Eurozone and World Saved! Ha, Ha!!!

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This topic contains 17 replies, has 8 voices, and was last updated by Profile photo of angie angie 5 years, 1 month ago.

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  • #56399
    Profile photo of angie
    angie
    Spectator

    Well done Eurozone, Van Rumpy Tumpy and all those Presidents and Dodgy Leaders, including Cameron, Berly. Zappy and the Napoleonic dwarf as he’s been called.

    They’ve saved us, written off 100 Billion of Greek debt, created a new sovereign bail-out fund with no money in it yet, Banks taking a 50% writedown of their loans to Greece and now have to raise this money from somewhere, maybe a piggy (PIGS) bank etc etc.

    And, the stockmarkets have boomed, short term profiteering perhaps?

    How long will it be before Portugal, Spain, Italy, Ireland etc start bleating for a writedown of their considerable debts?

    The UK’s considerable interests as Ca-moron says are now protected 😆

    It was all quite easy in the end, send 1000’s of highly paid Gov’t people and their minions on a jolly good jolly at vast expense and patch it up over night, why on earth didn’t we think of this before? You just move things about on a board game, print some more wonga, write off Sovereign debt (but not personal debt for the populus), enjoy the hospitality and 1st class travel etc and job done! The biggest load of b—-x I’ve ever come across 😆 😆

    I enjoyed that one 😉

  • #106253
    Profile photo of Anonymous
    Anonymous
    Participant

    It’s a farce. We will be back to square one before long.

  • #106254
    Profile photo of peterhun
    peterhun
    Participant

    FT’s Alphaville doesn’t give it much chance.

    http://ftalphaville.ft.com/blog/2011/10/27/713546/so-many-bailout-questions/

    And a 60% haircut was needed.

  • #106255
    Profile photo of Chopera
    Chopera
    Participant

    They’ve agreed that Germany is not funding any further bailouts and that someone else will, and they’ve decided that the banks will accept 50% defaults, even though they won’t. All sorted then

  • #106256
    Profile photo of logan
    logan
    Participant

    Farce is indeed the right word but the markets seem to have bought it ……. for now. The devils in the detail as always.
    A 50% loss by mostly French banks has to be paid for. Banks don’t voluntary take a hit unless it’s been underwritten by someone.
    A haircut is a default in any other name and the CDS mechanism should be kicking in.
    I would very much like to know who is picking up the tab.

  • #106257
    Profile photo of Chopera
    Chopera
    Participant

    @logan wrote:

    Farce is indeed the right word but the markets seem to have bought it ……. for now. The devils in the detail as always.
    A 50% loss by mostly French banks has to be paid for. Banks don’t voluntary take a hit unless it’s been underwritten by someone.
    A haircut is a default in any other name and the CDS mechanism should be kicking in.
    I would very much like to know who is picking up the tab.

    Are we sure that the CDS will pay up with this type of haircut?

    I read somewhere that it has to be a certain type of “event” for CDS hedges to kick in. In accepting this type of haircut the banks might lose out elsewhere.

  • #106258
    Profile photo of logan
    logan
    Participant

    Exactly Chopera!
    The way to avoid a default in the EU is to simply call it something else. Who does it fool? Who’s going to pay?
    I suspect the ECB will soon be printing money, or rather pushing a key on a keyboard. Result is higher EU inflation, higher interest rates, stronger Euro, lower growth, more unemployment and pain for everyone.
    Stop Press:
    Sarkozy announces higher business taxes, and higher personal taxation 2012 for French residents. The inevitable claw back has begun.
    Now where’s that thread about retirement in the US. Europe is heading for disaster.
    The next problem will be Italy despite Berlusconi’s promise to reduce the retirement age.
    The fundamental problem for Europe is that there’s not enough growth. Europe’s economies are hopelessly uncompetitive and over regulated.
    The solution the EU always thinks will work is more regulation and control over our lives.

  • #106269
    Profile photo of zoro
    zoro
    Participant

    Well I’d say that the market which really counts i.e. those willing to lend to the likes of Spain and Italy has just given its verdict on Wednesday’s deal.

    Italy has just had to pay record interest rates for 10 year bonds and still didn’t manage to sell all it wanted.

    Here is a link to the BBC Business page with the news.

    http://www.bbc.co.uk/news/business-15490890

    I think the breathing space that Sarkozy and Merkel thought they bought with their platitudes is shorter than they think.

  • #106272
    Profile photo of peterhun
    peterhun
    Participant

    They imagined up 1 trillion, but 2 trillion is needed. So they are half way there – result!

    50% cut won’t make the banks go bust, but 60% is required. What’s 10% eh? (36billion) Well, enough to wipe out the banks.

  • #106275
    Profile photo of katy
    katy
    Spectator

    A list of banks that need to re-finance taken from spanish news.

