Financial Crisis

[Tolley]

It is not just about the EURO either as you also have a China slowdown, the USA stuttering along with debt it can never repay and finally to top it all off Japan has debt it can never pay off and is on the verge of financial collapse as well. Japan spends 50 percent of its tax take on paying of its loans and that is with almost zero interest rates so where do you think that is likely to go?

GFC2 is only a matter of time and it is going to make GFC1 look like a tea party.

There could be more financial stimulus both in Europe and the US but that will only delay things for a little while and of course make the bubble even bigger when it bursts.

Suicide is the only answer.

I dont think I am being unduly alarmist but the facts speak for themselves.

I can only really see one way out and that is to forgive all sovereign debt and start again. Not sure how it will work thou.

[ExpatJ]

It is not just about the EURO either as you also have a China slowdown, the USA stuttering along with debt it can never repay and finally to top it all off Japan has debt it can never pay off and is on the verge of financial collapse as well. Japan spends 50 percent of its tax take on paying of its loans and that is with almost zero interest rates so where do you think that is likely to go?

GFC2 is only a matter of time and it is going to make GFC1 look like a tea party.

There could be more financial stimulus both in Europe and the US but that will only delay things for a little while and of course make the bubble even bigger when it bursts.

Suicide is the only answer.

I dont think I am being unduly alarmist but the facts speak for themselves.

I can only really see one way out and that is to forgive all sovereign debt and start again. Not sure how it will work thou.

I hope everyone is invested now to benefit from the current equities rally- my prediction- this one will run for longer than previous ones this year (i.e. weeks rather than days)...

[midas]

Suicide is the only answer.

I dont think I am being unduly alarmist but the facts speak for themselves.

I can only really see one way out and that is to forgive all sovereign debt and start again. Not sure how it will work thou.

I hope everyone is invested now to benefit from the current equities rally- my prediction- this one will run for longer than previous ones this year (i.e. weeks rather than days)...

my prediction- this one will run for longer than previous ones this year (i.e. weeks rather than days)...

why not just go to a casino where is no time limit at all ?

http://investmentwatchblog.com/breaking-irans-currency-in-free-fall-us-to-attack-iran-missiles-israel-to-take-out-syria-hezbollah/#.UB_WE6BvDIV

Edited August 6, 2012 by midas

[yoshiwara]

It is not just about the EURO either as you also have a China slowdown, the USA stuttering along with debt it can never repay and finally to top it all off Japan has debt it can never pay off and is on the verge of financial collapse as well. Japan spends 50 percent of its tax take on paying of its loans and that is with almost zero interest rates so where do you think that is likely to go?

GFC2 is only a matter of time and it is going to make GFC1 look like a tea party.

There could be more financial stimulus both in Europe and the US but that will only delay things for a little while and of course make the bubble even bigger when it bursts.

Suicide is the only answer.

I dont think I am being unduly alarmist but the facts speak for themselves.

I can only really see one way out and that is to forgive all sovereign debt and start again. Not sure how it will work thou.

Man puts cart before horse.

[midas]

It is not just about the EURO either as you also have a China slowdown, the USA stuttering along with debt it can never repay and finally to top it all off Japan has debt it can never pay off and is on the verge of financial collapse as well. Japan spends 50 percent of its tax take on paying of its loans and that is with almost zero interest rates so where do you think that is likely to go?

GFC2 is only a matter of time and it is going to make GFC1 look like a tea party.

There could be more financial stimulus both in Europe and the US but that will only delay things for a little while and of course make the bubble even bigger when it bursts.

Suicide is the only answer.

I dont think I am being unduly alarmist but the facts speak for themselves.

I can only really see one way out and that is to forgive all sovereign debt and start again. Not sure how it will work thou.

Man puts cart before horse.

"there you go again."

[Naam]

Man puts cart before horse.

horse pushes cart. problem solved. as simple as that.

[Tolley]

Man puts cart before horse.

horse pushes cart. problem solved. as simple as that.

That'll solve all the world's financial problems.

[mccw]

""

Royal Dutch Shell has unveiled plans to move some of its cash from Europe to the United States because of the growing fear of macroeconomic risk.

The Anglo-Dutch oil major may put about $15 billion into non-European assets such as U.S. government bonds and bank accounts, according to the companys Chief Financial Officer Simon Henry.

"There's been a shift in our willingness to take credit risk in Europe," Henry told The Times newspaper.

However, Shell said it will not move all of its funds out of Europe as it's required to keep some money in the EU to fund its operations.

Asked if Shell regarded the risk in Germany differently to some of the eurozones southern and heavily indebted members, Henry said: We differentiate between different credit risk.

