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UBS' Euro Doom And Gloom Team Releases Sequel: "The Eurozone Sovereign Crisis Has Entered A More Dangerous Phase"

Tyler Durden's picture


From the same fine Swiss folks who three weeks ago (and before it was uncovered that when it comes to playing, or at least scapegoating, dangerously, UBS is second to none) brought you, "Under the current structure and with the current membership, the Euro does not work. Either the current structure will have to change, or the current membership will have to change," comes the sequel: "We believe the Eurozone sovereign crisis has entered a more dangerous phase. Financial and banking stresses are plainly evident as concerns about sovereign default grow. Notwithstanding signs from Washington this past weekend that European and world leaders are willing to consider more decisive policies, concrete steps remain elusive. Yet rising uncertainty threatens an already weakened world economy." The Swiss Bank's conclusions? "First, Europe’s politicians and policy makers must do more to shore up the Eurozone and investor confidence more generally. Among others, that probably includes stronger capital buffers in the banking sector, an expanded EFSF/ESM to finance bank recapitalization and support Eurozone bond markets, and further fiscal austerity in ‘at-risk’ Eurozone countries. But these are big asks of Europe’s ‘political economy’. Hence, the second conclusion: The likelihood is that the crisis will intensify before policy can deliver what is required." Reality 1: Strange little "source" voices inside the heads of chief economists of financial comedy cable channels: 0. 

And let's cut right down to the case, or in this case the section UBS titles, "Risk Scenarios":

Risk case 1: Disorderly default


It may be, however, that compromise between the ‘troika’ and the Greek government becomes at some point impossible. That could occur if the Greek government (and broader socio-political backdrop) is unable to deliver compliance with the IMF program of fiscal austerity, structural adjustment and privatization.


This risk scenario could then unfold with a unilateral Greek default, which if not adequately anticipated and provisioned in the form of capital buffers in the financial sector, would lead to the default and collapse of much of the Greek banking system (given its extensive holdings of Greek government debt), which would then spread via counterparty default to the non-financial corporate and household sector in Greece, as well as to the financial counterparties elsewhere, above all in European banks, pension funds and insurance companies. Plausibly, rising risk premiums would also lead to rising bond yields and widening spreads in the government debt markets elsewhere in the Eurozone, above all in Italy and Spain. Selling pressures could easily overwhelm the modest buying-power of the EFSF (assuming its mandate to buy bonds has been approved) and could even challenge the ability or willingness of the ECB to engage in very large- scale bond purchases.


The resulting rise in risk premiums would depress economic activity, quite possibly pushing weakly-growing economies such as Italy’s into recession, exacerbating sovereign credit risk perceptions. Financial stress and heightened uncertainty would almost surely be transmitted globally, dealing another shock to the already-fragile and wobbly US recovery. Indeed, we believe it would not be an overstatement to consider disorderly Eurozone sovereign default as the chief risk to global recovery.


Risk 2: Eurozone exit

In a recent paper “Euro breakup – the Consequences” we demonstrated how complex and costly expensive breaking up the Eurozone would be. The worst case scenario would be the exit of a weak country, such as Greece. Less costly, but still very expensive, would be the case of a strong country leaving the Eurozone. The ‘direct’ costs include sharp increases in risk premiums and large moves in exchange rates, which would likely result in recessions everywhere, compounded by very high inflation in weak countries that exit and issue their own currency.


But the costs extend to widespread financial stress and default. Currency mismatches between assets and liabilities could lead to very large private sector defaults. Beyond that, it would be difficult, in our opinion, to contain financial risks, including bank runs in other ‘at risk’ countries. The ensuing dislocations in economic and financial terms could even result in severe social unrest and pressures on the political fabric of the EU itself.


Elsewhere we have detailed the potential costs of Eurozone exit, either by a weak or strong country departure. We will not repeat those scenarios or calculations here—the interested reader is referred to the publications at the end of this document. However, suffice it to say, that exit represents in all likelihood the most adverse development of all, with output losses for affected Eurozone countries ranging from 20-40% of GDP (if not higher), accompanied by widespread bankruptcy and financial dislocation.


Yet that does not mean that exit can be ruled out. In the scenario of a disorderly sovereign default outlined above, political pressure might well result in exit, particularly if the defaulted government had little prospect of receiving financial assistance from the EU, ECB or IMF.


Needless to say, however, the broad market implications of disorderly default and exit only differ by degree. In either case, surging risk premiums and falling output would lead to declines in equity prices, widening credit spreads and financial market dislocations on par with those of the immediate post-Lehman brothers market melt-down. The refuges of risk-averse investors would most likely include the usual suspects: cash, the US dollar, Swiss franc and gold.


Risk 3: Recession


The latest stresses emanating from the Eurozone crisis are arriving at a time when the global economy slowed and is therefore more vulnerable to shocks. As global economist, Andy Cates, recently noted, model results suggest the probability of a global recession have risen to 15% from about nil just a few months ago. Global economic activity indicators have slumped relative to consensus estimates over the past month. And although the weakness is pronounced in sentiment and survey measures, concerns are rising that ‘hard’ activity indicators may turn sharply lower as well.


The Eurozone crisis imparts two adverse shocks to the world economy. First, heightened uncertainty erodes confidence, resulting in weaker (discretionary) outlays by households and firms alike. Second, increased financial stress and rising counter-party risk—as evidenced by Eurozone bank funding gaps— threatens to curtail credit to the real economy.


