Germany ......
http://www.zerohedge.com/news/2013-11-13/europe-follows-us-demanding-germany-explain-its-exporting-ways
Submitted by Tyler Durden on 11/13/2013 08:44 -0500
http://hat4uk.wordpress.com/2013/11/12/eu-future-breaking-berlin-moves-germany-out-of-the-line-of-fire-and-squarely-into-the-driving-seat/
Although the process has gone largely (and very likely deliberately) ignored by the old Robber-Baron media, in a series of moves over the last few days, the German Federal Republic has given out the message loud and clear: the eurozone project will be pursued, but not in a way that even remotely risks German solvency. The Bankfurters, it seems to me, have won…as I always suspected they would. Mario Draghi – for all his initial political skills in the ECB job – now looks cornered. The Greeks must accept that they’ll be hung out to dry….and the Schäuble dream of a Germanised ‘business friendly’ Europe is on the verge of coming true.
Submitted by Tyler Durden on 11/12/2013 12:12 -0500
Submitted by Tyler Durden on 11/11/2013 11:46 -0500
http://www.zerohedge.com/news/2013-11-13/europe-follows-us-demanding-germany-explain-its-exporting-ways
Europe Follows US In Demanding Germany Explain Its Exporting Ways
As we discussed two weeks ago, it would appear Germany's lack of willingness to throw itself on the pyre of self-sacrifice and not adopt a global Fairness Doctrine - as engendered by the US Treasury's (and IMF's) bashing of the core European nation's for maintaining its export strength and daring to keep Europe in tact and thus a periphery-damaging strong Euro - is gathering steam. None other thanEurope itself is now 'probing' Germany's trade surplus, using enhanced powers over how euro nations manage their economies with the IMF urging German Chancellor Angela Merkel to curtail the trade surplus to an “appropriate rate” to help euro partners cut deficits.
As we previously noted, Jack Lew (and everyone else) appears surprised at the following chart all of a sudden...
It is also a complete shock to the US Treasury that the current layout of the Eurozone - the same Eurozone that the Fed has stepped in on numerous occasions to bailout, common currency and all - was simply to facilitate German exports to fellow European countries.
Which is probably why, after years of saying nothing, in its semi-annual currency report released yesterday and "employing unusually sharp language, the U.S. openly criticized Germany's economic policies and blamed the euro-zone powerhouse for dragging down its neighbors and the rest of the global economy."
And now - it's the Europeans jumping on the 'Bash Germany' bandwagon...
Via Bloomberg,
European Union regulators began a probe of Germany’s trade surplus, using enhanced powers over how euro nations manage their economies.The decision to step up monitoring of imbalances in the German economy follows criticism that the country’s current-account surplus -- which at 7 percent of gross domestic product is the second highest in the euro area --is limiting exports from other euro countries by adding to the strength of the single currency.The opening of an in-depth review into the imbalances in Germany’s economy comes after the U.S. Treasury blamed German surpluses for draining European and global growth. The International Monetary Fund also reprimanded Germany for its surpluses, urging German Chancellor Angela Merkel to curtail the trade surplus to an “appropriate rate” to help euro partners cut deficits.“Crucially, a rise in domestic demand in Germany should help to reduce upward pressure on the euro exchange rate, easing access to global markets for exporters in the periphery,” EU Economic and Monetary Affairs Commissioner Olli Rehn said in a blog post on Nov. 11. “Removing the bottlenecks to domestic demand would contribute to a reduction in Germany’s external trade surplus.”
http://hat4uk.wordpress.com/2013/11/12/eu-future-breaking-berlin-moves-germany-out-of-the-line-of-fire-and-squarely-into-the-driving-seat/
EU FUTURE BREAKING: Berlin moves Germany out of the line of fire…and squarely into the driving seat
It is no longer possible to deny the Grossdeutschland “business friendly” agenda in Europe
Although the process has gone largely (and very likely deliberately) ignored by the old Robber-Baron media, in a series of moves over the last few days, the German Federal Republic has given out the message loud and clear: the eurozone project will be pursued, but not in a way that even remotely risks German solvency. The Bankfurters, it seems to me, have won…as I always suspected they would. Mario Draghi – for all his initial political skills in the ECB job – now looks cornered. The Greeks must accept that they’ll be hung out to dry….and the Schäuble dream of a Germanised ‘business friendly’ Europe is on the verge of coming true.
