Le chat is out of the bag. Treasury Secretary Timothy Geithner, speaking at a conference, said German Chancellor Angela Merkel has repeatedly said “we are not going to have a Lehman Brothers.” Which probably means there is every chance they may have a Lehman Brothers, only one immeasurably bigger. European Parliament Member Daniel Hannan writes: “We are approaching end-game. Greece is supposed to pay off its next tranche of debts on 17 October, and the markets are now expecting what this blog has long predicted: a large-scale default.”
But since this could lead directly to the unraveling of the European project, no one will countenance even mentioning the apparently inevitable. French President Nicolas Sarkozy has “reaffirmed France’s determination to put everything in place to save Greece,” a wording which strongly suggests he’s going to try to get somebody else to pay for it.
That someone, according to John Ellis at the Business Insider, is likely to be the U.S. taxpayer. He predicts that before long Europe is going to ask Obama for a trillion dollars.
We’re at the end of “extend and pretend.” The crisis of the Eurozone is now acute. The headlines are specific. The best analysis suggests that only extraordinary action can keep it afloat. And even that would work only to delay the inevitable for a month or two more. …
In the days leading up to the collapse of Lehman Brothers, then French Finance Minister (now IMF Managing Director) Chistine Lagarde told then-Treasury Secretary Hank Paulson that he could not allow Lehman to fail. The ramifications would be catastrophic, she said. She was mostly right.
Three years later, it will be Angela Merkel talking to President Obama,Treasury Secretary Geithner and Federal Reserve Bank Chairman Ben Bernanke with exactly the same message. The United States government and the Federal Reserve must come to the rescue of the Eurozone or the ramifications will be catastrophic. And she will say that she needs roughly $1 trillion in financial guarantees and liquidity support. That’s the number that will calm the markets.
That would be crazy. But we live in crazy times. Whether Ellis’ predictions will be borne out by events remains to be seen. But even the BBC now admits that “fear is coursing through the corridors of Brussels.” It is a fear, the BBC says, which has been there for some time, like a nightmare lurking in the background, like the dim awareness that the bill from the credit card company is in the mail. And now the envelope has arrived, bearing the shiny bright logo of the finance company. And it’s all they can do to slit the envelope open and turn the page quiveringly to the page which says “amount due.” They describe the pathetic sight in Brussels of leaders sending sidelong glances, talking out loud largely to themselves, wishing things were better and generally looking vainly for an exit that does not exist.
In the absence of a plan, officials have turned to shock treatment. This was the moment to frighten.
First up, European Commission President Jose Manual Barroso, for whom this is now an existential crisis. “We are confronted with the most serious challenge of a generation,” he told the European Parliament in Strasbourg. “This is a fight for the jobs and prosperity of families in all our member states. This is a fight for the economic and political future of Europe. This is a fight for what Europe represents in the world. This is a fight for European integration itself.”
In his final words the warning was clear; the whole vision for a united Europe is at stake.
Next up, Polish Finance Minister Jacek Rostowski. He warned that crisis could destroy the European Union. “Europe is in danger,” he told the parliament. “If the eurozone breaks up, the EU will not be able to survive.”
For the German Chancellor, too, there is no Europe without the euro. These statements come without any explanation as to why the EU would fold without the single currency.
“The old system is visibly sinking and its captains are visibly confused, milling around on deck, now running here, now running there.”
Asea, in storm waters great, turn into the wind, shorten sail, put out a sea anchor and hang on. It amounts to taking the storm head on… The first rule in the Collision Regulations (Rules of the Nautical Road) is that nothing in the rules shall prevent the master of the vessel from taking prudent action to insure the safety of the vessel and all aboard.
A prudent master will NOT bail out anyone, thus threatening the entire vessel to gain a few minutes for the elites to look for lifeboats. Benefits are kaput. Cash flow is king.
…How in hell can the U.S., which borrows money every day just to operate, guarentee Europes debt’s ? And who would believe us when we do it ?
You’re right, Dave D. Who wants to bet they sell themselves to China?
Europe wants a trillion from . . . us?
Gee, is China tapped out?
