‘Toxic’ EU bank assets total £16.3 trillion

(£16.3 trillion = $23.4 trillion = € 18.1 trillion)

I have linked in Global News (02/12/09) to this article:
EU faces ‘toxic’ debt spiral
(Telegraph)
.

I have found out that the Telegraph had changed some important parts of the article, incl. the title. So the article below is the real thing, before it has been changed.

When you take a look at this important article, European bank bail-out could push EU into crisis (Telegraph), then you can still see the original title (‘Toxic’ EU bank assets total £16.3 trillion) on the right side under ‘Related Content’.

…. and this is the link to the article “European bank bail-out could push EU into crisis“:
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4590512/
European-banks-may-need-16.3-trillion-bail-out-EC-dcoument-warns
.html

Looks to me like they do not want you to know the real numbers here, because then you would know that the Titanic is already sinking. Somebody does not want you to panic, which would result in a run on the banks and on gold and silver.

(I would run get my money out there, buy gold and silver, stock up food and water etc. and also have some cash.
This is not to be seen as a recommendation for you to do the same.)

Related article:
European banks’ toxic debts risk overwhelming EU governments (Telegraph)


‘Toxic’ EU bank assets total £16.3 trillion

It is not surprising that European Union finance ministers looked ashen faced in Brussels on Tuesday.


The EU faces vast costs and spiralling government debt

The breakfast meeting discussed how EU governments should deal with, in other words pay for, the “toxic” banking assets that triggered the economic crisis.

The figures, contained in a secret European Commission paper, are startling. The dodgy financial packages are estimated to total £16.3 trillion in banks across the EU.

The “impaired assets” may amount to an astonishing 44 per cent of EU bank balance sheets. It is a deep ditch the bankers, regulators and their friends in government have dug us into.

More on the details of this story over on business.

As discussed here on Monday, the secret 17 page paper warned that government attempts to buy up or underwrite the assets could plunge the EU into a deeper crisis, one that threatens the Union.

Everyone is terrified that a second bank bailout will push up government borrowing at a time when bond markets have growing doubts over the ability of countries such as Spain, Greece, Portugal, Ireland, Italy and Britain, to pay it back.

“Estimates of total expected asset write-downs suggest that the budgetary costs – actual and contingent – of asset relief could be very large both in absolute terms and relative to GDP in member states,” the EC document, seen by The Daily Telegraph, cautioned.

Spread yields are widening on bond markets as investors judge it riskier to buy the debt of a country like Italy than the debt of another like Germany.

In line with the risk, and the low performance of some EU economies compared to others, the markets have demand a higher premium on government bonds issued to raise the cash.

The more the doubt there is over high levels of government borrowing, the more the markets have asked governments to pay to service their borrowing and all the more indebted countries become.

Ministers and officials fear that the process could lead to vicious spiral that threatens to tear both the euro and the EU apart.

“Such considerations are particularly important in the current context of widening budget deficits, rising public debt levels and challenges in sovereign bond issuance,” the EC paper warned.

There is trouble ahead. Is it possible to buck a crash?

Feb. 11, 2009

Source: Telegraph

EU attacks ‘Buy American’ clause

Buy American is meant to ensure that only US goods are used in public works

The EU has increased its pressure on the US to reconsider the “Buy American” clause in the $800bn (£567bn) economic recovery package now before Congress.

The clause seeks to ensure that only US iron, steel and manufactured goods are used in projects funded by the bill.

A European Commission spokesman said it was the “worst possible signal” the Obama administration could send out.

The EU will launch a complaint with the World Trade Organisation (WTO) if the clause remains, the spokesman said.

Related interview: Jim Rogers: If Obamanomics happens it’s all over

The EU and Canadian ambassadors to Washington have already warned that the clause could promote protectionism and trigger retaliatory moves.

The rescue plan has already been approved by the US House of Representatives and is under discussion in the Senate this week.

Mixed trade signals

“There isn’t a great deal of scope for doing much more but if America went ahead and did this we would have to take it up with the World Trade Organisation,” the European Commission trade spokesman, Peter Power, told the BBC’s Chris Mason in Brussels.

British Conservative Members of the European Parliament warned of the dangers of “a new economic iron curtain” being drawn across Europe.

Read moreEU attacks ‘Buy American’ clause

Hyperinflation is a possibility, say Morgan Stanley

That’s not in Zimbabwe by the way.

