I was up until 5:30 in the morning reading research regarding the European Union and possible collapse of the Euro. This is not something you should be laughing about over your stupid cocktail parties. Since when have the fucking Germans been a people who know what is right for the world? It’s in their DNA to be dicks and now they sit at the head of all tables. More importantly, a disorganized collapse of the euro is likely to result in terrifying carnage the world has never seen. Is it worth it?
I am reading about 50% reductions in GDP under a worst case scenario collapse, which is what we are heading for. Did you get that? 50 fucking percent.
What would happen if EU member states saw their GDP’s drop by 50%? Well, for one, most banks and corporations dependent on short term lending would fold. Most deposits would vanish into thin air and the entire continent of Asia would melt down, as they are Europe’s #1 trading partner aka the western world’s factory. Then the ripples would reverberate worldwide and we’d get the ax too. I know you Tea Party fuckheads do not believe this, as you “feel” failures must fail no matter the scenario. You are all sick, twisted, fuckers, deserving of famine.
To this day, you believe we would have been better off letting the entire western financial system collapse in 2008. You declared “it wasn’t such a big deal” and TARP was nothing more than “liberal mumbo-jumbo.” Well, soon enough, the Grandfather of all Tea Parties, the cocksucking Germans, will teach us all a lesson in economics 101, through their sheer stupidity.
At -50% GDP all big banks/insurance outfits are gone. At -50% GDP, corporate earnings will be negative on the S&P 500, allowing for valuations to drop into a sinkhole. Without a doubt, Dow 5,000 would be too expensive under such a scenario. After all, most of the Dow 30 components will file for bankruptcy protection. Let’s just say the FAZmobile will be the Rolls Royce of investment vehicles.
Under such a scenario, underfunded pensions would either collapse municipalities/corporations, which would result in broad insolvencies, or the mass reneging on commitments would take place. Choose your poison.
Oh, I hope you have money in the safe because all of your savings will be wiped out, until the FDIC is made solvent again by the Federal government. Over in Europe, there will be revolutions to overthrow the dicksuckers who caused this crisis. German hatred will soar to wwII levels and Europe will be fractured for decades. Unemployment will likely be in the 50-70% range, leading to pain on an unimaginable scale.
But of course we must “take the hits now” because, after all, we’re capitalist and that’s what capitalism is all about, no? Has it ever dawned on you that none of this horseshit was capitalism in the first place? So now you want to cure a socialism problem by capitalistic means? Good fucking luck with that.
An unmitigated disaster looms and awaits. I’ll see you on the bread line.
NOTE: Italy needs to go to the bond market for 30 billion in late January. Should we make it until then and a resolution to print euros has not been reached, that will most certainly be the date the world stops turning.
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No worries. Tim Geithner guaranteed to Jim Cramer on CNBC that Europe would not have a “Lehman moment”.
Geithner is never wrong, I think …
And MS is fine too.
sarcasm likely
bread crumbs for all yeay
Merkel is holding out for some kind of firs among equals status in the new EU political union. What they could not take by force, they are going to have given to them.
in due time there wont be a euro.and the next time someone mentions the word,”euro zone”,it’s because they will be pointing to an area on a map. having said that, if the bernanke tries bring any solvency to that area,people will be asking for a pound of flesh.
When the powers that be decided that bailing out the banks was the way out of the problem, it set a very dangerous precedent.
All of the PIIGS know they have Germany over a barrel. Give us more money or we’ll just default, they say.
When the crisis gets bad enough in the EU and if Germany finally caves, it will only stave off the next round of crises for several months until the PIIGS come back begging for more, as austerity and higher taxes simply will not work.
Too big to fail; and too big to save. Time to hit the reset button.
… sorta sounds like a Thunderdome scenario !
Guess we should start stockpiling guns, ammo & MRE’s !!!
.
not really.getting rid of nafta would work fine for me, as a start.
Lol. Don’t worry so much Fly.
All of the 2011 uprisings were created by the midwest crop commodities last fall.
In essence, don’t forget that the dicksuckers are “us.”
Germany merely manages the logistics of manufacturing.
Asians have vastly benefited from “the Wests” spreading of wealth.
If anyone is to blame, it’s Clinton’s team for removing the Brenton Woods Agreement + NAFTA.
Notice any Occupy DC? Obama hired same team (then fired last year).
NAFTA, absolute job killer to America. A boon for baby boomers.
How quickly we forget.
Whoops, in penultimate line, meant to say Latin anchor babies. BTW: I love that culture and speak Spanish, so no hate here; I’m just saying, as “an American”, it was bad “for us.”
I would add to the Clinton score killing Glass Steagall. But we shouldn’t worry, Perry, Romney, Cain & Newt will all finish the job Bush started.
Playing the devil’s advocate…why is it necessarily the Germans’ job to bail-out everyone else? Just because they were fiscally responsible and the others were not?
If germany didn’t want to bail out members , they should have never joined the eu. Also, it’s not so much Germany bailing anyone out. They just need to print.
Proper weslth trsnsfer will ensure the most stable countries are taken down, ss well. Hence, Germany’s mandatory involvement.
Willl printing make any difference if asshole bankers turn it into 100:1 CDS contracts that, will, one day payoff and suck everything into a black-hole?
Relative to everyone else in the EU Germany is fiscally responsible. How fiscally responsible though is Germany? They have been bankrupt twice in the past century. Also Germany has not recapitalized its banks yet.
