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European Debt crisis: A silly note on a silly situation

Angela Merkel painted portrait _DDC8548

Image by Abode of Chaos via Flickr

sarkozy 2011
Image by osipovva via Flickr
Mario Monti - Caricature
Image by DonkeyHotey via Flickr

Now that Mario Monti has upped the ante for Euro zone governments and we have covered the daily deterioratiion in a dozen articles, we

won’t be covering more of the daily crisis in 2011. Suffice it to say, ECB can’t backstop this monster, banks are too used to using that as a benchmark to stop selling and the recapitalisation and deleveraging may well change that as it will contine all of 2011 and more of 2012. IF we see anything that even changes the slope of the fall, we’ll cover more details. Till then, no crisis to solve here..just the daily dissing we will not partake from our corner desk steering this “evil skulduggery” (EVIL LAUGH!)

The next few steps we know(apart from random bank failures and untuned capital investors in banks):

1. Italian and French downgrade(s) Weekend started with Italian yields at 8% and Portugal finally at Junk ratings while the Thanks giving weekend continued The acceleration in rising yields is perceptible with less than 2 weeks o go for a big set of downgrades

2. Shrunk GDP at outer coure

3. Shruunk GDP at inner core

4. Tracing more Debt – GDP ratio which will deteriorate in 3 out of 5 situations

5. Proposals to strengthen EBA, EIB, EDB

6. Federal Overnight facility

7a. Draghi’s rate cuts

7b. Plateauing of ECB buying at Eur 25-50 bln in the weekly overnight window/report data

8. Jump ahead of UK with 0.5% + growth

9. Fiscal inspections of the EA 17 and we suspect the first mods organised by Brussels questioning sovereignity by May 2012

An unresolved parameter in this fiscal drama will be the non performance and real recession in Germany in these few weeks and the question of who will finance what debt as Germany gets busy with the situation at home. I hope you appreciated our detailed enunciation of how the crisis played out in the zone in the last 3-4 months

USD EUR under pressure has a magical few stops before parity at 1.35 and 1.30 and 1.19 ( the first one) but we’ll likely be back before that, Those moving to China for a crisis to unfold are likely to be (un) pleasantly surprised by the Sino perseverance and control to results correlation while US breaks down again before elections in 2012 and all hell breaks loose ( Nicht Wiltwertschaft kennen?)

3 comments on “European Debt crisis: A silly note on a silly situation

  1. Pingback: European Debt Crisis: OECD reports, Bond data and ‘elite’ bond rumors | The Banking and Strategy Initiative

  2. Pingback: European Debt Crisis: Saving Italy, the Merkozy ballot and Liquidity | The Banking and Strategy Initiative

  3. spiritofjubilee
    December 15, 2011

    Hi Zyakaira,
    Maybe a little off topic, however, The debt crisis has reached an all-time high for this country. We have overextended ourselves with both secured and unsecured debt. The crisis has subsequently reached far into the depths of our financial markets. We will explore some of the reasons why we are in this crisis and how we might go about changing the current trend.
    Good Job!
    In America: governments, businesses, individuals are now buried under a mountain of debt. A mountain of debt that will never be repaid.

    Who will borrow when they can’t make the payments on the debt that they have already? The math alone calls for a system reset, a debt jubilee.

    Investors are already losing… in a rigged monetary casino that rewards usury, speculation, and currency manipulation while looting main street.

    There is a moral principle that debts should be honored. That is, debts between businesses that buy and sell real products, not bundled ponzi schemes, debts between individuals, between friends and businesses that know each other to be rational and moral, debts based on investments where there is a rational expectation of return.

    There is also a moral principle that unjust debts should be cancelled, and usury legislated against. Debts that are ‘odious’, debts based on fraud, debts to dictators, debts arranged by oligarchs without the consent of the general population (the 99 percent who have been left out of the equation), debts based upon compound interest upon compound interest, that should have been written off long ago, the debts need to be cancelled in a general jubilee. Think outside the box. It’s time for a jubilee.


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