forthcoming military action and are just preparing. Canada has no choice or influence in this.

Sun, 09/09/2012 - 00:12 | 2775647 Oh regional Indian
Oh regional Indian's picture

Canada is a highly influential nation.

Think of the role it had in the "prohibition", back in the day. Mafia rules. Guess who rules the mafia? 

Canada is Zio land, one just needs to look at the case of Earsnt Zundel.


Sun, 09/09/2012 - 09:35 | 2775967 philosophers bone
philosophers bone's picture

LOL. Canada is a follower.

Sun, 09/09/2012 - 11:46 | 2776155 Randall Cabot
Randall Cabot's picture




The Purple Gang,

also known as the Sugar House Gang, was a mob with predominantly Jewish members of bootleggers and hijackers in the 1920s, operating out of Detroit, Michigan, which was a major port for running alcohol products during Prohibition due to Detroit's convenient proximity to Canada, which did not participate in Prohibition.

Sat, 09/08/2012 - 16:00 | 2775058 Haager
Haager's picture

So thats why the EUR/USD is gone up in the first place.

Sat, 09/08/2012 - 17:22 | 2775149 defencev
defencev's picture

Your irony quite understandable. This website and its puppet-masters predicted collapse of Eurozone for several years now.

Moreover, it pretends to provide an information useful for investment purposes. Yet, ALL OF THEIR PREDICTIONS, proved to be wrong. Everybody with semblence of brains should ask a simple question. Are these people total idiots or just have a wrong ideological agenda. There is no silver bullet that would suddenly and instantaneously resolve the European crisis. But the step made by Draghi is a correct one. It should be understood in the context of fiscal union which is a goal and a process which will take a time to complete. People who follow this cite need to make a choice between their flawed ideology and a natural desire to have a decent return on their investments. Yesterday my portfolio jumped 2.5 percent and though I do not have Euro investments in it, I do have reasonable proxies like Swiss franc and Norwegian Crona denominated investments. It is time to wake up and smell the roses. Stubborn and stupid ideologues running these website will ruin your portfolio. Be warned.

Sat, 09/08/2012 - 19:05 | 2775278 Radical Marijuana
Radical Marijuana's picture

Every extension of the global Ponzi pryamid scheme only postpones its final collapse to chaos. The problem is that your "portfolio" will become irrelevant when that system of global electronic fiat money fraud, backed by weapons of mass destruction, finally does collapse to chaos. It has gone from billions, to trillions, to quadrillions, and the ONLY way that it can continue is to keep doubling down.

I too hope that the established systems of runaway fraud keep going for as long as I am alive.  However, I no longer believe that, since they have to keep the global system contained, and enough people must be forced to agree to go along with the runaway frauds that control their lives, for the established system to survive indefinitely.

Sorry, but the "roses" are dying. The only "stubborn and stupid ideologues" are those who believe that the global pyramid scheme of electronic frauds, backed by atomic weapons, can be sustained indefinitely. Everyone, including me, more or less hopes the impossible exponential growth continues ... because when it finally fails to, then most of us will probably die miserable deaths. Therefore, for sure, enjoy your "portofolio" while you can. Enjoy participating inside of the established systems of frauds, backed by violence ... and go on laughing and dismissing those who believe that it is IMPOSSIBLE for exponential growth to continue forever, and when it finally stops, we will have already overshot way past what could have been sustainable, and therefore the collapse to chaos that happens then must wipe out most of the civilization that we now take for granted.

I WISH I could still believe what you believe!!!

Sun, 09/09/2012 - 03:29 | 2775780 Inthemix96
Inthemix96's picture


I share your opinion.  But ask yourself this.  When did the PTB knock on your door, give you a call, ask your opinion on what they are going about around the world doing, in your and my name?  Who do these fuckers think they are?  Do they really think average blokes and girls like me and I would imagine you would quietly sit here and not give a damn what they are getting up to in our name?  The internet is a tool like no other, it allows simple folks like me to find out world events and correlate it into something I can understand.

I personally have had enough of this game, I know just through my job of hundreds of people who want off this ride.  They never asked us, they perpetrate violence and abuse of others daily against the wishes of the majority.  Mankind has sunk to levels I never thought a decent population would allow.  We should be fucking ashamed of what we allow in all of our names.

The time for talking, debating, and internet posting is gone.  It is time for good and decent people to stop this.  Who in fucking gods green earth wants to live after a nuclear war?  Do you?  I fucking don't, and I don't want my kids to either.  Collapse or not, mankind does not deserve to go out in a flash because the fucking powers that be decide it.  We fucking do, and we do not desrve being fried because the big man at the top says so.  It really is time to fight.

Sat, 09/08/2012 - 19:02 | 2775279 trebuchet
trebuchet's picture

This ZH piece is right up there in terms of analysis insight and foresight.

And BECAUSE of this website and people like it predicting collapse - (this site is taken FAR more seriously than many realise)  the powers that be AVOID collapse.  

Whats the difference between a Forecast and a Fortune tale?  




Sat, 09/08/2012 - 19:07 | 2775284 Radical Marijuana
Radical Marijuana's picture

There is an Oedipus effect of interaction between the Forecasting and the Fortune Telling.

Sat, 09/08/2012 - 19:16 | 2775295 trebuchet
trebuchet's picture

My comment was in reply to defencev, my apologies if it seemed to be aimed at you

Sat, 09/08/2012 - 21:48 | 2775441 Poor Grogman
Poor Grogman's picture

I'm so impressed.

I think I will get some coins from different countries and put them on my desk in a tin.
That way whatever the market does I can truthfully claim to have good returns (denominated in other currencies).

With insight like that I too could aspire to become a hedge fund guru.

Sun, 09/09/2012 - 03:13 | 2775770 Inthemix96
Inthemix96's picture


Unlike you my learned friend, I am not a trader, I am not a wall street boy, I have nothing at all to do with finance.  Zip, zero, nada.  I stumbled upon ZH a while ago, and along with some other blogs and various web sites, this average joe called inthemix96, has found out what ails mankind.  When I found out that my labour (and hard at that) was bought with money created from thin air, at first I thought, don't be so fucking stupid man, how can it be?

