I thought I had filed this hours ago.
Excitement has been building. The DOW is down 160 counts to 12,419.88
http://hat4uk.wordpress.com/2012/05/30/euroblown-syriza-leaps-into-opinion-poll-lead-as-greek-president-has-talks-with-the-military-2/
EUROBLOWN: Syriza leaps into opinion poll lead as Greek President has talks with the military.
A new poll by VPRC tonight has Syriza as the biggest Greek Party with 30% of voting intentions, followed by New Democracy on 26.5%, while Pasok continues to languish at 12.5%. But there were disturbing reports of military discussions with the caretaker government.Opinion polls in Greece are about as stable as flies in a hurricane, but there is now a real possibility that the Left in Greece could put together a majority Coalition. With the Democratic Left at 7.5%, and the Communist Party at 5.5%, those together with Syriza would add up to 43%. And Louka Katseli – a former PASOK minister who now leads the small leftist party Social Pact – today threw her weight behind Alexis Tsipras." . . .
Tsipras has promised to reneg on the debt. If he does so the ECB will deny all credit. At that point the governments payments will be in "Drachma".
"Katey bar the door!"Zero Hedge is of the opinion that Spain is in collapse.
http://www.zerohedge.com/contributed/2012-05-30/europe-about-implode-are-you-ready
"I've warned time and again that the EU would collapse in May-June. That collapse is here right on schedule. And NO ONE will be able to stop it.
Here's why:
1) According to the IMF, European banks as a whole are leveraged at 26 to 1 (this data point is based on reported loans... the real leverage levels are much, much higher.) These are a Lehman Brothers leverage levels.
2) The European Banking system is over $46 trillion in size (nearly 3X total EU GDP).
3) The European Central Bank's (ECB) balance sheet is now nearly $4 trillion in size (larger than Germany's economy and roughly 1/3 the size of the ENTIRE EU's GDP). Aside from the inflationary and systemic risks this poses (the ECB is now leveraged at over 36 to 1).
4) Over a quarter of the ECB's balance sheet is PIIGS' debt which the ECB will dump any and all losses from onto national Central Banks (read: Germany)
So we're talking about a banking system that is nearly four times that of the US ($46 trillion vs. $12 trillion) with at least twice the amount of leverage (26 to 1 for the EU vs. 13 to 1 for the US), and a Central Bank that has stuffed its balance sheet with loads of garbage debts, giving it a leverage level of 36 to 1.
And all of this is occurring in a region of 17 different countries none of which have a great history of getting along... at a time when old political tensions are rapidly heating up (see Germany and France's recent butting of heads over fiscal policy).
So if you’re not already taking steps to prepare for the coming collapse, you need to do so now. The US will not escape from this unscathed. No one will. The global banking system is too interconnected: some estimates put US exposure in the ballpark of several TRILLION Dollars.
Again if you are not preparing for this, YOU NEED TO DO SO NOW."
http://www.zerohedge.com/news/spain-bankia-down-who-next
"Bankia is done: at this point the only questions left are i) what will be the final bailout cost ii) who will pay for these costs, and iii) whether the bank has enough beach towels to satisfy the onslaught of manic Spaniards desperate to hand over their €300 euros to the insolvent bank in exchange for some Spiderman-embossed linen. Oh, there is one more question: who is next.
Now, as we showed earlier today, in the aggregate the answer is simple: everyone. Because as JPM said "if a Spanish EU/IMF bailout package covered the government’s gross funding needs through the end of 2014, and included €75bn for bank recapitalisation, then it would amount to around €350bn." At roughly a third of its GDP, this is, needless to say, more money than Spain can procure. But, in a very Stalinesque sense, where everyone is merely a statistic, that is essentially the same as saying no one. It is also certainly not helpful to any Spanish readers who may be worried about their deposits (and investments) which in a world of total disinformation, will first be lost before the government advises caution and safety. So instead we go to Goldman Sachs which has conveniently constructed the following analysis, which replicated the loss provision calculation of Bankia, and applies it to the other listed banks. The result: in addition to the €19 billion in bail out costs for Bankia, Spain will need to spend at least another €25 in bailout funding for six other listed banks which include CaixaBank SA, Banco Santander, Banco Popular Espanol, BBVA, Banco Espanol de Credito SA, Bankinter SA."
http://krugman.blogs.nytimes.com/2012/05/30/japan-as-role-model/
Japan as “Role Model”
In my interview with Martin Wolf, I joked about apologizing to the emperor over Japanese policy — not because it was good, but because our policy in response to the liquidity trap has been even worse. I thought it might be useful to have some indicator of what I’m talking about.
So, here’s the employment-population ratio of men 15-64 in Japan and the United States since 1991, when Japan’s woes are often considered to have begun. Why men as opposed to both sexes, and why the age limitation? Basically, to abstract from social change and demography — Japan has lagged the US in terms of women in paid labor, and also of course has a rapidly aging population. I don’t mean to suggest that only prime-age men matter; this is just a relatively clean indicator. And here’s what it looks like:
Source: OECD i-Library
For all its woes, Japan has never experienced the kind of employment collapse we’ve suffered. That’s the sense in which we’re doing far worse than the Japanese ever did.
So as I said, in a way Japan is no longer a cautionary tale; it’s still a lousy story, but compared to us it almost looks like a role model."