    Santander: 14.970

    BBVA: 7.087

    Popular: 2.362

    Bankia: 1.140

    La Caixa: 602

    Total banca europea

    106.447

    Bancos alemanes: 5.184

    Belgas: 4.134

    Portugueses: 7.804

    Franceses: 8.844

    Italianos: 14.771

    Griegos: 31.312

    Spanish banks seem to be in a worse position than Italian banks.

  • #106279
    Profile photo of logan
    logan
    Participant

    “The world is at the mercy of irrelevant pygmies such as Silvo Berlusconi and Nicholas Sarkozy.”

    http://www.telegraph.co.uk/news/worldnews/europe/eu/8856384/The-world-is-at-the-mercy-of-irrelevant-pygmies-like-Silvio-Berlusconi-and-Nicolas-Sarkozy.html

    Provocative article but there is much truth in it. It’s easy to despair over the state of Europe and the fools who run it.

  • #106280
    Profile photo of angie
    angie
    Spectator

    Interesting replies and mainly agreeing that it’s a farce, a temporary sticking plaster until it rears it’s ugly head again.

    Begging bowl to China who may end up owning vast swathes of European assets as they do in Africa and S. America etc and, on their terms.

    Watch your Chinese takeaways from now on, at any given moment they may insert a little bit of ping pong drug and we’d all become Chinese followers. Spooky but true, we’ve literally just had a Chinese takeaway menu shoved through our letterbox!!

  • #106285
    Profile photo of Anonymous
    Anonymous
    Participant

    As we are on the subject, here are some interesting charts from John Mauldin’s Outside The Box economic newsletter.

  • #106287
    Profile photo of Chopera
    Chopera
    Participant

    @mark wrote:

    As we are on the subject, here are some interesting charts from John Mauldin’s Outside The Box economic newsletter.

    SACRE BLEU!

  • #106288
    Profile photo of logan
    logan
    Participant

    Nice charts Mark.
    So with any available option a European banking crisis results. No surprise there. Here is what George Soros thinks of the latest ‘patch’ to fix the disaster:-

    Given the magnitude of the crisis it is again too little too late,” Mr Soros said of the Brussels deal at a dinner organised by Pi Capital investor network on Thursday. “It will bring relief partly because the markets were so obsessed by the lack of leadership. The mere fact that something was achieved was a major relief and it will be good for any time from one day to three months.
    “Unfortunately it is not the last crisis because the fundamental issues have not been settled. It is clear that the amount of debt that Greece has accumulated and is accumulating is untenable and the country is effectively insolvent.”

    He also argued that many banks might not voluntarily join the ‘haircut deal’ as they will want to wait for the insurance offered by the credit default swaps they hold against the debt.

    So the real is question when does a 50% haircut become a default in real terms. As ever the EU continues to play with semantics rather than fix the underlying problems.

  • #106290
    Profile photo of Anonymous
    Anonymous
    Participant

    Excuse me for being so dumb but could someone in the know explain to me why the ‘debt’ can’t be written off on a worldwide scale. Just say ‘we are all fair and square and no one owes anything’ ?? Aren’t a lot of these numbers just that, numbers and not actually in cash or gold or whatever? It would write off 3rd world debt at the same time….. would it start a world war? would those dictators gain and those countries who’ve spent within their means lose out? Do pensions depend on lots of this debt, or Bill Gates’s value??

    What about our mortgage, if it states on paper (the deeds) that it has a value of 180,000 and a mortgage of 120,000 which we’ve paid off to 108,000 euros where is that ‘money’ in the value of what we have to pay. Do CajaMurcia owe our mortgage payments to someone else? Why can’t they rebalance their books and lower the values and amount people have to pay rather than repos? Isn’t it better to have someone paying for 30 years say 50k plus interest rather than not paying at all?

    Sorry, I just don’t understand banking at all??

  • #106300
    Profile photo of angie
    angie
    Spectator

    The charts seem to have sussed the options perfectly, ‘Severe or Extremely Severe Banking crisis’

    Now everyone talks of the PIIGS now including Italy but there are several smaller nations up to their eyes in debt in the Eurozone eg Belgium and Cyprus both holding large Greek debt (for them), I’m sure there are others too, both are on the edge and could default soon.

    In the UK, RBS may need another bailout by the Gov’t, Lloyds have still got large debt issues despite both being bailed out by the UK.

    ‘The shows not over till the fat banker/politician sings’ 😆

  • #106302
    Profile photo of angie
    angie
    Spectator

    As if the outlook couldn’t get worse, George Soros has given this new deal between 1 day and 3 months before it goes pear shaped again. Also the banks’ 50% haircut amounts to only writing down 20% (not 50%) of actual Greek debt because of the way it’s been structured, therefore their debt is still untenable and to top it all, the Chinese are baulking at the idea of financial aid.

    Love him or loathe him, Soros is a canny and wise investor.

    The Telegraph is carrying lots on this story 😯 IMO, the markets might go into reverse again once they digest this info and the detail in the package, if anything, it seems even more uncertain than before the deal was struck 🙄

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