Tag Archives: crisis
Before I wish you all a Merry Christmas…
Before I wish you all a Merry Christmas… I would like you all, and I mean all, read a post that will make you go cold. Enjoy your presents and turkey, the wine and port, because come March you may have nothing to eat or drink at all.
Don’t take my word for it, go read the Slog, one of the foremost economic blogs on the internet.
At the current rate, it’ll cost $9trillion to keep the eurobanks afloat until March 31st 2012.
Why we are heading for Grave New World
Now this is serious. You can’t even extrapolate forward and say, “That means the annual running total to bail out eurozone banks is $8trillion”. Looking ahead without being hawkish at all, a private eurobank borrowing need at this accelerating rate would require another $9trillion by the end of Q1 2012.
I calculate that number not as a serious prediction, but to make a simple and obvious point: the world doesn’t have ten trillion bucks right now to throw at 500 European banks. And even if it did, spending that amount on the banking system with the economy dying on its feet wouldn’t even allow the Hank Paulsons of this world to say with any credibility, “There is no alternative”. If this is what it costs just to keep one part of the global financial system from eating itself, then the system is a crock in need of urgent replacement.
Either the banks are allowed to fail. Or the ECB starts printing money. Or the current ClubMed bondholders stop jerking around and face facts: unless something gives here, we’re all dead.
The bottom line is that in order to try and bolster the defences of 500 private banks – hardly any of which are financing capitalist entrepreneurs any more – taxpayers, investors, pension holders and Treasuries around the globe are being turned upside down, and shaken vigorously until empty.
‘Empty’ is almost with us.
Please go read the whole post here. You will wish you hadn’t, but will kick yourself if you don’t.
Now, Merry Christmas to all our readers.
Talk about kicking the can down the road.. the grand delusional plan
Well its out, the draft of the agreement that Cameron refused to sign. The not a treaty treaty because its called an International Agreement. 20111216eucodraft
Talk about kicking the can down the road, it is laden with burdensome regulation and unachievable targets all accompanied by, yes you got it, because I guessed it absolutely right, constitutional changes that would grant the EU supremacy. Not just statutes that a future government could back out of or reverse, but constitutional, because they are going for the EU State in this agreement.
Posted in European Union, Main Page
Tagged agreement, Cameron, crisis, efsf, euro, eurozone, madness
5 Comments
That meeting, the ESM and the Crown – why Cameron said NO
I would like to URGENTLY garner an opinion from you all out there on a theory that I have as to the full measure of the plan for the ESM, and that famous Cameron meeting last Friday.
I know that many of you who visit this site have looked deeply into our constitution, and are already aware that our State, the Crown, is not the Monarchy, but the Corporation of London.
Fairy Stories and Tales of the Unexpected
Today I shall mainly be keeping a watching eye and reading the fairy stories coming out of the Euroland theme park.
Stories of the mythical beast the Merkozy, that stomps around Europe, ripping off heads of state and terrifying the natives, rumoured to be slain by our brave knight Sir Camerloon last week are quickly unravelling as little more than a boyish quest win the favours that he could display on his lance, to stop the eurosceptic hemorrhaging to UKIP. A quest that one of his fellow knights is now challenging, even after public self flagellation, perhaps we may even get to see an almighty duel as time develops as they fight over who gets the blue smarties as the sweeties run out.
In India, a country that builds space ships and nuclear weapons whilst taking aid from Britain, it seems that its power plant may have run out of steam. Its Industrial Production growth missed market expectations by a mile falling to levels only seen in the middle of the blogal economic shutdown in early 2009. It slowly splutters just as the British aid also runs out.
