Uncle Sam To The Rescue After All: Latest Rumor Sees €600 Billion Bailout Of Italy From US, Pardon IMF
The European desperation is palpable ahead of the EURUSD open in a few hours, which has to deal with the aftermath of the Friday afternoon downgrade of Belgium, the junking of Portugal and Hungary, and the prospect of an imminent downgrade of AAA-stalwarts Austria and France. So what does Europe do instead of actually proposing the inevitable debt repudiation that is the only and final outcome? Why more rumors of course. To wit: last night saw the preannouncement of Welt am Sonntag indicating that in order to bypass the lengthy process of treaty changes, Europe would instead proceed with bilateral agreements that would somehow enforce fiscal stability and convince the market that European states would follow the German leader. Well since that is sure to have absolutely no impact, overnight Italian La Stampa is out with a fresh new rumor which cites "IMF sources" according to which the US-headquartered and funded organization would provide a €600 billion loan to Italy at 4-5%. In other words, Uncle Sam, in his role as primary funding agent of the IMF would lose massive amount of money on the "market to fair value" arbitrage, only to bail out the latest European domino. As a reminder, the whole "under market rates" loan from the IMF was implemented in Greece and worked out just swell: at last check the 1 Year Greek bond was trading with a yield of over 300%. Oh, and La Stampa forgot to mention one thing: any changes to the IMF, which currently is massively underfunded and is why the organization was forced to create two new liquidity facilities: a Precautionary and Liquidity Credit line, since it is unable to fund its New Arrangements to Borrow, have to go through US Congress when it comes to expanding funding capacity. Yup, the most dysfunctional, corrupt and criminal thing in the world - the US House of Representatives, where unless everyone is short Italian CDS, this will never pass. In other words: this rumor is dead in the water.
More from Dow Jones:
The International Monetary Fund could offer Italy between EUR400 billion and EUR600 billion in financial support to give Italian Prime Minister Mario Monti a window of 12 to 18 months to enact reforms sufficient to restore waning market confidence in Italy's ability to repay its debt, Turin daily La Stampa reported Sunday, citing IMF sources.
he IMF "Italy package" would consist of loans at an interest rate of between 4% and 5%, compared with the 7% to 8% the country paid at its most recent bond auctions, the report says.
La Stampa reports that the worsening European debt crisis, which has increased pressure on French and Belgian bonds, and seen a German bund auction undersubcribed, is strengthening the conviction at the IMF that Italy is the nation that urgently needs support to avoid a breakup of the euro.
The IMF wants to give Monti another card to play if his reforms are insufficient to dispel financial speculation, the paper said.
The size of any IMF bailout for Italy would be so large that it must be done in coordination with other insitutions, La Stampa said.
Germany has been against any broadening of the European Central Bank's purchases of Spanish and Italian bonds on the open market to support prices. But German resistance to ECB bond-buying could fade if such funds were extended with oversight from the IMF, La Stampa reported.
The IMF board of governors agreed December [2010] to roughly double quotas from around $375 billion to around $750 billion. But out of the 187 member countries, only 17 have legally accepted the increase, including Japan, the U.K. and Korea. Most of the countries with the biggest quotas, such as the U.S., China and Germany, haven't yet gone through the legal process, such as parliamentary or congressional approval, need to hand over their promised dues.
(16 votes)
»
- Login or register to post comments
- 17371 reads
- Printer-friendly version
- Send to friend
Similar Articles You Might Enjoy:
- Italian Austerity Details Appear As Monti Steps Up
- Monti Forms Technocratic Government Which He Will Lead And Be Finance Minister
- Italy next week
- ECB Issues Ultimatum To Italy, Threatens To Halt Bond Purchases
- The Technocratic Revulsion Begins: Photos And Video As Thousands Of Italians Protest Monti's "Banker" Government
Who couldn't see this coming?
...jinx...
If this was a solution, why did it take them until now to figure it out? It's yet another attempt to soothe the market with rumors. What will the half-life be on this one?
I've used the rumors as a trading tool. Figuring to get a few days in one direction from them.
And it is true, the half life of this kind of "news" gets shorter and shorter. Most of my hedges are in place for the next part of the game, so it doesn't matter now. In this environment even being partially prepared is better than not at all. Very important to be personally hedged - need I even say it?
Agreed. Gotta stay nimble. Tricky, though, trying to time the moves. Gotta learn to think like a criminal.
Exactly. It is so strange to trade on the lies of the criminals running this mess. My trading used to be based on the quality of the company and their sales, and it would take a month or so for a trade to play out.
