http://hat4uk.wordpress.com/2012/06/06/crash-2-berlin-reverses-its-millimetre-of-movement-on-eurobonds-4/
http://www.telegraph.co.uk/finance/debt-crisis-live/9312612/Debt-crisis-Live.html
I have absolutely not discussed any intervention in Spain's banks today... in no more than 10, 15 days we will have the report from the independent auditors... which we are cerain will be very similar to that of the International Monetary Fund. From there the Spanish government will take the decisions it has to take in terms of recapitalising the institutions.
CRASH 2: Berlin reverses its millimetre of movement on eurobonds
The Earth may be turning, but the economy is at Dead Stop
‘Germany has not moved one inch towards fiscal union of any kind’ writes Ambrose Evans-Pritchard in today’s Telegraph.
And I’m afraid he’s right. Merkel is a crafty minx, and no mistake: she appeared to have buckled yesterday, but now she’s upped and said “Oooo nein, you misunderstood me”. This isn’t playing well in either Washington (where Geithner is tearing his hair out by the roots) and back in Bankfurt, where – I’m told – even Draghi looked exasperated after taking a phone-call from the Ostikanzler yesterday late afternoon.
“It goes back to what I told you last year,” an equally Merkeled-out diplomat in Paris told me this morning, “You never know at any time which Germany you’re talking to. A few here have given up hope.”
Meanwhile, the world heads on down into the vortex, ignoring the Antics Roadshow above. The flight of eurodeposits remains as it’s been for some time: Zurich, Frankfurt’s ECB, Bankfurt per se, and to a lesser extent Paris. French and Italian visitors to Switzerland are bringing currency in by car, and the Swiss police are searching every fourth vehicle. It beggars belief that the ‘machinery’ in Brussels just sits there round tables handing out fantasy press releases while Europe’s fiscal and economic structure crumbles.
Even Obamite New York Times columnist Floyd Norris said Friday’s US jobs report “was worse than almost anyone expected.” He too is right, but the picture as a whole is doing little more than fulfil The Slog’s expectations. Europe’s entire banking system risks collapse. Greek and Spanish banks face panic withdrawals. In April, Spanish retail sales plunged 9.8% – the sharpest monthly drop on record.
Chinese manufacturing declined for the tenth time in eleven months. Bank lending missed government targets by about $200 billion. Brazil shows increasing weakness. India is in a steeper output plunge than is being admitted by the Government. South Korea and Australia are beginning to realise they face a crash, especially the latter. Korea has a better chance of coming through, on the grounds that there are no Wayne Swans there.
UK manufacturing hit its lowest level since May 2009. In May, it showed contraction, in what was the sharpest single month decline since November 2008.
The world is coming to a halt. And the varietal factors behind this – debt fears, insane austerity, QE wasted on bank support, redistribution of wealth away from the mass market, stealth taxes, Zirp wiping out silver spenders, Brussels inaction, Wall Street over-leveraging, IMF underfunding and over-demanding – are all different symptoms of the same disease: this globalist, suprastate, finance-obsessed model of capitalism is wrong, wrong, wrong.
Meanwhile, stand by for a new development – predicted here some time ago, and connected to the fact that Global commodity prices had their worst decline in four years during the last four weeks.
The next post will flesh out the detail on a new (and very big) potential Sovereign casualty. Stay tuned.
and......
11.14 The EC has published its report on bank recapitalisation. Bruno Waterfield brings us the key points:
11.03 Markets are continuing to bob upwards as the ECB announcement nears. Investors are optimistic that the ECB could unveil more stimulus to fight the debt crisis.
10.35 More on the Spanish bank bailout, or, more specifically, the lack of one. Economy Minister Luis de Guindos says there are no immediate plans to request a recapitalisation - it needs the results of a banking sector audit first:
I have absolutely not discussed any intervention in Spain's banks today... in no more than 10, 15 days we will have the report from the independent auditors... which we are cerain will be very similar to that of the International Monetary Fund. From there the Spanish government will take the decisions it has to take in terms of recapitalising the institutions.
10.26 The ECB may cut interest rates to a record low later today. Officials are meeting in Frankfurt at the moment and an announcement is expected this afternoon. With governments struggling to fix the debt crisis that’s engulfing Spain, pressure's mounting on the ECB to lower rates and introduce more liquidity support for banks.
10.13 Spain's in discussions with Germany and EU policymakers on how to recapitalise its troubled banks, but no decision can be made until the first phase of an independent banking audit is completed later this month, sources say.
A series of reforms have failed to persuade investors that huge losses from 2008's property crash have been fully addressed.
Treasury Minister Cristobal Montoro said yesterday that Spain was locked out of the credit markets. That could prove troublesome tomorrow, as the country hopes to raise €2bn in a bond auction.
Reports this morning suggest that the EC will propose a new plan for boosting failing banks later today. But it won't kick-in until 2014, which means it will be of little help to Spain.
They call it a rescue, but in reality it is a kidnapping; they take over the sovereignty of the nation concerned and wire it up to shock treatment, until the now-happy patient relaxes a little. They are the Men in Black, the flying emissaries from the dreaded EU troika, the commissioners that Merkel sends to impose her airtight budgetary discipline. It’s a pitiless brigade whose presence always sparks panic in governments when things start to go the way they are going in Spain.
09.55 Spain isn't keen on a full bailout, as seen by Greece, Portugal and Ireland, instead calling for direct recapitalisation of its struggling banks by the eurozone bailout fund, the EFSF. In any case, it argues, it's too big to bailout directly.
There's a strong editorial by Ignacio Camacho on Spain's ABC which shows exactly how the troika inspectors and austerity measures which come part and parcel with European bailouts are seen:
They call it a rescue, but in reality it is a kidnapping; they take over the sovereignty of the nation concerned and wire it up to shock treatment, until the now-happy patient relaxes a little. They are the Men in Black, the flying emissaries from the dreaded EU troika, the commissioners that Merkel sends to impose her airtight budgetary discipline. It’s a pitiless brigade whose presence always sparks panic in governments when things start to go the way they are going in Spain.
Starting with pensions and unemployment benefits, they move on to taxes and civil service salaries and end up selling off all the assets that can be bought. When they finish, they leave the economy burned to the ground and politics mowed down to stubble, and depart arm-in-arm with the patient brushing the dust off their shoes. They may be able to clean up a nation that has sunk, but if there is any possibility of recovery they will leave it buried it under the rubble.
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