The market implications of a global ‘double-dip’ are superficially straightforward. Stocks, commodities and high-yield credit markets would slump, with safe-have bonds (Treasuries and Bunds) and currencies (Swiss franc) rallying.


But the scope of moves could be considerable. Notwithstanding the widespread observation that ‘stocks are cheap’, a global recession could send share prices 20-30% lower. That’s not just because earnings would fall. Concerns about how the world economy could extricate itself from recession, given the relative impotence of advanced economy monetary policies and the political or financial restraints on fiscal expansion, would result in more elevated risk premiums. The old adage that stocks don’t trade on trough multiples alongside trough earnings might not hold true if the world economy double-dips.

So.... in other words according to UBS, Steve Liesman's CDO Squared bailout rumor source, is that little voice of wishful thinking in the back of his head that always seems to pitch in whenever the danger of all those unvested GE options expiring worthless, and hence the Ponzi finally unwinding, reaches an apex.

Full report:



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Mon, 09/26/2011 - 19:43 | 1713299 UP Forester
UP Forester's picture

"But, but, but the Dow is back over 11,000!  This must be bullish!"

Mon, 09/26/2011 - 20:00 | 1713356 Ahmeexnal
Ahmeexnal's picture

A pailful of ordure has just hit the fan in France: Sarzoky has banned sale of gold and silver over 450 euros.

Mon, 09/26/2011 - 20:27 | 1713429 WestVillageIdiot
WestVillageIdiot's picture

I noticed last night that BullionDirect now sells gold in quantities of 1 gram.  I had never seen that before. I guess they want to make sure the little guy can get into the act. 


That is just in time for the AU bubble to burst.  /sarc

In all seriousness I am waiting for the people I know that weren't buying gold because it is "too expensive" to now say they aren't going to buy because they are afraid of the bubble.  People are dumb.  Real dumb. 

Mon, 09/26/2011 - 21:38 | 1713593 Lucius Corneliu...
Lucius Cornelius Sulla's picture

The last time I bought gold it was $360/ounce and I didn't tell anyone about it because people would have thought I was one of those freaky ultra paranoid survivalist types.  Now it's just the opposite.  Everyone thinks gold is such a safe investment!  Time to sell.

Mon, 09/26/2011 - 22:15 | 1713653 Fukushima Sam
Fukushima Sam's picture

"Ladies and gentlemen, I regret to inform you that we have reached the 'dangerous phase' of our economic journey.  This will soon be followed by the 'fright or flight' phase followed by the 'shitting the bed' phase, and finally ending with the 'eating the Joneses' phase.  Don't worry, this is all part of our regularly scheduled programming.  Please relax as best you can while we apply some final adjustments to make your ride more comfortable."

Mon, 09/26/2011 - 23:06 | 1713724 EvlTheCat
EvlTheCat's picture

The following rides at Economic Journey have minimum height restrictions.These heights are measured with shoes on. Maximum weight restrictions are also listed where appropriate.

Mon, 09/26/2011 - 23:26 | 1713749 slewie the pi-rat
slewie the pi-rat's picture

mo danger,

comrade BiCheZ!!!

Tue, 09/27/2011 - 01:42 | 1713878 Sock Puppet
Sock Puppet's picture

After reading all of the above, the only solution is for Europe to socialize the bank's losses so businesses, governments and people don't go bankrupt.  Better to preserve the status quo than risk the financial devistation that would be wrought by defaut.

Just sayin.

Tue, 09/27/2011 - 02:16 | 1713904 TruthInSunshine
TruthInSunshine's picture

Shit's hitting the fan in Germany today:

09-27 1:44: Germany at war over Eurozone bail-out - Telegraph

Germany at war over Eurozone bail-out - Telegraph

Confirmation of the talks, however, sparked outrage in Germany, where opposition politicians threatened to derail the plans by voting against a key amendment to the bail-out fund this Thursday. The head of Germany’s constitutional court also piled on the pressure by warning the government not to circumvent the law “by the back door”.

Tue, 09/27/2011 - 02:23 | 1713912 Sock Puppet
Sock Puppet's picture

Tuesday, Sep 27, 2011 01:39 AM

. . . . . . . . . . . . . . . . . . . . . . . . . 

 German Economy Minister Philipp Roesler, who’s also the leader of the Free Democratic Party, expects enough votes from the ruling parties to approve expansion of the European Financial Stability Facility without help from opposition lawmakers, Bild Zeitung reported, citing an interview.

Tue, 09/27/2011 - 02:25 | 1713914 Sock Puppet
Sock Puppet's picture

02:21 AM  German Gfk Consumer Confidence for October comes in at 5.2 vs. expectations for a reading of 5.0.

Tue, 09/27/2011 - 02:54 | 1713932 chump666
chump666's picture

wow! yeah it's on.

Tue, 09/27/2011 - 16:41 | 1716195 luna75
luna75's picture

Love your comment, made one change, hope you like this one too:


"Ladies and gentlemen, I regret to inform you that we have reached the 'dangerous phase' of our economic journey.  This will soon be followed by the 'fright or flight' phase followed by the 'shitting the bed' phase, and finally ending with the 'eating the Joneses' phase.  Don't worry, this is all part of our regularly scheduled programming.  Please relax as best you can while we apply some FOOD STAMPS to make your ride more comfortable."