""

To me this looks like that's a huge no confidence vote in the Euro as a whole including Germany.

If a host of other large companies follow suit this could be serious?

[Naam]

(Reuters) - Royal Dutch Shell (RDSa.L) is pulling some of its funds out of European banks over fears stirred by the euro zone's mounting debt crisis, The Times reported on Monday.

The company's chief financial officer Simon Henry told the newspaper that Shell is cutting back its exposure to European credit risk in the worst-hit economies and putting a higher price on doing business with the region's peripheral nations.

http://uk.reuters.co...E87503L20120806

to me it seems a rational decision not to leave too much cash in Greece, Portugal or Spain.

[mccw]

(Reuters) - Royal Dutch Shell (RDSa.L) is pulling some of its funds out of European banks over fears stirred by the euro zone's mounting debt crisis, The Times reported on Monday.

The company's chief financial officer Simon Henry told the newspaper that Shell is cutting back its exposure to European credit risk in the worst-hit economies and putting a higher price on doing business with the region's peripheral nations.

http://uk.reuters.co...E87503L20120806

to me it seems a rational decision not to leave too much cash in Greece, Portugal or Spain.

Sure. I agree. But note its all going to US rather than Germany, only leaving bare minimum operating euro liquidity in the safer zones. So this is a no confidence vote on entire currency not just the peripheral nations.

If other large companies follow could be 10s of billions; is that enough to push these already shaky banks over the edge? More bail outs?

[Naam]

But note its all going to US rather than Germany

we are talking of one company which moves cash into (what is assumed) a safer zone. if you hold cash dollars and don't need them then UST is presently considered the safest way. even small private investors like me hold their USD in UST.

what do you mean by "all"? the peanuts amount of a few billions? how many companies hold billions of cash?

[Naam]

To me this looks like that's a huge no confidence vote in the Euro as a whole including Germany.

did this "huge no confidence vote" make the EUR appreciate 2% vs. USD during the last few days?

[Naam]

CS Research 07 August 2012

• Investors began reducing short euro positions in June and we expect further unwinding before and in connection with a European policy response.

• Global sentiment and risk positioning mean that a policy response should have potential to take EUR/USD higher – even as the euro is no longer oversold.

• The current rebound is, however, likely to be shorter and smaller than previous rallies as relative rates have continued to move against the euro; 1.30 is likely to hold.

• A clearer break of the underlying downtrend would be likely to require US monetary easing in addition to a European policy response and a stabilisation of global growth. This is becoming an increasingly likely scenario for H2 but it remains premature to dismiss the underlying trend lower in the euro.

Less euro bearish sentiment

Investors have begun exiting short euro positions in what we expect to be a longer unwind period. The driver is expectations of a policy response in Europe (European Financial Stability Facility [EFSF] and ECB bond buying) and the potential for a policy response in the US (QE3). EUR/USD has so far rebounded four big figures from its 24 July low and as only one-third of short euro positions have been unwound, according to IMM data, there should be further potential for EUR/USD to rise on a policy response.

Since 2009, there have crudely been three episodes of euro net-short covering from stretched levels: May 2010, January 2011 and January 2012. The 2011 period differs by being driven by a build-up in long positions. These unwind periods have generally become shorter and delivered less euro upside over time; lasting 101, 81 and 51 trading days respectively and delivering 23, 19, and 8 big figures in EUR/USD (low to high).

Bigger bang for the euro

The length and strength of the current unwind period will depend on the policy responses delivered over the coming months. Our main scenario is that Spain will ask the EFSF to activate a bond purchase programme, which would then be followed by the ECB buying on the secondary market.

However, while it appears more likely than not that we will see a policy response, the details on how this would look remain unclear. Strong purchases combined with measures to address the seniority issue (that when buying bonds the ECB pushes private bond holders further out on the creditor line) should be able lift markets further, though.

As we have seen in recent years the ‘beta’ of a policy response is a function of risk sentiment, positioning and the global cyclical backdrop. In other words, if policymakers deliver at a time when risk sentiment is low, investors are already positioned for a down market, while the business cycle is stabilising, then it is much easier to have a market impact. The current environment is not very supportive but it is not too bad either.

[manarak]

CS Research 07 August 2012

• Investors began reducing short euro positions in June and we expect further unwinding before and in connection with a European policy response.

• Global sentiment and risk positioning mean that a policy response should have potential to take EUR/USD higher – even as the euro is no longer oversold.

• The current rebound is, however, likely to be shorter and smaller than previous rallies as relative rates have continued to move against the euro; 1.30 is likely to hold.

