Europe

Spain: Unprecedented Surge In Corporate Bankruptcies (Chart)

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– Spain’s Hell Is A Bankruptcy Lawyer’s Heaven (ZeroHedge, Sep 5, 2012):

You’ve seen Spanish youth unemployment rates soaring; been brow-beaten with data on the dramatic rise and acceleration of Spanish bank non-performing loans; and the rate of Spanish capital outflows chart is now ubiquitous; but where there is pain, there is also pleasure. As we are always looking on the bright-side and trying to find a silver-lining, Michael Cembalest provides just such a chart. To wit, the unprecedented surge in corporate bankruptcies in Spain; without question, a boon for the bankruptcy-lawyer industry and perhaps just the economic boost the country needs. Tongue-out-of-cheek, this is just a disastrous chart of reality on the ground.

BILDERBERG MERKEL TELLS LAWMAKERS SHE OPPOSES UNLIMITED ECB BOND PURCHASES, CAN ACCEPT TEMPORARY ECB BOND BUYING & ECB BOND BUYING OF SHORT MATURITIES

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– European Credit Buying The Rumor; European Stocks Not So Much (ZeroHedge, Sep 5, 2012)

…

The world, it seems, has no idea what is going on once again… and then Merkel adds this:

  • *MERKEL TELLS LAWMAKERS SHE OPPOSES UNLIMITED ECB BOND PURCHASES
  • *MERKEL CAN ACCEPT TEMPORARY ECB BOND BUYING, BARTHLE SAYS
  • *MERKEL CAN ACCEPT ECB BOND BUYING OF SHORT MATURITIES: BARTHLE

…

If You Do Not Prepare For The Coming Economic Collapse …

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– Some Of The Really Bad Things That Could Happen If You Do Not Prepare For The Coming Economic Collapse (Economic Collapse, Sep 4, 2012):

Most people just assume that since things have always been a certain way that they will always be that way in the future.  Most people just have blind faith that the people running our government and our financial system know exactly what they are doing and that they are doing their best to take care of us.  In fact, once upon a time I was fully convinced of that.  When I was a kid I quickly realized that my elementary school teachers really didn’t have the answers, but I had total faith that those running society at the highest levels were “experts” that were looking out for our best interests.  As time went on I kept progressing in my education, and by the time I was finished with law school I came to understand that none of our “experts” really know what they are doing, and they are definitely not looking out for our best interests.  The blind are leading the blind and we all need to finally admit that the emperor is not wearing any clothes.  Unfortunately, most Americans will repeat the mantra of “if that was true I would have heard about it on the news” until it is way too late.  Most people are waiting for the “authorities” to tell them what to do instead of thinking for themselves.  Sadly, time is rapidly running out and a lot of people are going to end up getting totally blindsided by what is coming.The man in charge of our financial system, Federal Reserve Chairman Ben Bernanke, is not going to save our economy.  He didn’t see the last financial crisis coming, and even after things started falling apart he continued to insist that housing prices would not go down and that we would not have a recession.

Well, it turned out that we had the worst housing crash and the worst recession since the Great Depression of the 1930s.

But still millions of Americans are trusting him to save us this time around.

It isn’t going to happen.

Read moreIf You Do Not Prepare For The Coming Economic Collapse …

German 10 Year Bond Auction Suffers Technical Failure

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– German 10 Year Bond Auction Suffers Technical Failure (ZeroHedge, Sep 5, 2012):

This morning, Germany attempted to sell €5 billion in 1.5% 10 Year bonds. It sold just €3.61 billion directly to investors (who had submitted a less than auction clearing €3.91 billion in bids), forcing the German Treasury to retain 27.8% of the auction, €1.39 billion: the highest retained amount since November 2011 when it was 39%. For one reason or another: the yield was too low at 1.42% (compared to the 1.634 average), there was much more supply elsewhere, fears of what the ECB will do tomorrow, or who knows – the real bid to cover was a paltry 0.79 (all in BTC 1.09 including government retention) compared to 1.57 at the last auction and a 1.31 average at the past 4 auctions. In other words the auction was for all technical reasons, a failure, and only the second such “failure” of 2012. The immediate reaction was Bund futures down 22 ticks at 143.28 vs 143.70 before auction as the market digested the surprising disappointment, with the German 10-year government bond yield up 2.4 basis points at 1.41 percent vs 1.37 percent before auction. In summary, if the Germans needed any more reasons that funding the insolvent Eurozone at all costs up to an including debt monetizations, which may result in failed bond auctions for German itself, are not in their best interest, they just got one. The good news: in an email sent out immediately by the German Finance agency, the bond sale was “not a risk to the budget.” Wouldn’t want a failed bond auction to jeopardize the budget now.

