Perspectives on the global economic meltdown- (Nov 28 2010)

The Technology & Economic Forum is a venue to discuss issues pertaining to Technological and Economic developments in India. We request members to kindly stay within the mandate of this forum and keep their exchanges of views, on a civilised level, however vehemently any disagreement may be felt. All feedback regarding forum usage may be sent to the moderators using the Feedback Form or by clicking the Report Post Icon in any objectionable post for proper action. Please note that the views expressed by the Members and Moderators on these discussion boards are that of the individuals only and do not reflect the official policy or view of the Bharat-Rakshak.com Website. Copyright Violation is strictly prohibited and may result in revocation of your posting rights - please read the FAQ for full details. Users must also abide by the Forum Guidelines at all times.
SwamyG
BRF Oldie
Posts: 16144
Joined: 11 Apr 2007 09:22

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby SwamyG » 10 Nov 2011 01:21

I called it on Nov 02 2011 09:40 am. viewtopic.php?p=1188137#p1188137

SwamyG tussi great ho. :rotfl:

SwamyG wrote:Ladies and gentlemen, I saw Bloomberg TV moving on to discuss Italy. They were talking about how Italy is better than Greece. If Italy was not like Greece, why even bring it up, huh :-) Are they comparing Greece with Australia. No it is with Italy. So there is smoke saar log. Portugal and Spain are going to be spared for the moment now.

Tanaji
BRF Oldie
Posts: 3284
Joined: 21 Jun 2000 11:31

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Tanaji » 10 Nov 2011 01:29

I am beginning to think economics theory is on the same lines of Scientology or homeopathy. Both require suspension of rational belief to make it work.

Adams = Xenu.

Prem
BRF Oldie
Posts: 21155
Joined: 01 Jul 1999 11:31
Location: Weighing and Waiting 8T Yconomy

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Prem » 10 Nov 2011 02:00

Tanaji wrote:I am beginning to think economics theory is on the same lines of Scientology or homeopathy. Both require suspension of rational belief to make it work.
Adams = Xenu.


The new exonomic theory is every one in then industrialized world now works for Goldman Sachs but just dont know it.

ramana
Forum Moderator
Posts: 54390
Joined: 01 Jan 1970 05:30

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby ramana » 10 Nov 2011 02:36

Have you guys wondered if we are seeing WWIII with financial instruments and not nooks?
All the countries around the Mediterranean Sea are getting decimated. "Arab Spring" and now Euro Debt crisis. Same result of political changes.

Further from NPR today, Southern italy demands quality of life same as Northern Italy which is more productive. So italian solution is borrow money and feed them. All was OK when interest rates were low but now they doubled. And hence the turmoil. And some clucking noises about Greeks.

Question is its not a political issue(corrupt, fickle politicians) but an economic one as NPR is portraying. How are the people of those ciuntries going to pay those huge debts?

Prem
BRF Oldie
Posts: 21155
Joined: 01 Jul 1999 11:31
Location: Weighing and Waiting 8T Yconomy

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Prem » 10 Nov 2011 02:43

One upside is the price of Gold going North have incremental value to Indian net worth. Let the Gold shoot through 3k an ounce barrier and add solid Trillions to Indian reserves .

SwamyG
BRF Oldie
Posts: 16144
Joined: 11 Apr 2007 09:22

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby SwamyG » 10 Nov 2011 03:09

Italy, aaaaaa the birth place of Corporations. From the book Life, Inc. by Douglas Rushkoff
Traditional family businesses, which shared labor, risk and capital by blood ties, were no longer sufficient to the task. New kinds of laws, contracts, and standardized currencies would be required to extend these agreements to people of different families and regions. Florence, with its key location on the Mediterranean (as well as it is widely accepted currency, the gold florin), became the birthplace of the first "limited partnership" firms. The precursors to full-fledged corporations, they distinguished between the liability of the firm's directors and of those who merely contributed capital, who would only be responsible for the amount of their contribution. Furthermore, contributors were not subject to being listed among the business partners, allowing noblemen, and even monarchs, to hide their commercial interests. The concept of the limited partnership quickly spread throughout Europe, funding daring investments from mines and plantations to colonialist adventures. Through this new opportunity for quiet and passive participation, the nobility became mad for investing.

As the operators of these huge projects sought to secure even more capital from a wider range of regions and social classes, they formed a more advanced form of limited partnership called the join stock company, which could generate investment from shareholders on an open market. This broke business open, allowing for the creation of businesses by virtually anyone capable of getting investors. It almost heralded an era of business meritocracy, which would have generated unprecedented churn in the class structure. The wealthiest merchants were now as vulnerable to upstarts as the aristocracy.