But, alas, I have found out how little the likes of people like you value real value.  I am afraid I am the bearer of bad news Defencev, you are going to pay friend.  You are going to pay a price that cannot be measured in wealth.  You, and all of your like mined jackals will pay a due.  You will pay in full, and you will pay with interest.  Humanity has no need for leeches of a mans labour.  You will learn this.  You will learn this wether you like it or not.  Enjoy the rest of your day, and digest these words.

Payback, will be a bitch

Sun, 09/09/2012 - 02:42 | 2775767 MiltonFriedmans...
MiltonFriedmansNightmare's picture

So am I to believe that the Germans disapprove of Goldman owing Europe? Herecy I say, simply herecy, or is it terrorism?

One more question; when in the hell will the Spaniards and Italians wake up and grow a pair, tell Draghi (Goldman) to F-off, leave the Euro and print their own currencies?

Guess they aspire to be Greece.

Sat, 09/08/2012 - 19:42 | 2775323 kevinearick
kevinearick's picture

Soros,another initiating jackal caught behind the curve, playing heads i win, tails you lose, inside the prison of his own construction.

when the ss cars suddenly flee the palace...

Sun, 09/09/2012 - 07:16 | 2775866 noses
noses's picture

Soros... A master thief among thieves.


Well... No fucks could be extracted from the ECB to be given for him.

Sat, 09/08/2012 - 14:07 | 2774869 bob_dabolina
bob_dabolina's picture

These fuckin' idiots are going to go back and forth like this forever.

eur/usd @ 1.28? Give me a fucking break.

Sat, 09/08/2012 - 14:12 | 2774882 Hulk
Hulk's picture

Its not going to go on forever Bob, the Math couldn't be ignored forever.

The Math is now, finally, asserting itself...

Sat, 09/08/2012 - 14:45 | 2774941 Ancona
Ancona's picture

Math cannot be ignored forever, but there are a hell of a lot of people who can be baffled with numbers for a very long time. Just look at how many people buy the BLS statistics.

Sat, 09/08/2012 - 15:32 | 2775014 sosoome
sosoome's picture

forever=very long time

Sat, 09/08/2012 - 15:22 | 2774995 DosZap
DosZap's picture

Drahuggi, was FOS  when he made the statement, saw this one coming 3000 miles away.

BACK to start.

Sat, 09/08/2012 - 17:18 | 2775143 amadeusb4
amadeusb4's picture

I wonder how Hugh Hendry is making out. In 2011, he talked about the euro going to parity this year.


Sat, 09/08/2012 - 18:15 | 2775210 smiler03
smiler03's picture

What if Germany exits the Euro?  Parity would look good.

"(as a reminder, nobody in Europe has actually implemented austerity)"

Tyler, try telling that to the Greeks. Suicide up. Homelessness Up. Charities feeding the poor. Pensioners taking 40% haircuts. If that ain't austerity, what is your definition?

Sun, 09/09/2012 - 07:59 | 2775897 Umh
Umh's picture

While I find many different retirement numbers mentioned. Both years of work (35,38) and age (58,61,63) requirements are mentioned. It is clear that the Greeks don't work as many years as the Germans who they are expecting to bail them out.

Sun, 09/09/2012 - 03:19 | 2775776 gggunchi
gggunchi's picture

It is true insanity.  When the BvFG grants the ESM its license this week you'll see it over 1.30 again . . . beautiful thing about that is you'll see that asscloen HvR get up say the problem is solved, just for a crap Spanish auction to send the thing crashing back down.  The people who made their money on this faux rally will make it back on the shorts.  


I personally htink this is Obama's effect, and he is doing his best to inflate the market.  Average voter in the US has no idea what the hell is going on in Europe . . . and I'm sure most of them have no idea there is a world outside their borders.  


I don't see it going above $1.31.  You are going to start to see negative rhetoric coming out of Franktfut to keep the EUR/USD down.  Last thing they want is some panicked sell off.  


Fuck this stupid Euro project.  

Sat, 09/08/2012 - 14:08 | 2774872 Racer
Racer's picture

The Central Bwanksters are like the boy who kept crying wolf when there was none and when there finally was no-one came to help because they no longer believed..

Tell a lie for too long and people give up listening

Too much jawboning and no action...

Sat, 09/08/2012 - 14:09 | 2774873 Vet4RonPaul
Vet4RonPaul's picture

First, Love ZH - thank-you for your honesty, expertise, courage and service to your fellow man.

Second, the Europeans are to be given great credit for their ability to postpone what should have been a complete implosion multiple times over the last 4 years.  They really are masters at getting blood from a rock.  And for the life of me I have no idea how the Euro/USD is now above 1.28.  I was betting it was going to near parity.  Finally, how is it that with silver skyrocketing, JPM is also going up?  If they have such a big short silver position, why isn't it translating to a falling stock price and losses?

Sat, 09/08/2012 - 14:11 | 2774879 bob_dabolina
bob_dabolina's picture

For all intents and purposes, JPM is the FED.

Sat, 09/08/2012 - 14:26 | 2774912 Vet4RonPaul
Vet4RonPaul's picture

oh shit!  some things i wish you hadn't told me bob

Sat, 09/08/2012 - 14:28 | 2774915 Bay of Pigs
Bay of Pigs's picture

JPM is piling massive shorts on right now as the price of silver rises (4000 new short contracts). Nothing new there at all. And when they engineer another waterfall decline they will cover and move on. From Ed Steers column today,

"JPMorgan's short position is now 26,000 contracts [130 million ounces] at a minimum...and that represents 26.3% of the entire Comex futures market in silver."

This what criminal banksters do. They steal money from unsuspecting investors (fools) who play the paper game with them.


Sat, 09/08/2012 - 14:37 | 2774927 Vet4RonPaul
Vet4RonPaul's picture

sheesh!  so when the Hunt brothers monopolize silver longs the Feds screw them but when JPM monopolizes silver shorts the Feds backstop them?  who says campaign contributions don't pay?!  

So Bay of Pigs, will we see silver rise to $50 and stay there for a few months in the next three years or will JPM keep that from happening?

Sat, 09/08/2012 - 14:59 | 2774960 Bay of Pigs
Bay of Pigs's picture

Either the CFTC forces them to reasonable position limits (highly unlikely) or a failure of delivery (default) appear to be the only things that will dramatically change this situation for the better.