The simple reason is that they’re not bailing out Greece, Portugal, etc., but rather their own banks. Isn’t it fucking clear that the Euro was a vendor financing scheme? Unless they really want to be united like the US, and actually pull along their mississippis and alabamas and other loser states with loser senators, as the New Yorks, New Jerseys and Californias do on this side of the pond, then Deutsche Bank and all their regional banks, the Landesbanken, will fail.
So let’s be clear on who’s getting bailed out. It ain’t the greeks.
It’s literally Germany’s job to cooperate, else they fuck the world. That’s not good for anybody and in trying to protect themselves, Germany will ultimately fuck themselves if they keep this shit up.
Best and most perceptive post ever.
“To this day, you believe we would have been better off letting the entire western financial system collapse in 2008. You declared “it wasn’t such a big deal” and TARP was nothing more than “liberal mumbo-jumbo.” Well, soon enough, the Grandfather of all Tea Parties, the cocksucking Germans, will teach us all a lesson in economics 101, through their sheer stupidity.”
Right call on the Tea Baggers, too… little Brown Shirt wannabees.
Fly, are you talking about change in GDP or level of GDP?
You start off saying “I am reading about 50% reductions in GDP under a worst case scenario collapse,…”. Then towards the end you say “At -50% GDP all big banks/insurance outfits are gone. At -50% GDP, corporate earnings will be negative on the S&P 500, allowing for valuations to drop into a sinkhole.” You seem to start of with the first construct but then transition to the second construct.
A 50% negative change in GDP is still positive GDP even at current levels of very low GDP.
No, negative 50, not 50% reduction.
Maybe I’m fucked up, but I’m pretty sure there is only one interpretation of -50%. IE; how do you subtract half of a zero GDP economy? ( One of my pet-peeves is when folks say 150% LESS of something)
@Calgary G. – Dude, it means YOY GDP is down 50% from the previous year. Our financial press is inhabited by a bunch of journalism and poly sci majors who really don’t “get it”. Check out the Kyle Bass interview froom the beeb over on Youtube. It should help get you started in your reading.
Like Fly said, this wasn’t capitalism to begin with. It was privatized gains and socialized losses. Now the overlevered entities are collapsing rather rapidly.
Yogi: Thanks for the Kyle Bass tip,great interview..For the record, my comment was to Bobby Boucher who was asking if the Fly was talking about ” a change in GDP or level of GDP?”
I couldn’t agree more with the observation of “privatized gains and socialized losses”, but is there any other way when we have TBTF entities permitted to do as they please? What this shit-storm has done is expose our economic “system” to be a farce, and I don’t think anybody understands its machinations fully.
I believe that we have “advanced” to the point where the average human is incapable of functioning within the systems they find themselves in. To wit: we have technology that lets us send a message to anywhere else on the planet,instantly, but it would seem that almost half the population of this city, at least, is too fucking stupid to understand that doing so while driving is a bad idea. So we now have a law to tell people to not type while dring a car. or look at the footage of Black Friday in the Excited States, and see people blowing wads of cash on made- in-China garbage (literally,garbage) in the face of a moribund and fragile economy.
I am not clever enough to begin to understand the world economy, or how to fix it, but I think that this shit was probably created by the same mentality that causes people to text while driving, or shove more crap down their fat,overstuffed gobs;only in a finance type-way- Selfish,greedy,mindless.
I sometimes think that
Well said Calgary G. Sometimes thinking this way seems to be about as accurate and frank as one can be given the full catastrophe of living… some times…
layers of denial in the face of the mirror can be multifaceted and paradoxical.
Life is hard.
Understanding my selves in interaction with myself, the world, and others…
The opposite of “fuck it” is….__________.
Since you seem mentally challenged, Calg, I try to use a simple example of what I was attempting to elicit from Fly.
Example; In the US, Q3 2011 GDP came in at a 2.0% annualized rate of growth. A 50% reduction in the rate of gdp growth would lower the number to a 1.0% annualized rate in Q4 2011. Alternatively, the Q4 2011 annualized rate could come in at -50% annualized rate of growth (ie, the economy in Q4 2011 is on pace to shrink by half from Q3 2011).
I believe that Fly’s losses have led him to become shell-shocked. Shell-shocked to the point where he is taking a note that discusses a 50% reduction in the rate of GDP growth (the first part of the example) and is interpreting it as implying a -50% annualized rate of change in GDP growth (the second part of the example).
Alternatively, you could have said “Fly, do you mean to say a 50% reduction in GDP, or a 50% reduction in GDP GROWTH”. But thanks for the explanations folks. BTW, there is nothing wrong with my thought processes, I just don’t read “stupid”.
Exactly what should happen!! Leverage is good when it goes your way, a killer if it is against you
I recall Germany being in a worse pickle once, now they run the joint…. Btw Panama is going through some building boom. Sky Cranes at least a dozen, dot the horizon. Cant wait to go back.
arent the chinese establishing a presence in Panama? might explain some creanes.
It is the same thing in the Philippines. There are new projects going up everywhere in Cebu. I assume the big money is coming from China. The only reason I am in the states right now is for back surgery. This Pacific Northwest weather is killing me.
People still need to eat and wash. They should have had an orderly collapes. Then disolve the euro, it was a pipe dream anyway.
When Germany finally caves, as they must, the Dow will rally 50,000 points and Best Buy will give away free 70″ TV’s.
Europe has always reminded me of a bunch of tribes. with war every once is awhile. Let it collapes. Its not the first time, wont be the last.
