Who didn’t pay the Titanic ticket?

Greece and the Brazilian new-colony Portugal didn’t pay the ticket: so what?

Europe already sank

In http://ftalphaville.ft.com/blog/2011/11/23/760601/germany-the-only-first-class-passenger-on-the-titanic/, Neil Hume quotes RBS rate guru Harvinder Sian:

 

Is this the start of German credit erosion, the point at which Germany finds out that it is only the first class passenger on the Titanic? The media headlines in the next few days will point this way.

I essentially see much more market stress before Bunds are able to sustain a sell-off. More specifically:

1. Do not expect the ECB to capitulate on demands to ease the debt crisis as a lender of last resort any time soon. This should become obvious at the 9th December EU Summit. The pain threshold for the ECB and Germany is far higher and will likely involve concerns that some countries are about to pull out of the Euro, bank runs or both. Think blind panic and you are close to the picture that I have in mind. I see this as a necessary condition for some type of solution effort given the political failure to get ahead of the crisis.

2. Greece risks a hard default, mostly likely in Q1-12, as the PSI will fail to get enough private sector contribution and other EMU countries will be reluctant to pile in more cash. The default risk is likely to remain elevated into year end if the Greek ND leader Samaras does not fully back the IMF/EU deal.

3. The German view is hardening towards using conditional rescue entities for countries in need (EFSF/IMF) and Germany still looks fully behind the idea that countries with unsustainable debt can see haircuts. This is the logic of the ESM and this is a far cry from the debt mutualisation that is the current consensus. This is important in the German credit assessment.

4. From a flow-of-funds perspective, we expect to see a continuation of ex-EMU residents dump all debt, including Germany. The EMU region is however self-financing. Over 75% of debt issued in EMU stays in EMU and that number can and will get higher. As such, many of those exiting periphery and weaker AAAs will need some exposure to debt markets, with Germany still the de-facto location. Buying Treasuries (or Gilts) over Bunds makes sense as a trade; but not the macro data.

As such, my ongoing bullish Bund conviction rests on the idea that the market is too hopeful on a near term solution, is not prepared for hard default risks, and ignores the closed economy nature of the Euro region.

In sum, Europe and € are going to experience a near-death in 12s1, when Greece might go into an orderly-to-chaotic mess, while Monti’s Italy might find a last minute escape, eventually. The too late acceptance of QE by Germany in 2012, will sanction the €-centred phase 2 (after $ubcrime phase 1) of the 2007-about 2025 #GreatOECDepression.

Published in: on November 26, 2011 at 6:53 am  Leave a Comment  
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Q€: e la nave va, ma NON a gonfie vele

Bilancio del primo giorno UFFICIALE di caccia alle farfalle da parte delle Vispe Terese di Francoforte.

Per LEX il Quantitative €asing (Q€) è già un primo mattone di una qualche maggiore coesione se non fusione fiscale:

“As it is an interest-rate subsidy, it is also a cross-border transfer of wealth, the ECB’s equivalent of the EU’s regional development fund (set up in 1975). Hence this is a further small step towards a single fiscal eurozone.

There could be a bigger step yet to come. The ECB might have to issue its own bonds to sterilise the money it is printing to buy sovereign debt. Such bonds, true “euro-bonds”, might face legal obstacles. Politicians and voters could well object.”

E per Phastidio senza yield targeting (tipo: sopra il 5% compro tutto sul mercato) non si fa paura a nessuno; pertanto date le dimensioni in gioco,  per esser credibili occorrono gli eurobond proprio come dice Lex (qui le 2 analisi collimano):

“è inimmaginabile pensare che l’Eurotower compri titoli italiani nelle quantità necessarie a mantenere il rendimento compresso su livelli di sostenibilità (yield targeting), come vi avevamo già detto. E a dire il vero non lo ha fatto neppure per Grecia, Portogallo ed Irlanda, eppure era più semplice, visti i volumi in gioco. L’impressione è che la Bce abbia concordato con i governi francese e tedesco e con la Commissione europea una soluzione-ponte più pirotecnica che sostanziale, in attesa che l’EFSF venga dotato di risorse per l’autunno. Ma anche 1000 miliardi non servirebbero.”

Infatti, Roubini parlava oggi su La Repubblica di 2-3 volte gli attuali 0,4 trilioni in dotazione al nascituro EMF, oggi embrione efsf. Stavolta Nouriel è ottimista, come accade più spesso dello stereotipo: non 1 ma 2 trilioni sembrano una cifra minima più adeguata, sempre sull’ipotesi che intanto si arresti il domino sulla Francia, sennò potrebbe non bastare NESSUNA CIFRA.

