Something really bad is about to happen

Bund, Treasury, Gilt Yields Drop to Records as Euro Crisis Grows

June 1 (Bloomberg) -- German, U.S. and U.K. yields fell to all-time lows after Spanish Economy Minister Luis de Guindos said the future of the euro is at stake, driving demand for the safest government securities.

German two-year note yields fell below zero for the first time and 10-year yields on Austrian, Dutch, Finnish and French bonds dropped to records as data affirmed euro-region manufacturing shrank in May. Spain's 10-year yield exceeded 6.5 percent for a fifth day after de Guindos said yesterday that we're in a "very difficult situation." The euro weakened to a 23-month low versus the dollar as euro-region unemployment rose to the most on record and before today's U.S. payrolls report.

"There is a real sense of impending panic spreading now and that's exacerbating all of these moves," said John Wraith, a fixed-income strategist at Bank of America Merrill Lynch in London. "Safe havens are alive and well and risk aversion is likely to intensify as long as Europe's problems remain unresolved."

I think we're seeing panic setting in. The markets just opened in NY and the Dow is already down over 150 points. A dismal unemployment report won't help.

These record-low bond yields (for the countries considered safe havens) mean that there's a flight to quality of epic proportions underway, which means people are at least scared, perhaps panicking.

I'm afraid that that the economic warning lights are all flashing red.

I hope I'm wrong.

I think that the socialist bureaucrats in France are right: austerity is bullshit, spend more.

There must be a way to sell bonds to China and Japan until you become prosperous......

Oh Noes, more inflations!

Something bad is ABOUT to happen? We are in about the fifth year of "something bad".

Nyarlathotep wrote:

Something bad is ABOUT to happen? We are in about the fifth year of "something bad".

Yeah, poor Nyarl has resorted to making pumpkin pie ice cream in his bathtub. Like a FUCKING CAVEMAN.

You don't know "bad". Nobody in our generation or our parents generation knows "bad". Our grandparents did, though. Grapes o' Wrath shit. That's bad.

Nyarlathotep wrote:

Something bad is ABOUT to happen? We are in about the fifth year of "something bad".

Yeah but things were headed in the right direction at least for a little while. The unemployment rate was coming down. The latest jobs report was awful. A lot worse that expected.

Well the end of the world is right around the corner. What could be worse than that? Perhaps seeing my 401k become a 201k?

izittrue wrote:

Well the end of the world is right around the corner. What could be worse than that? Perhaps seeing my 401k become a 201k?

401k ----> 401

Dismal jobs report sends Dow into 275-point dive
By DANIEL WAGNER, AP Business Writer – 28 minutes ago

Alarmed by an ominously weak U.S. jobs report, investors ran for safety Friday from new worries about a global slowdown, sending the Dow Jones industrial average to its biggest loss since November.

The nearly 275-point dive wiped out the last of the index's gains for the year.

And now all we need is one of the Euro-countries to bail on the bail out, and leave the Euro....

they gotta keep spending .... they should allow people to retire at 45 to start off with.

Here's one from the (sort of) private sector:

GM to cut about one-fourth of U.S. pension liability (Reuters via Yahoo)

Abdul Alhazred wrote:

Here's one from the (sort of) private sector:

GM to cut about one-fourth of U.S. pension liability (Reuters via Yahoo)

Yea read that. Only for managers though.
I guess there waiting until they can crush the union before they go after the union side of the pension fund.

Skeeve wrote:

I guess there waiting until ... after the election ... before they go after the union side of the pension fund.

ftfy

http://www.washingtonpost.com/opinions/ ... story.html

Anaxagoras wrote:

http://www.washingtonpost.com/opinions/euro-zone-on-the-brink/2012/06/04/gJQAiUOVDV_story.html

Headline:
Euro zone on the brink They need a leader.

I'm living it up in vegas right now, has the collapse happened yet?

