A Tale Of Two Cities

Tyler Durden's picture

From Mark Grant, author of Out of the Box

A Tale of Two Cities

Euro bonds “didn’t find much support” at the EU conference.
                              -Jean-Claude Juncker

“A majority of European Union leaders at a Brussels summit this week backed joint euro-area bonds.”
                             -Mario  Monti


Encapsulated in these two comments is the problem that Europe is now facing. Two views, two radically different positions and no agreement on a middle ground because there is not one. Of course the periphery countries, the weaker nations want Eurobonds because it would dramatically drop their cost of funding. Of course Germany and their stronger EU countries do not want it because it would dramatically raise their cost of funding. Nations, in the end, will act in their own self-interest, this has been proven more than enough times in history, which is why I stand by my conclusion that Eurobonds will not be forthcoming regardless of the polite rhetoric attached to them. Germany cannot and will not ever accept Eurobonds not only for this reason but because it would not only raise the cost of their borrowing dramatically and because it would lower their standard of living, over a period of time, to the median of all of the Euro-17 nations and that would not only be political suicide in Germany. I therefore state that regardless of any and all pandering in the Press that Eurobonds will not happen because it is a political non-starter in Germany, Austria, Finland et al. They are like the Titanic; dead in the water.

Beyond this single issue is also the widening rift between the European Socialists and the Conservatives. Without assuming any moral high ground; Europe is now split between one view of the world and a distinctly separate second viewpoint and this will make the governance of Europe not only difficult but very close to impossible. I fully expect any number of issues where you have a Socialist majority and an intransigent  German led Conservative minority where vetoes will be used, threats will be made and no compromise will be found. All of the pushing by the weaker nations will result in a backlash where the funding countries will not allow themselves to be impaired by the lifestyles of the poor and begging and the flare-ups could become quite intense. Nothing was achieved at the summit this week and nothing of substance will be achieved at the one in June and floundering on the beach may be the only actual result. The fish is out of the water; let the sputtering commence.

"Waste forces within him, and a desert all around, this man stood still on his way across a silent terrace, and saw for a moment, lying in the wilderness before him, a mirage of honorable ambition, self-denial, and perseverance. In the fair city of this vision, there were airy galleries from which the loves and graces looked upon him, gardens in which the fruits of life hung ripening, waters of Hope that sparkled in his sight. A moment, and it was gone. Climbing to a high chamber in a well of houses, he threw himself down in his clothes on a neglected bed, and its pillow was wet with wasted tears."


                         -Charles Dickens, A Tale of Two Cities


  • The Strategic Death Wishes
  • Eurobonds will be forthcoming shortly.
  • The ECB will be doing another round of LTRO any day now.
  • Greece will not exit from the Eurozone.
  • Spain will not need to approach the EU for financial assistance.
  • Germany and France will reach a compromise position.
  • Portugal and Ireland will be just fine and not need any further funding.
  • America has decoupled and will not be impaired by the recession in Europe.
  • The Euro is stable and will not decline further.
  • Treasuries cannot have lower yields from here.

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Colombian Gringo's picture

Eurobonds is nothing more than a fancy name for southern european welfare.  There is no free ride.

jus_lite_reading's picture

>>"Two views, two radically different positions and no agreement "<<

... and one big lie!! That's the EU.

Harlequin001's picture

I reckon two, maybe three megatons should do it...

StychoKiller's picture

"Lifestyles of the Poor And Begging", starring Robin Leech, same Bat-time, same Bat-channel! :>D

Bananamerican's picture

the trouble with it all is, the Saurons of Banking, Kings, Corporations and Religious leaders would rather Lord over ONE Human herd...

but people enjoy Tribalism; they NEED to belong to their special Nation, group, clan, race, religion, clique etc....their, "my People" and "my communitee"....

talk about "two radically different positions"

and who rammed the Euro thru in the 1st place?

Even after all the propaganda is laid down about "world peace and free markets and one race" people instinctively realize that ONE WORLD means "ONE PRISON" and rightly recoil from it....

Kumbaya, y'all

Vive' la difference

speaking of which, i would like to ad my voice to the call for larger icons on ZH

JustObserving's picture

When all else fails, try schizophrenia

Sudden Debt's picture

At least we're communicating on one line

Sandmann's picture

I always like to see majority weighting by capital.....maybe even by population. Mario Monti has found a group of friends who have have exposed the Eu for what it always was. Welfarism for Agriarian nations paid for by Industrial nations. It has come down to Germany + Austria + Netherlands paying to feather-bed France, Italy, Greece, Portugal, Spain. It has always been about France harnessing German horses to pull a French plough attached to a gilded carriage. The Germans may have thought they were paying for the plough, but it was the carriage hidden behind the plough they can now see.


