Veteran investor George Soros has attacked the lack of leadership at the top of the eurozone and said that the new Brussels "deal" to solve the debt crisis will only last between "one day and three months". http://www.telegraph.co.uk/finance/financialcrisis/8857456/George-Soros-attacks-Brussels-rescue-deal.html
Portugal Is Next: Improverished PIIG Demands US Assistance, Debt "Haircut" To Come Next http://www.zerohedge.com/news/portugal-next-improverished-piig-demands-us-assistance-debt-haircut-come-next
http://www.zerohedge.com/news/we-are-all-greeks-socgen-presents-new-world-order
another corner into which to back themselves. You can hardly champion the ‘One Europe’ manifesto on the one hand but then, as the next country lines up at the counter, declare “No soup for you!” - but that seems to be the ‘plan’ at this stage." http://www.zerohedge.com/news/things-make-you-go-hmmm-such-empty-box-filled-promises-money-and-europes-soup-nazi
Price stability in the euro-area will “prevail” for the next 10 years, Bild Zeitung said, citing an interview with outgoing European Central Bank President Jean-Claude Trichet. “In the coming 10 years, the inflation rate will likely be very low,” Trichet told the newspaper. “According to current expectations, it will lie around 1.8 percent. That means price stability prevails in the euro-zone.” He said the same doesn’t apply to financial stability. “Governments in Europe have made grave errors by not holding to the Stability and Growth Pact,” the newspaper cited Trichet as saying. The central banker also said Europe needs to strengthen its political structures and move toward greater political union, according to the newspaper. Such developments will require treaty changes, he told the newspaper http://www.bloomberg.com/news/2011-10-30/trichet-sees-euro-zone-price-stability-over-10-years-bild-says.html "Banks must raise their level of resistance and avoid behavior that is not in cohesion with the values of our society -- including excessive bonus payments." He said regulatory bodies should ensure financial market innovations served the real economy and did not damage it. "At the moment we are working on correcting this," he said. "There is an agreement among all authorities worldwide that we have to discipline the markets and in general the financial system, and we have to make sure that they are considerably more resistant under all circumstances in the future." But the central banker warned against restricting banks too much, given that this would have negative impact on the real economy they financed. Trichet said Europe needed to strengthen its political structures, which would require changes of the constitution. He called for stronger European governance, making it possible to implement the necessary measures in those countries that continuously contravene the stability criteria and endanger the financial stability of the euro zone. "In the long run, we will have to go further down the path toward political union," he said. http://www.reuters.com/article/2011/10/30/us-ecb-trichet-inflation-idUSTRE79S3D920111030 Is the crisis over now, Mr. Trichet? http://tinyurl.com/3nmuasb http://tinyurl.com/3bjryyy
China knows a thing or two about dealing with crises. In fact, China is an almost perpetual crisis: it has 180,000 incidents of social unrest a year, smog-shrouded cities, a demographic timebomb, rivers that are 60pc polluted, and all this while managing the biggest mass-migration from village to town in the history of the world. So set against these challenges, the crisis facing a French teacher who might now have to retire at 62, or the prospect of a few years of stagnant growth in the eurozone doesn't have China's leadership racing to man the pumps on Europe's behalf. An editorial published by the state-run Xinhua news agency this week warned tartly that China and other emerging economies were not the "EU's Good Samaritans", and that in the end, "the EU has to pull itself out of the crisis". http://www.telegraph.co.uk/finance/financialcrisis/8857499/Chinas-refuses-to-play-the-Good-Samaritan.html
Europe has set its sights on Beijing as it tries to haul itself out of a debt crisis, but many Chinese people are asking why they should bail out wealthier nations that have lived beyond their means.
With $3.2 trillion in foreign exchange reserves and an economy that depends heavily on exports to the European Union and the United States, China has both the means and the motive to help Europe in its hour of need.
But as China's own economic growth begins to slow and inflation remains persistently high with surging prices for food and housing, there are fears a major investment in Europe's bailout fund could trigger a domestic backlash.
Already, opposition to such a move is being expressed online on China's hugely popular weibos -- microblogging sites similar to Twitter that now have more than 200 million users -- and in some state media. "Europe is much richer than China.
How can they be short of money? This is clearly a fraud, a robbery," said weibo user Song Hongbing. Michael Pettis, a professor of finance at Peking University, said the opposition gave China's leaders cause for concern as they consider whether to stump up the large sums of cash Europe needs. "
It's going to be perceived that China is bailing out a bunch of rich foreigners, and politically that's never a popular move," said Pettis, who is also a senior associate at the Carnegie Endowment for International Peace. Klaus Regling, the head of the European bailout fund, held talks with China's commerce ministry and central bank in Beijing on Friday -- a day after European leaders reached a last-ditch deal to tackle the crisis.
The chief executive of the European Financial Stability Facility was reportedly aiming to coax another $100 billion out of China, already a major holder of EFSF bonds, but Beijing has so far been non-committal about further investment. Details of the form any investment might take remain sketchy, and Vice Finance Minister Zhu Guangyao said on Friday that Beijing needed more clarity before it could agree to invest.
China has been burned before on risky overseas investment. It bought stakes in investment bank Morgan Stanley and asset management firm Blackstone only to see values collapse in the 2008 global financial crisis.
