This day, Friday, the equity markets sold off some. Down 1.5% on the Dow.
Down 2.2% on the nasdac. Down 1.66% on the S&P.
Europe was down. U.S. and German bonds were up
The summit conference in Brussels was a bust no matter how it is spun.
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19 Oct 2012: Editorial: Political fix remains vulnerable to the fiscal equivalent of the next extreme weather event to hit the eurozone 6 comments
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19 Oct 2012: Eurozone crisis summit failed to resolve any substantial issues and shelved some big decisions until December and beyond 13 comments
Merkel wins major victory over Hollande
19 Oct 2012
| 24 Comments
Cameron threatens to veto EU budget unless Brussels sacks staff
19 Oct 2012
| 839 Comments
Accuracy of UK GDP data 'worse than China'
19 Oct 2012
| 45 Comments
Hollande welcomes 'stable and efficient' deal
French President Francois Hollande said the EU had reached a "turning point" in the debt crisis, after leaders agreed to create single banking regulator for all eurozone banks.
19 Oct 2012
| 7 Comments
EU banking supervision is no triumph
Last night’s summit deal on banking supervision was no triumph. It was another EU exercise in decision dodging and fudge as German procrastination won the day.
19 Oct 2012
| 18 Comments
"Full of sound and fury signifying nothing"
Germany Spoils Party With Refusal on Bank Aid
By JAMES KANTER
BRUSSELS — Germany’s leader dampened expectations of direct aid from a bailout fund for Irish and Spanish banks.
In other places on my windows:
eight now nine entries
I don't need a drug. A few nights sleep do it for me.
Yes, that is my email as you well know.
I think my system is moderately clean. I will reformat the disk if you wish.
Alternatively I can come to AOL from a different machine.
I have instant messaging off. I pushed the button for the cleaning service.
It took me hours to figure out how to shut it down.
Greg Montoya can send mail. I will not respond.
If I ran a printer this is probably a good deal. I make almost no hard copy.
Snail mail reaches me at home.
Taylor Gardner pushes drugs. I have not needed them yet.
Jeany doubtless has a decorative image.
What I want is a warm and friendly presence in bed.
Dish is a good "off the grid" service. Telephone will be difficult with one second plus lags. Streaming and Email will work.
They are simplex (one way at a time) for most of us.
I have not required a stent.
Judges try to do the right thing.
They are as bound by the law as we who come before them.
A lawyer is very useful.
Van transport or cab is a way for a nondriver to deal with airports.
Often there is a bus.
I am guessing.
There are things I can try when I am rested.
Friday, October 19, 2012
EU Summiteers Feast While Eurozone Smolders
By
Delusional Economics, who is determined to cleanse the daily flow of
vested interests propaganda to produce a balanced counterpoint. Cross
posted from MacroBusiness.
So it’s yet another two days where the leaders of the EU get together for a dinner (this time it’s tarte, fine eggs/mushrooms, braised veal on bed of fresh spinach followed by a chocolate trio) and attempt to thrash out greater economic integration. Up for discussion is Greece and Spain, what to do with the funds from the financial
transaction tax and most importantly the plan for a banking union.
Given previous results the expectations are running fairly low and Reuters reported that Hollande and Merkel are already at odds over some key points:
The single supervisor makes way for direct banking re-capitlaisation and a further move towards a banking union. As I’ve talked about previously, without the banking union there is no supra-European deposit insurance which means that deposit outflows from the periphery are likely to continue and this will add to the pressure on the weaker sovereigns. In regards to that we saw Spanish bad loans reach a new record overnight:
We are also expected to hear from the Greek PM on the progress, or lack there of , on Greece’s progress to meet its emergency program obligations. I don’t expect the speech to lead to anything as everyone is well aware that Greece already needs a further debt write-off , although the EU does appear to be pushing for a debt buy-back in order to hold off the inevitable. In the meantime back in Athens anti-austerity rallies have turned violent once again.
There is another full day of the summit to come , so we will get further announcements over the next 24 hours.
So it’s yet another two days where the leaders of the EU get together for a dinner (this time it’s tarte, fine eggs/mushrooms, braised veal on bed of fresh spinach followed by a chocolate trio) and attempt to thrash out greater economic integration. Up for discussion is Greece and Spain, what to do with the funds from the financial
transaction tax and most importantly the plan for a banking union.Given previous results the expectations are running fairly low and Reuters reported that Hollande and Merkel are already at odds over some key points:
Germany and France, Europe’s two central powers, clashed over greater European Union control of national budgets and moves towards a single banking supervisor before a summit of the bloc’s leaders began on Thursday.In the lead up to the summit Angela Merkel had stated that Germany wouldn’t be rushed on the banking union and reports in the last hour look as if she has got her way:
German Chancellor Angela Merkel demanded stronger authority for the executive European Commission to veto national budgets that breach EU rules, but French President Francois Hollande said the issue was not on the summit agenda and the priority was to get moving on a European banking union.
The two leaders met privately for 30 minutes just before the start of the 22nd EU summit since the euro zone’s debt crisis erupted nearly three years ago. Afterwards, a French source said they had agreed on the need for a tight timetable for introducing banking union.
German diplomats say leaders meeting in Brussels have reached agreement on creating a powerful single supervisor for eurozone banks and the plan will be implemented at some point next year.It is yet to be seen what the UK, Finland and Sweden have to say about this given they have been opposed to a banking union for their own reasons, and let’s not forget the risk of post-summit backflips.
France and Germany have been tussling over how to best shore up Europe’s struggling banks. France wanted a single supervisor in place by the end of this year — because that would allow Europe’s bailout fund to directly loan
But Germany has been dragging its heels because it’s nervous about such loans
The diplomats said leaders reached agreement Thursday night to draw up the legal basis for the supervisor by the end of this year. They will then put it into place sometime in 2013.
The single supervisor makes way for direct banking re-capitlaisation and a further move towards a banking union. As I’ve talked about previously, without the banking union there is no supra-European deposit insurance which means that deposit outflows from the periphery are likely to continue and this will add to the pressure on the weaker sovereigns. In regards to that we saw Spanish bad loans reach a new record overnight:
Spanish households and companies defaulted on their debts in record numbers in August, hurting the country’s lenders and highlighting the need for an aid package and bad bank to help the economy out of recession. A property crash left banks with billions of euros in bad debt from real estate developers on their balance sheets but the problems have spread to small businesses and other sectors. Loans that fell into arrears in August increased by 5.3 billion euros ($7 billion) from July, reaching 178 billion euros, Bank of Spain data showed on Thursday.
Spain is setting up a bad bank to siphon property assets off lenders’ balance sheets and banks are preparing to receive the first funds from a 100-billion-euro credit line agreed with the European Union. But the record loan data raises the question of whether consumer loans should also be transferred to the bad bank and if Spain will take too little of the European cash. The government estimates it only needs 40 billion euros.
We are also expected to hear from the Greek PM on the progress, or lack there of , on Greece’s progress to meet its emergency program obligations. I don’t expect the speech to lead to anything as everyone is well aware that Greece already needs a further debt write-off , although the EU does appear to be pushing for a debt buy-back in order to hold off the inevitable. In the meantime back in Athens anti-austerity rallies have turned violent once again.
There is another full day of the summit to come , so we will get further announcements over the next 24 hours.
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