• A clearer break of the underlying downtrend would be likely to require US monetary easing in addition to a European policy response and a stabilisation of global growth. This is becoming an increasingly likely scenario for H2 but it remains premature to dismiss the underlying trend lower in the euro.

Less euro bearish sentiment

Investors have begun exiting short euro positions in what we expect to be a longer unwind period. The driver is expectations of a policy response in Europe (European Financial Stability Facility [EFSF] and ECB bond buying) and the potential for a policy response in the US (QE3). EUR/USD has so far rebounded four big figures from its 24 July low and as only one-third of short euro positions have been unwound, according to IMM data, there should be further potential for EUR/USD to rise on a policy response.

Since 2009, there have crudely been three episodes of euro net-short covering from stretched levels: May 2010, January 2011 and January 2012. The 2011 period differs by being driven by a build-up in long positions. These unwind periods have generally become shorter and delivered less euro upside over time; lasting 101, 81 and 51 trading days respectively and delivering 23, 19, and 8 big figures in EUR/USD (low to high).

Bigger bang for the euro

The length and strength of the current unwind period will depend on the policy responses delivered over the coming months. Our main scenario is that Spain will ask the EFSF to activate a bond purchase programme, which would then be followed by the ECB buying on the secondary market.

However, while it appears more likely than not that we will see a policy response, the details on how this would look remain unclear. Strong purchases combined with measures to address the seniority issue (that when buying bonds the ECB pushes private bond holders further out on the creditor line) should be able lift markets further, though.

As we have seen in recent years the ‘beta’ of a policy response is a function of risk sentiment, positioning and the global cyclical backdrop. In other words, if policymakers deliver at a time when risk sentiment is low, investors are already positioned for a down market, while the business cycle is stabilising, then it is much easier to have a market impact. The current environment is not very supportive but it is not too bad either.

nice piece of research there, and easily understandable too!

[midas]

I dont think I am being unduly alarmist but the facts speak for themselves.

I can only really see one way out and that is to forgive all sovereign debt and start again. Not sure how it will work thou.

I hope everyone is invested now to benefit from the current equities rally- my prediction- this one will run for longer than previous ones this year (i.e. weeks rather than days)...

my prediction- this one will run for longer than previous ones this year (i.e. weeks rather than days)...

why not just go to a casino where is no time limit at all ?

http://investmentwat...h/#.UB_WE6BvDIV

And in the casino you can have your flutter even before you have to pay which you can't do in the stock market

http://www.smh.com.au/business/bad-cheque-star-sues-high-rollers-20120808-23trg.html

[Naam]

seven days no crisis posting. i consider that an unwarranted complacency and predict the sky will fall any time from now, and if not than a bit later.

[mccw]

Predictably i see standard chartered got off with a slap on the wrist.

My favourite quote from that story was when the banker said to the regulator "you fuc_king Americans, who do think you are to tell us not to deal with Iran".

----//

On a totally different side of the crises.

Ive been reading dome things about FEMA camps and the various laws in good old USofA giving the president power to declare marshal law on his own and lock up and/ or execute anyone deemed a national security risk without trail. Just interested to hear this forums thoughts on this. Is it in preparation to deal with the coming monumental economic meltdown, system transition, new world order or FEMA doesn't really exist and the new statute is just a coincidence or whole reserved for Muslims?

Sinister.

Many euro countries have brought in extended police holding powers if approved by a judge but nothing to this extent.

[mccw]

"

When America insists on international bailouts for the eurozone it simply wants to rescue the money of its own investors, Hans-Werner Sinn, the President of the IFO Institute for Economic Research in Munich told RT.

The German economist pointed out that the US government hasnt rushed to bail out its own drowning states, such as California, as they face bankruptcy.

Sinn warned the widespread investor tactic of privatizing profits and nationalizing debt won't cut it in the eurozone because with its 2.5 trillion euro GDP Germany simply cannot bail out 12.5 trillion euro of total debt of Europe, so they are going to have to do it on their own.

Hans-Werner Sinn told RT's Oksana Boyko that since the American insurance companies have insured sovereign debt of Southern Europe with CDS (Credit Default Swap) contracts, once they default the Americans would have to pay the insurance indemnification payment.

Hans-Werner Sinn

RT: How does the Eurozone crisis affect the American economy?

Hans-Werner Sinn: The problem is that in five [European countries in crisis], including Italy, we have a government debt of nearly 3.5 trillion Euros and a banking debt of more than 9 trillion Euros. So were talking about 12.5 trillion Euros.

This debt is also assets sitting in some portfolios of investment companies throughout the world, including American investment companies. So it is obvious that they are very afraid of not getting their money back, if some of the Southern European countries default and they look for someone else to pay them the money.