Morgan Stanley’s Jocahcim Fels and Spyros Andreopoulos look at the possibility of hyperinflation hitting the western shores of the UK, Europe and the US in their latest note. Their conclusion is a little scary (our emphasis).

One stark lesson from the ongoing financial and economic crisis is that so-called black swans – large-impact, hard-to-predict and seemingly rare events – can occur more frequently than generally believed.

With policymakers around the world throwing massive conventional and unconventional monetary and fiscal stimuli at their economies, we think that it is worth exploring the black swan event of very high inflation or even hyperinflation.

While such an outcome is clearly not our main case, the risk of hyperinflation cannot be dismissed very easily any longer, in our view. We discuss the historical evidence, the conditions that can lead to very high or hyperinflation, and whether and how it might happen again.

Read moreHyperinflation is a possibility, say Morgan Stanley

Iceland to be fast-tracked into the EU

Plan for cash-strapped state to become member by 2011

Iceland will be put on a fast track to joining the European Union to rescue the small Arctic state from financial collapse amid rising expectations that it will apply for membership within months, senior policy-makers in Brussels and Reykjavik have told the Guardian.

Ian Traynor on fast-tracking Iceland into the EU and the euro Link to this audio

The European commission is preparing itself for a membership bid, depending on the outcome of a snap general election expected in May. An application would be viewed very favourably in Brussels and the negotiations, which normally take many years, would be fast-forwarded to make Iceland the EU’s 29th member in record time, probably in 2011.

Read moreIceland to be fast-tracked into the EU

US-EU trade war looms as Barack Obama bill urges ‘Buy American’

Jim Rogers: If Obamanomics happens it’s all over


The prospect of a trade war between the US and Europe is looming after “Buy American” provisions were added to President Barack Obama’s $820 billion (£573 billion) stimulus package.

President Barack Obama's $820 billion stimulus package was passed by the House of Representative
President Barack Obama’s $820 billion stimulus package was passed by the House of Representatives Photo: AP

The EU trade commissioner vowed to fight back after the bill passed in the House of Representatives late on Wednesday included a ban on most purchases of foreign steel and iron used in infrastructure projects.

The Senate’s version of the legislation, which will be debated early next week, goes even further, requiring that any projects related to the stimulus use only American-made equipment and goods.

The inclusion of protectionist measures has quickly raised hackles in Europe.

Catherine Ashton, the EU trade commissioner, said: “We are looking at the situation. The one thing we can be absolutely certain about, is if a bill is passed which prohibits the sale or purchase of European goods on American territory, that is something we will not stand idly by and ignore.”

Despite the parlous state of the US economy, some major American firms, including General Electric, are also opposed to the Buy American stipulations, fearing reprisals from overseas and further damage to the global economy.

Read moreUS-EU trade war looms as Barack Obama bill urges ‘Buy American’

Help Ireland or it will exit euro, economist warns

A leading Irish economist has called on Dublin to threaten withdrawal from the euro unless Europe’s big powers do more to rescue Ireland’s economy.


David McWilliams, a former official at the Irish central bank, has said that Ireland could withdraw from the euro if they are not given more help Photo: Rex Features

“This is war: countries have to defend themselves,” said David McWilliams, a former official at the Irish central bank.

“It is essential that we go to Europe and say we have a serious problem. We say, either we default or we pull out of Europe,” he told RTE radio.

“If Ireland continues hurtling down this road, which is close to default, the whole of Europe will be badly affected. The credibility of the euro will be badly affected. Then Spain might default, Italy and Greece,” he said.

Mr McWilliams, a former UBS director and now prominent broadcaster, has broken the ultimate taboo by evoking threats to precipitate an EMU crisis, which would risk a chain reaction across the eurozone’s southern belt, where yield spreads on state bonds are already flashing warning signals. The comments reflect growing bitterness in Dublin over the way the country has been treated after voting against the EU’s Lisbon Treaty.

“If we have a single currency there are obligations and responsibilities on both sides. The idea that Germany and France can just hang us out to dry, as has been the talk in the last couple of days should not be taken lying down,” he said.

Read moreHelp Ireland or it will exit euro, economist warns

Revolt! Robbed of their right to buy traditional light bulbs, millions are clearing shelves of last supplies


End of light as we know it: Millions of Britons are stocking up to grab the last of the traditional bulbs

Millions of Britons are finally waking up to the fact that their beloved light bulb will disappear for good after 120 years.

