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Citi Chief Economist Willem Buiter: A Spanish Or Italian Default Could Happen In A Few Short Days

Tyler Durden's picture


Citi's Willem Buiter whose succinct analysis a few weeks ago sealed the coffin of the worthless EFSF, has just come out with another knock out punch this morning after telling Bloomberg TV what everyone else knows is true, but is terrified to say out loud: namely that, "time is running out fast." He adds: " I think we have maybe a few months -- it could be weeks, it could be days -- before there is a material risk of a fundamentally unnecessary default by a country like Spain or Italy which would be a financial catastrophe dragging the European banking system and North America with it. So they have to act now." In sum -  a rehash of the Deutsche Bank pitchbook to the ECB we posted earlier, only in Mutually Assured Terms that would make even Hank Paulson blush. At this point Germany has an option: tell Europe to take a hike, or go balls to wall in bailing out 250 million European's early retirement packages. The ball is in Merkel's court, who unlike Citi, JPM, DB, and everyone else, has to worry about this fickle, and potentially pitchfork bearing, thing called "voters."

Full transcript via Bloomberg TV

Buiter on Europe's crisis:

"Time is running out fast.  I think we have maybe a few months -- it could be weeks, it could be days -- before there is a material risk of a fundamentally unnecessary default by a country like Spain or Italy which would be a financial catastrophe dragging the European banking system and North America with it. So they have to act now."

"The only two guns in town, one is only theoretical, and that is increasing the size of the EFSF to 3 trillion.  It should happen but it can't for political reasons.  The other one, the only remaining share is the ECB.  They may have to hold their noses while they do it, and if they don't do it, it's the end of the euro zone."

On why the ECB hasn't acted yet:

"Because after the error of the Bundesbank, they consider central banks purchasing sovereign debt outright to be like swearing in church.  It's just not done.  This has been in fact to a certain extent embedded in the treaty which forbids the ECB from lending directly to governments or buying stuff in the primary market.  But there is no restriction at all on them buying any amount of sovereign debt at any time in the secondary market, so they can do it."

"This crisis is the result of the failure to provide the minimal institutional underpinning for a monetary union in the euro area and also a result of the ECB unfortunately being the heir of the Bundesbank and therefore not understanding and rejecting the role of central bank as lenders' last resort to sovereigns.  They certainly are a central bank.  They just are a central bank that prefers to fight with both hands behind their back.  If they just let go of one hand, that would be enough."

On Italy’s situation:

"This is already challenging.  If this was the rate at which they are going to fund themselves, even over the medium term, that becomes an explosive debt deficit spiral…This is clearly unsustainable. You can live here for awhile, they're not going to keel over tomorrow, but this is not sustainable…The only way they can get back there is for the ECB to provide the liquidity while Italy does the hard work for years, in fact for the rest of the decade quite possibly, of restructuring their economy and tightening the budget in a major way."

On whether he's concerned about France:

I think France definitely has its work cut out for itself. It has a government budgeting problem which is structural to a large extent. And then they have a large banking sector. Do not forget that the U.S. banking sector balance sheet is less than 100% of GDP. In Europe and France, it is 300%. Their banks are under fire and so their sovereigns are under fire. I do not think the sovereign will keel over, but they have their work cut out for them.

On what he'd like to see in Europe to get the fiscal house in order:

Clearly some minimal federal fiscal structure would be desirable, but it is completely unrealistic.  They best they can hope for is that the ECB will indeed ring fence the euro area sovereigns in exchange for basically glorified IMF programs. So that they will temporarily transfer a significant amount of fiscal sovereignty to some super-national body, but then when they get restored to health, they regain this.  That is not a long-term solution.  Ultimately there will have to be some form of fiscal union that creates a federal solution, but that's for the next crisis, not this one.

On whether Europe is an AIG waiting to happen:

No for several reasons.  First of all, AIG happened and everybody learned from it. Whereas the sovereign CDS, the regulators by and large know who wrote it, who issued it and who holds it.   Unlike quite a bit of the CDS written by AIG.  This stuff is all collateralized.  So nothing is ever completely safe, even sovereign debt, but I think it's a lot safer to trigger them and use their insurance value than to kill the market."

On the quality of the German economy right now:

"It is a mixed bag. It has a very productive manufacturing exporting sector. Much of the rest of it is not very efficient at all, including the services sectors. Germany had the world's largest corporate takeover in 1999 when West Germany took on East Germany. That has not been fully digested yet. It is a country that is very much a dual economy. It is very strong at the moment strong at the moment as an export-oriented economy, which of course is vulnerable to cyclical is structural and cyclical. The German demographics are terrible, even by European standards."

On whether the U.S. should use its currency to help with exports:

"No, I think to pursue competitiveness policies by manipulating or steering down the nominal values of the exchange rate is a loser's game. In the limit, it gets you to Zimbabwe, which didn't exactly become a hub of competiveness. It's a gross misalignment for historical reasons…I think we shouldn't get too upset about the Chinese manipulating their currency.  There's also no reason to attach great importance to the ability of the U.S. in manipulating its currency. Both are second order instruments."


