Eurozone Crisis

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10.10 Europe's leaders must clarify their vision for the euro quickly or risk disaster as the ECB can't fill the policy vacuum, says President Mario Draghi. Can the ECB fill the vacuum of lack of action by national governments on fiscal growth? The answer is no. The financial crisis has heightened risk aversion in a dramatic way. I urge all governments to keep this in mind, because it is better to err by too much in the very beginning rather than by too little.

The next step ... is to clarify what is the vision a certain number of years from now," Mr Draghi said. "How is the euro going to look like a certain number of years from now? What is the union vision that you have a certain number of years from now? The sooner this is specified, the better it is.

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http://www.zerohedge.com/

Guest Post: Enter The Swan
Submitted by Tyler Durden on 05/30/2012 - 17:01
Bond Borrowing Costs Brazil China Creditors default ETC Federal Reserve fixed Germany Guest Post Housing Bubble India Iran Japan Krugman Paul Krugman Purchasing Power recovery Saudi Arabia

We know the U.S. is a big and liquid (though not really very transparent) market. We know that the rest of the world — led by Europe’s myriad issues, and China’s bursting housing bubble — is teetering on the edge of a precipice, and without a miracle will fall (perhaps sooner, rather than later). But we also know that America is inextricably interconnected to this mess. If Europe (or China or both) disintegrates, triggering (another) global default cascade, America will be stung by its European banking exposures, its exposures to global energy markets and global trade flows. Simply, there cannot be financial decoupling, not in this hyper-connected, hyper-leveraged world.

All of this suggests a global crash or proto-crash will be followed by a huge global money printing operation, probably spearheaded by the Fed. Don’t let the Europeans fool anyone, either — Germany will not let the Euro crumble for fear of money printing. When push comes to shove they will print and fiscally consolidate to save their pet project (though perhaps demanding gold as collateral, and perhaps kicking out some delinquents). China will spew trillions of stimulus money into more and deeper malinvestment (why have ten ghost cities when you can have fifty? Good news for aggregate demand!).

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Germany's resolve begins to crumble:

14.01 Angela Merkel says Europe should be ready to consider all options to stop the debt crisis - but wouldn't comment on a banking union in the eurozone. She said member states should be ready to hand over more powers to the EC:

There are integration steps which will require treaty changes. We are not at that stage today but nevertheless there are no taboos.

I have always said we need more Europe and that means eventually giving more competences to the European Commission.

We have to think about how we move forward over the next five to ten-year horizon. And if we are constantly coming up with new taboos, it won't work.

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http://www.telegraph.co.uk/finance/fina ... ority.html

Spain tries to raise the prospect of a nice new Caesar:

Spanish premier Mariano Rajoy calls for eurozone 'centralised control' authority
Mariano Rajoy, the Spanish prime minister, has called for the eurozone to have “centralised control” over the budgets of all the countries using the euro.

So here it comes.

He said: “The European Union needs to reinforce its architecture. This entails moving towards more integration, transferring more sovereignty, especially in the fiscal field.
“And this means a compromise to create a new European fiscal authority which would guide the fiscal policy in the eurozone, harmonise the fiscal policy of member states and enable a centralised control of [public] finances.”
Mr Rajoy is not the first to propose creating such an authority but the fact that Spain – a country deemed too big to fail – is backing the move may now accelerate talks.

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07.55 Germany's banks are in focus today. Moody's, the credit rating agency, has downgraded six German banks, including the country's second largest lender Commerzbank.

Moody's said in a statement it was downgrading by one notch the credit ratings of Commerzbank, DekaBank, DZ Bank, regional banks LBBW, Helaba and NordLB in view of "the increased risk of further shocks emanating from the euro area debt crisis, in combination with the banks' limited loss-absorption capacity."

08.41 The morning briefing from Benedict Brogan has just been sent out (sign up here), focusing today on "Eurogeddon".

Parliament might be in recess and politics put aside for the Jubilee, but the eurozone crisis still rages across the continent, giving David Cameron something to be busy with.

Yesterday he had a telephone call with Barack Obama about preparations for this month’s G20 summit in Mexico. No wonder - things are getting hairy. Yesterday Spain admitted for the first time that it can no longer raise money on the global markets or roll over its sovereign bonds. And manufacturing and jobs data in the US and China came in weaker than expected. You can read more in Ambrose Evans-Pritchard’s report.

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Big stuff continues... not sure how this is going to play out in the UK, will Cameron buckle and infuriate the British people or will he stand up to this new European integration step?

07.45 More from German Chancellor Angela Merkel. She's calling for countries to give up more powers to Europe "step by step" as the continent tries to claw its way out of the debt crisis and says a "political union" is needed. She told the ARD public television's breakfast show:

We need not just a currency union; we also need a so-called fiscal union, more common budget policies. And we need above all a political union.

She says that means that "we must, step by step ... give up powers to Europe as well."

09.31 Bruno Waterfield brings us some background on the banking union and what it will mean for George Osborne and the Coalition Government:

A new EU "banking union" treaty will present David Cameron with a political headache just six months after he vetoed a European “fiscal pact” because he could not secure safeguards for the City of London outlined in a secret negotiating note.

The Coalition Government will be split over what to demand in return for giving Britain’s support for a new EU treaty to create federal structures in the eurozone after the Prime Minister so recently failed to secure the protection for British economic interests last December.

The Government is concerned that a two-tier Europe will mean the eurozone, which has an inbuilt EU majority, takes important binding decisions, such on regulation of financial services, as a bloc without reference to Britain. These concerns are compounded by calls for a eurozone banking union.

Many backbench Conservative MPs will demand that the Government seeks to negotiate a new arms-length relationship with the EU, returning sovereignty to Britain.

In the absence of major concessions for Britain there will be calls for a referendum on membership of an EU that is increasingly dividing into a federal eurozone and “Europe-lite” periphery that is excluded from critical decisions.

Angela Merkel will alos demand that the “fiskalpakt” vetoed by Mr Cameron, which enshrines euro budget rules into the national law of the 25 countries that signed it, is immediately incorporated into European treaties alongside a new “political union”.