Now it is just trying to weed through the astonishing lies. And that is the significant change we have in markets. It's why I came to believe this is going to blow up. I've been alive long enough to see that the markets in general are now totally run on stunningly epic lies & nonsense.
"Who couldn't see this coming?"
LOL -- Very first thought after seeing headline.
But if the Fed is a private bank with substantial European ownership (that just happens to print our currency) what is to stop them from loading up their balance sheet with reserves from the whole EU?
In that sense, isn't the US goverment just a customer?
"In that sense, isn't the US goverment just a customer?"
So, if the Fed like MF Global, looses their ass on European Bonds who pays?, their Customers? as in MF Global's customers? So, is their customer the Primary Dealers and banks? No they are the Fed's Directors, that leaves who? Only one customer? No you got to be shitting me! It's me? No no! it is you and you and You!
That's what I mean..
The US government is the proxy for us, and as such, IS RETAIL.
Unfortunately, the politicians are the proxy for the banks.
It is so outrageous that it is surely to happen!
Exactly!!
Been trading this way as well. Only to pull out more Fiat and buy more Physical gold. Thanks to these asswipes I have picked up another 20oz of bullion since September and 100oz silver. I hope prices drop more.
Been reading books on post collapse societies and survival skills, upped my physical training, buying emergency supplies, and trying to get friends and family ready. Been tough waking people up but I see it happening.
My wife has started a food garden, we are shopping for additional home defense, planning ways to get family centrally located, etc.
My wife was originally stationed in Egypt while in the military. She knows what a dysfunctional society looks like. She thinks we are collapsing now.
Wonder could I get your wife to talk to mine?
Why does china get away with such a small IMF quota?
http://www.imf.org/external/np/sec/memdir/members.aspx
They don't. USA is paying a greater bill, but dear Benny only has to hit the magic button to generate that money. China has to earn what they contribute. In essence, China is the one paying more.
And it's the US corporations that are ripping in the profits when IMF proceed to their next stage NWO agenda.
Multiple bounces will not resurrect the cat.
it will until cat has bounced for the ninth time. are we there yet?
Algos know how to dribble cats.
If ya can't soothe 'em with rumors, just fuckin' Print More.
Like to solution to all golf problems: Swing Harder
(right Dawg... And hoping you had a good holiday)
What amazes and I sincerely mean amazes, in awe, numbed by the audacity and ignorance, is that the charade yet continues.
Why even the Economist, official high brow publication du jour of the NWO is suggeating (finally) the demise of this oddity. And when the Economist throws in the towel to at least retain an appearnace of intelligence and adult demeanor, it's the veritable swan song.
Print More
Jesus.
Getcher yellow metal, step right up, hurrahy hurrahy hurrahy...
My guess is that we will see more such disclosures/leaks/opinions on MSM, which might have the effect of dampening a panic when TSHTF, as well as indignation and arrogant denials from bureaucrats on high (Merkell, Sarkozy, etc) and then the blame game in full bloom. But with GS in firm control of the EU and USA you can bet the can kicking will continue until GS decides to miss a kick or, more likely, change cans.
Going to get more popcorn from my garden, milk the cow and make some butter and ferment some potatoes to make some vodka.
Just whom in the open market thinks that this will sail through CONgress. This has no half life.
Because ... if it were to be true ... what?
I'll be writting my representatives. There are negative consequences to them continuing to act in their best interest not ours.
...Because it really takes them THIS long to make a move....
My biggest problem trading this noise is trying to remember that these are slow, stupid ships trying to turn in these waters, and something like Zero Hedge is so far ahead of the game that it's easy to second-guess some pretty inevitable information.....
The idiots in Congress will be trying to "sooth" the markets when they've already melted down.....
Food, gold, silver and lead are the hedges now. Or if you have the storage capacity...Oil.
"If this was a solution, why did it take them until now to figure it out?"
They wanted to bounce Germany into doing it through crisis-maximizing.
The ogligarchs will monetize on the back of the 99% to ensure the continuity of their power. It will only lead to high-hyper inflation, and greater income disparity between the 99% & 1%, and further agitation between the BRICs & the West.
But it will give them time to convert nations into police states.
It'll be interesting to see how China & Russia vote on this IMF plan. And will the IMF (taxpayers) bail out Spain too?
Time to convert? We're 10 years in! This will attach to something involving Syria/Iran/War thingie, and pass with a flag on it's ass. US corporations cannot have the failure of their off-shore, bottom line pumping, tax dodging network, so the US Chamber of Commerce will get this through Con-gress, leaving the rest of us feeling like a 10 year old in a Penn State shower room.
i call dibs on the cheerleaders shower room!
