Domino Effect at Work with Euro - Last Days of the Eurozone ? - UPDATE: S & P put EU on Negative Watch

[Dr. FIVE]

ZH

Who Really Calls The Shots In Europe

Hint: It's not the "sovereigns." The chart below (an update of a chart we showed some years ago: not unexpectedly, Dexia no longer made the cut) shows the ratio of the biggest European and American bank assets to domicile nation GDP. The red line is the 50% assets/GDP breakeven. It is safe to say that if a bank's "assets" whether marked to myth, unicorns, or markets (sadly nobody has done the latter in the past 3 years) represents at least half of a domicile nation's GDP, the bank is obviously Too Humongous To Fail, and when it comes to leverage it is its unelected executive committee which calls the real shots for not only the host country, but any monetary union it may be part of. This is how 20 or so corner offices hijacked Europe. The ironic observation is that for all the complaints about the TBTF phenomenon in the US (banks in red), it is Europe where the TBTF spectacle will truly unfurl once the central banks finally lose control, and the giant unwind begins.

remember what I saying last week about the only real negotiations being between the creditors and their banks

[MPB]

Banks started it, Banks will finish it.

When they eventually collapse, countries will thrive.

[ang]

'Euro failure will mean war', Vince Cable warns -

Business Secretary Vince Cable warned today that Europe could be plunged into war if the euro was to collapse.

The senior Liberal Democrat said the consequences would be "incalculable" and said there was "no automatic guarantee" that Europe would not disintegrate into conflict.

"I think we need to take stock that if the eurozone were to unravel in a way that destroyed the European project - and there is a risk that could happen - the consequences would be absolutely incalculable," Mr Cable said.

http://www.standard.co.uk/news/polit...s-8210694.html

[DCon]

Hardly glowing figures

The government debt figures released by Eurostat this morning (see 10.14) also show that 17 of the 25 members of the EU have deficits above 3% (the maximum level 'permitted' under EU laws).

They are:

• Ireland (-13.4%), Greece and Spain (both -9.4%), UK (-7.8%), Slovenia (-6.4%), Cyprus (-6.3%), Lithuania and Romania (both -5.5%), France (-5.2%), Poland (-5.0%), Slovakia (-4.9%), the Netherlands (-4.5%), Portugal (-4.4%), Italy (-3.9%), Belgium (-3.7%), Latvia (-3.4%) and the Czech Republic (-3.3%).

Three countries achieved surpluses: Hungary (+4.3%), Estonia (+1.1%) and Sweden (+0.4%)

http://www.guardian.co.uk/business/2...l-cameron-veto

[Dr. FIVE]

Malaria has returned to Greece,

[morticia]

Malaria has returned to Greece,

Given the state of medical services in Greece right now, this is hardly surprising; appalling, but not surprising. Malaria used to range as far north as Somerset in its milder form ( Plasmodium vivax).

[barrym]

Hardly glowing figures
http://www.guardian.co.uk/business/2...l-cameron-veto

Sorry, the figures in the quote didn't come over. Just about now the Noonan+ bumble wagon is rolling over in the Merrion St media centre with the latest 'good boy' reports from the troika.

Maybe some journo would have the guts to ask what is all the guff about when the latest Eurostat figures say the debt to GDP ratio is worsening - vis the latest blog from the LaRouche Irish Brigade -

"In 2011, overall indebtedness climbed to 87.3% of GDP for
all 17 euro countries combined, from 85.4% one year earlier. But
for the individual bailed-out and austerity-driven countries, the
results were much worse: Greek government debt rose from 165.4%
to 170.6% of GDP, despite both deadly austerity and a
100-billion-euro write-off ("the haircut") in bailout II; Italy's
rose to 120.7% from 119.2% GDP; Portugal's rose to 108.1% from
99.0% of GDP. Ireland's government debt rose to 106.4% from 92.2%
of GDP. Spain's rose to 69.3% from 61.5% of GDP.
Budget deficits: Here the austerity is being touted as a
success, because the report showed the total deficit, for all
countries combined, fell from 6.2% to 4.1% of GDP. But in the
countries under bailout/austerity plans, all the deficit figures
got worse than previous estimates: Greece's 9.4% instead of 9.1%
of GDP; Spain's 9.4% instead of 8.5%; Ireland's 13.4% instead of
13.0%; Portugal's 4.4% instead of 4.2%. Italy's stayed at 3.9%."

