In his 2010 State of the Union Address, President Obama said, “I don’t think American elections should be bankrolled by America’s most powerful interests, and worse, by foreign entities.”

In this situation, the foreign donation problem coming from online sources can be solved and President Obama’s promise of transparency can be kept in one click by enabling all security protections and releasing the names and records on all transactions under $200 to verify Obama for America is a clean campaign operating within FEC law.

Overall, major reforms are needed to ensure foreign contributions are not interfering with or influencing elections in the United States.

Obama for America did not return calls for comment.


Regarding China , let's connect some dots..... what has China been focused upon and why might they bankroll on candidate versus the other ? To take a look at China's agenda , the piece below from Jim Willie gives insight ( while the entire article is excellent , focus on the death of the petro - dollar based system and China's agenda to advance the yuan )  .....and why Obama - is it because he is viewed as weak , malleable and a man who can be controlled ? If you could ensure - by sliding maybe a half a billion to the President's re-election campaign that your country would not only not be deemed a currency manipulator for the next four years , but that you also would be allowed to continue unimpeded your truly grand scheme of unthroning the dollar as the World Reserve Currency , would you not spend the money - make that strategic investment ? 

http://www.silverdoctors.com/jim-willie-death-knells-for-the-usdollar/

JIM WILLIE: DEATH KNELLS FOR THE USDOLLAR- GOLD & SILVER SET TO EXPLODE

OCTOBER 8, 2012 BY  49 COMMENTS
The recent decision by the US Federal Reserve to contaminate the financial body until it responds favorably was the last straw in my book. Witness a declaration of permanent QE and hyper monetary inflation of the most virulent strain, unsterilized. The USFed is essentially admitting failure. The signal serves as the loudest death knell for the USDollar among many in a sequence.  The QE bond monetization of USGovt debt has turned viral and entrenched. It is sold as stimulus, when in fact it acts like a giant wet blanket on the USEconomy. It is intended as stimulus to businesses, but the effect is felt on the financial speculation and on Asian direct business investment. In the past the emergency lever device had been successful only because it was used on a temporary basis. But now the USFed high priest assures it is a permanent fixture, a sign of their failure.
The money is not finding its way into the USEconomy for further circulation. The plague is insolvency, soaked by endless applications of tainted money from central bank fire hoses.
GOLD PRICE READY TO EXPLODE UPWARD
Gold market instability could be a tremor before a burst upward. The same appears true for the silver market.On a single day last week, JPMorgan dumped two years worth of US silver mine output in the form of paper silver supply on the COMEX market. The corruption went largely unnoticed. They defend the important $36 level.
A powerful USDollar decline is imminent.
The public is too ignorant to comprehend the ruin. They can only see the threat to their personal ruin.
The bankers are determined to ruin the entire system in order to retain power, all while dispensing increasingly nonsensical dogma like from heretical high priests about the effectiveness of their solutions. Theirs is heresy built upon alchemy laced with arrogance, with no precedent of success in past history. A definition of insanity comes to mind, offered by a psychologist who works in a clinical practice. Let’s stick with the layman translation. Insanity is defined as repeating the same action but expecting a different result. So the USFed conducted QE, then QE2, then Operation Twist (a deceptive QE), now is set for QE3. It expects a different result from the rising costs and debasement of the currencies. Somehow by enlisting the cooperation of the Euro Central Bank, the Bank of England, the Bank of Japan, and the Swiss National Bank, together they can pull off QE3 in a veritable ongoing QE to Infinity when all previous efforts have failed to produce a solution or economic recovery. The high priests from the central bank altars do admit that liquidity does not address the insolvency ills, yet they hit the monetary levers and accelerators more quickly. The central bankers are in a panic, and it is beginning to show clearly. Their solutions solve nothing. They will next attempt to rule more formally over the ruins.
MONEY VELOCITY
Money velocity is going down as quickly as money supply is going up. This report card is a grand contradiction of the USFed actions for a generation. The American Weimar experiment is turning into a tornado of financial ruin with inadequate recognition. As industry was dispatched and forfeited to Asia, the USEconomy lost its base for traction. New money has lost its effect in producing economic activity following a series of asset bubble busts, a spinning of capitalist gears, now stripped gears. New money is devoted to the financial sector in perverse fashion, as a reward for the past destruction of capital itself. The central bankers cannot dictate the speed at which money moves. They can only create it and drop it in the mix, speak their incantations, sprinkle pixie dust, offer some loony fiat prayer to the duped public, and continue with the next paper dump. The Untied States will gradually achieve systemic failure from redoubled efforts, suffer debt default from inability to manage the debt structure, and fall into the Third World. The nation will experience the monsters of high prices and acute shortage without comprehension of its source. It is toxic money.