In Germany’s emergent post-election CDU/CSU/SPD Grand Coalition, red lines have been clearly agreed on banking union. Alongside this sits a united decision to reject the proposals of the European Commission and ECB on banking union, and to anchor the resolution fund to the Ecofin on a purely inter-governmental basis. Several sources involved in the coalition talks have confirmed the story, which ran at Reuters. The 3 major German Parties also agreed that no funds from the ESM should be made directly available for the recapitalisation of eurobanks.
Wolfgang Schäuble will present the proposals to the Ecofin on Tuesday, but this is essentially a Germandiktat. All told, it trades the CDU’s wish not to involve the Commission in the decision-making with the SPD’s wish not to involve the ESM in the funding. It is win-win for Germany.
Before this decision, however, it was obvious that Draghi’s rate cut had been a bridge too far for Frankfurt and Berlin. Weidemann voted strongly against the cut. And although the ECB is becoming openly critical of Germany’s position on banking union – and will be incandescent with rage at Schäuble’s deal with the SPD - its previous insistence that “Coordination between national resolution systems has not proved sufficient…By pooling resources, the (fund) will be able to protect taxpayers more effectively than under national arrangements, and thus break the adverse nexus between banks and their respective sovereigns” now enjoys dead duck status.
A trusted US source for The Slog comments, “Without a common backstop – and also without an implicit fiscal backstop once the resolution fund is complete – it would be dishonest to talk about banking union. Common resolution and deposit insurance is the essence. Without it, it degenerates into a bureaucratic exercise of job reshufflings”.
Berlin has made it clear: ‘it’s our ball, and if you don’t use our rules, we’re taking it home’.
But the final move by Berlin may prove to be the most decisive: the increased constitutional role in the German constitutions for the referendums – especially on EU issues. The dominant eurozone member State subjecting the banking union process of eurozone integration to a referendum is bound to introduce huge uncertainty. The further development of the eurozone must surely involve important treaty changes in the coming years – and after even a year or two, it will become obvious that Germany will be dictating the terms….as it did from 1938 onwards under Hitler.
I was amazed just over a fortnight ago when Olli Rehn’s blithe admission that Greece would get no debt relief before May 2014 went almost unnoticed in the Western media. But this too was a sign of the EC basically doing Berlin’s bidding. Effectively, that decision was and is a death sentence for the Greeks: without that interim help, they must default.
Germany has really done nothing less than force the rest of Europe to sue for peace. I got it wrong in 2012 when I wrote that Francois Hollande’s election shifted the EU balance of power away from Germany. This was partly because I did not have the remotest inkling of just how ineffectually hopeless Hollande would be. The degree of this can be measured by the increasing likelihood that France could have a Front Nationale President within three years. But I also must confess to having underestimated the talent that Wheelchair Wolfie has for regrouping ready for counter-attack.
The one thing I did nail however (when most didn’t) was the unstoppable power of the Deutschland über Alles Bankfurters as an institutionalised power base in Germany. Those who laughed at the Bankfurt Maulwurf (and often claimed I’d invented the bloke) have been proved spectacularly wrong. He may have decided that I am a dangerous radical these days, but everything he told me about German financial culture was spot on. I raise a glass of schnapps to him tonight.
………………………………..
It would be hard to overestimate the geopolitical and diplomatic importance of these moves. Although I had always thought (as did most informed observers) that a different, more aggressively decisive Germany would emerge from the Bundesrepublik elections, I don’t believe anyone knew for sure what the exact shape of that change would be. Now I think it is much clearer: there is only one group of people the Germans trust to run Europe, and that is the Germans. What we can see here is a remarkable level of political consensus in Germany, and it is saying this: under the guise of increased democracy, we will hold everything up until we hold every one of the purse strings. And we alone will decide who is good, and who must be banished to the naughty step.
This New Order in Europe will not, of course, be democratic in any real sense. The fulcrum of elected power will shift from Brussels to Berlin, and the EC will meekly assume its new role: that of spinning German foreign policy as being European Union policy. But this German policy will itself be answerable to the same econo-financial desires that every other Sovereign State in the West has to obey. We are heading for the application to Europe of that awesome and deadly trend being whipped up by Camerlot in Britain: a more “business-friendly” environment.
