Europe Then, Europe Now...

[GRG55]

Europe then [well, Great Britain at least ]:

...we shall fight on the beaches,
we shall fight on the landing grounds,
we shall fight in the fields and in the streets,
we shall fight in the hills;
we shall never surrender...

Europe now:

“We will defend the euro, whatever it takes”...

EU to Set Up Fund to Prevent Spread of Greek Crisis

May 8 (Bloomberg) -- European leaders agreed to set up an emergency fund to halt the spread of Greece’s fiscal woes, seeking to prevent a sovereign debt crisis from shattering confidence in the 11-year-old euro.

Jolted into action by the sliding currency and soaring bond yields in Portugal and Spain, leaders of the 16 euro countries said the workings of the financial backstop will be hammered out before Asian markets open late tomorrow European time.

“We will defend the euro, whatever it takes,” European Commission President Jose Barroso told reporters early today after the leaders met in Brussels.

Europe’s failure to contain Greece’s fiscal crisis triggered a 4.3 percent drop in the euro this week, the biggest weekly decline since October 2008...

...European officials declined to disclose the size of the stabilization fund, to be made up of money borrowed by the European Union’s central authorities with guarantees by national governments. Finance ministers will meet at 3 p.m. tomorrow in Brussels to flesh out the details. A press briefing is scheduled for 6 p.m...

[jpatter666]

Re: Europe Then, Europe Now...

The crisis is limited to subprime (uh...Greece).

We have put a bazooka (gun) on the table.

We will defend the Euro, whatever it takes.

We should start a "greatest lines from the Great Crash" thread.....

[don]

Re: Europe Then, Europe Now...

The crisis is limited to subprime (uh...Greece).

We have put a bazooka (gun) on the table.

We will defend the Euro, whatever it takes.

We should start a "greatest lines from the Great Crash" thread.....

The US lead is possibility insurmountable. Quotes from Sir Alan, Summers, Bernanke, Geithner, Blankenfeld ... the list goes on and on :eek:

[jpatter666]

Re: Europe Then, Europe Now...

The US lead is possibility insurmountable. Quotes from Sir Alan, Summers, Bernanke, Geithner, Blankenfeld ... the list goes on and on :eek:

Haha...reminds me of a horse race. Andddd....they're off! US in the lead, coming around the bend it's the US, followed by the EC with Japan on the outside and China at the rear of the pack.

And China, making a move....drawing up alongside Japan.

Hold on! Here comes EC, with a sudden burst of economic nonsense!

[GRG55]

Re: Europe Then, Europe Now...

An uncharacteristically ominous sounding El-Erian...

El-Erian on a critical weekend for Europe and the economy

Posted by Guest writer on May 08 17:32.

This is a critical weekend for Europe (and the global economy), with governments shifting to a “whatever it takes” mode as they scramble to regain control of the situation, Pimco’s chief executive Mohamed El-Erian writes for FT Alphaville.

Yesterday night’s important news out of Europe points to renewed efforts to rescue Greece and safeguard the Euro. The news will undoubtedly be accompanied by additional announcements out of Brussels and Berlin, as well as Washington DC. In the process, the stakes are getting even bigger…for Greece, Europe and the global economy.

As the announcements multiply, it is even more important to be clear about the key question. This is best summarized by a simple, and disturbing image, that a friend alerted me to:

With Greece (as well as Portugal and some other countries) now visibly drowning in a sea of debt, the question is whether the rescuer (EU/IMF) can pull off the rescue or, instead, get pulled down with all parties drowning.

So far, the attempts at rescue-including last Sunday’s dramatic EUR 110 billion announcement-have have been incomplete with respect to both design and implementation. They were thus viewed as insufficient and not credible by analysts and markets. As a result, the Greek crisis morphed in the following days into something much more sinister for Europe and the global economy.

This explains this weekend’s shift in the EU to a “whatever it takes” mindset. We are seeing evidence of a significant step-up in crisis management. Yet the question is not whether a step-up is required-it clearly is. The question is whether the strengthened rescue attempt will prove sufficient.

Has the rescuer been bolstered enough to pull out the drowning parties, or will the latest rescuer be pulled down too?

It is too early to make this call with a sufficient degree of foundation and conviction. At the very minimum, we have to wait for tomorrow’s operational details.

Even with this critical uncertainty, we should not under-estimate the historical relevance of what is happening this weekend; and the stakes for Europe and the global economy are huge.

If this rescue attempt does not work, there will be a material acceleration in the process of change to Europe’s economic, financial, and institutional landscape; and the reality of the debt explosion in industrial economies will become even more of a destabilizing factor for the world economy.

Mohamed El-Erian is CEO and co-CIO of PIMCO

[GRG55]

Re: Europe Then, Europe Now...

...We will defend the Euro, whatever it takes.


...

