European Reality Check

swissaustrian

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Union leaders are considered above the law in France. If they decide to occupy a company and detain the CEO in order to get him to rethink his decision on layoffs or closures, many politicians consider them heros.
 

ancona

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The EU is going to kill off these little principalities that became havens for businesses and investors. The best thing that could happen is their EU exits. And right soon that.
 

bushi

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IRELAND: think tank proposed to Irish Government "compulsory 15 pc private retirement contribution", on those middle-income workers, who currently don't have any (6 out of 10). Presumably, because they a)cannot afford it or b) don't see any economical sense in supporting private pension insurers, instead of themselves & their kids.

...guess that rings well with the private pensions insurers, no? Also, creates that one nice, juicy pot of money for government to seize "for the greater need" down the road, no?

http://campus.ie/news/national-news/million-of-us-face-paying-15pc-of-wages-into-pensions

..does not go much lower than this, right?
 

benjamen

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IRELAND: think tank proposed to Irish Government "compulsory 15 pc private retirement contribution", on those middle-income workers, who currently don't have any (6 out of 10). Presumably, because they a)cannot afford it or b) don't see any economical sense in supporting private pension insurers, instead of themselves & their kids.

...guess that rings well with the private pensions insurers, no? Also, creates that one nice, juicy pot of money for government to seize "for the greater need" down the road, no?

http://campus.ie/news/national-news/million-of-us-face-paying-15pc-of-wages-into-pensions

..does not go much lower than this, right?

That sounds a whole lot like the U.S. Social Security. Mandatory % of your income in exchange for retirement money. Unfortunately, U.S. politicians treated that big pot of money like a personal piggy bank and Social Security is now projected to run out of money in the next 20 years.

I am sure no such thing could happen for the Irish.
:noevil:
 

ancona

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Socialism security has vacuumed far more money from my paychecks over the last thirty three years than I shall ever see in the form of payments in my lifetime. It is a scam of the highest order meant to buffer federal coffers. When initially conceived, SSI was meant to be a supplement to that which workers saved throughout their career, not to be the sole source of income. Now, many years later, we hear cries of "it's just not enough to live on, it's not fair". Well, you should have read up on the history of SSI before embarking on your lifelong spendthrift ways. SSI is treated as some sacrosanct right that cannot be modified in any way and I am tired of hearing about it. There are quite a few calling for means testing before receiving SSI, which to me is utter bullshit, since I paid in to the system so I expect to receive from the system, irrespective of my financial status.
 

bushi

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That sounds a whole lot like the U.S. Social Security. Mandatory % of your income in exchange for retirement money. Unfortunately, U.S. politicians treated that big pot of money like a personal piggy bank and Social Security is now projected to run out of money in the next 20 years.

I am sure no such thing could happen for the Irish.
:noevil:

...if it was ONLY that.... nonono, sir, of course, all Europeans ARE ALREADY PAYING social security for all kinds of services, including "free" medical care (that you have to pay for it anyway), and "state funded" pension.

That, my friend, is a proposal, to FORCE people, who don't currently own a separate PRIVATE pension plan, on top of the social security one, to buy one - to the tune of fucking 15% of their income (!!!!).

Isn't it nice, that the government is caring about my future more than I do myself, and tells me, how should I prepare for my retirement - to a degree of FORCING me to buy a fucking COMMERCIAL FINANCIAL PRODUCT, from one of the (undoubtedly) "govt approved" and "certified" financial corporations, that will look after 15% of my earnings for me - for a small and most appropriate fee, of course!


