S&P Downgrades EFSF From AAA To AA+, May Cut More If Sovereign Downgrades Continue

See also:

Gerald Celente: ‘Politics Is Show Business For The Ugly’ – Expects Europe To Collpase In April – On The NDAA And Indefinite Detention: ‘They Can Simply Blow My Brains Out Now’ … ‘This Is FASCISM’


S&P Downgrades EFSF From AAA To AA+, May Cut More If Sovereign Downgrades Continue (ZeroHedge, Jan. 16, 2012):

And so the latest inevitable outcome of the French downgrade from AAA has arrived, after the S&P just downgraded the EFSF, that pillar of European stability, from AAA to AA+. S&P adds: “if we were to conclude that sufficient offsetting credit enhancements are, in our opinion, not likely to be forthcoming, we would likely change the outlook to negative to mirror the negative outlooks of France and Austria. Under those circumstances we would expect to lower the ratings on the EFSF if we lowered the long-term sovereign credit ratings on the EFSF’s ‘AAA’ or ‘AA+’ rated members to below ‘AA+‘.” In other words, as everyone but Europe apparently knew, the EFSF is only as strong as the rating of its weakest member. And now the rhetoric on how AAA is not really necessary for the EFSF, begins, to be followed by AA, next A, then BBB and finally how as long as the EFSF is not D-rated all is well.

From S&P:

Read moreS&P Downgrades EFSF From AAA To AA+, May Cut More If Sovereign Downgrades Continue

Of Imminent Defaults And Self Deception: Hedge Fund Manager Kyle Bass Prepares For The Worst

Flashback:

University of Texas Takes Delivery Of $1 Billion In Gold Bars After Cue From Hedge Fund Manager Kyle Bass, Storing It In New York Vault


Of Imminent Defaults And Self Deception. Kyle Bass Prepares For The Worst (ZeroHedge, Nov. 30, 2011):

In his latest letter to LPs, Kyle Bass of Hayman Capital Management, offers his tell-tale clarity on what may lie ahead for Europe and Japan. With his over-arching thesis of debt saturation becoming more plain to see around every corner, Bass bundles the simple (and somewhat unarguable) facts of quantitative analysis with a qualitative perspective on the cruel self-deception that we all see and read every day about Europe.

Whether it is Kahneman’s “availability heuristic” (wherein participants assess the probability of an event based on whether relevant examples are cognitively “available”), the Pavlovian pro-cyclicality of thought, or the extraordinary delusions of groupthink, investors in today’s sovereign debt markets can’t seem to envision the consequences of a default.

His Japanese scenario is no less convicted, as we have discussed a number of times, with the accelerant of this debt-bomb being the very-same European debacle and his time-frame for this is set to begin in the next few months.

Hayman_Nov2011

EFSF Denies It Is An Illegal Pyramid Scheme – The Euro Is Dead

EFSF Denies It Is An Illegal Pyramid Scheme (ZeroHedge, Nov. 13, 2011):

If there is one thing one can say about the insolvent European continent is that despite everything, it is a bastion of truth, and a knight of see-thru disclosure. After all, who can forget such brutally honest statements as “Greece will not default“, or the follow ups: “Ireland is not Greece”, “Portugal is not Ireland”, “Spain is not Portugal”, “Italy is fine”, “Italy has turned down money from the IMF“, “The IMF has never offered any money to Italy“, and then the old standbys, “the ECB will not be a lender of last resort”, “the EFSF will use 4-5x leverage“, wait, make that “the EFSF will use 3-4x leverage“, and last but not least, “Europe is not America” and “it is all the fault of evil CDS speculators.” Well we have one more to add to the list: “the EFSF is not an illegal ponzi scheme” – because after the mindboggling report in the Telegraph yesterday that the EFSF has bought hundreds of millions of its own bonds, exposing the scam in the heart of the Eurozone for anyone to see, the European rescuer of last resort (at least until the ECB comes out monetizing and Eurobonds are issued)has no choice but to join in the parade of truths and as Reuters reports “said on Sunday that it did not buy its own bonds last week, denying a British newspaper report that it spent more than 100 million euros ($137 million) to cover a shortfall of demand. “The EFSF did not buy its own bonds and the book was 3 billion euros,” an EFSF spokesman said, referring to the 3 billion euros raised in last Monday’s 10-year bond issue.” We are certain that in order to dispel rumors about its fraud-i-ness, the EFSF will promptly submit a full breakdown of the entities that received bond allocations (we know that Japan is good for €300 million, that China is good for €0.0, and that as Merkel said one week ago, “hardly any countries in G20 have said they will participate in the EFSF.So, because we believe everything that comes out of Europe, we are patiently waiting to see just who it was that bought EFSF bonds when nobody else did. And yet what is most troubling to us, is that it took the world 5 minutes to completely agree that the EFSF is a ponzi scheme, with nobody doubting this supposedly “refuted” disclosure for even a second. Perhaps that tells you more about the current state of Europe than anything else…