I think the best way to have exposure to silver is to buy physical and simply hold it. Same for gold.

Sat, 09/08/2012 - 14:39 | 2774932 Hulk
Hulk's picture

Yep. and when they get trapped in those shorts one day, we get to backstop them. Raped twice, in effect...

Sat, 09/08/2012 - 14:52 | 2774953 bob_dabolina
bob_dabolina's picture

How many ounces are they long?

You know banks do take long AND short positions.

Sat, 09/08/2012 - 15:12 | 2774977 Bay of Pigs
Bay of Pigs's picture

No bob, it's about the "concentration" of the short position. By having such a massive amount, JPM is able to move the price by sheer size and volume (pulling bids and running the stops). Thats why you see such ridiculous moves like we did in May 2011 (49 to 43 overnight on a sunday night with nobody trading in Europe or the US). In just four days silver was pounded to 34 dollars (-30%). 

And yes, as to your other question, JPM is long both gold and silver as well.

Sat, 09/08/2012 - 14:38 | 2774930 Vet4RonPaul
Vet4RonPaul's picture

Jamie or Bernie just junked you bob_dabolina

Sat, 09/08/2012 - 16:45 | 2775108 A Man without Q...
A Man without Qualities's picture

certainly when it comes to the silver short position..

Sat, 09/08/2012 - 14:10 | 2774874 gkumar
gkumar's picture

But the million "Yuan" question is when is it going to happen? In 2100?

Sat, 09/08/2012 - 14:13 | 2774883 Zero Bid
Zero Bid's picture

I wonder which primary dealer will blow up this year, only to see Spain/Italy get a bailout days later

Sat, 09/08/2012 - 15:51 | 2775047 ReallySparky
ReallySparky's picture


Sat, 09/08/2012 - 14:15 | 2774884 TN Jed
TN Jed's picture

This the part of Intervention where they lure the addict back into the hotel with the promise of one more for the road.

Sat, 09/08/2012 - 15:22 | 2774997 tickhound
tickhound's picture

Actually part of the Intervention where they lure the addict with the promise of one more for the road,

... yet the addict demands 2 for the road, and one more for his buddy... and only with the pre-condition that everyone in the room admits they have a problem.

I saved it on my DVR.


Sat, 09/08/2012 - 14:13 | 2774886 williambanzai7
williambanzai7's picture


Sat, 09/08/2012 - 15:07 | 2774968 machineh
machineh's picture

That's one way to defeat facial recognition cameras!

At first glance, I mistook him for Abe Lincoln.

The cockroach motif on his temple signifies 'I am a survivor!'

Sat, 09/08/2012 - 18:19 | 2775215 smiler03
smiler03's picture

It took me a while. A hand grenade?

Sun, 09/09/2012 - 01:28 | 2775722 monad
monad's picture

Queequeg the cannibal prince. How appropriate.

Sat, 09/08/2012 - 14:16 | 2774889 q99x2
q99x2's picture

Arrest GS executives in all sovereign states for acts of treason and as if by magic things will get better.

I like the silver aspect to taking down the Morgue. Where's the Hunt brothers when you need them?

Sat, 09/08/2012 - 14:16 | 2774890 apberusdisvet
apberusdisvet's picture

It will be interesting to see how they plan to move the NWO/Bilderburg totalitarian agenda forward.   in desperation will they merely order a NATO humanitarian invasion of Spain and Italy, after some sort of false flag catastrophe?

Sat, 09/08/2012 - 14:46 | 2774945 neptunium
neptunium's picture

You're basically creating a soup of conspiracytardage by combining buzzwords favoured by idiots :)


OMG! FALSE FLAG! NWO!! BILDERBERGS, how long until the shapeshifters come and get you?

Sat, 09/08/2012 - 15:53 | 2775053 earleflorida
earleflorida's picture

SHHH! Quiet, i haven't finished my CB`Alphabet soup...

, couldn't even find, 'one lousy fucking vowel' in the last canned speech!

Sat, 09/08/2012 - 14:48 | 2774948 Jason T
Jason T's picture

if they ever do decide to "flip the chessboard," it would send the entire planet into hell given our interdependency. 

Sat, 09/08/2012 - 16:12 | 2775072 Rogue Trooper
Rogue Trooper's picture

LONG Tinfoil?

Sat, 09/08/2012 - 18:55 | 2775264 barkingbill
barkingbill's picture

TINFOIL, just another name for truth these days it seems...

Sat, 09/08/2012 - 14:22 | 2774895 nathan1234
nathan1234's picture

Bailouts are for the Banksters- Not the people who have now understood what bailouts are all about.


Sat, 09/08/2012 - 14:23 | 2774901 Atomizer
Atomizer's picture

The process of collapsing sovereign fiat currencies has been triggered. Central Planners will begin coughing up hairballs once stage two is executed. Watching this failure will be joyful.

Sat, 09/08/2012 - 14:24 | 2774902 TIMBEEER
TIMBEEER's picture

But Germany will not honor any liabilities forced upon Germany by 3rd parties once S hits the fan. Only debt issued by the German government is going to be paid back.


Sat, 09/08/2012 - 16:54 | 2775111 Whoahthere
Whoahthere's picture

Depends on how much shit actually hits the fan and at what velocity. Promises are never to be kept under any circumstances. Period.

Sat, 09/08/2012 - 14:27 | 2774908 CrashisOptimistic
CrashisOptimistic's picture

Folks might want to note that not a single bond has been bought.  Spanish yields are falling.  They may not need the ECB to buy any if the yields continue falling.


The game will stop if people stop playing.  Sell whatever Spanish bonds you have and walk away.  US Ts are the parking place for now, but their day will come for the same treatment in a few years.

Sat, 09/08/2012 - 20:12 | 2775351 Peace is the x-axis
Peace is the x-axis's picture

The game will stop if people stop playing.

After these things I saw another angel coming down from heaven, having great authority, and the earth was illuminated with his glory.

And he cried mightily with a loud voice, saying, "Babylon the great is fallen, is fallen, and has become a dwelling place of demons, a prison for every foul spirit, and a cage for every unclean and hated bird!

