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More EU Bollocks.

The EU Creed – “Try and Try again there is no do”

The negotiations have gone on for months. If you truly believe that it’s about making Greece’s’ debts more affordable you’re mad, this is about setting targets that are impossible to meet, thus creating a situation wherein Greece becomes a third world country outside the EU, and all the unelected eurocrats cry “We did our best, we spent months working on a plan”. We already know its win, win for the bondholders anyway link , link, and the US is heavily leaning on Germany to do what ever is possible to stop the inevitable default bleeding the fed dry.

Saturday 4th February 2012

Euro zone finance ministers told Greece it could not go ahead with an agreed deal to restructure privately held debt until it guaranteed to implement reforms to secure a second financing package from the euro zone and the IMF.

via Euro zone insists no Greek rescue without reforms | Reuters.

Sunday 5th February 2012

Greece’s prime minister scrambled Sunday to convince lenders and politicians to sign off on a 130 billion euro rescue, after his finance minister said just hours remained to clinch a deal to avoid a messy default.

Via Greece on “knife edge” in push to agree bailout

Analysis 24 January 2012

So, they’re going through a drawn-out step-by-step procedure of demands for reforms, promises, failed implementations, rebukes, withheld bailout transfers that then might still be made, and so on. The idea is to keep markets from panicking, give governments time to prepare for the inevitable, and render politicians blameless for Greece’s exit from the monetary union.

Via Paying Lip Service To Saving The Eurozone

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EUR2.73 TRILLION : The cost of propping up a dead donkey.

Nearly a year’s worth of anticrisis lending measures have sent the ECB’s books to a record EUR2.73 trillion, some 29% of the euro zone’s gross domestic product. This expansion, capturing both the collateral pledged by banks receiving funds from the central bank and the sovereign bonds it has purchased for its own account, has been welcomed by bond investors, who see it as a stabilizing force. But the excess liquidity bodes for a weaker euro, and has some wondering if the ECB’s own solvency could eventually be in peril.

via Swelling ECB Balance Sheet Brings Relief, Poses Risk For Euro – WSJ.com.

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Reality has been suspended.

“There is a little pause in these discussions. But I am confident that they will continue and we will reach an agreement that is mutually acceptable in time,” Papademos said according to a transcript of an interview with CNBC.

via Greek PM confident debt swap to be clinched in time | Reuters.

Private Bond holders i.e. hedge funds are never going to take any haircut on their bonds, the reasons outlined here.

Greek default is now inevitable there is absolutely nothing that can be done except for wasting a monumental amount of tax payers money delaying default for another 6 months, and thus multiplying the pain.

The repeated application of a bad idea, does not ever result in the required outcome.

 

 

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Merkel : “I myself never saw a Triple-A fund as that important”

Angela Merkel

“I myself never saw a Triple-A fund as that important”

via The Slog.

Just incase you where in any doubt how monumentally blind and stupid Angela Merkel appears to be, below is a short excerpt of S&Ps’ reasoning for the downgrading of EU countries. Taking particular attention to note the lack of any kind of confidence in the EU to get anything done.

S&P:

More fundamentally, we believe that the proposed measures do not directly address the core underlying factors that have contributed to the market stress. It is our view that the currently experienced financial stress does not in the first instance result from fiscal mismanagement. This to us is supported by the examples of Spain and Ireland, which ran an average fiscal deficit of 0.4% of GDP and a surplus of 1.6% of GDP, respectively, during the period 1999-2007 (versus a deficit of 2.3% of GDP in the case of Germany), while reducing significantly their public debt ratio during that period. The policies and rules agreed at the summit would not have indicated that the boom-time developments in those countries contained the seeds of the current market turmoil.

Standard & Poors

Bond Holders walk away from Greece Bond Haircut:

This week also hailed the final nail in the coffin for the Greek haircut idea, with the IIF walking away from talks to “pause for reflection” link Interesting to note that media reported this as a done deal back in November.

It was never going to happen, why would the major bond holders voluntarily take cuts on their holdings. Bare in mind that the vast majority of holders of Greek debt now appear to be Hedge Funds.

These Hedge Fund being neither stupid nor suicidal knew that the EU was unlikely to force any cut, and were more likely to pay them out. Secondly, you really think they didn’t by insurance just incase? So why would you take a cut, when both options available to you are up.

Bloomberg: US Banks heavily exposed to CDS on EU Debt.

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France & Germany to Greece : “You will pay us, and let your citizens starve”

In the pre-austerity Athens budgets, there were quite a few items on the military’s shopping list… 60 Eurofighter aircraft, €4 billion. French frigates and patrol boats for over €4 billion and €400 million respectively. German U-boats, for €2 billion. But – you’d think – all that’s had to go by the board.

via GREEK CRISIS: AND YET MORE FRANCO-GERMAN HYPOCRISY | The Slog.

Franco-German hypocrisy of the highest order, it really doesn’t take a genius to work out the EU and for that matter the whole banking axis, is rotten and corrupt to its very core.

Lets not forget the French and German Pension liabilities that need paying.

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German & French Pensions at 300% GDP

French pension liabilities 303.81% of GDP, German pension liabilities 281% of GDP vs UKs 90.92%. French + German liabilities total nearly half of all pension liabilities across the 19 EU states.

And the Euro is going to stick around for the rest of the year, I think not. Its debt on-top of debt on-top of debt – it might as well be swiss cheese. Infact futures in cheeseare probably a safer bet than Euro futures.

From the horses mouth.

‘By contrast, State-funded pension obligations in France and Germany are three times the gdp of those two countries. Together they total 13.9 trillion euros, VERY NEARLY HALF of the pension bills of the 19 nation States studied by Freiburg’s authors, Christoph Mueller, Bernd Raffelhueschen and Olaf Weddige. – http://www.vwl.uni-freiburg.de/fakultaet/fiwiI/publikationen/229.pdf

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If you were in any doubt…

If you were in any doubt as to how bad the Euro ‘thing’ is, this article from Bloomberg should hopefully make it a little clearer.

I would wager that this game of Hedge funds buying CDO’s in Greece will replay in Italy, Spain and France.

If you have a system that works why change it.

Some hedge funds won’t accept a plan to cut Greek debt as they are betting that the country will default, Handelsblatt reported, without saying where it got the information.Hedge funds have bought Greek bonds as well as bad-debt insurance in the form of credit default swaps and therefore have no interest in the country’s rescue, the German newspaper said.

via Hedge Funds Are Betting on Greek Default, Handelsblatt Reports – Bloomberg.

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DON’T PANIC!!

I’m not quite sure if anyone else is keeping a running score on all this, but by my calculation, what was going to be a leveraged 440bn euro EFSF turning into 1.3 trillion via Spiv investments, plus an additional 2o0 billion from the IMF (a grand total of 1.5trillion euros) now looks more like 600 billion….falling short by a mere 60%. Or, as a French credit manager put it this afternoon, “Nowhere near enough”.

So in brief, the heads-up is this: thanks to half-bankrupting itself  to buy junk bonds, the ECB doesn’t have enough for proper bank bailouts; all the banks that most need buffers have the smallest ones; and the EU itself has just two euros out of each five required to stop multiple defaults.

via EU CRISIS: The simple problem is, there’s nowhere near enough money. | The Slog.

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“Lets Double Tuition Fees”.

http://petitions.number10.gov.uk/NohigherFees/

Many universities in England and Wales want a sharp increase in tuition fees, a survey by BBC News has concluded.

England’s Higher Education Minister David Lammy said there was an “important debate to be had”.
BBC News

New Labor – “Education, Education, Education”
Tony Blair said it, and Gordon Brown has re-iterated it. Yet both Brown and Blair have very little to show for it except a big hole in the budget, no one can actually say education has improved significantly, yes in places it has but the overall picture is very much the same as it was 11 years ago.

The net result is a heavily neglected Higher Education System, the solution was to get the student to contribute to the pot in addition to the government. As we already know money is being spent left right and center to get us out a recession we are already well entrenched in and it looks to be many years before we are out of it.

The one sure fire way to make sure we can stay strong through any recession is to make sure we have well educated and trained people, yet the government policy seems to be actively discourage students from pursuing higher education by burdening them with more and more debt.

Stop the government making another mistake sign the petition here:
http://petitions.number10.gov.uk/NohigherFees/