The € EURO thread

[Zander]

The problems in Europe are helping, not hindering, the U.S economy -at least for now. The fact that the dollar is perceived as a safe haven acts as a sort of self-fulfilling prophesy. Investors flee the Euro and pile into US Dollars (mainly treasuries- which lowers interest rates). The Dollar then rises to reflect the increased demand. The increase validates the decision to buy in the first place, and attracts even more buyers looking to profit from its appreciation. It's a nice ride while it lasts.

But when reality rears its ugly head and the spell breaks, the reversal will be vicious.

 

[Wiseacre]

France and Austria down one notch, Italy and Spain down 2 notches. Italy is getting close to junk status for it's bonds, they and Spain are significant parts of the EU.

 

[JimBowie1958]

France and Austria down one notch, Italy and Spain down 2 notches. Italy is getting close to junk status for it's bonds, they and Spain are significant parts of the EU.

And as their interest rates go up in order to auction their bonds, the proportion of their budget required to pay interest on existing debt grows as well.

Which makes keeping ones obligations to honor ones debts that much harder.

 

[KissMy]

Nine Countries have been downgraded

Austria, France, Malta, Slovakia and Slovenia have all been cut by one-notch

Cyprus, Italy, Portugal and Spain have been cut by two notches.

Germany, the Netherlands, Belgium, Estonia, Finland, Ireland and Luxembourg have all seen their ratings affirmed.

5 Euro countries are rated as Junk Bond Status or worse.

- Austria cut by one notch to AA+ Outlook Negative
- Belgium keeps it's AA Outlook Negative
- Cyprus cut by two notches to BB+ Outlook Negative
- Estonia keeps it's AA- Outlook Negative
- France cut by one notch to AA+ Outlook Negative
- Finland keeps its AAA Outlook cut to Negative
- Germany keeps it's AAA Outlook Stable
- Greece keeps it's CCC Debt talks broke down between Greece and its creditors.
- Ireland keeps it's BBB+ Outlook Negative
- Italy cut by two notches to BBB+ Outlook Negative
- Luxembourg keeps it's AAA Outlook cut to Negative
- Malta cut by one notch to A- Outlook Negative
- Netherlands keeps it's AAA Outlook cut to Negative
- Portugal cut by two notches to BB Outlook Negative
- Spain cut by two notches to A Outlook Negative
- Slovakia cut by one notch to A Outlook Negative
- Slovenia cut by one notch to A+ Outlook Negative
- USA keeps it's AA+ Outlook Negative
- Canada keeps it's AAA Outlook Stable
- Mexico keeps it's BBB Outlook Stable

 

[Trajan]

France and Austria down one notch, Italy and Spain down 2 notches. Italy is getting close to junk status for it's bonds, they and Spain are significant parts of the EU.

Italy always was the one they were watching out for, and......spain? well, thats academic too.

what a riot, german parsimony doing what the Wehrmacht couldn't.

 

[JimBowie1958]

France and Austria down one notch, Italy and Spain down 2 notches. Italy is getting close to junk status for it's bonds, they and Spain are significant parts of the EU.

Italy always was the one they were watching out for, and......spain? well, thats academic too.

what a riot, german parsimony doing what the Wehrmacht couldn't.

Most often its easier to buy than to take by force.

 

[percysunshine]

"...- Slovenia cut by one notch to A+ Outlook Negative"

Holy shit! Even Slovenia has a better GPA than Obama.

 

[editec]

Its all FAKE debts, folks.

Seriously.

40 or 50 yearsw of Currency manipulation that gave every advantage to the BANSTERS.

Now these parsites have sucked the lifeblood out of nations for so long that the victims can no longer sustain the drain on the systems.

They will attempt to keep up the illusion of business as usual, they will suck the marrow out of the bones of nations and call it creative capitalism.

What it really is, folks, is a very long CON that is reaching its END GAME.

 

[KissMy]

CNBC transcript:

LUCAS PAPADEMOS: Well, first of all, let me say that over the past few weeks, substantial progress has been made towards reaching an agreement between creditors and Greece. The process itself is not straightforward, because, as you know, it involves a 50% haircut in the nominal value of Greek public debt held by private investors.

How the hell does Greece keeps it's CCC Debt Rating when it is defaulting on 50% of their debt. Their rating should be a C highly vulnerable or D for default. Greece has even admitted there will be a credit event.

 

[editec]

Wonder when we'll finally have to call this Monopoly game done and turn all our money and deeds back into the bank.

Won't be long, now, I suspect.​

 

[KissMy]

Wonder when we'll finally have to call this Monopoly game done and turn all our money and deeds back into the bank.

Won't be long, now, I suspect.​

They may string the Euro for a few years & the US dollar along for 6 years.