– Full article here:  The Euro Is Dead (ZeroHedge, Nov. 13, 2011):

The ‘tragedy of the commons’ or ‘free-rider’ dilemma of game theoretical cocktail parties is a great framework for considering the current tug-of-war between individual sovereign fiscal actions among the European Union and the over-arching monetary policy of the ECB. If the ECB is dovish and too many states decide to suckle on the teat of liquidity – as opposed to fiscally ‘behave’ – then everyone loses (as we see currently evolving). The lack of any Nash (stable and dominant) equilibrium among the European nations and their hoped-for benefactor is becoming increasingly problematic for both trading and business investment.

Nomura’s Global Macro Strategy group tackle the problem that is now abundantly clear the euro area as currently constructed is not stable and so it will have to change (hence, the Euro is dead!). The direction of travel is being set out by northern European politicians and is worth noting – more Union not less. But two points are critical to note; first that the new euro area may be so different from the one the current members signed up to as to make a process of voluntary re-application for euro stage II necessary to determine future membership, and second that any new variable geometry euro will take a long period of time to set up. How then to cover the intervening period?

TOTAL DESPERATION: G20 Asks Germany To Pledge Its Gold For EFSF Rescue Fund – Bundesbank Refuses

In Act of Desperation, G20 Asks Germany to Pledge its Gold for EFSF Rescue Fund, Bundesbank Refuses; Grateful for the Arrogance (Global Economic Analysis, November 06, 2011):

The gall and arrogance of the G20 and Euro-nanny finance minister clowns is staggering.

German newspapers report that the G20 discussed asking Germany to pledge its gold to bail out Greece and the Piigs, and to fund the EFSF.

The Bundesbank, Germany’s central bank said “We know this plan and we reject it.”

One might think that would be enough to stop such idiotic talk, but one would be wrong. In spite of Bundesbank opposition, euro zone finance ministers will discuss the idea next week.

Please consider Bundesbank: central bank reserves will not help fund EFSF

The Frankfurter Allgemeine Sonntagszeitung (FAS) reported that Bundesbank reserves — including foreign currency and gold — would be used to increase Germany’s contribution to the crisis fund, the European Financial Stability Facility (EFSF) by more than 15 billion euros ($20 billion).

The European Central Bank (ECB) would own the reserves, according to the paper, citing sources at the G20 meeting held in Cannes this week.

Read moreTOTAL DESPERATION: G20 Asks Germany To Pledge Its Gold For EFSF Rescue Fund – Bundesbank Refuses

Germany ‘Won’t Give More To EU Bailout Fund’ – Finance Minister Wolfgang Schäuble Rules Out Larger German EFSF Contribution

And if Wolfgang Schäuble (or any other politician) says so, then it surely means NOTHING:

The Dangerous Subversion Of Germany’s Democracy (Telegraph) – Wolfgang Schäuble’s Lies Exposed

Prepare for collapse. Got physical gold and silver? (BTFD!)


Germany ‘won’t give more to EU bail-out fund’ (AFP, Oct. 1, 2011):

German Finance Minister Wolfgang Schaeuble ruled out Germany contributing any more money to the beefed-up EU bail-out fund than the 211 billion euros approved by parliament, in an interview published Saturday.

“The European Financial Stability Facility has a ceiling of 440 billion euros ($590 billion), 211 billion of which is down to Germany. And that is it. Finished,” he told the magazine Super-Illu.

He also suggested the European Stability Mechanism, which is due to replace the EFSF by 2013 at the latest, would be smaller.

“Then it will be only a matter of 190 billion in total, for which we will be guarantors, including interest,” he explained.

Germany’s lower house of parliament, the Bundestag, on Thursday approved the beefing up of the eurozone bailout fund, which cleared its final hurdle on Friday when it was rubber-stamped by the Bundesrat (upper house).

The vote had been seen as a crucial test of Chancellor Angela Merkel’s authority amid fears of a backbench rebellion. However she secured an overwhelming majority of her own deputies to back the move.