This article by Niall Ferguson is framed in that particularly annoying way (how economic armageddon in Europe is bad for Obama!) but the central point is that things are really, really bad in Europe right now:

Niall Ferguson on How Europe Could Cost Obama the Election

Indeed, having a monetary union without any of the other institutions of a federal state is proving to be a disastrously unstable combination. The paradox is that monetary union is causing Europe to disintegrate—the opposite of what was intended. According to the IMF, GDP will contract this year by 4.7 percent in Greece, 3.3 percent in Portugal, 1.9 percent in Italy, and 1.8 percent in Spain. The unemployment rate in Spain is 24 percent, in Greece 22 percent, and in Portugal 14 percent. Public debt exceeds 100 percent of GDP in Greece, Ireland, Italy, and Portugal. These countries’ long-term interest rates are four or more times higher than Germany’s.
. . .
Europe’s monetary union has entered a doom loop. Recessions in peripheral Europe are driving down tax revenues and increasing welfare spending. Despite German-imposed austerity programs, deficits keep overshooting the targets. But these governments can no longer borrow at affordable rates. Meanwhile, their banks are hemorrhaging deposits. Up until now, broke banks could prop up broke governments by borrowing from the European Central Bank and using the cash to buy their governments’ bonds. But that game is over. For there is nothing the ECB can do to stop panicky Spaniards swapping “Spanish euros” for “German euros”—in other words, putting their savings into German banks for fear that Spanish accounts will one day be converted back into pesetas.

This is a potentially explosive process. Already the centrifugal forces at work have generated a vast imbalance within the TARGET2 system, which processes payments between the euro-zone member states’ central banks. In effect, the peripheral central banks owe the German Bundesbank €650 billion. This is a figure that grows larger with every passing week.

What makes all of this so terrifying is that it vividly recalls the events of the summer of 1931. It’s often forgotten that the Great Depression, like a soccer match, was a game of two halves. If the first half was dominated by the U.S. stock-market crash, the second was kicked off by a European banking crisis. It began in May 1931, when the biggest bank in Austria, the Creditanstalt, was revealed to be insolvent. The lethal blow was the collapse two months later of the Danat Bank, one of the biggest in Germany.
. . .
So, after more than two years of procrastination—known universally as “kicking the can down the road”—Europe has reached the moment of truth.

It’s binary. Either German Chancellor Angela Merkel has to bow to the logic of her predecessor but one, Helmut Kohl, who always saw monetary union as a route to federalism, or it’s over—and the process of European disintegration is about to spiral out of control. Put another way: if Europe’s leaders try kicking the can one more time, it will turn out to be packed with explosives.

Interesting, contrast that with the way they are painting the latest Spain 'bail out' with such rosy colours....
Oil climbs above $100 on Spanish banks rescue, Iran

...
The larger-than-expected Spanish rescue eased some worries over Europe's debt crisis, boosting stock markets and a range of commodities.

Hong Kong shares jump on Spain bank aid; China edges higher

US Stock Futures Rise...

Skeeve wrote:

Interesting, contrast that with the way they are painting the latest Spain 'bail out' with such rosy colours....
Oil climbs above $100 on Spanish banks rescue, Iran

...
The larger-than-expected Spanish rescue eased some worries over Europe's debt crisis, boosting stock markets and a range of commodities.

Hong Kong shares jump on Spain bank aid; China edges higher

US Stock Futures Rise...

That won't last long. They haven't managed to kick the can very far down the road. The banks have hardly been rescued. The bailout is probably less than the amount of capital that has fled the country's banks in the last couple months or so.

Spain capital flight doubles as risk of European bailout rises

Spain's Central Bank said today that capital flight in March surged to 66 billion euros, double the previous record set in December 2011, before the worst of the country’s economic problems were exposed.

If similar amounts fled the country in April and May, then that would be 200 billion euros in 3 months, and in another month and a half, they'll need another bailout unless things calm down and people stop pulling their money out of the banks.

pulling it out and buying dollars?

Well, the euro committee is getting what it asked for. It seems that what worked for Germany when it absorbed the east isn't ok when it's madrid and athens who need help.

I'm still waiting for the crisis in Italy. But that can change every 5 minutes.

ed wrote:

pulling it out and buying dollars?

Bitcoins.

http://business.financialpost.com/2012/ ... y-bitcoin/

Bearguin wrote:

ed wrote:

pulling it out and buying dollars?

Bitcoins.

http://business.financialpost.com/2012/ ... y-bitcoin/

Anaxagoras wrote:

Skeeve wrote:

Interesting, contrast that with the way they are painting the latest Spain 'bail out' with such rosy colours....
Oil climbs above $100 on Spanish banks rescue, Iran

...
The larger-than-expected Spanish rescue eased some worries over Europe's debt crisis, boosting stock markets and a range of commodities.

Hong Kong shares jump on Spain bank aid; China edges higher

US Stock Futures Rise...

That won't last long. They haven't managed to kick the can very far down the road. The banks have hardly been rescued. The bailout is probably less than the amount of capital that has fled the country's banks in the last couple months or so.

