greece is pretty dumb man, without the bailout and declaring bankrupt...they are still in the same shit with govt cuts anyway
greece is pretty dumb man, without the bailout and declaring bankrupt...they are still in the same shit with govt cuts anyway
http://www.myfinances.co.uk/investme...into-recessionHolland and Italy, two of the Eurozone’s largest economies, have gone into recession, new figures show.
The economies of both countries suffered a second successive quarter of shrinkage, each contracting by 0.7 per cent during the last three months of 2011.
Germany’s economy also contracted in the fourth quarter, down 0.2 per cent from the previous quarter. This was the country’s first shrinkage since 2009.
Together, all 17 nations making up the Eurozone witnessed a 0.3 per cent contraction in the fourth quarter, but have managed to avoid a collective recession with growth of 0.1 per cent in the third quarter.
Read more: http://www.dailymail.co.uk/news/arti...#ixzz1mTRRO4ofA Spanish town is looking to the past to safeguard the future of its ailing economy by reintroducing the peseta.
Fed up with the failing euro, rebellious locals in Villamayor de Santiago have reverted to using the old currency, which was phased out a decade ago.
http://www.dailymail.co.uk/news/arti...#ixzz1mTRpag2uThe country introduced the peseta in 1868, joined the euro in December 2001 and phased out the old currency in February 2002.
However, unlike other euro countries such as France and Italy, it never set a deadline for exchanging pesetas into euros.
http://www.reuters.com/article/2012/...81E2I820120216(Moody's) said among 17 banks and securities firms with global capital markets operations, it might cut the long-term credit rating of UBS, Credit Suisse and Morgan Stanley by as much as three notches following the review. It said the guidance was indicative.
Among the banks that might be downgraded by two notches are Barclays, BNP Paribas, Credit Agricole, Deutsche Bank, HSBC Holdings, and Goldman Sachs.
Bank of America and Nomura were included in those that might be downgraded by one notch.
http://www.bbc.co.uk/news/world-europe-17127792The European Commission plans to suspend 495m euros (£417m; $655m) of Hungary's EU funds next year because of the country's budget deficit.
The penalty is "unprecedented" for an EU nation, said a statement from the commission - the EU's executive arm.
The sum represents 29% of Hungary's cohesion (development) fund allocation.
Last month the commission threatened Hungary with legal action over new laws said to restrict the independence of its central bank and courts.
Hungary has until 1 January next year to improve its budget finances - otherwise the EU funds will be frozen.
http://blogs.telegraph.co.uk/finance...erkels-europe/The Spanish rebellion has begun, sooner and more dramatically than I expected.
As many readers will already have seen, Premier Mariano Rajoy has refused point blank to comply with the austerity demands of the European Commission and the European Council (hijacked by Merkozy).
Taking what he called a "sovereign decision", he simply announced that he intends to ignore the EU deficit target of 4.4pc of GDP for this year, setting his own target of 5.8pc instead (down from 8.5pc in 2011).
En Ingles herr Winehole?
Seems to be a lot of trouble on the horizon for Eurozone?
well within the horizon of possibility, it would seem.
I don't really do predictions but anyone who reads enough news can tell the EU has rekindled nationalism and economic union prevents defaulters from devaluating the currency in one country. Germany loves the catbird seat but doesn't want to pay full price to sit there -- full price being picking up the tab for deadbeats....
a wave of sovereign defaults is possible...not inevitable, or even necessarily likely, but possible.
http://www.theglobeandmail.com/repor...rticle2391076/In March, a record 4.75 million Spaniards were unemployed, taking the jobless rate to 23.6 per cent, the highest in the 17-country euro zone. The youth unemployment rate is just above 50 per cent, also the zone’s highest. Both figures are greater than those of Greece, whose economy is in tatters after two bailouts and a sovereign default.
“Spain is in a critical situation,” Spanish budget minister Cristobal Montoro said Tuesday.
His warning came during a presentation in parliament of Madrid’s budget plan for 2012. Mr. Montoro said the country plans to raise €186.1-billion of gross debt this year, which translates into a net debt increase of €36.8-billion. Spain’s debt costs have been rising. For most of last year, its bond yields were well below Italy’s. Now the situation has reversed. Italy’s bond yields are fallen to about 5 per cent. Spain’s are at about 5.5 per cent, and rising.
Spain’s climbing debt and jobless rates, combined with its weak banking system and the overhang from an out-of-control construction spree that came to a sudden halt in 2008, leaving tens of thousands of apartments without owners or tenants, are reminders that the euro zone debt crisis is far from over. Spain, the zone’s fourth-largest economy, is back in recession and some economists and politicians fear it will require a bailout from the so-called troika – the European Commission, the IMF and the EuropeanCentralBank.
In late March, Citigroup chief economist Willem Buiter said in a research note, “Spain looks likely to enter some form of troika program this year, as a condition for further European Central Bank support for the Spanish sovereign and/or Spanish banks.”
Mr. Buiter, who is a former member of the Bank of England’s monetary policy committee, said Spain may lack the financial strength to recapitalize the domestic banks, which are still hurting from the housing collapse. Fresh data shows that toxic loans – bank loans that are at serious risk of default – have gone from 1 per cent of outstanding loans in 2008 to 7.6 per cent today. The value of potentially dud loans is €136-billion, equivalent to 13 per cent of Spanish GDP.
http://www.telegraph.co.uk/finance/f...t-spirals.htmlItaly's leading MIB index plunged 5pc and Spain's Ibex fell 3pc amid fears that the eurozone's third and fourth biggest economies were in the grip of a deadly and uncontrollable spiral of debt and recession.
The borrowing costs of both "sinner states" soared. The yield on Italy's benchmark 10-year bonds jumped to 5.7pc, heading into the danger zone that is considered unsustainably high. The equivalent Spanish debt climbed to 6pc. Meanwhile, the yield on safe-haven German bunds was pushed to an almost record low of 1.6pc. UK gilts benefited, too, dropping to 2pc.
The yields reflected a level of fear on the bond markets not seen since the fraught period before Christmas when traders bet that the eurozone could collapse.
This is carrying over to the US with the stock market taking a shit and bond prices increasing. This should force US mortgage rates solidly back intro the 3's again.
Damn I'm glad I'm refinancing now.
Goldman thinking the shit is about to hit the fan in Italy?Goldman Sachs cuts Italian debt holdings by 92%
Goldman Sachs Group Inc. (GS), the fifth- biggest U.S. bank by assets, cut its holdings of Italian sovereign debt by 92 percent in the second quarter after boosting them in the first three months of the year.
http://www.spiegel.de/international/...-a-849747.htmlBanks are particularly worried. "Banks and companies are starting to finance their operations locally," says Thomas Mayer who until recently was the chief economist at Deutsche Bank, which, along with other financial institutions, has been reducing its risks in crisis-ridden countries for months now. The flow of money across borders has dried up because the banks are afraid of suffering losses.
According to the ECB, cross-border lending among euro-zone banks is steadily declining, especially since the summer of 2011. In June, these interbank transactions reached their lowest level since the outbreak of the financial crisis in 2007.
In addition to scaling back their loans to companies and financial institutions in other European countries, banks are even severing connections to their own subsidiaries abroad. Germany's Commerzbank and Deutsche Bank apparently prefer to see their branches in Spain and Italy tap into ECB funds, rather than finance them themselves. At the same time, these banks are parking excess capital reserves at the central bank. They are preparing themselves for the eventuality that southern European countries will reintroduce their national currencies and drastically devalue them.
"Even the watchdogs don't like to see banks take cross-border risks, although in an absurd way this runs contrary to the concept of the monetary union," says Mayer.
Since the height of the financial crisis in 2008, the EU Commission has been pressuring European banks to reduce their business, primarily abroad, in a bid to strengthen their capital base. Furthermore, the watchdogs have introduced strict limitations on the flow of money within financial institutions. Regulators require that banks in each country independently finance themselves. For instance, Germany's Federal Financial Supervisory Authority (BaFin) insists that HypoVereinsbank keeps its money in Germany. When the parent bank, Unicredit in Milan, asks for an excessive amount of money to be transferred from the German subsidiary to Italy, BaFin intervenes.
Unicredit is an ideal example of how banks are turning back the clocks in Europe: The bank, which always prided itself as a truly pan-European institution, now grants many liberties to its regional subsidiaries, while benefiting less from the actual advantages of a European bank. High-ranking bank managers admit that, if push came to shove, this would make it possible to quickly sell off individual parts of the financial group.
In effect, the bankers are sketching predetermined breaking points on the European map. "Since private capital is no longer flowing, the central bankers are stepping into the breach," explains Mayer. The economist goes on to explain that the risk of a breakup has been transferred to taxpayers. "Over the long term, the monetary union can't be maintained without private investors," he argues, "because it would only be artificially kept alive."