If you think this to be a cavalier judgement, then kop a load of this: in an unprecedented and united call published by the Sunday Times in the UK, the front page of Dagens Industri in Sweden and Frankfurter Allgemeine Zeitung in Germany, the entrepreneurs and business leaders – many of whom have never spoken out in the Europe debate before – urged policymakers to construct a more business-friendly, internationally competitive and democratically accountable Europe. Cutting across different sectors and countries, the initiative’s supporters have helped lead companies employing close to a million people across Europe and the world.
Signatories to the initiative – who have all signed in a personal capacity – include Karl-Johan Persson, the CEO of Swedish retail giant H&M, Dr. h.c. August Oetker, Chairman of renowned German food producer, Dr. Oetker, and head of one of Europe’s largest family-owned businesses, Douglas Flint CBE, Group Chairman of HSBC Holdings, Joanna Shields, Chief Executive of Tech City, and Sir John Peace, Chairman of Standard Chartered Bank.
Open Europe Advisory Council Member Maria Borelius is quoted in the Sunday Times saying “This is the first serious attempt to reach across the Channel and engage like-minded entrepreneurs and business leaders across Europe to form a coalition for change in the EU – it is a definite sign of the growing momentum for EU reform across the continent. If the UK is going to achieve meaningful reform of the EU, the case must be made across Europe and not simply argued out within the UK.” The letter is also cited by Die Welt andCity AM.
As the Slogger who pointed this out to me pointedly comments, “Does anyone seriously believe such “signatories” as the CEOs of HSBC or Standard Chartered really give a toss about democracy?”
Quite: of course they don’t. In fact, I would go further: when a Newscorp Sunday paper run by a monopolist psychopath joins forces with FAZ (the German financial powerful’s inhouse magazine) to get something moving, you know that citizen liberties and genuine democracy stand ready to be annihilated.
Does the team around (and behind) David Cameron worry about this? No, not a chance: they know all about it. They’re in on it. This sort of crap is music to the ears of Fallon, Hunts, Schapps, Osborne and all the other cretins who think that the pursuit of money and power is infinitely more important and relevant to our species than the re-civilisation of society.
This has not been a good day for life-balanced freedom and socio-economic mutuality. The Bad Hats have their ducks in a row. The Left is dumbstruck, and the blogosphere is splintered every which way. I take but one small solace from all this: is is very often true in history that, on the eve of what appears to be unassailable victory, the uncontrolled hubris of power-mongers trips them up. We shall see.
http://www.zerohedge.com/news/2013-11-12/goebbels-would-be-proud-european-union-pulls-report-alleging-spanish-economic-data-m
Spain......
Goebbels Would Be Proud: European Union Pulls Report Alleging Spanish Economic Data Is Made Up
One of the underreported stories from last week was the implicit announcement by the official statistical agency of the European Union - Eurostat - that Spanish budget (and who knows what other) data is now just one big lie. Last Tuesday Bloomberg reported: "European Union officials made an extraordinary visit to Spain in September that signals escalating concern about the reliability of the country’s budget data. EU statisticians ordered a so-called ad-hoc visit, a procedure reserved for urgent issues, to assess whether regional officials are complying with recommendationsafter failing to report all the unpaid bills they had accumulated in 2011, Tim Allen, a Luxembourg-based press officer for the statistics agency Eurostat, said in an e-mail.Eurostat raised concerns about Spanish datain April following at least two “upstream dialog visits,” the second of four levels of checks the agency has on member states’ statistical reporting."
The report continues:
September’s visit signaled a shift in gear to the second-most serious intervention. Ad-hoc visits are triggered by urgent issues regarding the quality or the methods used to produce the data, which only can be resolved with a face-to-face meeting, according to the agency Web site.Local and regional administrations in Spain need to make “substantial improvements to public accounting and statistical reporting,” the agency said in its April 30 report. “Eurostat notes the lack of initiative and preparedness to follow up the recommendations.”
The damning report by the Eurostat can be found at the following link. Or rather could because as of moments ago one is greeted with the following 404 screen:
What happened? Something that would make Goebbels giddy with pride.
Eurostat, BBG reports again, the European Union’s statistics agency, withdrew a report criticizing Spain’s processes for reporting budget data after consultations with the country’s government, Eurostat spokesman Tim Allen says by e- mail.
"Further exchanges with the Spanish authorities have shown that a few statements in the report were too general," Allen says. "The report has been temporarily withdrawn for amendment."