Finally, the monarchy had something it could offer the bourgeoisie who threatened to unseat them.

ramana
Forum Moderator
Posts: 54390
Joined: 01 Jan 1970 05:30

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby ramana » 10 Nov 2011 03:30

Bloomberg;

Italy bond attack breached Euro defenses

Who and why this attack? was it to nudge the Italians to pass the new laws or what?

What is Euro exit that is feeding this fear?

ramana
Forum Moderator
Posts: 54390
Joined: 01 Jan 1970 05:30

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby ramana » 10 Nov 2011 03:43

Is Germany the final target of this turmoil?

And will it lead to US?
Reason I ask is the EU trouble looks like due to bloated economies with unwilling govts not ready to take real decisions to address the fundamental issues.

We see the same in US with the stalemate in US Congress after the 2010 elections.

SwamyG
BRF Oldie
Posts: 16144
Joined: 11 Apr 2007 09:22

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby SwamyG » 10 Nov 2011 04:57

From Active Investor.
Image

Hari Seldon
BRF Oldie
Posts: 9252
Joined: 27 Jul 2009 12:47
Location: University of Trantor

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Hari Seldon » 10 Nov 2011 05:12

If Italy is really in such deep trouble, who knows perhaps a certain family there with filial connections to the real powercenter in India's biggest parliamentary party might wanna move their India-derived monies out of there in a hurry, eh? No wonder GoI reports total ignorance about the destinations and itineraries of certain medical trips of late only....

Suraj
Forum Moderator
Posts: 13356
Joined: 20 Jan 2002 12:31

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Suraj » 10 Nov 2011 07:08

I don't see any countries unilaterally exiting the Eurozone in response to the crisis, to revert to their own currency. Their debts will still be in Euros, and to their public debt and interest rate risk they add the element of exchange rate risk as well. Part of the issue with the Euro also lies in the ECB and Germany in particular being unwilling to follow the same lender of last resort behavior of the US Fed in printing money. This is partly the result of German institutional history and the imperatives of the Deutsche Bundesbank when it was created in the late 40s after crippling hyperinflation in the 1920s/30s and again after WW2.

With the inability to handle the domino line of PIIGS debtor nations effectively, I think the ECB will finally cave in and become more like the Fed, in the process devaluing the Euro, generating a greater, managed level of inflation in the continent (with localized stagflationary conditions) and a combination of some writeoffs and more loose liquidity driven policies to manage the debt loads. There simply isn't sustainable longterm political will to maintain an extended period of austerities.

Hari Seldon
BRF Oldie
Posts: 9252
Joined: 27 Jul 2009 12:47
Location: University of Trantor

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Hari Seldon » 10 Nov 2011 07:13

^^^ Not if they default and rescind recognition of debts as sovereign liabilities. The Iceland example.

Sounds far-fetched I know, for oirostani TFTAs to go Icelandic right now, I know, but I'd say give it a few months/yrs and we'll see how much assterity they can take. Only.

Update:
OK, I stand corrected on that one. Iceland only derecognised its pvt sector external debt. For PIIGS, we're talking soveregin debt. So perhaps, Argentina or the 90s Russia is the right template then, eh?

Suraj
Forum Moderator
Posts: 13356
Joined: 20 Jan 2002 12:31

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Suraj » 10 Nov 2011 07:24

Neither the Argentinians nor Russians shared a currency with those who held their debts. Argentina ended up pegging to the USD as a stabilization measure. Russia had a readymade stream of natural resource income at a time when those resources shot up in value.

The blame for the situation may lie with the PIIGS debtor governments, but the resolution lies equally, if not more so, in the hands of ECB and Nichela Merkozy :) It was remarkable seeing those two call Papandreou over like an errant schoolboy about to be laid over their lap and caned.

Singha
BRF Oldie
Posts: 66601
Joined: 13 Aug 2004 19:42
Location: the grasshopper lies heavy

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Singha » 10 Nov 2011 07:57

now is the time for GOI to act strategically and try to pick up stakes in strategic industries there with lots of technology which might go under due to slacking spending like defence, machine tools, electrical parts, optronics and aerospace cos. any large deal we do should be tied to picking up stakes also. loss of 'control' for the goras but it can only help them survive and grow with access to the vast indian market.

ranjbe
BRFite
Posts: 267
Joined: 12 Apr 2011 21:25

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby ranjbe » 10 Nov 2011 08:09

Never seen The Economist so bearish.
The euro crisis
Finito?


SILVIO BERLUSCONI'S promise to resign has done nothing to calm European bond markets. Italian bond yields are soaring today; both the two-year and the ten-year are above 7%. There are rumours that the ECB is in the market and buying heavily. If so, it's not having the desired effect. The ECB can't hope to keep yields reasonable through brute force. It will need to make an expectations-changing announcement. Will it? Italy's yields aren't the only ones rising. Markets are ditching Irish, Spanish, Belgian, and French debt too. The ten-year Treasury is back below 2%.

