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Richard Evans European politicians will take the “easy option” of taking money from the rich rather than raising taxes and cutting spending to deal with the continent’s debt problem, Lars Christensen, the head of Saxo Bank, said. Asked if the raid on uninsured savings in Cyprus would be repeated, he told City AM: “There will be future bail-ins [loss of deposits] and other types of confiscation of wealth in [...] European leaders are loosening the economic shackles once demanded by Germany as the recession and mounting unemployment in southern Europe shove aside the debt crisis as the euro area’s biggest headache. A two-day Brussels summit starting today will endorse plans for “structural” assessments of national budgets, according to a draft statement, using code for granting countries such asFrance, Spain and Portugal extra time to bring down deficits. “We have to restore sound and sustainable public finances, via continued differentiated fiscal [...] from Spiegel International: The euro crisis may have dropped out of the headlines recently, but Spain and Italy would seem to be doing their best to bring it back. Real estate giant Reyal Urbis’ bankrupcy has raised fresh concerns about Spanish banks and many fear that a Berlusconi election victory could drive Rome to seek emergency aid. It had become a trend among top European politicians to forecast that the worst of the [...] London Gold Market Report from Ben Traynor BullionVault Friday 19 October 2012, 08:00 EDT
Gold’s Fall Blamed On “Speculative Sellers”, European Politicians “Papering Over Differences”
THE SPOT gold price traded lower to $1732 an ounce Friday morning in London, near one-month lows, while stock markets and the Euro also fell as a two-day European summit came to a close with several issues unresolved.
The gold price in Euros meantime sank to its lowest level since the end of August [...] Update II: Wow. The half-life of a European relief rally is now down to about 15 minutes.
Following last nights Greek election – which saw the pro-bailout establishment party win — markets initially rallied on the preservation of the status quo. And stocks in Europe opened higher. But now that’s all gone, as the market carnage continues. The Spanish market is down over 2%. Italy is down over 1.6%. Yields in Spain have shot up to record highs. [...] Up until recently, the chaos caused by the Great Depression seems nearly inconceivable. At least, it was to influential Financial Times columnist Martin Wolf. But in an editorial published yesterday, he writes that the euro crisis has led him to understand how fear and a lack of credible safety nets in the financial system can result in a disaster like the Great Depression: Before now, I had never really understood how the [...] In America we have a formalized process for insolvency, bankruptcy that is overseen by the Rule of Law and the decisions are made by our courts. We have a functioning judicial system and all manner of statutes and regulations so that claims on assets are a matter of well-established Laws that govern this process. This also used to be the way of it in Europe but now we are being [...] Independent.co.uk
The ascension of Mario Monti to the Italian prime ministership is remarkable for more reasons than it is possible to count. By replacing the scandal-surfing Silvio Berlusconi, Italy has dislodged the undislodgeable. By imposing rule by unelected technocrats, it has suspended the normal rules of democracy, and maybe democracy itself. And by putting a senior adviser at Goldman Sachs in charge of a Western nation, it has taken to new [...] Europe’s game of chicken, all of which is geared to one simple thing – to spook the Greeks into voting for pro-bailout powers, and against Syriza – has now officially entered the Twilight Zone. In the latest episode of what can now simply be described as the world’s most entertaining yet terrifying mutual assured destruction showdown, because should Greece leave, the destruction, at least in the short-term, will impact both Europe and [...] From FT: In domestic election campaigns European politicians display a kind of cognitive dissonance. They must be aware that any propositions on European policy will be subject to close reading in the embassies and chancelleries of their partners, yet they tend to talk as if they will only be heard by a domestic audience. The French Presidential campaign, which officially began on Monday, is a case in point. All the major [...] From FT: Many investors wish to wave a final goodbye to the disruption the Greek debt crisis has had on market valuations. Meanwhile, European politicians are already trying to move away from the dramas on the periphery and focus on restoring growth in Europe. Both impulses are understandable. Unfortunately, they are premature. The debt reduction agreement put in place last week is the biggest sovereign restructuring ever. Yet it only goes part [...] From Washington Times: European politicians are on the hunt for new sources of revenue as the continent’s fiscal situation worsens. The level of desperation is clear in the latest move from German ChancellorAngela Merkel’s coalition government to tap into the cash reserves of Internet search engine giantGoogle to bolster that country’s ailing publishing industry. The second item on the coalition’s list of priorities released last week was a proposal to slap online news aggregators with [...] With warnings that Europe is triggering a 1930s-style global depression, Merkel faced open rebellionTelegraph.co.uk The banks that were downgraded last night include US banks Bank of America and Goldman Sachs, Barclays and France’s BNP Paribas. Switzerland’s Credit Suisse and Germany’s Deutsche Bank were also cut. The downgrade could raise the cost of borrowing for these banks. Fitch cut the “issuer default ratings” at the banks to “reflect challenges faced by the sector as a whole”. The ratings agency said: “These challenges result from both economic [...] It was a sad day for America when our elected “leaders” in Washington could not even reduce $1.2 Trillion dollars from the budget over ten years. Americans used to come together when there was a crisis, but it seems no longer. We will just be allowed to go down the debt drain with the rest of the world due to our inept Congress. You see. As I write this piece the [...] Bob Chapman As Chancellor Merkel and PM Sarkozy search for a solution that doesn’t exist they continue to lose credibility. Nothing of substance has been agreed upon that is legal and can be implemented. At the IMF Christina LeGarde is frantically waving her arms like a cheerleader telling anyone that will listen that if the six sovereigns in financial trouble are not aided the euro will fail [...] Ben Chu A Qatari sovereign wealth fund has taken a 10 per cent stake in a Greek gold-mining firm, in a move that confirms that European politicians are increasingly keen to accept assistance from emerging economies in order to ease the eurozone’s debt crisis. The deal by Qatar Holdings to buy a 9.9 per cent equity stake in European Goldfields from the Greek construction firm, [...] The new Bundesbank president, Jens Weidmann, used to be one of Merkel’s closest advisers. Now, he is one of her staunchest critics over the euro rescue. He is strictly opposed to the European Central Bank’s policy of buying up bonds from debt-stricken countries — and is winning a growing number of allies for his cause. Nightmarish Idea What Geithner and the Obama administration view as a particularly [...] From FT: As Europe’s leaders pledge support for the single currency, the talk among some is of default. An outline of the possible outcomes “If the euro fails, then Europe fails.” Angela Merkel’s staunch defence of the single currency, made in the Bundestag this month, is widely shared by other European leaders. The German chancellor’s sentiment demonstrates the political will not to let Europe’s sovereign debt crisis undermine [...] by Simon Black of Sovereign Man If You Haven’t Bought Any Gold Yet… Print. Lie. Borrow. Deceive. Deny. These are a the principal tenants of the Greek restructuring plan that were released today from Brussels… it’s as if EU policymakers put it together after shaking a Magic 8-ball. The whole world knows that Greece is bankrupt and has been living bailout to bailout for over a year. Deep [...] Geert Noels is chief economist of Econopolis. His book ‘Econoshock’ was a bestseller in Europe. He appears regularly in the media, and advises various organizations and governmental agencies. He has extensive experience of economics, financial markets as well as asset management. ~~~ |
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Market Commentary: What An Ugly, Ugly Day – Peter Tchir
From Peter Tchir Of TF Market Advisors
Market Commentary: What An Ugly, Ugly Day
We are finishing at the lows or within spitting distance of the lows across the board, except for Gold, which traded like gold, all day long. Nothing really did anything to slow the increase in the price of gold. Overnight stock trading was less painful than many people expected (and [...]