"For all the nations have drunk of the wine of the wrath of her fornication, the kings of the earth have committed fornication with her, and the merchants of the earth have become rich through the abundance of her luxury."

And I heard another voice from heaven saying, "Come out of her, my people, lest you share in her sins, and lest you receive of her plagues.

"For her sins have reached to heaven, and God has remembered her iniquities.

- Rev 18:1-4

Sat, 09/08/2012 - 14:30 | 2774917 Peter Pan
Peter Pan's picture

They all want bailouts because they would otherwise collapse. They simply don't want the conditionlity that attaches to the bailouts. Watch how the conditions will be watered down.

Sat, 09/08/2012 - 14:37 | 2774926 flaunt
flaunt's picture

Yawn.  The Euro sky is falling rhetoric is stronger than ever.  This type of analysis can be entirely correct from an academic viewpoint but completely meaningless in practice.  They're going to find a way to do what they want regardless of whether it would be feasible in unhindered markets.

Next year when the Euro is still together and no countries have exited, everyone will forget all of this bullshit and go back to being mesmerized by nominal GDP growth and falling unemployment rates.  The sword of perceived economic prosperity is the one by which politicians live and die.  They all know the consequences of terminating the Euro and if there's one thing human beings can be counted on to do it's to act in their own self interests.


Sat, 09/08/2012 - 14:42 | 2774937 Hulk
Hulk's picture

Good MDB impersonation. Backstops are all optical and therefore this thing ends well...

Sat, 09/08/2012 - 16:16 | 2775076 Rogue Trooper
Rogue Trooper's picture

Agreed Hulk... 'Dont Vote' needs to work on the sarcasim better otherwise some folks will think this was a serious post.

Sat, 09/08/2012 - 21:56 | 2775450 Calmyourself
Calmyourself's picture

Yeah he is way off base as that has not continued to happen for years now.. All the doom and gloom rests on one posit that rules, laws, customs and deomcracy matter, they dont.  Once you get that the only thing that percolates out of this fetid mess is supply lines.  Global macro supply lines and micro local. 

 Once they are impacted by deflation or inflation to the point of failure batten down the hatches.  However if the media does their part, the military does their part and the politicians and bankers play their coordinated part this could last for years and years as it is only limited by this simple thing.  The ignorance and desire for responsibility free lives of the populace at lagre and that folks is unlimited.  Prepare for a very long haul as the machine has been well oiled and works, creaky at times but the wool stays over the eyes...

Sat, 09/08/2012 - 14:47 | 2774947 Atomizer
Atomizer's picture

Go right ahead wanker. Continue to share your rosy views while leaving a skid mark in your underwear.  

When the baby boomers joined the workforce and started saving, money supply and property prices entered a rising trajectory. We conclude that demography was the long-run driver of this process, basing our argument on data from 22 advanced economies for the 1950-2010 period. According to our lifecycle model, large working-age populations saved for their old age by investing in property and broad money instruments, such as deposits. In the past, savings activity by baby boomers drove up property prices and also increased demand for money. As baby boomers retire, these dynamics will go into reverse. Falling demand for savings, including money and deposits, might hinder banks in their efforts to collect deposits and thereby bring down excessively high loan-to-deposit ratios. Our model also confirms that monetary stability contributes to long-run property price stability. 

You’re just another piece of shit that thinks money falls from the sky. Yawns!

Sat, 09/08/2012 - 14:39 | 2774931 tahoebumsmith
tahoebumsmith's picture

All eyes are on Iceland... Bitchez. 

Sat, 09/08/2012 - 14:39 | 2774933 Eddyspain
Eddyspain's picture

Watch out  the last desperate measures in rescued Euroland: Portugal cuts all salaries (public&private) by 7% in 2013 (by requiring more ss contributions from the employee)

Sat, 09/08/2012 - 14:44 | 2774939 Schmuck Raker
Schmuck Raker's picture

Here's an interesting tidbit on ECB and pari passu(Oh pe shaw):

Seniority, the SMP, and the OMT

"The SMP seniority only activated when Greece switched the ECB’s holdings into special securities protected from restructuring. Therefore, as Nowakowski notes, nothing has changed in the bonds’ terms. That means the ECB could, if hell-bent on avoiding losses through a restructuring, stay legally ‘pari passu’ but effectively senior anyway. As Nowakowski pointed out in a recent note:

The ECB can promise to be pari passu, until a default threatens and it can then pressure Euritania to let it swap into local or international bonds without CACs that receive special treatment, exactly as it did with Greece. They could still argue, though not in good faith, that those bonds are not senior to anyone, they just got lucky again to get such a great offer. The ECB has tremendous leverage on countries whose banking systems depend on it for funding, so it can call the shots.

The point, really, is that eurozone sovereign debt is overwhelming governed by the domestic law of the issuer. Making it easier, if deemed necessary, to change the law to protect the ECB, technically pari passu or not."

Sat, 09/08/2012 - 15:04 | 2774965 Tyler Durden
Tyler Durden's picture

Here it is simpler: not a single (legitimate, not Twitter-based) bond trader believes that any purchases by the ECB - an institution that changes the rules at whim and whose credibility is predicated upon the inability to incur a loss - are pari passu.

Here it is simplest: nobody will buy Spanish bonds using non-"Other People's Money"

The only trade that does work (until it doesn't at which point the entire sovereign bond market will be irrelevant) is the one we suggested in January: buy non-local, strong-covenant sov bonds, sell the inverse.

Sat, 09/08/2012 - 15:10 | 2774975 Schmuck Raker
Schmuck Raker's picture

Simple enough even for this Schmuck. Thanks as always Tyler.

Sat, 09/08/2012 - 16:03 | 2775061 CrashisOptimistic
CrashisOptimistic's picture

There's a wiser trade.

Sell European sovereign bonds you might have.  Short nothing.  Buy nothing.  Take the cash and flee.  Do not keep any money in Europe.

There is NOTHING you can do that is immune to or safe from an entity that can change the law at a whim.  

Get the hell out of European bonds and never return. Period.

Sat, 09/08/2012 - 17:23 | 2775153 falak pema
falak pema's picture

You could also say in the same breath : Get the hell out of US treasury notes! 

Its the same song...don't get me wrong! 

