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Posts tagged ‘Eurozone’

Mario Draghi’s Nightmare Gets Worse: European Loans Decline At Record Rate

By Tyler Durden

Back in July we posted “What Keeps Mario Draghi Up At Night, And Why The European Depression Has A Ways To Go” in which we presented “Europe’s annual change in M3, alongside the far more important bank lending to the Euro area private sector. It is the latter which [then had] just dipped to a record low, indicating once more that Europe’s monetary transmission mechanism is not only clogged up (a rising M3 should have a favorable impact here) but hopelessly broken. In other words, it is the brown line in the chart below that is what is giving the ECB chairman nightmares, and is leading to such secondary effects as record high unemployment and negative GDP growth virtually across the entire Eurozone.” Needless to say, in a Keynesian a world in which credit growth and only credit growth leads to economic growth (see Ray Dalio for more), and in which the ECB is a net extractor of liquidity (and thus debt), this means that the European depression will simply get worse as soon as the current episode of foreign capital flows tapers out and the “current account” injectors realize that it was nothing but another case of greater fool risk-chasing in Europe.

 

full artical at source: http://www.zerohedge.com/news/2013-09-26/mario-draghis-nightmare-gets-worse-european-loans-decline-new-record-pace

The Bailout Of Russian “Black Money” In Cyprus

Wolf Richter   www.testosteronepit.com   www.amazon.com/author/wolfrichter

Timing couldn’t have been worse. Or more opportune. A “secret” report by the German version of the CIA, the Bundesnachrichtendienst (BND), bubbled to the surface, asserting that the pending bailout of Cyprus would use the money of taxpayers in other countries, particularly in Germany, to bail out mostly rich Russians who have over the years deposited their “black money” in Cypriot banks that are now collapsing.

Not that the bailout of this tiny speck of land with 840,000 people isn’t in enough trouble. Admitted into the Eurozone in 2008, Cyprus veered towards bankruptcy in 2011 but was temporarily bailed out last November by a €2.5 billion loan from Russia. That money didn’t last long. In June, it asked the Troika, the austerity gang from the EU, the ECB, and the IMF, for a full-fledged bailout. So Troika inspectors have been combing through the financial rubble to determine a bailout amount and needed structural reforms.

On Thursday, Finance Minister Vassos Shiarly was still optimistic. He hoped that negotiations with the Troika would conclude before the November 12 meeting of Eurozone finance ministers. On Friday, he admitted that a number of issues were still unresolved, including privatization of state-owned enterprises and elimination of Cost of Living Adjustments for wages, both of which have hit a wall of resistance. But then, a Troika report that Reuters “obtained in Berlin” considered Cyprus’ latest proposal for structural reforms “insufficient” and urged the government “to cooperate with the Troika.”

Shocked and appalled, government spokesman Stefanos Stefanou added to the confusion over the weekend by quibbling with the word “insufficient” and by denying that the government…………………………………….

full article at source: http://www.zerohedge.com/contributed/2012-11-04/bailout-russian-%E2%80%9Cblack-money%E2%80%9D-cyprus

Elite View: The Yo-Yo Economy

Euro zone rot spreads to Germany, China mending … The euro zone’s biggest member Germany is being sucked into the bloc’s worsening economic quagmire, business surveys suggested on Wednesday, as similar data signalled the slowdown in China may be abating. The slump that began in Greece and spread to other smaller euro zone economies was clearly gripping the core in October, marking the worst month for the 17-member bloc since it emerged from recession more than three years ago. – Reuters

Dominant Social Theme: Things go up and down.

Free-Market Analysis: There are problems with Germany but the good news regarding China brings us back to emotional parity.

This seems to be the gist, the dominant social theme of this Reuters article. We’re supposed to be depressed about Germany but excited about China.

The idea the Reuters article (above) is advancing is that the world is involved with a number of different economic trends. We are given to believe from such reporting that there is no specific direction, and thus no extensive conclusions to make.

This is surely a kind of power elite meme. Reuters, a mainstream media conglomerate is eager to provide us with a serial comprehension of economics rather than a holistic one. Here’s some more from the article:

Markit’s Composite Purchasing Managers’ Index (PMI), which polls around 5,000 businesses across the 17-nation ………………………….

full article at source: http://www.thedailybell.com/28198/Elite-View-The-Yo-Yo-Economy

Controlled Demolition of Europe Continues

Euro-zone jobless rate hit record highs … The number of people out of work in the euro zone climbed further in August reaching a fresh record high, underscoring the hardship that the currency area’s fiscal crisis is inflicting on households, and suggesting any economic recovery is some way off. Eurostat, the European Union‘s official statistics agency, said Monday that 18.196 million people were without jobs in August, an increase of 34,000 from the previous month and the highest total since records for the 17 nations that use the euro were first compiled in January 1995. – MarketWatch

Dominant Social Theme: Capitalism provides us with terrible consequences.

Free-Market Analysis: It is really sad to watch what’s going on in Europe. One can almost imagine reading the history books about this period and getting a completely different picture of what is going on than the reality that should be evident to anyone who has lived through this time.