The German Chancellor will demand the “federal” structures giving a central eurozone or EU authority control over national budgets before she agrees to any polling of debt and banking liabilities at the European level to help highly indebted governments or weak banks. Germany is also demanding EU control over social welfare reform and harmonised tax policies.

Whether you're a follower of the RRE theory or not, the world is changing in big ways and quickly.

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13.01 Ambrose Evans-Pritchard has now been asked why George Osborne seems to be in favour of ever closer fiscal union across the eurozone. "Because he is terrified," says Ambrose:

Because we are on the cusp of a 1931 moment. If the eurozone makes a total hash of this, Britain will be engulfed. It is by far the biggest British crisis of my lifetime. I am 54.

[Exit40]

June 6, 2012, 10:36 a.m. ET
Turkey Urges Strong Action to Preserve Euro Zone
By JOE PARKINSON, TRACY CORRIGAN and YELIZ CANDEMIR

ISTANBUL—Turkey's economics chief on Wednesday urged Europe to take strong action to keep a financial crisis from breaking up the euro zone and called on policy makers to follow the example of Turkey and other nations that have weathered austerity programs.

Speaking in an interview in Istanbul as the city hosted the World Economic Forum summit, Deputy Prime Minister Ali Babacan underlined how some emerging economies with hefty experience of crisis management are becoming increasingly frustrated with stuttering efforts to quell the crisis in Europe.

He also signaled that Turkey would continue pursuing unorthodox monetary policy for a sustained period to offset lingering financial risks and called on the European Central Bank to do more to help beleaguered Spanish lenders and prevent a Greek exit from the euro area, which could cause a domino effect that would shatter the single currency....

Wall Street Journal article

**** Maybe Turkey is no longer the ' sick man ' of Europe. It might even be the other way around at this point. It may be the EU needs to accept Turkey as a full member at some time in the not too distant future. With Sarkosy gone there is a huge push from Turkey right now for just this very event. D.

God Bless

David

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Hi David, well pointed out we could see an interesting convergence of theories here! There is a leadership vacuum in Europe someone is going to step in.

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http://www.zerohedge.com/

The World Is Flat And Other Tales From Spain
Submitted by Tyler Durden on 06/11/2012 - 07:44

For those of you that keep waiting for some giant change-the-world event; I invite you to re-gear your perspective. Greece has fallen, Portugal has fallen, Ireland has fallen and now Spain has followed the road into Purgatory. These are significant events that are, in fact, changing the world though none has caused Armageddon to date though they may by their aggregate but not singular importance. This is also why Greece is of such key importance; it has nothing to do with staying in or out of the Euro or of the preservation of the European Union as a political entity. That part of the equation is barely relevant. What is of critical importance though is that if they leave the Euro that they will default on some $1.3 trillion in total debt that can be afforded by no one. That is the rub and you may ignore the rest of the Eurospeak that is bandied about from Brussels to Berlin. A default by Greece will bankrupt and cause re-capitalization at the European Central Bank, it will throw the IMF into a tailspin and it will play havoc with Target2 and the German Central Bank. Do not allow yourself to be taken in and mis-directed; this is THE issue and the only issue of real importance.

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13.30 Spanish newspaper El Mundo is reporting a fairly extraordinary set of text messages between PM Mariano Rajoy and the country's finance minister during the bank bialout negotiations this weekend.

According to El Mundo editor Pablo Rodriguez, Mr Rajoy texted Luis de Guindos: "Resist, we are the 4th power of the EZ. Spain is not Uganda."

A follow-up message has been translated as: We are powerful, and if they don't give in, the whole thing will go down. It will cost Europe 500 billion if Spain goes bust, and then another 700 billion if Italy goes bust.

Did Mr Guindos (below) take this advice on board when he was at the negotiating table?

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15.25 Britain could be on the way to leaving the EU, suggests Tim Bale, Professor of Politics and European Studies at Sussex University. In a blog post for the LSE he argues that the Conservatives may need to promise the UK a referendum on EU membership at the next election, and Labour may have to follow suit.

I never thought I would write this sentence but here goes: the UK is on the road to leaving the EU. This doesn’t mean that it will happen – there are too many powerful interests with a stake in continued membership for that. But it does mean that it might.

The Tories are moving, seemingly inexorably, from ‘soft’ Euroscepticism (a critique of the EU and how it currently functions) towards ‘hard’ Euroscepticism (the belief that membership of the EU is inimical to the national interest). And in David Cameron they have a leader who, ever since he made and then honoured his rash promise to pull Tory MEPs out of the EPP-ED group in Brussels, seems unwilling or unable to tell them ‘no’.

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Europe Brings Out The "Capital Controls" Bazooka
Submitted by Tyler Durden on 06/11/2012 - 11:31

Here we go:

•EU SOURCES HAVE DISCUSSED IMPOSING CAPITAL CONTROLS AS WORST CASE SCENARIO IF GREECE LEAVES EUROZONE - RTRS
•IMPOSING BORDER CHECKS, LIMITING ATM WITHDRAWALS ALSO PART OF WORST-CASE SCENARIO PLANNING - EU SOURCES - RTRS
•SUSPENSION OF SCHENGEN ALSO DISCUSSED
In other words, that money you thought you had... You don't really have it. We can only hope this message was not meant to restore confidence and prevent future bank runs. Because if Europe wanted a continental bank run, it may have just gotten one.

This is getting scary very fast.

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16.47 European markets breathed a sigh of relief this morning on news at the weekend that Spain would be saved with a bailout, sending stocks soaring. At one point the FTSE 100 hit a high of 5,536. But investors lost their faith after lunch as reality set in and shares first gave up their gains, then slipped into the red.

The FTSE 100 lost 0.08pc, the CAC dipped 0.32pc and the DAX dropped 0.1pc. Spain's IBEX slipped 0.6pc and Italy's FTSE MIB tumbled 2.79pc.