From Reuters:

“The figures once again show that the market environment is very volatile and is holding back on purchases given upcoming decisions,” the German finance agency said, referring to a pending interest rate decision from the ECB due on Thursday.

Read moreGerman 10 Year Bond Auction Suffers Technical Failure

The German Economy Tanks, The ECB Throws Gasoline On The Fire, And Eurozone Bailouts Enter Phantasy Land

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– The German Economy Tanks, The ECB Throws Gasoline On The Fire, And Eurozone Bailouts Enter Phantasy Land (ZeroHedge, Sep 4, 2012):

Slovenia joined the Eurozone in 2007, went on a borrowing binge that blind bond buyers eagerly made possible, dousing some of its two million people with riches, creating a real estate bubble that has since burst, and driving up its external debt by 110%. And in October, it may go bankrupt, admitted Prime Minister Janez Jansa. Because borrowing binges can last only so long if you can’t print your own money. The sixth Eurozone country, of seventeen, to need a bailout. But it’s just a speck, compared to Spain, which will strain the bailout funds, and Italy, which is too large to get bailed out. The other option is the European Central Bank. Its printing press—the one it is not supposed to have—could easily bail out the once blind but now seeing bondholders. As in all bailouts, workers and taxpayers would get a haircut. And in Germany, the debate itself may tear up the Eurozone—just as its economy is tanking.

New car sales in Germany had been holding up well through June—a miracle in face of the fiasco playing out in the Eurozone’s auto industry. But they caved in July; and instead of miraculously recovering in August, they caved again: down 4.7% from August 2011 and down 8.6% from July. Ominously, sales of medium-heavy and heavy trucks, a thermometer of the business investment climate, fell off a cliff: -18.8% for trucks over 12 metric tons, -15.1% for trucks over 20 tons, and -9.4% for tractors (now down 5% for the year!).

Read moreThe German Economy Tanks, The ECB Throws Gasoline On The Fire, And Eurozone Bailouts Enter Phantasy Land

18 Indications That Europe Has Become An Economic Black Hole Which Is Going To Suck The Life Out Of The Global Economy

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– 18 Indications That Europe Has Become An Economic Black Hole Which Is Going To Suck The Life Out Of The Global Economy (Economic Collapse, Sep 3, 2012):

Summer vacation is over and things are about to get very interesting in Europe.  Most Americans don’t realize this, but much of Europe shuts down for the entire month of August.  I wish we had something similar in the United States.  But now millions of Europeans are returning from their extended family vacations and the fun is about to begin.  During August economic conditions continued to degenerate in Europe, but I figured that it wouldn’t be until after August that the European debt crisis would take center stage once again.  And as I wrote about last week, if there is going to be a financial panic, it typically happens in the fall.  The stock market has seen quite a nice rally over the summer, and many investors are nervous that we could see a significant “correction” very soon.  The month of September has been the absolute worst month for stock performance over the past 50 years, and it has also been the absolute worst month for stock performance over the past 100 years as well.  Of course that does not guarantee that anything is going to happen this year.  But things in Europe continue to get worse.  Unemployment rates are spiking, manufacturing activity is slowing down, housing prices are crashing and major financial institutions are failing.  What is happening in Europe right now appears to be an even worse version of what happened to the United States back in 2008.

Read more18 Indications That Europe Has Become An Economic Black Hole Which Is Going To Suck The Life Out Of The Global Economy

Fears Rising, Spaniards Pull Out Their Cash And Get Out of Spain (New York Times, Sep 3, 2012)

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– Fears Rising, Spaniards Pull Out Their Cash and Get Out of Spain (New York Times, Sep 3, 2012):

LONDON — It is, Julio Vildosola concedes, a very big bet.

After working six years as a senior executive for a multinational payroll-processing company in Barcelona, Spain, Mr. Vildosola is cutting his professional and financial ties with his troubled homeland. He has moved his family to a village near Cambridge, England, where he will take the reins at a small software company, and he has transferred his savings from Spanish banks to British banks.