Appearances are important! Those who follow free-market economics know what needs to be done to pull Europe out of its slump. But the reporting gives no clue of the reality.

With a grim mercilessness, the mainstream press – controlled by the power elite that has evidently and obviously created this mess – tallies the damages and makes sure everyone knows how horrible its………………………………

full article at source:http://www.thedailybell.com/4372/Controlled-Demolition-of-Europe-Continues

Market Brief 4th. September 2012

By  Christopher M Quigley

Market Divergence:

Labour Day is done, the holidays are over, schools and colleges are back: game on. Expect one wild ride in the markets between now and the November US presidential election results.

 

Internally the technicals are weakening. There is a significant divergence between the Dow 20 Transports and the Dow 30 Industrials. The Dow 20 is moving towards lower lows and a break below 4850 will be an indication that the overall market is going to move much lower, fast.

UK Crash Expected:

With the London Olympics now more or less over the absence of sporting construction and service dollars is beginning to be felt throughout the British economy. The UK is already in recession, as is most of Euroland, but the figures going forward for UK GDP data are going to be far worse than expected. This will not augur well for City institutions which are already reeling from numerous financial scandals.

 

Spanish Bank Runs and Struggling Deutsche Bank:

There is a fully fledge bank run ongoing in Spain that is not being adequately reported in the mainstream news media. In June $70 billion dollars left their system. In July it was $92 billion which is 4.7% of total banking deposits.  This means that from January to July of this year $368 billion or 17.7% of total banking deposits has fled Spanish institutions. Previously this money was heading for Switzerland and Germany but with the truth filtering out concerning the weakness of German and Swiss banks alternative destinations are now being chosen. The emerging weakness of Deutsche Bank is a particular worry for the ECB and the situation is being exacerbated by a sharply contracting German economy. As reported in Spiegel today:

 

Euro Crisis Starts to Bite. German Export Orders Fell Sharply in August.

 

Exports are a major pillar of the German economy, but now the sector is starting to feel the impact of the euro crisis and the global economic slowdown. German export orders fell in August by the highest rate in more than three years, the Markit financial information company announced Monday after conducting a survey of 500 industrial firms.

 

“Survey respondents commented on a general slowdown in global demand and particular weakness in new business inflows from Southern Europe,” the institute said. The firms hardest hit by declines are manufacturers of machinery and other investment goods as well as producers of intermediate goods such as chemicals.

 

In the first half of 2012, German exports had still grown thanks to demand from Japan, the United States and Russia. But it was already evident then that exports to crisis-hit countries were falling sharply, and that trend is now continuing.

Markit economist Tim Moore said the German industrial sector is going through its worst quarter — the three months to the end of September — in more than three years.

“The new orders figures are especially disappointing, with export work dropping at the fastest pace since April 2009 amid an ongoing deterioration in global demand,” he said in a statement.”

 

Mini Flash Crashes:

I have noted over the past few months that the “flash crash” syndrome, which nearly collapsed the market on May 6th. 2010, has not been sorted out by the powers that be. This ongoing problem has major implications and the fact that regulators have not fully solved this manipulation is very very serious. I list below two charts for your consideration. I fervently request my American colleagues to write to their elected representatives to implore them to use their influence to finally end this travesty. Its ongoing presence is undermining the integrity and future of the US stock market.

Example 1. Monster Beverage Company (MNST) 30th. April 2012.

Note: price moved from $65 to $83.96 and quickly back again, a total change of 18.9%.

 

Example 2. Dollar Tree Stores Inc. (DLTR). 16th. August 2012

Note: price moved from $38.40 to $49.11 and quickly back again, a total change of 27

(C) Christopher M. Quigley 4th. September 2012

 

 

 

Telling tales about our ‘Productivity’?

Odious Debt Lawyer Wanted - Work for The 99%

Odious Debt Lawyer Wanted – Work for The 99% (Photo credit: infomatique)

By Dr. Constantin Gurdgiev

Irish labour productivity per person employed is at 136.9% of the EU27 average, which makes us the second most productive economy in the Euro Area and the third most productive in the EEC. Of course, the thing that jumps out in the chart is the massive over-performance in output terms by two other ‘special’ countries: Luxembourg and Norway. This should ring lots of alarm bells when it comes to trusting the above data to base actual comparative assessments on

full article at source: http://trueeconomics.blogspot.ie/

Comment:

No surprises here as we all know, the government sponsored figures crunchers  are only manipulating the data and coming out with the “right picture” making the government look good and on top of an otherwise disastrous economic policy!

Forcing the people of Ireland to take on massive odious debts of the corrupt banks and debts resulting from their own incompetence and economic treachery! Nothing coming from the government   sponsored   Quango’s and their mouthpieces can be trusted .

The real truth is that we are worse that Greece and there is no possible way we can service the imposed odious debts placed on our shoulders by mouthpieces of the conmen and woman in Berlin! Time to be truthful and bit the bullet tell Berlin go take a hike and squeeze somebody their own size like France or Italy!  As for the collaborating puppet government in Lenster house, economic terrorists the lot of them!

