Moderator: Peak Moderation
I don't understand the question.DominicJ wrote:UE
What exactly is Spain going to say?
**** Off chinese bank you'll lend me money at the rate I say or else?
And, in a nutshell, there is the Eurozone problem. How it plays out is going to be very interesting.UndercoverElephant wrote:I don't understand the question.DominicJ wrote:UE
What exactly is Spain going to say?
**** Off chinese bank you'll lend me money at the rate I say or else?
Spain has almost the same set of problems Greece has. It's broke, it can't devalue, and it doesn't want to leave the eurozone.
If I was a betting man, I'd put my money on Germany/Finland/Holland leaving the euro or creating an "inner euro", followed by a major devaluation of the "outer euro." The Germans don't want to be blamed for breaking up the euro, but the Finns and Dutch might just decide it is time to get the hell out of there, and that would give the Germans cover to follow them.SleeperService wrote:. How it plays out is going to be very interesting.
Any solution that proposes more debt as a solution to a debt crisis is clearly insane. Lack of proper control just makes it even worse.energy-village wrote:The much praised system for permanently bailing out the banks in Euroland seems madness to me (European Stability Mechanism). It was rejected in the USA. A fruit machine for the bankers, but with 3 cherries guaranteed every time.
If I understand correctly the ESM will be completely immune from any legal, administrative or government challenges. Debt addicts will be able to find relief from an all powerful pimp who answers to no one.
The Guardian - Live - 19/07/12
Eurozone crisis live: Spain suffers bond auction blow
http://www.guardian.co.uk/business/2012 ... nd-auction
The Guardian - Live - 20/07/12
Finance ministers to sign off Spanish bank rescue
Article continues ...
Anything to keep the show on the road it would seem.
7.284%....SleeperService wrote:A bit of healthy paranoia there UE.UndercoverElephant wrote:Odd that they seem to hit the danger territory of 7%, then don't go any higher. Anyone might think that the official data is being fiddled...Aurora wrote:
The rate won't go much above 7%, as things are at the moment, because the market sees that as unrepayable. Not very long ago that trigger was 6.5%If the debt is offered at higher rates then there are very few takers as it's seen as a certain default, or at least a savage haircut.
Aw mierda!The Guardian - 20/07/12
Euro crisis deepens as time starts to run out for Spain's banks and regions
Spain drags the eurozone closer to the edge of collapse despite winning the backing of finance ministers from the single currency's major economies for a €100bn bank rescue fund.
Article continues ...
So at some point in the very near future, Spain is going to ask for a major sovereign bailout. And this is with Italy following down a similar path and not so far behind. There has to be a circuit breaker.Marchel Alexandrovich from Jefferies Fixed Income said the markets are already bracing for second bigger rescue of around €400bn. “A few more weeks like this and Madrid is going to decide to it has nothing more to lose and call for a full sovereign bail-out,” he said. “Then we will find out if there really is any money in the EU kitty.
“If the ECB goes on holiday without doing anything more, this is going to snowball. We’re way past point where any country can deliver fiscal measures on its own. People are not going to buy Spanish and Italian debt right now whatever ever they do. There has to be a circuit breaker.”
“There is no money left to pay for services,” said treasury minister Cristobal Montoro, calling for years of hard sacrifice. “We have to raise VAT to stay in Europe. There is no other option. All alternatives are worse. This has gone beyond ideologies.”
Beyond Ideologies
Please read that last paragraph carefully. I disagree strongly with the finance minister. This is not "beyond ideologies". Instead it is precisely about the foolish ideology of staying in the eurozone at all costs, including 25% unemployment and tax hikes upon tax hikes.
Also note the misstatement (or misquote), the VAT need to be hiked to "stay in Europe". I assure you Spain will stay in Europe regardless of what happens, and it can stay in the European Union as well.
The correct alternative, is for Spain to leave the European Monetary Union. Stubborn ideology, unfortunately, is still in the way.
At some point, however (and this could be it), Spain is going to hike the VAT one time too many. At that juncture, the willingness of Spanish voters to stay on the euro will fly right out the window.
The Guardian - 22/07/12
Markets fear for Spanish economy as local governments seek financial aid
ECB president insists the eurozone will not collapse as Murcia becomes latest region to request funding.
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It looks like the IMF wants to save Spain, but only if it can rid itself of Greece. This is why I think it may turn out to be Germany that has to leave the eurozone.SleeperService wrote:Spain's bond rate gets to 7.4%
http://www.bbc.co.uk/news/business-18950896
this could be the end of the line. The only thing left is for the IMF et al to take a savage haircut to buy more time. Can't see that happening