There’s a huge amount of fraud in the system. The DJIA is currently up 270 points from today’s minimum on almost no volume and bad news (Europe is on the verge of implosion), refer to:
http://finance.yahoo.com/q/bc?s=^DJI&t=1d
The linear ramp up on no volume is classic PPT. The markets are now so broken that the PPT does not even try to hide it’s manipulation. I wonder if we’re looking at a situation of 20% unemployment, gold at $3000/ounce, rampant hidden inflation (expensive food and fuel) and the DJIA at 13,000 entirely due to the PPT? I wonder what the folks commanding the PPT are thinking? Is having an utterly discredited stock market a good thing after our economy has gone Tango Uniform?
What am I missing here; if it really is an existential crisis for the EU and the French banking system, why won’t the ECB just print Euros and inflate their way out of the mess?
The U.S. doesn’t have $1 trillion. We would have to borrow it from China. Why don’t the Euros just ask China for the money and cut out the middleman?
I’m not even being facetious here.
2. Dave D.: …How in hell can the U.S., which borrows money every day just to operate, guarentee Europes debt’s ?
News for ya Dave, we already did.
In summary, instead of doing everything in its power to stimulate reserve, and thus cash, accumulation at domestic (US) banks which would in turn encourage lending to US borrowers, the Fed has been conducting yet another stealthy foreign bank rescue operation, which rerouted $600 billion in capital from potential borrowers to insolvent foreign financial institutions in the past 7 months. QE2 was nothing more (or less) than another European bank rescue operation!
Grrr. Frustration. Greece, et al, still has revenue, of some sort. Spend only cash….service the debt, make the payroll, at whatever reduced rate works out to exactly equal income.
It is gruesome, it is difficult, but the storm does not take prisoners.
Don’t sink the ship! Hardtack is easier on the stomach than seawater.
well they are – Italy is talking to China about some of those good Italian government bonds and some fine leather shoes that are already being counterfeited in Beijing for a tenth the price.
however, only Ben Bernanke has the golden goose, he doesn’t need China – which scares China even more.
otoh, if it’s guarantees you want, talk to AIG – they issued untold trillions in CDS using nothing but an inkjet printer and a twitter page. impressive, huh? Bernie Madoff, eat your heart out.
“a growing sense that the crisis is reaching a climax”,
but when will the climax reach the denouement, the accident, adversity, affliction, alluvion, bad luck, bad news, blow, calamity, casualty, cataclysm, contretemps, crash, culmination, curtains, debacle, desolation, devastation, disaster, emergency, end, failure, fatality, fiasco, finale, grief, hardship, havoc, ill, infliction, meltdown, misadventure, mischance, misery, misfortune, mishap, reverse, scourge, stroke, termination, the worst, tragedy, trial, trouble, upshot, waterloo, wreck?
the President is too full of himself to listen just yet
Actually, he seems to be running on empty these days: “President Barack Obama’s reelection campaign just sent out this creepy e-mail, with the subject line ‘Sometime soon, can we meet for dinner?’ asking supporters to donate to his campaign for a chance to have dinner with Obama.”
http://www.businessinsider.com/obama-sends-out-creepy-email-sometime-soon-can-we-meet-for-dinner-2011-9
Then there’s this remark from Our Laddie of Perpetual Camp(aigning):
“Obama talked about his proposal to pay for the plan by raising taxes on big corporations and the wealthy, an idea that has not sat well with Republicans in Congress.
‘We need to build an economy that lasts,” he said. “If you love me, you gotta help me pass this bill.’”
http://jammiewearingfool.blogspot.com/2011/09/obama-if-you-love-me-you-gotta-help-me.html
I hope Jay Carney has a mega-stash of Prozac somewhere.
Terri at 8. And of course it wasn’t real money. Just more “full faith and confidence” in the US economy…an economy almost completely gutted by…them.
IN A SMALL BRUSSELS TOWN
In silence they stood
As the body was borne
With slow solemn steps
To a hearse drab and worn
Black horses at ease
As the casket was placed
In the bowels of the hearse
A life’s promise erased
And so it has gone
Gone the socialist dream
Gone and buried for good
‘Mid the Left’s silent scream
In a small Brussels town
In a drizzling rain
The corpse was interred
The Left’s promise in vain
Rostowski not only said that destruction of euro-zone will destroy UE, he also hinted that its breaking will lead to war.