Yesterday, I wondered why equities weren't falling. Today, they are. But I think Tim Duy is on to something here:


All I can say is that we have been here before. Recall 2007...
By the middle of 2007 the TED spread was exploding, signaling enormous financial turmoil. Yet equities kept heading upward, fueled by data that was just not that bad coupled with ongoing expectations that a solution was just around the corner. And now we find ourselves in almost the exact same position...the news out of Europe is abysmal...There is no solution, no magic summit at hand. At this point, it is a choice between severe recession and depression. There is no happy ending to this story.”


http://www.economist.com/blogs/freeexchange/2011/11/euro-crisis-5?fsrc=nlw%7Cnewe%7C11-9-2011%7Cnew_on_the_economist

Neshant
BRF Oldie
Posts: 4850
Joined: 01 Jan 1970 05:30

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 10 Nov 2011 08:26

Hari Seldon wrote:Sounds far-fetched I know, for oirostani TFTAs to go Icelandic right now, I know, but I'd say give it a few months/yrs and we'll see how much assterity they can take. Only.


That's what Greece is hoping will happen.

They get the bailout money for now to keep things afloat... and PRAY the euro falls apart so they don't have to re-pay their debts over the longer term. Its like you took out loans from a loan shark and you are making installment payments under threat of having your legs broken ... but really you are praying that the loan shark gets gunned down by rivals and you're freed from your debts as a result.

Austerity for them will only last a couple of years and that isn't too bad a deal for 10+ years of living to the max by running up foreign debt. They might yet come out of this on top having derived maximum benefit from running up debts while only paying a small price.

The Germans and French are forced to keep the euro together if for no other reason than to get back the loans they have given out. Last thing they want is for the euro to fall apart in value like Russian rubles in 1991.

I too think they will finally hit the printing press to 'solve' their problem. Worthless paper money always invites corruption of its value & theft from the productive. Its at the heart of what sustains the useless middleman industry.

skumar
BRFite
Posts: 124
Joined: 30 Nov 2008 08:22

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby skumar » 10 Nov 2011 09:29

Hari Seldon wrote:If Italy is really in such deep trouble, who knows perhaps a certain family there with filial connections to the real powercenter in India's biggest parliamentary party might wanna move their India-derived monies out of there in a hurry, eh? No wonder GoI reports total ignorance about the destinations and itineraries of certain medical trips of late only....

:rotfl: Yeah, they should be able to spare a couple of hundred billions.

Pratyush
BRF Oldie
Posts: 8216
Joined: 05 Mar 2010 15:13

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Pratyush » 10 Nov 2011 10:30

Singha wrote:now is the time for GOI to act strategically and try to pick up stakes in strategic industries there with lots of technology which might go under due to slacking spending like defence, machine tools, electrical parts, optronics and aerospace cos. any large deal we do should be tied to picking up stakes also. loss of 'control' for the goras but it can only help them survive and grow with access to the vast indian market.



Singha Ji,

Ju are so optimistic that ju expect the present baboons ((c) Vina ?? ) to act in this way.

Singha
BRF Oldie
Posts: 66601
Joined: 13 Aug 2004 19:42
Location: the grasshopper lies heavy

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Singha » 10 Nov 2011 11:55

names that come to mind as having use for strategic investments to remain afloat and safeguard jobs & future could be alenia, casa, hispano suiza,navantia,finmeccanica,fincantieri,galileo avionica,whitehead,iveco,....

amol.p
BRFite
Posts: 302
Joined: 14 Sep 2006 18:15
Location: pune

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby amol.p » 10 Nov 2011 12:01

From The Massa Land....

Alabama county files biggest municipal bankruptcy

Alabama's Jefferson County filed for bankruptcy court protection on Wednesday in the biggest municipal bankruptcy in U.S. history.With more than $5 billion in total indebtedness, the Chapter 9 filing on Wednesday surpassed that filed by Orange County California, in 1994.
The county's biggest creditor, JPMorgan Chase, had wanted to avoid bankruptcy, according to company spokeswoman Jennifer Zuccarelli.


http://www.reuters.com/article/2011/11/ ... WW20111110

.....That more that expected losses from Olympus scandal.....

Christopher Sidor
BRFite
Posts: 1435
Joined: 13 Jul 2010 11:02

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Christopher Sidor » 10 Nov 2011 13:02

Euro Crisis’s Enabler: The Central Bank --- New York Times, Published 8-Nov-2011
It seems NY Times is going after the former ECB chairman, Jean-Claude Trichet, all guns firing. Just a few days back they had published another article in which Jean-Claude Trichet was crucified. And now this article.