A “Grimm” story indeud Herr Fly.
Didn’t a couple of germans once leave a trail of bread crumbs so they could find their way home?
The crumbs were eaten by crows and.. things just got a lot worse from there.
The europeans are idealists and they have failed to look at several of the possible outcomes which “cannot be possible”. Winding up the euro will be hugely disruptive after 10+ years of euro denominated transactions. I suspect they find a way to preserve some of their standard of living and wealth.
The Germans will agree to print once they get the deal they are currently working on behind the scenes. They know they hold the big stick and are waiting for all these piss ant socialists to puke.
+1…Brinksmanship to buy the mess cheaper.
Lord Humungous should ring the bell Monday!
they had the chance back in 2009 to make everyone take haircuts. would have been better off wiping ou the equity and hitting the bond holders with a cut then prime the pumps from there with stimulus in the form of infrastucture, at least get people working and getting the dollars flowing in the system. It would have been brutal but better for it at this juncture.
printing is a short term solution and has been proven it does not work. each intervention has a shorter and shorter half life. not to mention demographics are the headwind we are facing. most people do not require new credit as they want to pay down and not have to work like dogs until freedom 75.
germany got what they wanted from the EZ. they had their expensive DM goods priced in a EUR that everyone could afford now, thanks to credit. they raped the weaker members and are now looking at finishing them off.
the EUR will survive, the costs to have it go away are too great. the thing is the EUR and EZ will look like what germany wants it to look like.
my guess at a likley response will be, let the markets feel more pain. no change will take place until there is pain at the commoners level. and people can withstand a lot of pain before chnage is enacted.
once pain has hit, ECB will be allowed to print (i.e. given germany’s blessing), under the understanding that EZ moves to a fiscal union. until germany is assured that, and in effect control over EZ it will be posturing and white washing.
just sayin’
Printing works. It’s a reset of prices and liquidity. The problem is the politicians then jack things out of shape again.
Cascadian,
how does printing work? Japan has proven that it doesnt. Its a short term solution that you hope gets growth going again?
also, the incremental value of GDP gained against new debt is also diminishing.
the printing of money reminds me of the scene in Ocean’s Eleven (remake) when they are about to black out Vegas and he holds his nuts, turns his head, closes his eyes and then pushes the button.
bottom line, very short term solution, and problem is, while consumers were binging so were governments. If govs had not binged then the printing would go on and would not be in this shit mess.
Finally just go back to GDP = C + G + I + (X-M). If C is dropping then G has to step up because the (X-M) is not offsetting. Therefore printing is what the current solution, but not a long term one. We’ve been printing for 3 years now. Next print will be nuclear with ECB and FED, and likely JPY joining in.
Great comment. Agreud.
Great post Fly. Great post (no zerohedge).
If Germany bails out Europe does that solve the problem or simply delay the pain?
It solves it for now
So what is the German upside to bailouts? Other than not having the money the second time around.
They have an economy going forward. If those morons think they aren’t dangerously exposed in an uncontrolled breakup they are fucking clowns.
It solves it until they realize all the austerity measures are killing their economies.
The ineptness of the European politicians is amazing.
You haven’t lived long enough to see strife or to experience it, most Tea Partiers have. How about life in the depression without sugar, butter or red meat, watching your children go hungary. Then in WWII where men were blown apart or wounded, everyday they woke up, it could be their last. Folks back home couldn’t buy a new car or get tires and food was rationed. Then families getting torn apart in Vietnam seeing their men come home getting spit on without a hope for a job. Watching blacks burn entire city blocks down in every major city. The assasinations. Most folks cannot fathom the Tea Partiers feelings for this country because they have not experienced these things. Now maybe you’ll get your turn.
No thanks. I’d rather surf the internet on my ipad.
You would be more productive with a nice laptop with an Intel chip inside.
My family actually came out of the depression in better shape than they went in. I believe that you could to do the same.
How did they do that? It might be good advice for more than a few of us……….
That sounds awful. Why would I want to live through that? Thanks, but no thanks, Tea Party.
Coming from farming community Colonel, I concur with the “Tea” sentiment.
I totally get that.
My great grandparents talked about how when you break a leg, you still get out and till.
I own 600 acres of farmland and work part of it each year.
I still don’t get that sentiment.
how many generations?
Wilmer.
I think your full of bull shit mang.
I own such.
Go clear out and clean someones toilette poser.
I grew up with it, still farm the family farm and know the Tea Baggers are crazy. They worship WWII austerity and the Junkers.
Zero Hedge “patriots,” one and all.
Family homesteaded farm since 1884 if you want precedence… although calling for historic precedence denotes Tea Bagger idiocy.
BTW, if there was no way to set the bone, the man stayed in bed until it healed and limped behind the horses… “got out and farmed with a broken leg…” Pure worshipful rubbish.
If you came near our land, you would be sniped.
For damn sure.
We’ve been clearing shit before congress provided you with such “rights” SOB.
Fuck off.
In the hypothetical scenario you envisage, Sir Fly, yields on the 30 year treasury will go negative and every man and their dog will be doing the Hugh maniacally in the streets of Paris.
Indeud.
Get back to me on companies that make glow sticks. Time for Raves during times of social unrest, doing the Hugh.
So based on your thesis, and the fact that you are over 90 % invested long equities (I think), what is your strategy for next week?