Sat, 09/08/2012 - 22:21 | 2775483 CDSMonkey
CDSMonkey's picture

Good idea, except buy crap when no one thinks central banks will step up. Then sell when everyone expects them to

Sat, 09/08/2012 - 22:23 | 2775485 CDSMonkey
CDSMonkey's picture

If it doesn't work they will be senior. If it does work, which it might, then sub won't matter though wouldn't be long Spain 10 yr here, but not short either

Sat, 09/08/2012 - 14:47 | 2774946 slewie the pi-rat
slewie the pi-rat's picture

as our moms usta say:  we'll just hafta wait and see...

hi mom!

almost the whole soggy bloggy sphere is claiming QE3 is coming next week!

l0^0ks to slewie like some of the heavyweight gold touts just went full retard and the toy boys are afraid to be "wrong"

same shit, different day

dNoland [PrudentBearHome] "apparently" joins them in his great weekly summary :>

Amazingly, in the face of exceptionally buoyant securities markets and an expanding economy, the Federal Reserve is apparently about to embark on yet another round of quantitative easing (“money printing”).  Few expect this to have much impact on the real economy, but it is clearly having a major impact on already speculative financial markets.

I’ve always feared such a scenario:  Severely maladjusted Bubble Economies responding poorly to aggressive monetary stimulus, spurring policymakers into only more aggressive stimulus measures.

i think we have it right tyler;  let's win some respect from the fukin street here 

fightClub, BiCheZ!

Sat, 09/08/2012 - 15:24 | 2775005 slewie the pi-rat
slewie the pi-rat's picture

did you rake any radishes?

i can get $40 to ya if ya need it!  tyvVm

for me it is a live issue;  and i have a sense i am not alone;  i still see 1 labor-data manipulator;  1 b-mup; and 1 election

and i hope i'm wrong, too, btw...

who d'ya think that parrot that answered my last (there) likes?  L0L!!!

Sat, 09/08/2012 - 15:04 | 2774964 banksterhater
banksterhater's picture

They DO want it, WITHOUT STRINGS ATTACHED. Watch the Fed's bal sheet for swaps with ANY or NO collateral going to the ECB !

Sat, 09/08/2012 - 19:59 | 2775344 trebuchet
trebuchet's picture

Spain and Italy want it without strings.. direct to banks etc... bollox as merkel has said "nein.."  That was their shuttle diplomacy last week it seemd to me.

Its like this.  Spain runs out of money, markets spike and no more public sector and then they get the bailout (Spain must first be destroyed to be saved), or they see that coming and do the Goldman thing and get the bailout now....

Is there a third option for Mr Rajoy et al?  would have been "wait for the austerity to kick in", sell as much debt as possible  (76% of 2012 planned bond issuance sold YTD, but they need more than planned given the severity of recession etc), and hope the rising tide lifts all boats.... that massive capital outflow is not looking good for them. Bank of Spain triggered ELA. 

Mr Rajoy has to fall on his sword in the interests of EU unity and the future of Spain... ECB signed up to Deustche repbulic of euroland..... As this article points out the shit is getting stickier and stickier, harder to get rid of.

ECB bond buying is not going to be a simple answer, get ready to ride a roller coaster...


Sun, 09/09/2012 - 05:19 | 2775816 nathan1234
nathan1234's picture

Yes! The only way left to help Europe is the Fed.

So what if the Fed has already given away $16 trillion. Another $5 trillion is just small change.

Swaps are the way of getting over the lending restrictions.

So what if the money is not returned! The Fed is already broke and the American taxpayer is there to bailout again and again.

Sep 12th when the German court rules- The Fed will rule.

Sat, 09/08/2012 - 15:05 | 2774966 shovelhead
shovelhead's picture

As for Rayjoy trying to keep his job...

You're lovin' gives me a thrill
But you're lovin' don't pay my bills
Now give me money
That's what I want
That's what I want, yeah
That's what I want.

Poor Draghi...

It must suck trying to play Superman without a phonebooth in sight.

Sat, 09/08/2012 - 15:06 | 2774969 lizzy36
lizzy36's picture

Oh what a tangled web we weave, when FIRST we practice to deceive.

Sat, 09/08/2012 - 15:20 | 2774990 JamesBond
JamesBond's picture

you can save our asses but only on our terms.....

yeah, that about sums it up.


Sat, 09/08/2012 - 15:21 | 2774994 Caviar Emptor
Caviar Emptor's picture

Don't expect collapses. You'll simply get crumbling. 

Central bankers will keep the game going on for as long as they can. They figure nobody opposed to them can stay solvent long enough. 

The trouble is their policies are eroding the economic engines and the wealth (and buying power) of the middle class and ushering in neofeudalism. There will be political ramifications

Sat, 09/08/2012 - 17:05 | 2775122 slewie the pi-rat
slewie the pi-rat's picture

no doubt of the "erosion" downside, C_E

we're getting it also, i would say, but let's go the the EU here now

german pastryChefCourt rules next WED and marioECB got some time to re-fi and get some add'l short-end credit to spain (and others?)

troika in athens monday (ECB + IMF + EUcommish)

if the sovereignty is not "federated" [tyler is right, imo] then i think the EZ will go two-tier to protect the core and the IMF will roll into the peripheral states to "help" but not in a 'third-world sense' (we would hope) and what an offensive term that is, huh?

i can't forget that timmah and christineL met with spain before the last EU goldilocksSummitTM and i don't pretend to fathom the bankstering involved;  my pea brain is getting:  the IMF will take some eoro-"assets" offa the SNB and the blunderbank  [and with some hi-quality stuff, too, given the heavy lifting and the "helluva job" these two have done here]  and use them to do controlled financing in the periphery

i may not understand the EU and be responding to "prop" but i think the 2-tier is the best solution politically and monetarily;  the periphery will hafta submit to those silver spurs coco had made for christine;  and they will eat a ton of fiscal shit;  but they will remain sovereign and they will not die completely, economically;  quite the contrary one might "hope"

where will italy "land"?  they are very skilled politically and financially and may be able to "hang in there" at least for now;  this would also tend to spread the 'burden' with the ECB-IMF printing

so we are left with the sovereigns, their criminal fuking TBTFs, and thePeople just bent over in the barn for the uberMeisterz

just like home!  L0L!!!