But they are not the reason for the systemic failure of the European financial system. Overwhelmingly, this failure has been caused by the policy choices of one of the few European institutions that has the capacity to act unilaterally and decisively: the European Central Bank.
....
....
And this brings us to the most crucial recent event: not the drama in Greece but the departure of Jean-Claude Trichet as the central bank’s president on Nov. 1. More than any other single person, Mr. Trichet has embodied the systemic failure of European financial institutions.
Having failed to predict or resolve the crisis, Mr. Trichet has compounded his errors by denying them. Rather, he pronounced his own performance as “impeccable,” because inflation rates had been kept at or below the target level.
....
....
Mr. Trichet’s replacement, Mario Draghi, has shown no particular signs of independent or creative thinking. Nevertheless, he has one great asset: he is not Mr. Trichet.

Neshant
BRF Oldie
Posts: 4850
Joined: 01 Jan 1970 05:30

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 10 Nov 2011 13:50

How a Financial Pro Lost His House

Financial advisor Carl Richards tells how "dumb things" caused the loss of his house and way of life.

http://www.cnbc.com/id/45224128/
Last edited by Neshant on 10 Nov 2011 14:12, edited 1 time in total.

vishvak
BR Mainsite Crew
Posts: 5835
Joined: 12 Aug 2011 21:19

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby vishvak » 10 Nov 2011 14:02

Neshant wrote:The Question(s) Of Italy's 2451.8 Tons Of Gold

http://www.zerohedge.com/news/questions ... -tons-gold

Image
Seems Italy has more gold than France, China, etc but is still taking in currencies as debt!
Why is Italy not paying this in gold and instead choose to default? Who will lose out the most if Italy does not pay up in spite of gold deposits?

Why are most of these bankers who are in this global economic crisis mostly white?

Admins, please delete if this observation reads too much about whites.

Neshant
BRF Oldie
Posts: 4850
Joined: 01 Jan 1970 05:30

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 10 Nov 2011 14:23

We can't be sure if those numbers are right for any of those countries.

Its in the interests of countries especially US, China, Russia, India..etc. to NOT reveal how much gold they actually hold. This is due to various end game scenarios where one side (namely the US) might unilaterally shift to a gold backed currency (thereby repudiating its debts and) forcing others to adhere to this new standard. And if you don't have very much in the way of gold when that happens, woe be unto you.

I would not be surprised if US has a vast stockpile of gold well in excess of the 8000+ tons they publically claim. Default on the paper debt and stick the creditors with the losses while making a transition to a new currency. That's what I would do if I were them.

Christopher Sidor
BRFite
Posts: 1435
Joined: 13 Jul 2010 11:02

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Christopher Sidor » 10 Nov 2011 18:44

The new Greek PM is the former ECB official. CNN is reporting that the Euro-Zone countries are asking the new PM to give a written undertaking that it will agree to the 26-Oct bailout conditions. Wonder how will the aam-admi Greeks take it?

While the action shifts to Italy. Debt of 2.6 trillion. One of the biggest bond market. The 4th largest economy is Europe and the 3rd largest economy of the Euro-Zone. Too big to fail. And too big to bail out. The Euro rescue fund has a capacity of 1 trillion. Not sufficiently big.

Hari Seldon
BRF Oldie
Posts: 9252
Joined: 27 Jul 2009 12:47
Location: University of Trantor

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Hari Seldon » 10 Nov 2011 20:51

Perhaps very soon, we'll have a 'credit event'. And the ebbing of that tide will show who's swimming how much naked only. Particularly in opaque shadowy markets like that of derivatives and to a lesser extent CDS swaps.

Of course, if everybody shows up naked, then its back to biz as usual, who knows? Won't quite be the same though.

RamaY
BRF Oldie
Posts: 17249
Joined: 10 Aug 2006 21:11
Location: http://bharata-bhuti.blogspot.com/

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby RamaY » 10 Nov 2011 21:28

NightWatch Report 11/9

Greece: Update. Papandreou resigned but progress towards forming a new government has been slow.

Italy: Either a new Italian government will be formed or parliament will be dissolved, Italian President Giorgio Napolitano said on 9 November. An electoral campaign will be carried out in a brief time span, Napolitano said. It is certain that Italian Prime Minister Silvio Berlusconi has decided to resign, and the stability law will be approved in the next few days, Napolitano added. Italian lower house speaker Gianfranco Fini is trying to have the Italian financial stability package approved by 12 November, a parliamentary source said.

Comment: The high yield on Italian bonds is an indicator of threat to the financial system. The crisis has moved beyond assessments of risk. A Bloomberg analysis suggested Italy is too big to fail, but also to big to save.

European Union: French and German officials have discussed the EU overhaul to reorganize the European Union into a smaller eurozone :twisted: , an unnamed senior EU source on 9 November. Brussels, Paris and Berlin policymakers suggest the smaller eurozone work toward deeper economic integration regarding fiscal policy, EU sources said.However, a French Finance Ministry spokesman denied plans to reduce membership. French President Nicolas Sarkozy said the eurozone would move forward more quickly than the 27 EU members and that the "two-speed" Europe is the model that should be followed. The plan has not been put into action yet, another EU official said.

Comment: The gravity of the financial crisis and the threat of a ripple effect are highlighted by the occurrence of even informal discussions about shrinking the European Union. In studying violent political instability, living systems under stress always contract. The government reduces the volume, quality and frequency of services it provides and the geographic area over which it provides them in order to reach a sustainable position short of collapsing. It tries to find a set of lines it can hold to avoid collapse and to prepare for returning to normality.Contraction may be understood as the first step in a process whose ultimate end state is organizational or systemic collapse. Collapse is not inevitable, but more frequent than recovery in instability case studies. Recovery almost always requires significant outside intervention of some sort, such as a surge, and even that might only provide temporary relief from the stress that caused the shrinking.A contraction of the EU in this financial crisis would parallel the behavior of governments experiencing violent internal instability, such the insurgency in Afghanistan or the opposition uprising in Syria. In both countries, the government's ability to provide public services has contracted under violent stress. In Afghanistan the US troop surge has provided temporary relief in some areas, but is not a permanent solution.The Greek bailout is a surge that has proved inadequate to stop the financial crisis or keep it from spreading. The increase in bond yields represents one aspect of shrinkage, of credit worthiness.This is not a prediction of EU collapse or Italian collapse, but it is a warning that long experience shows that once living systems begin to contract they seldom recover on their own and might not even with outside help. Financial systems also are living systems.


We need to model the last comment...

Reminds me a discussion I had with an economic-policy friend on international trends in 2004.

His take - EU and PRC are going to be new super powers.

My take -
>> EU is going to be balkanized further. If the above report comes true, the fringe elements will start making fiefdoms and warlordism will be introduced to EU. A perfect opportunity for ME funded islamic enclaves. The military power of EU nation-states will not be able to control the chaos (Remember the story where Arjuna was depowered after Yadava infight and Krishna's niryana)

>> PRC will not be able to move beyond $10-$15T real GDP levels. That means $7-10K per capita GDP which is not a developed nation. China will lose Tibet after it reaches this plateau and the majority Han population will be forced to consume their national product leaving less economic leverage in CCP's hands for outward aggression.

shyam
BRFite
Posts: 1453
Joined: 29 Jul 2003 11:31

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby shyam » 12 Nov 2011 08:49

Altair wrote:Folks, I have very very specific information. I cannot say anything more.


So Altair-saab, what were you expecting to happen? Now we know that the specific information you had is not correct.

Neshant
BRF Oldie
Posts: 4850
Joined: 01 Jan 1970 05:30

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 12 Nov 2011 08:54

As predicted by Jim Rickards!

China wants to offload US dollars. US wants China to offload US dollars so it can inflate away debt.

The solution - let China exchange dollars for SDRs. Basically offload the dollars on other countries (suckers) and then depreciate its value. Those who take those dollars and those who hold it (i.e. savers, workers, creditors, americans in general) will sees their purchasing power eroded and their living standards plummit.

India better not get involved in this IMF scam or we'll be left holding the bag. Start buying gold and offloading these dollars ahead of the curve. I'll post Jim Rickard's interview soon.

------------
IMF to release new rules for currency basket: report

http://www.reuters.com/article/2011/11/ ... NS20111111

Neshant
BRF Oldie
Posts: 4850
Joined: 01 Jan 1970 05:30

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 12 Nov 2011 08:58

Note the prediction is coming true. I posted this many moons (months) ago. The SDR is being pushed forward as the new international (worthless paper) currency for trade & settlement between countries. Actually its just a mechanism for offloading US debt (aka t-bills) which China has accumulated on the rest of the world at a fixed rate for tangible goods, services & resources.

Listen to the interview with Jim Rickards. He knows what he's talking about. The Federal Reserve only knows how to come up with schemes & scams that involve diluting the savings & purchasing power of suckers holding their paper.

SDRs will be the new kind of worthless paper that gets peddled and India better not have a part in it - at least not on the receiving end!