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Wed, 11/16/2011 - 16:32 | 1884094 mayhem_korner
mayhem_korner's picture



Italian Bonds = muffin stumps; ECB = Newman

Wed, 11/16/2011 - 16:35 | 1884115 BaBaBouy
BaBaBouy's picture

Anyone Know What Pellossi's trades are today ???

Wed, 11/16/2011 - 16:39 | 1884151 Hedgetard55
Hedgetard55's picture

She went long on BOTOX.

Wed, 11/16/2011 - 17:23 | 1884442 redpill
redpill's picture

Germans are known for being logical and calculating.  Great engineers and craftsmen.  However, if you piss them off a little bit too much it's like you flip a switch, and suddenly that skill and ability is used in aggression, and you're left with a rabid, fire-breathing Germanic horde trampling down everything in its way with Rammstein blaring in the background.  The last time this happened was when David Hasslehoff cancelled a concert.  Let's just say it got ugly.

Good luck, Angela.

Wed, 11/16/2011 - 17:44 | 1884615 allocater
allocater's picture

This time we will let Poland in peace. The Panzers will roll south and take out Switzerland and Liechtenstein. The Luftwaffe will take care of Monaco and Andorra.

Wed, 11/16/2011 - 18:07 | 1884765 unky
unky's picture

The German army is a joke

Wed, 11/16/2011 - 18:12 | 1884778 redpill
redpill's picture

--Belgium, May 1, 1940 

Wed, 11/16/2011 - 21:43 | 1885417 Harlequin001
Harlequin001's picture


Wed, 11/16/2011 - 21:40 | 1885424 Harlequin001
Harlequin001's picture

'will temporarily transfer a significant amount of fiscal sovereignty to some super-national body, but then when they get restored to health,' - by selling tickets for rides on magic unicorns one presumes...

It's always the weak point in the plan, how they "just get fixed'...

Thu, 11/17/2011 - 02:24 | 1885919 jeff montanye
jeff montanye's picture

good point.  another possibility is german withdrawal from the euro, instituting of a new dm for german use, converting german euro debt to dm, inflating euro debt "away" without extracting fiscal resources from germany, and, possibly, having germany rejoin the euro zone at some "future time".  please see

Wed, 11/16/2011 - 23:13 | 1885614 LeonardoFibonacci
LeonardoFibonacci's picture

sorry blue haired girl, you got that totally wrong!

Wed, 11/16/2011 - 18:18 | 1884805 cossack55
cossack55's picture

No!!! Not Andorra!!!! Where would one get cheap Cubans if not Andorra!!!!

Wed, 11/16/2011 - 18:17 | 1884801 eatthebanksters
eatthebanksters's picture

I heard she's taking massive doses of estrogen to keep her balls from growing back...

Wed, 11/16/2011 - 21:29 | 1885404 Pondmaster
Pondmaster's picture

....and implants , chest and butt ones

Wed, 11/16/2011 - 23:23 | 1885631 Ted K
Ted K's picture

Personally I think I would short the particular BOTOX maker she uses.  She got the Al Pacino thing where her lips are now 2 feet from her nose.  I wonder when it's going to dawn on these idiots 6 months of good looks for the rest of your life as a zombie isn't a good trade off.

I'm a Democrat, and that's one thing I have to concede to Republicans---Pelosi is the ultimate hypocritical BITCH.  God help us if she's supposed to protect the middle class from the 1%.

Wed, 11/16/2011 - 16:48 | 1884209 sabra1
sabra1's picture

Dildos and extra batteries! you don't want those batteries to die when you ain't finished! janet napolitano learned it the hard way!!!

Wed, 11/16/2011 - 16:53 | 1884228 gatorengineer
gatorengineer's picture

Short on BRAIN I thought?

Wed, 11/16/2011 - 17:05 | 1884330 Robot Traders Mom
Robot Traders Mom's picture

Anal beads

Wed, 11/16/2011 - 18:09 | 1884770 Mugatu
Mugatu's picture

His comment:

"No, I think to pursue competitiveness policies by manipulating or steering down the nominal values of the exchange rate is a loser's game. " 

If this is true, how come the chinese have been doing it for years?  It has not been a loser's game for them.

Wed, 11/16/2011 - 19:26 | 1885076 BigJim
BigJim's picture

It has been a loser's game - for Chinese workers who would have seen the purchasing power of their wages appreciate along with the Yuan if their government hadn't been suppressing their currency.

Thu, 11/17/2011 - 01:23 | 1885827 ub40onlyonce
ub40onlyonce's picture

She traded her vagina in for a Mao Tse Tung

Wed, 11/16/2011 - 16:37 | 1884134 GeneMarchbanks
GeneMarchbanks's picture

What are Spanish bonds in that case? TurKramer?

Wed, 11/16/2011 - 16:43 | 1884180 mayhem_korner
mayhem_korner's picture



I was thinking of merging Spanish and Italian into a single word, but didn't want to give up the shot at the pole position. 

Wed, 11/16/2011 - 16:53 | 1884234 GeneMarchbanks
GeneMarchbanks's picture

SPITalian has a nice ring to it, no?

Wed, 11/16/2011 - 17:25 | 1884500 CrazyCooter
CrazyCooter's picture

Oh, how about SH (SpanisH) and IT (ITalian).