“The macro situation in Spain is getting worse and worse,” Mr. Vildosola, 38, said last week just hours before boarding a plane to London with his wife and two small children. “There is just too much risk. Spain is going to be next after Greece, and I just don’t want to end up holding devalued pesetas.”

Mr. Vildosola is among many who worry that Spain’s economic tailspin could eventually force the country’s withdrawal from the euro and a return to its former currency, the peseta. That dire outcome is still considered a long shot, even if Spain might eventually require a Greek-style bailout. But there is no doubt that many of those in a position to do so are taking their money — and in some cases themselves — out of Spain.

In July, Spaniards withdrew a record 75 billion euros, or $94 billion, from their banks — an amount equal to 7 percent of the country’s overall economic output — as doubts grew about the durability of Spain’s financial system.

Read moreFears Rising, Spaniards Pull Out Their Cash And Get Out of Spain (New York Times, Sep 3, 2012)

Spain Is Running Out Of Cash

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– Is Spain Running Out Of Cash? (ZeroHedge, Sep 3, 2012):

Some hours ago Spain finally bit the bullet, and after months of waffling had no choice but to hand over €4.5 billion (the first of many such cash rescues) in the form of a bridge loan to insolvent Bankia, which last week reported staggering losses (translation: huge deposit outflows which have made the fudging of its balance sheet impossible). As a reminder, in June Spain formally announced it would request up to €100 billion in bailout cash for its insolvent banking system, which subsequently was determined would come from the bank rescue fund, the Frob, which in turn would be funded with ESM debt which subordinates regular Spanish bonds, promises to the contrary by all politicians (whose job is to lie when it becomes serious) notwithstanding. And while Rajoy has promised that the whole €100 billion will not be used, the truth is that considering the soaring level of nonperforming loans in Spain – the biggest drain of both bank capital and liquidity – it is guaranteed that the final funding need for Spain’s banks will be far greater. As a further reminder, Deutsche Bank calculated that when (not if) the recap amount hits €120 billion, Spanish total debt/GDP would soar to 97% in 2014 from an official number of 68.5% in 2011 (luckily the endspiel will come far sooner than that). But all of that is well-known, and what we wanted to focus on instead was the fact that bank bailout notwithstanding, Spain will have no choice but to demand a full blown rescue within a few short months for one simple reason: its cash will run out.

Read moreSpain Is Running Out Of Cash

Overnight Sentiment: Hoping There Is Hope

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The truth Mr. Schäuble is that …

– The ESM Violates The Law And EU Treaties (Welt, Sep 4, 2012)

–  Overnight Sentiment: Hoping There Is Hope (ZeroHedge, Sep 4, 2012):

Yesterday we dedicated significant space to the most recent piece of perfectly ludicrous propaganda out of the ECB, namely that monetizing debt with a maturity up to three years is not really monetization but is instead within the arena of “money market management” (images of Todd Akin defining when something is ‘legitimate’ and when it isn’t swimming our heads). The implication of course is that debt under 3 years is not really debt, but some mystical piece of paper that nobody should be held accountable for. Hopefully all those consumers who have short-maturity credit card debt which nonetheless yields 29.95% APR are made aware of this distinction and decide to follow through with Mario Draghi’s logic, which is about to take the war of words between Germany and the ECB to the next level. Sure enough, this is precisely the news item that is dominating bond risk markets this morning, if not so much futures, and sending Spanish and Italian 2s10s spreads to record wides on hopes Draghi will definitely announce some sub 3 year monetization program for the PIIGS. Bloomberg summarized this best last night when it commented on the move in the EURUSD, since retraced, that we now have speculation Draghi’s move will bolster confidence.  In other words: the market is now hoping there is hope. Sure enough, even if Draghi follows through, for the ECB to monetize Spanish bonds, Spain still has to demand a bailout, which however is now absolutely out of the question as mere jawboning has moved the entire highly illiquid curve so steep Rajoy (and Monti) have absolutely no reason to hand over their resignations (i.e., request a bailout). And so we go back to square one. But logic no longer matters in these markets.

Read moreOvernight Sentiment: Hoping There Is Hope

The ESM Violates The Law And EU Treaties (Welt, Sep 4, 2012)

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Google translation here: The ESM Violates the Law And EU Treaties (Welt, Sep 4, 2012):

The Federal Constitutional Court rules on 12. September on the constitutionality of the European Stability Mechanism (ESM) . The European Court verifies that violates the euro bailout of EU law. The Constitutional Court has already made clear that a new Euro Treaty and further financial support to weaker euro-zone countries do not cancel the Budget Law of the Federal Parliament must.