Con 1 g. di ritardo leggo  via Sole 24 ore una stima NYT vicinissima alla mia: US$ 1.4 trilioni per il bailout italico ed altri 0.7 per l’iberico. Io ho detto la stessa cifra per l’aumento di dotazione. Infatti aggiungere alla dotazione efsf €1.6 tn. = US$ 2.28 tn.

Citazioni da:
1. LEX
http://www.ft.com/intl/cms/s/3/72ad8a62-c1ae-11e0-acb3-00144feabdc0.html#axzz1URmx51dk
2. PHASTIDIO.net
http://networkedblogs.com/lp0Ek
Che a sua volta cita: http://phastidio.net/2011/08/05/lora-dei-dilettanti/

Libitalia

LIBITALIA, le 2 Marie ed i 4 Marii

Iniziato venerdì, continua oggi lunedì 8 agosto il QE (Quantitative Easing) nella zona €: venerdì hanno comprato titoli pubblici le BC di Madrid e Via Nazionale. Oggi s’alza dalla panchina e scende in campo Francoforte (ECB). Funziona così il “governo tecnico” internazionale (che fa riferimento al Colle prima che a Pal. Chigi) di cui parlava DALLA PANCHINA il prossimo Primo Ministro italiano, Super-Mario Monti ieri nell’editoriale del Pompiere della Sera che in qualche modo ufficializzava e precisava la natura della sua accettazione dell’invito del Colle.

Stanotte borse in calo in Asia per la doppia elica di inviluppo e squilibrio:

A) Debiti Sovrani a varia insostenibilità negli ex-paesi ricchi, con focus della crisi ora spostatosi dai PIGS ai FIS, Francia, Italia e sempre la Spagna;

B) S&P cattivella e scapestrata: entra a gamba tesa nelle pre-Presidenziali degradando i Tea Party ad AA+ (anche Obama ha ovviamente le sue colpe).

Si sfoglia anche questa settimana la margherita: I MERCATI LO CACCIANO; NON LO CACCIANO. I mercati ci amano, non ci amano.
Fa confusione tra il SI e NO netto, l’equivoco “FORSE MI AMA”  di Casini ed alcuni leader europei, ma certo non della BCE\ECB. Gli appelli cerchiobottisti: fate prima la manovra. Come dire: FATE SCHIFO, MA ALMENO FATELO + IN FRETTA! Subito.
Tra gli altri, 3 dei 4  MARII, ossia il Gov. Draghi, +Mario Seminerio e http://www.mariobaldassarri.it/ (quest’ultimo, anche oggi su Il Giornale) chiariscono che TUTTO L’IMPIANTO DI QUESTA MANOVRA sia di puro stampo Voltremontiano. Nel segno di una sciagurata CONTINUITA’, la pseudo-Manovra mira a pareggiare i bilanci ad un PIL VIA VIA inferiore; degradando il paese, il suo morale, le sue infrastrutture, la sua capacità di esprimere idee, perseguirle, creare valore economico e relazionale. Spegnendo col vento della Reazione Gretta l’ultimo lumicino di speranza residua dei giovani: avremo la pensione a 70 anni e nessuno straccio di riforma dei mercati del lavoro.
E che dire del metodo di un Premier (si fa per dire) che delega le strategie di sistema al Min. Economia, tanto a lui non gliene può fregar di meno?
L’amico Guido Viale cita a modello di “sviluppo verde” il libro inglese Prosperità senza crescita. Qui siamo alla disperazione senza crescita. VERSO L’ABBRACCIO FINALE CON QADDAFI. Il Nuovo che avanza: la repubblica federalista libico-padana dalle Alpi al Sahara.

LIBITALIA

A meno che non si completi, meglio se entro Ferragosto massimo fine mese, la liquidazione del governo dopo questa emergenziale, provvisoria ed umiliante TUTORSHIP di Napolitano su SB,  Draghi sull’ingoiatore Guinness di rospi Voltremont.

Leggi anche:

– SuperMario ACCETTA una sua candidatura a Primo Ministro, tra queste righe. Mario Monti: governo italiano commissariato da “governo tecnico sovranazionale”. Evidenza palmare, ma non per tutti http://t.co/soxbdZS

 

– http://www.noisefromamerika.org/index.php/articoli/Il_default_non_era_nel_programma_ma_stiamo_lavorando_per_servirvelo

a Francoforte sono dei Bari

Bari a Francoforte. Il cavallo germanico e’ stanco e  s’abbevera meno.

6 pm GMT UPDATE: we knew nothing, zis morning,  about today’s European stock exchanges, where someone must agree with the Roubini’s tiny sect.

Whatever they think, they voted today  “pollice verso” to ECB dull uncertainty, going opposite to a last minute rally at  Wall Street, with:  FTSE Eurofirst 300 -3.96%,  CAC 40 Paris -5.4%.


If the German horse drinks less,

at ECB they must cheat.

Two bad news from Germany, for the European deep recession.

Today: -6% manuf. industries orders in Germany.

Yesterday: at ECB they have lost their LAST CHANCE to serve the people they should serve.

ECB cuts rates by 0.75, NOT daring to choose between 0.5 and 1.0.

Please note that, as soon as some world region will succeed to do something in order not to stop (physically impossible), but  to smooth some effects of the “december 2007 – sometimes in 2o10-11” recession, Europe will just crackdown as a whole, in the absence of any policy. And there is no reason to preview that any policy will be undertaken in Europe, before it’s too late: IT IS TOO LATE ALREADY.

All the best macro-economists (except our modest, little Roubini sect, the Truth-Tellers) realised we were in a crisis, although still not grasping it as a complex-deep and  unique one, only in … September 20o8, i.e. 13  months after its dramatic, nuclear-bomb  implosion.

The forecast of a German bank of GDP – 4% is  clearly over-optimistic,  in an average scenario without any European economic policy; eventually, later on just  some social policy, when people’s revolts will diffuse and become violent. The Italian CGIL Trade Union is  unluckily the only one, of the 3 BIG TUs,  to play a democratic, moderate and responsible game; with foresightedness, in order to prevent the crisis to go socially very very bad, catastrophic and  VIOLENT; an ideal ground for Red and Islamic Brigades: we’ll talk this soon, in a next post, à propos of the FRIDAY 12 DEC. GENERAL STRIKE IN ITALY ON BEHALF OF AN ECONOMIC POLICY. Talking Brigades: DO YOU KNOW THAT THERE ARE AT LEAST SOME HUNDREDS  hidden-sleeping Al Qaeda associates in Germany, UK and elsewhere, with a European passport, and all of them received a full military training in the tribal provinces of Pakistan? We know it, from published sources: October issue,  Le Monde Diplomatiqe.

From the Frankfurt BABEL TOWER (read: ECB), board member Mr Bini Smaghi (interviewed zis morning at Italian RAI-RADIO 3) replies to the  -4% provocation, by saying that “such bank economists have vested interests” (conflitto di interessi) in making such forecasts. He, they forecast a GDP upturn in the 2009 2nd semester, but they don’t believe such bullshit, since they are not crazy. They just lie.

Let us fix a 1st Babel Tower dimension: LA MALAFEDE;  at the ECB they are liars  using all their hyperpower and Authority, to  diffuse informational heavy drugs, downers (tranquillanti) to people. MENTONO SAPENDO DI MENTINE.

TODAY: According to Mario Platero (il sole 24 ore correspondent), the worst guesses were 380,000 jobs lost in November: they came out almost 50% more than that. IT IS SURE THAT THE U.S. ARE  LOSING MORE THAN 2 MILLION JOBS across 2008, since thet’re up to 1.7 mn by now.

ft

US job losses steepest since 1974

The US economy lost a stunning 533,000 jobs in November – the largest monthly drop in more than three decades – as the unemployment rate jumped to 6.7 per cent
today, Dec.5; – 14:23

German manufacturing orders collapse

October orders fall 6.1%
today, Dec.5; – 12:19

YESTERDAY: At ECB,  besides being professional and trained liars: either they know little about economics, or they live in another planet (ignoring what happens here), or they have unconfessable aims (like fucking the working class and the Trade Unions, together with large sections of the creative and productive bourgeoisie, etc.). We firmly believe THE 4 OF THEM HOLD, in a satanic mix.

As usual, ECB did’nt dare to cut 1% full (just 0.75), even though  its 2%  inflation target is already, fully and even too much satisfied – since (a short lecture  for  ECB dunces and liars):

081204oil-price

a) Summer 2008 breakthrough shift in ALL PRIMARY MARKETS: from inflation to deflation;

b) such a radical change is NOW quickly diffusing  downwards on intermediate and final goods markets;

c) present state-of-the-art: less year-base inflation, quickly converging to the 2% target and overshooting;

d) ST perspective: a DRAMATIC DEFLATION much more than likely:  pretty difficult to avoid, exp. without creativity, innovation and Zeitgeist in economic, social policies and Politics tout court. A horrible  STAG – DEFLATION – Roubini, 2 dec. FT.

wsj

[Crisis Management chart]

ECB, Bank of England Cut Rates

Central banks world-wide delivered sweeping cuts,

with the ECB lowering rates by 0.75 percentage point to 2.5%

and the BOE slashing its key rate by one point to 2%. (Trichet remarks)