Fly, considering that us “Tea Bagging”, free-market, libretarians have such command of world governments such a scenario is highly likely… I refer you to the collapse of Iceland in 2008 and their subsequent restructuring. They had no cash or leverage to bail out their failed banking system in Jan of 2009, their GDP collapsed, their market was down 90%, and no Euro-state came to their rescue. Their pain was significant, yet they have now returned their GDP to pre-boom levels, the krona has stabilized and interest rates are less than the PIIGS. The failure and free-market solution of Iceland should be a lesson to us in the West and a model going forward.
When Iceland defaulted, UK and Euro banks lost billions.
If Italy defaults, banks and investors will lose trillions.
If Europe defaults, the word “trillions” will not begin to describe the losses.
If Iceland is to be the model going forward than you and I will lose all of our money, whether invested in stocks, bonds, real estate or stuffed in a sock under the mattress.
I am not prepared for that; however I admire your willingness to gamble your entire net worth on your theories.
By definition a bank is where you store wealth created by fruitful production, not a house that gambles with obscure financial instruments… I would argue that the healthiest future lies in abandonment our fiat money and a return to sound money principles. If individuals gambled on the krona, they list and that was the risk. You advocate for socialized loses over generations.
MCPJ
You are living in fantasy land. The banks already did the damage. You are trying to fix the leaky faucet when in fact there isn’t a faucet at all. It’s a giant fucking pipe pouring into your kitchen.
This is not about socializing losses, but preserving our way of life.
Fuck this way of life. Non-sustainable is non-sustainable. Better to try to fix it before it gets even worse.
Having said that, I’m young so my bias is clear.
Fly, similar to your plumbing experience, when it is a gigantic pipe, sometimes the whole thing has to be redone.
“By definition a bank is where you store wealth created by fruitful production, not a house that gambles with obscure financial instruments…”
There is a middle ground. Banks enable the savings of some to be put to work by others,
“I would argue that the healthiest future lies in abandonment our fiat money and a return to sound money principles.”
The Euro was an attempt to replace individual fiat monies with something more stable and it is failing spectacularly.
“If individuals gambled on the krona, they list and that was the risk.”
Investing your savings in conservative bonds and stocks in North America is not gambling. The collapse of the Euro over there will destroy much of the value of your savings over here.
“You advocate for socialized loses over generations.”
When Europe adopted the Euro the economies in Europe became intimately linked. To protect its own currency Germany needs to find a way to prevent Greece, Italy and the rest of the PIIGS from destroying it. The losses are massive and will be shared by everyone, regardless of their responsibility for the mess. I believe that the losses should be absorbed through orderly government action instead of simply letting everything collapse. The losses will be felt for generations regardless.
I’m sorry but putting your money anywhere is a gamble; you may not call it such as you believe that this gravy train will last forever. Just because it is a more conservative, stable bond/stock there is still inherent risk involved.
Having governments absorb the damage is prolonging the problem, and that according to Dr Fly is the fucking pipe in your kitchen… I wouldn’t replace the faucet, I would replace the entire plumbing system. If that doesn’t fix the problem, replace the entire water system. Yeah you won’t have water for a while, and your house will be flooded but your neighbor and your kids won’t have to deal with the problem down the road.
The Euro was a good idea for globalist fear-mongers who wanted larger control of the monetary system in order to protect their investments. A village of cards built on sand is better than consolidating those cards to create a massive house.
We need LEADERS in government to worry about the future of the free world rather than their next re-election. It will be painful, and crushing for us, but at least our children will not have to deal with these problems.
I agree, old friend, yet the reality is they they don’t give a fuck about us at all, except to get them reelected. It would honestly take a violent ass revolution to make these changes. Are we as a society prepared to sacrifice like that?
There is no way to get out of this easily. The only way to do it is to make sure the over leveraged pay the biggest price. I am sick of the false inflation…Shit a Mazda Miata is about $30,000 these days.
Yeah it will suck, but so did the stone age. WE HAVE to stop kicking the can. And America should want the shit to hit the fan while we have such a military advantage over the rest of the word (problem is how do we continue to pay for it?)
Amen
Angela MERKEL,GERMANS&French…
Should not just Bail them out and print or anything UNTIL the GERMANS&French OR Possibly Other INTELLIGENT life forms.types aka american revolution types like our founding Father’s .. run the Euro zone !
OTHERWISE
they will end up with this Current America !
and Not the America our Father Knew..”
In Gold we trust.!!.nationalized
the Gold Mines{ NOT the BANKS, have the darn Unemployed work there ..well see who lazy and entitled.
Stop the Drug War and supply and tax drugs like spain and when the die early WE SAFE ION mED-CARE COSTS.
Fuck Europe lets get independant folks !
Lets set the people free by having them
rule this Country again and Implement some Cretivity ..RIGHT HERRE IN…
the “OLD” USA.
You do realize nobody uses the gold standard anymore, don’t you? Have you ever asked yourself why that is?
Asia is about to that on its head with the Renmibi project.
By 2020, Moscow and Beijing will have a stellar system.
I get a lot of criticism from mediocre minds, but remembers BRA’s words in a decade and see.
Estonia may be an excellent place to invest in small businesses.
yeah, and shut down the Food and Drug Administration. If drugs are legal they will have nothing to do. That will save some gov’t overhead.
and you may lose money.
The thing is you can’t just say we are going to “print” Euros. The ECB does not have the ability to behave that way. They are not the FED. You can’t just say we are going to issue Euro Bonds either. Every solution they have to this problem takes changes to their treaties and their constitution. That time frame is measured in years not days or weeks. That’s if they can even pass those changes.