Traditional 100-watt bulbs are vanishing from the High Street because of a controversial European Union decision.

Yesterday panic buyers were snapping up the remaining bulbs in a last-ditch attempt to stockpile the final supplies. Hundreds of leading supermarkets and DIY chains – including Sainsbury’s, Asda and Homebase – have already sold their last remaining bulbs after a surge in panic buying.

Other stores say they have enough stocks to last until the end of next week.

The supplies are running out after the Government signed up to an EU decision to replace conventional 100w light bulbs with supposedly greener low energy alternatives.

Ministers claim the switch will reduce carbon dioxide by around five million tons each year.

But experts have questioned whether or not the new bulbs, far from being environmentally friendly, are actually harmful.

The low-energy fluorescent bulbs can trigger skin rashes, migraines and epilepsy.

There is also concern because the fluorescent bulbs contain mercury, which makes them dangerous to get rid of.

They can also be more expensive. Currently, an average supermarket price for a six pack of standard 60w pearl light bulbs is £1.21, but a single 60w low energy stick light bulb already costs around £2.19.

Retailers stopped replenishing supplies of conventional incandescent 100w bulbs at the start of the year under a ‘voluntary’ Government scheme to force people to buy green compact fluorescent lights.


New light: Energy-efficient bulbs use less energy – but critics say they can cause skin rashes, migraines and epilepsy

But concerns about the poor quality light of low energy bulbs – and the fact that most don’t work with dimmer switches – has led to tens of thousands of people stockpiling supplies.

Read moreRevolt! Robbed of their right to buy traditional light bulbs, millions are clearing shelves of last supplies

Russia halts gas supplies to European countries

Russia has halted all gas supplies to European countries including Turkey and Greece.

The move comes amid a deepening rift between Russia and Ukraine, which hosts a pipeline supplying gas from its bigger neighbour to countries across Europe.

Bulgaria and Macedonia also reported that all supplies of Russian gas had been cut, while Romania’s pipeline operator said that its supplies had been cut by 75 per cent.

Related articles:
Ukraine: Russia stops sending gas to Europe (AP)
EU faces deepening energy crunch over Russian gas
(Reuters)
Gazprom Halts Gas Supply to Europe Via Ukraine Pipes (Bloomberg)

Bulgaria’s finance ministry said the country was facing a crisis. Petar Dimitrov, the economy and energy minister, said: “Russia and Ukraine must find an urgent solution because the energy systems of dozens of countries are at risk.”

The European Commission condemned the cuts as “completely unacceptable”. In an unusually strongly worded statement, it demanded that Russia restore supplies “immediately”.

Russia ordered a reduction in gas flow to Europe via Ukraine on Monday, a measure it said was to stop its neighbour from stealing fuel. Ukraine said the move would jeopardise supplies to the rest of Europe, which is facing freezing temperatures.

Read moreRussia halts gas supplies to European countries

Israel rejects EU calls for ceasefire

Israel rebuffed a call from visiting European foreign ministers on Monday for an immediate ceasefire in its Gaza offensive, as troops engaged in their heaviest clashes with Hamas fighters and the civilian death toll mounted. At least 14 children were reported to have been killed.

Speaking after a meeting with a European Union delegation that included foreign ministers from the Czech Republic, France and Sweden, Tzipi Livni, the Israeli foreign minister, said: “A necessary war on terror does not end with an agreement. We don’t sign agreements with terror; we fight terror.”

Read moreIsrael rejects EU calls for ceasefire

Police set to step up hacking of home PCs

THE Home Office has quietly adopted a new plan to allow police across Britain routinely to hack into people’s personal computers without a warrant.

The move, which follows a decision by the European Union’s council of ministers in Brussels, has angered civil liberties groups and opposition MPs. They described it as a sinister extension of the surveillance state which drives “a coach and horses” through privacy laws.

The hacking is known as “remote searching”. It allows police or MI5 officers who may be hundreds of miles away to examine covertly the hard drive of someone’s PC at his home, office or hotel room.

Material gathered in this way includes the content of all e-mails, web-browsing habits and instant messaging.

Under the Brussels edict, police across the EU have been given the green light to expand the implementation of a rarely used power involving warrantless intrusive surveillance of private property. The strategy will allow French, German and other EU forces to ask British officers to hack into someone’s UK computer and pass over any material gleaned.

Read morePolice set to step up hacking of home PCs