Strikes me that the Euro is the CDO of currencies...

Start with a Deutschmark base, mix with a healthy dose of Francs, stir in equal amounts of lira, schilling, and peso, finally season with a dash of drachma, escudo and koruna and then peddle it to the world as a triple-A credit.

A scheme worthy of Goldman, non? :-)

[jk]

Re: Europe Then, Europe Now...

Strikes me that the Euro is the CDO of currencies...

Start with a Deutschmark base, mix with a healthy dose of Francs, stir in equal amounts of lira, schilling, and peso, finally season with a dash of drachma, escudo and koruna and then peddle it to the world as a triple-A credit.

A scheme worthy of Goldman, non? :-)

that's right. it made the drachma as strong as the deutschmark, AAA! and greek rates as low as bunds! oops.
seeing it that way, and that clearly, though, makes me remain as skeptical as ever about any "rescue."

[GRG55]

Re: Europe Then, Europe Now...

Merkel Then:

Angela Merkel: EU summit should not discuss bailout for Greece

Sunday 21 March 2010 18.34 GMT

The stage is set for a showdown between Angela Merkel and José Manuel Barroso, the European commission president, after the German chancellor said a bailout for Greece should not be on the agenda of this week's EU summit in Brussels...

...She said it was the persistent speculation about a possible bailout that was creating the volatility in the financial markets and warned against raising "false expectations" that other eurozone economies would come to Greece's rescue...

Merkel Now:

Merkel says situation in Europe is serious

BERLIN
Sat May 8, 2010 11:07am EDT

(Reuters) - Europe faces a serious situation with Greece not the only country subject to financial market pressures, German Chancellor Angela Merkel said on Saturday...

"It is a serious situation," she told reporters in Berlin after meeting Canadian Prime Minister Stephen Harper.

"If you looked at the spreads from Friday or Thursday, you see we are facing a development that is not good in several countries, not just one country," she added.

Merkel said euro zone leaders made the right decisions on Friday, when they agreed to have special measures ready before financial markets open on Monday to prevent financial turmoil in Greece spreading to other countries such as Spain and Portugal...

[GRG55]

Re: Europe Then, Europe Now...

Nine pictures [well, charts actually] worth a peek. Chart number 3 brought to mind an old adage about "people who live in glass houses...".

http://www.spiegel.de/fotostrecke/fo...cke-54629.html

[Jay]

Re: Europe Then, Europe Now...

Haha...reminds me of a horse race. Andddd....they're off! US in the lead, coming around the bend it's the US, followed by the EC with Japan on the outside and China at the rear of the pack.

And China, making a move....drawing up alongside Japan.

Hold on! Here comes EC, with a sudden burst of economic nonsense!

Like this horse race?

http://www.youtube.com/watch?v=ZB27L...eature=related

[GRG55]

Re: Europe Then, Europe Now...

...We will defend the Euro, whatever it takes.

...

Well this was predictable, wasn't it.

If this is the best of "whatever it takes", then the Euro truly is doomed...

From Eurointelligence:

...European leaders, meanwhile, in preparation for today’s summit, are focusing squarely on the blame game. While the crisis is spreading to Spain and Portugal, Jose Manuel Barroso, the president of the European Commission, blames “speculators” for the problems of the euro zone, showing once again that he, and those who advise him, have no understanding of the crisis. Der Spiegel reports that Angela Merkel and Nicolas Sarkozy will push for their agenda of banning naked CDS, speculation against the euro, and the set-up of a European rating agency at today’s eurozone summit. (...The markets are panicking about a spread of the crisis, while Barroso/Merkel/Sarkozy are blaming the markets, and threatening action against them. This is a game they will not win.)...

...Joe Stiglitz says there are now three ways out. The first is an internal devaluation by southern European countries – wage and price cuts. He believes this is not going to happen. The second would be an exit of Germany from the eurozone, or split of the eurozone into a northern and southern hemisphere. And his preferred solution is the type of institutional setup the euro area should have had right from the start: a fiscal union...

[metalman]

Re: Europe Then, Europe Now...

Well this was predictable, wasn't it.

If this is the best of "whatever it takes", then the Euro truly is doomed...

From Eurointelligence:

...European leaders, meanwhile, in preparation for today’s summit, are focusing squarely on the blame game. While the crisis is spreading to Spain and Portugal, Jose Manuel Barroso, the president of the European Commission, blames “speculators” for the problems of the euro zone, showing once again that he, and those who advise him, have no understanding of the crisis. Der Spiegel reports that Angela Merkel and Nicolas Sarkozy will push for their agenda of banning naked CDS, speculation against the euro, and the set-up of a European rating agency at today’s eurozone summit. (...The markets are panicking about a spread of the crisis, while Barroso/Merkel/Sarkozy are blaming the markets, and threatening action against them. This is a game they will not win.)...

...Joe Stiglitz says there are now three ways out. The first is an internal devaluation by southern European countries – wage and price cuts. He believes this is not going to happen. The second would be an exit of Germany from the eurozone, or split of the eurozone into a northern and southern hemisphere. And his preferred solution is the type of institutional setup the euro area should have had right from the start: a fiscal union...

& the answer is... 'shock & awe' printing!

E.U. Offers $957 Billion Rescue Package

By JAMES KANTER and LANDON THOMAS Jr.

Published: May 9, 2010

BRUSSELS - European leaders, pressured by sliding markets and doubts over their ability to act in unison, agreed on Sunday to provide a huge rescue package of nearly one trillion dollars in a sweeping effort to regain lost credibility with investors.

wanna place a side bet on the reaction of gold prices?

[cjppjc]

Re: Europe Then, Europe Now...

A sad commentary that a trillion didn't make me jump.

[GRG55]

Re: Europe Then, Europe Now...

Looks like Jean-Claude has signed up for the Ben Bernanke home study course for helicopter pilots.

And I just loved the line about how "surgical" this is going to be. Credits the ECB with a level of precision that seems to have eluded most other Central Banks of the world...

ECB to Intervene in Bond Market to Fight Euro Crisis

May 10 (Bloomberg) -- The European Central Bank said it will buy government and private bonds as part of an historic bid to stave off a sovereign-debt crisis that threatens to destroy the euro.

The ECB wants “to address severe tensions in certain market segments which are hampering the monetary policy transmission mechanism and thereby the effective conduct of monetary policy,” the central bank said in a statement today, minutes after European finance ministers announced a loan package worth almost $1 trillion to staunch the market turmoil.

The central bank said it will intervene in “those market segments which are dysfunctional,” signaling it views the recent surge in some of the region’s bond yields as unjustified...

...“They are not cranking up the printing presses,” said James Nixon, co-chief European economist at Societe Generale SA in London. “This is a much more targeted, surgical approach. They buy the duff stuff that no one in the market will touch.”...

...The ECB’s announcement came four days after President Jean- Claude Trichet said the buying of bonds hadn’t been discussed when members of the bank’s 22-member Governing Council met to set interest rates in Lisbon...

[medved]

Re: Europe Then, Europe Now...

An uncharacteristically ominous sounding El-Erian...

El-Erian on a critical weekend for Europe and the economy

Posted by Guest writer on May 08 17:32.

This is a critical weekend for Europe (and the global economy), with governments shifting to a “whatever it takes” mode as they scramble to regain control of the situation, Pimco’s chief executive Mohamed El-Erian writes for FT Alphaville.

Yesterday night’s important news out of Europe points to renewed efforts to rescue Greece and safeguard the Euro. The news will undoubtedly be accompanied by additional announcements out of Brussels and Berlin, as well as Washington DC. In the process, the stakes are getting even bigger…for Greece, Europe and the global economy.

As the announcements multiply, it is even more important to be clear about the key question. This is best summarized by a simple, and disturbing image, that a friend alerted me to:

With Greece (as well as Portugal and some other countries) now visibly drowning in a sea of debt, the question is whether the rescuer (EU/IMF) can pull off the rescue or, instead, get pulled down with all parties drowning.

So far, the attempts at rescue-including last Sunday’s dramatic EUR 110 billion announcement-have have been incomplete with respect to both design and implementation. They were thus viewed as insufficient and not credible by analysts and markets. As a result, the Greek crisis morphed in the following days into something much more sinister for Europe and the global economy.

This explains this weekend’s shift in the EU to a “whatever it takes” mindset. We are seeing evidence of a significant step-up in crisis management. Yet the question is not whether a step-up is required-it clearly is. The question is whether the strengthened rescue attempt will prove sufficient.

Has the rescuer been bolstered enough to pull out the drowning parties, or will the latest rescuer be pulled down too?

It is too early to make this call with a sufficient degree of foundation and conviction. At the very minimum, we have to wait for tomorrow’s operational details.

Even with this critical uncertainty, we should not under-estimate the historical relevance of what is happening this weekend; and the stakes for Europe and the global economy are huge.

If this rescue attempt does not work, there will be a material acceleration in the process of change to Europe’s economic, financial, and institutional landscape; and the reality of the debt explosion in industrial economies will become even more of a destabilizing factor for the world economy.

Mohamed El-Erian is CEO and co-CIO of PIMCO

I think, we will get over these "surprises" just like we got over the banking crisis, and the markets will go back to their happy self. TPTB will, indeed, do whatever it takes including bailout of Europe by the US ( a true financial superpower ;)). Nobody wants repetition of 2008, and we will not get one.

The main goal is to keep markets pacified. If US will not achieve it alone, G20 will do it with the help of BRICs. This comedy will continue, until the real inflation shows up.