i've been following axelMerk quite closely for a few weeks;  he has taken a rather simple approach to all this (ok by me) and just said :> the ECB is gonna = the FED or close to it and it is happening now, right before our eyes

Euro: Looks like a duck, quacks like a duck -

he puts one foot in front of the other and you know where he stands

again:  "it's the sovereignty, styooopid!"

maybe these are "generally" the policy options the EZ nations are seeing, also;  the boilerplate legal and sovereignty issues seem to be begging to be addressed, either way

and i am also left with:  does the EZ even WANT a "FED-like creature" in its midst?  germany does not, imo

i thing the germans would like to see those with "problems" in IMF therapy with a clear "re-entry mechanism"

this would allow them to get on with their beer-drinking, ass-slapping, and guess what else?  hitchcock's theBirds

when i lived on the coast, the (young-to-me) germans would come visit in the summer wanting to know where everything was shot nd every detail of the film you could imagine.  they were very "ernst" and just goggle-eyed about the film

they came all the way from germany to see the schoolhouse in bodega and they were practically insane about "trying to find the gas station"

...veddy inderestink...

Sun, 09/09/2012 - 05:31 | 2775823 trebuchet
trebuchet's picture

thats quite a bullish post for you :) 

i think the bundesbank does want a Euro-Fed. But with it at the driving wheel. MErkel as has to them " in time", lets get the boys in line first" 


and coco didnt just make a set of spurs for christine, Merkel wearing the same brand too. 

Sat, 09/08/2012 - 17:05 | 2775132 Spastica Rex
Spastica Rex's picture


Sat, 09/08/2012 - 19:17 | 2775297 Radical Marijuana
Radical Marijuana's picture

Exploding iceberg in Antarctica!

Things only keep crumbling to a point, then they can collapse instead!

There can be drastic changes of state, where milder social storms turn into things analogous to hurricanes and tornadoes ... The world has a couple thousand atomic bombs, ready to go at the push of a button! It has many thousands more held in reserve. The insane people controlling the world are willing to gamble on world war, to back up their established global monetary fraud systems. Therefore, the economic collapsing that is just bit by bit crumbling CAN reach a critical point, where it changes state, and collapses into chaos beyond comprehension!

Sun, 09/09/2012 - 07:50 | 2775893 MiltonFriedmans...
MiltonFriedmansNightmare's picture

Caviar, your statement sounds as if the destruction of the middle class is an unintended consequence. To me, it seems to be their goal.  Suck out every last drop of blood from the bodies of the middle class, then leave the dead corpses to the maggots.

Sat, 09/08/2012 - 15:23 | 2775002 FleaMarketPete
FleaMarketPete's picture

What kind of schemes do you think Bernanke will come up with to help support the Eurozone and ECB?  You don't think he'll just sit back and do nothing if things start to fall apart do you?

Somehow buying Spanish and Italian bonds will become part of the Fed's mandate of full employment in the US.  I can even image some Dems and Reps demanding that Bernanke keep Europe from pulling the US into the abyss.

Sat, 09/08/2012 - 15:35 | 2775020 Ted Baker
Ted Baker's picture


Sat, 09/08/2012 - 15:38 | 2775026 Monedas
Monedas's picture

Socialist Euro-Fucks !   They are the ones they have been waiting for !        Monedas      1929       Comedy Jihad The Proud, The Dumb And The Common

Sat, 09/08/2012 - 15:40 | 2775030 hannah
hannah's picture

ok i agree with everything theauthor says....but...i dont see any cracks in the banker bs plan. nothing. same old massive debt that gets rolled and coruption that goes uncontested. i dont see any reason why this parade cant go on well into next year. sure a black swan will take the whole system down eventually but there are zero negative ramafications to the wealth of the 1% so far....nothing.

Sat, 09/08/2012 - 15:42 | 2775032 sunny
sunny's picture

Written above:

(as a reminder, nobody in Europe has actually implemented austerity)

Actyally I think Estonia did.  Cut government workers pay by 20% , major reforms to entitlements, all the hard stuff.  It worked.  They are now running a nice, tight, fiscally responsible country.  

Just saying.


Sat, 09/08/2012 - 15:47 | 2775042 nearvana
nearvana's picture

U-turn: bailout is for p*ssies and we are c*nts


Sat, 09/08/2012 - 15:50 | 2775046 americanspirit
americanspirit's picture

Great picture - looks like he must have caught a whiff of Merkel's crotch

Sat, 09/08/2012 - 15:51 | 2775049 Tombstone
Tombstone's picture

What's more debt piled on more debt?  We do it in America all the time and see what happens?  The stock market rallies, gold rises, oil rises, and even home prices are rising again.  Sure, employment is down a smidgen, but hey we got the best welfare backstop next to Europe.  And don't forget our secret weapon: Bennybucks.  They will be flowing into the ECB soon.

Sat, 09/08/2012 - 16:03 | 2775051 michael_engineer
michael_engineer's picture

Aren't bailouts now mostly a rolling over of bad paper while trying to insert a different stuckee onto the hook?

Most see this now I think.

Current stuckees will favor it and target stuckees will not.

Sat, 09/08/2012 - 17:37 | 2775172 Pure Evil
Pure Evil's picture

There's never a different stuckee with this crap, it's always the taxpayer.

Sat, 09/08/2012 - 16:04 | 2775060 Atomizer
Atomizer's picture

I have stated numerous times, the names & faces will come to surface. My above post outlines how they have crashed the affordable home life cycle gravy train. Now they have installed The Affordable Care Act to keep the Ponzi scheme going. These folks are real geniuses for milking the baby boomer proles. One cannot imagine what will happen, once the family cartel is exposed.     


Those poor gypsy thieves will declare an act of monopoly terrorism in defense.


Sat, 09/08/2012 - 16:19 | 2775082 falak pema
falak pema's picture

ZH loves to pour on the drama of gypsy queen psychodrama; Carmen singing to her lover that she won't do his bidding.

In fact its much simpler; Draghi holds the purse strings; period.

Nobody wants the humiliation of pulling their skirts up, but nobody can stand the pain of having to say "no rain today" to their Oligarchs.

Its NOT the people that are the issue; its the Oligarchs. 

And their money is NOT for sale to please the Carmens of this world. Carmen dances or she shuts up. Period.