I swear, if Irish don't rebel this time again, they fucking deserve all they are getting.
 

swissaustrian

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Any forced pension payment is a tax to a government.
If it was rational to invest into certain schemes, market forces would create natural demand for them. But they don't.
Here in Switzland, pension funds for public employees are chronically undercapitalized, because their pensions are not calculated on the basis of actual returns on investments / payments, but rather on a guaranteed pension amount.
We taxpayers had to bail many of the public pension funds out, especially the public railroad fund and several state employee funds.
 

swissaustrian

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Market talk that a French bank could be in trouble - unconfirmed

'Market talk’ – Signifies information that has not been formally tested through traditional journalistic channels and therefore is to be treated as unsubstantiated. Any interpretation of the talk is taken at the readers own risk and is a representation of the rumours within the market place and never generated by ourselves.
Update details:

- At this point in time we are not giving this talk much credence and are cross checking it with our contacts.
- Do note, that stocks have been on a fairly agreesive decline since the open on Wall Street and this may have come about as people look for a fundamental news story to back the move lower.
- At present trade, BNP (-1.4%), SocGen (-4.5%), Credit Agricole (-2.2%).
- Of the three major French banks, SocGen has seen most downside volatility compared to BNP and Credit Agricole over the last hour.
- More updates to follow...
http://ransquawk.com/headlines/mark...nk-could-be-in-trouble-unconfirmed-18-04-2013

UPDATE: French banks remain under pressure following earlier market talk that a French bank could be in trouble...

'Market talk’ – Signifies information that has not been formally tested through traditional journalistic channels and therefore is to be treated as unsubstantiated. Any interpretation of the talk is taken at the readers own risk and is a representation of the rumours within the market place and never generated by ourselves.
Update details:

- Having crossed referenced this with our contacts they cannot confirm or substantiate any truth behind this talk and put it down to purely market chatter at this point.
- The talk seems to have gained attention after hitting the Twitter sphere.
- Last week, Le Figaro reported that the French state and French banks could face a combined loss of as much as EUR 20bln on loans to local authorities after a lower court ruled in February that interest rates on loans to one municipality needed to be lowered.
- The banks estimated that in a worst-case scenario the loans could lead to a loss of EUR 20bln, half of which would fall on the French state through new state lender Societe de Financement Locale, or SFIL, and Franco-Belgian lender Dexia SA.
Reaction details:

- As of 1524 (GMT): Although French banks continue to underperform their peers, prices are off the lowest levels of the session.
http://ransquawk.com/headlines/upda...-a-french-bank-could-be-in-trouble-18-04-2013
 

benjamen

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How does France expect this to be sustainable?
http://finance.yahoo.com/news/thousands-french-households-taxed-over-062530348.html

"More than 8,000 French households' tax bills topped 100 percent of their income in 2012, according to a French newspaper report."

"...in addition to those taxed at over 100 percent last year, almost 12,000 households paid taxes worth more than 75 percent of their 2011 income and that a further 9,910 households were taxed at more than 85 percent of their income."

:flail:
 

pmbug

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Well, that depends upon what the definition of income is. /wink wink, nudge nudge
 

benjamen

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So, this is "Austerity"
http://www.24hgold.com/english/news...10020&redirect=false&contributor=Martin+Masse

"In nominal terms, government spending has never stopped rising in the Union as a whole since the beginning of the financial crisis, except in 2011 when it remained constant (see Figure). Spending grew by 6.3% in the last three years, in other words during the period when "austerity" policies were supposed to have been applied.

Thus, whenever finance ministers announced budget cuts, they were actually referring not to absolute reductions in total spending but simply to spending increases that were lower than what was previously planned or to cuts that were offset by more spending elsewhere."

"With no net decrease in spending, the deficit reductions observed in most countries must have occurred because tax revenues went up faster than spending. And that is precisely what the Eurostat data show, with revenues up 12.9% from 2009 to 2012, double the pace of increase in public spending."
 

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Aubuy

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It looks like the EU is considering making it standard policy to have the depositors of a bank fork over 8% of the cost a bank bailout. This would make it normal to haircut the depositors and I am sure this percentage will only go up.

Article in German:
http://deutsche-wirtschafts-nachric...langt-8-prozent-zwangsabgabe-von-den-sparern/

Google translation:
http://translate.google.com/#de/en/

The EU has too many "officials" with too much time on their hands and all they can do is try to think up new rules. It's starting to look more and more like a circular firing squad with the world waiting to see who pulls the first trigger. :popcorn:
 

benjamen

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How long before Greece just goes into civil war?
http://www.sovereignman.com/trends/the-situation-on-the-ground-in-athens-12264/

"There are roughly 11 million people in this country. 3.4 million of them are employed, of which roughly one third work for the government."

"The middle class here has been completely gutted. Aside from a few pockets of wealth, the country is either unemployed or working poor, hamstrung by debilitating debt."

"Given what I’m seeing on the ground here, it’s clear that the situation is more explosive than it has been for years."

"People are angry. Not the ‘I’m going to vote you out of office’ anger from 2010-2012. I’m talking ‘I’m gonna go postal ‘cuz I have nothing to lose’ anger.
Imagine millions of people that angry, and you can understand that this country is close to reaching the activation energy necessary to make a revolutionary change."
:flushed:
 

Aubuy

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Imagine millions of people that angry, and you can understand that this country is close to reaching the activation energy necessary to make a revolutionary change."
:flushed:

What would happen to Greece if they did have a revolution? I guess they could have their own currency again, but whoever takes charge is going to have a complete economic and political nightmare on their hands. What a mess.
 

benjamen

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Portugal is getting worse:
http://www.sovereignman.com/trends/beware-the-man-on-the-white-horse-12286/

"The unemployment rate in Portugal hit a record high of 18% in May. The rate eased slightly by late June to 17.6%… but only because (you guessed it) the government simply stopped counting people.
Or, more appropriately, so many people vanished.
Here in Portugal, the latest craze is leaving. The country is experiencing a massive brain drain as people pack their bags and get out of dodge."

"The Portuguese economy contracted at a 4% annualized rate in the first quarter, worse than last year’s 3.2% contraction.
All of this comes at a time when the central government has collapsed. Based on the terms of their 78 billion euro bailout agreement, it’s EU bureaucrats in Brussels and Frankfurt that are calling the shots now."
 

pmbug

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DB is a pretty big domino. If MK's source is right, it's going to have a huge impact.
 

pmbug

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More on Deutsche Bank from Jim Willie:
...
My best German source informs me that 3 major banks are in trouble, and these 3 banks are fighting every single night to fight off insolvency and failure. He says CitiGroup in New York, Barclays in London, and Deutsche Bank in Germany- every single night are in trouble.

...

The big immediate threat for Deutsche Bank though has to do with their problems in hiding debt for the Sovereign nations applying for the Eurozone. For example, Greece and Italy couldn’t have their debt ratios over certain levels, so what Deutsche Bank did was they turned nice big chunks of Sovereign debt into currency swaps.

For an example of how this works: Suppose you have a $250,000 bad business loan that is stinking up your credit report. So you call up your favorite Deutsche banker (or Goldman or Morgan- pick your criminal enterprise that is your personal favorite) and you tell him, look I have a $250,000 debt here and I want to make it go away. They say OK, we can do something clever here. We can pay off your debt so your credit report looks good, and we can establish this $250,000 Euro swap, and we’ll keep it off the books!

So you have this $250,000 bad loan stinking up your books, it goes away, and is replaced by something hidden- a euro currency swap! That’s precisely what was done on a larger macro scale by Greece and Italy- and Deutsche Bank is involved with several of these, and the total that is becoming disclosed is $400 Billion. Apply your typical ratios and you can conclude that they are $10, $15, $20 billion short for capital requirements!
...

http://www.silverdoctors.com/jim-willie-if-deutsche-bank-goes-under-it-will-be-lehman-times-five/
 

pmbug

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News from Europe has been fairly quiet lately (at least here on this forum). Looks like a political movement might be stirring in France:
The leader of France’s far-Right party has vowed that the European Union would “collapse like the Soviet Union” as she conspired to form what would be the most radical faction yet seen in the European parliament.

Marine Le Pen, buoyed by a weekend by-election triumph in southern France, criticised the EU as a “global anomaly” and pledged to return the bloc to a “cooperation of sovereign states”.

She said Europe’s population had “no control” over their economy or currency, nor over the movement of people in their territory.

“I believe that the EU is like the Soviet Union now: it is not improvable,” she said. “The EU will collapse like the Soviet Union collapsed.”
...

More: http://www.telegraph.co.uk/news/wor...n-EU-will-collapse-like-the-Soviet-Union.html

Two recent events regarding Marine Le Pen and her eurosceptic party have the nannycrats in Brussels worried. The first occurred in early October when Marine Le Pen's Eurosceptic "National Front" Party Took Lead in France National Poll.

Yesterday, a huge victory by the National Front in a local election had the nanmnycrat alarm bells ringing.
...
A local council by-election in a small town in the sleepy hinterland of France’s Côte d’Azur would not normally be the stuff to shake national – much less international – politics.

But a decisive victory by the National Front (FN) in Brignoles on Sunday night has set alarm bells ringing in Paris that the far-right party, led by Marine Le Pen, will repeat the feat more widely across the country in municipal elections in March.

Just as ominous, not just for mainstream parties in France but across the EU, is the prospect that the vote signals a much-feared surge by the populist right in European elections due in May.
...

http://globaleconomicanalysis.blogspot.com/2013/10/decisive-victory-by-le-pens-eurosceptic.html
 

ancona

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When the European union comes apart at the seams, it will be interesting to see what the effect will be on our dollar. I suspect that we'll see at least a temporary bolstering effect as nations revert back to their historic currencies and realign themselves within. It will also be interesting to see if they revert back to a closed border system with mandatory border cards and nationality checks as trains, cars, etc. cross borders. Marine LePen wants France OUT of the union, and to put a complete stop to the rampant inflow of Muslims, which are destroying the fabric of French society. I wish Marine LePen luck in the endeavor.
 

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I am at a loss as to why the Euro zone hasn't at least partially unraveled yet. There are powerful forces that are determined to keep it together at any cost. It's like a giant game of "chicken" and nobody is flinching. Makes for a louder "kaboom" at the end of the game. :popcorn:
 

pmbug

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The DXY fell through 80 and was flirting with 79 at various times over the last few days. Bad Euro news to the rescue:
Those following the Euro FX pairs saw a plunge at 6 am Eastern, when Eurostat released the latest Eurozone unemployment and inflation statistics. They were, in a word, abysmal. After the August unemployment data finally saw a modest drop forcing many to announce the end of the European depression, not only did the the September number revise the August print from 12.0% to 12.2%, a new record high as 73,000 thousand people became unemployed, but more importantly made the September unemployment rate 12.2% as well following another 60,000 Eurozoneans losing their jobs, effectively meaning that for all the talk of a European recovery, its unemployment rate keeps hitting new all time record highs every single month.
...

More (incl. charts): http://www.zerohedge.com/news/2013-...mployment-print-inflation-4-year-low-euro-tum

Spain's CPI has declined for four consecutive months and eight out of the last twelve. A decline of .4 percentage points in October pushed the CPI negative for the first time since 2009.
...
Via translation please consider Recession Continues and Spain on Brink of Deflation
...

http://globaleconomicanalysis.blogspot.com/2013/10/scathing-attack-on-rajoy-in-spanish.html
 

pmbug

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The euro dropped below $1.35 on Wednesday after the European Central Bank was reported to consider a negative deposit rate if more stimulus was needed, according to Bloomberg. "ECB said to weigh minus 0.1% deposit rate if more easing needed," Bloomberg TV said in a tweet Wednesday. The report comes a day after ECB Vice President Vitor Constancio said that while quantitative easing was still a possibility, the central bank had not discussed how it would be implemented. ...

http://www.marketwatch.com/story/eu...it-rate-report-2013-11-20?link=MW_latest_news

Unleash the Kraken!
 

pmbug

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Germany's Bundesbank said on Monday that countries about to go bankrupt should draw on the private wealth of their citizens through a one-off capital levy before asking other states for help.

The Bundesbank's tough stance comes after years of euro zone crisis that saw five government bailouts. There have also bond market interventions by the European Central Bank in, for example, Italy where households' average net wealth is higher than in Germany.