The German Constitutional Court has already ruled that Merkel does not have the power to do what keeps being proposed.
But they do, they have been buying Italian and Spanish debt. All that needs to be done is to increase the amount of debt they are allowed to hold. It would be a simple amendment, but the Germans want something for it, and are going to make everyone else feel the pain until they collectively cry Uncle.
I am sorry but my understanding is quite different regarding the bond buying and the ECB balance sheet. The German pols can’t just say “yes”. Their court said they couldn’t. Second, and this is very important, the bank can not directly buy bonds as our FED does, because they are not allowed by treaty to finance governments, but must purchase them on the open market after damage to yield has been done. Further – what the German’s want all involve changes to the aforementioned treaties and the constitution. The Irish have already said they want debt relief like the Greeks had before they “think” their population would consider ratifying any changes. Then Portugal will demand it and then Spain and Italy will demand it too. There no longer is any “just amending” things any longer. That shipped sailed. Germany is 25% of the EMU economy. It can’t bail the EMU out. Also it has not recapped its banks. Once it does that its north of 125% of debt to GDP. Finally, the ECB can’t just backstop everything. Even if they try the markets won’t have it. No fiscal control. Now see above again – central fiscal control takes years even if its approved. They have weeks, maybe even days, to work something out for the EURO. The yield curves are already inverting.
Purchasing them on the open market after the price declines is beneficial to the ECB for obvious reason.
And I don’t know if an activist judge or two is what is holding up Merkel from ok’ing the ECB. I think it is far more likely that Germany wants some strong concessions on sovereignty rights before they are going to do what they already know has to be done.
Let’s put it to Vote? ..
Who votes for higher taxes & austerity?
Who votes for USA to hire unemployed to work at gov’t gold mines to pay off the Debt?
The Central Banks of the World arn’t buying Gold cause it’s losing value.. get real..
once they” print again ..guess what dollar drops …gold/stocks -up again ! surprised?
well make money alright !!!
Actually FAZ and the rest of the inverse ETFs could well collapse under this scenario. They are built on swap agreements between the ETF provider and unnamed financial institutions. There is no visibility into how a given swap is structured or who the counter party is. They weathered 2008 fine but sovereign debt was not coming unglued at the time. So I could see FAZ going gangbusters and then waking up to find it is in default.
sounds like we are all fucked one way or the other …
I agree.
Faz goes to zero
I know that people like you(the FLY) have too much to lose and don’t want total collapse but may be because I don’t have much to lose I agree with the Tea Party and prefer to see all those bailout candidates bankrupt even if that leads to the scenario you described – I don’t see any other way the world learning its lesson.
Don’t worry, though, the people in power in both US and EU think exactly like you(despite you obliging yourself in cursing them) and the procession of bailouts and money printing will continue.
Fly, you have to remember that 99.9% of the human population doesn’t give a rat’s fucking ass about the goings on in Europe. Life goes on! There is 99% of the population that doesn’t watch any of this bull fucking shit. Life is going on with or with out you. Attitude comprises life. Not fortitude.
You are an idiot full of empty catch phrases. STFU.
Short squeeze
Do the 99.9% like to retire with pensions or go to the store for bread?
All of that will literally end.
Apologies to this site- Fly can you please delete my embarassing idiotic brainless rants?
After 3 bloody marys and a bottle of red wine yesterday, Mr Hyde made an epic appearance.
I hope I never see that a**hole again.
-major apologies
I’ll say again. Fuck the Market! Look what you’ve created………….A following!
Welcome to business 101!
He wasn’t talking about the market… you might need to read it a few times more for you understand.
Wow, what are you doing on this website, ShortSqueeze. Almost EVERYONE here cares about “the goings on in Europe”, Fuck the “99.9% of the human population”, not the blessed market.
We need to get over the notion that we can become wealthy through money manipulation. Wealth is created through production of goods and services. This house of cards will fall in short order and while the Bilderberg group flounders to reestablish themselves and control/create a bullshit market those who can survive will survive. Don’t Tread on Me!
The Revolution is coming and unfortunately for most of you, a firm grasp of indicators/derivatives/FOREX etc will not help you survive…
Good idea to be prepared.
At least in America, the second amendment guarantees that any real rioters will face an unexpected exit.
We will get bailed out with war.
Its human nature to want to blow up
our problems rather than solve them
rationally.
Get ready for it…the headlines are starting to tell the tale.
But Iran and the financial crisis are just coincident!
They are *in no way* gonna come to a head at the same time, and force our leaders to bail out the status quo in the name of National Security!
Then it would be like, you are pro- bailout, or pro-Terror.
Nah, no way
Somebody is going to PRINT TO INFINITY whether it be Germany or the Fed. We passed the point of No Return in 2006, some argue in 2001. The result will be a whole other can of worms. If you have ever taken a good look at the shadow banking system, its easy to see why there is no easy way out of this. It will eventually lead to a Global Currency SDR. That will be the “Fix”.
Yes, exactly. See my post, America, the Joke is On You.
Fly – Given your scenario, they must act. No?
There is no way out except to print, backstop, fire-ring, liquefy the system, etc.
They will do it. Its just a matter of when. If soon, then we rally. If later, it is too late.
Therefore they will act and soon.
Thoughts?
The world collapses in late Jan? Maybe the mayans were right.
Stand back, I’m going to use science!
“The entropy of a universe tends to the maximum” – anarchy.