Wed, 11/16/2011 - 17:30 | 1884540 arizona11912
arizona11912's picture

EURO BONDS will be the catch phrase on ZH. Just watch. Euro bonds cant be implemented unless there's sheer panic in Europe. I'm selling pre-order Euro bonds. Come on China and Japan, I know you want in on some of this action.

Wed, 11/16/2011 - 17:30 | 1884541 arizona11912
arizona11912's picture

EURO BONDS will be the catch phrase on ZH. Just watch. Euro bonds cant be implemented unless there's sheer panic in Europe. I'm selling pre-order Euro bonds. Come on China and Japan, I know you want in on some of this action.

Wed, 11/16/2011 - 18:18 | 1884804 vast-dom
vast-dom's picture

Got Default?

No Fucking Shit!


Wed, 11/16/2011 - 16:32 | 1884097 Comay Mierda
Comay Mierda's picture


Wed, 11/16/2011 - 16:36 | 1884122 Hedgetard55
Hedgetard55's picture

Waterfall in all the bankster stocks!

Wed, 11/16/2011 - 16:45 | 1884190 Comay Mierda
Comay Mierda's picture

quick someone get cramer to start pumping!

Wed, 11/16/2011 - 16:54 | 1884244 DoChenRollingBearing
DoChenRollingBearing's picture

Another $500 comes out of the ATM on my way home today.

Wed, 11/16/2011 - 17:36 | 1884582 viahj
viahj's picture

thanks for the reminder

Wed, 11/16/2011 - 16:47 | 1884204 WonderDawg
WonderDawg's picture

Late day sell off, Dow just tanked 100 points in minutes...

Wed, 11/16/2011 - 16:56 | 1884252 GeneMarchbanks
GeneMarchbanks's picture

FlashSmash. Sovereign downgrade imminent?

Wed, 11/16/2011 - 16:50 | 1884215 bartek
bartek's picture

Give us 3 trillion or the world will end and half of population will die.
Yea, right
Scumbags wailing for their $5 million Christmas bonuses

Wed, 11/16/2011 - 16:33 | 1884100 MassDecep
MassDecep's picture

The sky is falling, the sky is falling. Bet ya, they don't default!

Print the money!

Wed, 11/16/2011 - 16:36 | 1884123 SheepDog-One
SheepDog-One's picture

Dont look to bet me, bet in the market! May I suggest all-in on 00 black? Good of a bet as anything else....go bet!

Wed, 11/16/2011 - 16:33 | 1884103 SheepDog-One
SheepDog-One's picture

Noooooooo! Not when everything was just going so great and the FED's just came out and said theyre 'bout to print more and hand it to ECB and banks and all is well arrrrgghhhhhhhhh!!!

Wed, 11/16/2011 - 16:34 | 1884105 J 457
J 457's picture

BAC @ $5.96.

Wed, 11/16/2011 - 16:34 | 1884110 Hedgetard55
Hedgetard55's picture

Buiter = one more worker bee in the bankster hive. Fuck him.

Wed, 11/16/2011 - 16:54 | 1884239 Lord Welligton
Lord Welligton's picture

No mention that Greece and Italy cannot compete within the Eurozone.

Just take your medicine for 10 years like good boys and girls.

Then we, Citi and Friends, will own the very ground you walk on.

Wed, 11/16/2011 - 17:58 | 1884710 Calmyourself
Calmyourself's picture

That is pretty much it isn't it.  France, Italy and the rest we loaned you money we never had and now you can buckle down and slave away to enrich the banker class in perpetuity.  Ohh and the CB's will print to make us whole forever, MMMMhhhhaaa, evil laugh..

Thu, 11/17/2011 - 01:40 | 1885868 Elorant
Elorant's picture

Of course they can compete. Besides machines you have to eat something. Try eating a tomato from Germany and one from Greece and then you'll know. The problem with Greeks is that they lack the marketing to export their products.

Wed, 11/16/2011 - 16:34 | 1884113 homersimpson
homersimpson's picture

FAZ it up! *w00t*

Wed, 11/16/2011 - 16:34 | 1884114 SheepDog-One
SheepDog-One's picture

'Why hasnt the ECB 'acted' yet'...

Well thats all the ECB and FED does! ACT! As in a fucking puppet show! Phony actors!

Wed, 11/16/2011 - 16:35 | 1884117 SDRII
SDRII's picture

Buiter speaks with forked tongue. This is the same pink paper prodigy who never missed a chance to bang the barbaric relic meme. His proposals included a thought exercise to impose negative interest rates by destroying random serial number currency. First rate shill who should be applauded only for his ability to add.

Wed, 11/16/2011 - 16:59 | 1884200 sitenine
sitenine's picture

Agreed. This dipshit sounds like Krugman. EFSF 3 trillion how?! The ECB should start printing?! If this is success, we should PRAY for failure! Debt is not an asset when you're the one that owes, and debt is not an asset when your debtor can't pay. Don't know how to say it any simpler than that.