Neshant wrote:Bewarned. By emerging economies the US mostly means China. They want to get China onboard a global IMF led SDR type currency and once that happens, US debts will be free to inflated away its debts. Probably Arabs and others including perhaps Americans savers will take it up the &&&. The federal reserve knows the dollar ponzi scheme is eroding and wants to move important creditors to a new system while screwing all other dollar denominated debt holders.

In time, the new SDR paper game will surely prove just as worthless as the federal reserve ponzi scheme.

Jim Rickards Interview from June 14th with Eric King
http://www.kingworldnews.com/kingworldn ... 3A2010.mp3

Singha
BRF Oldie
Posts: 66601
Joined: 13 Aug 2004 19:42
Location: the grasshopper lies heavy

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Singha » 12 Nov 2011 09:09

http://timesofindia.indiatimes.com/worl ... 697064.cms

ireland's former richest man declares bankruptcy

Patni
BRFite
Posts: 878
Joined: 10 Jun 2008 10:32
Location: Researching sub-humans to our west!

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Patni » 12 Nov 2011 12:04

Banks to dump more Italian debt: IFR
By Gareth Gore and Spencer Anderson
Fri Nov 11, 2011 6:33pm EST
LONDON, Nov 11 (IFR) - European banks are planning to dump more of the 300 billion euros they own in Italian government debt, as they seek to pre-empt a worsening of the region's debt crisis and avoid crippling write downs - a move that could scupper the European Central Bank's efforts to bring down soaring yields.

Still reeling from heavy losses on money they lent to Greece, lenders are keen not to make the same mistake twice. Then, under the pressure of governments and a hope that credit default swaps would protect them against heavy losses, they held on until it was too late to sell.

With the ECB providing a bid for Italian bonds that might not otherwise exist, board members at some of Europe's largest bank say now is the time to accelerate disposals. Many are also reversing long-standing policies of buying into new Italian bond issues, denying Rome an important base of support.

"Our traditional buying days are no longer," said one board member at a European bank, one of Italy's 10 biggest creditors, who added that the bank has also sold off previous bond purchases. "Unless there is more certainty on Italians changing direction, it will be very tough for them to find buyers."

Banks are important creditors to Rome, having bought about 40 percent of the 22 billion euros Italy issued in euro-denominated syndicated bonds since 2009. According to the European Banking Authority, the region's biggest 90 banks held 326 billion euros of Italian debt at the end of last year.

Many banks have since reduced their holdings, although the EBA numbers - released in July - are the most up-to-date cross-industry figures on nominal holdings. Italy's debt load totals around 1.7 trillion euros, with more than 300 billion due to mature next year alone.

NO POINT WAITING

"You're better off doing it now rather than waiting," said one investment banker who is currently working on plans for bank clients to further sell down their Italian bond holdings. "It's better to take the losses now when everyone is expecting it rather than wait around for a default."

The ECB has been buying Italian bonds to keep down yields since August. Since then, the institution has bought about ?110bn of European government debt, some of which traders say is Italian debt. Most sales have been and will be on the open market.

"The market is still as liquid as hell for those that want to sell," added a senior banker at one non-European bank. "We managed to sell off half of our holdings in one morning."

The sheer volume of such sales will make it increasingly difficult for the ECB to keep Italian bond yields down. The yield on 10-year governments bonds surged as high as 7.5 percent this week, the most in the history of the eurozone and the highest for Italy since 1997. Selling intensified after LCH.Clearnet lifted its margin requirements on Italian debt. The 10-year Italian bonds currently trade at 85 cents on the euro.

Foreign banks are likely to be the biggest sellers, say bankers advising on the holdings. EBA stress tests showed that in December half of Italy's 10 biggest European bank creditors were foreign: BNP Paribas held 28 billion euros in bonds, Dexia 15.8 billion euros, Commerzbank 11.7 billion euros, Credit Agricole 10.8 billion euros and HSBC 9.9 billion euros.

Most of those banks have since reduced their exposure - either through outright sales, short positions or hedges - although direct comparisons are difficult because most banks only detail their net exposures. Still, in the four months to the end of October, BNP Paribas cut its Italian exposure by 8.3 billion euros, while Commerzbank cut its exposure by 1.8 billion euros in the first nine months of the year.

"I think what you are seeing right now is a lot of the short-dated stuff is being sold," said Eric Strutz, chief financial officer at Commerzbank, on a recent call with analysts. "Do we expect another 2 billion euro reduction in Q4? Right now, we're looking into that."

Other sellers include Societe Generale, which this week said it had halved its Italian net exposure since June to 2.5 billion euros. Barclays, meanwhile, has reduced its net exposure to Italy by more than 1 billion euros during the same three month period.

According to people close to some of the bank disposals, the efforts of the European authorities to ensure that a Greek debt restructuring would not trigger CDS payouts has driven much of the bond selling. Unable to confidently hedge their exposures, many are choosing to sell - even at a loss.