How terrible!!
I am not surprised by the panic, with the breakdown of euro-zone all these politicians in Brussels will loose their privileges.
The thing that WOULD help would be to let Greece go from the EU (where it didn’t belong to begin with) so they could return to their own currency, default and devalue the hell out of it and start over from there. This is the way these issues have been dealt with for centuries and it is the only way that actually works. But the Euro-crats don’t want to do this because it would set a precedent: if Greece can go, so can Spain, Italy, etc, and there goes their DREAM of a united European uber-bureaucratic state or something. So they are effectively forcing Greece to go thru economic torture to keep their own personal delusions alive. It’s Sisyphus vs. the boulder, only the boulder is getting bigger and will soon crush them all.
It was June 1815, the last time a small town in Belgium (ht. Walt, as always) held center stage. Then it meant the end of United Europe I. Now, just 30 miles away, UEII is about to fail. The Grand Army was out of steam. Nappy was out of ideas and health.
Eurocrats have lost their way.
Pay the bills.
“The Tea Party may not provide an end point, but it certainly serves as a starting line.”
I’m afraid the Tea Party is neither. It is America’s “thin red line” against governmental insanity. Pray it holds.
China won’t even touch Greek’s debt, they’re not going to buy it through a middleman.
The one true debt ceiling is being hit, where people simply won’t loan more money because they don’t believe they’ll get it back.
Greece is a case of international embezzlement — something that can’t be cured — just resolved.
It is unnecessary to kick Greece out of the EU. The Euro Zone needs to shrink back to those nations able to withstand its rigors.
No one is going to start a war — Europe is a land of single sons.
When Greece abandons the Euro it will be no different than leaving the Gold Standard. Life will go on.
It is ESSENTIAL that the credit-enablers of this embezzlement be the ones who take the hit. It’s the only cure.
You know, the “Downfall” Hitler’s Bunker scene-You Tube writers are going to really have fun with Merkel’s “Lehman Bros” comment, and probably this whole situation.
Speaking of Belgium: hasn’t it been “without a government” for more than a year now? Belgium seems to be functioning, after a European fashion. If that’s the case for Belgium, does Europe need an EU?
The biggest tragedy? So much of this could have been avoided on both sides of The Pond if there wasn’t a malignant envy of those who strive for prosperity and making something of themselves in the open market. When a ruined Germany emerged from WII, their first economic minister defied the occupying powers and deregulated the German economy with a vengeance. The result was an economic miracle, subsequently pissed away by fat and happy Germans. The same has happened here in the U.S. One of the pitfalls of following a freemarket system successfully for a few years is that people divert the fruits of prosperity into more entitlements and other benefits through their votes, instead of fattening their own personal bank accounts; and I am talking about the middle class here, not the “rich.” This means that many Americans (and Europeans) are making it more difficult for those who insist the government get out of people’s economic lives.
Once the EU flips its canoe in the river of Utopia-Undone they will find there is no bail-out. You can’t bail out a capsized canoe. Then:
1) the EU canoe will float upside down and the EU-bahs will cling to the hull because it is there;
2) as the current sweeps them round the river bends, the EU hull will pass close to solid gravel bars but the current will sweep the EU hull into deeper water away from the left bank towards the right bank;
3) step 2 will be repeated for as long as the EU-bahs cling to the upturned hull; left bank, right bank but never making shore;
4) now the river of Utopia-Undone is glacier fed and is cold enough to numb any EU-bah :- eventually each EU nation will have to swim for shore on its ownsome, leaving the upturned EU-canoe to float down the river of Utopia-Undone into the sea of Fantasy-Lost.
I don’t think a bail-out by the U.S, China or Santa Claus is in the cards. Some EU nations will end up beached on the left bank, some will beach on the right. After the chill has worn off the shivering and trembling will start. The ones who can summon the energy to find food and start a fire will survive. The others may just lie down and go to sleep.