“Scientists have often been baffled by the existence of spontaneous order in the universe. The laws of thermodynamics seem to dictate the opposite, that nature should inexorably degenerate toward a state of greater disorder, greater entropy. Yet all around us we see magnificent structures…”
The common argument used to explain this is that, locally, entropy can be lowered by external action (printing). This local increase in order is, however, only possible at the expense of an entropy increase in the surroundings; here more disorder must be created – (Kicking the can).
*via wikipedia
The real answer is we need to find a new fucking planet to inhabit 😉
I will be the first volunteer to colonize the moon…not the space station.
All of you hoping for the apocalypse need to read a bit more. The basic understanding of our global financial system is pretty pathetic given what I’m reading in these comments.
It fucking amazes me that you can pretend to trade or invest without the basic knowledge. NAFTA, farming with broken legs, fiat money? Gimme a fucking break. This is serious shit if it becomes systemic. If you don’t understand what systemic means, you need to get learned [sic] real quick, before your ISP shuts down because it no longer has any way to finance its operations.
If the Germans relent and keep the ball in the air for a while longer by reflating, they might make it out alive. I’m not hopeful and heavily in cash. When I start pulling cash out of my diversified financial institutions and stashing it in the safe, you’ll know it’s the point of no return for the time being.
Who wants an apocalyptic end? I want my children and their children to have higher standards of living than I do, and if that means pain for me, I’ll gladly take it.
ISPs, just like any other business, should be financing their operations with revenue and “true” debt not bullshit loans from banks who borrow at near zero. When we print, print, print, which seems to be the only solution the global elitists believe will work, enjoy the hidden tax known as inflation. Yeah, the fiat system we employ is not sustainable, no fiat currency has ever been sustainable due to human nature: GREED.
GM is a good microcosm of what is to come: the major banks and political favorites have a seat at the new, restructured table while the common bond holder, shareholder, tax payer get fucked. You assume that the people in charge give two fucks about us.
What’s the point of “keeping the ball in the air for a while longer” if we all know it will eventually come back down?
Your “cash” won’t be worth the paper it’s printed on if all that happens.
OK, Fly please tell us the perfect solution to this mess. Maybe you’ve mentioned it in past posts and I missed them. Just relink it in your next post. Thanks.
PRINT, PRINT, PRINT and own gold/silver.
While it does suck that the end of the world as we know it may indeud occur, and as we all must live and eventually die, I for one am grateful that I may be here to witness it should it be the case.
My one wish is that until the earth cracks open releasing lava up my ass, that my internet and power stay on in my ultra modern media room…to that last second.
Embrace the fuckin horror. Only die once!
REQUIRED READING
http://www.telegraph.co.uk/news/politics/8917077/Prepare-for-riots-in-euro-collapse-Foreign-Office-warns.html
Scary article. As I’m long EUO calls, I’m curious what might happen to them if I wake up one morning and the euro is no more. How would a value of a currency vs a non-currency be equated or would the ETF simply collapse given the financial instruments (contracts and swaps) used to determent value. Thoughts please.
Read the telegraph every day…actually I have read even uglier stuff in other european newspapers.
i read that.what i think you might find more interesting is that there is a bill that is secretly making it’s way through the senate now, and will be voted on monday.this bill, as i am beginning to understand,makes our own surroundings a “battlefield”, and the right of military force on our own citizens, whereas,we, as civilians can be arrested and jailed at will for any specified amount of time for no ryhm or reason, and MOTHER FUCKING JOHN MCCAIN IS IT’S AUTHOR. i was taken completely aback by this……….. me thinks the time to rise is now, we the “real” people of this country must take the tea party and the ows types, push them aside and do a deed that only our fore fathers would love……….thanks MCCAIN i hope you fucking die of cancer………and soon.
Got a Senate Bill number on that?
Yoki. I am afriad if things get to that point, cash in your safe will be akin to firewood.
On a positive note Black Friday Sales were up 7% YOY
It will all work out, it always does.
This is just more bullshit scare tactics from the media.
There won’t be food lines
There won’t be riots
A nice swift kick in the market’s ass wil be exactly what the buyers will jump on.
If it all goes to shit and everything will be worthless, there’s nothing we can do about it anyway, but it won’t happen.
Maybe I’m sticking my head in the sand, but it’s better than panicking over what will likely be nothing.
Your head is firmly placed up your ass. Euro collapse and everything will be fine!?
… my head is “firmly placed” … amongst some TNA !
Uhhh … as it were !
For a trade … mind you !
—
Hedged SHORT, of course !
.
Sir Fly
Sure, if that happened, it would be bad.
I’m saying that it WILL NOT happen and it’s all just scare tactics from the media, as they are the best at it.
Still waiting for the radioactive waste from the Japan nuclear disaster to wash up on the shores of San Fran. Maybe that will coincide with the Euro collapse and the alien attack.
Naturally I do not believe the Germans are so stupid to allow this. I am simply stating the path.
This is some seriously fucked up shit, assuming the only “things” that would store value would be gold and silver bricks as well as farm land?
Then again, if this did occur there would be anarchy and like in the olden days, those with big sticks would just take gold, silver, farmland and women of those with…
I used to believe that a revolution was necessary to get where we needed to be. It would be worth the temporary displacement and casualties. But now I think revolution would kill a bunch of good people and put the most bad-ass idiots in charge.
The bad ass idiots are already in charge. Socialists have been running most of Europe for decades.