The growth of the monetary base has been staggering high since the financial crisis broke in September 2008 with the collapse of Lehman Brothers. Since the end of August 2008, the monetary base has risen from $877 billion to $2,651 billion as of September 2012. That is a giant 3-fold rise. Witness the American Weimar era, its final chapter. The massive increase in new money has done nothing to foster growth in the USEconomy. The main reason is that fiat paper money destroys capital, a concept the hapless corrupted US economists cannot comprehend, either from compromise to their masters or lack of intellect due to years of exposure to the ass backwards preachings. The USEconomy is stuck in a powerful recession based in grotesque insolvency and bond fraud. As the USFed is poised to kick in another round of QE bond monetization, the money supply will ramp sharply up again. Do not expect much of any economic benefit, since the cost structure will rise again, then shrink profit margins. This capital destruction factor is a great blind spot to the hack economists who operate more as marketing harlots for Wall Street and the USGovt than analysts and advisors. The Ponzi Scheme theory dictates that an acceleration in new money is required to keep a constant speed. Expect more wreckage from the stripped gears of the USEconomic engine.
The growth of the monetary base has been staggering high since the financial crisis broke in September 2008 with the collapse of Lehman Brothers. Since the end of August 2008, the monetary base has risen from $877 billion to $2,651 billion as of September 2012. That is a giant 3-fold rise. Witness the American Weimar era, its final chapter. The massive increase in new money has done nothing to foster growth in the USEconomy. The main reason is that fiat paper money destroys capital, a concept the hapless corrupted US economists cannot comprehend, either from compromise to their masters or lack of intellect due to years of exposure to the ass backwards preachings. The USEconomy is stuck in a powerful recession based in grotesque insolvency and bond fraud. As the USFed is poised to kick in another round of QE bond monetization, the money supply will ramp sharply up again. Do not expect much of any economic benefit, since the cost structure will rise again, then shrink profit margins. This capital destruction factor is a great blind spot to the hack economists who operate more as marketing harlots for Wall Street and the USGovt than analysts and advisors. The Ponzi Scheme theory dictates that an acceleration in new money is required to keep a constant speed. Expect more wreckage from the stripped gears of the USEconomic engine.
The money velocity chart shows a deadly decline since 1980, and a powerful decline since the 2007 outbreak of the absolute bond crisis. The new money is going to the big banks in bond redemption, derivative coverage, and Black Hole (Fannie Mae, AIG) fills under the USGovt supervision. The money is not finding its way into the USEconomy for further circulation. The plague is insolvency, soaked by endless applications of tainted money from central bank fire hoses. The velocity of money has been falling for years, in reflection of an economy that is not turning over much at all. Think of a car missing its cylinders, spinning its gears, burning itself out, going nowhere. The above chart serves as pictorial evidence that the root cause of ruined money was the war. In the current decade, the wars are endless. America chose war over industry. A fuller explanation is offered in the September Hat Trick Letter.

Three eras are worth identifying in my view. The Vietnam War era and its aftermath saw huge expansion in money supply, huge nominal income growth, and huge increases in price inflation. The USFed did not interrupt the expanded USGovt debt from reaching Main Street, simply put. For consecutive years, the Consumer Price Index rose over 10%, which led to big worker pay hikes. The result was that US corporations began to send industry overseas. It started with Intel going to the Pacific Rim. The money velocity fell, as income fell on a real basis. The climax event was China being given the Most Favored Nation status in 1999, which released the gates for foreign direct investment. China made a deal with the Wall Street devils that has yet to gain publicity. The hidden motive was for Wall Street firms to borrow the Chinese gold hoard from the Chairman Mao era, so as to continue the great gold suppression game that has bankrupted the Untied States and betrayed the nation. US and London bankers skimmed and stole the gold.
HOUSE OF SAUD STARTS TO UNRAVEL
More loyal Jackass wannabee followers will recall a story (repeated often) that on the Easter Sunday weekend of April 2010, a secret gathering of over 200 Arab billionaires convened in Abu Dhabi. They arrived in unmarked jets. My source was one of only two or three white faces in the crowd, invited by his clients. One result of the meeting was an accord struck between the Persian Gulf oil producers, led by the Saudis, to work toward a pact with Russia and China as protector of the gulf in return for financial cooperation, economic construction, and forward progress. The implicit message was that the Untied States would be phased out in the protectorate. In the balance would lie the Petro-Dollar defacto standard as victim. Events continue to this day in movement toward that end.

However, since the Syrian uprising, a new lethal element has entered the mix. Account will be kept brief, since so volatile and controversial. Just some bare notes. The Assad family in Syria has suffered some assassinations. Apparently, the Saudis had a hand in the killings. HezBollah has vowed retaliation. Their ties to Iran might be longstanding, but perhaps are exaggerated. My view is their home is in Lebanon. In August, Prince Bandar was assassinated. He was the Saudi head of security, and long-time ally to the USGovt. The Saudi regime is concealing his death, with outdated photos and false statements. They are working toward a transition. The House of Saud has been unstable from threats to the south in Yemen. It is unstable from internal threats tied to the fundamentalists. Although cooperation and respect has been shown between Riyadh and Tehran, the Bandar hit has created an entirely new environment. The Saudi regime with high likelihood is in its final months.
More importantly, the Petro-Dollar is losing its all important Saudi leg. Implications are vast. The US public takes the USDollar for granted, with almost no concept of FOREX exchange rates. If the House of Saud falls, when it falls, the impact crater will include the entire waistline of the USEconomy and its financial dog tail that wags it. The USGovt and its banker handlers have relied heavily upon the Petro-Dollar in general, and on the Saudis in particular, ever since Henry Kissinger signed an accord that governs over the grand surplus recycling back in the 1973-1974 era. Watch the Saudis convert USTBonds to Gold, then bug out of the desert to their new mansions in Southern Spain.

