Moody’s Cuts Greece’s Credit Rating Again

See also:

With $5 Trillion In US And European Funding Needs Over The Next 3 Years, How Long Until The Global Monetization Tsunami Hits (Again)?

Portugal: Only €4 Billion In Cash Vs €20 Billion In Bond Maturity And Deficit Ouflows In 2011

Spain Is Still The Elephant In The European Room!

Happy currency reform!

• Ratings agency warns of more cuts if Greece pulls back from reforms
• EU leaders fear offering bailout to Portugal will leave Spain exposed

Moody’s has angered the Greek government, including finance minister George Papaconstantinou, by slashing its credit rating to B1. Photograph: Louisa Gouliamaki/AFP

Portugal took a step nearer a humiliating multibillion-pound bailout by the European Union on Monday after Greece saw its credit rating slashed to a new low and speculation grew that eurozone leaders will fail this weekend to agree measures to prevent a repeat of last year’s sovereign debt crisis.

The ratings agency Moody’s cut Greece’s credit rating by three notches to B1, which analysts said was deep into “junk” territory, sending the cost of insuring the country’s debt soaring.

The downgrade, which was attacked as reckless and “completely unjustified” by the Greek government, highlighted the collapse in confidence among international investors who fear peripheral eurozone countries such as Greece, Portugal and Ireland cannot afford to repay their debts.

Greece, like Ireland, has already been forced to accept a rescue package put together by the EU and the International Monetary Fund. Portugal is widely regarded as the next country in need of a bailout as it struggles to refinance its debts while still in recession.

Read moreMoody’s Cuts Greece’s Credit Rating Again

Ireland: Fine Gael/Labour Coalition Government To Ditch Pledges On Economy – Voter Betrayal!

Bilderberg and non-executive Chairman of Goldman Sachs International (a registered UK broker-dealer, a subsidiary of Goldman Sachs) Peter Sutherland is doing an excellent job for the elitists!

They will brazenly follow Fianna Fail’s four-year austerity plan as Labour protects public sector

The Fine Gael/Labour coalition Government is to implement in detail the outgoing Government’s four-year austerity plan as approved by the EU-IMF, the Sunday Independent can reveal.

In what will amount to the most barefaced breach of election promises ever perpetrated by an incoming Government, the coalition partners’ programme for government will cause uproar when it is published today.

While an attempt will be made to dress up the programme as a new plan by a new Government, when it is analysed it will be seen for what it is — the continuation of the economic policies of Fianna Fail and the Greens, virtually in minute detail, as laid down by the EU-IMF.

Read moreIreland: Fine Gael/Labour Coalition Government To Ditch Pledges On Economy – Voter Betrayal!

Cloned Animals – Consumers Shall Have No Choice

Press Release

Christoph Then


EU Commissioner for Trade: Products from offspring of cloned animals already on the market

Munich, Bruxelles, 3 March 2011. A non-public EU Commission paper confirms that food from offsprings of cloned animals are already on the European market. The animals get into the market via the import of breeding material from the US. The EU Trade Commission argues that in future too these products should not be regulated, labelled or controlled for unexpected risks, because so far no systems have been established for registering the animals in exporting countries such as the US. If the EU Commission succeeds, consumers within the EU will not get any information about these products like milk and meat, despite a high level of consumer rejection of cloning of animals for food production.

“Products that are widely rejected on ethical concerns are to be disposed of via consumers. The EU Commissioner De Gucht is giving in without a fight to industrial agriculture lobbyists. This is astonishing since only very few companies are making profits from this highly controversial technology,” says Christoph Then at Testbiotech in Germany.

Read moreCloned Animals – Consumers Shall Have No Choice

Clone Food Could Be Sold Without Warning Labels

See also:

UK: Milk From Cloned Cows Given Green Light By Defra

Perfect pint? Currently it is illegal to sell milk and meat from cloned animals in the UK – a ruling that the European Commission wants to amend

Milk and meat from cloned animals’ offspring could soon be on sale without any warning labels, shoppers were warned last night.