“Gee, is China tapped out?”
Effectively. China just told Europe that it was sorry, but it was well past time for Europe to go out and get a job and an apartment and support itself because China was just damn tired of . . . uh . . . because it would help Europe to grow as a person.
Version two has China telling the U.S.A. that it’s not going to keep bailing Europe out without us getting some skin in the game, so now would be a great time to hop in.
Europe cease to exist!?? Oh, please; you’d think they haven’t been there for the past several centuries or so. What’ll cease to exist is the reputations and soft nest these idiots have built for themselves in Brussels. They should go back to marks, francs, pesetas, and lira and re-think the whole thing.
Headline in the New York Post a few weeks from now:
AMERICA TO EUROPE: DROP DEAD
5. Eggplant
What is ”PPT”?
Perhaps this will spread more fear:
http://www.washingtonpost.com/world/middle-east/islamists-emerge-in-force-in-new-libya/2011/09/12/gIQAdU10QK_story.html?wprss=rss_world
Two Islamist nations side-by-side … what is the likelihood of a merger?
PPT == Plunge Protection Taskforce or something. Designed to stop a stock market melt down. Check it out on Google or Bing.
LarryD @ 18: The one true debt ceiling is being hit, where people simply won’t loan more money because they don’t believe they’ll get it back.
I think that’s right but it’s a mushy ceiling, if China doesn’t bail out its customers, it goes dark itself – or fears it will. I’m never sure of the exact nature of Chinese rationality. And BernankeCare has kept the US perking for three years now, and I believe is now being extended to ECBCare – massive and continuous printing of fiat money that beggars Peter to pay Paul while pushing the day of reckoning (see my #10 above for synonyms!) off by months, or years, or who knows.
I mean, I am appalled that the mounting crisis is causing money to flood into the US even while we are no better off than anyone else – or are we? The trillions that have been held harmless overseas for twenty years, are NOW coming home???? And they don’t want wheat or Pentiums or Lady Gaga, they want T-Bills at 1.9%? If I hadn’t long since burned my 1970s Econ texts, I’d burn them now.
Every attempt to unify the european subcontinent under a single authority has failed. History or even a board game would show you that.
America is going to be okay. Sooner or later, we’ll get out of this rut. I’m betting sooner rather than later.
“Every attempt to unify the european subcontinent under a single authority has failed.”
They all bow to gravity. And to the market.
I’m beginning to think nobody in Europe has ever read the US Constitution. Obama can ‘lend’ bombs to France and England but he cannot lend money. Only Congress can do that.
The odds of Congress sending off one Trillion to Europe is about the same as the Stanley Cup finals being held in ‘ell.
Gordon pretty much got it right. The little guy is so hammered that a few more blows won’t matter. It is the rich and powerful that will get it when the banking cartel collapses. Think French Revolution times 100. Instead of a heart attack as the #1 cause of death among bankers, it will be ‘falling from tree while entangled with rope’.
Since that is a mouthful, the ME’s will shorten it to ‘Bankers disease’.
Here is an idea: We give the Yerps the trillon dollars if they agree to hire all those people Obama wants to give jobs!
I fully expect that idea to be advanced by someone.
Back in 1972 a Democrat advanced what he thought was a great idea. We would take all the people on welfare and instead use the money to give them jobs instead.
A brilliant reporter (by today’s standards, anyway) asked “Won’t that cost more money than the welfare does now?” To which the Dem replied “No, because with jobs those people will be paying taxes so it won’t cost any more than having them on welfare.”
Eggplant:
I believe that Market Pumping is happening, as usual. It’s like this. They HAVE to get the Stock Market up over the next few months because that is when the firms report their dividends and capital gains. Not only does getting things up higher look good, but those gains are reported to the shareholders as income. And then that income is taxed based on that report, even if the share price goes through the floor 15 nanoseconds later.
“Obama can ‘lend’ bombs to France and England but he cannot lend money. Only Congress can do that.”
You need to first append to the beginning of each of your sentences the words “Under a Rule of Law”. Then, you need to remember that you speak of Obama.
