Here is a retired English advertising consultant trying to make sense of Europe: http://hat4uk.wordpress.com/
Imagine an EU in which we could learn from how others do things better than we do. One which celebrated that variety for the good of all. One that sought not only to keep the differences, but strove to incorporate them into our many ways of life. That kept bankers in their place, and accepted that not everyone should be expected to make cars, bread, wine, roads, and movies in the same way as the rest.
That was the Europe I was after in the 1970s – the one and only time I was asked. It’s the diametric opposite of the one we’ve got….and a million light years from the one we seem to be about to get.
I vote that Britain should not be a part of it. Not because of Little Englanderism, but because I love the real Europe. If my Government doesn’t get that, what else can I say? If the only way to unite Europe is to turn it into a drab, neocon shade of Frankfurt grey, then f**k my Government, f**k the EU, and f**k the Brussels eurocrats. I vote no."
"December 5, 2011
BREAKING….SCHAUBLE PLANS ‘IN TROUBLE’ AS MERKEL’S RIFT WITH PARIS REAFFIRMED – Sources
More break than make on Day One
Last Saturday, German Finance Minister Wolfgang Schauble ran a kack-handed plan for debt reduction up the media flagpole. Not many people saluted it, but then Saturday does tend to be a slow day. A piece of pure Janet & John housekeeping, the basic suggestion was that the 17 eurozone States (or anyone else among the other 10 who cared to join in) should take all of their debt that was above 60% of gdp, and tell the citizens to pay it back in taxes. Can you really imagine a politician buying into that one?
Reuters reported it, I admit to having skimmed and then skipped it. It felt like another Schauble dodge to keep everyone (a) convinced there were lots of options and (b) confused as hell. But earlier today I became concerned, having seen an entry at Zero Hedge quoting unnamed sources as suggesting Wolfie intends ‘to present the plan at a crunch summit of EU leaders on 9 Dec’. As the ZH piece seemed entirely sound on the 6-central-banks-liquidity stunt, I immediately gave the story some credence.
After some brief initial digging, further news has since been forthcoming from Brussels and Paris. This tends to confirm both my worries, and the ZH line.
A relatively junior (but usually reliable) Brussels source has given me a rushed, almost panicky, account of what – from the Sprout viewpoint – looks like something of a disaster for Wolfgang Schauble’s disguised forgiveness plans. The gist of the conversation – which had to be ended abruptly – was that in a lone meeting with Chancellor Merkel, the good news for Wolfie was, she thought the guaranteed 60% debt cap in future for the eurozone was a terrific idea; the bad news is that Geli had to be revived with cordite fumes after being given even a watered-down version of the Schauble-Paris-Brussels plan. [For new readers, this was - very briefly - a scheme to use the IMF, the ECB, and EU citizens to write off a proportion of ClubMed's debts and cancel all bank haircuts in return for much stricter banking regulations from here on.]
In Paris, there is even deeper gloom. The quote there, however, was more succinct and lucid:
“The problem we have with the Germans is that there is more than one Germany, and it is never entirely clear which one we’re dealing with. But the news from Berlin is that the Chancellor wants everyone to take responsibility for their actions. Forgiveness is not on the agenda: so we are as far apart as ever”.
Whether this means we’re back to Square One (or have merely slipped down a short snake) is impossible to read as of 16:45 GMT. My guess is that Angela Merkel believes the simplicity of her plan – a dash for Fiskalintegration via Treaty Change followed by a Sovereign eurobond – is the only answer. And thus Schauble has been ordered to present his 60% cap proposal as part of this market-reassurance package.
I doubt very severely if the markets will be reassured enough. More to the point over the next 48 hours, I really don’t see how Sarkozy can sell the German leader’s plan to his own national constituency. And in the background, Mario Draghi at the ECB waits for the signal he needs (about agreement on concrete steps and proposals) before giving a green light to the EU Central Bank piling in on a broader basis.
My gut feel is that this is a terrible start to the proceedings. As for the UK’s interests in this atmosphere, anyone thinking that Camerlot has an ant’s chance in a hungry ant-eater’s reunion of getting anything substantive from this must be certifiable."