"(A capital levy) corresponds to the principle of national responsibility, according to which tax payers are responsible for their government's obligations before solidarity of other states is required," the Bundesbank said in its monthly report.
...

http://www.reuters.com/article/2014/01/27/us-eurozone-crisis-bundesbank-idUSBREA0Q0HV20140127
 

bushi

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pmbug

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Is Portugal about ready to implode?

That's what one hedge fund manager believes. For now, interest rate action suggests otherwise.

...

Salanic maintains the status quo is not sustainable. Here is his overall thesis.

Portugal Debt Implosion Thesis
  • The Troika Program is off track. Portuguese bondholders are at the mercy of that market.
  • Portugal has excessive public and private debt financed from abroad. Portugal can neither grow nor devalue that debt.
  • Austerity fatigue has set in as the people carry the full burden of the adjustment.
  • Corporates are defaulting en masse and cannot sustain their debt burdens, leading to a vicious cycle of deleveraging.
  • The long-term outlook is bleak.
  • Debt-to-GDP is very high and growing one percent per month. Portugal is the third most leveraged country in the Eurozone.
  • Accounting for growth and interest expense, Portugal's debt is the highest in the Eurozone and is not sustainable.
  • Portugal can neither raise taxes nor cut expenditures, leaving little room to improve debt-servicing capacity.
  • 40 consecutive years of deficit and 18 years without a primary surplus confirm that Portugal cannot sustain so much debt.
  • In the most optimistic case, the Portuguese sovereign has at least 30% too much debt.

Salanic does a fantastic job presenting his case in a 62 page document, Rehabilitating Portugal.
...

http://globaleconomicanalysis.blogspot.com/2014/02/portuguese-debt-about-to-implode-what.html
 

pmbug

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Heard about this on the radio this morning:
Art for money's sake: Portugal looks to recoup bank debts with Miro auction

Portugal is hoping a master of surrealism can help taxpayers recoup some of the millions they lost rescuing a failed bank.

The government is selling 85 works by Spanish artist Joan Miro that became public property when Banco Portugues de Negocios was nationalized in 2008.

Christie's in London, which is handling the two-day sale starting Tuesday, describes the collection as "one of the most extensive and impressive offerings of works by the artist ever to come to auction."
...

http://www.usnews.com/news/business...-for-moneys-sake-portugal-aims-to-recoup-debt

Edit: benjamin - that link is the same article as the one I posted above it.
 

pmbug

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Ukip wins European elections with ease to set off political earthquake

For the first time in modern history, neither Labour nor Conservatives have won a British national election
...
Farage said the result justified the description of an earthquake because "never before in the history of British politics has a party seen to be an insurgent party ever topped the polls in a national election".

He claimed voters had "delivered about the most extraordinary result that has been seen in British politics for 100 years and I am proud to have led them to that." The Ukip leader predicted that as a consequence: "We may well see one party leader forced out of his position and another to reconsider his policy of opposition to a referendum on Europe, and David Cameron will have to take a much tougher negotiating stance. It is now not beyond the bounds of possibility that we hold the balance of power in another hung parliament."
...

http://www.theguardian.com/politics/2014/may/26/ukip-european-elections-political-earthquake


They also won a seat in Scotland:

http://www.express.co.uk/news/uk/478322/European-election-results-Ukip-wins-first-Scottish-MEP-seat
 

pmbug

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... Espirito Santo International SA - is in a "serious financial condition" according to a central bank driven external audit by KPMG identified "irregularities in its accounts." Sure enough, the 'ponzi-like' maneuvers have left the bank unable to pay its bonds as Bloomberg reports bonds plunged to record lows after a parent company delayed payments on short-term notes. More importantly, given the divisively dependent nature of the domestic sovereign bond market (and hence the health of the EU) and its banking system, it is noteworthy that Portuguese bond risk has surged to 4 month highs with the biggest 2-day spike in a year. As one analyst noted, “The bigger question is whether the government will have to get involved,” leaving the EU taxpayer on the hook once again (for fear of M.A.D. threats) as most critically, it "will have to step in to prevent systemic repercussions?"
...

http://www.zerohedge.com/news/2014-07-09/portugals-largest-bank-misses-bond-payment-bonds-collapse
 
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