The ESM can buy directly from euro zone countries to provide them with government bonds or loans. This allowed the ECB officially not the EU Treaty. However, it emphasizes the federal government sees the ESM prior to a cap of 700 billion euros and limited the German share of it applies to “only” 190 billion euros. Apparently reading the Parties from politicians not or do not understand the details. The ESM is clearly illegal.

Original article here: ESM verstößt gegen Gesetz und EU-Verträge (Welt, Sep 4, 2012):

Das Bundesverfassungsgericht urteilt am 12. September über die Verfassungsmäßigkeit des Europäischen Stabilitätsmechanismus (ESM). Auch der Europäische Gerichtshof prüft, ob der Euro-Rettungsschirm gegen EU-Recht verstößt. Das Verfassungsgericht hat bereits klargestellt, dass ein neuer Euro-Vertrag und weitere finanzielle Unterstützung für schwächere Euro-Staaten das Budgetrecht des Bundestages nicht aufheben dürfen.

Der ESM darf direkt von Euro-Zone-Staaten Staatsanleihen aufkaufen oder diesen Kredite gewähren. Dies darf die EZB laut EU-Vertrag offiziell nicht. Allerdings, so betont die Bundesregierung, sieht der ESM eine Haftungsobergrenze von 700 Milliarden Euro vor und begrenzt den deutschen Anteil daran eindeutig auf “nur” 190 Milliarden Euro. Offenbar lasen die Politiker den Vertag nicht oder sie verstehen dessen Details nicht. Der ESM ist eindeutig rechtswidrig.

Caption Contest: Defining ‘Legitimate Monetization’

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– Caption Contest: Defining “Legitimate Monetization”

The legitimacy of vulgar acts has been making headlines recently and so this morning’s rumors of Mario Draghi’s insistence to the European parliament that direct ECB buying three-year sovereign bonds is not ‘monetary’ state-financing got us thinking – just what is ‘legitimate monetization’ or perhaps “It’s not monetization if…”

or perhaps – George Costanza is on to something:


YouTube

EU’s Poorest Member Country Smacks Down Euro As Bulgaria Refuses To Join Eurozone

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– EU’s Poorest Member Country Smacks Down Euro As Bulgaria Refuses To Join Eurozone (ZeroHedge, Sep 3, 2012):

If one needs a shining example of why the days of Europe’s artificial currency are numbered, look no further than the EU’s poorest country which moments ago said “Ne Mersi” to the Eurozone and the European currency. From the WSJ: “Bulgaria, the European Union’s poorest member state and a rare fiscal bright spot for the bloc, has indefinitely frozen long-held plans to adopt the single currency, marking the latest fiscally prudent country to cool its enthusiasm for the embattled currency. Speaking in interviews in Sofia, Prime Minister Boyko Borisov and Finance Minister Simeon Djankov said that the decision to shelve plans to join the currency area, a longtime strategic aim of successive governments in the former communist state, came in response to deteriorating economic conditions and rising uncertainty over the prospects of the bloc, alongside a decisive shift of public opinion in Bulgaria, which is entering its third year of an austerity program. “The momentum has shifted in our thinking and among the public…Right now, I don’t see any benefits of entering the euro zone, only costs,” Mr. Djankov said. “The public rightly wants to know who would we have to bailout when we join? It’s too risky for us and it’s also not certain what the rules are and what are they likely to be in one year or two.“

When a parasitic technocrat asks to shake your hand, you refuse:

Of course, Bulgaria is right: at this point the only “upside” to new EMU entrants is for the unelected Brussels technocrats, who are now the butt of every possible joke, to demand said countries hand over their middle class’ wealth in order to bailout Greece, Portugal, Ireland, Spain, Italy and all the rest of the “wealthy and developed.” And since. in trader jargon, by not being “long” the euro, Bulgaria is effectively “short” it, expect to hear some rather disparaging statements emanating out of Europe’s insolvent core vis-a-vis the poor nation shortly.

From the WSJ:

Prime Minister Boyko Borisov said concerns had been heightened by growing disputes between policy makers, some of whom back Germany’s call to give priority to fiscal discipline over growth, while others want a more expansionary policy.