Thu, 11/17/2011 - 03:59 | 1885993 zhandax
zhandax's picture

Let's elaborate on that a bit more.... how do you like this quote, "No for several reasons.  First of all, AIG happened and everybody learned from it. Whereas the sovereign CDS, the regulators by and large know who wrote it, who issued it and who holds it. "

The ECB may know who in Europe wrote, issued, and holds it, but do they even care who in the US wrote, issued, and holds it?  Not their problem, perhaps?  Perhaps they think that surely the US regulators will stop watching tranny porn long enough to do something before TSHTF.  Perhaps they know that the US banks will take the hit and uncle sugar will pull another Hammerin' Hank bailout.  Only thing is, Hammerin' Hank is out to pasture and lil' timmay ain't gonna get the job done this time around.  Congress decided in '08 that they would rather face the wrath of the voters than the wrath of Hank.  timmay seems to lack that same gift for suasion.  When TSHTF, everyone wants to believe that their uncle is rich.

Wed, 11/16/2011 - 16:35 | 1884118 partimer1
partimer1's picture

Ray dalio, the hard-head truth-seeker told you this long time ago. default will happen, and once it happens, it cannot be stopped easily. Reality works in certain way. This is not Larry Summer's tomorrow is beeter than today shit. If you don't have the money to pay the bill today, you are in default. its just that simple.

Wed, 11/16/2011 - 16:36 | 1884121 B-rock
B-rock's picture

Did RANSquawk say "JP Mordor" a few minutes ago?

Wed, 11/16/2011 - 16:36 | 1884125 Amused2Death
Amused2Death's picture

Days???  It can happen at the speed of ONE FAT FINGER!

Wed, 11/16/2011 - 16:36 | 1884126 J 457
J 457's picture

BAC @ $5.92 with 10MM+ shares dumped in minutes.  Yikes.  Stopped out at $6.04.

Wed, 11/16/2011 - 19:50 | 1885158 jdelano
jdelano's picture

You were long BAC? Bwhahahahahaha....

Wed, 11/16/2011 - 16:37 | 1884128 Flounder
Flounder's picture


Wed, 11/16/2011 - 16:36 | 1884129 Chariots of the Feds
Chariots of the Feds's picture

Going long piano wire

Wed, 11/16/2011 - 16:36 | 1884130 Caviar Emptor
Caviar Emptor's picture

Germany may have its own problems and can't just leave the Eurozone

Wed, 11/16/2011 - 16:37 | 1884138 tony bonn
tony bonn's picture

germany 2012: eu Anschluss or bust

Wed, 11/16/2011 - 16:38 | 1884140 Bansters-in-my-...
Bansters-in-my- feces's picture

I agree with him,but why does he say "fundamentally unnecassary" default ?

Fundamentals don't look to good to me.

Wed, 11/16/2011 - 16:38 | 1884141 0cz
0cz's picture

Most idiotic Americans judge their level of cummulative wealth and well-being off what point value the DOW average is currently sitting at. 

I judge my wealth and well-being off how low Bank of America's stock is currently trading. 

Wed, 11/16/2011 - 16:38 | 1884144 SheepDog-One
SheepDog-One's picture

Why do all these European financial guys seem to look like such total pedophiles?

Wed, 11/16/2011 - 16:39 | 1884154 sabra1
sabra1's picture

because, they are!

Wed, 11/16/2011 - 16:38 | 1884147 sabra1
sabra1's picture

remember, they create a  crises , then shove a solution down our throats! and...we're gonna like it! 

Thu, 11/17/2011 - 04:46 | 1886041 e-recep
e-recep's picture

Yes, real crisis do not come with headlines that appear many weeks in advance.

Wed, 11/16/2011 - 16:40 | 1884149 mayhem_korner
mayhem_korner's picture



It's not about the default, it's about the distribution of the default-saving currency debasement.

Wed, 11/16/2011 - 16:39 | 1884150 Frank N. Beans
Frank N. Beans's picture

... In A Few Short Days


hours bitzchez

Wed, 11/16/2011 - 16:39 | 1884157 Frank N. Beans
Frank N. Beans's picture


Wed, 11/16/2011 - 16:40 | 1884158 Mister Ponzi
Mister Ponzi's picture

I see. Former Goldman Sachs advisor.

Wed, 11/16/2011 - 16:42 | 1884159 NotApplicable
NotApplicable's picture

First of all, AIG happened and everybody learned from it. Whereas the sovereign CDS, the regulators by and large know who wrote it, who issued it and who holds it.   Unlike quite a bit of the CDS written by AIG.  This stuff is all collateralized.  So nothing is ever completely safe, even sovereign debt, but I think it's a lot safer to trigger them and use their insurance value than to kill the market."


Anybody care to take a guess at what this collateral is? Also, other than the acronym TBTF, what exactly did everybody learn from AIG?

Wed, 11/16/2011 - 16:44 | 1884185 0cz
0cz's picture

Judging from what we have seen lately?  Probably toxic sovergn debt that has been spun off into pretty looking, AAA rated, time capsules that aren't allowed to be opened or peered into until there is a credit event. 

The IMF/World bank has been plundering nations for 70 years now.  That sovergn debt has to be somewhere and there are only a hand-full of banks in play these days that could possibly be the 'benefactors' of that debt. 

Wed, 11/16/2011 - 19:01 | 1884971 Ned Zeppelin
Ned Zeppelin's picture

While hiding behind the truth, Willem is talking bullshit big time. This is a straight out demand to the ECB to PRINT ALREADY! Should we be surprised this comes from someone at one of the TBTFs? "This stuff is all collateralized?" Do you mean the gross, or the phony "net" exposure, douchebag?