The European Commission is threatening to force through the change – with the backing of the British Government.

The alarm was raised by the European consumer group, BEUC, whose director general, Monique Goyens, said: ‘Consumers must be able to know and choose what they eat.’

Currently, it is illegal to sell meat or milk from clone animals or their offspring in the UK. Anyone who wishes to do so would have to apply for permission from the Food Standards Agency. The European Commission takes the view that food from the offspring of clones should be allowed into the high street without any labels or the need for approval.

Read moreClone Food Could Be Sold Without Warning Labels

With $5 Trillion In US And European Funding Needs Over The Next 3 Years, How Long Until The Global Monetization Tsunami Hits (Again)?

While we have presented the below charts in the past in some form or another on various occasions, since everyone’s memory is at most 1 trading day strong these days, we are happy to recycle content while continuing to “surprise” our readers.

Below, we present the chart showing European maturities over the next three years. It should be sufficient to convince anyone that while the US needs ongoing QE to not only to keep stocks rising past May/June (Fed’s 3rd and only mandate) but to monetize trillions in gross debt issuance (without rates needing to surge to make up for demand shortfall as Bill Gross pointed out so well on Wednesday), Europe is in an even worse predicament.

European bank funding needs 2011-2014:

And Sovereign debt redemption schedule:

Source: Morgan Stanley

Among the Eurozone’s banks, there is roughly $2.4 trillion in funding requirements until 2014. And as our disclosure yesterday on the massive Irish capital shortfall notes, nobody has yet answered the question where all this funding will come from, short of the ECB pulling a Fed, and starting to monetize everything from the bottom of the capital structure upward in the primary markets instead of only through secondary market interventions.

Read moreWith $5 Trillion In US And European Funding Needs Over The Next 3 Years, How Long Until The Global Monetization Tsunami Hits (Again)?

Portugal: Only €4 Billion In Cash Vs €20 Billion In Bond Maturity And Deficit Outflows In 2011


Prof. Nouriel Roubini Tells Portugal To Seek Bailout, Spain ‘Too Big To Bail Out’:

Nouriel Roubini, the US economist, said Portugal should consider asking for a bailout before its financial plight worsens as the euro fell after the €85bn Ireland bailout failed to ease eurozone debt fears.

However, he said neighboring Spain, Europe’s fourth-largest economy, is “too big to bail out.”

It seems there is just one market which the Fed is either unable, or unwilling to manipulate: that of Portuguese (and generally peripheral European) debt. And for good reason.

As the WSJ reports, Portugal started the year with about €4 billion in cash:

“Fresh borrowing and other public transactions suggest Portugal has this year likely increased that number to around €4 billion. The official said in an email that the figure had risen but didn’t elaborate.”

There is one small problem: the country has a €4 billion outflow on April 15… and has to pay down €20 billion worth of debt maturities and budget deficits through the end of this year!

Where the country will get this money… nobody knows. Just BTFD. But not in Portuguese bonds. As the charts below show that is still the only asset that can’t find a greater idiot.

Portuguese CDS:

From the WSJ:

Portugal’s leaders have said repeatedly that they don’t need a bailout, and that a program of economic reform and austerity the country has embarked upon will convince financial markets to lend it what it needs. Portugal has been able to issue both long- and short-term debt this year, albeit at high interest rates.

Read morePortugal: Only €4 Billion In Cash Vs €20 Billion In Bond Maturity And Deficit Outflows In 2011

Spain Is Still The Elephant In The European Room!


Prof. Nouriel Roubini Tells Portugal To Seek Bailout, Spain ‘Too Big To Bail Out’:

Nouriel Roubini, the US economist, said Portugal should consider asking for a bailout before its financial plight worsens as the euro fell after the €85bn Ireland bailout failed to ease eurozone debt fears.

However, he said neighboring Spain, Europe’s fourth-largest economy, is “too big to bail out.”