Read moreEU’s Poorest Member Country Smacks Down Euro As Bulgaria Refuses To Join Eurozone

Socialist Lampoon’s European Vacation Is Over As Merkel Calls To Order

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– Socialist Lampoon’s European Vacation Is Over As Merkel Calls To Order (ZeroHedge, Sep 3, 2012):

Ahead of this week’s ‘critical’ game-changing events – or not – it seems Europe’s true overlord-ess is back, and now, tanned and relaxed, she is making clear that nothing about her (or her country’s) view of the world has changed – no matter how much Draghi, Monti, Hollande, Rajoy or Samaras jawbone about it. It would seem by her words that expectations are being set and conditionality remains key – which means no matter what the ECB does – it is a can-kick no nearer an end-solution; and the market in its wisdom will price through that can-kick (after knee-jerking first of course): (via Bloomberg)

  • *MERKEL SAYS `DEBT MEANS DEPENDENCY’
  • *MERKEL SAYS EU MUST ENSURE THAT IT FIRST EARNS WHAT IT SPENDS
  • *MERKEL SAYS `ECONOMY THERE FOR PEOPLE, NOT PEOPLE FOR ECONOMY’
  • *MERKEL SAYS EUROPE HAS TO LEARN TO ONLY SPEND WHAT IT TAKES IN
  • *MERKEL SAYS TOO MANY IN EUROPE HAVE LIVED BEYOND THEIR MEANS
  • *MERKEL ‘ABSOLUTELY CONFIDENCE’ ECB TO WORK WITHIN ITS MANDATE

Carpe Diem, Quam Minimum Credula Postero

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– Carpe Diem, Quam Minimum Credula Postero (ZeroHedge, Sep 3, 2012):

Via Mark J. Grant, author of Out of the Box,(Latin)

“Seize the day, put no trust in tomorrow.”

Tomorrow, September 4, 2012 will be a defining moment. Mr. Draghi will release to the European Central Banks his plan to save the Continent. The plan will get leaked, no doubt, and the consternation will begin throughout Europe. Today the German Economy Minister went public and announced that he supports Weidmann, the head of the German Central Bank, in his opposition to the European Central Bank’s plans to buy debt of Eurozone countries with high borrowing costs, saying that they could not replace economic reforms. I think we may all read this as Frau Merkel’s position as well as Herr Roesler does not speak without approval. The stage is now set for battle.

“A good soldier in an enemy’s country should everywhere and at all times be on the alert. It has been one of the rules of my life, and if I have lived to wear grey hairs it is because I have observed it.”

-Sir Arthur Conan Doyle, The Adventures of Gerard

Spain wants the ECB to buy their debt without limit. France, Greece, Portugal, Italy and Cypress are lined up with Spain. The “have nots” are demanding divine intervention; the “haves” are not willing to tithe or to provide the necessary “indulgence” to send Madrid into Heaven. It is not the Barbarians but Martin Luther at the gate and I expect rancor and the spitting of Hell-fire. The Draghi plan, whatever it is going to be, will cause a very serious division of the faithful in Europe and I expect quite a fight. Spain and perhaps Italy are waiting on the plan before lining up for hand-outs and the trouble in Europe keeps escalating. Over the weekend the largest mortgage lender in France had to be bailed out and I expect the cost to be between $40-50 billion. In Spain Bankia had to be rescued and besides the initial payment of $5-6 billion you may expect a $30-40 billion injection required. In Italy the oldest bank in the world, Monte Paschi, turned to the nation to get bailed out in the last few days. The events may be isolated but a pattern is beginning to develop and the amount of money required will send shell-shocks through the national budgets of a number of countries in Europe.

“Once more unto the breach, dear friends, once more…”

-William Shakespeare, Henry V

The Battle Of Frankfurt

Read moreCarpe Diem, Quam Minimum Credula Postero

Italy: World’s Oldest Bank Faces Uncertain Future

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– In Italy, world’s oldest bank faces uncertain future (Washington Post, Sep 1, 2012):

SIENA, Italy — Tucked away in this Tuscan city, the oldest bank in the world has survived the Borgias, pestilence and too many wars to count. Now, a mundane foe has proved far more dangerous: Italian government debt.

The 540-year-old Monte dei Paschi Bank, Italy’s third-largest, is on the ropes as it struggles to deal with holdings of Italian bonds, once considered a prudent place to tuck cash.

The euro crisis upset that calculation. Across Europe, banks are confronting the same problem as seemingly safe bets that governments would repay their debts turned out to have been major gambles.