This is why they urge Germany in particular to step in and agree to an expansion of the debt, the banking union which would socialize the debt in Europe. It is always the case that the investors look for someone else to pay the bill.

In addition there is of course an American involvement. So far, the American insurance companies have insured the state debt of Southern Europe with CDS (Credit Default Swap) contracts, so should they default, they would have to pay the insurance indemnification payment. And clearly they want to avoid that.

RT: You recently made a point that the US, economically speaking, is not practicing what it preaches. On one hand it pushes Germany to provide money to bail out Greece and embattled countries. But on the other hand nobody is talking about bailing out California, for example, which is also heavily in debt.

HWS: Yes, what I find very surprising is that the US would never think of bailing out California when it goes bankrupt. Every state is responsible for itself and if there is a loss, it has to be borne by the creditors of that state.

But at the same time they argue in Europe there should be international bailout. This is all too obvious they want to save and rescue their own investment.

RT: The collapse of the Soviet Union was taken as a proof that socialism as an economic system is not sustainable. Were seeing a lot of crisis in the capitalist countries. Do you take it as a sign that capitalism in its classic current form is not sustainable either?

HWS: I believe that capitalism is sustainable and I think that the market economy is really no doubt a better alternative. But this kind of turbo-capitalism which were seeing in recent years, this irresponsible capitalism resulting from the gamble for resurrection played by the banks that invested in risky enterprises, hoping that their profits would be privatized while at the same time expecting to be bailed out if something goes wrong this kind of capitalism should not have a future.

RT: Were seeing a very strange situation. Germany is asked to provide help to those [southern European] countries, but on the other hand were seeing citizens of those very countries taking money out and spending it in Germany. How do you explain that?

HWS: The problem is that the Southern European countries are not competitive anymore. With the cheap credit that the Euro provided inflated too much, price levels are way above a sustainable equilibrium. Now, the European Central Bank prints money and helps those countries with cheap credit, which is way below market rates. And they make it possible to continue buying goods in the rest of Europe with this newly printed money. The whole thing is a mess, and we have to find solutions to pacify the European situation, which in my opinion can only be a temporary exit of some European countries. This will reduce the value of their currencies; they recover and can return later, at a new exchange rate, into the currency union. Everything else is dreaming. Our politicians dream of a solution with more and more money. They have the impression that putting money in the window would solve the problem. In fact it is a bottomless pit.

RT: Some economists suggest that rather than kicking Greece or Ireland out of the Eurozone, it is Germany that should take the lead and exit the union. What do you think about that proposal?

HWS: I dont think any country should be kicked out of the European Union, but some countries are so expensive that they wont make it in the Eurozone. Greece is a good example. They have to come down with their price level by 37 percent to be on the Turkish level. They have the same wine, the same water and the same food as Turkey, so basically they cannot be more expensive.

You cannot achieve that in the Eurozone. You cannot cut wages and prices to such extent to make the country competitive because then it would be breaking up. The only solution for Greece is to exit, hopefully temporarily, and return later at a new exchange rate into the Euro. Why this is such a catastrophe? If the politicians say it is a catastrophe, they might make it a catastrophe. It would be much better to see this less dramatically.

RT: Many economists see Spain as major reason for concern as well. Its government debt stays at 72 per cent of the countrys GDP. Its banking system is quite unstable. Do you think that Spain will become the next black hole for German finances?

HWS: We have the competitiveness problem in Spain, too. But it is not as severe as in Greece and Portugal. According to a study by Goldman Sachs, Greece has to come down by 30 percent in its price level, Portugal by 35 percent and Spain by 20 percent. So it is a completely different situation, 20 percent is possible.

If you think of Germany, since the announcement of the Euro at the Madrid summit in 1995, from then to 2008, the Lehman crisis, Germany depreciated or devalued in real terms, as we say by having a lower inflation rate than the other states in the Eurozone, by 22 per cent. So [spains] 20 percent in that order of magnitude with a decade of stagnation is a possibility, not a pleasant one.

Germany had its own crisis under the Euro, and recovered only after the financial crisis. A similar crisis is foreseeable for Spain. If Spain wants to do it that way the hard way theyre invited to do so. But Spain is too big to be bailed out in a similar way to Greece. Greece has received 214 per cent of GDP as aid; how can we do that for Spain? The sums become astronomical, too big for the rest of Europe, and I think everyone knows that.

RT: How much deliberation we can really afford on deciding what to do with the Euro?