Kathleen Brooks, research director at Forex, gives us this summary:

The markets have whimpered to the finish line today after a bout of knee jerk euphoria post the announcement of the Spanish banking bailout at the weekend. The markets haven’t perceived the bailout as way to reduce credit risk in the periphery, in fact Spanish bond yields rose to their highest level since the end of May as investors digested the prospect they may not get all of their money back in the event of a Spanish default. And it didn’t stop there. Italian 10-year yields are rising at an alarming rate, and have ended the European session above 6pc, for the first time since January.

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More news on that federal union:

07.07 The Times is reporting that the EU is working on plans for a federal economic union.

The blueprint is being drafted at the request of German Chancellor Angela Merkel and the other leaders by a quartet of EU top brass: Herman Van Rompuy, President of the European Council; Mario Draghi, head of the European Central Bank; Jean-Claude Juncker, chairman of the Euro Group council; and José Manuel Barroso, President of the European Commission.

They are to present what they call building blocks for integration, including fiscal and banking union and possibly proposals for pooling debt through joint bonds, to a gathering of EU leaders on June 28. One European diplomat said that the significance of the summit would be huge.

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http://www.zerohedge.com/

Credit Suisse Explains "The Real Issue", And Why There Is Two Months Tops Until France Is In The Bulls Eye
Submitted by Tyler Durden on 06/11/2012 - 19:12

"It’s all about Spain”, so now we are cutting to the chase. Recapitalization of the banks versus funding the sovereign is of course a semantic issue given the nature of the interplay. But it enables the attempted finesse we describe below. Given the market’s adaptive learning behaviour, we suspect that this finesse might last two [months]. The eventual denouement should be flagged by symptoms of the failure of the credit of EFSF/ESM and/or France."

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10.38 French Finance Minister Pierre Moscovici believes an aid package of up to €100bn for Spain's banks is just the first step towards a banking union in the eurozone.

What we did for Spain was a convincing step forward but we must go further still. It is the moment where Europeans must define the framework for definitively consolidating the euro in political, budgetary and social terms.

10.35 An EU banking union proposed by EU Commission chief Jose Manuel Barroso is a good idea but should not be a "permanent income transfer union", Finnish Prime Minister Jyrki Katainen has said.



"We must be ready to develop this union and not to prevent its development. But we have our own starting points. It cannot become a permanent income transfer union in which the north is always paying the south," Katainen told Finnish financial daily Kauppalehti.

10.24 Nicholas Spiro, managing director of Spiro Sovereign Strategy, has commented on the rising bond yields of Spain and Italy this morning:

Spanish and Italian benchmark yields are moving in lockstep - so far both up 7bps to 10bps this morning. While the yield gap between the Spanish 10-year and its Italian equivalent was 80bps as recently as June 1, it is now roughly 50bp. Italian bonds are relinquishing their large gains in January and February. We're witnessing the strongest reversal of the post-LTRO rally in Italian debt as a result of contagion from Spain. There is a complete lack of differentiation between the Spanish and Italian credit stories. Country-specific conditions count for very little in the eyes of investors. This is contagion with a vengeance and bodes ill for Thursday's Italian bond auction.

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http://www.historylearningsite.co.uk/we ... n_1929.htm

How Hitlers arrive:

Weimar Republic and the Great Depression

The Weimar Republic was devastated by Wall Street Crash of October 1929 and the Great Depression that followed. The Crash had a devastating impact on the American economy but because America had propped up the Weimar Republic with huge loans in 1924 (the Dawes Plan) and in 1929 (the Young Plan), what happened to the American economy had to impact the Weimar Republic's economy.

Both plans had loaned Weimar money to prop up the country’s economy - especially after the experiences of hyperinflation in 1923. Now America needed those loans back to assist her faltering economy.

Stresemann had died in 1929, but shortly before he died even he admitted that the German economy was a lot more fragile than some would have liked to accept.

"The economic position is only flourishing on the surface. Germany is in fact dancing on a volcano. If the short-term credits are called in, a large section of our economy would collapse."

History repeats itself, aka "there's nothing new under the sun".

...........The only person with any form of credibility left was Hitler. He had the support of the Reichstag and his party was the most popular in Germany

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11.40 Bruno Waterfield, our Brussels correspondent, sends over a precis of what a banking union across Europe would mean for the UK as the region's banking capital, and what power the Government could exert to limit the damage:

The EU's banking union proposals, phased in from 2013, with treaty change to come later, herald the biggest EU fight for David Cameron’s government.

Banking union will be centrepiece of the June 28 EU summit. Britain will demand safeguards to protect the City, where the European Banking Authority is based.

The UK made a demand for identical safeguards last December, which was rejected, but Mr Cameron has leverage as a single EU deposit insurance fund requires a unanimous vote from EU members.

Britain is seen as unlikely to get changes to voting weights at EU banking supervisory bodies and councils of finance ministers.

A eurozone-only banking union will create big problems for Britain, shifting power to Frankfurt and pulling the EBA away from London.

If the UK vetoes a union at the level of 27 EU members, then banking union would be very unlikely to stay at 17 euro area countries - as many as 23 or 25.

[OneDay]

This latest euro fix will come apart in less than a month
Another day, another sticking plaster solution from beleaguered eurozone policymakers.
Only this one may not even succeed in buying time – I give it less than a month before some such other piece of bad news comes along to fire the crisis anew. Like all the others, the latest fix seems to create as many problems as it solves. The euphoria in markets at Spain's rescue lasted all of a few hours; having bounded away at the opening, they ended broadly flat.

But please don't call it a bail-out. It may walk, talk and look like a bail-out, but to the Spanish premier, Mariano Rajoy, Spain's handout is completely different to the three rescues we've already seen, even though at €100bn (£81bn)– or some 10pc of Spanish GDP – it's quite a bit larger than that of Ireland and Portugal.
continues: http://www.telegraph.co.uk/finance/comm ... month.html

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OneDay, perhaps Sunday?

09.10 Some serious news from Greece - banks are seeing customers withdraw money at an increasingly rapid pace ahead of Sunday's elections.