Europe is in a big mess, bottomline. We still have a massive commodity bubble that needs to play out. Next week is normally bullish for the Euro, lets see if the dip buyers come again. Fly, nice to see I am not alone in my concern over Germany…hey, Black Friday broke records it appears…
It will be interesting to see if Asia suffers in the next decade TN.
I believe Germany will shun the faucet of production.
The initial “spiral” down that China currently fears and faces may be incited to new levels of social revolution never before seen in that land.
Few understand it yet, but the Dragon’s neighbors can make it a “paper dragon” quiet quickly (the likes of which haven’t been seen since the 18th century, and never before that).
I hope that’s not the case, as I like China and have grown in affinity for the whole continent’s growth.
China is a growing Country. Not sure how it will all play out. I have noticed in the past that China goes boom to bust to boom, repeat. Their Stock Market is seeing this pattern and has been not crazy giddy like the other global markets from 2009 to present. So, IMHO, they have a much smaller way to fall when we bust again. China short term lent a lot of money to people that are not going to pay it back in their country..now, CEO’s are “disappearing” and factories are being sold off..just growing pains of the wild New West of this Teenage Dragon. FWIW, China’s biggest problem is the aging population which must depend on very spoiled self centered little budda’s for their future..not a good set up at all. We will see.
Germany needs China more then it needs Greece, Italy, etc.
With regard.
Not really.
Scary?
The giant shell game
http://www.bis.org/publ/otc_hy1111.pdf
read with a smile
oh and what is the number called after 999 trillion
A quadrillion.
If you took one quadrillion U.S. $1 dollar bills and stacked one atop the other you would have a pile that would reach out 3/4s the way to the sun.
The ‘Fly’ points out something here that the media will ‘accidentally’ (sarcasm) fail to mention; that the cause of Europe’s problem WAS socialism. Instead they’ll blame Capitalism and search for father figures on CNBC. If the system had not been played with by people asking for ‘free’ healthcare, shorter work weeks, more union benefits, more strikes etc… from the ‘government’, we wouldn’t be in this mess.
Unfortunately, Obozo and the idiot media here in the USA haven’t learned this and believe the ‘government’ can give everyone everything for ‘free’ – well as my papa used to say, nothing is free, including your freedoms….
Not to be too morbid but I suppose the best defense against a currency collapse is to own assets. Land, gold, even stocks. At least these have some kind of intrinsic value. Owning stuff seems better than simply holding cash.
Hell, I’ve got so much crap in my garage that I can sell I should be able to feed my family for months.
This is the chance of your life to buy real estate and make your family rich within five years.
It’s called wealth cycling.
It’s time to pick up real estate rentals.
The Euro is a stateless coin (currency).
It (Euro) has no teeth, no wings and no borders.
Europe is in a tub full of shit and no one wants to reach down and pull the plug.
Boom!! You’re all dead!
Hmm. Italy – 168B euros to roll in 2012. Ok.
In 2010 – it was 251B euros, 2011 – 192B. 2013 – drops to 104B, then 40-90B annually till 2020.
Primary surplus, technocrats in charge.
If they survive the next 6 months, Italy will pull through. Similar story elsewhere in EU.
Be careful assuming the EU is out of runway; runways lengths are multivariate functions in finance.
What kind of growth trajectory are built into those numbers?
Le Fly, you should write a whole book on this one comment: “Has it ever dawned on you that none of this horseshit was capitalism in the first place? So now you want to cure a socialism problem by capitalistic means?”
Germans are not responsible for the crises – Don’t kill the messanger.
Deflation is better than printing.
The era of entitlements is over.
On what do you base this moronic comment?
Here is your answer:
Germany is advocating sound fiscal policy, the Independence of the ECB and not to print money. Of course nobody want to hear that…
Deflation brings down prices and rewards people that did the right thing – save money. Inflation punishes everybody.
In Europe governments have given out entitlements regardless of their income. That era is over.
Now maybe you tell me why this is so moronic.
Deflation is a horrendous event.
Both Inflation and Deflation are horrendous. The questions is which is less horrendous….
Consumer spending is the engine of the economy. Deflation kills consumer spending.
Also, there is a lag between wages and price changes. Deflation means that workers are always being paid more than the goods they produce bring in.
Inflation of about 2% seems to be the ticket. Consumers are happy to spend because hanging on to your money is costly. And companies earn in today’s dollars but pay wages in yesterday’s dollars.
All this talk of entitlements and socialism is horseshit. This whole mess started with the unbridled capitalism of the mortgage mess in the USA.
There is a middle ground.
1: Governments need to live within their means. Both a high tax/ high service environment or a low tax/ low service environment can work, but a low tax/ high service environment (like in the USA, Greece etc) leads to disaster eventually.
2: There needs to be a strong regulatory framework to ensure the excesses of capitalistic greed will not bring down the economy.
What happens when the institutions that you are saving your money in go *poof* along with your savings, overnight?
You need to realize that the debts outstanding far exceed the amount of cash in the system. This is black hole suck everything into it style deflation.
FDIC still works. However, even investment money should not disappear. this is why J. Corzine needs to go to jail.
FDIC still works? In what world does the FDIC have enough funds in reserve to honor all the accounts in the U.S.?
What happens when your money is worth nothing overnight through the other extreme -hyperinflation.
You need to realize that it’s your responsibility to put your money in an institution that has a sound balance sheet with no exposure to risky assets. At least in Germany there are some local “not for profit”savings banks that fulfill that criteria.