Spain capital flight doubles as risk of European bailout rises

Spain's Central Bank said today that capital flight in March surged to 66 billion euros, double the previous record set in December 2011, before the worst of the country’s economic problems were exposed.

If similar amounts fled the country in April and May, then that would be 200 billion euros in 3 months, and in another month and a half, they'll need another bailout unless things calm down and people stop pulling their money out of the banks.

Hrm, looks like its not so rosey after all: Lack of detail on Spain bank rescue plan spooks investors; stocks down, bond yields up

MADRID — Spain’s borrowing costs rose sharply Tuesday for the second day in a row and stocks seesawed as investors fretted about a lack of detail over how a lifeline of up to €100 billion ($125 billion) from the other countries in the 17-nation eurozone will be deployed to save troubled Spanish banks.

The interest rate — or yield — on Spain’s 10-year bond rose to 6.62 percent, close to the 7 percent level that forced Greece, Ireland and Portugal to ask for more rescues of their public finances.

If only there were some middle ground between massive spending and crippling austerity! Curse this dichotomous universe... what I wouldn't give for a continuum...

corplinx wrote:

I'm living it up in vegas right now, has the collapse happened yet?

The collapse hit Vegas years ago, take a look at life beyond the strip.

jj wrote:

Well, the euro committee is getting what it asked for. It seems that what worked for Germany when it absorbed the east isn't ok when it's madrid and athens who need help.

Correct. Greece is far too corrupt for that to work, and Spainand Italy aren't that far behind on the corruption scale.

Must be something in the Mediterranean air...

WildCat wrote:

corplinx wrote:

I'm living it up in vegas right now, has the collapse happened yet?

The collapse hit Vegas years ago, take a look at life beyond the strip.

http://www.pinballmuseum.org/

The greatest thing in America, easily.

World Bank sees eurozone crisis taking global toll

...
In the report, a scheduled update to the bank's overview of the global economy, the bank forecasts sluggish growth in high-income countries, like Japan, Germany and the United States, in the coming years. It expects more modest growth in the middle-income economies that have been the engine of the global recovery, like China and Brazil. And it sees developing countries in Africa, Asia and Latin America experiencing slower growth than they have for most of the past decade.

swell

WildCat wrote:

jj wrote:

Well, the euro committee is getting what it asked for. It seems that what worked for Germany when it absorbed the east isn't ok when it's madrid and athens who need help.

Correct. Greece is far too corrupt for that to work, and Spainand Italy aren't that far behind on the corruption scale.

Must be something in the Mediterranean air...

Actually, we don't know that, the Germans haven't let them try.

EvilYeti wrote:

WildCat wrote:

corplinx wrote:

I'm living it up in vegas right now, has the collapse happened yet?

The collapse hit Vegas years ago, take a look at life beyond the strip.

http://www.pinballmuseum.org/

The greatest thing in America, easily.

Dayam, there might be something in Lost Wages I might actually enjoy, beyond leaving it.

I could happily spend the rest of my life in that place. *SIGH*

Greek Voting Past, Europe Returns to Fiscal Rescue

BERLIN — After Greek elections eased fears that the country’s exit from the euro zone was imminent, attention turned Monday to an even bigger challenge: restoring the economic body to health with Greece still in it.
A respite from market pressure early Monday proved to be short-lived, as investors shifted their attention from political infighting in Athens to the larger question of whether European leaders could find a more lasting solution to a debacle now well into its third year.

Looks like they managed to kick-the-can a bit further down the road...again.

Skeeve wrote:

Anaxagoras wrote:

Skeeve wrote:

Interesting, contrast that with the way they are painting the latest Spain 'bail out' with such rosy colours....
Oil climbs above $100 on Spanish banks rescue, Iran

...
The larger-than-expected Spanish rescue eased some worries over Europe's debt crisis, boosting stock markets and a range of commodities.

Hong Kong shares jump on Spain bank aid; China edges higher

US Stock Futures Rise...

That won't last long. They haven't managed to kick the can very far down the road. The banks have hardly been rescued. The bailout is probably less than the amount of capital that has fled the country's banks in the last couple months or so.

Spain capital flight doubles as risk of European bailout rises

Spain's Central Bank said today that capital flight in March surged to 66 billion euros, double the previous record set in December 2011, before the worst of the country’s economic problems were exposed.

If similar amounts fled the country in April and May, then that would be 200 billion euros in 3 months, and in another month and a half, they'll need another bailout unless things calm down and people stop pulling their money out of the banks.