It is all about Club Med turning the Germans into Slaves for the Luxury and Indolence of the Sunshine States. Hollande's first gesture was to restore retirement at 60........

Nachdenken's picture

Thanks, sound about right. There is a proposal in the German Parliament to raise the German pensionable age to 67 (it is now 65), in Luxemburg a pension may be received after 40 working/contribution years. 

Talk about swords into ploughshares, and then plough horses. Yes, you got it right.

AnAnonymous's picture

Welfarism for Agriarian nations paid for by Industrial nations. It has come down to Germany + Austria + Netherlands paying to feather-bed France, Italy, Greece, Portugal, Spain.


What does it mean? Germany has a large farming sector. So do the Netherlands.

Farming sector maintained US citizen way, that is through heaps of subsidizes.

Again, another US citizen perception and rejection of consequences of actions.

That is the way it is.

That is US citizen nature.

Useless to distinguish between US citizen nations. All of them have overconsumed the world. That one can push the other under the train to conceal that basic fact changes nothing.

US citizens have entered history as the biggest drag ever made on the environment, rationalized through cheap propaganda and fantasy.

Joe The Plumber's picture

I suppose if a Chinese citizen only has one tool, a hammer, then he will treat everything like a nail

Cosimo de Medici's picture

Teach us environmentalism, O Wise Mandarin.  Teach us how to recycle dead babies by chopping them up and cooking them on a stove, powdering them and turning what was once hopeful life into Double Good Fortune Multiple Happiness Sacred TCM Penile Elixir! (since rhino horns clearly didn't get the job done in the Middle Kingdom)  Share with us the ancient secrets of blobbing so that we can be one in blobbingness and create a bright future on a golden path to maximum blobability.  Let us defecate together on the sidewalk of life!

ThatThatcher's picture

Don't forget the 'Common Agricultural Policy'........

fonzannoon's picture

I hate to post this on a Mark Grant column because no one reads them...but Tyler, just read this in Forbes....

But what if that schedule is wrong? What if that third forcing issue—hitting the statutory debt limit—does not happen until sometime in the first quarter of 2013? That is increasingly likely, say the folks who watch this sort of thing. And it would completely change the politics of the coming train wreck.

Here’s what might happen:

Assume President Obama is re-elected. Separating the debt limit from those other fiscal issues strengthens his hand enormously in 2012.

It makes it much easier for him to push Congress to extend the 2001/2003 tax cuts for all but those making $200,000 or more. Without the threat of a government shutdown, congressional Republicans lose their strongest leverage. And they’d have to explain why they forced a tax increase for nearly all Americans in order to preserve tax cuts for a handful of the wealthiest. Worse, they’d look like petulant losers.

The GOP hand will be weakened even more by the Congressional Budget Office’s new estimate that falling off the fiscal cliff would likely throw the nation back into recession.

Obama could, in that environment, come off as the voice of reason—the role he loves to play more than any other. He could sweeten the pot by offering a deal to delay the automatic spending cuts (which almost no-one supports) and set a date in 2013 by which Congress would enact tax reform and, perhaps, additional spending reductions. He’d try to work a debt limit extension into the mix too. But worse case, he could put it off until say, March of 2013.

The more interesting speculation, however, is about what happens if Mitt Romney is elected President. If he wins in November, there will be no living human in America more anxious to have the debt limit resolved in 2012 than Romney. He would, I suspect, give up almost anything to avoid having to face the debt limit shortly after he is sworn in. I can hardly think of a less auspicious start to his presidency than a knock-down drag-out brawl over increasing government borrowing.

Just think about it. If he asks for a debt limit increase as one of his first acts in office, already-skeptical tea partiers would abandon him in droves. If he didn’t, and allowed the nation’s borrowing authority to expire….Well, no self-respecting ex-Wall Street guy is going to do that.

As a result, a newly-elected Romney would put enormous pressure on congressional Republicans to make the debt limit issue go away. In 2012. That would mean convincing the lame duck Congress to quietly pass a one or two year increase.

Just defeated Democrats, who have spent the past year ripping Republicans for irresponsibly holding the debt limit hostage would, of course, switch roles and hold the debt limit hostage. Their price for dealing: Tax increases. Big. Fat. In-your-face-Grover-Norquist tax increases.