 

[Trajan]

they downgraded the EFSF....*shrugs* the message is they are using the lower tier nations to rate the entire block, which frankly is the only way to go. Its a house of cards.

 

[Toro]

The ECB has essentially implemented QE through the back door by providing liquidity for a year in exchange for shitty collateral.

The euro will continue to go down but some systematic risk has been taken off the table.

Greece will default, but does anyone care anymore? Who doesn't know that?

 

[Wiseacre]

I'm guessing they'll crank up the ole printing press and monetize the debt. Won't work, but it'll delay the inevitable awhile longer.

 

[Wiseacre]

The ECB has essentially implemented QE through the back door by providing liquidity for a year in exchange for shitty collateral.

The euro will continue to go down but some systematic risk has been taken off the table.

Greece will default, but does anyone care anymore? Who doesn't know that?

Yeah, but isn't it the presidence that is set that make's it a big deal? How do you trust the banks in any other country, particularly if that country has big debt?

 

[Toro]

The ECB has essentially implemented QE through the back door by providing liquidity for a year in exchange for shitty collateral.

The euro will continue to go down but some systematic risk has been taken off the table.

Greece will default, but does anyone care anymore? Who doesn't know that?

Yeah, but isn't it the presidence that is set that make's it a big deal? How do you trust the banks in any other country, particularly if that country has big debt?

I don't trust the banks in those countries. In the long-run, without major structural reform, the eurozone is dead. But in the near-term, the ECB may have found a way to monetize the PIIGS's debt, which takes near-term liquidity concerns off the table. Thus, the bias would be for a lower euro and a higher stock market. And probably higher gold eventually too.

 

[Trajan]

The ECB has essentially implemented QE through the back door by providing liquidity for a year in exchange for shitty collateral.

The euro will continue to go down but some systematic risk has been taken off the table.

Greece will default, but does anyone care anymore? Who doesn't know that?

true but knowing and happening are 2 very different things amigo......when Greece defaults that opens the door for.....___________fill in the blank

 

[Trajan]

The ECB has essentially implemented QE through the back door by providing liquidity for a year in exchange for shitty collateral.

The euro will continue to go down but some systematic risk has been taken off the table.

Greece will default, but does anyone care anymore? Who doesn't know that?

Yeah, but isn't it the presidence that is set that make's it a big deal? How do you trust the banks in any other country, particularly if that country has big debt?

I don't trust the banks in those countries. In the long-run, without major structural reform, the eurozone is dead. But in the near-term, the ECB may have found a way to monetize the PIIGS's debt, which takes near-term liquidity concerns off the table. Thus, the bias would be for a lower euro and a higher stock market. And probably higher gold eventually too.

yea baby, I could put 2 more kids thru school on my gold wrangling, lets go for 3, I don't have 3 so I will happily pocket the proceeds.

 

[Trajan]

have to hand it to Brett, hes got way with metaphors....

* JANUARY 17, 2012

What Is Europe Sinking About?
The shipwreck of a cruise liner is a metaphor for a continent.

The Lord works in mysterious ways, or so it is often said. But in an era when few can read His signs, those signs have a way of becoming a bit more obvious. Like 45-10. Or how about another Titanic-type event, right on the eve of the 100th anniversary of the first one, as a way of prefiguring some great European disaster?

OK, probably better to leave Him out of it. But as metaphors go, Friday night's tragic-ridiculous shipwreck of a cruise liner off the Italian coast is an apt one for a continent in which nine countries had their credit ratings downgraded earlier that same day. Even the biggest ship can founder in calm waters if the captain is negligent. Even a rescue operation 50 feet from shore can turn into a fiasco if nobody has conducted a drill and the crew have no idea how to steer a lifeboat.

When the hors d'oeuvres are listing hard to starboard and the waiters tell you nothing's wrong, something's terribly wrong.

That last detail—from passenger accounts of the accident—reminded me of listening to European Council President Herman Van Rompuy in New York last fall, explaining that Greece would never default, that the euro zone's financial position was not a serious cause for alarm, and that the main thing was to prevent further outbursts of market irrationalism. In other words, it wasn't the ship that was sinking, in Mr. Van Rompuy's view, it was just that the passengers had an odd way of occasionally going berserk.


more at-
Stephens: What Is Europe Sinking About? - WSJ.com


I love that last sentence I bolded.....exactly. You see, its everyone else who is crazy, I am fine

 

[Wiseacre]

You have to wonder what the Germans are thinking these days. It's not like their economy is going all that good right now, they're an export-driven country and nobody else is going to be buying much for awhile. And everyone else in the EC wants them to pony up a lot more money? What'll they do if the ECB starts printing gobs of more euros; I'm sure they are well aware of the Weimar Republic catastrophe and what that lead to.