CHINA AS INTERMEDIARY AGAINST PETRO-DOLLAR
Reports swirl that China is attempting to act as intermediary in global oil transactions, for Yuan currency settlement. The rebellion globally is picking up momentum against the USDollar. The Petro-Dollar defacto standard is slowly unraveling. The denizens of the Untied States have no idea the ravaging impact of a lost global reserve currency. It will unleash price inflation when the USFed central bank is letting loose the monetary flood gates. This declaration is an act of financial war directed at the US by China. To fortify the rear flank, Russia has promised to meet all requests for crude oil made by China, with settlement in Yuan and Ruble currencies. Take the pledge as a protection from any sudden USGovt threat or retaliation. The Russia-China Axis is forming more clearly in opposition to the USDollar, the Syndicate behind it, the many Embassies that offer sanctuary for espionage, and the global rules that enforce its hegemony.
Crude oil payments are the critical core of global trade. The rest of global trade will follow in non-USDollar payments, all in time. Entire banking systems will gradually make a transition away from the USTreasury Bond in its reserves managements. The banking practices will follow the trade payment structures, as it should be. The profound effect on the USEconomy will be clear, as blame is shifted as usual to external factors, even to extremists. In reality the US is up against vengeful Cossacks and the angry Mongol Horde. The entire world is moving against the USDollar, seen increasingly as a toxic agent within their internal domestic systems. They see the lack of solutions, the spreading bank insolvency, the accelerated debasement of currency, and the corrupted grants of multi-$trillion banker grants. They are taking action in response. They are following the Chinese lead with the Russians acting as a quasi-Rasputin.

Gerald Celente reported in early September, “On September the 6th of 2012, China officially announced that any country in the world that wishes to sell crude oil using its currency the Renminbi instead of the USDollar can do so. The following day September the 7th, Russia announced that the nation will sell China all the crude oil they need, no limitations whatsoever. They will not use the USDollar for their trade.” The claim by Celente is far reaching. The USDollar is dying a slow death. Its antagonists do not wish to speed the death process too rapidly, for fear of quickening the ravage to their own nations. They also do not wish to invoke the wrath of the USGovt, which since 2003 has enforced the USDollar as global reserve currency via its war machinery.
What China is offering is an intermediary clearing house role to sidestep the Petro-Dollar, where crude oil payments can be made in the Chinese Yuan currency. This offer is a financial act of war against the Untied States currency, where China will backstop all transactions. It is a violent offer to disrupt the USDollar. Look to see if any Saudi oil sales are settled in Yuan currency as alternative, even the Euro currency as expedient. The superpowers are openly attempting to isolate the USDollar, the clear victim to be the USEconomy, the land of consumption excess. The move is a tacit push of the US into an isolated place where it can very easily slide into the Third World.

MEXICO CUTS A DEAL WITH CHINA FOR OIL
Mexico is in the process to make concrete a major deal to sell crude oil to China, but not in USDollar terms. The Chinese declaration of financial war against the Untied States has reached both the northern border in Canada and the southern border in Mexico. To be sure, the Canadian oil is not sold outside the USDollar. But other factors are hard at work. The bulk of Athabasca oil produced from the oil sands in Western Canada (Alberta) output is directed to China, by way of the Vancouver ports owned 100% by China. In fact, the Chinese influence is so strong in the beautiful city on the Pacific coast that it has earned the nickname of Hongkouver. Some shallow analysts attribute a wayward motive to the decision by the USGovt to abandon the Keystone Oil Pipeline several months ago. The more realistic hidden motive was to assure the Western Canada oil output would be sent to China. The cutoff to the pipeline came with spurious official accounts, all quite humorous to the informed. The pipeline was abandoned to accommodate China, owner of significant USTBond holdings. They are the largest USGovt creditor. The tipping point was passed many years ago when the majority of USGovt debt was held by foreign creditors. Its consequence is vivid and unmistakable. The Untied States is converted into a colony, a killing field, as pathways are fashioned for entry into the Third World.
China through closed door negotiations is sealing deals to purchase Mexican crude oil without using USDollars as its trading currency. The Yuan is slowly moving toward global reserve status, not by a summit meeting and signed accord, but rather by numerous bilateral deals. Consider the bilateral swap accords signed by China with partners in Brazil, Japan, and elsewhere. The list grows, and beyond oil trade. As it does, the net is cast over the USDollar in isolation. Officials claim meetings were held with the Mexican Govt and PEMEX, the state owned oil giant. They are in progress with a brokered secret deal to purchase crude oil using currency means other than the USDollar. Expect a public announcement soon by Chinese Govt and PEMEX firms. In the past decade, China has planted seeds in trade while ignoring politics with numerous major players in global trade. The USGovt prefers the heavy handed financial banking games, backed by the heavy handed military maneuvers, all part of the sickening Full Spectrum Dominance that has blossomed in ruin. The Chinese have responded with an archipelago of trade pacts, best viewed as a Full Spectrum Encirclement of the USDollar. It cannot be conquered. So their plan apparently is to isolate it, to starve it, to let it suffer the Weimar consequences of its own high pitched debasement, and to permit it to become a Third World currency by default.