Read moreItaly: World’s Oldest Bank Faces Uncertain Future

Global Manufacturing Update Indicates 80% Of The World Is Now In Contraction

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– Global Manufacturing Update Indicates 80% Of The World Is Now In Contraction (ZeroHedge, Sep 3, 2012):

With the US closed today, the rest of the world is enjoying a moderate rise in risk for the same old irrational reason we have all grown to loathe in the New Normal: expectations of more easing, or “bad news if great news”, this time from China, which over the weekend reported the first official sub-50 PMI print declining from the magical 50.1 to 49.2, as now even the official RAND() Chinese data has joined the HSBC PMI indicator in the contraction space for the first time since November. Sadly, following today’s manufacturing PMI update, we find that the rest of the world is not doing any better, and in fact of the 22 countries we track, 80% are now in contraction territory. True, Europe did experience a modest bounce from multi-month lows of 44 in July to 45.1 in August (below expectations of 45.3), but this is merely a dead cat bounce, not the first, and certainly not the last, just like the US housing, and now that China is officially in the red, expect the next shoe to drop in Europe. Also expect global GDP to eventually succumb to the manufacturing challenges faced by virtually every country in the world, and to post a negative print in the coming months.

And charted via MarkIt:

Read moreGlobal Manufacturing Update Indicates 80% Of The World Is Now In Contraction

Spain: For Whom The Bell Now Tolls

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– Spain: For Whom The Bell Now Tolls (ZeroHedge, Sep 2, 2012):

Via Mark J. Grant, author of Out of the Box,“It is an old saying; the Devil lurks behind the cross. All is not gold that glitters. From the tail of the plough, Bamba was made King of Spain; and from his silks and riches was Rodrigo cast to be devoured by the snakes.”

-Miguel de Cervantes, Don Quixote

It was not so long ago that I spoke at the “Strategic Forum” which was sponsored in part by TD bank. After my presentation about Europe where I had stated, quite clearly, that Spain would hit the wall I found myself accosted by the economist of one of Spain’s major banks. Fortunately Craig Alexander, the senior economist at TD, was walking next to me and as the quite impolite lady from Spain tried to verbally incase me in the famous “iron lady” of the Spanish Inquisition he grabbed my arm and led me out to the patio to speak with some other people and so saved me from not only the diatribe of the loca senorita but from saying several impolite things which I was about to say in retort. As I consider the latest data about Spain I think of this incident and take some delight in saying, “I told you so” or other things inadmissible in my commentary.

To use the analogy offered by Senor Cervantes I would say that Rodrigo, as representing Spain, is about to be devoured by the snakes. The central bank of Spain just released the net capital outflow numbers and they are disastrous. During the month of June alone $70.90 billion left the Spanish banks and in July it was worse at $92.88 billion which is 4.7% of total bank deposits in Spain. For the first seven months of the year the outflow adds up to $368.80 billion or 17.7% of the total bank deposits of Spain and the trajectory of the outflow is increasing dramatically. Reality is reality and Spain is experiencing a full-fledged run on its banks whether anyone in Europe wants to admit it or not.

Read moreSpain: For Whom The Bell Now Tolls

Europe’s Scariest Chart … Got Scarier!

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– Europe’s Scariest Chart… Got Scarier (ZeroHedge, Aug 31, 2012):

While the general level of unemployment in Europe is rising in a scary enough way (more detail here), the one really concerning data point has gone from bad to worse. When we last looked at youth unemployment in Europe, things were stabilizing a little, though at extremely lofty levels. With the release of July’s data, the situation has deteriorated rapidly; Euro-Zone youth unemployment hs now ticked back up to its euro-era record-high of 22.6% (18-year highs). Only Portugal saw an improvement is the rate of unemployment among the Under-25 age group (from 37.6% to 36.4%) though it remains anarchically high. Italy was the hardest hit, back above 35% with its largest rise in youth joblessness in 5 months, Ireland rose back above 30% for its biggest rise in 11 months as France jumped to two-year highs and Spain and Greece are practically deadlocked with ~53% of their younger-generation out of work – new all-time records. Why do we worry? Why is this so scary? Two reasons – this and this.