A majority of Germans (58%) consider it was a mistake to boost the EFSF, according to a poll to be published Sunday in the weekly Bild am Sonntag.

(As if ‘Bild am Sonntag’ readers would know anything about economics and politics.)

Schaeuble rules out larger German EFSF contribution (Reuters, Oct. 1, 2011):

Oct 1 (Reuters) – Finance Minister Wolfgang Schaeuble was quoted on Saturday ruling out a higher German contribution to the euro zone’s rescue fund beyond the 211 billion euros approved by parliament last week.

In an interview with the Super-Illu newspaper published on Saturday, Schaeuble said Germany would not contribute more than that amount to the 440 billion euro European Financial Stability Facility (EFSF).

“Germany will take on 211 billion euros in guarantees and that’s it, that’s really the end of it with the exception of the interest costs on top of it,” said Schaeuble, who has faced criticism recently for revising upwards earlier pledges on ceilings for the guarantees.

Read moreGermany ‘Won’t Give More To EU Bailout Fund’ – Finance Minister Wolfgang Schäuble Rules Out Larger German EFSF Contribution

Germany Must Hit The Eject Button (Stratfor)

Germany must hit the eject button (Stratfor via Business Spectator, Sep 30, 2011):

The eurozone’s financial crisis has entered its 19th month. There are more plans to modify the European system than there are eurozone members, but most of these plans ignore constraints faced by Germany, the one country in the eurozone in a position to resolve the crisis. Stratfor sees only one way forward that would allow the eurozone to survive.

Germany’s constraints

Most of these plans ignore that Germany’s reasons for participating in the eurozone are not purely economic, and those non-economic motivations greatly limit Berlin’s options for changing the eurozone.

Read moreGermany Must Hit The Eject Button (Stratfor)

The Dangerous Subversion Of Germany’s Democracy (Telegraph) – Wolfgang Schäuble’s Lies Exposed

From the article:

‘Mr Schäuble has now been forced to give a categorical assurance that the EFSF will not be expanded. He cannot break his word without very serious consequences, or before the financial crisis turns deadly.’

As for the assurances of Mr Schäuble, either he really is lying, in which case there will be all Hell to pay in the Bundestag, and most likely a massive political backlash that will change German politics profoundly.

Or he is not lying, in which case there is no plan to save the eurozone, and we therefore face the mounting risk of a spiral into a banking crash, serial sovereign defaults, and a disorderly break-up of EMU.

Not pretty.

I bet Mr. Schäuble lied (again), but here is why the plan to save the eurozone is doomed to fail:

The Multi-Trillion Euro Bailout Plan Has Already FAILED

Wolfgang Schäuble’s lies exposed:

In December 2009 Schäuble said that the Germans cannot pay for the problems of Greece.

In April 2010 he said that Greece may not need a bailout.

In May 2010 he promised his people the € 110 Billion bailout to be a one-time grant and the absolute upper limit of payments.

In May 2011 he agreed to the € 750 Billion bailout package.

In June 2011 Greece got another € 100 Billion bailout, again with approval from Mr. Schäuble.

Finance minister Wolfgang Schäuble is not only a LIAR, but a TRAITOR unto his people.

The elite puppet governments in Europe and in the US do exactly what they are told by their masters.

This is the greatest looting of the people in world history orchestrated by the elitists.

Europe is already burning (and so is the US).

Prepare for currency reform(s) and the greatest financial collapse in world history.

This is the ‘Greatest Depression’.

Got physical gold and silver (…and food and water supplies)?


The Dangerous Subversion Of Germany’s Democracy


The Bundestag and the German people are being undermined

The dangerous subversion of Germany’s democracy (Telegraph, Sep. 29, 2011):

Optimism over Europe’s “grand plan” to shore up EMU was widely said to be the cause of yesterday’s torrid rally on global markets, lifting the CAC, DAX, Dow, crude and copper altogether.

This is interesting, since Germany’s finance minister Wolfgang Schäuble has given an iron-clad assurance to the Bundestag that no such plan exists and that Germany will not support any attempt to “leverage” the EU’s €440bn bail-out plan to €2 trillion, or any other sum.

“I don’t understand how anyone in the European Commission can have such a stupid idea. The result would be to endanger the AAA sovereign debt ratings of other member states. It makes no sense.”

Read moreThe Dangerous Subversion Of Germany’s Democracy (Telegraph) – Wolfgang Schäuble’s Lies Exposed