In the tiny Euro state of Latvia the parlous state of its economy is under pressure having had an SFI (shit fan interface). It is currently suffering from its second bank run in less than a month on rumours that the large Swedish bank Swedbank is about to collapse, whilst next door…
in Lithuania authorities are arresting the bankers. Prosecutors issued an arrest warrant for Vladimir Antonov and Raimondas Baranauskas who are former shareholders of Bankas Snoras AB. Both men are suspected of embezzlement and document forgery, the Prosecutor General said in a statement on its website today. Baranauskas is also suspected of accounting fraud and abuse of authority, it said." Perhaps those prosecutors would like to run a master class for the rest of us…
Meanwhile, as we wait for the markets to finish the job that Sir Cameloon failed to do, one suspects that the mythical Merkozy is already thinking of another cunning plan…
Company bosses begin impact limitation fearing Euro breakup
The business world is planning for the end of the Euro. Companies as diverse as Car manufactures, tax & legal publishers, engineering to home improvement retailers right across the EU are all making contingency plans to minimise risks and in many cases already putting them into action.
According to Bloomberg:
Grupo Gowex (GOW), a Spanish provider of Wi-Fi wireless services, is moving funds to Germany because it expects Spain to exit the euro. German machinery maker GEA Group AG is setting maximum amounts held at any one bank.
“I don’t trust Spain will remain in the euro zone,” said Jenaro Garcia, founder and chief executive officer of Madrid- based Grupo Gowex, which provides Wi-Fi access in 15 countries. “We moved our cash and deposits to Germany because Spain will come back to the peseta.”
They go on to say, The Bundesbank, Germany’s central bank, registered capital inflows of 11.3 billion euros ($15 billion) from non-banks in September, according to the breakdown of its current account published Nov. 9. That helped transform a deficit of 47.3 billion euros in Germany’s balance of other capital flows in August to a surplus of 700 million euros in September.
Companies switched gears from preparing for a possible exit by Greece to some sort of currency breakdown after Italian Prime Minister Silvio Berlusconi’s government collapsed and 10-year Italian bond yields rose past 7 percent in November.
“We obviously have plans in place if something happens,” ABB Ltd. (ABBN) CEO Joe Hogan said in Zurich on Dec. 1. “They can never be as robust as you’d want them to be but we certainly are prepared if there is a crisis.”
The Swiss engineering company “updated what we would do” in the past few weeks, Hogan said. “We just keep updating and making our plan more and more detailed.’
Bayerische Motoren Werke AG, the world’s largest maker of luxury cars, has honed its plans developed following the 2009 financial crisis and is prepared to act if markets dive, Chief Financial Officer Friedrich Eichiner said in November.
The Munich-based carmaker’s response would include reducing production by as much as 30 percent and using its banking unit to directly tap central bank reserves. The company also has reduced its leasing portfolio to manage risks in case used car values decline.
Top of the list of concerns among companies is the collapse of one or more financial institutions in Europe. Executives say they’re already moving money around to avert that risk.
Kingfisher Plc (KGF), Europe’s largest home-improvement retailer, has considered plans for the possibility of a collapse of the euro region and will focus on cash generation to account for that possibility, Chief Executive Officer Ian Cheshire said.
Juan Jose Nieto, chairman of Service Point Solutions SA (SPS), a Barcelona-based document-management company, said he would move the company’s headquarters to the U.K. or Scandinavia in the event of a euro breakup.
K+S AG, Europe’s biggest potash supplier, said the company is assessing the counter-party risk of the banks it works with and, should they reach predetermined thresholds, stop the flow of any new funds into that institution.
“We spread our risk by defining maximum amounts that we allocate to individual bank or issuers of commercial paper and spread our funds broadly among many different parties,” said K+S spokesman Michael Wudonig.
Bloomberg notes that European companies spent billions preparing for the euro when it was introduced in 2000 by 11 countries. Contingency planning for an unravelling of the currency involves cutting investment, moving money to Germany, transferring headquarters to northern Europe from southern, and even going out of business, according to interviews with more than 20 executives.
When the contingency planning and capital flight is underway on such a massive scale, it seems that everyone except the unelected mafia in Brussels can see the writing on the wall.
May the French Banks be the first to go…… quickly followed by the quislings Euro pensions….