So watch what happens to that debt limit deadline. It could change everything.

LawsofPhysics's picture

Another sheep the still believes the left/right lie. Look who is backing Romney, it is the same financial and wall street firms that backed Obama in 2008.  Wake the fuck up already.  

Regarding this comment about people making $200,000 or more "...explain why they forced a tax increase for nearly all Americans..." 

Do you really think that the majority of Americans are making more than $200,000 per year?  How stupid are you?  Go over to trimtabs and look at their research or go look at the tax reciepts yourself.  The average salary for the average American is well under $60,000 per year.  again, wake the fuck up.

It's game over for the west, period.  All economies are local and becoming more local by the second.  Hedge accordingly.

fonzannoon's picture

Yeah...you tell that guy from Forbes LOP! My question was regarding whether the debt ceiling will be in Oct/Nov like ZH claims or March like Forbes claims.

As far as game over...says you. You should wake the fuck up to the idea that this could go on a long time....and seeing that you have already blown a few gaskets this does not bode well for you.


fonzannoon's picture

and by the way YOU should go over to trimtabs and watch that fat asshole argue the COMPLETE REVERSE of everything he says now a few years back against Schiff.

LawsofPhysics's picture

Your own response gives you away.  Might want to get some deodorant, you stink of fear.  Just like every other paper-pushing asshole who knows that the real value of their labor is zero.  Good luck chasing that carrot, I am sure you'll get it, someday, maybe.

Nice job avoiding the fact that the average American salary is still well below $200,000.  Let me know when you want to actually discuss the truth.

fonzannoon's picture

I don't think so slappy. Go attack someone else. You are foaming at the mouth and striking out at anything. Calm down.

fonzannoon's picture

Who the hell is arguing that the average american makes less than 250k?

There has been a ton of articles on THIS SITE regarding the debt ceiling being hit by election time. Can it be pushed off till March was all I was questioning.

I get it productive people producing real goods will get through this and paper pushers will be in deep shit. You have said that ad nauseum with a lot of f bombs.

I hope you are right.

fonzannoon's picture

makes more than 250k. pardon me.

LawsofPhysics's picture

Your own post argued that the majority of Americans are making more than $200,000.  Still drunk this morning are we?  Good times, I guess.

fonzannoon's picture

I corrected myself pretty fkin quickly. Don't be one of these assholes looking for spelling and grammer errors to help your arguments. It's very unbecoming of you.

LawsofPhysics's picture

LMFAO!  Who needs to "take it easy".  Again, try not to stink of fear before entering the ring fonzannoon.  Now go be productive, I have a lot to do today.

LawsofPhysics's picture

So you still want to go on record that the majority of Americans make more than $200,000?  I am not attacking anyone, simply pointing out the truth.  The truth is only a problem if you are a fascist.  Again, thanks for giving yourself away.

disabledvet's picture

as if Democrats want a fight of debt over the debt ceiling. That's a good one! Half the cities in the USA will be bankrupt by November and more than likely a State or two! Catalonia bitchez!

fonzannoon's picture

Who gives a shit about the debt ceiling debate. I am certainly not saying it matters. The only reason I care is that when it obviously gets extended it gets us one day closer to the rest of the world waking up and escelating the dollar dump.

LawsofPhysics's picture

Wah, wah, wah, the world is dumping my precious dollar.  If you are so smart, simply get ahead of the dollar dump.  Two words for you wage parity.  Your real owners (like the guys in Forbes magazine) will see to it that you work for Chinese wages.  Hedge accordingly, Nature makes no promises regarding your survival, grow the fuck up and deal with it.  Regarding ZH, around here you speak the truth or fuck off.

AnAnonymous's picture

Two words for you wage parity. Your real owners (like the guys in Forbes magazine) will see to it that you work for Chinese wages. Hedge accordingly, Nature makes no promises regarding your survival, grow the fuck up and deal with it.


Because nature determines survival of individual in a US citizen world?

Djeee, quite a piece of news. And I thought that US citizens have been running a gigantic human selection program...

Must be stuff like wealth transfer program.

fonzannoon's picture

Nice job presuming what I am doing and not doing. You think I have not gotten ahead of this already? I know the final score of the game.  I was asking a question regarding the timing of the debt ceiling. Ho Le shit. I do not disagree with you. But take it easy.

John Law Lives's picture

"But take it easy."