Wed, 11/16/2011 - 16:41 | 1884161 steve from virginia
steve from virginia's picture


I agree w/ Buiter to the degree that the ECB is not helping with the monetization task at hand. "Both hands behind its back," sez Buiter. ECB would need three hands in order to get a handle on real EU problem.

Two for the money -- hand over fist -- the third to be pumping that four extra Saudi Arabia's worth of crude oil needed at the moment to get the crude price back under $20 per barrel.

Minus $20 would cut Europe's foreign currency drain which is bankrupting them along with debt service costs, where to get it ...

(whistling ...)

Oh well, not to be had, that two-fisted fighting central bank will fail, maybe not next month, but perhaps a week ... even a matter of days.

Wed, 11/16/2011 - 17:07 | 1884356 Robot Traders Mom
Robot Traders Mom's picture

I'm collecting personal information from fellow ZH'ers. I need the following from you:


1. Your first name

2. What state you are from

Wed, 11/16/2011 - 17:15 | 1884426 mayhem_korner
mayhem_korner's picture



1.  Mork

2.  Ork

Wed, 11/16/2011 - 17:31 | 1884548 Uchtdorf
Uchtdorf's picture

Ve are in ze middel of ein crisis now. You must halt mit ze humor.

Wed, 11/16/2011 - 17:40 | 1884609 mayhem_korner
mayhem_korner's picture



Correction: you're not in the "middel," you're just at the start.  All of CandyLand lies ahead.

Wed, 11/16/2011 - 18:39 | 1884878 Jendrzejczyk
Jendrzejczyk's picture

All your candy are belong to us.

Wed, 11/16/2011 - 18:25 | 1884831 eatthebanksters
eatthebanksters's picture

Barry...Hawaii, er, uh, Washington, uh, is that a state?

Wed, 11/16/2011 - 18:29 | 1884844 skepticCarl
skepticCarl's picture

1.  skeptic

2.  panic

Wed, 11/16/2011 - 16:41 | 1884162 jomama
jomama's picture

if i have a silve eagle for every time i've heard this one, i'd be able to retire by now.

everything is relative, namely a few short days.

Wed, 11/16/2011 - 16:41 | 1884163 Rob Jones
Rob Jones's picture

... Could Happen In A Few Short Days

Nice pun!


Wed, 11/16/2011 - 16:41 | 1884168 whaletail
whaletail's picture

Didn't we learn from the Greek deal (version 3.0?) a few weeks ago that there are no defaults? Because not paying is "voluntary". 

Newspeak bitchez!

Wed, 11/16/2011 - 16:41 | 1884169 PaperBear
PaperBear's picture

The ECB can always print more euros.

Wed, 11/16/2011 - 16:41 | 1884171 topcallingtroll
topcallingtroll's picture

Socialism was born in Europe.
It is good to watch it die there.
This brings me more joy than anyone could imagine to watch it collapse.

Wed, 11/16/2011 - 16:45 | 1884195 NotApplicable
NotApplicable's picture

You seem to be forgetting that it was born from collapse. While it may appear to be dying, "it" (being an abstraction) is actually being reborn.

Wed, 11/16/2011 - 17:06 | 1884342 MachoMan
MachoMan's picture

It seems so strange that we get technological advancement each of these cycles, but our social mechanisms don't change much...  I suppose the mechanisms of control are becoming more and more subtle, but this is hardly much of a development in the same sense technology has increased.

Wed, 11/16/2011 - 17:12 | 1884403 Waffen
Waffen's picture

The problem is that TPTB will offer more socialism/centralization not less as the solution.

Wed, 11/16/2011 - 21:36 | 1885418 surrational
surrational's picture

I don't understand, it all just looks like fascism to me? Central banks, sold out politicians, drama.....just seems like they get some social perks while being fucked.

Wed, 11/16/2011 - 16:44 | 1884175 Barbarians_R_Us
Barbarians_R_Us's picture

Would SOMEBODY fucking default already....I am SO sick of hearing, reading "soon's". Seems like that is all there is these days - predictions, theories, postulations, etc etc and none of it is occuring. Oh, but "soon" it will, ya ya, I know.....

Wed, 11/16/2011 - 18:42 | 1884897 jerry_theking_lawler
jerry_theking_lawler's picture

one big one already did...Jefferson County, AL...but it was kept hush, hush, and no major media followed the story. suprisingly, the world did not end that day either!

Wed, 11/16/2011 - 18:46 | 1884912 Jendrzejczyk
Jendrzejczyk's picture

Barely 5 weeks in and you're already complaining it's taking too long? There are people here that have been waiting decades and still have granite conviction that it will all happen soon.

Patience grasshopper.

Wed, 11/16/2011 - 22:13 | 1885475 Messianic
Messianic's picture

Pelosi can make more money if there are lots of ups and downs...rumors of default are worth more $$ to players than defaulting immediately...

Thu, 11/17/2011 - 08:40 | 1886217 Archduke
Archduke's picture

iceland did.  they seem to be doing just fine.

Wed, 11/16/2011 - 16:43 | 1884181 Mark123
Mark123's picture plunge in late afternoon.  PPT where are you?!