Over the past ten years with new trade agreements China has invested $billions inside Mexico. China has helped the Mexican Govt create jobs and has financially supported investments in the privatization of ports and infrastructure throughout Mexico. As the movement toward privatization of large sectors of its economy continues, China is in line to benefit from additional investments inside Mexico. Since the 2009 global economic crisis, Mexico’s central bank has been quietly purchasing large quantities of gold. In fact, some of the recent boost in May for Mexico Central Bank gold holdings was gold purchased from Chinese sources. The gold sales belie a closer relationship building with Mexico on the southern US border. While the USGovt is occupied with the Mexican Govt on matters pertaining to gun running, to handling illegal immigrants, and to shielding vast narcotics sales, the Chinese are busily working on trade, with a gold foundation and crude oil blood system. Those are the stuff of a stable currency. Perhaps Mexican leaders are preparing for the imminent and unavoidable devaluation of the USDollar. In more practical terms, regard the movement as the collapse of the USDollar in a vast sea of liquidity, better identified as toxic fiat paper currency.
STRIKES HINDER GOLD OUTPUT
Not in sufficient focus is the radical impact on gold supply. The gold investment demand has been on a tear in recent months. A sinister effect has been realized from the vast QE bond monetization conducted by the USFed and its partners at the Euro Central Bank and the Bank of Japan. The effect is of rising food and energy costs. The impact is particularly hard felt in poorer areas of the world. The great majority of major gold and silver mines are located in the poorer nations. The labor strikes at mining facilities are as much based upon unsafe worker conditions as they are based upon a higher cost of living, centered on food costs. The workers need more to survive at home, as they provide more precious metal output that satisfies mining company production targets. The end result is lower output in pockets of South America such as Bolivia, but more importantly in South Africa. A whopping 39% of South African Gold production has been taken offline. The impact on global output will be seen in the next few quarters. The fast rising investment Gold demand will be met by a significant decline in Gold supply. Price pressures will force a much higher Gold price. But first comes the depletion of the COMEX, as its paper contract merchants continue to ply their trade. Their new specialty is stealing client accounts that stand ready for contract delivery. See MFGlobal and the JPMorgan thefts, all fully blessed by the tainted US Court system.

THIRD WORLD THREAT
The implications are vast. A lost Petro-Dollar standard would mean a grand shift in payment for oil transactions, the most important of all global trade. In the last 20 years, all has been turned upside down. A global phenomenon of a powerful nature has been at work since the Lehman Brother failure, the Fannie Mae adoption, and the AIG redemption in 2008. The entire world is losing trust in the USGovt and its financial institutions. Personal email exchanges cite a regular occurrence of US corporations not receiving return phone calls, and of open disrespect in Europe for American businesses. The debt rating agencies do their part in upholding the paper fortress walls, but they must over time deliver the downgrades. An important catalyst took place when the USGovt imposed trade sanctions against Iran. The result was angering US trade partners more than anything else, well, except for causing severe price inflation on the Iranian Economy. The movement in reaction has been swift by global trade partners, in establishing bypass routes for payment systems between nations. The workarounds against the SWIFT bank payment system have been remarkable. The climax will be the non-US$ payment system to emerge, with no centralization, complete independence, relying upon non-bank devices like mobile communications.
Another bypass event just hit the news wires. The Swiss-based Vitol is the latest oil firm bypassing the USGovt sanctions against Iran. They exploit a legal loophole in Swiss law, since the nation did not abide by the US-led sanctions, a notable resistance. Vitol boasts being the largest oil trader in the world. It buys and sells Iranian fuel oil, undermining Western efforts to choke the flow of flow of money to Tehran. In August alone, Vitol purchased two million barrels of fuel oil, used for power generation, from Iran and offered it to Chinese traders. The Vitol firm is not obliged to comply with a ban imposed in July by the European Union on trading oil. The tale of the cargo for Iranian fuel oil involves tanker tracking systems being switched off, frequent ship-to-ship transfers, and the blending of the oil with fuel from another source to alter the physical specification of the cargo. How crafty.

Global finical markets are acutely aware that oil trade outside the USDollar will rapidly destabilize the USDollar even further. With Russia and China having entered into an agreement to trade crude oil using their own currencies, the Mexican news of a Chinese oil deal has potentially devastating consequences. The eventual effect is that the USDollar will lose its prestigious reserve currency status. In the process, it will lose value gradually. My view is that the defense of the USDollar will lead to all major fiat paper currencies to implode, step by step, taking down the banking systems and economies of major nations. The prevailing currency will be what is used in global trade. All signposts point to Gold. A new global trade system is ready to be installed, based upon gold in special notes. The transition awaits further collapse of the current currency regimes, the further collapse of the sovereign bonds, and the further collapse of the banking systems, which all assures the collapse of the global economy.
The QE fallout by the desperate central bankers has been seen in fast rising demand for gold bars and gold coins. The phenomenon is primarily in the Eastern world but also in Europe. The American crowds remain transfixed on their dwindling paper assets locked in stock accounts, many not easily altered due to tax rules. They remain transfixed on home equity losses, in a mindnumbing effect that the Jackass described in years 2005 and 2006 and 2007. The American Home was not a hard asset at all. Since its value was largely determined by the mortgage loans and mortgage bonds, together with the vast network of devices like MERS among bankers and the hidden caches with slush funds at Fannie Mae. The entire criminal history of Fannie Mae has been safely buried under the USGovt roof. Ten years ago, people would laugh at comments that the largest and most powerful criminal syndicate was operating under the USGovt label. They do not laugh anymore, including my own family. They protect themselves with the real deal currency for storing life savings, GOLD. They will soon enjoy the benefits, safety, and efficiency of trade systems based upon GOLD also.