In the (presumably leaked) reporting on MI this morning they 'expect' the troika to say that we are en route to getting the deficit under control

Lies, damn lies, etc.

[DCon]

So, the big German bank (bigger than German GBP) was leveraged 40:1 in Q4 2011

And people wonder why our banks could not default..

A new document published by Deutsche Bank shows that in Q4 2011, the large German bank was leveraged at a ratio of 40:1 according to the International Financial Reporting Standards (IFRS). This is higher than Lehman Brothers had.

https://www.db.com/ir/en/download/FDS_4Q2011.pdf

http://www.forexcrunch.com/deutsche-...d-than-lehman/

[DCon]

Hardly glowing figures



http://www.guardian.co.uk/business/2...l-cameron-veto

Schaeuble wants the Comish having the final say on all the above budgets (I am assuming, as these are violating one of the Agreements). Draghi thinks it's a plan

The President of the European Central Bank Mario Draghi has backed a proposal by the German Finance Minister to give the European Commission extra power to scrutinise the national budgets of EU member states.

Germany’s Finance Minister, Wolfgang Schaeuble said earlier this month that the EU needed a commissioner who would wield power over member states’ budgets – in an effort to ease the eurozone debt crisis.

He also said that this commissioner should have the authority to veto budgets if they broke deficit rules.

Mario Draghi’s public support for these proposals is a boost for the German Finance Minister’s plan but such reform would require changes to EU treaties, and may therefore require another referendum to be held in Ireland.

http://www.newstalk.ie/2012/news/ecb...ional-budgets/

[Ephilant]

New Euro-speak, new treaty coming?

Lately, there is more and more mention of GEMU in Euro-babble. This stands for "Genuine Economic and Monetary Union". Within this context, there seems to be a growing acknowledgement that the single currency created by the 1992 Maastricht Treaty was flawed and woefully incomplete.
It also seems to indicate that the various leaders in Euro are moving away from the plaster-on-the-wooden-leg treatment of the crisis to a much more fundamental, and far reaching remedy, a union set on a totally new footing. There is much discussion on how this will/should happen, there is total agreement on it happening.
Are we looking at a new GEMU treaty to replace Masstricht?

[Captain Con O'Sullivan]

Shortly to be followed by FUBAR (Fundamentally Unsound Beyond All Recognition). I did have the US down as the shortest lived attempt at Empire but looks like the EU are going to go for it- just in time to meet the Godzilla of resurgent nationalism and regionalism clambering up on the beach ... get the popcorn.

[ang]

Schaeuble wants the Comish having the final say on all the above budgets (I am assuming, as these are violating one of the Agreements). Draghi thinks it's a plan



http://www.newstalk.ie/2012/news/ecb...ional-budgets/

This is also interesting and really not what Michael nor Enda would like to hear on EU Nations handing budget sovereignty to the EU-

SPIEGEL: But this is precisely what many governments are unwilling to do. Why is there so much resistance?
Draghi: A lot of governments have yet to realize that they lost their national sovereignty a long time ago. Because, in the past, they have allowed their debt to pile up, they now need the goodwill of the financial markets. That sounds like a paradox, but it is nonetheless true. Only when the euro area countries are willing to share sovereignty at the European level will they gain sovereignty.

http://www.forexlive.com/blog/2012/1...germanys-side/

[C. Flower]

RTE replaying the Schauble - Noonan press conference on a loop.

Schauble is clear enough that there is no agreement for a retrospective bailout for Ireland and that the new measures agreed at the Summit will not come into being until 2014.

He claims he is 100% clear that Ireland will not need a second bailout - another way of saying no deal.

Retrospective deal ? "A medium term issue - but if we don't stick to the same sentences there will be misunderstanding - saying the same as Noonan"

[Captain Con O'Sullivan]

2014- after the next round of German elections?

[Dr. FIVE]

€ area bank branch closures 2007-2011.
Spain: 5,397
Germany: 1,976
France: 852
Greece: 5.
Italy actually has 231 more branches over period