Senior bankers told Reuters thay daily deposit outflows from the country's biggest banks have been between €500m and €800m over the past few days, with the pace accelerating yesterday.

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Forget Three Months: Italy May Have Two Weeks Tops, As "It Already Is Where Spain Is Heading"
Submitted by Tyler Durden on 06/13/2012 - 08:05

Yesterday, Austrian finance minister Maria Fekter ruffled the unelected Italian PM's feather by saying "forget Spain, Italy is next in the bailout line" - a statement which as expected was promptly loudly refuted, mocked, and scorned by everyone possible: the type of reaction that only the truth can possibly generate in Europe. So far so good: after all the typical European reaction to any instance of the truth is loud screams of "lies, lies" and promptly sticking your head deep in the sand. However, this time around Italy may not have the benefit of the doubt, nor the benefit of some sacrificial replacement of a prime minister: Silvio is long gone, and at this point switching one banker figurehead with another will do precisely nothing. Which is why this morning's assessment from Bloomberg economist David Powell is spot on: "Italy would probably be forced into receiving a bailout if it were to face another two weeks like the last seven days." But the punchline: "The bad news for Italy is the country’s stock of debt is already as large as Spain’s may become after years of fiscal turmoil. In other words, Italy already is where Spain may be heading."

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Farage: "The Euro Titanic Has Now Hit The Iceberg"
Submitted by Tyler Durden on 06/13/2012 - 09:10
European Central Bank Greece Italy National Debt
In an epic rant, trumping Biderman, UKIP's Nigel Farage appears to have reached the limit of his frustration with his 'peers' in the European Parliament after the Spanish bailout. Rajoy's proclamation that this bailout shows what a success the euro-zone has been, sends Farage over the edge as he sees the Spaniard as just about the most incompetent leader in the whole of Europe (up there with favorites like Van Rompuy and Barroso). The erudite Englishman notes that by any objective criteria "The Euro Has Failed" expanding on the insane farce of Italy funding Spain's banking bailout at a loss (borrowing at 6% to fund a loan at 3% as we discussed here). "This 'genius' deal makes things worse not better" as it merely drives other nations towards needing bailouts themselves and while his socialist colleagues in the room are mumbling and checking their blackberries, he reminds them that Spanish national debt will surge and that 100 billion does not solve the problem, and that if Greece leaves, the ECB is failed, is gone, and to rectify this there will be a cash call from the very same PIIS (Ex-G) that are tumbling towards the abyss. Blood pressure surges as he screams "you couldn't make this up" concluding that "the Euro Titanic has now hit the Iceberg and sadly there simply aren't enough lifeboats."

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Well that almost wraps it up, it's passover time.

08.15 BREAKING NEWS...

Spanish 10-year bond yields pass 6.9pc.

08.32 Swiss National Bank maintains French ceiling of 1.20 versus euro. SNB ready to buy unlimited quantities of foreign currencies, says further franc gains would have a serious impact and it "will not tolerate" this.

SNB says Switzerland will experience economic slowdown. "Essential" that Credit Suisse to boost capital in 2012.

08.22 German Chancellor Angela Merkel says the IMF must be ready at all times to step in. She adds that the lack of a political union has led to debt mounting, addressing EU union is a "Herculean task" but is necessary.

This week the markets got wrecked.

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The Definitive Lesson In "New Normal" European Geography
Submitted by Tyler Durden on 06/14/2012 08:13 -0400


FitchGreeceIrelandItalyNew NormalPortugal


For your definitive documented "X is not Y" atlasing needs.

1. “Spain is not Greece.”
Elena Salgado, Spanish Finance minister, Feb. 2010

2. “Portugal is not Greece.”
The Economist, 22nd April 2010.

3. “Ireland is not in ‘Greek Territory.’”
Irish Finance Minister Brian Lenihan.

4. “Greece is not Ireland.”
George Papaconstantinou, Greek Finance minister, 8th November, 2010.

5. “Spain is neither Ireland nor Portugal.”
Elena Salgado, Spanish Finance minister, 16 November 2010.

6. “Neither Spain nor Portugal is Ireland.”
Angel Gurria, Secretary-general OECD, 18th November, 2010.

7. "Spain is not Uganda"
Rajoy to Guindos... Last weekend!

8. "Italy is not Spain"
Ed Parker, Fitch MD, 12 June 201

[OneDay]

from another site:
Financial Crisis: Urgent
1Thessalonians 5:5,6

Ye are all the children of light, and the children of the day: we are not of the night, nor of darkness. Therefore let us not sleep, as do others; but let us watch and be sober.
Commentary

If I wrote about the melting down of European economy without including all the following articles, you might find it hard to believe. The reason for this would be there is NOTHING in the main news about this. If you dig like I do, it is clear to see what is happening. The collapse is accelerating as the nations and banks are now falling like dominoes!

The Greeks vote this weekend for a government, and if the Communists win, it is the immediate end of the Euro as they stated Greece will not follow the austerity agreements with the Germans. If this happens the European Union will start to unhinge! Italy and Spain are now in the same position as the Greeks along with Ireland. What you are witnessing is a historic event as the European Union that was put together after WW2 is now disintegrating before your eyes! Social unrest and war are in the air. The US media is silent about this. With the articles that I posted, I hope you see how serious this situation really is.

Financial Crisis in “real time” – U.S. media silent 06/13/12 The American public is being lulled to sleep by the media. You will only find the truth on information sources like this blog. The Left wants this kept quiet so they can spring a financial trap on the public! They can panic the public into their controlled system.

“12 June 2012: Steve Quayle broke the news in real time during our special Sunday Edition of The Hagmann & Hagmann Report: Italy’s oldest and 4th largest bank, Bank Network Investments, or BNI, ran out of money and declared a “bank holiday.” Now I will ask our readers and listeners to try to find information about this significant event in the major media in the United States. Go ahead, we’ll wait.”

The LORD is showing us what is coming soon to the world economy. He will probably connect the final collapse to bullying Israel to divide the land. On its economic deathbed, the EU will still attempt to pressure Israel over God’s covenant land. They will do this to their doom, which is now very soon!

In America is is very apparent that the LORD will tie the collapse of the US economy to bullying Israel or promoting the homosexual agenda or maybe both. The time of reckoning is drawing very close. Both the Europeans and Americans have really challenged the LORD over His everlasting covenant with Abraham, Isaac and Jacob along with the sanctity of marriage.

On several occasions, I have warned to seek the LORD about what to do with the impending judgments. He will not judge without His church first being warned. He will warn but do His people have the spiritual ears to hear what the Spirit is saying unto the churches?

Amos 3:7 Surely the Lord GOD will do nothing, but he revealeth his secret unto his servants the prophets.

Please seek the LORD about what to do. There is still time to store some food and supplies. It appears that when the collapse hits the doors are going to close very fast.

I have received several emails from people who followed my advice and the supplies helped then get through horrific tornado damage! They thanked me for the warning. It is time for churches to work together to help each other and especially those who cannot help themselves.

Most of all draw close to the Lord Jesus and stay focused on His coming for the church. Times could be real rough before the Lord comes for us. No matter WHAT happens you stay focused on the Blessed Hope. The coming of the Lord Jesus is the Anchor for your soul in this world.

May the Holy God of Israel bless and protect you.

Revelation 3:22 He that hath an ear, let him hear what the Spirit saith unto the churches.

[OneDay]

Tony Blair seeks European banking union
MADRID, June 14 (UPI) -- Envoy Tony Blair warned of a widening popular backlash against austerity and added his voice to calls for a pan-European banking union and fiscal integration.

Speaking ahead of Sunday's Greek election to form a government that could revoke the terms of its bailout, the former British prime minister told the Financial Times, "You look at what the Greeks are being asked to accept -- it's beyond tough."

The risk of unrest goes beyond Greece to Europe as a whole, Blair said.

"In the end, what people will ask is: 'Is the single currency worth it if that's what we're being asked to accept,'" Blair told the Financial Times in Jerusalem.
skip
Blair told the Financial Times he believed the euro would survive, even if the eurozone under its current 17-member set-up collapses.

"I have no doubt that the single currency makes sense," he said, adding the single currency was central to Europe's ambitions to be a power on the world stage.

Read more: http://www.upi.com/Top_News/World-News/ ... z1xpWBgZpa

[OneDay]

From Pastor Brian:
Greece Drama End Game?
Saturday, 16 June 2012

MY THOUGHTS

Whatever happens on Sunday, we must keep everything in perspective. We have been in an economic collapse since 2008, and whenever it ends we will see great prophetic fulfillment. I truly believe what we are witnessing is the march toward a global horror story of strict government control with an economic vision wrapped into the mark of the beast. Greece's election will determine many events, but it is still Spain that is worrying the elites. You can lose Greece and survive, but Spain is a different story. If Spain goes down, more than likely the whole system will be a house of cards that will fall. We will follow Greece and reactions from Europe and the rest of the world. We may not know Sunday or even Monday, and it may take days and weeks before the fallout is really known. What I do know, is this time it is different, and we must all pray this is the time because if it isn't, may God help us. Time will tell.



Russian troops are heading for Tartus, Syria as Russia strengthens its stronghold in the Middle East. As Europe heads into a dictatorship which will end in the Antichrist, the Middle East is coming together to bring that very Antichrist into E. Jerusalem to perform the abomination of desolation. Russian troops in Syria is a very major development. Again, we are witnessing events that will have great prophetic significance. The timing is hard to interpret at this moment, but as soon as we can see the movement of God in more detail we will report it.



Egypt's election will end in the Antichrist coming in and taking control as Egypt, being the King of the South, pushes against Israel. The peace treaty with Israel will be broken, and the real Egypt will emerge. Israel is facing threats now from the South, North, and East. It will take a false promise from the West, in the name of the Antichrist, to bring the abomination of desolation into Jerusalem (Daniel 11:33-45; Daniel 9:26).



The current sovereign crisis started in Europe and the Middle East geopolitical crisis is about to erupt. Europe's economic collapse will lead to a resurgence of a false prosperity in the mark of the beast and the military chaos which will start in the Middle East will end in Armageddon. I do not see the world going on much longer, but the world system that will be born out of these crises will be prophetic. How it will play out and how long it will take for us to get there remains to be seen, but the horror the world will see will soon be turned into Glory for those who follow and believe in Jesus Christ.



Bro. Brian



SCRIPTURE

Daniel 11:40-45 (Scripture focuses on the Middle East before the Antichrist performs the abomination of desolation)

" At the end time the king of the South will collide with him, and the king of the North will storm against him with chariots, with horsemen and with many ships; and he will enter countries, overflow them and pass through. 41 He will also enter the [h] Beautiful Land, and many countries will fall; but these will be rescued out of his hand: Edom, Moab and the foremost of the sons of Ammon. 42 Then he will stretch out his hand against other countries, and the land of Egypt will not escape. 43 But he will [i]gain control over the hidden treasures of gold and silver and over all the precious things of Egypt; and Libyans and Ethiopians will follow at his [j]heels. 44 But rumors from the East and from the North will disturb him, and he will go forth with great wrath to destroy and [k]annihilate many. 45 He will pitch the tents of his royal pavilion between the seas and the beautiful Holy Mountain; yet he will come to his end, and no one will help him.

NEWS LINK

The financial crisis of 2008 was a wave.

The epicenter of the next great financial crisis will be in Europe and that will be another wave.

For many, the next financial crisis will feel like "the end of the world" but it won't be.

There will be waves after that one that will be even worse.

Yes, the waves are going to start coming more rapidly and will start becoming more intense.

In that way, they will kind of be like birth pains.

But these problems did not build up overnight and they are not going to disappear overnight either.

A lot of people that write about the coming economic collapse seem to suggest that we should just let it happen so that the "recovery" can begin.

Unfortunately, it is not going to be so simple.

It took decades to build up a national debt of almost 16 trillion dollars.

It took decades for American consumers to build up the greatest consumer debt bubble in the history of the world.

It took decades to gut the economic infrastructure of the United States and ship millions of our jobs overseas.

These problems are going to plague us for a very long time.

Sadly, a lot of people out there seem to wish for an economic apocalypse. They seem to think that if the global financial system crashes that the government is going to disappear and we are going to start fighting with each other using sharp pointed sticks.

Well, it simply is not going to happen.

The U.S. government is not going to help you survive when things hit the fan, but it is not going to disappear either.

In fact, the federal government will probably try to grab more power than ever in an attempt to "restore order".

The governments of Europe are not going to disappear either. In fact, in the long run Europe is probably going to end up more "federalized" than ever even if the euro breaks up in the short run.

A lot of people out there seem to think that when the old system collapses that it will give them an opportunity to help put in a new system. ( I believe it will)

Sorry, but that is not going to happen either.

The powers that be are going to have their own ideas about what needs to happen.

They never like to let a good crisis go to waste, and they will certainly try to use every crisis to shape the world even more in their own image.

The coming economic collapse is going to play out over a number of years (I don't think so?Bro. Brian) and it is going to be absolutely horrible.

Billions of people will deeply suffer because of it.

It will be unlike anything any of us have ever seen.

Personally, I believe that it will eventually be much worse than the Great Depression of the 1930s.

The United States is going to get hit particularly hard. The United States is going to lose its position as the leading economic power on the globe and the U.S. dollar is going to lose its position as the default reserve currency of the world.

http://theeconomiccollapseblog.com/arch ... ngle-event

[James1:12]

09.05 BREAKING NEWS...

Spanish 10-year bond yields breach 7pc, spread to bunds at 555 basis points. Italian yields pass 6pc..

[James1:12]

And... Spanish 10 Year At Record 7.12%, S&P Futures Down And EURUSD Down
Submitted by Tyler Durden on 06/18/2012 - 06:38 Below is a market recap where we find that, yes, as we expected yesterday, the half life of yesterday's Greek euphoria is shorter than even that of the Spanish bailout.

•S&P500 Futures down
•EURUSD down 0.1%

•Spanish 10Yr yield up 24bps to 7.12%
•Italian 10Yr yield up 12bps to 6.05%
Er.... now what?

[kirthril]

Just heard on the radio about 1hr ago that Spain is about on the verge of taking a bailout from the EU. With greeks voting in a pro-bailout government, the focus now shifts to spain and its failing banks. As the analyst put it: "its looking more and more like the entire spanish banking system/economy is headed toward a bailout".

My question: The EU had a tough time and complained about the cost in Euros of bailing out tiny ole Greece. Spain's economy is much much larger. How are they gonna pull this off? And to what impact on the EU citizens and their wallets?

[Exit40]

Hi Kirthril. Actually, Greece is still a problem. The pro eurozone party eeked out a victory, but since it takes about 150 Parliament seats to have the mandate ( they only have less than ten seat majority over the other leading party ) they must form a coalition govt with the other two major parties. I am going on fallible memory of an article I read recently. So it is still a wait and see at this point, unless I have missed something, which is entirely possible. Not saying Spain is not important, it is absolutely crucial as the crisis could further expand beyond them if the situation is not corrected. The Spanish seem more reasonable than the Greeks but the basis of the crisis remains. It seems to me finance is still trying to keep up with ideology, which is apparently socialist in nature.

God Bless You

David

[James1:12]

Hi Kithril, it is also likely that Cyprus will request a bailout, ok its a small economy but the political consequences and the indicators are that this is a very contagious crisis and not one serious issue has been resolved with Greece yet.

David is right on Greece, some are saying that it would have been better for Greece to have voted against the bailouts as this may have brought the crisis to a head. Now Italy is very much in the firing line now as its borrowing costs have risen dramatically, some commentators have said that it is in a worse place than Spain which makes it all the more laughable that Italy has been involved in funding the bailout for Spain.

[kirthril]

To Exit and James:

I don't think the analyst was implying that the EU was sighing a breath of relief because of the elections outcome or that they completely shifted focus, but rather with the sudden onset of Spain's national banks including its 2nd largest needing a bailout, the attention has begun to divert to Spain.

But yeah, i realize Greece far far from even seeing the edge of the woods. Italy i know is in big trouble to, but from what we have seen its as if the EU is just trying to deal with one country at a time. 1st Greece, then Ireland, then Portugal, back to Greece, and now it seems Spain is next.

[James1:12]

08.31 The 'Big Four' aren't the only ones to be having a chinwag today. European finance ministers and officials are meeting today in Luxembourg to discuss plans for deeper integration of the bloc's banking sector, including draft rules on how to rescue failing banks and proposals for a tax on financial transactions.

As he went into the meeting, Olli Rehn, the EU Economic and Monetary Affairs Commissioner, commented on support for Spanish banks and strengthened EU economic governance:

Yesterday we took important decisions concerning Greece and Spain. We have a very clear roadmap concerning the decisions to support recapitalisation of the Spanish banking system, and I expect that we could agree on a memorandum of understanding in the next regular Eurogroup meeting, which will take place on July 9 in Brussels.

Today is a very important day for the reinforced economic governance in Europe. The ecofin is expected to adopt country-specific recommendations on economic and fiscal policy and structural reforms for all 27 member states.

[James1:12]

08.06 The Telegraph's Ambrose Evans-Pritchard is in Rome and has filed this dispatch on how a desperate Mario Monti needs a deal from the 'Big Four' summit to stop revolt at home:

"Monti is desperate. Reform fatigue has breached breaking point," said a top Italian official. "There is a feeling here that the euro is basically dead already. Unless Germany offers a road map out of this crisis, Monti is not going to be able to hold it together much longer."

The main Left and Right parties have until now backed Mr Monti's fiscal squeeze – a net tightening of 3.2pc of GDP this year – and radical reform of pension and labour markets.

The implicit trade-off was that Brussels and the European Central Bank would in return intervene to keep the bond vigilantes at bay, if necessary. Germany has so far blocked such action. Yield spreads of 10-year Italian bonds over German Bunds neared a record 500 basis points last week.

Party leaders fear an electoral massacre akin to the PASOK defeat in Greece if they back further austerity with no reward. Dissidents are near open revolt.

"We will back Monti in spite of difficulties until the summit: after that it will depend on Angela Merkel," said Angelino Alfano, secretary-general of the dominant Peoples of Liberty Party (PdL).

07.45 Traders will also be keeping an eye today on a meeting between the Eurozone's 'Big Four' in Rome. Angela Merkel, Francois Hollande, Mario Monti and Mariano Rajoy will try to find some common ground over how to resolve the crisis ahead of a full EU summit next week.

Mr Monti, Italy's prime minister, has been speaking to the Guardian and other European newspapers ahead of the Rome meeting. He warned of the apocalyptic consequences of failure at next week's summit of EU leaders, outlining a potential death spiral whose consequences would become more political than economic. Here's a bit more from the Guardian:

Monti said that, without a successful outcome at the summit, "there would be progressively greater speculative attacks on individual countries, with harassment of the weaker countries". The attacks would be focused not only on those who had failed to respect EU guidelines, but also on those like Italy, which he said had abided by the rules "but which carry with them from the past a high debt".

Monti warned: "A large part of Europe would find itself having to continue to put up with very high interest rates that would then impact on the states and also indirectly on firms. This is the direct opposite of what is needed for economic growth."

[Resurrection Torchlight]

He warned of the apocalyptic consequences of failure at next week's summit of EU leaders, outlining a potential death spiral whose consequences would become more political than economic.

So the new economy is founded on blackmail? Or rather funded by blackmail....

RT

[James1:12]

He warned of the apocalyptic consequences of failure at next week's summit of EU leaders, outlining a potential death spiral whose consequences would become more political than economic.

So the new economy is founded on blackmail? Or rather funded by blackmail....

RT

So true RT what a mess!

[James1:12]

http://www.zerohedge.com/news/moodys-ju ... stem-hours

[quoteNearly two weeks ago we penned "These Three Spanish Banks Will Be Downgraded Tomorrow" which showed which banks had a rating higher than the sovereign following Moody's long overdue Spanish downgrade, and thus were about to be downgraded by many notches. Today, after a ridiculously long delay whose only purpose was to buy time, Moody's is about to junk virtually the entire Spanish banking sector, as was widely expected.The downgrade is expected to happen within hours.

][/quote]

[James1:12]

Given the literal thunderstorms gathering over Brussels perhaps it will be a big summit:

12.25 George Osborne has said the FSA uncovered "systemic failures at the heart of the financial system.


Follow our live blog on the fallout from Barclays' fine for Libor manipulation. Barclays' share price has fallen more than 10pc today.

12.20 After an earlier rejction of eurobonds Germany's finance minister Wolfgang Schaeuble says Berlin is willing to negotiate, but must have fiscal union as a pre-condition. Urges eurozone members to use the EFSF to buy bonds.

Spanish PM Rajoy hopes Summit will take decisions to help lower Spanish borrowing costs.

12.08 We are hearing reports that two medical orderlies with a stretcher and oxygen tanks have been led to the EU Summit.


08.34 Spanish 10-year bond yields have jumped seven basis points to 6.99pc this morning. And they have now passed 7pc.

[James1:12]

13.52 Stephen Hughes, director of Currencies.co.uk, believes people no longer trust banks:

The Libor rigging scandal has finally taken things too far for consumers. We are witnessing record-breaking applications from clients looking at using a currency specialist because they no longer have any trust in banks. Some consider them 'a jack of all trades and master of none'.

“The impact this scandal will have on an international scale is also incredibly worrying. The FBI is now conducting an inquiry into bank traders accused by regulators of conspiring to rig international interest rates and could even attempt to extradite any Britons that were involved in the affair should they feel there is a case to answer. This therefore has the potential to escalate into something that could damage our relations with the US permanently and severely damage the Pound.

“Barclays has been hit with a record fine (£290m) and I am sure over the coming days and weeks we will learn that the scandal is likely to involve many other banks both here and across the pond. With this in mind, we suggest those looking to exchange sterling to capitalize on its recent strength and look to exchange as soon as possible. Given the current global economic activity, it may also be worth considering a forward contract to fix the exchange rate at its current level.”

[James1:12]

16.12 Barclays says it had 13 "principal documented contacts" with FSA on Libor submissions in 2007/2008, 12 with NY Fed and two with Bank of England.

16.02 Barclays has spent £100m on three-year internal Libor investigation. Barclays says del Missier had been investigated over Libor submissions but regulator decided not to take action.

15.58 A letter by Barclays, that is included in that submission to the TSC, basically accuses the Bank of England of telling it to manipulate Libor so that it would appear less weak in the aftermath of the Lehman collapse.

[James1:12]

10.01 We mentioned earlier (09.13) that Mario Monti has been on something of a charm offensive ahead of his meeting this afternoon with Mrs Merkel. Here are a few more details of the interview he gave to Frankfurter Allgemeine Zeitung. The Italian prime minister said:

We need a partial mutualisation of debt, but also more central control of national budgets. Without proper control it would be irresponsible to burden others with a share of your own debt. Germany and Italy take the same line on this and are prepared to surrender national sovereignty. Mr Monti insisted that Italy "isn't calling for a rescue and isn't calling for eurobonds. Italy is doing everything that is being demanded of it to boost growth."

[James1:12]

http://www.zerohedge.com/news/futures-t ... l-easefest

In continuing the quantum physics scramble of the past 48 hours in the aftermath of the potential Higgs Boson discovery which confirms mass exists (and will soon be blamed for America's obesity epidemic) we ask if three of the world's largest central banks eased and futures turned red, did three of the world's largest central banks actually ease? Because if today is any indication, either all the EURUSD-ES algos are being furiously shut down right now to prevent risk from being dragged far lower, or we have reached peak central planner intervention. In other news, the entire EURUSD ramp since last week's summit is now gone, which incidentally is just what Germany always wanted.