Mon, 09/26/2011 - 22:14 | 1713658 CapitalistRock
CapitalistRock's picture

Fewer than 1 in 500 Americans own even a single ounce of gold bullion. What gave you the idea that "Everyone thinks gold is such a safe investment"? Absolutely nothing could be further from the truth!

Mon, 09/26/2011 - 20:30 | 1713436 LongBalls
LongBalls's picture

The way I understand it; anything over 450 Euro or $600 USD must go through a bank transaction. It's not an all our ban. It is however a tracking system for confiscation.

Something bigeth come our way. It seems that no matter what the price of gold the governments of the NWO are going to come for it.

Mon, 09/26/2011 - 20:33 | 1713444 Ahmeexnal
Ahmeexnal's picture

Yes, that's exactly what it is as I also posted on the other thread.

Mon, 09/26/2011 - 20:34 | 1713450 WestVillageIdiot
WestVillageIdiot's picture

Does anybody really know where all of their metal is?  I'm serious.  I've given so much of the shit away, trying to turn people on to buying, that I don't know what I have anymore.  Don't tell my wife.  I'm trying to keep it secret. 

Mon, 09/26/2011 - 20:36 | 1713452 Ahmeexnal
Ahmeexnal's picture

when TSHTF and "they" come for your shiny stuff, just tell them you hosted several Bunga-Bunga parties and paid for them with the metal.

Mon, 09/26/2011 - 21:02 | 1713529 Prometheus418
Prometheus418's picture

I sold it all, on account of I was scairt of teh bubble bursting.  Can I write off the capital losses on my taxes now?

Mon, 09/26/2011 - 21:46 | 1713608 Tater Salad
Tater Salad's picture

Sorry agents, I spent my bullion on prostitutes and whiskey....and yes one midget, needed a midget to complete the party.


Mon, 09/26/2011 - 23:13 | 1713734 yabyum
yabyum's picture

Hooker & Blow! Always a sound investment.

Mon, 09/26/2011 - 23:55 | 1713785 WoodMizer
WoodMizer's picture

I swapped it all for bitcoin after the Bernak called it tradition.

Tue, 09/27/2011 - 01:14 | 1713858 Founders Keeper
Founders Keeper's picture

[when TSHTF and "they" come for your shiny stuff...]---Ahmeexnal


"Who is it?"

"Federal Reserve Agents, Smith and Jones."

"What do you want?"

Mr. Keeper?...We're here to serve notice under the authority of the Federal Reserve and hereby execute the Precious Metal Repatriation Act.  We're here at your convenience to Repatriate your PMs to the Federal Reserve and compensate you at fair market price.  Are you alone, Mr. Keeper?

"Do you have a warrant, Agent Smith?"

"Well.  As you may be aware, Mr. Keeper, the mandate is a nationwide repatriation.  We wish to collect only those PMs for which we have purchase records.  We have your records here.  Can we expect your full and patriotic cooperation?  May we come in?

...Mr. Keeper?"

"You're gonna need more agents."


Mon, 09/26/2011 - 20:59 | 1713521 mcguire
mcguire's picture

WVI, thanks for posting that... i thought i was the only one giving it away.


Tue, 09/27/2011 - 03:23 | 1713963 terryfuckwit
terryfuckwit's picture

cool me too

Mon, 09/26/2011 - 20:35 | 1713451 UP Forester
UP Forester's picture

Boy, doesn't this sound just like the Obamacare tracking requirements on gold?

Nah, it's just a conspiracy theory, 'cuz that little tidbit got Memory-holed....

Mon, 09/26/2011 - 22:18 | 1713515 doomz78
doomz78's picture

so when banks in europe fail or they do a europe quantitative easing to liquify the banks will gold and silver shoot through the roof?   The world seems to be trying to print their way out of everything!!!!  I think if they bail out the european banks we will solidify another year of slow and steady bull market in gold and silver.  A more controlled explosion of the euro if you will...  Confusing times.  Now for the USA....  I don't know where to begin.  Euro and US dollar seem to be destined to sink together over time.  Thelma and Louise. 

Mon, 09/26/2011 - 21:06 | 1713536 Dapper Dan
Dapper Dan's picture


tout cela est écrit en langue française, je ne peux pas lire cette langue.

Mon, 09/26/2011 - 21:31 | 1713576 LeonardoFibonacci
LeonardoFibonacci's picture

Ahmeexnal actually you are incorrect as all sale of gold > 450 euros can only be SETTLED by wire transfer method (virement).  The limit is not 450 euros, it is the method of settlement which is limited

Tue, 09/27/2011 - 00:54 | 1713840 Ahmeexnal
Ahmeexnal's picture

Yes, it's CASH sales over 450 euros that are banned.

For all intents and purposes my statement that gold and silver sales in France are banned is correct.

It's just the timing of my statement which came to early.  Speed of thought is faster than speed of light.

So just relax and don't bother getting of you couch.

If the 450 ban on CASH sales means nothing to you, it's because you will never buy any PMs anyways.

For those who see the writing on the wall, it means they have not much time left to buy more.

Tue, 09/27/2011 - 02:57 | 1713884 Sock Puppet
Sock Puppet's picture




Tue, 09/27/2011 - 09:31 | 1714609 Overflow-admin
Overflow-admin's picture

Foutu nain! Je parie qu'il veut tout l'or pour lui! Vive le marché noir n'est-ce pas?!?
-> Damn dwarf! I bet he wants all gold for him alone! Long live black market - isn't it ?!?


(sorry I couldn't resist...)