The losses led to severe criticism of the investment choices made by China's sovereign wealth fund, only a year after it was established. "There was a lot of domestic criticism for that, so I think they're sensitive to do it again," Pettis said.
http://profit.ndtv.com/news/show/china-risks-public-backlash-over-eu-bailout-185042
Nick Clegg last night widened the Coalition rift over Europe by effectively dismissing David Cameron’s call for a repatriation of powers from the European Union. The Deputy Prime Minister increased tensions within the Government over EU policy by writing a provocative newspaper article which described the aims of Tory Eurosceptics as ‘economic suicide’ and ruling out a ‘head-first’ charge towards greater political independence for the UK. http://www.dailymail.co.uk/news/article-2055183/Clegg-widens-Coalition-rift-slams-suicidal-Tory-Eurosceptics.html?ito=feeds-newsxml
Here is a reply from Athens from a friend in Greece who commented on the FT article:
Ordinary Greeks themselves started to speak up.
Your comments?!!
Ordinary Greeks themselves started to speak up. Here is one who took the trouble to write 15 paragraphs to explain why he thinks Greece is being robbed by Germany.
Ahmet
a greek | October 6 11:47pm | Permalink
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@ Dan Allen
I have to praise your courage and sincerity in pointing out the 'unmentionable'. Indeed, by blaming Greece for everything, save arson and bigamy, for the moment, is an extremely effective PR exercise which has managed to persuade European Electorates that if Greece were to evaporate all would be nice and cozy in the Euro-Zone.
The huge lie is that money lent to Greece is 'given'. What a gift. Germany borrows at 1,7% and lends to Greece at 4,5%. This is not a 'gift', this is usury. Still, ask any German on the street, he is convinced that his money is 'thrown' at the Greeks. And of course these loans are never meant to be part of any haircut. These loans will be paid back by Greece, even if Panzer Divisions have to roll down the Balkans again.
Another huge lie, is that only Greece 'cooked' the books. Just in this issue FT laments that Portugal today had to admit that 1,3Bln Euros debt were hidden under the sunny skies of Madeira. Of which 569 Mil were incurred this year. Some weeks ago, Catalonia in Spain came also out of the closet blaming the outgoing regional government of hiding a huge pile of debt. And mind you, Catalonia alone has a debt in excess of 100bln, whereas Portugal has just 86. Castilla La Manza admitted to heavy 'cooking' also. So, who is fooling whom?
In Greece, the Eurostat forced the Greek Statistical Authority to include every form of debt which eventually will hit the fan of the government budget to the national debt. And correctly. I challenge everybody: Do the same in Spain, add Regional, Municipal, and Bank Debt not related to Sovereigns, do the same in ... Germany. Add Laender debt, Municipal and State Enterprises debt.
When you have the figures in front of you, you will doubt your eyes.
Greece was simply the canary in the mine. The fumes killed the canary. But the canary cannot as a cadaver create such a volume of poisonous fumes. However, EU spin doctors pretend there are no fumes in the mine. Well, wait until it explodes.
About the question if Greece will stay in the Euro. Well, Greece will not stay in the Euro, but for a very different set of reasons .
All these months have instilled into the mind of Greek people two things which will stay for generations:
1. That the Greek political establishment intentionally, as a manifestation of corruption in extremis, betrayed the interests of the people by allowing the country to reach such a state.
The shock and the abhorrence is so huge, that do not be surprised if in the next elections the totality of current political parties and personnel are wiped out. If some hotheads prevail, some of them will even face the firing squad.
2. That Europe is an occupying power. Europe lent some money, but Europe did it only to safeguard its interests and in doing so did not hesitate to insult, humiliate, provoke and ridicule the Greek Nation. Europe is no more a partner. Money may still come from Europe, but the decision is made : Europe is an enemy.
These two realizations, acting together, will lead to interesting geopolitical games.
First a new class of populist politicians will ride the wave of anger and will oust the corrupt show of today.
Second, this new class, to satisfy the cry for revenge, will turn away from Europe. America, Russia, even China, with little or very little money will have a very big foothold in Europe through Greece.
For those ready to deride this eventuality, before you burst out laughing, please consider two historical events.
--- China propped up Albania for years, helping a speck of land to defy the NATO and the Warsaw Pact right into their own backyard. China was really toothless then, now they are buying up Iceland.( NATO as a North Atlantic Organization,will have to consult the Chinese before it deploys in North Atlantic? Hilarious !)
--- As we speak, Cyprus managed to draw Russia, Israel and America into the East Med, ridiculing in the process both Turkish belligerence and European policy in the region. Result, when Cyprus suffered an accidental disaster recently totaling almost 40% of government revenue, the EU did not lift a finger to help, Russia extended a loan of 2,5bln Euros, almost 50% of the Cypriot budget. Cypriot government ratified the loan the day before yesterday.
Anyway, Greece was never considered by Western Europe as a part of 'Real' Europe. That is why
Greece will eventually get out of the Euro, because it does not belong culturally to the same block which Luther and Kalvin convinced that it is God's Will to work hard and accumulate capital and then their horrible sins in the marketplace are all forgiven.
So, Greece will go back where it started from. Being a bridge between East and West. It spent too much time as a pariah of the West, time to taste other allegiances. Of course this will accelerate the diminution of the geopolitical clout of Western Europe. But even Western Europe will not mind. They are dirt broke at the moment, although they find it terrible to admit, so they have neither the money nor the inclination to care about geopolitics. The only thing they really care about is how to scrape through another day. Any decent neighborhood banker would say that this is the sign of the truly bankrupt.
full story: http://www.ft.com/intl/cms/s/0/50ee6e86-ef68-11e0-bc88-00144feab49a.html
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