http://www.businessweek.com/magazine/christine-lagarde-how-to-save-europe-09222011.html Time to ditch the EU says Thatcher Hugh Hendry's Slams Economist Jeffrey Sachs: I Would Recommend You Stop Going Skiing And Panic http://www.lighthouseinvestmentmanagement.com/2011/09/21/bundesbank-ready-to-pull-the-euros-ripcord/ Something odd is happening. Germans are leaving the ECB. First Weber, then Stark. Why would senior German officials withdraw from the ECB just at a time when they should seek greater influence? One explanation: to avoid having a conflict of interest once Germany re-instates the Bundesbank as the leading central bank of Europe. Currently, Germany and Greece are engaged in a game of chicken; the Germans do not want the first “domino” of the Euro zone to fall, and the Greeks know that. Each time Greece nears default, Germany agrees to a last-minute stick save without offering a far-reaching solution. Their aim is to limit the funds actually flowing to Greece. This, of course, guarantees the crisis to simmer on indefinitely, preventing a recovery in Southern Europe. But, as with every game, this one will have to end one day. Especially as German and Dutch 5-year CDS approach 100 bps. France’s CDS rocket has long left the launch pad, reaching 190 bps recently. Source: CMA Assuming the Euro zone will eventually disintegrate (as default without Euro exit does not make much sense) there are two scenarios: 1. Germany watches as one “PIIGS” after another is being forced out, leading to bank runs in those countries (as savers try to escape devaluation by transferring their deposits into countries remaining in the zone) 2. Germany (together with the Netherlands) decides to leave the Euro zone. Germans would be happy to get their Deutschmark back. Savers in PIIGS would probably not want to “speculate” in a new, unproven currency and keep deposits in their banks. The Euro would devalue, improving competitiveness for troubled countries. The Germans would have to live with the inconvenience of a strong currency. Something they are used to from the days of the ERM (European Exchange Rate Mechanism). Scenario (2) would overall be less damaging for Europe. This is when I remembered an article in DER SPIEGEL http://einestages.spiegel.de/static/topicalbumbackground/16161/der_geheime_bunkerschatz_der_bundesbank.html). During the cold war, billions worth of a new series of Deutschmark were kept in a secret bunker under a harmless-looking villa near Frankfurt. This was in case the Russians tried to destabilize the West-German economy by flooding it with counterfeit Deutschmarks. The Bundesbank could have replaced most notes in circulation over a short period of time. I would be surprised if Germany was not prepared for a scenario where the Euro disintegrates. Finally, one odd detail: after meticulously hiding the secret stash for 25 years, Germany decided to send it to the shredder. In 1988. End of story. Except: The Berlin Wall fell in 1989. Erich Honnecker was still in power in October of 1989. Who cannot remember the talk of Russian tanks possibly crushing those “Montags”-demonstrators. And the Bundesbank decided the risk of an escalation was so low they could dispose of the back-up currency for good? DER SPIEGEL broke the story in 2010, 22 years after the back-up currency had allegedly been destroyed. Either the gardener spilled the beans on his death bed, and the Germans needed to “prove” the back-up currency was gone (and not just moved behind “the door behind the door”) in order not to upset their Euro partners. Or, someone “saw” new Deutschmarks being printed, and the Bundesbank had to come up with a good story on why that was the case. This entry was posted in Bond Market, Central Banks, Currencies, Economy. Bookmark the permalink.
IMF economy warnings: Time to panic?
http://www.bbc.co.uk/news/world-us-canada-15023694
IMF chief tells Europe: you must bail out the banks again
IMF says debt crisis has cost institutions €300bn as bank shares plummet on new market fears for global economy
http://www.guardian.co.uk/world/2011/sep/22/imf-chief-europe-bail-out-banks?newsfeed=true
Christine Lagarde: ECB must continue ‘reliable’ funding
http://www.telegraph.co.uk/finance/financialcrisis/8782431/Christine-Lagarde-ECB-must-continue-reliable-funding.html
Signs of Stress Grow at European Banks
What the Continent's banks need most is cheap funding. Nervous investors cause rates to rise, and can trigger exactly the troubles they fear
Europe’s debt mess has been festering for so long it sometimes feels more like a chronic condition than a life-or-death crisis. But as negotiations to prevent a Greek default drag on, investors and lenders increasingly are concerned that a banking crisis could break out, dragging down the Continental economy before Greece even has a chance to default. On Sept. 21 the International Monetary Fund estimated that Europe’s banks face more than $400 billion in losses and said that weak banks need to raise capital quickly.
http://www.businessweek.com/magazine/signs-of-stress-grow-at-european-banks-09222011.html
European banks head towards another meltdown
Fears over the state of the eurozone economy weighed heavily on the region's banking sector on Thursday as fears grew that the industry is headed for another meltdown.
http://www.telegraph.co.uk/finance/financialcrisis/8782960/European-banks-head-towards-another-meltdown.html
Bernanke sends stocks plunging
September 22, 2011 by Don Surber
President Barack Obama is not the only government employee with the Midol Touch (everything he touches turns out so bad and gives people such headaches that everyone needs a Midol, including men). Federal Reserve Chairman Ben Bernanke discovered on Wednesday that he, too, can turn the stock market into a panicked bear just by mentioning the word stimulus. These fellows have zero credibility and should be replaced by the first two names out of the Boston telephone book.
http://blogs.dailymail.com/donsurber/archives/42796
Did Bernanke Do That On Purpose?