Now that the world is focused on the ongoing turbulence in the Middle East, Europe gets a rest from the financial hit men.  While Europe ain’t the Middle East, there are lots of connections between the two continents.

Many countries within the European Union have citizens with Arabic roots and backgrounds, and the Islam is a second largest religion. And lets face it, a few hours in a jet airplane and most Europeans can enjoy the tropical climate of the Middle East region.

But there’s more, like the large trade and financial pacts between different Arabic and European nations. Take for instance the in ‘state-of-turmoil’ Libya, who holds large stakes in Italian blue-chip companies like banking giant UniCredit or defence company Finmeccanica. That makes Italy, already a EU member in financial chaos, a first potential victim of the unrest in the Middle East.

But if we dig deeper in the EU/Middle East web, then we see more potential trouble ahead. The immense trading hub between Morocco and France, or the Turkish ‘gateway’ for Eastern Europe. No wonder few pundits are sounding the alarm bells. But hey, that’s the world we live in nowadays, with everyday a potential to chaos.

If we take a step back, away from the heat, and have a look at the bigger picture for Europe, then the real problem and threat for Europe lies within Europe, namely Spain. Spain is for Europe what Florida is for the US: one gigantic foreclosure mess! And guess what, prices of Spanish homes are still dropping, just like oversees.

The latest official drop in house prices for Q1 ’11 was 3.5 percent, which is better – or less worse –  then 6.5 pc drop of last year, but still dramatic for one of the largest EU countries, with gigantic debt loads in the property market.

And there is more where that came from! Mark Stucklin of Spanish Property Insights touts the official housing numbers:

“As a result, prices have now fallen 13.1pc peak-to-present, and by as much as 20pc in popular tourist destinations like Alicante province (Costa Blanca), home to a large stock of holiday-homes.

The problem with the Government’s data is it tends to understate price falls, which have been more like 30pc or more (peak-to-present) in coastal regions like the Costa Blanca and the Costa del sol.”

We wouldn’t be surprised if a second leg down happens in Spanish property prices. The latest unemployment figures from the peripheral country are devastating. Last month (February ’11) the number of unemployed citizens in Spain stood at 4.3 million, more than 20 percent of the working class and above 40 percent among the youngster!

Read moreSpain Is Still The Elephant In The European Room!

US Launches New Missile Defense Program For Europe

The Russians got it right that the missile defense shield is aimed at them and not at Iran and respond accordingly:

Russia: Strongest Ever Nuke Warhead, Will Penetrate All Missile Defense Shields For the Next 40 Years

Russia Threatens NATO to Deploy ‘Offensive’ Nuclear Weapons:

The Russian president has called on NATO to clarify Moscow’s role in a European missile system, warning if no agreement is reached, Russia will be forced to deploy “offensive” nuclear weapons.

“So this is not a joking matter. We expect from our NATO partners a direct and unambiguous answer,” Dmitry Medvedev said during a meeting with Russia’s NATO envoy Dmitry Rogozin.

“In either case, we are either together with NATO, or we separately find an adequate response to the existing problem,” he said.

Under former US President George W. Bush the United States proposed a plan to deploy a missile system in Poland and the Czech Republic — a plan which was fiercely opposed to by Russia. Moscow said it would deem such a deployment a threat to its sovereignty and would properly respond to it.

Russia Develops New Intercontinental Ballistic Missile:

In comments to Russian news agency ITAR-TASS that went largely unnoticed, the head of Rosobshemash said the new missile would be capable of overcoming any nuclear missile shield that the Americans or indeed anyone else might build.

“This applies in the fullest sense to the USA’s anti-missile defence system and to Nato’s (planned) European missile defence system,” said Artur Usenkov.

Associated Press= WASHINGTON (AP) — The United States is sending a special radar-equipped warship to the Mediterranean Sea next week, the first step in the development of a broad anti-ballistic missile system to protect Europe against a potential Iranian nuclear threat, the Pentagon said Tuesday.