Here are an actively trading group of hard money people ( gold for choice) :
http://www.zerohedge.com/
"Jeremy Grantham Releases The Scariest Market Forecast Yet
Submitted by Tyler Durden on 12/05/2011 - 14:27 Ben Bernanke China Japan Jeremy Grantham recovery
While we will leave readers alone when reading what the GMO head has dubbed the "shortest quarterly letter ever", we want to emphasize one point, namely Grantham's projection of how the market will perform in the next 10 years. The squeamish may want to look away: "No Market for Young Men.” Historians would notice that all major equity bubbles (like those in the U.S. in 1929 and 1965 and in Japan in 1989) broke way below trend line values and stayed there for years. Greenspan, neurotic about slight economic declines while at the same time coasting on Volcker’s good work, introduced an era of effective overstimulation of markets that resulted in 20 years of overpriced markets and abnormally high profit margins. In this, Greenspan has been aided by Bernanke, his acolyte, who has continued his dangerous policy. The first of the two great bubbles that broke on their watch did not reach trend at all in 2002, and the second, in 2009 – known by us as the first truly global bubble – took only three months to recover to trend. This pattern is unique. Now, with wounded balance sheets, perhaps the arsenal is empty and the next bust may well be like the old days. GMO has looked at the 10 biggest bubbles of the pre-2000 era and has calculated that it typically takes 14 years to recover to the old trend. An important point here is that almost no current investors have experienced this more typical 1970’s-type market setback. When one of these old fashioned but typical declines occurs, professional investors, conditioned by our more recent ephemeral bear markets, will have a permanent built-in expectation of an imminent recovery that will not come. For the record, Exhibit 1 shows what the S&P 500 might look like from today if it followed the average fl ight path of the 10 burst bubbles described above. Not very pretty.""
Here Comes The S&P Downgrade Barrage - Full Statement, In Which S&P Says France May Get Two Notch Downgrade
Submitted by Tyler Durden on 12/05/2011 - 16:26 Belgium Credit Conditions default European Central Bank Eurozone Finland France Germany Greece Insurance Companies Ireland Netherlands Portugal ratings Recession Sovereigns Structured Finance From S&P: "Standard & Poor's Ratings Services today placed its long-term sovereign ratings on 15 members of the European Economic and Monetary Union (EMU or eurozone) on CreditWatch with negative implications. .. We expect to conclude our review of eurozone sovereign ratings as soon as possible following the EU summit scheduled for Dec. 8 and 9, 2011. Depending on the score changes, if any, that our rating committees agree are appropriate for each sovereign, we believe that ratings could be lowered by up to one notch for Austria, Belgium, Finland, Germany, Netherlands, and Luxembourg, and by up to two notches for the other governments. [THIS MEANS FRANCE]"
Commodities And Rates Lead Derisking Afternoon
Submitted by Tyler Durden on 12/05/2011 - 16:08 BAC Bond CDS Derisking Exchange Traded Fund Fund Flows High Yield Sovereigns
High yield credit spreads were the first to show signs of disappointment this morning but this seemed more due to technical relationships in the CDS index market as HYG stormed ahead with stocks. Commodities had notably cracked early on this morning and were trending lower already as we broke the FT rumor of broad S&P downgrades in euro sovereigns. All markets reacted instantly, no questions asked, and while IG, HY, and the S&P dropped together, it was the drops in commodities as the USD strengthened that were optically of the highest magnitude. TSYs also instantly reacted and were another major outperformer - drastically beating Bunds on the day. ES (the e-mini S&P 500 futures contract) was much less volatile than broad risk assets overnight but as Europe opened markets started to move closely together in a positive risk mode. CONTEXT (the broad risk basket) was less positive that ES in the US morning session but as we sold off and closed they were closely in sync once again as every member of the basket was contributing to risk aversion. Financials outperformed but were well off their intraday highs as a sector with the majors closing mixed (e.g. BAC near lows and MS near highs) but we note that financials were the most net sold (especially the majors) in corporate bond land.
Some late day covering lifted 30Y TSY yields and EUR strengthened against the USD (European banks repatriating ahead of their open?) helping CONTEXT and elevating ES into the close. ES was on its own relative to credit though as it tore back up to try and regain VWAP.
Here is a liberal NY financial consultant:
This gets done before the floor opens.Monday, December 5, 2011
NYT’s James Stewart Runs PR for Compromised SEC Chief Khuzami Against Judge Rakoff on Proposed $285 Million Citi CDO Settlement
Tom Adams, an attorney and former monoline executive, provided considerable input into this post.
There is nothing more useful to people in authority than when a writer with an established brand name does their propagandizing for them.
Harvard Law graduate and Pulitzer Prize winning author James B. Stewart penned a remarkable little piece in the New York Times over the weekend. Titled “Few Avenues for Justice in the Case Against Citi,” it contends that Judge Jed Rakoff’s ruling against a proposed $285 million SEC settlement with Citigroup over a $1 billion CDO (Class V Funding III) that delivered $700 million in losses to investors and $160 million in profits to Citi is misguided. Stewart argues, based on “some reporting,” that the SEC is unlikely to do better in the trial that Rakoff has forced on the agency by nixing the settlement.
We will look at the caliber of Stewart’s “reporting” in due course, since his article reads like dictation from the SEC’s head of enforcement Robert Khuzami (the SEC’s interests are aligned with Citi’s in wanting the settlement to go through). He either did not read or chose to ignore critical information in the underlying complaints, which the Rakoff ruling cites, and he also overlooked relevant cases.
Read the Rest...
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