'It'll be interesting to see how China & Russia vote on this IMF plan. And will the IMF (taxpayers) bail out Spain too?'
That whole IMF being an international organization facade has been uncovered as bullshit for some time now. I suggest the work of Ha-Joon Chang. Be real, this ain't Yahoo, the IMF is and has been a tentacle of the banking cartel so Russia and China can't really co-opt that organization. You can say with certainty that they aren't influential enough ... yet.
true.. but my thesis is how Western laissez faire monetization will upset the BRICs, and lead to future hostilities (currency wars). So if China & Russia vote no on the IMF plan it will support this thesis. If they vote yes, then it would falsify it. Which is why I'm interested to see how they vote.
Votes? We don't need no stinking votes!
The dead mobster floating in the St. Lawrence.
"n other words: this rumor is dead in the water."
Good. Enough is enough already.
bernake, "well, since the europeans wont use their bazooka, i guess we'll have to use ours!"
...didn't see that coming...
No jokes about Monti and cards.
"No jokes about Monti and cards."
Ah Nuts! :-)
It's actually IN the Dow Jones article:
"The IMF wants to give Monti another card to play."
It may or may not be dead in the water but it certainly reeks of desperation. These rumors are brilliant, they're like a windsock telling in which direction the wind is blowing. So what can we deduce from all this? Germans remain stubborn, the cartel continues to come up with extortion schemes. On it goes...
If they would have applied to the crisis itself half the creativity that they have had to use to come up with these rumors, we might have actually had a viable solution ...
well, one can wish ...
By 'viable solution' I can only assume that you mean the only one when you have a solvency problem: Default.
Sounds more and more like evermore desperate attempts to avoid triggering a Credit Default event!
Swaps anyone? What happens when a small one is triggered and everyone else tries to cover? Better stand close to the doors...
Maybe it already started. That $88 billion the Fed just doled out to an "other" could include the IMF.
+6 trillion.
According to the ZH article, Other indeed includes the IMF.
Italy saved, euro saved, bye bye "crisis". Told you soooooo for many months. Merry Christmas and a happy euro-2012.
This is getting too easy.
Then the u.s. 30yr is toast.
us 30yr will never be toast as long as bernake owns the printing press
So then, Sante Clause isn't coming this year?
Euro-Biotch.....
If you're a Euro-Bitch shorting the market, Santa might be coming twice this year.
We were never at war with Eurasia.
spain: daddy, daddy its not fair!!! why does italy get so much for the holidays!! i want a 800 billion dollar bailout tooo!!!!
Last sentence:
"Since Italy has a state budget better than other European countries it is reasonable to assume that these conditions the IMF would focus on two aspects: the need to reduce debt and increase growth."
I also have to laugh at the "need Congressional approval" bit. Since when do the psychopaths need any approval? The final agenda of the NWO cannot be forestalled by democracy; a rather quaint meme that got trashed long ago.
besides, we have seen over and over that the governments are almost totally controlled... its all show. all that AIPAC money gets a nice return in the form of total control.
The big story is France which has gotten little copy here. France is DOA in less than five years. People forget where England was before North Sea oil. An extensive list of what France manufactures is listed below:
Oh I don't know, I've been importing large amounts of French ennui for the past several years. Goes real well with a warm fire and a craft IPA.
+1 for squeezing "ennui" into a stinger.
Yes, and the prices on French goods are so low they're practically surrendering them to you!
I used to drive a Peugeot.
I worked with a guy who had a Le Car; every time he pulled up to a job site and shut it down, it's fan would continue to run heroically, trying to cool itself down. Invariably someone would ask, "Hey Sam, what'd you do, put some extra quarters in it?"
And we'd all laugh uproariously, every time. It was like the man owned a clown car. I'm guessing even Yugo owners looked down on him.
Spastica
Bet you don't remember when they were down to five dealerships in America.
I was young, it was my parents' 1979 504 diesel sedan. It was actually a very satisfying car to drive, although s-l-o-w. Brilliant, simple design.
I don't really recall when they left the US. I think I must have been out of college - maybe around 1990? I do remember the last 405 turbos zipping around Seattle.
Porn, w(h)ine, and cheese. And I wager they don't wash their hands......
Politicians are testimony to the need for radical birth control measures.