 *  *  * 



Finally , regarding the European Union , if they are aware of what China's gameplan is , why wouldn't they slide money to the same Re-election Operation ? And is that why Europe was so distraught after the first debate ? Do they see their money going up in smoke if Obama loses and Romney just stones their bailout schemes whereby the Fed or Treasury bails out the weak sisters of the EU ? Foreign donors doesn't just mean China , it could be donors assisted by  bailout schemer nations like Greece , Spain , Italy and yes France .....


http://www.zerohedge.com/news/europe-finally-comes-out-us-election-determines-entire-european-bailout-calendar

Europe Finally Comes Out: Obama's Reelection "Uber Alles" Determines Europe's Future

Tyler Durden's picture
Submitted by Tyler Durden on 09/21/2012 09:46 -0400



For those to whom this comes as a surprise, following the periodic jaunts of Tim Geithner to Europe explaining just what is truly important in life, not to mention Obama's daily phone calls to Mario Monti, we feel truly sorry:
  • EU-IMF REVIEW OF GREEK DEBT SITUATION SET TO BE DELAYED UNTIL AFTER U.S. ELECTION - EUROPEAN OFFICIALS
And the punchlines:
  • "Obama doesn't want anything on a macroeconomic scale that is going to rock the global economy before Nov. 6," a senior EU official told
  • "As far as European leaders are concerned, they don't want Romney, so they're probably willing to do anything to help Obama's chances," said the source, an EU official involved in finding solutions to the debt crisis.
One kinda wonders: just what has Obama promised a broke Europe in return? Don't answer: it's rhetorical. It's also "fair."
At least it is finally clear that the entire world's agenda is to get Obama reelected, broke Athens municipalities no longer collecting garbage, and running out of cash to pay the local Five-Oh notwithstanding.
Get ready for reality to come crashing down once the second coming is completed on November 6, and surreality is no longer needed.
Full article confirming that the entire developed world is now not only broke, but socialist as well:
An EU-IMF report into whether Greece's debt is manageable looks set to be delayed until after Nov. 6 because policymakers want to avoid any shock to the global economy before the U.S. election, EU officials and diplomats say.

The report by the 'troika' of Greece's foreign lenders -- the European Commission, European Central Bank and International Monetary Fund -- was expected during October, possibly before a meeting of eurozone finance ministers on Oct. 8.

The study provides the basis for decisions on whether to disburse the next tranche of aid to Athens, which may otherwise run out of money to pay wages and pensions, default on its debt and perhaps be forced to leave the euro area.

Differences inside the troika about the precise extent of Greece's debt problems, combined with political pressure to hold off for another few weeks, look likely to mean a delay until mid-November. In the meantime, Greece will be kept afloat by issuing short-term treasury bills and its banks will get access to emergency funds from the Greek central bank.
"The Obama administration doesn't want anything on a macroeconomic scale that is going to rock the global economy before Nov. 6," a senior EU official told Reuters, adding that previous troika reports had also slipped.

Several sources in Germany said top officials in Washington had made clear in numerous conversations with their German and European counterparts that they would prefer no surprises before the tightly contested election.

"It's likely the troika report will be pushed back beyond the U.S. election date," said a Berlin official who spoke on condition of anonymity. Asked if that was a special request from Washington, he replied: "They don't want any surprises."

The European Commission's spokesman on finance said on Friday the troika would take a week-long break from its work in Athens, the second time it has interrupted its mission since it began in late July, adding to expectations of a delay.

"The inspectors are expected to return to Athens in about a week," spokesman Simon O'Connor told reporters.

"As for a conclusion of the mission, I don't have any dates to share with you," he said, adding that it should be some time during October. "We can't say exactly when."
If Greece is off-target by a wide margin, as many economists predict, financial markets will react negatively, concerned that another round of debt restructuring will be required to get government finances back on a stable footing.

A negative troika report could also revive pressure to force Greece out of the single currency area with potentially devastating knock-on consequences for other European countries and the global economy.

European leaders have the same interests as the U.S. president in not destabilising markets -- their own economies have also been badly affected by the fallout from Greece, where the sovereign debt crisis began in January 2010.

But one source said EU leaders' motives went beyond macroeconomic stability. They also had political reasons to avoid rocking the boat before the U.S. election.

"As far as European leaders are concerned, they don't want Romney, so they're probably willing to do anything to help Obama's chances," said the source, an EU official involved in finding solutions to the debt crisis.

The problem for Obama is that if Europe's leaders are seen, implicitly or otherwise, to be working to bolster his reelection chances, it could provide ammunition for the Romney campaign.

European leaders have repeatedly been accused of acting too slowly and in a confused way to resolve the crisis, with a knock-on negative impact on the United States. If they are now seen to be allying with Obama, it could dent his popularity.
So dear Greeks, Spaniards, Portuguese, and all other soon to be broke nations, who are stuck not knowing if you will ever get a pension payment, if the money in your bank is safe, or if there is nobody to collect your garbage, thank the US president.
Also: buy every December VIX call option you can find cause the feces sure are gonna hit the fan once the BS is finally over and truth can no longer be delayed.
http://frontpagemag.com/2012/frank-crimi/as-romney-rises-europe-slouches/