I’m not sure there are any institutions that would be spared in such an event. Perhaps local credit unions, actually probably not since even those would be exposed via mortgage and auto loans and when unemployment skyrockets those assets would plummet and the ability to service them would be gone.
Personally, I would rather deal with hyperinflation than mass deflation for various reasons. Look at Japan, they have been printing for decades and inflation has been low.
Yes, but Japan is just kicking the can down the road. Debt to GDP in Japan is 200%, if interest rates rise just a little bit they are instantly bankrupt.
Correct. And we’ve been kicking the can down the road now for the past 20 years. The enormous debt bubble that has been created in the West is not going to just burst and reset via deflation. It is going to consume everything.
Taking interest rates to zero and encouraging household savings to be levered up to infinity was probably the threshold where we passed the point of no return.
Please tell me how japan would be bankrupt if they can print their own money? The US and Japan are issuers of currency that can print at will. They will never have solvency constraints. The EU countries are currency users and cannot print. This is a huge difference people fail to see. What people also fail to see is Germany is just as much at fault through the huge trade imbalances brought on by the Euro. They were a reckless lender just as much as the piigs were reckless spenders.
“Please tell me how japan would be bankrupt if they can print their own money? The US and Japan are issuers of currency that can print at will. They will never have solvency constraints.”
Technically you are right but you say that as if it would solve any fundamental problem…. They will print and ruin the country.
By the way why couldn’t the ECB print?
The only thing why that is not happening is because Merkel does not want it at the moment.
the derivatives appear to exceed all money…appreciate if someone could enlighten, wilmer?
Liebestod – meine Freunde.
http://www.youtube.com/watch?v=J8UzmAgGdlU&NR=1
Achtung! Welt am Sonntag
BERLIN, Sunday, 27 November 2011
German Chancellor Angela Merkel and French President Nicolas Sarkozy are planning more drastic means – including a quick new Stability Pact – to fight the euro zone sovereign debt crisis, Welt am Sonntag reported on Sunday.
The Sunday newspaper reported in an advance before publication that if necessary Germany and France were ready to join a number of countries in agreeing to tough budget discipline.
The report, which echoed a Reuters report on Friday from Brussels, quoted German government sources as saying that the crisis fighting plan could possibly be announced by Merkel and Sarkozy in the coming week.
The report said that because it would take too long to change existing European Union treaties, euro zone countries should avoid such delays be agreeing to a new Stability Pact among themselves – possibly implemented at the start of 2012.
It could be similar to the Schengen Agreement that allows for uninhibited cross border travel for citizens in countries that take part. Among the countries in the Stability Pact there would be a treaty spelling out strict deficit rules and control rights for national budgets.
The European Central Bank should also emerge more as a crisis fighter in the euro zone. The ECB is independent and governments cannot tell it what to do. But the expectations on the ECB are clear, Welt am Sonntag wrote.
“Based upon these measures, there should be a majority within the ECB for a stronger intervention in capital markets,” Welt am Sonntag said. It quotes a central banker as saying: “If the politicians can agree to a comprehensive step, the ECB will jump in and help.”
In Brussels on Friday, euro zone officials said a push by euro zone countries towards very close fiscal integration could give the ECB the necessary room for maneuver to scale up euro zone bond purchases and stabilize markets.
The ECB, which cannot directly finance governments, has been buying Italian and Spanish bonds on the secondary market since August to try to keep down borrowing costs for the euro zone’s third and fourth largest economies and contain the spreading of Europe’s sovereign debt problem.
Such tight fiscal integration is being considered by France and Germany, the officials said, with Berlin pushing to change the European Union treaty so that a country could be sued for breach of EU budget rules in the European Court of Justice.
The European Commission, the EU executive arm, put forward proposals on Wednesday to grant it intrusive powers of approval of euro zone budgets before they are submitted to national parliaments, which, if approved, would effectively mean ceding some national sovereignty over budgets.
This could lead to joint debt issuance for the euro zone, where countries would be liable for each others’ debts.
Germany strongly opposes the joint issuance idea fearing spendthrift countries would piggyback on its low borrowing costs – meaning no gain for the virtuous and no pain for the sinners.
have the markets priced in this fear?
I was thinking the other day that if bond holders are eventually going to be forced to take a significant haircut and they know it the 7% threshold currently freaking out everybody is pricing this in. So 7% really is 3.5%.
I’m not very knowledgeable about the bond market and the above statement probably show it. Excuse me if I’m way off base.
frankie, let’s use a conversation between you & me to illustrate. We’ll ignore compounding for now.
You say you trust me a bit but not a lot. So you’ll loan me $100 for 2 years if I pay you 7% per year, or $114.
I take your money and tell you to fuck off, I’m going to pay all the interest but only half the principal. So you get $64 back.
How are you feeling about the haircut? Of course you have $1,000 and loaned it in $100 batches to diversify your risk, but I’m betting that you’re more than a bit pissed off and not likely to loan me money on the same terms next year.
Panic is good.
There will be money to be made buying eqities from classic “Weak Hands”.
Those of us who remember having to pratice hiding under our school desks “In case of atomic attack” are less than impressed with the current End of the World chatter.
Every new generation overthinks the present and ignores the past. That is how the game plays out.
Opportunity will knock again soon I think.
Carry on.
You are officially trading like a CNBC idiot Fly. Can’t make any money until somebody gets bailed out.
And you are officially BANNED.
This country has been co-opted by the incestuous relationship between Washington and Wall Street.
Should future generations pay for the financial sins of their parents?
It is time to pay the piper.
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