SUPPORT

Italian bonds still have one support bloc. Domestic banks appear to be holding on to their much larger holdings. As of last December, EBA stress tests showed Intesa Sanpaolo held 60 billion euros of Italian debt. UniCredit and Banca Monte dei Paschi di Siena held 49 billion euros and 32 billion euros respectively. Recent results indicate that those holdings have changed little.

"We will keep investing the largest part of our liquidity in Italian government bonds," said Corrado Passera, chief executive officer at Intesa Sanpaolo, in a call with analysts this week. "We believe they provide the right yields vis-à-vis the cost. So no policy change on our side."

Still, according to the investment banker advising firms on their Italian holdings, the domestic banks' decisions to hold on could have more to do with their inability to offload such large amounts quickly and without deep losses. Indeed, some Italian bankers seem resigned to the situation.

"We feel that fears of a default are greatly overdone, but the market psychology is what it is," added an executive board member at another large Italian bank, which is also holding onto its bonds. "Lots of players do not want to buy them. They think it is better to sell if you have the opportunity to."

Capital concerns are also preventing them from selling. "The key issue is on solvency and I think they made a mistake in requiring us to hold more capital," said the chief executive of a mid-sized Italian bank. "To meet these levels we cannot sell too much of our sovereign debt." (This story is to appear in the November 12 print edition of the International Financing Review - www.ifre.com)


So seems like bond yield are set to keep rising and Italian govt. debt bond holders are looking at 20/30% hair cut?

Neshant
BRF Oldie
Posts: 4850
Joined: 01 Jan 1970 05:30

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 12 Nov 2011 16:56

Nullifying the Credit Default Swaps on Greek debt and cheating investors who bought those contracts to protect themselves against the risk of default... will backfire on the Europeans.

No longer are creditors going to trust European governments promising to repay their debts. They will demand the risk be reflected in the yield of the bond.

So what's gonna happen now? Will yields do a moon shot or will Bernanke once again hit the printing press and start buying up bonds of FOREIGN countries to add more worthless junk to the Fed's balance sheet. Stay tuned to find out.

ramana
Forum Moderator
Posts: 54390
Joined: 01 Jan 1970 05:30

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby ramana » 12 Nov 2011 22:12

Thirty years of boom and bust along with doom and gloom tells me the future is uncertain but the end is not always near.

Christopher Sidor
BRFite
Posts: 1435
Joined: 13 Jul 2010 11:02

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Christopher Sidor » 12 Nov 2011 23:43

View from Berlin about the euro-zone crisis

What Comes Next for Troubled Italy? --- Der Spiegel Dated 11-Nov-2011
Spiegel is speculating on what the exit of Berlusconi means for Italy. It laid out three alternatives. 1) Things improve with Berlusconi's exit. 2) Things remain the same due to what Spiegel refers to as "ozified" political structures. 3) Italy fails.

Berlin Was Right to Resist 'Grab for German Gold' --- Der Spiegel Dated 7-Nov-2011
One of the proposals for boosting the euro rescue fund was to draw on the gold reserves and/or foregin exchange reserves and/or SDR rights of the member countries. Since this would not require various parliament approvals and central banks would have been easier to work with, it was assumed that it would pass. Germany put its foot down. This was due to the historical hyper-inflation that it had undergone prior to WWII. A hyper-inflation like the kind witnessed in Russia after the fall of Berlin wall or currently in Zimbabwe. Interesting point is that this would have boosted the fund by some 50-60 billion euros. Out of which German contribution would have been 15 billion euros or some 25-30%. The total amount of fund is some 1000 billion euros or 1 trillion euros.

Berlin Prepares for Possible Greek Exit from Euro Zone --- Der Spiegel Dated 12-Nov-2011
This is the most troubling of the news. Dont know if this is just psych-ops by Germans or just covering ones bases for all eventualities. It appears that Germany, or at least a section in its government, is seriously considering exit of Greece from the Euro and its fall out. This would be a disaster for the whole world. At one stroke the euro would face oblivion. Excluding the pain that greece would undergo, as it debt would still be in euro and with its depreciated currency would be more of a burden, it would call into question the all the other debt-laden weak countries of Euro. If Greece can be kicked out or leave then why not Spain or Portugal or worse Italy.


After reading all of these, it does appear that the Germans are more concerned about how much should they pay for keeping laggards like Greece in euro. While they will walk to a certain distance, to expect them to go all the way is well expecting too much. They want to preserve the Euro, but not pay the actual cost of keeping it. Also consider the misguided tonics for the debt crisis, which apparently have full backing of the Germans. Countries are being forced to undergo gut-wrenching austerity. Which causes growth to slump, the Debt-to-GDP ratio to rise as GDP contracts. Just like Chemo, a cure which in many cases is worse than the disease.

yogi
BRFite -Trainee
Posts: 86
Joined: 18 Jun 2008 02:25

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby yogi » 13 Nov 2011 01:23

Neshant wrote:I too think all you scrawny beggars should be out of the market in October. My spidey senses say the market will crash mid to late October. Sell all your stocks and move into cash 100% if you have not already.


Neshant, I think you should move out of this business of predictions. Had people followed your "Advice" they would have missed the best October in stock market in years!

If you keep shouting "Its Midnight" every second, you will be true once, but spectacularly wrong way too many times. State your opinions, but keep away from predictions and giving advice.

SwamyG
BRF Oldie
Posts: 16144
Joined: 11 Apr 2007 09:22

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby SwamyG » 13 Nov 2011 04:43

Hmmm...so America creates an international economic crisis; and its effect is regime changes across the planet. Africa and West Asia expends blood doing so, and Europe fares slightly better - not much blood. One could say Republicans lost because of Economy.

So only India and China withstand the E-Khan-Mic Toofan? Life went about as (almost) usual.

Any parallels with WWII ? The West - notably Europe was wasted and spent. Lots of countries saw independence from Europe. America rose. After this WWIV (economic crisis), Europe and America are wasted and spent too. Despots in Africa and Asia fall because of lack of support. People in these countries get more freedom? Let us forget about the Islamic revolution waiting to happen in some countries.

I think the big 'perspective' to me is the hold of West (IMF and WB) on the rest of the World, and how their grip has been relaxed. Hope some scholars study and get some PHd veeHd.

Neshant
BRF Oldie
Posts: 4850
Joined: 01 Jan 1970 05:30

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 13 Nov 2011 07:21

yogi wrote:Neshant, I think you should move out of this business of predictions. Had people followed your "Advice" they would have missed the best October in stock market in years!

If you keep shouting "Its Midnight" every second, you will be true once, but spectacularly wrong way too many times. State your opinions, but keep away from predictions and giving advice.



It is my opinion, not a prediction.

The Federal Reserve tacked on another 500 billion in swap agreements in Oct with Europe to keep the value of the dollar down and stocks up during the Greek default. A whole lot of market rigging is going on and it will end in a mess. I am not venturing into the stock market as its going up on nothing but hot air.

sumishi
BRFite
Posts: 514
Joined: 30 Oct 2008 00:03
Location: Innerspace

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby sumishi » 13 Nov 2011 08:46

SwamyG wrote:Hmmm...so America creates an international economic crisis; and its effect is regime changes across the planet. Africa and West Asia expends blood doing so, and Europe fares slightly better - not much blood. One could say Republicans lost because of Economy.

So only India and China withstand the E-Khan-Mic Toofan? Life went about as (almost) usual.

Any parallels with WWII ? The West - notably Europe was wasted and spent. Lots of countries saw independence from Europe. America rose. After this WWIV (economic crisis), Europe and America are wasted and spent too. Despots in Africa and Asia fall because of lack of support. People in these countries get more freedom? Let us forget about the Islamic revolution waiting to happen in some countries.

I think the big 'perspective' to me is the hold of West (IMF and WB) on the rest of the World, and how their grip has been relaxed. Hope some scholars study and get some PHd veeHd.


Read Gerald Celente's take somewhere, along the following lines:

In the years leading upto WWII, the flow of events was:
economic crisis ---> depression (they hid the ground economic realities from public for 3 years) ---> currency wars ---> trade wars ---> WWII

Now we have:
economic crisis (triggered in 2008) ---> depression (they kept hiding it by issuing fake government statistics for 3 years) ---> currency wars (as admitted, even by Pranab Mukherjee) ---> trade wars (China mentioned something about that some time back) ---> WWIII ?? (sabre rattling with Iran, to instigate??)

Neshant
BRF Oldie
Posts: 4850
Joined: 01 Jan 1970 05:30

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 13 Nov 2011 10:23

Stock market going up while unemployment has also been going up AND even the jobs being created are low paying. This does not even take into account the bogus rate of inflation put out by the Federal Reserve used to calculate real wages - which would put it on an even steeper downward trajectory.

Something stinks to the high heavens.

The only ones doing well are those in the useless middleman industry with an inside track to money printing, banking & bonusing and market rigging by the Federal Reserve.

Its all coming at the expense of the productive economy which is being rapidly hollowed out.

-------

Economy Creating Mostly Low-Paying Jobs

http://finance.yahoo.com/news/economy-c ... 31880.html


Return to “Technology & Economic Forum”

Who is online

Users browsing this forum: No registered users and 9 guests