Greece: ‘We don’t need no stinkin’ restructuring’
This morning a Bloomberg article states that ‘Greek bond yields yesterday rose above their level before euro-area leaders agreed on the bailout on May 2.’ Yet, again quoting Bloomberg, investors worry that ‘rescues similar to Greece’s 110 billion-euro ($143 billion) package will be needed in Spain and Portugal.’
HUH? The rescue failed, so the failed plan should be extended to other countries too?
We hear a lot of talk about political extremism. But fiat currency constitutes an extremist secular religion. Its brainwashed adherents exult that governments ‘face no revenue constraint,’ meaning that they can print the currency to service debt if tax collections don’t suffice.
But markets have started to see through the money illusion. The abstract quantity of interest on debt has compounded beyond the ability of the bricks-and-mortar, flesh-and-blood economy to service it. More debt is no longer the answer.
[/quote]+1 Greek bond market is on holiday. LOL
The question now is will the unrest displayed during the national strike be sustained, spread, or die down – I think this will affect how quickly (or slowly) Europe faces up to the need for debt restructuring – an acknowledgement of reality if you will. Seems to me that unrest is simmering all over Europe.
Thursday — the crisis deepens:
The pledge of a 110 billion-euro ($142 billion) bailout for Greece from euro-area countries and the International Monetary Fund failed to assuage investors’ concerns.
Credit-default swaps on Spanish and Portuguese banks rose to records, according to CMA DataVision prices. Portugal’s Banco Comercial Portugues SA increased 37 basis points to 516 and Banco Espirito Santo SA climbed 26.5 to 537.5. Contracts on Spain’s Banco Santander SA rose 16.5 basis points to 223.5 and Banco Bilbao Vizcaya Argentaria SA jumped 17.5 to 239.
Swaps on Greece, Portugal, Spain and Italy rose to or near all-time high levels. Swaps on Greece surged 15 basis points to 859, Portugal climbed 18.5 to 434, Spain increased 11 to 241 and Italy rose 10 to 197, CMA prices show.
Only one place to hide, as European shares and bonds tank:
May 6 (Bloomberg) — The price of gold in euros jumped to a record today as a slump in the currency prompted investors to buy bullion to preserve their wealth. Holdings in the biggest exchange-traded fund backed by bullion reached an all-time high.
Gold denominated in euro has advanced 20 percent this year as the 16-nation currency tumbled about 11 percent on concern that the region’s debt crisis may spread even as the European Union and International Monetary Fund agreed on a 110 billion euro ($143 billion) bailout package for Greece. It reached a record 921.2842 euros today and was last at 919.75.
Thousand-euro gold is becoming more probable, as the dying EU dinosaur thrashes in its tar pit.
Ambrose Evans Pritchard:
Are We Nearing Capital Controls?
“As Jacques Cailloux at RBS and others have been saying for nearly two weeks now, the European Central Bank must come down off its high horse and launch a massive purchase of eurozone bonds — ie QE, printing money, eurocopters, call it what you want — which means tearing up the EU rule book in the process.
If they refuse to do this, they must expect to see their short careers in Frankfurt come to a swift end, and to see the Eurotower in Frankfurt boarded up.
Will it happen today when the ECB’s governing board meets in Lisbon? Almost certainly not. The Germans are adamantly opposed, fearing the Weimar virus. Axel Weber from the Bundesbank has has already fired a warning shot. So once again, the EU response is being paralysed by the conflicting philosophies of the Teutonic and Latin camps.”
Krugman writes on his blog:
The consensus that Greece will end up defaulting is probably too optimistic. I’m growing increasingly convinced that Greece will end up leaving the euro, too.
Gold calls b.s. on the bankster clowns:
Thurs. 2:12 pm — Gold at $1,201.70 in post-pit, electronic trading.
Managing a global Ponzi scheme by daytrading the supply of bankrupt government paper has to rank as the stupidest idea since communism.
The euro is a Yugo, thanks to turbo-injected sovereign junk debt.
Oh, NO, it’s Friday! Another day older, and another day deeper in la merde:
May 7 (Bloomberg) — The cost of insuring against losses on European bank bonds soared to a record, surpassing levels triggered by the collapse of Lehman Brothers Holdings Inc., as the sovereign debt crisis deepened.
The Markit iTraxx Financial Index of credit-default swaps on 25 banks and insurers soared as much as 40 basis points to 223, according to JPMorgan Chase & Co. The index closed at 212 basis points March 9, 2009. Swaps on Greece, Portugal, Spain and Italy rose to or near all-time high levels.
Contracts on Spanish and Portuguese banks rose to records, according to CMA DataVision prices. Portugal’s Banco Comercial Portugues SA increased 63 basis points to 589 and Spain’s Banco Santander SA rose 18 basis points to 259. Swaps on Greece surged 75 basis points to 1,008 before the advance was pared to 964, Portugal climbed 42 to 502 before cutting its increase to 461 and Italy rose 24 to 255.5 before trading at 238.5. Spain increased 14 to 288 before falling to 269, CMA prices show.
Europe’s one-trick-pony ‘leaders’ meet this evening to discuss ‘more of the same, piled higher and deeper.’ If 110 billion euros of new debt won’t solve the problem, how about 1.1 trillion euros? Like the alcoholic whose bottle let him down, these debt addicts just can’t believe that their universal remedy for hurting countries don’t work no more.
German Chancellor Angela Merkel and other euro region governments are set to arrive in Brussels about 6:15 p.m. local time for a summit called five days ago to draw “conclusions” from the Greek crisis. The final press conference is slated for 10 p.m.
Conclusion: the tertiary stage of Eurosclerosis is EuroAlzheimer’s. Stick a fork in your ear, Angela — you’re done!