Greek pensioner found hanging from tree in Athens over ‘unpayable debts’

A GREEK pensioner who was heavily in debt hanged himself from a tree in Athens yesterday, leaving a suicide note saying his country could only be saved with a leader like Margaret Thatcher.

The 61-year-old electrician and father of two, identified only by the name Alexandros, had owed money to banks and the tax office that he was unable to repay, according to police.

Greece, which used to have one of the lowest suicide rates in the world, has seen a surge of people taking their own lives since it was plunged into the euro zone’s worst economic crisis. Experts say the suicide rate probably doubled last year.

In his anguished suicide…..

Full article at source: http://www.independent.ie/world-news/europe/greek-pensioner-found-hanging-from-tree-in-athens-over-unpayable-debts-3124649.html#disqus_thread

Three reasons I don’t like the idea of the Eurobonds

Wipe our Debt

Wipe our Debt (Photo credit: Images_of_Money)

Posted by

Three reasons I don’t like the idea of the Eurobonds:
  1. Issuing Eurobonds to swap for existent Government debt is equivalent to attempting to treat debt overhang by relabeling the debt. While it might reduce the interest burden on the sovereigns suffering from more severe debt overhang, but that is a relatively shallow improvement, especially given that the heavier-indebted sovereigns are already being financed or about to be financed from a collective funding source of ESM.
  2. Issuing Eurobonds to create capacity for new borrowing is equivalent to fighting debt overhang with more debt. In addition to being seriously problematic in terms of logic, there is also a capacity constraint. Eurozone will sport 89.964% debt/GDP ratio this year and under current IMF projections this debt will remain above 90% (+/-1%) bound for 2012-2015. At these levels, debt exerts long term drag on future growth potential for the Euro area as a whole.

full article at source: http://trueeconomics.blogspot.com/

Now Cometh the Eurozone ‘Recession’

by Staff Report

EU predicts 0.3 per cent eurozone economic contraction in 2012, says bloc in ‘mild recession’ … The European Union estimates that the economy of the 17 countries that use the euro is in recession in the wake of a debt crisis that has prompted savage spending cuts and a jump in unemployment to record highs. The European Commission, the executive arm of the EU, forecasts that the eurozone economy will contract by 0.3 per cent in 2012 and grow by 1 per cent next year. Its prediction for 2012 is far weaker than the one it gave last November, when it predicted growth of 0.5 per cent. A year ago it was predicting growth of 1.8 per cent. Friday’s forecasts provide clear evidence of the impact of Europe’s debt crisis on the eurozone economy over the past year as governments have struggled to introduce deficit-reduction measures and business and consumer confidence has taken a dive. Olli Rehn, the EU’s monetary affairs chief, said the recession is likely to be “mild” and “short-lived.”

full article at source: http://www.thedailybell.com/3880/Now-Cometh-the-Eurozone-Recession

The Stock Market Correction is Not Over

By: Andre_Gratian

Current Position of the Market

SPX: Very Long-term trend – The very-long-term cycles are down and, if   they make their lows when expected (after this bull market is over) there will   be another steep and prolonged decline into late 2014. It is probable, however,   that the steep correction of 2007-2009 will have curtailed the full downward   pressure potential of the 120-yr cycle.

SPX: Intermediate trend – The intermediate uptrend is still intact and   so is the extended short-term correction.

Market Overview

It looks like the traders and investors took the “sell in May” mantra   seriously this week. (John Murphy)

In last week’s newsletter, when many EW analysts were heralding the coming of   wave 5, some – including yours truly – expressed skepticism that this was the   case. There were just too many technical factors that did not support it. What   happened this week, on Friday in particular, should convince even the most   entrenched bulls that the correction which started at 1422 in the SPX is not   over. Next week should leave no more doubt that what could be an important   decline has started.

I mentioned that two events could have a significant effect on the market:   the first was the jobs report which came on Friday morning and triggered the   biggest decline of recent weeks, and the other, the French election (and perhaps   even more important, Greece‘s) will take place tomorrow. Should there be a   radical change to the political status quo of either or both countries, we could   have a repeat of Friday’s scenario.

To me, the SPX activity during the last three weeks in March looked very much   like distribution. The fact that the index did not collapse immediately created   some uncertainty which caused the bulls to regain their conviction that new   highs were imminent. After Friday, it appears that a second phase of   distribution was created over the past month. On the Point & Figure chart,   the two combined make an impressive top with potential projections which, if   realized, could bring about a loss of at least one hundred more points before   the SPX can regain its footing.

P&F counts are not always realized fully, so we’ll let the market tell us   how far down it wants to go but, judging by the fact that the weekly chart   indicators just gave a sell signal this past week, it could take a while before   they get back in a buy position. In order to confirm that a serious decline has   started, the SPX has to break its 1357 support. Since it closed at 1369 on   Friday, this could be achieved in the first hour of trading on Monday if the   Eurozone election results spook the market and, if that happens, the first   target will be 1342, the level of the last wave 4 of lesser degree. Beyond that,   there are good P&F counts – supported by Fibonacci – down to 1245.

full article at source: http://www.marketoracle.co.uk/Article34527.html

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