You are viewing an obsolete version of the DU website which is no longer supported by the Administrators. Visit The New DU.
Democratic Underground Latest Greatest Lobby Journals Search Options Help Login
Google

Reply #83: The Never-Ending Eurofiasco By Mike Whitney [View All]

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
Home » Discuss » Latest Breaking News Donate to DU
Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 11:07 AM
Response to Reply #73
83. The Never-Ending Eurofiasco By Mike Whitney
http://www.informationclearinghouse.info/article29547.h...

Imagine if the local fire chief, in the spirit of conservation, decided hed use no more than 1,000 gallons of water to put out any given house fire. Do you think the citizens would support that policy if their town was burned to the ground? And, yet, this is the same approach that eurozone leaders are using to address the debt crisis. The central bank (ECB) has virtually limitless resources (Think: printing press) to defend the debt of the individual states and to act as lender of last resort, but the eurocrats wont hear of it. They refuse to use the ECB as every other central bank in the world is used. Theyd rather reinvent the wheel by creating a funky, improvised emergency fund (European Financial Stabilization Facility or EFSF) thats massively leveraged and which only provides a 20 percent first-loss guarantee on sovereign bonds. So, for example, if Italy goes belly-up in the next year or so and cant repay its debts, then Mr. bondholder gets a whopping 20 cents on the dollar. Such a deal!

Can you see how ridiculous this is?

Look; US Treasuries are backed by the full faith and credit of the United States of America. What are Italian bonds backed by? Or Portuguese bonds? Or Irish bonds? Under this new regime, theyll be partially backed by a dodgy, undercapitalized insurance fund. That ought to shore-up investor confidence. Is this any way to run a multi-trillion confederation of states?

And the EFSF is only part of this latest Eurofiasco. Theres also a special purpose investment vehicle (SPIV) that will be used to attract foreign investment. (Re: China) EU leaders assume that the Chinese are so yield-crazy that theyll scarf up hundreds of billions of these (toxic?) EU bonds to stack atop their cache of USTs. Dream on. Apparently, Nicholas Sarkozy has already been on the horn to leaders in China inquiring about future investments. But, so far, no takers. The truth is, investors are exiting Europe as fast as their two feet will carry them, not lining up to get back in...The good ship Eurozone is taking on water from all sides...

Everything is worse. The Eurozone is imploding, and its imploding because the policies theyre implementing are, well, stupid, which is to say, they wont work. And investors know they wont work which is why they keep fleeing Europe en masse.

Can you blame them?

AND THIS IS FROM OCTOBER....
Printer Friendly | Permalink | Reply | Top
 
  -STOCK MARKET WATCH, Thursday, December 1, 2011 Pale Blue Dot  Dec-01-11 05:52 AM   #0 
  - Today's Reports  Pale Blue Dot   Dec-01-11 05:53 AM   #1 
  - Unemployment Higher than Expected, Imagine that!  Demeter   Dec-01-11 08:31 AM   #44 
  - Oh, noes!  hamerfan   Dec-01-11 01:42 PM   #104 
  - Beige Book Shows Stronger Growth, but Europe a Major Threat  Demeter   Dec-01-11 08:52 AM   #52 
  - Have We Turned The Corner on Jobs?  Demeter   Dec-01-11 08:54 AM   #53 
  - U.S. Economy Barely Moving Amid Creeping Disinflation, Beige Book Shows  Demeter   Dec-01-11 08:56 AM   #54 
  - Oil rises to near $101 amid global stocks rally  Pale Blue Dot   Dec-01-11 05:53 AM   #2 
  - U.S. Futures Decline; S&P May Snap 3-Day Gain  Pale Blue Dot   Dec-01-11 05:54 AM   #3 
  - 400 Dow Points Arent What They Used To Be...  rfranklin   Dec-01-11 06:05 AM   #4 
  - Central Banks Treat Fever - Not Bank Disease  DemReadingDU   Dec-01-11 07:17 AM   #12 
     - Fed leads central banks in effort to ease funding woes  Demeter   Dec-01-11 08:20 AM   #40 
        - Commodities Rise to Two-Week High as Fed, Central Banks Boost Liquidity  Demeter   Dec-01-11 08:58 AM   #55 
  - Good morning.  Tansy_Gold   Dec-01-11 06:27 AM   #5 
  - morning miss tansy! nt  xchrom   Dec-01-11 06:48 AM   #6 
  - i'm heading into a different kind of insanity in 48hrs  Roland99   Dec-01-11 06:49 AM   #7 
     - Best wishes to you both! May you find a bit of sanity, safety and security together  Demeter   Dec-01-11 07:21 AM   #13 
     - Congratulations!  DemReadingDU   Dec-01-11 07:35 AM   #16 
     - Wishing you both many fine days together. Being in love is a good thing. eom.  Hotler   Dec-01-11 07:42 AM   #20 
     - that is so sweet! congratulations!  xchrom   Dec-01-11 07:58 AM   #28 
     - Congrats....  AnneD   Dec-01-11 08:33 AM   #45 
     - Congrats to you and your future spouse, Roland99.  Hugin   Dec-01-11 09:09 AM   #60 
     - **Thanks everyone!!**  Roland99   Dec-01-11 11:43 AM   #86 
     - Congratulations  DoBotherMe   Dec-01-11 11:51 AM   #87 
     - Best wishes! n/t  westerebus   Dec-01-11 04:47 PM   #111 
  - europe: Spanish, French Bonds Climb After Auctions; Euro Strengthens  xchrom   Dec-01-11 06:57 AM   #8 
  - European shares turn negative in choppy trade  xchrom   Dec-01-11 07:37 AM   #17 
  - ECB hints at action if euro zone adopts fiscal pact  xchrom   Dec-01-11 07:39 AM   #19 
  - The dash for cash Europes troubled banks are running out of money  xchrom   Dec-01-11 08:02 AM   #30 
  - Did we not just read that American banks were so stuffed with cash  dixiegrrrrl   Dec-01-11 08:38 AM   #46 
     - All that money stuffed into US banks is Capital in Flight from Europe  Demeter   Dec-01-11 08:40 AM   #48 
     - as someone raised in the 50s -- nothing about modern finance & banking makes  xchrom   Dec-01-11 09:06 AM   #59 
        - It's All FRAUD, is What it is  Demeter   Dec-01-11 09:14 AM   #63 
           - +1  xchrom   Dec-01-11 09:26 AM   #67 
           - +++  DemReadingDU   Dec-01-11 09:42 AM   #76 
  - Moscow issues Trans-Caspian Project warning  xchrom   Dec-01-11 08:05 AM   #32 
  - Resource wars getting serious, as predicted.  dixiegrrrrl   Dec-01-11 10:19 AM   #80 
  - Finance Ministers Agree to EU Debt Guarantees  Demeter   Dec-01-11 09:05 AM   #58 
     - Banks row hampers EU bid to halt credit freeze  Demeter   Dec-01-11 09:09 AM   #61 
     - EU Ministers Back National Bank Guarantees With Common Rules  Demeter   Dec-01-11 09:13 AM   #62 
        - Obamas morbid fear of EU meltdown  Demeter   Dec-01-11 09:35 AM   #73 
           - The Never-Ending Eurofiasco By Mike Whitney  Demeter   Dec-01-11 11:07 AM   #83 
           - Yves Smith Snipes:  Demeter   Dec-01-11 12:35 PM   #92 
     - Does Anybody Who Gets It Believe Central Banks Did All That Much Yesterday?  Demeter   Dec-01-11 12:52 PM   #99 
  - Cotton Crop Reaching Record Makes Goldman Bearish: Commodities  xchrom   Dec-01-11 06:59 AM   #9 
  - U.S. Bank Funds Wont Cover MF Global Shortfall, Trustee Says  xchrom   Dec-01-11 07:01 AM   #10 
  - A Hole TOO Big to Fill In  Demeter   Dec-01-11 07:22 AM   #14 
     - I suggest we start filling it with  Tansy_Gold   Dec-01-11 08:14 AM   #37 
        - Is He a Big Enough Man for the Job?  Demeter   Dec-01-11 08:22 AM   #41 
           - He may or may not be, but we won't know until we actually see him there. n/t  Tansy_Gold   Dec-01-11 09:40 AM   #75 
  - Forget Job Creators: The Best Stimulus Is For Shoppers  xchrom   Dec-01-11 07:14 AM   #11 
  - The payroll tax thingy scares the bejeebers out of me  Tansy_Gold   Dec-01-11 07:38 AM   #18 
  - Sing it loud sister. I'm right there with you. eom.  Hotler   Dec-01-11 07:48 AM   #23 
  - And so am I - every word (n/t)  bread_and_roses   Dec-01-11 10:31 AM   #82 
  - Did I Say That?  Demeter   Dec-01-11 07:59 AM   #29 
  - Yes, you did.  Tansy_Gold   Dec-01-11 08:12 AM   #35 
     - That was the purpose of Money  Demeter   Dec-01-11 08:26 AM   #42 
  - Seems like a stealth way to dismantle social security  DemReadingDU   Dec-01-11 08:11 AM   #34 
  - Absolutely.  Tansy_Gold   Dec-01-11 08:13 AM   #36 
  - I am resigned to NO SS for people in their 30/40's.....I fear it will not be there  dixiegrrrrl   Dec-01-11 09:03 AM   #57 
  - Do people think we will continue to receive those SS checks?  DemReadingDU   Dec-01-11 10:03 AM   #78 
     - I have been preparing for the worse since 2007.  dixiegrrrrl   Dec-01-11 10:18 AM   #79 
     - me too, n/t  DemReadingDU   Dec-01-11 03:22 PM   #110 
     - His Discussion of Derivatives is Enlightening and Chilling at the Same time  Demeter   Dec-01-11 11:26 AM   #84 
        - And then, there's the Bibical Jubilee  Demeter   Dec-01-11 11:29 AM   #85 
        - Ilargi has interesting perspective over at TAE  DemReadingDU   Dec-01-11 03:22 PM   #109 
  - yeah...I like the extra money but I'd rather SS be fully funded on its own  Roland99   Dec-01-11 12:04 PM   #89 
     - my opinion  wordpix   Dec-01-11 01:59 PM   #105 
  - This is a tax-scam shell game.  Loge23   Dec-01-11 08:20 AM   #39 
  - +1 n/t  Hotler   Dec-01-11 02:02 PM   #107 
  - Robbing Peter to pay Paul.  westerebus   Dec-01-11 08:29 AM   #43 
  - asia: Nikkei surges as central banks' move calms jitters  xchrom   Dec-01-11 07:35 AM   #15 
  - China's manufacturing activity falls to a 32-month low  xchrom   Dec-01-11 07:52 AM   #24 
  - Asian markets up on central banks' move to help lending  xchrom   Dec-01-11 07:53 AM   #25 
  - U.S. Ratchets Up Economic Pressure on Iran By Barbara Slavin  Demeter   Dec-01-11 07:42 AM   #21 
  - The Obama Predicament-and the Final Option! Rev. Richard Skaff  Demeter   Dec-01-11 07:45 AM   #22 
  - Low-intensity? Asia Times is interesting...  Ghost Dog   Dec-01-11 01:15 PM   #101 
  - It's so fucked up. eom.  Hotler   Dec-01-11 02:17 PM   #108 
  - Wells Fargo is an ADMITTED money laundering concern.!  dixiegrrrrl   Dec-01-11 09:16 AM   #64 
     - Not even gonna prosecute or break them up  Demeter   Dec-01-11 09:18 AM   #66 
  - south asia: India traders strike against retail reform moves  xchrom   Dec-01-11 07:55 AM   #26 
  - India Transparency International corruption index blow  xchrom   Dec-01-11 07:57 AM   #27 
  - Food inflation rises to 8%  xchrom   Dec-01-11 08:09 AM   #33 
  - Sensex rallies 360 pts on positive global cues  xchrom   Dec-01-11 08:49 AM   #49 
  - Latin American Poverty Levels Fall To Lowest in Two Decades, UN Report Finds  Demeter   Dec-01-11 08:03 AM   #31 
  - Morning Marketeers....  AnneD   Dec-01-11 08:19 AM   #38 
  - Our water is so hard, I'd have to go liquid  Demeter   Dec-01-11 08:38 AM   #47 
  - Just look it up on You Tube.....  AnneD   Dec-01-11 08:50 AM   #51 
  - Making soap!  Juneboarder   Dec-01-11 12:02 PM   #88 
     - It is so easy as to be sinful....  AnneD   Dec-01-11 01:28 PM   #103 
  - Global Capital Descends on Berlin Tech Scene  Demeter   Dec-01-11 08:49 AM   #50 
  - S&P downgrades hit bank funding, counterparty cost  Demeter   Dec-01-11 08:59 AM   #56 
  - Bank of America stock ( BAC) down again today.  dixiegrrrrl   Dec-01-11 09:34 AM   #72 
  - BofA, Goldman Sachs, Citigroup Credit Ratings Cut by S&P  Demeter   Dec-01-11 01:10 PM   #100 
  - Somewhere in the past few days, I've picked up a virus  Demeter   Dec-01-11 09:17 AM   #65 
  - I had one that laid me out all of last week.  Fuddnik   Dec-01-11 09:53 AM   #77 
  - A Banker Speaks, With Regret By NICHOLAS D. KRISTOF  Demeter   Dec-01-11 09:27 AM   #68 
  - Unwittingly, we actually made out good on the mortgage loan game.  dixiegrrrrl   Dec-01-11 10:28 AM   #81 
  - Former Award Winning Chase Banker Describes Predatory Mortgage Lending Practices  Demeter   Dec-01-11 12:50 PM   #98 
  - Congress push to relax US securities laws  Demeter   Dec-01-11 09:30 AM   #69 
  - Yves Smith Opines:  Demeter   Dec-01-11 12:37 PM   #93 
  - US faces pension bill for AMR restructure  Demeter   Dec-01-11 09:30 AM   #70 
  - Buffett makes headlines as he buys local paper  Demeter   Dec-01-11 09:31 AM   #71 
  - FT investigation: A realm fit for a tsar  Demeter   Dec-01-11 09:37 AM   #74 
  - Fed saves Europe's banks as ECB stands pat MUST READ  Demeter   Dec-01-11 12:26 PM   #90 
  - What Does the Fed Know That We Dont?  Demeter   Dec-01-11 12:32 PM   #91 
  - Foreclosure fraud whistleblower found dead  Demeter   Dec-01-11 12:42 PM   #94 
  - Economy is So Good People are Living in Cars  Demeter   Dec-01-11 12:44 PM   #95 
     - Millions of people to become expendable next year  Demeter   Dec-01-11 12:47 PM   #96 
     - Is a Universal Social Net Good Macro Economics?  Demeter   Dec-01-11 12:49 PM   #97 
     - "superfluous people" ...  AnneD   Dec-01-11 02:00 PM   #106 
     - "here in my car. I feel safest of all."  Roland99   Dec-01-11 01:22 PM   #102 
 

Home » Discuss » Latest Breaking News Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators


Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC