Saturday 30 June 2012


Nigel Farage: Van Rompuy, Barroso worst people in EU since 1945

After a tough night of wrangling, EU leaders have agreed to set up a new authority - tasked with keeping sinking banks afloat. And to do that, the new agency will be given access to Europe's mammoth bailout funds - stocked in a large part by taxpayer money. This exact function was previously carried out by governments. But now, the EU can bailout a nation's banks - without adding to the government's debt levels - at least on the books. It's something that Germany strongly opposed, but was forced to relent on due to Spanish and Italian insistence. 

Nigel Farage, a member of the European Parliament and leader of the UK Independence Party, believes that it's Germany who plays the deciding role in these talks...

Zombie markets high on bath salts
the Extinction Protocol,29 June, 2012
The benefits of the announcements (lower yields on sovereign bonds and higher share prices in EU banks) will be short-lived.
None of these decisions from the EU summit address the core issues facing the EU banking system: namely, insolvency and excessive leverage.
No one in the EU actually has the money to make these measures work (again, Spain and Italy will provide 30% of the ESM’s funding). Markets will stage a knee jerk reaction to these measures.
That reaction will see bank shares rise and yields fall, temporarily. But this move will be short-lived, just as moves following LTRO1 and LTRO 2 were.
After all, these announcements are just more political measures than anything else.
And Europe needs capital NOT politics at this point. So I would expect this rally and the drop in bonds to be short-lived. EU leaders may have put off the Crisis by a few weeks (or perhaps even a month). But they still haven’t addressed the core issues causing the Crisis: excess leverage courtesy of hundreds of billions of Euros’ worth of garbage debt.

Zero Hedge – Phoenix Capital

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