The fear of a collapse is not limited to banks. Early last week, Shell startled the markets. "There's been a shift in our willingness to take credit risk in Europe," said CFO Simon Henry.
http://www.spiegel.de/international/...-a-849936.htmlThe German economy continued to defy the euro crisis and grew 0.3 percent in the second quarter, buoyed by exports and consumer spending, but economists warned that GDP could contract in the third quarter.
The growth rate, released by the Federal Statistics Office on Tuesday, marked a slowdown from 0.5 percent in the first quarter. "Positive impetus came from consumption as well as from the net exports," the office said in a statement. That offset a decline in investments, particularly in industrial equipment.
Compared with other euro-zone countries, German is doing well. The second-quarter growth compares with declines of 0.7 percent in Italy, 0.6 percent in Belgium and 0.4 percent in Spain. The French economy stagnated and the entire 17-nation euro zone is expected to show a GDP contraction of 0.2 percent in the same period.
Economists say the German economy may shrink in the third quarter to end-September. Leading indicators such as the Ifo business climate index point to a slowdown in economic activity due to falling demand for German exports in Europe, the US and emerging markets, especially China, which has been a major source of German export growth.
In July, the Ifo index, based on a survey of 7,000 German firms, fell to its lowest level since March 2010. The German government recently admitted that there are "considerable risks" attached to the country's economic outlook.
http://www.economist.com/node/21560879Yet it would be foolish to bet on an extended lull in the euro crisis. The Greek economy is in deep recession, and Germany seems adamant that no more money will be made available to help it out. Germany’s central bank remains opposed to the ECB buying bonds in order to cap the borrowing costs of Spain and Italy. To these familiar concerns is added a newish one: that efforts to shore up the euro might be scotched not in Berlin but in another austerity-minded northern capital: Helsinki.
Last month Finland’s finance minister, Jutta Urpilainen, caused a stir when she said that her country would “not hang itself to the euro at any cost” and that it would not be prepared to shoulder the debts of other states. More recently the foreign minister, Erkki Tuomioja, revealed that Finland had made contingency plans for the break-up of the euro. Uniquely, Finland has demanded collateral for its part of Greece’s second bail-out and for the funds it underwrites to support Spain’s crippled banks. If a grand bargain on the mutualisation of debts is ultimately required to keep the euro together, the Finns could block it. A few observers even think a “Fixit” (a Finnish exit from the euro) is more likely than a Grexit.
Fix it or Fixit?
It is true that Finland has the most to lose from a pooling of sovereign debts. The IMF reckons the combined gross debt of euro-area countries will peak at 91% of GDP next year, when the ratio in Finland will be just 53%, the lowest of any euro-zone country bar Estonia and Luxembourg. Finland’s borrowing costs are roughly the same as Germany’s. After Japan and Italy, Finland has the most rapidly ageing population among rich countries, so it is wary of adding to its debts. And having recovered from a nasty banking crisis in the 1990s through their own efforts (albeit with a favourable tailwind from the world economy), Finns are hostile to bail-outs.
Finland might also have least to gain from keeping the euro show on the road. Its banks have little direct exposure to the euro zone’s troubled periphery, in contrast to those of France and Germany. Its economy is less integrated into the euro zone than those of other northern bail-out grumps, such as the Netherlands. Only 31% of Finnish exports go to other euro-zone countries, a smaller share than is sold by Eurosceptic Britain. Five of Finland’s seven biggest foreign markets lie outside the euro zone. Its biggest supplier is Russia and its largest single customer is Sweden, whose economy is growing more quickly than Finland’s (see article).Norway is also doing better. Finns fed up with being asked to stump up for Greece and the rest cannot have missed that their nearest neighbours seem to be thriving outside the euro.
http://www.bloomberg.com/news/2012-0...e-a-drug-.htmlBundesbank President Jens Weidmann said a proposed new wave of sovereign bond purchases by the European Central Bank may increase governments’ reliance on such funding and won’t help solve the euro-area debt crisis.
“We shouldn’t underestimate the danger that central bank financing can become addictive like a drug,” Weidmann said in an interview with Der Spiegel. “Such policy is too close to state financing via the money press for me.”
ECB President Mario Draghi said earlier this month that the central bank may intervene in the secondary market to lower yields in countries that ask Europe’s bailout fund to buy its bonds in the primary market. While such a move would ensure conditionality, the Bundesbank has been critical of the plan.
“In democracies, parliaments rather than central banks should decide on such an encompassing mutualization of risks,” Spiegel cited Weidmann as saying in an e-mailed summary of the interview today. The plans are becoming “concerted actions by the state rescue mechanisms and the central bank. That causes a link between fiscal and monetary policy.”
http://www.bloomberg.com/news/2012-0...shrinking.htmlEuropeís failure to resolve its sovereign-debt crisis will force investment-banking chiefs in the region to consider shuttering entire businesses rather than rely on piecemeal job reductions to revive profit.
Dealmaking fees may drop 25 percent this year from 2009, when the crisis began in Greece, research firm Freeman & Co. estimates. European banks, including UBS AG and Barclays Plc (BARC), have cut about 172,000 positions since then, according to data compiled by Bloomberg, the same strategy they used after Lehman Brothers Holdings Inc. collapsed in 2008.
“Unlimited intervention by the ECB in the bond markets would be the ultimate game-changer in the euro zone debt crisis,” said Steven Major, global head of fixed income research at HSBC Holdings Plc in London. “Not only would it drive spreads down, it would keep them down.”
Keeping the yields of peripheral nations within a preset range of those of core economies could require the ECB to spend as much as 7 billion euros ($8.8 billion) per week buying bonds, Major estimates. The gap between two-year German and Spanish bonds could almost halve to 200 basis points from more than 370 currently, he said.
The ECB “will always act within the limits of its mandate,” Draghi wrote in a commentary for German newspaper Die Zeit provided by the Frankfurt-based ECB yesterday. “Yet it should be understood that fulfilling our mandate sometimes requires us to go beyond standard monetary policy tools.”
While speculation has mounted the central bank may try to cap bond yields outright, Goldman Sachs Group Inc. economist Huw Pill predicts it will avoid explicit targets for rates or spreads and instead try to steer market yields within wider bands depending on economic performance.
The central bankers may even hold fire. ECB Executive Board member Joerg Asmussen said Aug. 27 that the bank shouldn’t buy bonds before the rescue fund intervenes. Two officials said last week it may even hold off furnishing full details of its plan until Germany’s Constitutional Court rules on the legality of the European Stability Mechanism.
So Sept. 12 provides investors with two flashpoints, the German court ruling and a Dutch election. The ESM cannot operate without Germany’s say so and its 500 billion-euro cash pile is needed if Europe is to have enough cash to recapitalize banks and support Spain and Italy.
And Portugal, and Ireland, and Slovenia...there is no point in re-capitalizing the banks if nothing changes, it just delays the inevitable and puts us all further behind.So Sept. 12 provides investors with two flashpoints, the German court ruling and a Dutch election. The ESM cannot operate without Germanyís say so and its 500 billion-euro cash pile is needed if Europe is to have enough cash to recapitalize banks and support Spain and Italy.
http://www.nytimes.com/2012/09/04/bu...pens.html?_r=1Julio and Eva Vildosola and one of their two children. Mr. Vildosola will join a small software company in Cambridge.
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.
The deposit outflow in Spain reflects a broader capital flight problem that is by far the most serious in the euro zone. According to a recent research note from Nomura, capital departing the country equaled a startling 50 percent of gross domestic product over the past three months — driven largely by foreigners unloading stocks and bonds but also by Spaniards transferring their savings to foreign banks.
http://www.marketwatch.com/story/eur...ist=beforebellThe downturn in private-sector activity in the 17-nation euro zone deepened in August, the Markit euro-zone composite purchasing-managers' index, or PMI, for the region indicated Wednesday. The PMI fell to 46.3 from 46.5 in July and was down from a preliminary reading of 46.6. The index for the services sector fell to 47.2 from 47.9 in July and was down from a preliminary figure of 47.5. A reading of less than 50 signals a contraction in activity. "The final August PMI came in only slightly below its earlier flash estimate, leaving the euro-zone economy on course to fall back into technical recession in the third quarter," said Rob Dobson, senior economist at Markit. "Sharp declines in new orders at manufacturers and service providers, plus further job losses, mean that there is little prospect of a sustained improvement in economic conditions over the near-term," he said.
http://buzz.money.cnn.com/2012/08/31...ent/?iid=HP_LNSpain suffered the highest level of joblessness in the eurozone in July, as overall unemployment in the region held steady at a record high.
One out of every four citizens in Spain is unemployed, according to the latest statistics from Eurostat. The situation is even worse for young Spaniards. The unemployment rate for those under 25 years old is now approaching 53%.
Spain has been dealing with high unemployment for years. The nation's jobless rate has been above 20% since May 2010, according to data from the European Central Bank. In July, the rate rose to 25.1%.
The Spanish economy slipped back into recession during the first quarter and activity has continued to deteriorate. Spanish gross domestic product declined 0.4% in the second quarter.
Holy shit. 53% unemployment for those under 25?
Fucked up numbers like this cause revolutions.
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