Romney Rising, Europe Panicking

Posted by  Bio ↓ on Oct 5th, 2012 Comments ↓
The European hope for an Obama second term is now flagging after Barack Obama’s disastrous debate performance Wednesday night against Mitt Romney.
As in the United States, Obama’s debate performance is being ruthlessly panned by European leaders, diplomats and media, many of whom were not only hopeful, but confident that Obama would easily win re-election.
Instead, that certainty has now been replaced by heightened angst, best expressed by the French paper, Le Monde, which wrote on its front page, “Where did the favorite go?: Obama fails his first televised debate against an incisive Romney.”
That Obama failure, according to European media accounts, is rooted in the President’s shocking lack of style, substance and commanding presence, a critique shared across both sides of the European media’s political spectrum.
In Britain, for example, the conservative Daily Telegraph wrote that Romney was “stunningly on top of his argument with a faultless command of detail and a confident fluency that made Barack Obama seem hesitant, defensive and occasionally evasive.”
For its part, the liberal Guardian said Romney came off as “energetic and self-assured,” in contrast to the “sullen, grumpy and disengaged” Obama.” Meanwhile the liberal German news magazine Der Speigel bemoaned the fact the “sullen and listless Obama” could not best the “smiling and energetic” Romney.
The net effect, according to Der Speigel, was to render Obama “something of a Dud President,” causing a “negative effect on his candidacy” and thus placing his re-election efforts on “shaky ground.”
That electoral prospect, however, has engendered deep alarm in many European Union countries, led by right and left-centered governments, eager to keep their relationship with the Obama administration intact as they work to prevent the EU from fiscally imploding.
As one European financial analyst said, “The Europeans have a general uneasiness about a Romney presidency. It’s not because they don’t like him, but…There’s a general tendency to stick to what you know and what you have been working with.”
Romney certainly didn’t endear himself to EU leaders, in particular the Spanish, when he singled Spain out in the presidential debate as the poster child for the euro-debt crisis, when he said, “Spain spends 42 percent of its total economy on government. We’re now spending 42 percent of our economy on government. I don’t want to go down the path to Spain.”
Not surprisingly, that pointed observation hurt Spanish sensibilities, leading the country’s main daily, El Pais, to write, “Spain has never been mentioned in a presidential debate as a symbol of failure. What happened last night makes history. And not in a good way.”
To be fair, it’s hard to paint Spain in a positive light when the country is faced with record unemployment at 25 percent and reportedly on the verge of needing a bailout from the EU.
Moreover, it’s understandable why Romney wouldn’t want the United States to go down the same path as the EU, drowning in a sea of debt by giving unsustainable bailouts to welfare-state nations, such as Spain and Greece, in order to prevent them from going bankrupt.
Moreover, those recipient countries of EU largesse have had to impose harsh new spending cuts, tax increases and economic reforms to meet EU deficit targets, efforts which have hit their citizens with wage cuts and fewer services, prompting waves of anti-austerity protests.
Not surprisingly, those protests have signaled a coming EU economic meltdown, one which the Obama administration has been working feverishly to prevent prior to the November election lest it affect the US economy and imperil Obama’s reelection chances.
Administration officials have pressured EU countries to support Obama’s policy initiatives, evidenced most openly at the G8 meeting in May in which one European leader said, “It was like all of the G8 apart from Russia and Japan were expected to be part of the Obama re-election campaign.”
One EU official was even more direct when he revealed, “The Obama administration doesn’t want anything on a macroeconomic scale that is going to rock the global economy before November 6.”
To that end, Greece, which has been dependent since 2010 on billions of euro rescue loan packages as well as largesse from and the International Monetary Fund, now has a reported debt of $25 billion, double what that nation had previously claimed.
The European Commission wants a final decision on the next Greek bailout to take place at the next EU summit in mid-October, while Germany insists that it can’t be done until sometime in November — after the US Presidential election.
Yet, regardless of who wins that election, it’s unlikely that the EU will hold any longstanding objection to a Romney presidency.
As one diplomat in Brussels said, “Even though we have a natural predilection for Democratic presidents, we’ll embrace the next US president whoever he is. We just have to deal with it.”
Europe is right to be considering the possible eventualities. At this point, the election is anyone’s game.


http://www.zerohedge.com/news/2012-10-08/esm-has-been-inaugurated-spains-%E2%82%AC38-billion-invoice-mail

The ESM Has Been Inaugurated: Spain's €3.8 Billion Invoice Is In The Mail

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Submitted by Tyler Durden on 10/08/2012 13:00 -0400