Data: Bloomberg

Veterans Today’s Gordon Duff: NATO Secretly Authorizes Syrian Attack

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See also:

– The Truth About The Woman Who Stopped The 2007 Invasion Of Iran (Veterans Today)

– NATO secretly authorizes Syrian attack (PressTV, Aug 30, 2012):

On Monday, August 27, 2012, in a meeting in Brussels, NATO military leaders in consultation with “telephonic liaison” with officers of military forces in several former Soviet Republics, major African states, Israel, Saudi Arabia and the Persian Gulf states came to a combined decision to act against Syria.

Two issues were on the agenda:

1. How climate change in Greenland will effect geopolitics, immigration and military affairs for the EU

2. Syria and the potential for Russian and Chinese intervention.

3. Iran was not an official agenda item but it is an unspoken conclusion that, if China and/or Russia stand aside for interference by NATO in Syria’s internal affairs, this will be seen as an authorization for incursions into Iran, a systematic “Balkanization” based on a prescribed formula of “manufactured and simulated internal political and social strife.”

No announcement was made, no plans or timetable published, simply a vote on authorization of force which passed unanimously by member and included non-member states unanimously.

Read moreVeterans Today’s Gordon Duff: NATO Secretly Authorizes Syrian Attack

Time For Eurozone To Reach For The Gold Reserves?

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– Time for Eurozone to Reach for the Gold Reserves? (Financial Times, Aug 31, 2012):

Is it time for some eurozone governments to start selling that metaphorical family silver? Or, more specifically look at their all-too-real gold reserves, to find a solution to Europe’s crisis?

That is a question which has recently been buzzing around in some policy making and investing circles. For as autumn looms, it is clear that the eurozone remains under profound stress. However, it is also unclear whether the European Central Bank – let alone the eurozone politicians – will really be able to do anything soon to ease market fears and lower those borrowing costs.

Thus, as unease builds, the World Gold Council – or the body that represents the gold industry – has recently lobbed a new idea into the fray: it thinks it is time for eurozone governments to start using gold in a creative manner, particularly in places such as Italy, to cut those interest rates.

The issue at stake revolves around the estimated 10,000 tonnes of gold reserves that are currently held by eurozone governments. According to the Council, “it is well known that some of the countries most affected by the crisis, including Portugal and Italy, are responsible for a significant proportion of these assets.”

Unsurprisingly, this situation has prompted some to suggest that governments should sell some of that gold. The value of gold has soared in the last few years, and if there were ever a time that eurozone countries needed an unexpected windfall – say, to pay interest on bonds – it would be now.

But the Gold Council, for its part, insists this would be a mistake. For quite apart from the fact that a massive dump of gold would dampen the price, eurozone debt woes are now so large that gold sales would only scratch the surface of the problem. Or as it notes: “The gold holdings of the crisis-hit eurozone countries (Portugal, Spain, Greece, Ireland and Italy) represent only 3.3 per cent of the combined outstanding debt of their central governments.”

Read moreTime For Eurozone To Reach For The Gold Reserves?

The ‘Euphoric’ Economy And Why ‘They’ Didn’t See It Coming

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– The ‘Euphoric’ Economy And Why ‘They’ Didn’t See It Coming (ZeroHedge, Aug 28, 2012):

We are often asked for glossaries or background posts to help in the comprehension of how-we-got-here?, where-here-is?, and where-we-are-going? We hope that our posts, while diverse in nature, build upon one another and provide an educational platform for all levels of market/economy participant (active traders, passive investors, and working / non-working citizens alike) but as far as a succinct primer on how broken the status quo is and the ‘euphoric’ economy that very few could see through their Keynesian “debt doesn’t matter” blinders, Steve Keen’s introductory lecture at UWS is perhaps the most complete soup-to-nuts discussion we have seen recently. From the OECD’s total ignorance to Bernanke’s ‘Great Moderation’ miss; from economic ‘religion’ to science; and from Keynes to Minksy, Keen explains, in language even Chuck Schumer could understand, how more debt doesn’t solve too much debt, how stability breeds instability, and why the US won’t be finished deleveraging until 2025 (at this rate).

This brief lecture seems extremely apropos given we appear to be on the eve of yet another embarkation on the Keynesian ‘stimulate’ experiment – as everyone waits with baited breath for the next morsel of Fed/ECB/BoE/BoJ/PBOC juice…


YouTube

Given the Australian audience, and the purpose of the clip, there is some ‘selling’ of his University course but quite frankly, his discussion of the various ‘players’ in the field of economics over time provides not just a ‘reading’ program but critically the concept that economics is not in equilibrium but is dynamic – as if common sense hadn’t already persuaded you of this…