The € EURO thread

[Toro]

The ECB will keep on taking sovereignty in exchange for bailouts. After-wards the ECB will be dictator over said state's taxes & budget. After they will not be able to afford to raise an army or buy any weapons to fight each-other. They will all sit around & cry while sucking their thumbs.

How many army divisions does the ECB have?

If all the major players in the EU say '**** off' then the ECB cant do shit about it but cry.

And the Wermacht is now the Bundeswere and that is a sad thing to say if you like military shit.

When a country gives sovereignty to the ECB in return for a bailout then the ECB controls it's military, instead of that states government & it's the citizens. If all the countries of the Euro gives sovereignty to the ECB they will be left with nothing but rocks to fight eachother with & the ECB will have total military superiority.

"Give me control over a nation's currency and I care not who makes its laws." -- Baron M.A. Rothschild (1744 - 1812).

How does the ECB control Italy's military?

 

[KissMy]

Spain and Italy have ~€1,500,000,000,000 to refinance over the next two years. Where's it all going to come from?

They will have to sell their sovereignty to the ECB for a bailout.

 

[KissMy]

How does the ECB control Italy's military?

Read: My post here It was in response to Trajan's post here

Zero Hedge: Details Emerge About Spain's Cramming Down "Bailout" Loan - In return for subsidized rates, Spain will cede sovereignty over its financial system, but also lose tax sovereignty, contrary to what the Government said yesterday.

Reuters: Nicastro said Italy would not resist proposals for a political and banking union requiring nations to cede more sovereignty in order to stabilise the euro bloc. "Italy is more oriented to accept this passage. We see resistance from other countries and not necessarily only in Germany," he said.

 

[Wiseacre]

You have to ask yourself a question, if you're Germany or any other fiscally solvent country in Europe who is being asked to co-sign for massive loans to the prolifigate PIIGS countries who aren't really showing any indication of changing their ways. Governments in Spain, Italy, Portugal, Greece, etc., will agree to anything to get bailed out with someone else's money, but would they actually make the tough decisions necessary to regain fiscal control, and then follow through? Will the populations in those countries revolt at the spending reductions that would have to take place, and the changes in many of the social safety net programs that must be made?

Frankly, I don't think so. I think promises were made in good times that cannot be kept, one way or another changes will have to be made. Unpopular changes.

 

[KissMy]

You have to ask yourself a question, if you're Germany or any other fiscally solvent country in Europe who is being asked to co-sign for massive loans to the prolifigate PIIGS countries who aren't really showing any indication of changing their ways. Governments in Spain, Italy, Portugal, Greece, etc., will agree to anything to get bailed out with someone else's money, but would they actually make the tough decisions necessary to regain fiscal control, and then follow through? Will the populations in those countries revolt at the spending reductions that would have to take place, and the changes in many of the social safety net programs that must be made?

Frankly, I don't think so. I think promises were made in good times that cannot be kept, one way or another changes will have to be made. Unpopular changes.

Of course this stuff is not going to be popular. I bet the papers have already been drawn up for all these countries to give up their sovereignty but the leaders are just waiting until the majority is starring into the abyss & scared enough to allow their leaders to sign away their countries power to tax, borrow, spend & control their military. Italy will be the country that tips the scales.

 

[Trajan]

and this is what a skittish crowd looks like......the fuse is burning, will it be lit? *shrugs*


* Updated June 14, 2012, 3:12 p.m. ET

Ahead of Vote, Greeks Move Cash, Hire Guards

As Greece prepares for a weekend vote that could determine whether the country stays in Europe's common currency, many Greeks are gripped by uncertainty and taking measures large and small to prepare for what may come next.

"I don't know whom to trust or what to believe," said Ilias Daskalopoulos, a 28-year-old unemployed writer who earlier this year went to the bank and withdrew his entire life savings—a few thousand euros that he now keeps stashed in a secret hiding spot.