Mon, 09/26/2011 - 20:22 | 1713414 Cruel Aid
Cruel Aid's picture

11000 with participation plunging... hmmm!

Mon, 09/26/2011 - 20:30 | 1713434 WestVillageIdiot
WestVillageIdiot's picture

Look at that.  In early trading the Nikkei is up 1.5%.  It is all the way back to 8,500.  What a joke the American "market" is.  We'll see if the Dax can continue its rally tomorrow. 

Does anybody even look at NYSE futures anymore, for anything other than comic relief? 

Mon, 09/26/2011 - 21:59 | 1713627 nyse
nyse's picture

It is bullish.

Mon, 09/26/2011 - 22:01 | 1713628 wombats
wombats's picture

Damn right its bullish....and GS bonuses will be assured as well!  What more could the world ask?

Mon, 09/26/2011 - 19:45 | 1713306 westboundnup
westboundnup's picture

When doom finally arrives, the global economic system collapses, and markets finally close for good, the Dow will finish modestly up. 

Mon, 09/26/2011 - 19:54 | 1713338 Cheesy Bastard
Cheesy Bastard's picture

If tomorrow there was a world wide nuclear comet based earthquaking volcanic pole shifting explosive hurricane blizzard caused famine, the dow would finish modestly up.  Volume would probably be low.

Mon, 09/26/2011 - 20:13 | 1713390 Bunga Bunga
Bunga Bunga's picture

Because such things are already priced in. But neutrinos are faster than light, this is not priced in yet and very bullish.

Mon, 09/26/2011 - 20:22 | 1713413 UP Forester
UP Forester's picture

And the only thing faster than neutrinos is the newest algo software, so GS can front-run it anyhoo....

Mon, 09/26/2011 - 20:32 | 1713439 WestVillageIdiot
WestVillageIdiot's picture

My wife always tells me I'm faster than the speed of light.  Or is it the speed of sound?  I don't really know.  I'm usually asleep by that point. 

Mon, 09/26/2011 - 20:46 | 1713485 Cheesy Bastard
Cheesy Bastard's picture

I used to be that fast.  Lately I can get to about the speed of smell.  When I'm done I can usually claim narcolepsy too.

Mon, 09/26/2011 - 21:41 | 1713597 Manthong
Manthong's picture

The market is a discounting mechanism.

Neutrino algos have been discounted to the speed of a Greenspan kidney stone.

Mon, 09/26/2011 - 23:17 | 1713740 jdelano
jdelano's picture

Junior physicist:

I hate to tell you this, Sir, but we've been unable to demonstrably prove or disprove the existence of the Higgs Particle. Whatsmore, we can't even find the particles we sent flying around this bitch...

Senior physicist:

What? What do you mean you can't find them?


There appears to have been an cognitive aberration in the observation apparatus that has catalyzed a systemic failure in the quantification dialectic.


In plain English, Son, where the f@$k are the particles.


Uh. We don't have a f$@king clue, Sir. We lost them.


You lost them?! Do you have any idea how many billions of dollars it took to build this freaking facility? We can't tell the msm we LOST the freaking particles because you inept ass hats can't run a proper experiment?!


Well, then what should we tell them, Sir....


I don't know--ANYTHING. Tell them we opened a new dimension--no, wait, even better, tell them we think we actually managed to accelerate the particles so freaking fast they exceeded the speed of light and made a quantum leap into another dimension!

Mon, 09/26/2011 - 23:55 | 1713784 G-R-U-N-T
G-R-U-N-T's picture

LOL/UGH!!...What's disturbing about this is there may indeed be a grain of truth in this.

Tue, 09/27/2011 - 00:48 | 1713833 Dapper Dan
Dapper Dan's picture

Stop the LHC now!

CERN should be halted until irrefutible evidence of Hawking Radiation is returned from GLAST, launched last year. Any sooner would be irresponsible. Visit the official myspace awareness site:

:24, Nov 30, Ms. Amanda Lucas, Germany
Why do I feel CERN's experiment should be stopped? For one, CERN stated that physicists who were part of the LHC Safety Assessment Group were not involved with the LHC experiments, when in truth, CERN physicist John Ellis has been promoting this experiment since 1987. CERN physicist Brian Cox has stated on numerous occasions that they don't know what will happen, like his statement "At every stage of understanding the universe better, the benefits to civilisation have been immeasurable. None of those big leaps were made with us knowing what was going to happen." Their most idiotic statement, two colliding protons which would be 100,000 times hotter than the core of the sun, is equivalent to two mosquitoes colliding. EQUIVALENT TO TWO MOSQUITOES COLLIDING! What the hell are they smoking down there? These CERN crackpots, who state they're not religious, like myself, are proudly showing off a four-armed statue outside their complex of the Hindu God Shiva, destroyer of worlds in Hinduism, which was a present from India. And they want us to take them serious when they state all is safe? CERN states on their site "The LHC, like other particle accelerators, recreates the natural phenomena of cosmic rays. Nature (cosmic rays) has already generated on Earth as many collisions as about a million LHC experiments ? and the planet still exists." and when you continue reading, third paragraph under the topic "Micro Black Holes" they contradict themselves on this same page with "Collisions at the LHC differ from cosmic-ray collisions with astronomical bodies like the Earth." MAD SCIENTISTS! First statement: Contradicting statement: Great source of info:

Mon, 09/26/2011 - 20:17 | 1713400 agent default
agent default's picture

Modestly?  It will rally at least 5000 points.  I mean total disaster. That's bullish right? Even better throw in WIII +15000 intraday guaranteed.

Mon, 09/26/2011 - 19:45 | 1713310 Seasmoke
Seasmoke's picture

just seeing Liesman holding worthless options, makes a total collapse worth it

Mon, 09/26/2011 - 19:46 | 1713312 Sequitur
Sequitur's picture

Eurozone imploding? Who cares. Please pay attention to what is important:

A Deeper Look At The Dire Bonus Situation

At UBS, they say, "A bunch of employees that were staying put anticipating a bonus just got sacked in the nuts."


Mon, 09/26/2011 - 20:23 | 1713419 Bobbyrib
Bobbyrib's picture

"That suggests that people will leave for other job opportunities before bonuses are paid out in March. Talent loss would further devastate the struggling bank."


I think the same argument was made about American executive compensation right after Home Depot shitcanned Bob Nardelli.

Read more:

Tue, 09/27/2011 - 00:49 | 1713835 walküre
walküre's picture

Talent loss

What a fucking crap shoot that argument is and always will be.

The best and brightest stay regardless of potentially earning a few dollars more at the next firm.

The skirt chasing, quick fix, easy money loving, one-night stand, coke binging, fast & not-so-furious girlie man motherfuckers are jumping from one pimp to the next for a few bucks because they're motherfucking whores.

No strike that, whores have decency and a reputation to uphold. These guys are just plain old skanks.





Mon, 09/26/2011 - 20:37 | 1713454 WestVillageIdiot
WestVillageIdiot's picture

Those fuckers will have to settle for the Maserati, not the Lamborghini.  Fuck all of them.  I mean that from the bottom of my heart. 

Mon, 09/26/2011 - 21:37 | 1713592 JW n FL
JW n FL's picture



I have Porn for you!

 You are welcome and I am sorry all at the same time! LOL!!

Mon, 09/26/2011 - 21:53 | 1713618 Cheesy Bastard
Cheesy Bastard's picture

Sorry, not into autoeroticism.  <rimshot> .  Try the veal.

Mon, 09/26/2011 - 19:46 | 1713316 fonestar
fonestar's picture

But the DOW finished up 272 points so everything is A-OKAY in momo land.  Carry on....

Mon, 09/26/2011 - 20:38 | 1713459 WestVillageIdiot
WestVillageIdiot's picture

All the momo-sapiens are celebrating tonight at the Pound and Pence.  They are so close to being human, but not quite. 

Mon, 09/26/2011 - 19:50 | 1713324 cabtrom
cabtrom's picture

Yea yea, whatever, ivebeen hearing this shit "collapse", "this is the end", literally for 10 fucking years. THIS MADNESS WILL NEVER END!

Mon, 09/26/2011 - 20:20 | 1713409 zen0
zen0's picture

Maybe you should revisit your understanding of "collapse". Of course the madness never ends, because the madness is the reaction to the end.


One era ends, and another begins, with their characteristics overlapping for a time.


The Mystics Of Old  (MOO) call it "HISTORY".

Mon, 09/26/2011 - 20:40 | 1713465 WestVillageIdiot
WestVillageIdiot's picture

In the winter of 1940 there were a lot of Europeans that felt exactly the way you do.  In the winter of 1941 they were thinking different thoughts.  I'm not saying that you should be panic but always be prepared. 

Mon, 09/26/2011 - 19:50 | 1713325 Cdad
Cdad's picture

So...does Steve Liesman get a superdee duper bonus for his lie-a-thon today?

Mon, 09/26/2011 - 19:54 | 1713337 zorba THE GREEK
zorba THE GREEK's picture

As long as the EZ is a monetary union only, there will be no solution found for the current crisis.

There are too many spokesmen for the EU and the EZ. The authority to speak and act for all the

countries is questionable. No one or no one organization in Europe seems to be totally in charge.

No plan will be enacted in time to resolve the crisis. It will be day-to-day crisis management

with much in-fighting and finger pointing. The EZ experiment was doomed from the outset.


Mon, 09/26/2011 - 20:36 | 1713453 agent default
agent default's picture

Yeah if it only became more unified, they would have been able to deal with the crisis so much more efficiently. I mean look at the US.  Look at how effective the FED and the Ben Bernank have been. 

Mon, 09/26/2011 - 19:55 | 1713339 mynhair
mynhair's picture

but...but...subprime is contained?  LIESman told me so...

Mon, 09/26/2011 - 20:44 | 1713476 WestVillageIdiot
WestVillageIdiot's picture

I remember turning on that monkey-boy Cramer in about 2007.  I had not flipped on that shit-show for a long time.  He was spouting how it was time to buy a house since the bottom was in for housing.  I have never turned that stupidity on again.  I have not watched one minute of that frothing jackass.  If you ignore it, it will go away. 

Mon, 09/26/2011 - 19:58 | 1713349 richard in norway
richard in norway's picture

my advice  is whatever UBS tells europe to do they should do the opposite, unless that's what UBS is expecting

Mon, 09/26/2011 - 21:35 | 1713590 Snidley Whipsnae
Snidley Whipsnae's picture

"Germany's Top Judge Throws Major Monkey Wrench Into Leveraged EFSF Machinery, Demands New Constitution and Popular Referendum for Further Powers"

"Germany's top judge has issued a blunt warning that no further fiscal powers may be surrendered to Europe without a new constitution and a popular referendum, vastly complicating plans to boost the EU's rescue machinery to €2 trillion (£1.7 trillion).

Andreas Vosskuhle, head of the constitutional court, said politicians do not have the legal authority to sign away the birthright of the German people without their explicit consent.

"The sovereignty of the German state is inviolate and anchored in perpetuity by basic law. It may not be abandoned by the legislature (even with its powers to amend the constitution)," he said.

"There is little leeway left for giving up core powers to the EU. If one wants to go beyond this limit – which might be politically legitimate and desirable – then Germany must give itself a new constitution. A referendum would be necessary. This cannot be done without the people," he told newspaper Frankfurter Allgemeine."

Mon, 09/26/2011 - 21:46 | 1713607 JW n FL
JW n FL's picture



That web site is filled with idiots.

go ask them what my name is, LOL!!

I am Jason Bourne BITCHEZ! LOL

Mon, 09/26/2011 - 22:06 | 1713638 Snidley Whipsnae
Snidley Whipsnae's picture

The same 'German Judge' article is posted on Mish's site...

Have a cuppa STFU...

Tue, 09/27/2011 - 00:48 | 1713834 Tao 4 the Show
Tao 4 the Show's picture

Here's the original link (following German source):

This is a voice of sanity. Let's see if people begin to catch on.

Mon, 09/26/2011 - 19:59 | 1713353 taraxias
taraxias's picture

As global economist, Andy Cates, recently noted, model results suggest the probability of a global recession have risen to 15% from about nil just a few months ago.


Seriously, how much money do these guys make?

Mon, 09/26/2011 - 19:59 | 1713355 Piranhanoia
Piranhanoia's picture

What options does a eurozone have that don't guarantee the people won't storm their parliament with leftover barbarous relics from WWII saved in the basement by Uncle Claude?

Tue, 09/27/2011 - 04:12 | 1714007 Treason Season
Treason Season's picture

French guy I met in Phnom Phen once swore up and down when the shtf watch the guns comes out in France. Said if something similar to the Atocha bombing in Madrid happens in Paris there would be a race war.

Mon, 09/26/2011 - 20:01 | 1713362 gwar5
gwar5's picture

They're all insolvent and shuffling fiat. More fear and loathing with major money printing ahead. Bernanke will get to print to bail out the EU and push the USD back down in a "global coordinated effort" after the G-20 hold hands and agree to it.

Mon, 09/26/2011 - 20:07 | 1713364 fdisk
fdisk's picture

It's insane, GOLD falling again. So EUR supposed to collapse? And? CHF capped, GOLD tanking and USD has little

better DEBT to GDP ratio than GREECE, while morons flying into "safety" of Bernank QE superman.. Where is the

logic? Well, unless I see Gold over 2k, don't bother with EZ collapse..

Mon, 09/26/2011 - 20:15 | 1713393 butchtrucks
butchtrucks's picture

Check out John Hempton's (Bronte Capital) two predictions on how this Euro crisis could play out.   It's very plausible and very scary.  He sees the distinct possibility of 'troops on the border' to prevent money transfers from southern to northern Europe as the Eurozone explodes:

"If you are going to split the currency I see no alternative to a big bang - and if you do that I see no alternative to troops at the border stopping transfers (and wire transfers) because shifting cash North looks so profitable against a sudden devaluation. Suddenly – and against all historic hope – its time again to guard the French-German (and every other European border) with troops for a week whilst the money is stamped."


Mon, 09/26/2011 - 20:25 | 1713426 TJ00
TJ00's picture

So Don Johnson is out of a job then? ;)

Mon, 09/26/2011 - 20:43 | 1713472 westboundnup
westboundnup's picture

One of my favorite Don Johnson moments.

Mon, 09/26/2011 - 20:16 | 1713397 max2205
max2205's picture


Mon, 09/26/2011 - 20:22 | 1713411 ArkansasAngie
ArkansasAngie's picture

I feel an urge to write my congressional representatives and tell them that I don't want my money going to a dad gum European bailout.  And ... Bank of America ... that goes for you, too.

I don't think they know that some of us are getting upset about this and we aren't joe six packs

Mon, 09/26/2011 - 20:24 | 1713423 Sequitur
Sequitur's picture

A ray of hope: bankers being fired by the tens of thousands. Asset securitization being shrunk.

This is very good news. If ever there were a leach on society, it is these goddamn bankers and their bullshit "technology," i.e. balance-sheet manipulation, for which they earn a "fee" with every circular money movement. These goddamn bankers are far, far worse than car salesmen, insurance salesmen, lawyers and politicians.

Mon, 09/26/2011 - 21:39 | 1713596 Snidley Whipsnae
Snidley Whipsnae's picture

Sequitur... "These goddamn bankers are far, far worse than car salesmen, insurance salesmen, lawyers and politicians."

and the IRS...

Mon, 09/26/2011 - 21:52 | 1713616 JW n FL
JW n FL's picture



the people being fired are not the problem, idiot.

Mon, 09/26/2011 - 22:22 | 1713667 Pancho Villa
Pancho Villa's picture

If you added up all the money that was stolen by Jesse James, John Dillinger, Bonnie and Clyde, Ma Barker, Butch Cassidy and the Sundance Kid and compared it to the money Jamie Dimon makes in one week, I wonder which would be larger.

Mon, 09/26/2011 - 20:29 | 1713433 DeadOnArrival
DeadOnArrival's picture

"As global economist, Andy Cates, recently noted, model results suggest the probability of a global recession have risen to 15% from about nil just a few months ago."

If only they put their money where their mouth is and actually read and followed the advice of their analysts instead of packaging it up for clients to read and follow.  On second thought, maybe the +$2Bln recent loss sheds light on how they actually trade on their own account.  "Thank you, UBS (PaineWebber)."

Mon, 09/26/2011 - 20:34 | 1713441 mynhair
mynhair's picture

None of this matters until after EOQ window dressing.  Can't have redemptions, dontcha know?

Tuesday is T+3 book profits day.

I'm short the long bond in anticipation.

Mon, 09/26/2011 - 20:43 | 1713471 Rodent Freikorps
Rodent Freikorps's picture

The Euro has to be like that incontinent alzhiemers patient that keeps getting turfed  to the ER, and just won't fucking die.

Mon, 09/26/2011 - 20:47 | 1713489 mynhair
mynhair's picture

We need the Euro to beat up on.  Beats total global thermonuclear war.

Would you like to play a game?

Mon, 09/26/2011 - 20:45 | 1713478 Sigma X
Sigma X's picture

I just wonder how long after the Euro fails or is reorganized that the attention will turn to the almighty dollar.....

Mon, 09/26/2011 - 20:45 | 1713479 Sigma X
Sigma X's picture

I just wonder how long after the Euro fails or is reorganized that the attention will turn to the almighty dollar.....

Mon, 09/26/2011 - 21:42 | 1713603 Snidley Whipsnae
Snidley Whipsnae's picture

"I just wonder how long after the Euro fails or is reorganized that the attention will turn to the almighty dollar....."

I believe the Yuan is on deck...

But, the Yuan will be a much more difficult to strike out.

Mon, 09/26/2011 - 21:55 | 1713621 Sigma X
Sigma X's picture

Nothing would suprise me at all, and to a degree, most of this situation is symbiotic across soverigns.  Japan has made it work as a trade surplus nation longer than I would have expected so who knows.  Having said that, I have a feeling that a tectonic shift is in order....more than half of me hopes it happens...

Mon, 09/26/2011 - 21:55 | 1713622 Sigma X
Sigma X's picture

Nothing would suprise me at all, and to a degree, most of this situation is symbiotic across soverigns.  Japan has made it work as a trade surplus nation longer than I would have expected so who knows.  Having said that, I have a feeling that a tectonic shift is in order....more than half of me hopes it happens...

Mon, 09/26/2011 - 20:45 | 1713483 The Shootist
The Shootist's picture

What's the volatility index at again?

Mon, 09/26/2011 - 20:48 | 1713492 mynhair
mynhair's picture


Mon, 09/26/2011 - 20:55 | 1713510 OneEyedJack
OneEyedJack's picture

It just seems to me that I see a repeat of history going on here.

Articles of Confederation / European Union

Except  Europe is broke

just sayin

Mon, 09/26/2011 - 21:03 | 1713531 DeadOnArrival
DeadOnArrival's picture

Anybody check the Baltic Dry Index lately?  The monthly chart of the ETF: BALT looks like it's headed straight to HELL!

Mon, 09/26/2011 - 22:37 | 1713689 LongBalls
LongBalls's picture

I don't have the courage to look at the Baltic. That's like standing on a cliff and throwing a 500 lb cannon ball attached to your leg by chain over the edge. The sight is some scary chit!

Mon, 09/26/2011 - 21:11 | 1713545 Stoploss
Stoploss's picture

A) Coordinated global default.

B) Uncoordinated global default.

After breaking the closet pole while beating A about the head and upper torso, B, after a much needed rest,

 has found what appears to be an aluminum baseball bat with some kind of spikes protruding from the end.

A, has not realized this.


Mon, 09/26/2011 - 21:17 | 1713552 wang (not verified)
wang's picture

Take a deep breath



Obama Administration Set to Ban Asthma Inhalers Over Environmental Concerns

Mon, 09/26/2011 - 21:21 | 1713563 msmith
msmith's picture

The USD index is important to be watching.  It seems to be the key driver of the Markets.  Price action has been consolidating before a possible push higher.

Mon, 09/26/2011 - 21:39 | 1713580 Goldtoothchimp09
Goldtoothchimp09's picture

Wanna hear some funny shit - I was unpacking books from a recent move -- 2 of my college economics books were authored by Fred Mishkin and Paul Krugman...I want a fucking tuition refund!!!

I've got some more books to look thru....if I find Lazlo "the ruler" Byrini I am contacting the Economics Department immediately for my refund.

These have got to have some collectors value to some sicko, uber-dork econ. masochist - I'm taking bids.

Mon, 09/26/2011 - 22:00 | 1713625 dwdollar
dwdollar's picture

My wife has one authored by the printus primus himself.  The Bernanke.

Mon, 09/26/2011 - 23:50 | 1713780 Goldtoothchimp09
Goldtoothchimp09's picture


A female economics major - get out of here?!  Had to be an elective right??

Mon, 09/26/2011 - 21:37 | 1713588 Caviar Emptor
Caviar Emptor's picture

It's funny old world. Just a few short months ago, April to be exact, the sky was blue and things were bubbly. Here we are in the autumn and it's clear to even the pumpers that we're in a depression. It's not behaving like a normal business cycle and hasn't in almost 5 years. The economics of the past 3 decades don't work anymore. And nobody has any clear solutions. But one thing is definitely clear: social and political unrest. 