Sat, 09/08/2012 - 16:38 | 2775097 Atomizer
Atomizer's picture

Let me fix that for you..

Draghi holds the empty purse strings; period.

Sat, 09/08/2012 - 17:14 | 2775142 falak pema
falak pema's picture

Its the Zeitgeist of the Reaganista age: FED, ECB, BOE, BOJ all together. Thats Oligarchy capitalism for you. So the purse strings are empty for all or more importantly for ALL their people. Its the people that lose. And there are no exclusions.

So don't cry for Argentina; 'cos Argentina is Oligarchy land. The winners, ah the winners...

Its the blind who can't see who those winners truly are. Its not the libertarians...thats for sure, as they are the lost sons of Reaganista land; les pieds noirs of capitalism, like the true  pieds noirs were of french Colonialism; hoping one day to win back their Algerie Française! 

Sat, 09/08/2012 - 19:39 | 2775319 Atomizer
Atomizer's picture

Falak pema,

Sorry to rain on your parade, I'm debt free. They can exert all efforts in collecting left over table scraps. Watching everything come apart in real-time will be very entertaining. Sometimes bad intentions can bring on a sack of damaged goods.  Winks!




Sat, 09/08/2012 - 16:22 | 2775085 SmoothCoolSmoke
SmoothCoolSmoke's picture

Blah, blah, blah.  Wake me up when the SP hits 1270, until then, banksters have won.

Sat, 09/08/2012 - 17:14 | 2775141 Atomizer
Atomizer's picture

Let’s pretend we went to a strip club. Draghi sits down next to you with pumped up tits. As he crosses his legs, he begins to spill all of his financial problems.


Draghi: Hello sexy

Me: Hello

Draghi: Would you mind buying me a drink?

Me: Certainly

Draghi: I’m really down in the dumps. My mobile phone is going to be shutdown, the landlord is chasing me for 3 months past, and I owe on my sign & drive car payment.

Draghi: Do you want to have a lap dance with me?

Me: Wish I could. Have to be at an engagement in 15 minutes. Catch you next time dear.



Sat, 09/08/2012 - 17:25 | 2775157 Dareconomics
Dareconomics's picture

Spanish financing needs are greater than the MSM NYT mentions in the article. I have them pegged at €90bn for the rest of the year based on a conservative budget deficit of 8.08%. Check my figures here:

If the budget deficit is 10% and in light of the Greek crisis trajectory this is a reasonable estimate, the amount needed between now and the end of the year is more like €123bn. This figure will be impossible to finance without external assistance.

Next year, they will need even more money. Spain will need to roll over about €120bn in debt and finance another €118bn deficit. €238bn in Spanish debt sales are just not happening next year. The ECB, ESM or the IMF is going to have to render assistance.


Sat, 09/08/2012 - 17:54 | 2775189 Dareconomics
Dareconomics's picture

Actual Spanish Financing Needs « DARECONOMICS.

We see that Spain has a ridiculous amount of debt to finance between now and the end of the year (click above for the figures). How does the situation look for 2013?

Spain's financing needs for 2013 are its budget deficit plus the amount of debt it needs to roll over. The Spanish finance ministry is claiming that it will be able to get its deficit down to about 5.3% of GDP next year. Assuming that GDP does not shrink further, we get a euro amount of €59.25bn (5.3% * €1.18tr).

The IMF projects that Spain will have government debt of 96.5% of GDP in 2013:

12.7% of that needs to be rolled over:

Let's calculate the total financing needs based on these figures assuming €1.18tr in GDP:

.965 debt rate  * 1.18tr =  €1.078tr total debt

Now, we need to refinance 12.7% of that figure

12.7% * 1.078 = €137.02bn debt rollover

And we add that to Spain's projected budget deficit:

€137.02bn + €59.25bn = €196.27bn

Spain needs to sell €196.27bn in debt just to finance itself next year. The NYT's numbers are way off; they must be taking the Spanish government at their word rather than fact checking those figures. But wait, there's more.

If you have been paying attention to the Eurocrisis, you already know that the budget cuts undertaken in an austerity program actually cause the budget deficit to rise.  Spain made deep budget cuts this year, and its deficit rose from a forecast of 4.0% to over 8% now, and this figure is very optimistic:

What happened in Greece with the every increasing budget deficits is happening in Spain. This shouldn't be surprising, because both countries are the midst of depression. You can also throw Portugal into this club.

Therefore, I posit that next year's budget deficit will be double the forecast for 10.6%. This means that Spain will need to sell €255.27bn to finance itself next year. 

I think Drakel better fire up the printing press now, because it's going to be a long 16 months in Spain.

Sat, 09/08/2012 - 18:19 | 2775216 SmoothCoolSmoke
SmoothCoolSmoke's picture

But you see.... the can has been kicked out 4 mos, more like 6?  Plenty of time for the Criminal Elite to scheme up another plan.

Sat, 09/08/2012 - 17:58 | 2775195 phoolish
phoolish's picture

"Nobody Wants the Bailout"


That' s not true.  I'm certain the bankster pigmen do.

Sat, 09/08/2012 - 18:11 | 2775205 Hapa
Hapa's picture

Maybe the can that Draghi kicked down the road didn't bounce, and the boost to markets will be much shorter lived than hoped for.  I suppose TPTB never know how much of a boost they'll get with their jawboning, but do it because it's a cheap shot and doesn't cost them anything. It's all talk, talk, talk today and will continue as long as people are willing to be deluded yet again.

Sat, 09/08/2012 - 21:24 | 2775413 Poor Grogman
Poor Grogman's picture

The Euro-peons are becoming nearly as funny as Annoying -mouse.

Which is nothing really to brag about.

Maybe the ECB could hire annoying-mouse as a special adviser on economic matters. After all he/she/it always seems to have the answers?

Sun, 09/09/2012 - 04:58 | 2775808 natty light
natty light's picture

I enjoyed watching the farmers throw watermelons onto the street.

StopcartelTV from Greece

Sun, 09/09/2012 - 11:21 | 2776107 tip e. canoe
tip e. canoe's picture

yeah that's really smart, wasting food.  when the greeks figure out that the answer is to work with nature, instead of destroying its bounty, then they'll be able to tell the Cartel to fuck off for good.