Hrm, looks like its not so rosey after all: Lack of detail on Spain bank rescue plan spooks investors; stocks down, bond yields up

MADRID — Spain’s borrowing costs rose sharply Tuesday for the second day in a row and stocks seesawed as investors fretted about a lack of detail over how a lifeline of up to €100 billion ($125 billion) from the other countries in the 17-nation eurozone will be deployed to save troubled Spanish banks.

The interest rate — or yield — on Spain’s 10-year bond rose to 6.62 percent, close to the 7 percent level that forced Greece, Ireland and Portugal to ask for more rescues of their public finances.

The last 100 billion euro bailout was 10 whole days ago. Now they're about to ask for more:

Spain to seek bank aid as borrowing costs soar

LUXEMBOURG/MADRID, June 21 (Reuters) - Independent auditors said Spanish banks may need up to 62 billion euros in extra capital, to be filled mostly by a euro zone bailout, after Spain's medium-term borrowing costs spiralled to a euro-era record on Thursday.

Euro zone finance ministers met in Luxembourg to discuss how to channel up to 100 billion euros ($126 billion) in aid to Spanish lenders weighed down by bad debts from a burst property bubble. Madrid's economy minister said a formal request would be made in days for the bailout, which was agreed two weeks ago.

Many in the markets see the package as a mere prelude to a full programme for the Spanish state, which Madrid vehemently denies it will need.

Anaxagoras wrote:

...big snip...

The last 100 billion euro bailout was 10 whole days ago. Now they're about to ask for more:

Spain to seek bank aid as borrowing costs soar

LUXEMBOURG/MADRID, June 21 (Reuters) - Independent auditors said Spanish banks may need up to 62 billion euros in extra capital, to be filled mostly by a euro zone bailout, after Spain's medium-term borrowing costs spiralled to a euro-era record on Thursday.

Euro zone finance ministers met in Luxembourg to discuss how to channel up to 100 billion euros ($126 billion) in aid to Spanish lenders weighed down by bad debts from a burst property bubble. Madrid's economy minister said a formal request would be made in days for the bailout, which was agreed two weeks ago.

Many in the markets see the package as a mere prelude to a full programme for the Spanish state, which Madrid vehemently denies it will need.

Spain Crisis: Bond Yield Hits Bailout Danger Zone
And the usual suspects want a heap of interest to buy them, WTH, this is like Greece not all that long ago...

MADRID (AP) — Spain's ability to manage its debt without an international bailout was thrown into doubt Monday after investors pushed its borrowing rates up to the level at which Greece, Portugal and Ireland had sought help.

I think we are well and truly screwed, once again.

Skeeve wrote:

I think we are well and truly screwed, once again.

Good. I hope our whole damned civilization collapses because of it too.

Nyarlathotep wrote:

Skeeve wrote:

I think we are well and truly screwed, once again.

Good. I hope our whole damned civilization collapses because of it too.

Come on Narl, don't sugar-coat it like that, tell us how you really feel!

Skeeve wrote:

Nyarlathotep wrote:

Skeeve wrote:

I think we are well and truly screwed, once again.

Good. I hope our whole damned civilization collapses because of it too.

Come on Narl, don't sugar-coat it like that, tell us how you really feel!

A good old fashioned Nuclear War putting an end to our species is probably hoping for a bit much out of this, but hope springs eternal. Maybe we'll piss off the Chinese somehow in all this.

Credit Suisse Cut 3 Levels as Moody's Downgrades Biggest Banks

June 21 (Bloomberg) -- Credit Suisse Group AG's credit rating was cut three levels by Moody's Investors Service, Morgan Stanley was reduced two levels and 13 other banks were downgraded in moves that may shake up competition among Wall Street's biggest firms.

Credit Suisse, the second-largest Swiss bank, received the maximum reduction that Moody's said in February it may make during a review of global banks with capital markets operations. Morgan Stanley and UBS AG (UBSN), the other firms singled out for such a steep cut, were lowered two steps instead.

"All of the banks affected by today's actions have significant exposure to the volatility and risk of outsized losses inherent to capital-markets activities" Moody's Global Banking Managing Director Greg Bauer said today in a statement.

The downgrades may force banks to post additional collateral to trading partners in derivatives deals while boosting the companies' borrowing costs. Moody's said when it announced the review that it was seeking to reflect the banks' reliance on fragile in funding markets and increased pressures from regulation and a difficult market environment.

Isn't this the same Moody's that took CDO's swaps and other derivitative-based "instruments" (loaded with toxic shit) then turned around, and rated them AAA?
Why are these people still in buisness, much less out of jail?