Now that the ESM has been officially inaugurated, to much pomp and fanfare out of Europe this morning, many are wondering not so much where the full debt backstop funding of the instrument will come from (it is clear that in a closed-loop Ponzi system, any joint and severally liable instrument will need to get funding from its joint and severally liable members), as much as where the equity "paid-in" capital will originate, since in Europe all but the AAA-rated countries are insolvent, and current recipients of equity-level bailouts from the "core."
As a reminder, as part of the ESM's synthetic structure, the 17 member countries have to fund €80 billion of paid-in capital (i.e. equity buffer) which in turn serves as a 11.4% first loss backstop for the remainder of the €620 billion callable capital (we have described the CDO-like nature of the ESM before on many occasions in the past). The callable capital is highly amusing: as part of the finalized structure, the capital call process is as follows: "ESM shareholders irrevocably and unconditionally have undertaken to pay on demand such capital within 7 days." The irony of a country like Greece precommiting to a €19.7 billion capital call, or Spain to €83.3 billion, or Italy to €125.4 billion, is simply beyond commentary. Obviously by the time the situation gets to the point where the Greek subscription of €20 billion is the marginal European rescue cash, it will be game over. The hope is that it never gets to that point.
There is, however, some capital that inevitably has to be funded, which even if nominal, may prove to be a headache for the "subscriber" countries. The payment schedule of that capital "invoicing" has been transformed from the original ESM document, and instead of 5 equal pro rata annual payments has been accelerated to a 40%, 40%, 20% schedule. And more importantly, "The first two instalments (€32 billion) will be paid in within 15 days of ESM inauguration." In other words, October 23 is the deadline by which an already cash-strapped Spain, has to pay-in the 40% of its €9.5 billion, or €3.8 billion, contribution, or else.
Spain will then have 2 years in which to fund the balance of its remaining €5.7 billion equity subscription commitment.
What happens, at least on paper, if Spain is ever "equity" deficient? Here is what the ESM Treaty has to say on this particular matter:
If any ESM Member fails to pay any part of the amount due in respect of its obligations in relation to paid-in shares or calls of capital under Articles 8, 9 and 10, or in relation to the reimbursement of the financial assistance under Article 16 or 17, such ESM Member shall be unable, for so long as such failure continues, to exercise any of its voting rights. The voting thresholds shall be recalculated accordingly.
And this:
If an ESM Member fails to meet the required payment under a capital call made pursuant to Article 9(2) or (3),a revised increased capital call shall be made to all ESM Members with a view to ensuring that the ESM receives the total amount of paid-in capital needed.The Board of Governors shall decide an appropriate course of action for ensuring that the ESM Member concerned settles its debt to the ESM within a reasonable period of time. The Board of Governors shall be entitled to require the payment of default interest on the overdue amount.
Source: ESM Treaty
In other words, should a worst case scenario materailize and Europe's insolvent countries are unable to even prefund their portion of the €80 billion in equity needs (forget 8x bigger capital calls), it will be up to Germany (and/or any other viable AAA-rated countries) once again to fill the hole, and at that point "The Board of Governors shall decide an appropriate course of action for ensuring that the ESM Member concerned settles its debt to the ESM within a reasonable period of time." The same board of Governors comprising of the same insolvent countries whose primary duty is to stuff Germany with as much of the costs as possible. We can't wait to see what punishment they dole out for Europe's insolvent (i.e., most of them) countries.
Now the problem for Spain, as has been frequently reported here in the past month, is that due to the major debt maturity hurdle in October, the country is in danger of running out of cash in the next few weeks. Adding the burden of funding an otherwise token amount of cash such as the €3.8 billion paid in capital requirement, and one can see why everyone from Mario Draghi, to Goldman, to Italy and France (but oddly enough not Germany - why? Recall that Germanyneeds a low EURUSD which benefits its export industry, and needsthe periphery constantly on the verge of collapse - Germany doesnot want a strong periphery as that does not help the European mercantilist construct nor its leverage as Europe's ultimate paymaster) has been asking that Spain promptly demand a bailout, and get the implicit ECB secondary market support, so that Spain can then in turn not be a threat to the primary market monetization scheme which is the ESM.
And here is where the glory of the European close-loop ponzi truly shines:
Spain needs to request a bailout in order to have the explicit (as merely implicit will no longer do) ECB backstop, to be able to issue the debt at modest rates, to raise the cash needed to fund the ESM payment and other general "sovereign purposes", which in turn is needed to make sure future Spanish debt obligations are funded in the primary market (at least until the ESM's dry powder runs out), in order to allow Spain to continue to do nothing to fix its soaring budget deficit due to rising spending and contracting revenues, for which the market merely looks away with Draghi's blessing, until the crisis reaches the next plateau, as fundamentally the lack of cash is due to insolvency, not lack of liquidity, and breaks through it, requiring even more cash, and even more pledgeable collateral, which Europe no longer has (which then activates "Operation Obama rescue us in exchange for our implicit votes" in play" but that's a different story). And of course, for all of the above to happen, Mariano Rajoy has to be prepared for the social and political fallout when he officially cedes sovereignty of the country to the IMF, the Troika, and naturally to Merkel. Fast forward to 2014 when a Merkel visit in Madrid requires the protection of 70,000 policemen (not just the 7,000 planned for her visit to Athens tomorrow).
Some union.
Finally, the reason why all of the above is actually very much moot, is as follows. In the ESM presentation, we also get a glimpse of the combined residual ESM capacity:
In other words, with up to €292 billion already pledged out of a total €700 billion, there is just over €400 billion left for incidentals. Such as the sovereign funding cliff needs in 2013 driven primarily by Spain and Italy. How big are said needs? For that answer we go back to Ray Dalio, and Bridgewater, who recently spelled out the crux of the European situation in one simple chart:
In other words, everything Europe has "done" so far is completely meaningless. Any questions?



http://www.zerohedge.com/news/2012-10-08/imf-cuts-global-growth-warns-central-banks-only-game-town

IMF Cuts Global Growth, Warns Central Banks Only Game In Town

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Submitted by Tyler Durden on 10/08/2012 18:05 -0400