Sat, 09/08/2012 - 23:18 | 2775562 mewenz
mewenz's picture

there are no conditions at all and all involved know this completely, all part of the illusion.

- The very second the very first bond is purchased, all conditions become null and void.  Why?  because the ECB will be completely and totally unwilling and unable to stop buying especially if the "conditions" are not being met.  To do so would risk "the end of the world as we know it", just ask ECB / Fed / Banksters etc...that will be their same tired line.

Sun, 09/09/2012 - 10:04 | 2775869 THE DORK OF CORK
THE DORK OF CORK's picture

People are missing something quite simple in all of this , forget about the debt for a second - debt is a metaphysical concept.

Whats more important is the leaking of Hard currency because of non national control systems set up withen the Euro Market state

If Spain, Italy , even Germany go back to more national systems of control the energy leakage withen these now Euro systems will slow.

This means more will be available for domestic demand & rational investment.

When a country , a nation state and not the current market  states prints the energy is not lost , how could it ? it is simply redirected towards less wasteful domestic demand.

This level of globalisation is just too costly for energy systems......Europe needs to go back to at least pre 1987 political and economic systems...this will then be reflected in their energy & trade balances.

 E.G. In 2010 Dublin & Ireland had the biggest drop of passenger traffic in Europe at -10.1% & -12.1% ....

In a national economy this would prevent the export of hard currency......but Ireland is not a national economy - its export of hard currency continues to climb since then.

Sun, 09/09/2012 - 11:10 | 2775885 falak pema
falak pema's picture

Lord Soros and the ECB : Soros On What Happens Next In Europe After September 6 Game-Changer - Business Insider

Key line : Mutti Merkel as future Euro Hegemon. To make it work under German benign leadership.

Soros is convinced that MErkel is fully on board to save the Euro, that Weidmann is isolated. And to do that, after the monetary can kicking and Draghi string pulling, she will impose fiscal harmony and more federated budgetry; as Pericles of Eurozone!

Caramba! Down on your knees nation states. Pericles-Mutti now runs the Euro league. 

Farage will suffer from apoplexy if this happens.

Sun, 09/09/2012 - 10:13 | 2776008 Quinvarius
Quinvarius's picture

This article is ludacrous.  Of course they want the ECB to buy their bonds.  Even if there was something magic about 8%, they want their rates lower.  Rates only stay under 8% or lower when the ECB buys the bonds and knocks rates down.

Sun, 09/09/2012 - 10:35 | 2776024 falak pema
falak pema's picture

the Euro peripherals rate spreads is a scam run by the Anglo HFs, to make money off the poor Euro sovereigns and their sheeple, with the help of all those banksta banks who have no morals, ethics or national attachments; a renegade scam within a larger scam which is the financialista ponzi itself, as one hollows out the other. Go figure out.

Greed now runs toe to toe with panick as the game is in a monster casino run where nobody knows if he is burnt toast or melting butter.

Sun, 09/09/2012 - 11:35 | 2776132 boiltherich
boiltherich's picture

So, if we know this will - MUST - end in a eurozone collapse, and the ECB knows there is no way in the end to avoid it, and the markets know just as much as we do, and the Germans and all other individual nations within the zone also know this cannot end well, then why is ANYBODY putting hard earned money into these "investments?" There are no returns possible in this game for any players that warrant the risks, especially when the ECB imposes draconian austerity and grants bond seniority to itself upon activation of any aid.

In the case of the ECB itself the obvious answer is they cease to exist without the euro, and the euro ceases to exist in reality with the first national exit, at that point the game is up. So no matter how duplicitous his words and actions are Draghi will still carry out this charade, and the individual debtor nations that are being floated by the ECB actions may go along with it because they get to live a little longer beyond their means until they actually have to resort to mainlining funds direct from Draghi at which point they lose sovereignty which just means they become vassals of Germany to no apparent benefit either to them or Germany.

The only reason I can think of that the "markets," that is the so called investors, would go along with any of this is that having driven bond prices so low they now hope to reap a minimum price assured by the ECB's rumored interest rate cap, which would be a floor price higher than what they have invested, capital gains. But, they know any ECB interventions also carry the threat, or should I say after what happened in Greece, the promise of not just a haircut but being snatched bald with anything from a 75% to a total loss of investment. For them it is a heads you win tails I lose proposition, if there is intervention they are subordinated and will face haircuts at some point, a partial but deep and protracted default, if no intervention the sovereign goes belly up and they face default. Either way they not only have to see the game as not profitable but a completely rigged game in which the house will win and they will lose. Even if there could be a central planner miracle that somehow saves the eurozone and their nominal principal investment it can only come at the price of devaluations that still destroy their profitability via inflation.

So why is the market a player? Do they expect the Fed, the Bundesbank, the BOE, the BOJ and BOC, as well as perhaps BRIC central bankers to continue to secretly support the zone/ECB forever with limitless funding? Have they had some sort of guarantee of this covert foreign intervention that the greater public is somehow not aware of? How could such an enormous secret be kept when the greater public is part of the "market?" Even if such secret support does exist the nations in the zone cannot tolerate the debt loads they already have no less mountains more debt at politically prohibitive terms.

There has to be a truly basic fundamental piece to this puzzle we are missing here, for years we have read and participated in a debate that is speculation and awe as to how things could be unfolding while we watched in disbelief at the scale of the events. And no, the explanation cannot be as simple as the power and greed of Goldman though Goldman is up to it's eyeballs in the whole thing, their sticky little fingerprints are all over this mess but it's role is little more than as ambassador or tool of US/Fed policy in the matter, this eurozone debacle is magnitudes larger than even US ability to manipulate or benefit from. What possible motive could the world have for life support of the eurozone currency when there can be no winning outcome to it's survival, especially when it's survival means a permanently debt crippled Europe?

At this point Krugman's alien invasion scenario comes to mind as being as plausible an explanation as any we have seen so far.

Sun, 09/09/2012 - 12:40 | 2776252 GMadScientist
GMadScientist's picture

no puedes tenerlo todo, tienes que elegir, putas.

Mon, 09/10/2012 - 10:29 | 2778286 WhiteNight123129
WhiteNight123129's picture

Tyler you are in great shape today.

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