Yesterday’s Fed policy statement was a curious one. What could have motivated it?
The choice of words to describe the health of the U.S. economy in the form of “significant downside risks to the economic outlook” is clearly what has sent financial markets reeling in the last 20 hours or so and the curious thing about it is that it is so out of character for the central bank.
They are normally an optimistic lot and, after making clear with QE2 last year that one of their policy goals was higher stock prices, why on earth would they choose this point in time to suddenly express the gravest of concerns for the economy?
It’s not likely that they casually added the words “significant downside risks” to the statement and they must have known what kind of impact they would have
http://seekingalpha.com/article/295317-did-bernanke-do-that-on-purpose
Ben Bernanke Spooked Wall Street
http://www.theatlanticwire.com/business/2011/09/ben-bernanke-spooked-wall-street/42813/
Bad times to come, no choices, says Ben Bernanke
LONDON: Ben Bernanke is usually looked up to by everyone as the man who can fix everything and anything. So, whether he twists, turns or does the salsa, hapless market traders look to him for direction. On Thursday, Bernanke triggered a global market meltdown by officially accepting what Christine Lagarde of the IMF said last week - that the world economy is entering a seriously "dangerous" phase.
Manmohan Singh can take heart - despite 2, 3 or 4 Gs. Christine Lagarde, head of the IMF in Washington, actually used the term "inclusive growth" to talk about balancing growth and instituting spending cuts - a term coined by India, even though she did not attribute it to him.
Global markets are not impressed with the band aid programme of major Euro zone or US players, and are expecting more from the G20.
http://economictimes.indiatimes.com/news/international-business/bad-times-to-come-no-choices-says-ben-bernanke/articleshow/10084488.cms
Europe Officials Weigh Forming Crisis ‘Firewall
European officials said governments may leverage the region’s bailout program to erect a “firewall” around the sovereign debt crisis once a revamp of the fund is completed.
“To stabilize the euro zone, we need the right firewall to prevent contagion,” French Finance Minister Francois Baroin told reporters today in Washington before meeting his Group of 20 counterparts. The firewall is the European Financial Stability Facility, and “we can discuss how to give it the necessary strength, about using the power of leverage to give it systemic force,” he said
http://www.bloomberg.com/news/2011-09-22/europe-officials-mull-leveraging-efsf-to-build-crisis-firewall-.html
Geithner Predicts Europe Will Act With ‘More Force’ to Resolve Debt Crisis
http://www.bloomberg.com/news/2011-09-22/geithner-predicts-europe-will-act-with-more-force-to-resolve-debt-crisis.html
ALEX BRUMMER: Return of the crisis of 2008
Suddenly it is starting to feel like the autumn of 2008 again. The markets are in freefall. The sovereign debt crisis has become the new sub-prime and policymakers again look caught in the headlights.
The effort by Fed chairman Ben Bernanke to halt the slide through a series of complex manoeuvres in the US debt markets, colourfully called the Twist, in the end caused more disruption than it was worth because of remarks indicating a serious worsening in American economic conditions.
http://www.thisismoney.co.uk/money/news/article-2040712/ALEX-BRUMMER-Return-crisis-2008.html?ito=feeds-newsxml
18/03/2002 09:28:05
Baroness Thatcher dramatically fuelled the European debate last night by demanding that Britain pull out of key parts of the EU.
She said Britain should ditch the Common Agricultural Policy, along with EU defence and foreign policy, and take back control of trade issues.
The former Tory Premier's call is so wide-ranging it is effectively a demand that Britain quit the EU altogether.
http://www.dailymail.co.uk/news/article-105481/Time-ditch-EU-says-Thatcher.html
Baroness Thatcher gives up public speaking
22/03/2002 17:37:46
Baroness Thatcher will never make a public speech again - on doctors' advice, her office announced today.
http://www.dailymail.co.uk/news/article-106398/Baroness-Thatcher-gives-public-speaking.html
May 27, 2010, 11:19 AM
http://www.businessinsider.com/hugh-hendry-vs-jeffrey-sachs-2010-5
Newsnight 26th May, Hugh Hendry 'I would recommend you panic
http://www.youtube.com/watch?v=nuysYXlJ43I&feature=player_embeddedBundesbank ready to pull the Euro’s ripcord
Friday, 23 September 2011
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