With the stakes so high, Mr. Daskalopoulos said, he is nervous about the outcome of Sunday's national elections, the second to be held since May. "The situation could be very precarious," he said.

Other Greeks are transferring money out of the country, hiring security guards, stocking up on groceries and keeping their cars' gas tanks full—measures of the anxiety many feel as the country's economy collapses and government institutions struggle to cope. Unemployment passed 22% in the first three months of the year, and crime rates are climbing.

The elections pit the left-wing Syriza party, which has pledged to annul Greece's bailout deal with the European Union and International Monetary Fund, against its conservative rival, New Democracy, which backs the rescue package.

Stern warnings from EU leaders that deviating from the strict—and widely unpopular—terms of Greece's loan agreements could force the country out of the euro zone have set voters on edge.

more at-

Ahead of Vote, Greeks Move Cash, Hire Guards - WSJ.com

honestly, I don't know if the left loses that will matter for long, they need another bailout now. If the left does win, my feeling is it will just speed things up.

I wonder who merkel is rotting for?seriously....

 

[KissMy]

Drachmageddon is upon them - It wont do Greece much good to switch to drachmas if everyone has already emptied all their bank accounts. They won't be able to confiscate any Euros to swap with drachmas. Greece should just default on it's creditors & suck it up for a few weeks as their defaults crumble the banking system.

 

[Toro]

You have to ask yourself a question, if you're Germany or any other fiscally solvent country in Europe who is being asked to co-sign for massive loans to the prolifigate PIIGS countries who aren't really showing any indication of changing their ways. Governments in Spain, Italy, Portugal, Greece, etc., will agree to anything to get bailed out with someone else's money, but would they actually make the tough decisions necessary to regain fiscal control, and then follow through? Will the populations in those countries revolt at the spending reductions that would have to take place, and the changes in many of the social safety net programs that must be made?

Frankly, I don't think so. I think promises were made in good times that cannot be kept, one way or another changes will have to be made. Unpopular changes.

Governments are cutting spending and implementing structural reforms. The question is whether it's enough and too late.

Germany is in a vice too. If they reject a bailout, they risk crashing their economy.

Unlike KissMy, I do not believe further integration will mean loss of military sovereignty. But we would most likely see more fiscal and banking integration.

 

[Toro]

Drachmageddon is upon them - It wont do Greece much good to switch to drachmas if everyone has already emptied all their bank accounts. They won't be able to confiscate any Euros to swap with drachmas. Greece should just default on it's creditors & suck it up for a few weeks as their defaults crumble the banking system.

The endgame is either the North subsidizing the Greeks (et al) permanently or a return to the drachma. Barring a miraculous spurt in Greek productivity, there is no other way. Any other option merely delays the inevitable.

I believe the Greeks will leave the euro, and probably other countries too. But it will survive thereafter.

 

[Trajan]

Drachmageddon is upon them - It wont do Greece much good to switch to drachmas if everyone has already emptied all their bank accounts. They won't be able to confiscate any Euros to swap with drachmas. Greece should just default on it's creditors & suck it up for a few weeks as their defaults crumble the banking system.

after they dump the euro, they will only choose the drachma becasue its better than barter, which they are and will do plenty of anyway.

saw that monti's union reforms got stepped on again, article 18 is killing the Italian economy, 24% of which is off the books anyway.

Oh, and they raised the vat last year and have another increase due this summer too.....for god sakes people it aint gonna matter, it will just increase the black economy more. get a clue, please.

 

[Trajan]

Drachmageddon is upon them - It wont do Greece much good to switch to drachmas if everyone has already emptied all their bank accounts. They won't be able to confiscate any Euros to swap with drachmas. Greece should just default on it's creditors & suck it up for a few weeks as their defaults crumble the banking system.

The endgame is either the North subsidizing the Greeks (et al) permanently or a return to the drachma. Barring a miraculous spurt in Greek productivity, there is no other way. Any other option merely delays the inevitable.

I believe the Greeks will leave the euro, and probably other countries too. But it will survive thereafter.

should it? I don't think so.

 

[KissMy]

Drachmageddon is upon them - It wont do Greece much good to switch to drachmas if everyone has already emptied all their bank accounts. They won't be able to confiscate any Euros to swap with drachmas. Greece should just default on it's creditors & suck it up for a few weeks as their defaults crumble the banking system.

The endgame is either the North subsidizing the Greeks (et al) permanently or a return to the drachma. Barring a miraculous spurt in Greek productivity, there is no other way. Any other option merely delays the inevitable.

I believe the Greeks will leave the euro, and probably other countries too. But it will survive thereafter.

The Euro will still fail because other countries will pull the same stunt as Greece. It's either a United States of Europe or a failed Euro.

 

[Trajan]

The impending Euro collapse is driving US Long bonds rates even lower. The yield for the 30 yr T-bond is down to 4.22 as of today.


PS- I was laughed at by Toro when I bought in Feb at 4.75. The fund has a duration of 20...do the math baby!!

the 10 year is just a Grecian or Spanish a hiccup away from sub 1% territory, is that simply unreal or what?

 

[Wiseacre]

You have to ask yourself a question, if you're Germany or any other fiscally solvent country in Europe who is being asked to co-sign for massive loans to the prolifigate PIIGS countries who aren't really showing any indication of changing their ways. Governments in Spain, Italy, Portugal, Greece, etc., will agree to anything to get bailed out with someone else's money, but would they actually make the tough decisions necessary to regain fiscal control, and then follow through? Will the populations in those countries revolt at the spending reductions that would have to take place, and the changes in many of the social safety net programs that must be made?

Frankly, I don't think so. I think promises were made in good times that cannot be kept, one way or another changes will have to be made. Unpopular changes.

Governments are cutting spending and implementing structural reforms. The question is whether it's enough and too late.

Germany is in a vice too. If they reject a bailout, they risk crashing their economy.

Unlike KissMy, I do not believe further integration will mean loss of military sovereignty. But we would most likely see more fiscal and banking integration.

Looks to me like Germany is risking a bad downturn either way. Until and unless those PIIGS countries show the willingness to put their fiscal house in order, not just the gov'ts but the people, then Germany and the other more solvent states are just throwing good money after bad.

Fiscal and banking integration means permanent bailouts. Everybody goes down the tubes then.

 

[Trajan]

You have to ask yourself a question, if you're Germany or any other fiscally solvent country in Europe who is being asked to co-sign for massive loans to the prolifigate PIIGS countries who aren't really showing any indication of changing their ways. Governments in Spain, Italy, Portugal, Greece, etc., will agree to anything to get bailed out with someone else's money, but would they actually make the tough decisions necessary to regain fiscal control, and then follow through? Will the populations in those countries revolt at the spending reductions that would have to take place, and the changes in many of the social safety net programs that must be made?

Frankly, I don't think so. I think promises were made in good times that cannot be kept, one way or another changes will have to be made. Unpopular changes.

Governments are cutting spending and implementing structural reforms. The question is whether it's enough and too late.

Germany is in a vice too. If they reject a bailout, they risk crashing their economy.

Unlike KissMy, I do not believe further integration will mean loss of military sovereignty. But we would most likely see more fiscal and banking integration.

Looks to me like Germany is risking a bad downturn either way. Until and unless those PIIGS countries show the willingness to put their fiscal house in order, not just the gov'ts but the people, then Germany and the other more solvent states are just throwing good money after bad.

Fiscal and banking integration means permanent bailouts. Everybody goes down the tubes then.

there needs to be a paradigm shift in thinking, and what the EU sees as a 'free market capitalism', apparently, Estonia for example gets it, they don't.

 

[JimBowie1958]

Drachmageddon is upon them - It wont do Greece much good to switch to drachmas if everyone has already emptied all their bank accounts. They won't be able to confiscate any Euros to swap with drachmas. Greece should just default on it's creditors & suck it up for a few weeks as their defaults crumble the banking system.

after they dump the euro, they will only choose the drachma becasue its better than barter, which they are and will do plenty of anyway.

What if the Greeks reissue Drachmas and back them with gold or a basket of precious metals?

What about letting private banks issue their own bearer notes to replace a national currency?

 

[Toro]

Drachmageddon is upon them - It wont do Greece much good to switch to drachmas if everyone has already emptied all their bank accounts. They won't be able to confiscate any Euros to swap with drachmas. Greece should just default on it's creditors & suck it up for a few weeks as their defaults crumble the banking system.

The endgame is either the North subsidizing the Greeks (et al) permanently or a return to the drachma. Barring a miraculous spurt in Greek productivity, there is no other way. Any other option merely delays the inevitable.

I believe the Greeks will leave the euro, and probably other countries too. But it will survive thereafter.

The Euro will still fail because other countries will pull the same stunt as Greece. It's either a United States of Europe or a failed Euro.

A currency union can exist if there is either labour mobility or transfer of funds between regions without fiscal integration. In fact, it may be preferable because fiscal union does not necessarily solve the structural imbalances between regions. If there isn't a mechanism which allows pressure to be alleviated in a hard hit area, the currency union will implode whether there is fiscal union or not.

 

[Toro]

The impending Euro collapse is driving US Long bonds rates even lower. The yield for the 30 yr T-bond is down to 4.22 as of today.


PS- I was laughed at by Toro when I bought in Feb at 4.75. The fund has a duration of 20...do the math baby!!

the 10 year is just a Grecian or Spanish a hiccup away from sub 1% territory, is that simply unreal or what?

I recall giving props to Zander for buying Tbonds at some time but I don't remember razzing him this year. I remember doing so some time ago, but maybe I'm wrong.

I'm sitting in 90% cash right now. The problem with the Tbond, though, is that people view it as safe, but if you think through the logical endgame if we don't get our fiscal house in order, those holding Tbonds will be in for a very big surprise.

I've started picking away at high yielding, high quality stocks though. I've purchased JNJ recently, and have buy triggers on companies such as CAG, PG, KFT, K, HNZ etc. A 4% dividend yield + 3-5% growth will beat the 10 year over the next decade in almost any scenario. CSCO trades at 4.25x EV/EBITDA. That's ******* crazy.

 

[KissMy]

The endgame is either the North subsidizing the Greeks (et al) permanently or a return to the drachma. Barring a miraculous spurt in Greek productivity, there is no other way. Any other option merely delays the inevitable.

I believe the Greeks will leave the euro, and probably other countries too. But it will survive thereafter.

The Euro will still fail because other countries will pull the same stunt as Greece. It's either a United States of Europe or a failed Euro.

A currency union can exist if there is either labour mobility or transfer of funds between regions without fiscal integration. In fact, it may be preferable because fiscal union does not necessarily solve the structural imbalances between regions. If there isn't a mechanism which allows pressure to be alleviated in a hard hit area, the currency union will implode whether there is fiscal union or not.

Without iron fist enforcement some countries will want to take as much as they can until they bring the system down. They may do it because they believe they are due reparations, corruption or just plain greed. They know they can walk just walk away from the steaming pile of shit they create.

All elected politicians aren't honest. It's a popularity contest. Some will stimulate the economy by hiding debt to become popular with their voodoo economics. This way it will explode on their successor making them look bad by comparison. This explosion screws all the countries in the currency union.

People are fools to trust in a system like that. Shared currency spreads risk like a MBS & makes a default systemic for a larger portion of the planet.

 

[JimBowie1958]

France is now junk bond status, no?

Egan Jones Cuts France To BBB+, Outlook Negative | ZeroHedge

Wont this cause some crap as hedge fund managers around the globe have to replace their colateral that was based on French sovereign bonds?

Man, this is something I couldnt have believed just ten years ago.

Edit: on second thought, once the WS rumor/spin machine is doen with it, I am sure it will be proven bullish no matter what.