Wed, 11/16/2011 - 16:53 | 1884231 SheepDog-One
SheepDog-One's picture

Heh heh, time to chop off some bull horns! Lop off a few steaks, throw em on the BBQ...And just when all the bulls were all-in 100% certain huge run thats a shame....

Wed, 11/16/2011 - 16:44 | 1884184 Yen Cross
Yen Cross's picture

  Ahhh!!!  Never mess with the mUSHRoom <    Bad outcome!

Wed, 11/16/2011 - 16:44 | 1884186 sabra1
sabra1's picture

On whether Europe is an AIG waiting to happen:

No for several reasons. First of all, AIG happened and everybody learned from it.

who's everybody! all this is way worse than AIG! the only thing learned, is how to screw our butts  longer and deeper! 

this guy has no credibility!

Wed, 11/16/2011 - 16:55 | 1884249 DonutBoy
DonutBoy's picture

Exactly - that is ludicrous.  What they learned is not to let the CDS's trigger - and voila - Italian yield pops up over 7% because there are no CDS's.

Wed, 11/16/2011 - 18:23 | 1884822 Flakmeister
Flakmeister's picture

So a CDS that is in reality worthless, in that it cannot make the holder whole, is the magic that keeps bond rates low...

Doublethink pushed to the the nth degree....

Wed, 11/16/2011 - 17:16 | 1884436 Mariposa de Oro
Mariposa de Oro's picture

The only thing they learned from it was how to screw the Sheeple longer, harder and with less lube.  His credibility is with the criminal class.

Wed, 11/16/2011 - 16:51 | 1884218 SheepDog-One
SheepDog-One's picture

Oh noooooooo whats happening to our beloved equities! Everyone had in a certain BTFD dip day this morning and now markets are plunging? Whyyyy oh WHYYYYYYY??

Wed, 11/16/2011 - 16:59 | 1884276 Yen Cross
Yen Cross's picture

 Get long! Asia hates us!

Wed, 11/16/2011 - 16:52 | 1884219 Ag1761
Ag1761's picture

But his cant happen now, we've got the Olympics next year and we need to pay for them, then sell the stadia and all the houses first. We've spent the ticket money now so those bloody Germans better well do the right thing for's just not cricket.

Potus, I think the HUN are weaponising Uranium, lets go in and liberate the gold and all that nice machinery. We could get 20c on the dollar selling it to China. That should see us through until Sept 2012.

Wed, 11/16/2011 - 20:04 | 1885210 BigJim
BigJim's picture

That's MISTER Potus to you, sonny.

Wed, 11/16/2011 - 16:53 | 1884232 azzhatter
azzhatter's picture

But it should happen and it will happen. Let's get on with it, default cleanses the soul, ask Trumpskrat

Wed, 11/16/2011 - 16:54 | 1884243 Lord Welligton
Lord Welligton's picture

No mention that Greece and Italy cannot compete within the Eurozone.

Just take your medicine for 10 years like good boys and girls.

Then we, Citi and Friends, will own the very ground you walk on.

Wed, 11/16/2011 - 16:55 | 1884245 riley martini
riley martini's picture

Unnessary default means the corrupt fascist pigs at Shity will have to pay for their bad investments (gambling)habits at the expense of honest free markets . 

Wed, 11/16/2011 - 16:55 | 1884246 Shleprock
Shleprock's picture

Bac 5.92

Wed, 11/16/2011 - 16:56 | 1884255 ebworthen
ebworthen's picture

"End of the Eurozone"


Wed, 11/16/2011 - 17:27 | 1884501 RemiG2010
RemiG2010's picture

End of the Euro as we know it? Yes! End of the Euro-Project. Definitely NO! Until German heart is still beating, noone will give up until it stops including Poles . Poles already took Greek bank Polbank under their FDIC equivalent to help Greeks as well to protect its customers. So, not so fast dude!
 Rahm once said: 'never let a crisis go to waste'! Let's hope this one will not be wasted!


PS Sorry dude, I need to give you vote down! No offence.

Wed, 11/16/2011 - 17:50 | 1884648 RemiG2010
RemiG2010's picture

Dude! Here is an exaple, that this time around, it's not going to be wasted! And that's just the beginning! New beginig...


Wed, 11/16/2011 - 18:23 | 1884823 RemiG2010
RemiG2010's picture

Well, on the other hand if these old fools in Brussels will screw everything up completely, at least we're going to sink together! No one will be spared!  
All hands on deck!

Wed, 11/16/2011 - 17:00 | 1884287 Ignorance is bliss
Ignorance is bliss's picture

Perhaps someone could explain to me why MF supposedly failed on Greek 50% haircuts with no CDS insurance. IF the ECB can buy bonds on the secondary market why didn't they buy the Greek bonds from MF? Why did the Greek investors in soverign bonds need to take a haircut if the ECB can buy their bonds?


Thanks in Advance

Thu, 11/17/2011 - 00:17 | 1885731 topcallingtroll
topcallingtroll's picture

It wasnt greek bonds.

They mis timed their purchases of italian bonds.

Wed, 11/16/2011 - 17:07 | 1884352 Yen Cross
Yen Cross's picture

  That was prophetic! +1

Wed, 11/16/2011 - 17:25 | 1884499 Lord Welligton
Lord Welligton's picture

Excellent stuff.

Wed, 11/16/2011 - 17:06 | 1884334 bob_dabolina
bob_dabolina's picture

Why doesn't the FED just buy the bonds?

They bought all this bullshit housing paper and hotels. Yea, did anyone know the FED owns the Red Roof INN?

It's not like anyone follows the rules anymore, it's the wild west, print the money to buy the shit and let's move on.

Wed, 11/16/2011 - 17:09 | 1884371 SamAdams1234
SamAdams1234's picture


Wed, 11/16/2011 - 17:10 | 1884392 Snake Plissken
Snake Plissken's picture

I'm not sure why this POS is looking so smug, he will be hanging from a lamp post pretty soon.

Wed, 11/16/2011 - 17:22 | 1884482 SheepDog-One
SheepDog-One's picture

MAN youve GOT to get an avatar to properly match that name!

Wed, 11/16/2011 - 17:11 | 1884394 Madcow
Madcow's picture

What an impressive game of chicken this is. The "conventional wisdom" is that there will soon be some kind of magic super-banker money to come in and save the day.  The "contrarian" POV is that they're going to just let Europe collapse and pull the plug on Globo-Welfare-Co and torpedo the financial assets of the "West" before oil climbs much further.   Just an observation -

Wed, 11/16/2011 - 17:23 | 1884488 SheepDog-One
SheepDog-One's picture

certainly magic dust needs to be dropped from helicopters real soon! Right? Hello? Anyone still out there?...

Wed, 11/16/2011 - 17:30 | 1884543 slewie the pi-rat
slewie the pi-rat's picture

with the EUR continuing to tank, stocks are (finally) hitting the fuking skids!

as time runs out, one hopes citi's willem beiter isn't too disappointed in the ECB's reluctance to bail out a continent full of bankster puppets and nannies

Wed, 11/16/2011 - 17:32 | 1884552 ivars
ivars's picture

51 day of accurate gold,silver,oil forecasting:

Wed, 11/16/2011 - 17:57 | 1884561 falak pema
falak pema's picture

by the looks of it the Oligarchs have cornered their collective money pump, the ponzi market, in a place where its been milked dry and is now so teatering, that apart from ruining it all for the every day man, its gonna come back to bite them in contagion both sides of pond.

This is one run-away roller coaster in Eurodisney thats on its way to th wall.

Wed, 11/16/2011 - 17:42 | 1884618 BurningBetty
BurningBetty's picture

For the love of God just let the printing begin! We are screwed anyway, postponing it will just make us oblivious for another year or two before all hell breaks lose. By then, those who are smart will actually do something about their financial situation so when the time comes they will be ready. 


Wed, 11/16/2011 - 17:48 | 1884657 Little Red Rooter
Little Red Rooter's picture

Pitch forks and irrigation, bitchez!

Wed, 11/16/2011 - 17:49 | 1884662 terryfuckwit
terryfuckwit's picture

yes it should have been raining defaults for the last 2 is totally sickening..and totally engineered by those five banks that have 94% of the 600 trillion fairy tale derivative balloon money...give us all the best xmas present we could ever imagine and let these failed power weilding bastards die.... a little bird tells me various intelligence communities are working on this as we speak.. and the politicians will claim ignorance too the depth of lies peddled by the TBTF'S... and then i sadly woke up...

Wed, 11/16/2011 - 17:52 | 1884679 Calmyourself
Calmyourself's picture

"On whether Europe is an AIG waiting to happen:

No for several reasons.  First of all, AIG happened and everybody learned from it."

No, about 50-100 times worse but it still will not fall.

Wed, 11/16/2011 - 17:57 | 1884702 kevinearick
kevinearick's picture

So, the economy doesn’t work the way they told everyone it works. Surprise, surprise.


Open source, those working beyond regulation, form the root and build forward event horizons, assembling unique developments, from timed integral developers. The derivative developers mirror the outcome in a relatively random competition, because they cannot see through the looking glass, in a rigged lottery economy that delivers the outcome to legacy systems. The Fed guesses and the accountants gloss over the errors.


The blind are leading the blind, looking for the new gate system, because the root has been moved and the kids are getting farther and farther ahead, while the old system implodes on itself, as the clubs cannibalize each other. The black hole reaches out and finds nothing to eat.


The black markets have all the necessary resources. Keep trying to prove me wrong.

Wed, 11/16/2011 - 17:57 | 1884708 uno
uno's picture

I was forced to view a Squid advert and no bloomberg video; I feel so dirty, cheap and used

Wed, 11/16/2011 - 17:59 | 1884718 LawsofPhysics
LawsofPhysics's picture

Yes, but would this be a credit event or not?

Wed, 11/16/2011 - 17:59 | 1884720 Ned Zeppelin
Ned Zeppelin's picture

The ECB will print.  And what is he talking about - there is not a chance of anyone allowing these sovereign CDS to blow up. Or the CDSs on the banks invovled themselves.  I disagree with Buiter on that point.  Gross, versus net, eh Buiter? "This stuff is all collateralized", right Buiter? 