So, here’s the employment-population ratio of men 15-64 in Japan and the United States since 1991, when Japan’s woes are often considered to have begun. Why men as opposed to both sexes, and why the age limitation? Basically, to abstract from social change and demography — Japan has lagged the US in terms of women in paid labor, and also of course has a rapidly aging population. I don’t mean to suggest that only prime-age men matter; this is just a relatively clean indicator. And here’s what it looks like:
For all its woes, Japan has never experienced the kind of employment collapse we’ve suffered. That’s the sense in which we’re doing far worse than the Japanese ever did.
So as I said, in a way Japan is no longer a cautionary tale; it’s still a lousy story, but compared to us it almost looks like a role model."
Any European bank union will have no "lender of last resort".
If it were to be formed it would have no effect without currency controls at the border of the euro-zone.
http://uk.reuters.com/article/2012/05/29/uk-spain-treasury-idUKBRE84S0EG20120529
"MADRID |
"There is a clear preference to tap the market. The other option (injecting state bonds directly into Bankia) is marginal," the source said.
"The (bank restructuring fund) FROB has liquidity and can tap the market. The Treasury also has a strong liquidity position. We'll choose one or the other mechanism."
FREE GUIDES AND REPORTS FROM DIANOMI
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(Reporting by Julien Toyer; Editing by Sonya Dowsett)"
"Those whom the gods would destroy they first make mad."
Debt crisis: Eurozone should look at banking union
30 May 2012
| 281 Comments More reasons why the LME should not fall into Chinese hands
30 May 2012
| 2 Comments ECB denies rejection of Bankia rescue plan
30 May 2012
| Comment Eurozone countries could face fines
30 May 2012
| 17 Comments Draft EU bank resolution law: main points
29 May 2012
| 6 Comments Spanish data underscore country's dangerous economic slide
Spanish retail sales plunged a record 9.8pc last month underscoring a dangerous economic slide that could derail Madrid's efforts to shore-up its banks and struggling regions.29 May 2012
| 96 Comments Increasing 'crisis of confidence' in the EU
Germany is the European Union's only major nation that still believes political integration has helped its economy amid "a full-blown crisis of confidence" across the region, opinion surveys have found.29 May 2012
| 29 Comments  Previous close value  *All charts show local time | |
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People are trading on very tight margins. This is not good.
http://www.guardian.co.uk/business/uk-edition
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Spanish bailout fears rock European stock markets
Brussels makes last-ditch attempts to prevent Spain becoming the latest eurozone country to need a bailout amid mounting fears of a banking collapse110 comments- Eurozone crisis - Wednesday's events
- Eurozone faces 'financial disintegration'
- Nils Pratley – German U-turn seems a fair bet
- European commission country scorecards
- Why it matters if Greece leaves the eurozone
- Spain looks to Vienna and Berlin for answers
- Why Italy is the next Spain
- Irish PM warns of referendum no vote cost
- Top London house prices 'could halve'
- Poll: which eurozone country is biggest worry?
- Hollande to clamp down on fat cat pay
- Eurobonds: an essential guide
-
Apple's efforts fail to end gruelling conditions at Foxconn factories
Abuses continue at electronics assembly firm with staff working up to 80 hours' overtime a month, says Hong Kong rights group -
Paul Krugman attacks Britain's austerity drive as 'deeply destructive'
Nobel prize-winning economist says austerity policy is failing and coalition should be increasing spending instead of cutting it
http://www.guardian.co.uk/business/2012/may/30/eurozone-crisis-spain-progress-reports
Eurozone crisis live: EC presses Spain and France as investors dash for safety - as it happened
Email
Olli Rehn of the EC says Spain's deficit targets could be relaxed if it comes up with a convincing budget plan.
Time to stop the blog, after quite an eventful day in which the EC issued report cards on the eurozone, and investors scrambled for safety in the face of the ongoing crisis.
Here's a closing summary:
The European Commission has warned that the eurozone faces 'disintegration' unless it takes swift steps to address the crisis. In its latest report on the economic health of the region, the EC called for closer banking ties, for the European firewall to directly recapitalise struggling banks, and for joint borrowing to be introduced. The EC also warned that the economic climate was troubling.Spain were offered a lifeline by the EC. Olli Rehn, the EU's economics affairs commissioner, said Madrid could be given until 2014 to bring its deficit down to 3% -- if it presented a convincing budget that would bring its economy onto a sustainable path. The EC also expressed concerns over the Spanish budget plans, and warned France that it must do more or miss its own deficit targets.
It was another bad day on the stock markets. Shares fell across Europe, with the Spanish IBEX hitting a new nine-year low. The FTSE 100 closed 93 points lower. Amid the dash for safety, the euro fell below $1.24 against the dollar, while the yields on German, UK and US debt all fell again.
Peripheral countries suffered, amid fears that the crisis could drag them down. Italy's 10-year bond yield rose over 6% after a worrying debt auction saw investors demand higher borrowing rates, while Spain's 10-year yield climbed towards 6.7%
Ireland prepared to go to the polls on Thursday in its referendum on the EU fiscal treaty. While No campaigners portrayed the Treaty as a bloodthirsty shark, prime minister Enda Kenny warned that borrowing costs would leap unless the treaty was approved.
In other developments.... the European Central Bank denied blocking a proposal to recapitalise Spain's Bankia with sovereign bonds, new opinion poll data from Greece was published, and Paul Krugman attacked the UK's budget plans.
Thanks all -- and Good Night.
- 30 May 2012: Bankia et al can't wait. With a backdoor bailout closed, it is time for Germany to show what it is prepared to do to save the euro
I think the Guardian has a truth here.
I think it will be a losing bet.
Informed opinion disagrees.
.