Really off topic: On the surface one might be given the impression that Norwegians and their apparent social leanings are better at basic math than their western counterparts - Wal-Mart inhabitants notwithstanding. North Sea Oil; good example, Norway socialized their sector early on, basically taking the position "the oil is there if you want it but here is the price - the government sided with the unions and priced the cost of doing business accordingly. Offshore workers in the Norwegian sector work a 2-week on 4 week off schedule and get paid pretty damned well for it including social benefits. Yes Norway has relatively high taxes but probably not more than what Brits Yanks and Snow Niggers (Canadians) pay. So WTF does any of this have to do with anything - well not much really but given that offshore labor makes up such an infinitesimally small portion of the price of a liter (quart to you yanks) of gasoline 2(fuck all) is still hardly measurable at the pump. However, 2 x the offshore workforce population working such a schedule doubles the income stream and doubles their onshore time to spend their after tax earnings which of course brings some level of inflation with it as all the knock on effects create jobs in the liquor retail, RV and ambulance sectors but it increases the overall number of folks available for financial ass rape… er… I mean financial instruments available to the government(s) and to reference Jeff Christian ….. like all financial instruments these are leveraged at 100:1 ….. In short these idiots gave away their North Sea, GOM and Tar Sand revenue stream for a blow job to the Big Oil set. And I heard a rumor that BP/SHELL wouldn’t even spring for mouthwash for the dumb bastards….
Ok not much of an analysis but it’s better than a boot in the nuts with a frozen mukluk and it supports my theory that politicians should be relegated to the role of walking organ donors for the more productive serfs…..
Come on!....this is easy.......just change the rules........again.
Restructure ?? If Monti pays the debt the zeros disappear---- more deflation ---- these people are in lala land-- OK the plan is to deflate and have growth? right --I got it--sounds like a good investment for the US taxed ones.
No wage deflation here:
http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20111127000064&cid=1202
It's amazing what Congress will vote for when they're scared into believing the system is about to fall apart and the positions they hold will no longer be consequential to the powers. That is, they will no longer receive bribes for their treasonous work.
And I am reading what $25 can do for students in India.
http://www.guardian.co.uk/environment/bike-blog/2011/nov/25/cycling-indian-schoolgirls-bike-blog
a) It was 25 pound, not dollars (so about $40).
b) Does it really help if they end up in an arranged marriage and caste-driven society anyway?
corruption is government intrusion into markets
“We know what to do, the problem is being re-elected after doing it.” - Jean-Claude Juncker
So my ES contracts will be green as fuck in a few hours. As a reminder, went long at 1161 then 1153.
To the stupid permabears that junked me, don't hate the player
While this may be a BS rumor, I would not be at all surprised if, at some point, Bernanke just fires up the presses and papers over the entire European problem. I mean he is going down in flames anyway, so WTF right.
Exactly, why should the BRICs really make an effort to kill the dollar's status as the world's reserve currency when the Bernanke is quite willing to do it for them.
Hello BRICs? If China really wanted the world's reserve currancy, they would be funding the IMF etc. This is more evidence that the BRICs, like most of ZH, are quite happy to sit back and let the whole ponzi scheme collapse under it's own fraudulent weight.
Things are moving along much faster now, fucking bring it.
What do you expect? A hug...
Anyway, I kinda like GERMANIA! AND WE ARE GOING TO HIRE JEWS TOO THIS TIME! It is the fucking clones at the America we HATE!
You have to admit, it's more fun to own Italy than AIG.
only fun until italy's gold leaves through the back door!
You only backstop. You own nothing.
Welcome the technocrats now.
i keep trying to download that scene in the Star Wars VI where they're torturing the robots and the robots are screaming "noooooooo!" while they do it...but i can't find it for some reason.
Perhaps with so many dumb rumours floating around, the markets will trade on technicals for a change: http://strawberryblondesmarketsummary.blogspot.com/2011/11/biggest-thanksgiving-week-drop-in-s-500.html
more debt=risk on!
less debt=risk off!
i was worried there for a second!
OT:
http://www.infowars.com/cop-arrests-five-year-old-for-acting-out-in-school/
It was fun to read the comments on the Infowars piece. Some Jonsers hate black more than they hate the state.
17 green bottles sitting on a wall, and if one green bottle should accidently fall....
You are surrounded! We got IRELAND and WE GOT A PACT! Just surrender peacefully before you do anything stupid...
Under this rescue scenario, would a U.S. passport be good for one free romantic gondola ride in Venice?
Venice?! The Italian rip off thing? Real Venezians with 15th century are living across the bay, they just could not afford the rent anymore after 10th generation. Real sad. It is all Miami Vice there in Venice, power boats Italian euro trash.