Wed, 11/16/2011 - 18:13 | 1884782 halflink123
halflink123's picture

Does she really have to worry about voters, though?  


If ALL the candidates are TBTF cronies (as in the United States), the banksters win the game before it's even played.

Wed, 11/16/2011 - 18:16 | 1884794 Cman5000
Cman5000's picture

Let's get this party started this shit is getting old ... Burn it down I'm ready

Wed, 11/16/2011 - 18:17 | 1884800 navy62802
navy62802's picture

The nuclear mushroom cloud is an apt image to associate with this eventuality.

Wed, 11/16/2011 - 18:24 | 1884828 chump666
chump666's picture

Social reasons butnut.  ECB prints and you'll have a social meltdown in Europe, simple, something these academic  brain-dead zombies can't comprehend.  Winter is coming and oil is bid, yeah grand plan...Cue French strikes/riots, Germany Strikes/riots, Asia/China goes into a stagflation wipe-out.  Geo political tensions etc etc etc

EUROPE TAKE THE PAIN...that is it, take it you weak a-holes.  F*ck your banks, they were greedy anyway.  As for Wall Street f*ck them too...who cares.  Write down the sh*t countries, kick em out.  They fend for themselves, who knows two yrs form now they become a powerhouse economy/s. In the meantime deal with reality.  

These guys are a joke


Wed, 11/16/2011 - 18:49 | 1884922 jmcadg
jmcadg's picture

If ECB print, Germany will exit the Euro.

Wed, 11/16/2011 - 19:55 | 1885175 ??
??'s picture

ECB to print = PMs, Oil etc liftoff

ECB Mario will print to help Compatriot Mario

Merkel will cave as short term cost to the Motherland is a death sentence

(besides the banksters are in charge)


1,000 point day on the Dow when they announce but it might fall by 2000 before they do -

Wed, 11/16/2011 - 21:36 | 1885295 Plumplechook
Plumplechook's picture

This Citi guy is way too sanguine.  For the real armageddon picture of what is about to go down in Europe you gotta read Ed Harrison's 'Italian Death Spiral' piece over at Naked Capitalism:

"If Italy blows up, a Depression is upon us; banks would be insolvent, CDS triggers would implode the system, bank runs would begin, stock markets would crash, and you will would see sovereign debt yields go to unbelievable lows for nations with a lender of last resort."

"Hedging against this outcome means preparing for black swan scenarios in stocks, government bonds, currencies, commodities and precious metals. This is a world of unpredictable policy paths that will certainly involve civil unrest, government repression and economic nationalism, but may also involve competitive currency devaluations, currency controls, and trade wars."


Wed, 11/16/2011 - 20:50 | 1885321 Imminent Collapse
Imminent Collapse's picture

Other than that, Mrs. Lincoln, how was the play?

Wed, 11/16/2011 - 21:01 | 1885344 CreativeDestructor
CreativeDestructor's picture

He is a total bankster...

Wed, 11/16/2011 - 21:39 | 1885423 DosZap
DosZap's picture

Not one word, about how this is HELPING Obama'mama..............the cameras/media,MSM, are somewhere else for a change.

Wed, 11/16/2011 - 21:54 | 1885439 Westcoastliberal
Westcoastliberal's picture

I for one will be highly pissed if any Fed money (i.e. a loan on our taxpayer tab) goes to wallpaper over ANY of this mess.  If we learn of it, IMHO that could be the straw to break the proverbial camel's back in unleashing more of the masses to the streets in protest. And it's just a matter of time until the gears come crashing to a halt since we've just pasted $15 Trillion "official" debt. (Add derivitates and we have a REAL party).

By the way, have any of you seen any factual comparisons of the protests/riots in other countries contrasted to what's happening with OWS?  I'd like to see the side by side two column treatment with plenty of quotes from our executive and state dept about how great it is when it happens over there and what a problem and inconvenience it is when it happens here.

Wed, 11/16/2011 - 21:57 | 1885442 JW n FL
JW n FL's picture



Print You Fuckers! Print!!

Thu, 11/17/2011 - 00:10 | 1885718 topcallingtroll
topcallingtroll's picture

I am quite convinced the germans would rather default and restructure versus monetize or "print" in the ZH vernacular.

Slowly the markets are beginning to realize this too. They are still in the bargaining phase. "Cmon you krauts. Are you crazy? Print baby print!"

Thu, 11/17/2011 - 00:37 | 1885759 chump666
chump666's picture

On wires earlier a IMF official (head of funds) quit.  ECB has had so many rifts and descents mostly from the German board members.  If the ECB become a runaway central bank, like the Fed, the Germans will kick up a huge fuss...They do not want to re-visit the 1920's inflation wipeout.  That and the ECB is a bank devised by the German banking rule book.  If the ECB goes rogue, Germany will leave the EU, or force a restructure of Greece/Italy. either way Europe's can kicking bullsh*t is about to end.

I am locking in Greece and Italy leaving the EU by Christmas, followed by Spain.  France will stay quite because they are about to get a yield beat-down...and they are babies for relying on the ECB to buy their waste.

Thu, 11/17/2011 - 01:14 | 1885817 Fozzy Slippers
Fozzy Slippers's picture

Can you just picture Grandma Merkel on her knees giving head?

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