This is Fight Club, fonzannoon.  Be fully prepared when you enter the ring here.

fonzannoon's picture

I get it. But that was more like friendly fire. I don't disagree with almost anything LOP said. But if he wants to presume what I am about and get it wrong I guess thats his problem. Acting like an animal takes away from his points IMHO.

LawsofPhysics's picture

LMFAO!!!  Where does one collect these "points" you speak of?  What is their "value"  can I use them to purchase more silver?

fonzannoon's picture

Silver won't help you when you have a stroke. You are in bad shape dude. Good luck.

LawsofPhysics's picture

So now you going to "presume you know something about me".  Contradict yourself much?  FYI- I used to race mountain bikes professionally and still compete at a high level, no stroke in my future  and by the way, luck has nothing to do with it, try hard work and perserverance.  We all will face hardship in this life, we will be defined by how we overcome that hardship, not the hardship itself.

fonzannoon's picture

So you admit to presuming to know about me. Good for you. Thats a start.

gatorengineer's picture

Or the rush to the Dollar.  Both Parties suck....


But with the republicans appearing to embrace Odumbos own Simpson Bolles, dont bet on the Repubs loosing this one.....

LawsofPhysics's picture

You are correct.

Winners--> Banks, politicians of both stripes, and irresponsible behavior in general.

Losers--> savers, taxpayers, and responsible behavior in general.

I think just about everyone would be happy if there were some real consequences for bad behavior at all levels.  Prosecute the fraud.  Nothing changes until the rule of law is restored, period.  Notice that neither party (nor any of the freshman tea party members) are talking about justice.  Fine, burn this fucker to the ground.  At least then compensation (in numerous forms) will find its way back to people who's labor is actually of some real value.  Bring it.

AnAnonymous's picture

Which fraud? The US of A is built on fraud. Why them and not the other US citizens? Because it is the past? Wait ten years and it will be the past.

Lets give bankers and the rest no US citizen special treatment. Lets them get away with their theft.

That is what US of A is all about.

LawsofPhysics's picture

Do you have a solution or are you just another "state the obvious" idiot?

TheFourthStooge-ing's picture

He has no solutions. His entire agenda is based on irrational jealousy, covetousness, and mental disorder.

His existence is a tilt-a-whirl of insanitation on an endless ride over a Möbius strip track through hallucinated fantasies.

Although he's not a "state the obvious" idiot, he occasionally appears to be one. This only happens because his tilt-a-whirl track of fantasy briefly touches reality at a few tangential points before veering off again into insanitation.

He's what I would call, pardon me, a "state the fantasy du jour and slap a US citizen label on it" idiot.

Because his views are so one-dimensional and rigid, it's possible that he's an automated process, like a perl script, or an amateur level troll squad of the PRC Ministry of Truth. If he's truly only one person, his extreme rigidity in thinking indicates some sort of disorder like Asperger's Syndrome or mild autism. It is unlikely that he will ever emerge from his self imposed prison of US citizenism fantasy.

But hey, at least every now and then he can be unintentionally entertaining.


Iwanttoknow's picture

LOP,well said.majority here get it.But a stubborn minority refuse to get it and are still stuck in the psuedo paradigm of left/right,demo/repub,christain/jew/muslim/hindu and sundry false dichotomies.this is about a very small global minority turning everybody else into serfs.

BandGap's picture

I have voted in every presidential election since 1980. I thought the choices in 2006 absolutely sucked but this go-around makes even that look good. Good Lord, Mitt Romney vs. an absolutely worthless leader, and stil there is doubt.

Personally, I could give a shit at this point. We deserve what we get, and either way the people who want something for nothing are going to be appeased. I have run out of patience, I am using my resources to prepare for the inevitable collapse.

John Law Lives's picture

It is hard to imagine that of all the people eligible to be POTUS, it appears to be down to Obumble vs. Romney.  This illustrates how the two-party system backed by corporate cronies has a virtual lock on the POTUS nomination and election process.  Depressing...  As much as I dislike Romney, I still think he is better than the worthless TOTUS that we have.  If Obumble gets elected again, Rand Paul may be the last, best hope for us in 2016.

2012 POTUS election = 100% FUBAR.

markar's picture

Which ever sock puppet gets elected, we'll be lucky to make it as a nation to 2016

pasttense's picture

There was no presidential election in 2006.

LawsofPhysics's picture

Same as it ever was.  Two views, time to take it to the matresses and fight it out.  Some things never change.