"The recovery continues but it has weakened" is how the IMF sums up their 250-page compendium of rather sullen reading for most hope-and-dreamers. The esteemed establishment led by the tall, dark, and handsome know-nothing Lagarde (as evidenced by her stroppiness after being asked a question she didn't like in the Eurogroup PR) has cut global growth expectations for advanced economics from 2.0% to only 1.5%. Quite sadly, they see two forces pulling growth down in advanced economies: fiscal consolidation and a still-weak financial system; and only one main force pullinggrowth up is accommodative monetary policy. Central banks continue not only to maintain very low policy rates, but also to experiment with programs aimed at decreasing rates in particular markets, at helping particular categories of borrowers, or at helping financial intermediation in general. A general feeling of uncertainty weighs on global sentiment. Of note: the IMF finds that "Risks for a Serious Global Slowdown Are Alarmingly High...The probability of global growth falling below 2 percent in 2013––which would be consistent with recession in advanced economies and a serious slowdown in emerging market and developing economies––has risen to about 17 percent, up from about 4 percent in April 2012 and 10 percent (for the one-year-ahead forecast) during the very uncertain setting of the September 2011 WEO. For 2013, the GPM estimates suggestthat recession probabilities are about 15 percent in the United States, above 25 percent in Japan, and above 80 percent in the euro area." The full details are below. 
Summing it up (via Reuters):
Global growth is too weak to bring down unemployment and what little momentum exists is coming primarily from central banks, the International Monetary Fund said in its World Economic Outlook, released ahead of its twice-yearly meeting, which will be held in Tokyo later this week.
The keyword is momentum. Or rather lack thereof:
Policy tightening in response to capacity constraints and concerns about the potential for deteriorating bank loan portfolios, weaker demand from advanced economies, and country-specific factors slowed GDP growth in emerging market and developing economies from about 9 percent in late 2009 to about 5¼ percent recently. Indicators of manufacturing activity have been retreating for some time (Figure 1.3, panel 1). The IMF staff’s Global Projection Model  suggests that more than half of the downward revisions to real GDP growth in 2012 are rooted in domestic developments.
  • Growth is estimated to have weakened appreciably in developing Asia, to less than 7 percent in the first half of 2012, as activity in China slowed sharply, owing to a tightening in credit conditions (in response to threats of a real estate bubble), a return to a more sustainable pace of public investment, and weaker external demand. India’s activity suffered from waning business confidence amid slow approvals for new projects, sluggish structural reforms, policy rate hikes designed to rein in inflation, and flagging external demand.
    • Real GDP growth also decelerated in Latin America to about 3 percent in the first half of 2012, largely due to Brazil. This reflects the impact of past policy tightening to contain inflation pressure and steps to moderate credit growth in some market segments—with increased drag recently from global factors.
    • Emerging European economies, following a strong rebound from their credit crisis, have now been hit hard by slowing exports to the euro area, with real GDP growth coming close to a halt. In Turkey, the slowdown has been driven by domestic demand, on the heels of policy tightening and a decline in  confidence. Unlike in 2008, however, generalized risk aversion toward the region is no longer a factor. Activity in Russia, which has benefited various economies in the region, has also lost some momentum recently.
    IMF isn't happy about Europe:
    Notwithstanding policy action aimed at resolving it, the euro area crisis has deepened and new interventions have been necessary to prevent matters from deteriorating rapidly. As discussed in the October 2012 Global Financial Stability Report (GFSR), banks, insurers, and fi rms have swept spare liquidity from the periphery to the core of the euro area, causing Spanish sovereign spreads to hit record highs and Italian spreads to move up sharply too (Figure 1.2, panel 2). Th is was triggered by continued doubts about the capacity of countries in the periphery to deliver the required fi scal and structural adjustments, questions about the readiness of national institutions to implement euro-area-wide policies adequate to combat the crisis, and concerns about the readiness of the European Central Bank (ECB) and the European Financial Stability Facility/ European Stability Mechanism (EFSF/ESM) to respond if worst-case scenarios materialize.
    These concerns culminated in questions about the viability of the euro area and prompted a variety of actions from euro area policymakers. At the June 29, 2012, summit, euro area leaders committed to reconsidering the issue of the seniority of the ESM with respect to lending to Spain. In response to escalating problems, Spain subsequently agreed on a program with its European partners to support the restructuring of its banking sector, with financing  of up to €100 billion. Also, leaders launched work on a banking union, which was followed up recently with a proposal by the European Commission to  establish a single supervisory mechanism. Leaders agreed that, once established, such a mechanism would open the possibility for the ESM to take direct equity stakes in banks. This is critical because it will help break the adverse feedback loops between sovereigns and banks. Moreover, in early September, the ECB announced that it will consider (without ex ante limits) Outright Monetary Transactions (OMTs) under a macroeconomic adjustment or precautionary program with the EFSF/ESM. The transactions will cover government securities purchases, focused on the shorter part of the yield curve.

    Importantly, the ECB will accept the same treatment as private or other creditors with respect to bonds purchased through the OMT program. (ZH: not really - especually not when the ECB has to see its bonds incur losses - see Greece)The anticipation of these initiatives and their subsequent deployment set off a relief rally in financial markets, and the euro appreciated against the U.S. dollar and other major currencies. However, recent activity indicators have continued to languish, suggesting that weakness is spreading from the periphery to the whole of the euro area (Figure 1.3, panel 2). Even Germany has not been immune.
    .. or the US:
    The U.S. economy also has slowed. Revised national accounts data suggest that it came into 2012 with more momentum than initially estimated. However, real GDP growth then slowed to 1.7 percent in the second quarter, below the April WEO and July WEO Update projections. The labor market and consumption have failed to garner much strength.
    Could have fooled the BLS and the brand spanking news "7.8% unemployment rate."

    To summarize:
    Risks for a Serious Global Slowdown Are Alarmingly High
    The WEO’s standard fan chart suggests that uncertainty about the outlook has increased markedly (Figure 1.11, panel 1). The WEO growth forecast is now 3.3 and 3.6 percent for 2012 and 2013, respectively, which is somewhat lower than in April 2012. The probability of global growth falling below 2 percent in 2013––which would be consistent with recession in advanced economies and a serious slowdown in emerging market and developing economies––has risen to about 17 percent, up from about 4 percent in April 2012 and 10 percent (for the one-year-ahead forecast) during the very uncertain setting of the September 2011 WEO.
    The IMF staff’s Global Projection Model (GPM) uses an entirely different methodology to gauge risk but confirms that risks for recession in advanced economies (entailing a serious slowdown in emerging market and developing economies) are alarmingly high (Figure 1.12, panel 1). For 2013, the GPM estimates suggest that recession probabilities are about 15 percent in the United States, above 25 percent in Japan, and above 80 percent in the euro area.
    Summary revised (lack of growth) table: