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More from the business press...
Credit Suisse Goes For Broke: Predicts End Of Euro, Escalating Bank Runs On "Strongest European Banks
Just because Credit Suisse bankers are people too (even if 1% people, but still people), and just because they know too damn well that "no ECB intervention" means "no bonus", and very likely "no job", they go for broke and join Deutsche Bank, JPM, RBS, and everyone else (but, again, not Goldman), in predicting the end of Europe unless Draghi does his rightful duty and remembers that without banker support he will also be lining up at the jobless claims office very soon.
Of course, being a Goldman boy, Draghi will only do what Lloyd tells him to. Either way, here is Credit Suisse's rejoinder to the global Mutual Assured Destruction tragicomedy, which now makes Honk (as Lagarde calls him) Paulson's overtures to congress seem like amateur hour.
"We seem to have entered the last days of the euro as we currently know it. That doesn’t make a break-up very likely, but it does mean some extraordinary things will almost certainly need to happen – probably by mid-January – to prevent the progressive closure of all the euro zone sovereign bond markets, potentially accompanied by escalating runs on even the strongest banks.
That may sound overdramatic, but it reflects the inexorable logic of investors realizing that – as things currently stand – they simply cannot be sure what exactly they are holding or buying in the euro zone sovereign bond markets...One paradox is that pressure on Italian and Spanish bond yields may get quite a lot worse even as their new governments start to deliver reforms – 10-year yields spiking above 9% for a short period is not something one could rule out. For that matter, it’s quite possible that we will see French yields above 5%, and even Bund yields rise during this critical fiscal union debate."
Of course, the explicit message is: help us ECB-Wan Kenobi, you are our only hope. The implicit one is: do it, or we pull the trigger and blow it all up to hell.
To see article GO HERE
The Run On Europe Begins As Global Investors Head For The Hills...
Until recently, the concern about Europe has been mostly theoretical--a potential train-wreck that would occur if/when the world's lenders decided that the continent's problems extended beyond the basket case known as Greece and cut lending to Europe's "core."
Well, that concern is no longer theoretical.
It's happening.
The world's lenders are increasingly deciding that it's better to be safe than sorry, and they're pulling their money out of Europe.
As a result, the borrowing costs of many European countries are rising fast. And so are inter-bank lending rates, because the second huge problem with the Euro-train-wreck is that Europe's banks have Euro debts coming out of their ears.
For article GO HERE
As ECB's Stark Warns Contagion Has Spread To Euro Core, Bank Cash Parked With ECB Soars At Fastest Rate In Years
The Germans at the ECB, which just refuse to die, have been let out of the cage, and are making loud statements. ECB policymaker Juergen Stark warned on Monday the sovereign debt crisis had spread from the euro zone's periphery to its core economies and was affecting economies outside of Europe, according to Reuters
For article GO HERE
Hague Says UK Treasury "Quietly" Preparing For "Contingencies On Euro"
Just a headline for now, but hardly a pleasant one for non Euroskeptics:
• Hague tells UK Treasury preparing for contingencies on Euro.
• Preparations under way in a “quiet, assiduous way,” Hague tells CBI conference
Super Committee Failure: Bush Tax Cuts Obstacle To Deal (UPDATE)
The leaders of a special deficit reduction panel signaled Sunday that they will fail to strike a deal to reduce the deficit before their Wednesday deadline.
Republican opposition to taxing the rich is the main obstacle, Sen. Patty Murray (D-Wash.) said on CNN's "State of the Union."
For article GO HERE
U.S. Stocks Decline on Outlook for Budget Talks
Bloomberg,
22 November,2011
U.S. stocks slumped, giving the Standard & Poor’s 500 Index its longest decline since September, as concern grew that $1.2 trillion in automatic federal budget cuts will be triggered if lawmakers fail to reach a deal.
For article GO HERE
MF Global Shortfall May Exceed $1.2B: Trustee
Bloomberg,
22 November,2011
MF Global Inc.’s shortfall in U.S. segregated customer accounts may exceed $1.2 billion, more than double what was previously expected, said the trustee overseeing a liquidation of the failed brokerage run by former New Jersey Governor Jon Corzine.
That would mean customer accounts are missing about 22 percent of their total of $5.4 billion. A shortfall of 11 percent had been previously estimated by a person with knowledge of probes into the firm’s collapse. James Giddens, the trustee, said today that forensic accountants and investigators are working “around the clock,” and the estimate may change.
For article GO HERE
Military Cuts Threaten Defense-Dependent States
Nov 18, 2011 4:00 AM GMT+1300
Hawaii and Alaska may suffer the most economic harm from defense cuts of as much as $1 trillion during the next decade, a Bloomberg Government study shows.
Those three states are the most dependent on U.S. military spending, the study found. Virginia, home of the Pentagon and the Norfolk naval base, tops the list with 13.9 percent of its gross domestic product derived from defense spending. Hawaii ranks second, at 13.5 percent, and Alaska is third with 10.7 percent. All other states are in single digits, the study showed.
Bloomberg Government examined military spending by state as Congress considers budget cuts that might threaten the economies of states such as Virginia, where the Defense Department spent $56.9 billion in fiscal 2009, the last year for which comprehensive data were available. The spending came in the form of payroll, contracts and grants.
“It is a big-ticket item for Virginia,” said Richard Brown, the state’s secretary of finance. “That would be quite a blow to Virginia if there would be a major hit.”
For article GO HERE
S&P Affirms U.S. Rating After Super Committee Fails
Nov. 21, 2011, 5:31 PM
Standard and Poor's says the nation's credit rating will be unaffected by super committee's failure to cut $1.2 trillion from the federal deficit, citing the $1.2 trillion in mandatory cuts that will take place anyway.
S&P cut the rating from AAA to AA+ in August after Congress and President Barack Obama brought the country to the brink of default.
The affirmation offers a warning against reducing the amount of mandatory spending cuts as part of the sequester: "we expect the caps on discretionary spending as laid out in the Budget Control Act of 2011 to remain in force."
Any easing the spending cuts would result in "downward pressure on the ratings," the ratings agency warned in a statement.
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