[James1:12]

Iron and Clay news:

http://www.reuters.com/article/2012/07/09/us-eurozone-banking-policy-idUSBRE86805N20120709

Signs are growing that Europe's economic and monetary union may be fragmenting faster than policymakers can repair it.

An invisible financial wall, potentially as dangerous as the Iron Curtain that once divided eastern and western Europe, is slowly going up inside the euro area.

European Central Bank President Mario Draghi acknowledged as he cut interest rates last week that the north-south disconnect was making it more difficult to run a single monetary policy.

Two huge injections of cheap three-year loans into the euro zone banking system this year, amounting to 1 trillion euros, bought only a few months' respite.

"It is not clear that there are measures that can be effective in a highly fragmented area," Draghi told journalists

Any event that makes a euro exit by Greece - the most heavily indebted member state, which is off track on its second bailout program and in the fifth year of a recession - look more likely seems bound to accelerate those flows, despite repeated statements by EU leaders that Greece is a unique case.

"If it does occur, a crisis will propagate itself through the TARGET payments system of the European System of Central Banks," U.S. economist Peter Garber, now a global strategist with Deutsche Bank, wrote in a prophetic 1999 research paper.

and of course:

09.13 Spanish bond yields have climbed above 7pc, the highest level since last month's EU summit. This is the "unsustainable" level at which Greece, Ireland and Portugal asked for international bail-outs

[James1:12]

16.11 China is on the cusp of a deflationary vortex, writes Ambrose Evans-Pritchard:

Consumer prices have been falling for the last three months, producer prices have been falling for four months. This is not a food cost story. It is systemic.

All engines of the global economy are sputtering at the same time. Is this the long-feared hard landing? Of course it is.

The fact that China DELIBERATELY engineered the slowdown changes nothing.

[James1:12]

[quoteSomewhere feeling particularly harsh cuts at the moment is Spain. Mariano Rajoy, the country's prime minister, yesterday unveiled plans to cut a further €65bn from the public spending budget over the next two-and-a-half years. Here's a taster of Jeremy Warner's column on the cuts, which appears in today's Telegraph. He argues that the eurozone's appetite for self harm knows no bounds:

What Spain is embarked on is a strategy of despair, a form of madness in which the patient deliberately does the wrong thing in the hope it will support the higher purpose – a currency union which is manifestly harming Spanish interests and is already effectively busted beyond repair.

What on earth does Mr Rajoy think he is doing applying a further huge drag to growth in an economy which is already in an apparent death spiral?

In attempting to cut its way back to fiscal sustainability, Spain is caught in a vicious circle of demand contraction which looks set only to make the fiscal problem even worse. Unlike Britain, there is nothing to mitigate the process of fiscal contraction by way of devaluation or monetary accommodation. It is as if the patient is forced to undergo open heart surgery without anaesthetic. The shock alone threatens to kill the subject.

][/quote]

[James1:12]

http://www.ritholtz.com/blog/2012/07/ca ... w-scandal/

In the last 10 days:

• The LIBOR inquiry in London early last week revealed that the Bank of England pressed Barclays to lower their quoted rate.

• The next day it was discovered that Peregrine Financial Group was missing $215 million of customer money.

• Later we found out that for many years Peregrine was submitting falsified financial statements to the National Futures Association (NFA). No one at the NFA independently verified these statements with the banks supposedly holding these funds.

• At the end of the week, JP Morgan’s quarterly call revealed that CDS prices were made up to the point that Q1 earnings need to be restated and a criminal probe is underway. A similar mispricing of CDS at UBS led to prison time.

• After the close on Friday we learned that the New York Federal Reserve (headed by Tim Geithner at the time) was aware of Barclay’s LIBOR scandal and essentially did nothing about it.

• Yesterday, as detailed above, we found out that HSBC has been used as a money-laundering and terrorist financing operation (Senate Probe Faults HSBC).

None of this should move the markets in the short-term on its own, but collectively it paints the financial industry as an out of control criminal organization with either incompetent or complicit regulators.

Today the reputation of bankers is between that of a used car salesmen and drug dealers. The last 10 days has made it worse.

[James1:12]

09.32 Here's an interesting take on the debt crisis from the BBC, which explores the "eurozone's religious faultline". Chris Bowlby of BBC Radio 4 points out that the German word for debt - schuld - is the same as the word for "guilt" or "sin" and he writes:

Discussion among eurozone leaders about the future of their single currency has become an increasingly divisive affair. On the surface, religion has nothing to do with it - but could Protestant and Catholic leaders have deep-seated instincts that lead them to pull the eurozone in different directions, until it breaks?

Following the last European summit in Brussels there was much talk of defeat for Chancellor Merkel by what was described as a "new Latin Alliance" of Italy and Spain backed by France.

Many Germans protested that too much had been conceded by their government - and it might not be too far-fetched to see this as just the latest Protestant criticism of the Latin approach to matters monetary, which has deep roots in German culture, shaped by religious belief.

[James1:12]

16.02 After the IMF's warning on the eurozone yesterday, The Telegraph's Ambrose Evans-Pritchard writes that the IMF has lost all faith in the euro project:

It would be very interesting to know exactly what has been going on at the IMF board over recent weeks. One hears that the White House – with the full support of China, Japan, Brazil, and others – has finally lost patience with Europe’s leaders. (I use that term euphemistically, since I don’t mean Monti, Hollande, Cameron, or even Rajoy, but one doesn’t want to be accused of picking on a defenceless, much-maligned, and vulnerable country between Poland and The Netherlands).

The IMF could hardly be clearer. It is a pre-emptive move to pin responsibility for the coming deluge exactly where it belongs:

On those who created this doomsday machine and pushed it through as a federalist Trojan horse, with scant concern for Europe’s democracies; on a second group of people who ran it for a decade with high-handed arrogance, disregarding warnings as the North-South gap grew to dangerous levels; and on a third group of leaders – led by Chancellor Angela Merkel – who now refuse to face up to the awful implications of what has happened.

The IMF is the leader of the Eurosceptic camp now.