The move marks the first of the Obama administration’s four-phase plan to put land- and sea-based radars and interceptors in several European locations during the next decade.

Endorsed by NATO during a summit in Lisbon last year, the missile shield has triggered opposition from Russia and set off lengthy negotiations over the future expanded ability to shoot down ballistic missiles in the region.

John F. Plumb, principal director for Pentagon nuclear and missile defense policy, said Tuesday that the USS Monterey will leave Norfolk, Virginia, next week, heading to a six-month deployment in the Mediterranean. The ship’s mission, he said, will lay groundwork for the unfolding missile defense plan there.

“Here is our first concrete demonstration of our commitment to the missile defense of our deployed forces, allies and partners in Europe,” Plumb said in an interview. “We said we were going to do it, and now we’re doing it.”

Under the plan laid out by the Obama administration in 2009, the missile shield would begin with ship-based anti-missile interceptors and radars. Later this year, the United States plans to add land-based radars in southern Europe. Plumb said officials are still in discussions with several nations, but the exact location for those radars had not yet been determined.

In phase two, land-based interceptors would be deployed in Romania in 2015, followed by the placement of interceptors in Poland in 2018. Each phase calls for a more sophisticated and capable interceptor, culminating at the end of the decade with the deployment of the last version planned as of now.

Read moreUS Launches New Missile Defense Program For Europe

Marc Faber: ‘I Think We Are All Doomed’

Added: 24.02.2011

(Complete PDF transcript)

All who enjoy hearing a meaty Marc Faber fire and brimstone sermon, that cuts through the bullshit, will be happy to know that the Gloom, Boom and Doom author conducted a 40 minute interview with the McAlvany Financial Group, which covers all the usual suspects: gold, silver, precious and industrial metals, the “crack up boom”, the future of the Ponzi and capital markets in general and much more. Of course, it wouldn’t be a Faber interview without the requisite soundbite: “I think we are all doomed. I think what will happen is that we are in the midst of a kind of a crack-up boom that is not sustainable, that eventually the economy will deteriorate, that there will be more money-printing, and then you have inflation, and a poor economy, an extreme form of stagflation, and, eventually, in that situation, countries go to war, and, as a whole, derivatives, the market, and everything will collapse, and like a computer when it crashes, you will have to reboot it.” Of course, on a long enough timeline…

Key extract from the Faber speech:

Read moreMarc Faber: ‘I Think We Are All Doomed’

Stronger EURO, Weaker US Dollar Still in Play

Faros Trading – Stronger EURO, Weaker US Dollar Still in Play (King World News)


While this is a set-back to our stronger EUR/USD call, it by no means causes us to reverse it. Globally, Central Banks continue to sell the USD against the SDR currencies of Europe, the UK and Japan, with those of Australia and Canada gaining additional flows. This will not change. Nor will the considerable yield differential between US and European 2-year swap spreads, last quoted at 109 basis points in Europe’s favor. While Europe may be taking a step backwards, news of US Fiscal duress are beginning to come to the fore. As we discussed at the beginning of 2011, we expected discussion of the US States and Municipality fiscal situations would become more mainstream, and as we have witnessed over the past week, Wisconsin has leapt to the foreground. Wisconsin is not alone; and the coming US fiscal austerity, along with its resistance is likely to stir up resentment across the US.

From February 1st we have noted a number of times the switch in sentiment when it applies to the ‘flight to quality.’ While the market used to jump into the USD on any uncertain news, we have witnessed this has been replaced by flows into the EURO. This was most obvious on the news out of Egypt, as uncertainty was followed by moves higher in the EURO, the CHF and Gold, while market calm saw outflows from these products. This past week has seen further uncertainty in the Middle East with the market focussed on Bahrain and Libya. We now understand that Libya’s Qaddafi has left Libya for Venezuela. Uncertainty throughout this region is likely to be met by further USD selling and EURO buying. We continue to see a higher EUR/USD going forward.