Too general as in not "everything" is made up, just this, this and this? Laughable.
At least we got yet another glimpse of how that sinking economic titanic, the Eurozone, deals with the truth: by withdrawing it for "amendments." Because one can't have something, anything, casting doubt on the Spanish "miracle recovery" - after all, the last thing the hedge fund "greater fool" scramble into Spain needs is even the faintest glimpse of not only how bad it is, but that when one strips away the endless lies, it has never been worse.
http://www.zerohedge.com/news/2013-11-11/mystery-behind-spanish-banks-extend-and-pretend-npl-miracle-revealed
Mystery Behind Spanish Banks' Extend-And-Pretend "Bad Debt Miracle" Revealed
- Capital Markets
- European Central Bank
- European Union
- Eurozone
- Global Economy
- Greece
- Housing Bubble
- New Normal
- non-performing loans
- Real estate
- Reality
- recovery
- Unemployment
One of the mysteries surrounding the insolvent, and already once bailed out Spanish banking sector, has been the question why reported bad loans - sharply rising as they may be - are still as relatively low as they are currently, considering the nation's near highest in the Eurozone unemployment rate, and in comparison to such even more insolvent European nations as Greece, Cyprus and Slovenia.
Courtesy of the just completed bank earnings season, and a WSJ report, we now know why: it turns out that for the past several years, instead of accurately designating non-performing loans, banks would constantly "refinance" bad loans making them appear viable even though banks have known full well there would be zero recoveries on those loans. In fact, as the story below describes, banks would even go so far as making additional loans whose proceeds would be just to pay interest on the existing NPLs - a morbid debt pyramid scheme, which when it collapses, no amount of EFSF, ESM or any other acronym-based bailout, will be able to make the country's irreparably damaged banks appear even remotely viable.
It has puzzled Spanish bank analysts for years: Why did the country's mortgage delinquency rate rise so slowly even as unemployment soared above 26%?A big part of the answer—revealed by a spate of bank earnings reports in recent days—is that Spanish lenders had been making their loan books look healthier than they really were by refinancing big numbers of loans to struggling homeowners and businesses.The lower interest rates and easier terms of refinancing helped hundreds of thousands of Spaniards like Juan Carlos Díaz,who stopped making mortgage payments more than a year ago, remain in their homes and keep their businesses afloat longer than otherwise would have been possible. It has also helped banks bury a growing risk in their credit portfolios and avoid recognizing losses on debts they are unlikely to recover.
Yet even with this ridiculous "extend and pretend" gimmick, NPLs just hit a new record high as a % of all loans according to the Bank of Spain.
One dreads to even contemplate just how worse this ratio would be if banks were honest in marking loans anywhere close to realistic recovery prospects. One may however soon find out, because new "more stringent disclosure guidelines from Spanish banking authorities are bringing these risks into the open. Partly as a result, mortgage delinquency is rising fast—a trend that could damp recent investor enthusiasm for a bailed-out banking industry rebounding from a property-market crash."
The Bank of Spain, the country's central bank, began forcing banks in April to re-evaluate and disclose their refinanced loan books out of concern that some lenders had been taking advantage of relatively loose guidelines to mask the deteriorating creditworthiness of their clients. As Spain's economic slump deepened, the Bank of Spain said at the time, "Difficulties considered to be temporary in many cases have become structural."
Which is the story of the New Normal in a nutshell: temporary issues revealed to be structural, and in fact worsened by ongoing, relentless central bank intervention which prevents the liquidation and cleansing of tens of trillions in bad debt from the global system. What is worse is that alongside that revelation, it is also about to be revealed that, surprise,Spain is not even close to recovery. Which will kill the only thing that matters in that insolvent continent: the latest dose of confidence.
It does, however, explain why the ECB shocked 98% of economists with its rate cut - recall that it was the soaring NPLs in Cyprus that led to the wholesale confiscation of uninsured deposits in order to preserve the domestic banking sector.
So back to Spain, and the clash of reality with can kicking:
For years following the real estate crash in 2008, analysts say, lenders applied an "extend-and-pretend" approach by refinancing ailing real-estate developers. Ultimately, banks were forced to recognize those losses, spurring last year's €41 billion European Union bailout of Spain's banking system.... It also raises questions about whether bankshave continued to sweep under the rug loan losses lurking on their balance sheets, a concern that has dogged the sector since the start of Spain's economic crisis.
The answer, incidentally, is a resounding yes. Continuing:
Refinancing struggling homeowners "only pushes the problem forward without finding long-lasting solutions because in the end, the debts only grow while the borrower's capacity to repay doesn't improve," said Carlos Baños, chairman of AFES, an association that advises mortgage holders who have trouble paying their debts. "These days it's hard to see things getting better unless you win the lottery."
So how exactly have banks been sweeping reality under the rug for over 5 years? Meet Mr. Diaz:
For Mr. Díaz, a 49-year-old account manager at a company that makes chemical pumps, the extend-and-pretend approach worked for a while. In 2007, he took out a €600,000 mortgage on a suburban Madrid home. At the time, his wife's fast-food restaurant in southeastern Madrid was going gangbusters, selling roasted chicken whole and in sandwiches to construction workers during a big housing bubble.In 2008, the bubble burst, leaving her business with few customers. Her take-home pay dwindled, and paying the mortgage starting eating up most of the household's monthly income.In 2010, Mr. Díaz asked his bank, Caixabank SA, CABK.MC for help. The bank agreed to refinance the mortgage, allowing him to lower his monthly payments by paying only interest during four years. The lender also furnished him with a second mortgage, for €32,000, to pay off credit card and other bills.By 2012, the family's finances were stretched so thin that Mr. Díaz began drawing from savings to keep his wife, two children and himself in their home.In July last year, he stopped paying the mortgages, rebuffing his bank's offer for an additional grace period that would further lower his monthly payments.Mr. Díaz said he has few good options. "I realized paying the mortgage was like having bread for today and going hungry tomorrow." He said: "Whatever happens now, let it come."
Which is ironic, and funny, because ever more people are saying exactly the same thing about the entire global economy and capital markets.
The reason: everyone - from the lowliest unemployed worker to some of the most respected fund managers - is so tired of the central banks' only remaining scam of asset price manipulating "extend and pretend" that they would rather take the pain now, and force "whatever happens now", instead of live with the reality that "going hungry tomorrow" is an assured outcome for the members of what was once the now extinct global middle class.
Greece.........
Distance separating Greece and troika getting smaller, says Stournaras
Finance Ministry sources told Kathimerini that the troika, which until this week was suggesting the shortfall could be as large as 2.9 billion euros, had accepted that the gap might actually be 1.5 billion euros. This came after Greece’s lenders took on board Athens’s position regarding projected tax revenues for next year. Nevertheless, the troika’s latest figure is still 1 billion euros higher than Greece’s estimate. This is largely due to the visiting officials not accepting the savings Athens is forecasting it will make from changes to the social security system. The creditors said they will study the government’s proposals and continue discussions on Friday, after holding talks on Tuesday with Finance Minister Yannis Stournaras. Troika officials will brief the Eurogroup on Thursday about the progress of the latest Greek review but there will be no decision regarding the disbursement of the next bailout tranche, which amounts to 1 billion euros. In fact, a European Union official in Brussels told journalists that there is not likely to be a verdict at next week’s meeting of eurozone finance ministers, nor the one on December 9. He suggested that there were “miles and billions” separating the two sides and a final decision might not come until after the “skiing holidays.” Stournaras appeared incensed by this assessment and insisted that Greece and the troika are edging toward a deal. “Whoever made this statement, which does not reflect the constructive discussions with the troika, should have the courage to say the same thing using his name,” said the minister of the EU official who spoke to reporters on condition of anonymity. “We are not miles apart, just meters.” It appears likely that after returning to Greece on Friday, the troika will leave the country again on November 22 to return in December in an attempt to complete the review.
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Wow I woulds love to see ethanol go away, therefore I have to believe it won't.
ReplyDeleteGermans being very German like, taking control whether you like or not. Love the "Bankfurter" phrase.
Ocare, another thing I would love to see go away, therefore they will "improve" it to make it even more onerous. Not that the current proposed bill wouldn't be an actual improvement, just don't believe they can really do that.
Have a great day, cold as as Hillary's tit in a brass bra down here.
Have a great morning
Morning Kev ! To use your term , Hillary visited us yesterday ! Lol
ReplyDeleteObamaCare falling apart , Dems running for cover.
Germans being Germans , winning
europe ( the third go round ) , this time without bullets !