HWS: The problem of the Southern European countries, a total bank and government debt of 12.5 trillion Euros is too big for Germany to solve. Germanys GDP is 2.5 trillion. The only possibility is that the investors themselves accept some haircuts. If banks in Spain, for example, have a problem because of toxic credit to real estate investors, than the creditors of the banks would have to lose their money.

First of all they can try an equity swap: Hand over their shares to the creditors, in exchange for haircuts. That would be a fair deal for the creditors. The equity owners would lose their money well, they had the risk, thats their function. If that is not enough and the losses are larger, then the creditors would have to lose a little bit more. But they can do it, no one else can do it. They own all these claims, therefore they are the only ones that have capacity to bear the losses. You cannot shift that to the taxpayers of other countries."

[midas]

I am completely speechless

the Grand Jury has already convened to prosecute Assange for telling the truth

while Corzine gets away without any charges for stealing from clients

and is even allowed to start a hedge fund.

What does that say about the state of society?

Jon Corzine Will Not Only Not Face Prosectuion, But May Be Launching A Hedge Fund Imminently

http://dealbook.nyti...s-at-mf-global/

and for the real icing on the cake...................

High Ranking DOJ Lawyers And AG Eric Holder Were Partners In Firm That Represented MF Global

http://dailybail.com/home/corzine-cronyism-bombshell-high-ranking-doj-lawyers-and-ag-e.html

Edited August 16, 2012 by midas

[yoshiwara]

I wouldn't be propping up alleged rapist Assange as the white knight to set against Corzine. Both should be in the dock.

[Naam]

I wouldn't be propping up alleged rapist Assange as the white knight to set against Corzine. Both should be in the dock.

Corzine set up people who lost hundreds of millions, Assange was set up by two hired bitches!

[waza]

I wouldn't be propping up alleged rapist Assange as the white knight to set against Corzine. Both should be in the dock.

Corzine set up people who lost hundreds of millions, Assange was set up by two hired bitches!

Consensual sex means asking before you go bareback. The reality is if the Banking and Financial industries were as regulated as Swedish love making then the GFC would never have happened.

Edited August 19, 2012 by waza

[midas]

I wouldn't be propping up alleged rapist Assange as the white knight to set against Corzine. Both should be in the dock.

Corzine set up people who lost hundreds of millions, Assange was set up by two hired bitches!

Consensual sex means asking before you go bareback. The reality is if the Banking and Financial industries were as regulated as Swedish love making then the GFC would never have happened.

[midas]

I wouldn't be propping up alleged rapist Assange as the white knight to set against Corzine. Both should be in the dock.

Corzine set up people who lost hundreds of millions, Assange was set up by two hired bitches!

Brilliant! In a nutshell

[midas]

sub-prime debacle now arrives in Australia

A WA mortgage broker who got rich by "fudging figures" has blown the whistle on the banks that conspired in Australia's own sub-prime mortgage scandal. "I would get upfront commission, I would get a trailing commission. I was probably earning about $5 million a year. It was great. It was wonderful. But it was all a lie," she said.

and all the major banks are named

Ms Brailey says it is a "roll call" of all the major banks.

"We've got Macquarie in there, we've got Westpac, NAB, ANZ, Commonwealth," she said.

http://www.abc.net.au/news/2012-08-13/mortgage-broker-blows-whistle-on-big-banks/4195920

[Naam]

sub-prime debacle now arrives in Australia

i hear these rumours for quite some time but never saw any evidence except for the price development of Oz immobile property.

[midas]

sub-prime debacle now arrives in Australia

i hear these rumours for quite some time but never saw any evidence except for the price development of Oz immobile property.

and some think Canada is the next cab off the rank

http://www.greaterfool.ca/2012/02/20/canadian-subprime/

[yoshiwara]

I wouldn't be propping up alleged rapist Assange as the white knight to set against Corzine. Both should be in the dock.

Corzine set up people who lost hundreds of millions, Assange was set up by two hired bitches!

Assange is a nasty piece of work. Don't buy the spin.

[mania]

Assange is a nasty piece of work. Don't buy the spin.

How does one know which side is spun?

When atrocities such as what was released by Assange & Manning

about any other country is made public it is "News" & someone is prosecuted for such actions

that were uncovered. Certainly the world calls for it when it involved any others or countries committing such acts.

But in this case it is all about the folks who leaked this information. Never a word about the horrendous

deeds it uncovered. Never any investigations about the deaths or those that knew about them & did nothing.

Until uncovered & still nothing.

Yes hard to determine spin

[yoshiwara]

He has been accused of rape and sexual assault. In Sweden.

He can defend himself in court. Interesting that some who consider themselves 'progressive' will jettison their sexual politics when it suits them.

Bitches and whores eh?