Presenting Spain's Economic Collapse In Context

Short, but not sweet from ZeroHedge.  Bonus bad graph included..

We have presented many charts over the last few weeks showing the collapse in retail sales in Spain, along with surging unemployment, bankruptcies and non-performing bank loans. But to do justice to the situation, you’ve got to put it in context of the last 150 years, and JPMorgan's Michael Cembalest provides just such context. Spain’s adventure in the Eurozone(Starting in 1986) has sent it into an economic tailspin the likes of which have not been seen, with the exception of the Spanish Civil War, since the 19th century. At that time, the Spanish empire was at the tail end of its colonial decline, and was an under-regulated, agrarian, closed economy subject to frequent crises. The chart shows the details, highlighting the economic declines during revolutions, depressions and agricultural epidemics. Spain’s recent decline has now matched them.

 

Guest Post: The End Of The Euro: When Will It Happen?

This time, it's Italy.  Zero Hedge:

In Rome, the main post office is in a majestic old building with imposing architecture. It was a procession just to buy a few stamps. Stand here, stand there. Take this ticket, fill out this form, print that form. What should have taken 10 seconds took 10 minutes; the process it took to get there was a real eye opener. They have all these fancy IT systems, but we get the sense that this ‘technology’ just gives the post office a veneer of modernity and sophistication without actually being necessary or adding any value. This is typical of bureaucracy: take a simple task, make it unnecessarily complicated, then spend a bunch of money on technology that makes it even more complicated. Given this experience, Italy has clearly mastered the art of unnecessarily complicating the simple. It’s no wonder they have serious problems paying the bills. Moreover, the country’s demographic challenges indicate the country’s fiscal situation cannot improve. Robust economies are productive… and productivity is typically not associated with the elderly. Italy has one of the world’s oldest populations concurrent with one of the lowest birth rates. This trend drives an unsustainable fiscal quandary: bloated public sector bills with lots of old people to pay pensions to, coupled with a rapidly shrinking population devoid of young workers to pay taxes.

At this point, there can be little doubt that Italy will exit the eurozone... most likely voluntarily. A return to the lira means the Italian government (probably to be headed by Berlusconi once again)(ugh) would be free to print currency at will. This is the only reasonable solution remaining. When will it happen? Probably sooner than we think.

Belgian National Bank Governor Gets It: Bailing Out Spain "Makes No Sense"

 No one in charge will listen, but it's good that someone finally said something.  Zero Hedge.  Excerpts:

A week ago we explained quite clearly why instead of encouraging self-defeating, short-termist behavior by promising to save Europe's insolvent countries if and when needed, which does nothing to resolves Europe's problems and make it worse in exchange for a brief respite from bond selling, the ECB should be doing precisely the opposite: encouraging local governments to understand that there is no magic bazooka from the central banks. Specifically we said that "this Catch 22 of confounding cause and event can continue seemingly indefinitely, although in reality it can't. Because fundamentally what the bond market does is keep sovereigns "honest" - just as Schauble said a week ago, Spanish yields at 7% are not the end of the world - instead what they are is a signal to the country to get its spending in control in order to reduce its deficit, and fundamentally get its house in order - yes, that means getting government spending to a sustainable level and firing hundreds of thousands of workers, as well as probably raising taxes even more. It also means pain all around, but the pain is inevitable and will only be worse the longer reality is denied." This logic is so clear that only a lifelong economist, PhD or Goldman apparatchik can not grasp it: sadly that accounts for most of the people "in charge."


Which is why we were delighted to read that at least one person "gets it" - Belgian national bank governor Luc Coene, the same Belgium that is also the clogged heart of the Burtonian bureaucratic labyrinth known as the EU, who told Belgium's two largest newspaper that "buying the bonds of these countries would only serve to weaken the ECB and do nothing to resolve underlying issues of competitiveness. “It makes no sense for the ECB to start financing those countries,” said Mr Coene, “It would only lead to the ECB taking on the whole public debt of Spain and Italy onto its balance sheet." Bingo.

Li(e)bor: The Cartel Emerges

Huge.  Zero Hedge.  Excerpts:

Just when you thought the Li(e)bor scandal had jumped the shark, Germany's Spiegel brings it back front-and-center with a detailed and critical insight into the 'organized fraud' and emergence of the cartel of 'bottom of the food chain' money market traders. "The trick is that you can't do it alone" one of the 'chosen' pointed out, but regulators have now spoken "mechanisms are now taking effect that I only knew of from mafia films." RICO anyone? "This is a real zinger," says an insider. In the past, bank manager lapses resulted from their stupidity for having bought securities without understanding them. "Now that was bad enough. But manipulating a market rate is criminal." A portion of the industry, adds the insider, apparently doesn't realize that the writing is on the wall.



There have been plenty of banking scandals, but none quite like this: Investigators and political leaders believe that the manipulation of the Libor benchmark interest rate was the result of organized fraud. Institutions that participated could face billions in fines and penalties.
And:

What the Banks Could Now Face



German banks must have pricked up their ears when BaFin President Elke König recently spoke about the Libor scandal. "Basically, banks must establish suitable reserves for possible losses," König concluded.


Investors, like Vienna hedge fund FTC Capital, have made it clear that they do not intend to let up. They feel obligated to their customers to file claims for damages, explains FTC executive Majcen...


There are already 20 lawsuits in the United States, some of which have been combined into class action suits. The plaintiffs range from the City of Baltimore to police and firefighter's pension funds, the City of Dania Beach, Florida, and Russian oligarch Vladimir Gusinsky.


They feel encouraged by the actions of regulators. "Both the American CFTC and the FSA have done excellent investigative work," says Majcen. Bank analysts expect that other institutions could face fines similar to the one imposed on Barclays. In fact, it ought to be in the banks' best interest to quickly settle their cases. "But they're afraid, because since Barclays, they know that it isn't just about money, but also about making heads roll," says a major shareholder of Deutsche Bank.


German attorneys are also lining up to represent potential clients. "A few institutional investors have already contacted us," says Marc Schiefer of the law firm TILP in the southern German city of Tübingen.


Years could go by before damage suits are ruled on...


Possible Libor-related liabilities would cause serious problems at WestLB, or its successor company Portigon. The once-proud state-owned bank is in the process of being liquidated, at a cost of billions to its former owners, the western German state of North Rhine-Westphalia and savings banks. The Libor scandal could further increase the burden on taxpayers.
...
The call for stricter regulation is also getting louder in politics once again... "cheap populism."


"This is a real zinger," says an insider. In the past, bank manager lapses resulted from their stupidity for having bought securities without understanding them. "Now that was bad enough. But manipulating a market rate is criminal." A portion of the industry, adds the insider, apparently doesn't realize that the writing is on the wall.


The parties involved, including Deutsche Bank and its new co-CEO Jain, cannot expect leniency when charges are investigated. "We can't make any allowances for high-profile names," say officials in the capital.

The vast inter-connectedness of these institutions presents a huge problem for regulators and investigators(Think thousands of strings of Christmas lights tangled together), but the main players are known, and those players have got to be freaking out.  Who will be branded "The First Example?"

Couple thoughts:  The public will never understand this scandal until the media finds a way to explain it clearly and succinctly.  But the media first must start actually covering this scandal.

What a glorious time to be an honest, independent Auditor!  Welcome to your Golden Age, nerds!

IMF Says Japan And Spain Are Done, "Debt Ratio Will Never Stabilize"

Needless to say, this is not good news..  Zero Hedge:  (Emphasis theirs..)

The IMF believes that advanced economy deficits will decline by about 0.75 percentage points of GDP this year which 'strikes a compromise between restoring fiscal sustainability and supporting growth". However, continued focus on nominal deficit targets runs the risk of compelling excessive fiscal tightening if growth weakens. In addition, there is a risk in the United States of political gridlock that puts fiscal policy on autopilot and results in a sharp and sudden decline in deficits—the “fiscal cliff.” What is more troubling is the significant upward revision to all of the peripheral European nations (with Greece now at 171% Debt/GDP in 2013 versus 160.9% forecast only 3 months ago). While the average debt-to-GDP ratio among advanced economies is projected to continue to rise over the next two years, surpassing 110 percent of GDP on average in 2013, debt ratios will by then have peaked in several advanced economies - though rather explosively they do not see debt ratios for Spain and Japan stabilizing.

Greek Finance Minister Resigns Just Days After Appointment; Cyprus Officially Requests Bailout

Bad Omen Monday..  Like, two-headed crow flying backwards, ten feet above your head shrieking "NOOOO!," bad..  Zero Hedge.  Whole Post:

This has to be a record:

•GREEK FINANCE MINISTER RAPANOS RESIGNS; PRIME MINISTER ACCEPTS


This is the same guy who was appointed last week, and who fainted after seeking the official Greek numbers. In fact we are not sure he ever got an official appointment. And elsewhere:


•CYPRUS REQUESTS EU AID


•CYPRUS SEEKS EXTERNAL FINANCIAL ASSISTANCE FROM EURO AREA: China just said NEIN


Prepare the bath salt firehose.


Repanos: we hardly knew thee. Courtesy of William Banzai:

Welcome, Cyprus!  If you haven't been paying attention, you're in for some "excitement!"

Forget the PIIGS, the EU as a Whole is Insolvent

Impending Systemic Collapse has an ominous ring to it.  Zero Hedge has the bad news..  Excerpts:

Europe is heading into a full-scale disaster.
You see, the debt problems in Europe are not simply related to Greece. They are SYSTEMIC. The below chart shows the official Debt to GDP ratios for the major players in Europe.


As you can see, even the more “solvent” countries like Germany and France are sporting Debt to GDP ratios of 75% and 84% respectively.



These numbers, while bad, don’t account for unfunded liabilities. And Europe is nothing if not steeped in unfunded liabilities.


Let’s consider Germany. According to Axel Weber, the head of Germany’s Central Bank, Germany is in fact sitting on a REAL Debt to GDP ratio of over 200%. This is Germany… with unfunded liabilities equal to over TWO times its current GDP.
To put the insanity of this into perspective, Weber’s claim is akin to Ben Bernanke going on national TV and saying that the US actually owes more than $30 trillion and that the debt ceiling is in fact a joke.
What’s truly frightening about this is that Weber is most likely being conservative here. Jagadeesh Gokhale of the Cato Institute published a paper for EuroStat in 2009 claiming Germany’s unfunded liabilities are in fact closer to 418%.

And of course, Germany has yet to recapitalize its banks.


Indeed, by the German Institute for Economic Research’s OWN admission, German banks need 147 billion Euros’ worth of new capital.

To put this number into perspective TOTAL EQUITY at the top three banks in Germany is less than 100 billion Euros.

And this is GERMANY we’re talking about: the supposed rock-solid balance sheet of Europe. How bad do you think the other, less fiscally conservative EU members are?
Think BAD. As in systemic collapse bad.

Tickticktick..

Dr. Michael "The Big Short" Burry's "Brutal Hangover Is Inevitable" State-Of-The-World UCLA Commencement Speech

The prediction has been made.  Will Dr. Burry continue his roll?  Zero Hedge(Video at the link) Whole post:

Infamous for his prediction of the great recession, Europe's demise, and the collapse of the US financial system (as well as profiting extremely handsomely from said predictions), so well captured in Michael Lewis' book "The Big Short", UCLA's Dr. Michael Burry undertakes UCLA's Economics Department's commencement speech with much aplomb. In this "age of infinite distraction", the astounding truthiness of this 15 minute speech is stunning from single-sentence summation of Europe's convulsions that "when the entitled elect themselves, the party accelerates, and the brutal hangover is inevitable" he reminds us that Californians, and indeed all Americans, should take note. A quarter-of-an-hour well spent from a self-described 'chicken-little' who was "just trying to figure it all out".


Another clear-eyed warning to be ignored, yeah?  It's not like this collapse is already in motion or anything..

Europe’s train-wreck and the inevitable collapse of the global economy

Dark, yes;  But Doomy?  Yes, well; That too..  The Economic Collapse, via The Extinction Protocol.  First and last paragraphs:

June 20, 2012 – ECONOMY – Yes, it is officially time to start freaking out about the global economy. The European financial system is falling apart and it is going to go down hard. If Europe was going to be saved, it would have happened by now. The big money insiders have already pulled their funds from vulnerable positions and they are ready to ride the coming chaos out. Over the next few months, the slow motion train-wrecks currently unfolding in Europe will continue to play out and things will likely really start really heating up in the fall, once summer vacations are over.
And:  Restated for effect.. 
 German Chancellor Angela Merkel has declared that Germany will not budge at all on the terms of the Greek bailout. If you are looking for some kind of a global financial miracle; you can stop watching. If European leaders had a master plan to save Europe, they would have shown it by now. The entire house of cards is starting to come down and things are going to get really messy.  A lot of people both in the United States and in Europe are going to lose their jobs and their homes over the next few years. It is likely that the next recession will be even more painful than the last one was.

Our global financial inter-connected-ness will come as a big shock to many people.  Also shocking will be the lack of preventative monetary firewalls that could have averted this looming crisis.

Hey!  You live; You learn!; You know?

Election Day! All Eyes On Greece, Please..

Greece's economic fate hangs in the balance, and will be decided shortly.  A sampling of the calm before the potential beginning of the Global Financial Super Storm..  Selections from Der Spiegel(via The Extinction Protocol) and Zero Hedge.  Excerpts: 


Greeks empty bank accounts ahead of historic election (Der Spiegel)



Many Greeks are emptying their bank accounts out of fear that the country may return to the drachma. But most of the money is not going abroad. Instead, individuals are storing cash in safe deposit boxes or at home — leading to an increase in burglaries. Joanna Stavropoulos is not proud of what she has done. “I had a guilty conscience when I withdrew my money from Greece,” says the 43-year-old. Of course she knew what would happen if everybody does the same: Greece’s banks would be threatened with collapse. But she says she had to think of her two-month-old daughter, Josephina, who is currently asleep on Joanna’s shoulder. Increasing numbers of Greeks are following Joanna Stavropoulos’ example and emptying their accounts. They are afraid that Greece may leave the euro zone and return to the drachma. Stavropoulos is one of the few people who know very well what this scenario would look like in concrete terms. As a journalist and NGO worker, she has traveled all over the world, most recently in Haiti and Iraq. “I have been to countries where banks closed,” she says. She was in Argentina, for example, when the government declared a national default. She has also lived in Zimbabwe, where three-digit inflation destroyed the currency. Joanna is sure that Greece could face the same thing if it returns to the drachma. “My country is going downhill,” she says. There is still little sign of panic in Greece, and there has not been a stampede to the banks. Nevertheless, people are withdrawing hundreds of millions of euros from the banks every day. In May alone, outflows totaled €5 billion. According to official figures, €80 billion has been withdrawn since the start of the crisis. Rich Greeks have long been moving billions to countries such as Italy or Switzerland, or buying luxury properties in London. But overall, according to estimates by the Greek central bank, only about one-fifth of the total money withdrawn has gone abroad. Many customers have left their money in the bank itself, Christiana says — but in a safe deposit box rather than in their accounts.
 
As Greek Banks Run Out Of Safe Deposit Boxes, An Eerie Calm Takes Over The Country 24 Hours Before D-Day (Zero Hedge.)
 
Oddly enough, despite the all too real dangers of a complete lock out by and of the local banks, Greeks refuse to believe that the worst case scenario could realistically happen:

There is still little sign of panic in Greece, and there has not been a stampede to the banks. Nevertheless, people are withdrawing hundreds of millions of euros from the banks every day. In May alone, outflows totaled €5 billion. According to official figures, €80 billion has been withdrawn since the start of the crisis.  

Which however is not to say that most people have not already commenced preparations:

Christiana (not her real name) can see the capital flight every day with her own eyes. The 46-year-old, who wishes to remain anonymous, works as an asset manager at a large Greek bank. "It's not just that it is increasing," she says of the withdrawals. It's not only major customers who have been taking out money in recent months, she explains, but all kinds of clients, from account holders with a few hundred euros to the bank's most important private customers. "Naturally, the wealthy ask particularly often what they should do with their money," she says.

Yet the most ironic moment in the Greek denouement will come when fractional reserve lending collapses onto itself:

Stavropoulos and her friends have a new strategy to deal with their daily expenses. "We charge everything to our credit cards," she says. If the Greek banks fail, they won't be able to collect the outstanding debts, she argues. "If they want to mess me around, I will do the same to them."

In other words, Greece is now America, where the vast majority of people also live on credit alone, and have taken up the following motto when dealing with banks: "you pretend to be solvent, we pretend to have money."


At the end of the day, it is all just one big global monetary circle jerk, only this time in reverse, as the snake of fractional reserve banking has finally started to eat its own tail. With people spending money they don't have, and in debt to their eyeballs to a banking system that itself is just as insolvent, is there any wonder that nobody really panics any more over daily threats the grand reset is finally coming?


But in the end, it probably won't even matter..


Citi's Buiter: Greece will be forced out of the euro regardless of who wins the Sunday elections.  (Zero Hedge)



New Democracy. Syriza. Doesn't matter. According to Citi's senior political analyst Tina Fordham, chief economist Willem Buiter, and global economist Ebrahim Rahbari, "any new Greek government, regardless of its composition, will struggle with implementation challenges related to the imposition of further austerity measures demanded by the Troika in exchange for further assistance," and as a result, they "consider it likely that a new troika deal would ultimately fall apart and lead to Grexit."



Citi notes that there is growing sense among European leaders that "promotion of economic growth can no longer be subordinated completely, even in fiscally unsustainable euro area member states, to the requirements of fiscal austerity," but no one has any idea what that means.


We will find out soon.  Riots will probably be forthcoming.  Cue Riot Dog, stage left..

Greek Bank Run Update: €100-€500 Million Per Day

From Zero Hedge.  Emphasis from post itself.  Excerpts:

Five days ahead of the Greek parliamentary re-vote, the media propaganda machine has gone mute due to the moratorium on the RAND() known as popular polling: forgotten are the days when Syriza' popularity rating would swing from -100 to +100 in the span of hours, Diebold notwithstanding. Which leaves the media machine just one tactic: updates on the economic collapse as a tacit suggestion of what may happen if situation is not fixed. And while at this point it is nearly impossible to distinguish propaganda from fact, the latest numbers out of Kathimerini are just stunning. As Bloomberg's Marcus Bensasson reports, citing Kathimerini, the Greek banking system has continued to hemorrhage deposits this month, amid uncertainty over the outcome of elections on June 17.
..
"Deposits are leaving the banking system at a rate of 100 million to 500 million euros ($125 million to $625 million) a day, Kathimerini said, without specifying over how long a period that rate of outflow has continued."

And:
Putting this in the US context, which has over $8 trillion in various forms of deposits, this would be equivalents to about $25 billion getting withdrawn. Every day.


It all happens/accelerates next week!

Unregulated global derivatives debt market hits $647 trillion mark

This is what will kill our economy.  Global economy.  So we've got that going for us..  The Extinction Protocol.  Excerpts: 

..Gross Credit Exposure has returned to 2008 levels, something the world might want to pay attention to. Once the lessons of the mistakes of the past are ignored, the risk factor increases proportionally and with Europe teetering on the edge of a Lehman event, the increase in interest rate derivatives might well indicate a new risk that has not been accounted for: A sudden collapse of the Euro currency below the 1.20 or even parity level. Such an event would make Lehman look like a picnic but there is more bad news beyond that as it is not just interest rate derivatives that have increased past 2008 levels as the chart above demonstrates, but some idiots placed bets on the currency markets which means that a collapse of the Euro creates an irreversible game of dominoes and destruction: Unfortunately for us common folk, no one has taken the time to explain the implications of a 10, 20, or even 30% decline in the value of the Euro versus the US Dollar in a compressed time period.

Credit goes where credit is due.. Lifetime Achievement Award!

Greece: Before And After

The populist tsunami forms..  If these polls hold true, Greece is about to change history.  Is this Greece's exit from the euro zone?  Is this the beginning of the end for the entire European Union?  Where's Riot Dog?  Zero Hedge.  Excerpts:

In one of the most fascinating psychological shifts, there has been a massive shift in the perspective of the Greek electorate since the election two weeks ago. Almost as if the size of the actual votes for Syriza, the far-left anti-bailout party, gave citizens 'permission' to be angry and vote angry. The latest opinion polls, as per Credit Suisse, show the center-right New Democracy party crashing from 108 seats to only 57 as Tsipras and his Syriza colleagues soar from 52 seats to a hugely dominant 128 seats. Is it any wonder the market is pricing GGBs at record lows and 'expecting' a Greek exit from the Euro as imminent given the rhetoric this party has vociferously discussed. On the bright side, the extreme right Golden Dawn party is seen losing some of its share.

The new election date for Greece is June 17th.  Can the bankers prevent a bank run meltdown before then?  Fun election fact:  More than one half of Greek policemen voted for the Neo-Nazi New Dawn Party.  That ought to be a great conversation starter and laugh riot during the upcoming real riots!

Spain in recession as austerity bites deep

Austerity is Stasis/Immovable Object.  Dynamic populations are Inertia/Irresistible Force.  There's definitely going to be more trouble before stability and growth returns.  Reuters.  Excerpts:

Spain sank into recession in the first quarter and economists said spending cuts aimed at meeting strict EU deficit limits, together with a reeling bank sector, would delay any return to growth until late this year or beyond.



It is the second recession in just over two years for the euro zone's fourth largest economy and comes as the government tries to convince investors it will not need outside aid to put its house in order.


The country is caught between pressure from its European peers to fix public finances and growing domestic resistance to austerity measures that have helped push unemployment to more than double the EU average.



Ratings agency Standard & Poor's added to the country's problems with a two-notch rating downgrade last week and on Monday it chopped the credit score of 11 banks.
..
"The wheels are very clearly coming off," Jefferies economist David Owen said. "It wouldn't surprise me to see a very significant decline in GDP both in the second and third quarters this year."

..
Spain's demand for electricity, a good indicator of the strength of economic output, fell for the eighth month in a row in April, the national grid operator said.



Spanish bonds showed little reaction to the GDP report but yields have risen to around 6 percent in recent weeks. At around 7 percent, they are seen as financially unsustainable.


The IBEX share index finished April down 12.7 percent, its worst monthly showing in nearly 1-1/2 years..

The real problems haven't even begun.  Spain and Greece are just the opening act.  Followed by, in no particular order, Portugal, Italy, and Ireland.  The others(E.U. and non-E.U.) will also be sucked asunder, victims of Austerity's implosion wave.  How much pressure can France, and ultimately Germany, withstand? 

The E.U.'s individual country/collective state implosion illustrates the concept of Immovable Object/ Irresistible Force:  I'm unsure of the outcome, but the Victor will soon be known by all.  These circumstances, at present, cannot sustain.  There will be no dispute after this head-on, high-impact event.

Greece Has Defaulted: Here Is Where We Stand

This weekend should be interesting.  From Zero Hedge.  Excerpts:
1) Greece was able to write off 100 billion euros worth of debt in exchange for a 130 billion rescue package of new debt, of which Greece itself will receive 19%, or about 25 billion, so that it can continue to operate as an ongoing concern. Somehow Greece is in a better position than before, with more debt and less sovereignty and still---by virtue of sharing a common currency---trying to compete toe-to-toe with the likes of Germany and the Netherlands, kind of like being the Yemeni National Basketball team in an Olympic bracket that includes the US, Spain and Germany. At least a "within the euro" default prevented bank runs in Portugal, Spain, Italy et al.



2) As a result of the bond haircuts, Greece has many pension plans that can no longer even pretend to be viable, at least according to the original contracted scheme, but pensionholders still working can take heart in the fact that their current wages will be cut, too.
And:
8) Given how much angst was caused by the drawn out Greek affair, the Spanish leader knows he has enormous leverage with EU leadership and he can continue to do what he has been doing with regard to ignoring the deficit targets demanded/suggested by the EU. The EU might well bark at him, but they cannot afford to bite at this time. Muchos gracias, Greece.

Moody's Downgrades Italy, Spain, Portugal And Others; Puts UK, France On Outlook Negative - Full Statement

Uh-oh.  All of Europe's gonna get Greece-d.  Zero Hedge's Tyler Durden has the details.  Excerpts:

As anticipated in November 2011, Moody's Investors Service has today adjusted the sovereign debt ratings of selected EU countries in order to reflect their susceptibility to the growing financial and macroeconomic risks emanating from the euro area crisis and how these risks exacerbate the affected countries' own specific challenges.
Moody's actions can be summarised as follows:

- Austria: outlook on Aaa rating changed to negative
- France: outlook on Aaa rating changed to negative
- Italy: downgraded to A3 from A2, negative outlook
- Malta: downgraded to A3 from A2, negative outlook
- Portugal: downgraded to Ba3 from Ba2, negative outlook
- Slovakia: downgraded to A2 from A1, negative outlook
- Slovenia: downgraded to A2 from A1, negative outlook
- Spain: downgraded to A3 from A1, negative outlook
- United Kingdom: outlook on Aaa rating changed to negative
..
The main drivers of today's actions are:



*The uncertainty over (i) the euro area's prospects for institutional reform of its fiscal and economic framework and (ii) the resources that will be made available to deal with the crisis.


*Europe's increasingly weak macroeconomic prospects, which threaten the implementation of domestic austerity programmes and the structural reforms that are needed to promote competitiveness.


*The impact that Moody's believes these factors will continue to have on market confidence, which is likely to remain fragile, with a high potential for further shocks to funding conditions for stressed sovereigns and banks.


To a varying degree, these factors are constraining the creditworthiness of all European sovereigns and exacerbating the susceptibility of a number of sovereigns to particular financial and macroeconomic exposures.


When everything collapses, don't forget to yell "Jenga!!"  And, as always, don't forget to stock up on canned goods and bottled water!  Happy Valentine's Day, yo!

Meanwhile, In Pre-Mayhem Greece..

FT Report That Greek Bailout Package On The Verge Of Collapse After Surge In Greek Funding Needs Sends Stocks, Euro Plunging From Highs  Tyler Durden for Zero Hedge.  Excerpts:

Wondering what just caused the market to slump? Take a wild guess. That's right - Greece. Minutes after Greece passed a vote in which it promised to promise to promise to consider collecting 1998-1999 taxes (even as all of its tax collectors are about to go on permanent strike), the FT was breaking news that while the Troika was "bailing out" Greece in the past years, the country was spending itself into an  even greater oblivion. As a result, the terms of the July 21 Second Greek Bailout will most certainly need to be renegotiated, with banks having to take even greater write downs on the bond exchange, and with far more capital having to be injected into the country.

The Downward Spiral tightens; speeds up.

Strikes and protests mount against austerity in Greece  World Socialist Web Site.  Found it on Rense.  Excerpts:

“Today, it is no longer safe for us to go onto the streets,” a politician of the Greek ruling party PASOK told the Frankfurter Rundschau. “We are the government and we are alone.”



Widespread popular anger against the government in Greece has only intensified following the latest round of austerity measures. Incidents abound of politicians of both the social democratic PASOK and the conservative opposition New Democracy (ND) being pelted with eggs and on occasion stones when they show themselves in public. Angry crowds have repeatedly besieged the homes of politicians and chanted “thieves, thieves” and “Give the money back!”


According to surveys conducted by Eurobarometer, 82 percent of Greeks have lost confidence in the government and 83 percent distrust the parliament. Sixty-seven percent no longer trust the European Union. Other polls show that PASOK would today win just 15.5 percent of the vote in a new election.

It's all hanging by only several threads..  The Big Question remains:  How big the shock waves will be, and how hard those impacts will be felt.  Globally, of course.

The beginning of the Fourth night of the Ninth Wave

Written back on July 13th, Calleman's analysis predicted the Fifth Day of the Mayan Ninth Wave would produce a global economic collapse.  I'm not saying anything more will happen from now until August 17th, when the Fifth Night begins, but don't be surprised if this does indeed happen, as momentum around the world continues to build.  First, excerpts from Calleman's article:

A couple of months ago I expressed my expectation that the Fifth day, beginning on July 31, 2011, will bring a global economic collapse, which would be the start of this end time scenario. What is going on now in this regard is that the European banks is still trying to find a solution for the Greek debt crisis by the end of July and a few days later, August 2, the decision will be made in the US whether to raise the lending ceiling or not. Meanwhile, increasing focus is placed on Italy, whose national debt in relationship to its GDP is almost as high (120%) as that of Greece (140%), but whose economy is seven times larger with correspondingly much larger potential consequences of a default on debt payments. A very delicate situation is thus already arising at the beginning of the fifth day and it remains to be seen if more money can be printed to avert a collapse.

Because it could be so painful a global financial collapse would seem to many to be a destructive event and hence not likely to occur in a period of light, a day. The economic system of the world is however probably the greatest obstacle to the development of unity consciousness that exists on our planet. I think it can even be said that a collapse of the world’s financial structure is a pre-requisite for us to be able to craft relationships of oneness between ourselves. For this reason it is not unlikely that such a collapse would occur in a day and then especially in the fifth day, which is the particular day that in the waves brings the breakthrough energy to the new frame of consciousness. Unity consciousness is thus likely to be perceived as a threat to many persons in economically dominant positions and this is part of the reason that so powerful media interests have sought to delude people about the Mayan calendar and postpone its true end date, October 28, 2011.

Around the world..

Asia markets plunge amid recession fears

From Thursday:  World stock markets in turmoil

European hijinx..  European Central Bank paralysis sparks global chaos

Crisis Exposes Rift Between ECB and Euro-Zone Governments

Stocks: Worst week since financial crisis

It's Friday night now, USA/CST.  We'll check back Sunday night when the Asian markets re-open.  Have a great weekend, and ride the Ninth Wave, babies..