Look for the bailouts in Euroland to have a much more muted effect than they would have had even a few short months ago. There is an understanding of the toxic side-effects of bailouts, rescues, and kicking the can. This time there will be lots more strings attached, more calls for austerity which weakens the underlying economy, and way more political discord. 

The phase of denial is over. The phase of easy solutions is over. 


Mon, 09/26/2011 - 21:34 | 1713589 The Navigator
The Navigator's picture

Andreas Vosskuhle, head of the constitutional court, said politicians do not have the legal authority to sign away the birthright of the German people without their explicit consent.


Mon, 09/26/2011 - 22:10 | 1713651 gwar5
gwar5's picture

Political agents of the central bankers like to forget litle things like constitutional constraints. More evidence the pols are just agents for the banks and don't represent the sovereign people against the banker interests.


Tue, 09/27/2011 - 02:08 | 1713899 The Navigator
The Navigator's picture

Very true, and in every corner of the earth.

Mon, 09/26/2011 - 22:10 | 1713649 Caviar Emptor
Caviar Emptor's picture

This is all a part of "managed complacency" : the political elite have agreed since the 08 fiasco to keep things extremely quiet becaue they believe that the fate of the entire global economy rests not on hard work and progress but "confidence". So no dissent in the ranks. 

Ponzi schemes require "confidence". Like any con. Not healthy economies. They recover. 

But here's why that approach will paradoxically do mroe harm: it will propel the level of outrage from impoverished masses who've been made false promises to nose bleed territory. Social/political turmoil will be allowed to fester and grow, and then it will boil over. 

Mon, 09/26/2011 - 22:22 | 1713665 mynhair
mynhair's picture

Dear The Donald,

Why do you blame the rest of the world for raping us?  Our wonderful dickheads gave the green light!  Can you please crawl under your next BK, and STFU!  You voted for these klowns!  (Damn Denninger wannabe)

Mon, 09/26/2011 - 22:28 | 1713675 Pancho Villa
Pancho Villa's picture

UBS: "Get serious guys! You need to immediately create a multi-trillion euro fund to bail out European banks like us or the world will end!"

Mon, 09/26/2011 - 22:42 | 1713696 RobotTrader
RobotTrader's picture

Risk On in Asia, everything taking off to the upside.

If we gap up tomorrow, nice island bottom.

Mon, 09/26/2011 - 23:06 | 1713726 UP Forester
UP Forester's picture

Nice island bottom, per Hank Johnson?

Never gets old....

Mon, 09/26/2011 - 22:56 | 1713715 Pain Train
Pain Train's picture

Let's get some predictions on record as to (1) the next country after Greece to default, and (2) how long that next country takes to default after Greece goes down. The winner gets a ZH t-shirt. I'll go first:


Italy, 4 months after Greece.

Mon, 09/26/2011 - 23:06 | 1713725 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

Harrowing sessions ahead for shorts I think. Am I long? you think I'm nuts?  And that sums up this clusterfucked market. It's a small insiders club and we aint in it

Mon, 09/26/2011 - 23:08 | 1713728 Clearly_Irrational
Clearly_Irrational's picture

What I find most disturbing is that the strong measures they're suggesting are necessary wouldn't fix the problem.  How hard is it to understand that a fixed currency and a trade imbalance don't go well together?

Mon, 09/26/2011 - 23:19 | 1713741 jdelano
jdelano's picture

Go Ron Paul! (I'll suffer jon stewart for this)

Mon, 09/26/2011 - 23:30 | 1713753 zorba THE GREEK
zorba THE GREEK's picture

I have two basic rules I follow: 1. I don't eat any food with the word ' crap ' in it.  Scrapple

                                         2. I don't believe anyone with the word ' lies  ' in their name. Steve Liesman

Tue, 09/27/2011 - 00:26 | 1713814 Kina
Kina's picture

Here we are again, corruption time on the gold markets...and sure enough the CFTC sponsored corruption by the banksters starts up again. Down $11 in 5 seconds.


They don't even try to hide it anymore. Who is going to stop them? The authorities? The authorities are themselves part of the criminal gang. Will just have to wait for when the whole system crashes and these people lose their protection.

Tue, 09/27/2011 - 05:03 | 1714033 Element
Element's picture

"BS' Euro Doom And Gloom Team Releases Sequel: "The Eurozone Sovereign Crisis Has Entered A More Dangerous Phase"



Each time I read/hear a statement or headline like that, it just rolls off meaninglessly ... like the latest downgrade announcement of who or whateverbank or sovereign.

All they are really saying is; "we're terribly sorry chaps [NOT!], but we can't pay the bill from now on, because now everyone actually knows we're both pathological delusionists and inconsolable liars".

Tue, 09/27/2011 - 08:03 | 1714301 msmith
msmith's picture

AUDUSD has rallied higher with equities but should find resistance soon and return to the bearish trend down.

Tue, 09/27/2011 - 08:18 | 1714345 msmith
msmith's picture

EURUSD price action is pressing up against the upper trend channel.  More downside ahead

Tue, 09/27/2011 - 16:45 | 1716216 johnjb32
johnjb32's picture

While the press cheers European resolve, big financial institutions are sounding a completely different story... as is Collapsenet. Just like the brave trader who went on BBC to tell the truth we believe it much wiser not to listen to press or politicians, but to watch what the big financial houses and banks are doing. -- Michael C. Ruppert


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