Executive branch regulation can accomplish much the same result with no legislative involvement. Or, Obama has avenues through which he could simply order such a transfer to be made as parts of other, existing, programs, and it would be done and it would then be someone else’s burden to object after-the-fact and get it enforced, a process we’ve not seen used lately nearly as often as it could have been. Finally, if he simply ordered his Treasury to write the check law-be-damned, I’m guessing they’d write the check. Rule of Law is for suckers, you know?
I’m just tired of seeing Obama’s actions and then thinking “but he can’t DO that, it’s illegal . . .” and then remembering too late that those two phrases can be separated.
RWE:
I think you are incorrect there. I believe you are only taxed on realized gains. That is, you are only taxed on the difference between your buy price and the price you actually sold them at.
I would like to see a cite for your claim above.
I think their need to keep the stock market rising is two fold:
1. Not to stampede the proletariat,
2. Allow their buddies to sell at a profit.
32. stoicheion Obama can ‘lend’ bombs to France and England but he cannot lend money. Only Congress can do that.
Or a consortium of independent US banks like the, uh, Fed.
19. blert No one is going to start a war — Europe is a land of single sons.
Europe could barely manage 100 sorties per day (of which about 40 were strike sorties) against Libya, which is about as far away from Italy as Cuba is from Florida, with most of the country’s population less than an hour’s drive from the Med by camel.
All this fear and drama for as Michelle Obama put it “a flag.”
None of this produces anything of value. The problem is caused by expenditures, like Greek pensions, unmatched by production.
RWE @ 33 said:
“They HAVE to get the Stock Market up over the next few months because that is when the firms report their dividends and capital gains. Not only does getting things up higher look good, but those gains are reported to the shareholders as income. And then that income is taxed based on that report, even if the share price goes through the floor 15 nanoseconds later.”
That’s an interesting theory. I wonder if the trillions of dollars spent by the PPT pumping up the stock market is paid back with higher taxes?
For every buyer there is a seller. The PPT buys declining stocks with Ben Bernanke’s phoney-baloney monopoly money. Someone sold those stocks to the PPT on the assumption that the stocks would go down. When market forces try to further drive down the price of stocks, the PPT buys even more to maintain price support. Of course the PPT is smart about it and buys stocks on low volume or uses HFT to best advantage. During a high volume market correction, the PPT stays out of the market. That’s the only reason why major market corrections are mathematically possible. I guess the theory is the PPT will make back their money after market recovery, i.e. during a growing economy, they’ll slowly sell back their stocks and then toss the remitted fiat money into a shredder. The obvious danger here is the market does not recover resulting in an inflation due to too much fiat money being pumped into the economic system with the Federal Reserve owning most or all of the common stocks and bonds (this might have already happened). Under that scenario, the DJIA could go to infinity (only the Fed makes the paper profits) with the dollar becoming worthless (gold goes parabolic) and the economy grinding to a dead halt.
I think I’m gonna report all y’all to ATTACK WATCH!!!!
http://tv.breitbart.com/attack-watch-the-commercial/
Does bailing out the Euro follow Obama’s leftist water mellon agenda, of breaking the system so it can be replaced by a leftist dictatorship of the proletariat?
Does Obama have enough power and influence left to use executive orders to do what he wants?
US Senate Democrats are quoted as saying his current jobs bill can’t pass in the Senate. Also the loss in the two special elections Congressional House seat election in New York and Nevada have increased the chatter about sending a delegation to Obama asking him not to run in 2012. It looks like they are going to take away the keys to the money printing press. If that is the case, no way for a bail out of the EU with US Money.
From a Democrat Political Adviser:
“I’m advising a lot of my clients not to run in 2012. It would be a waste of money and stain them for runs in the future.”
“I think you are incorrect there. I believe you are only taxed on realized gains.”
You are thinking of what happens when you own shares in a fund of some kind. If you own shares of a specific stock, payments are directly to you.
33. RWE
Pumping the stock price doesn’t figure into dividends, though. Dividends are based on corporate profits and the confidence the management has that the profits will continue. In rational periods, that’s what the stock price is based on too, but it’s easier to manipulate the market. To manipulate the profits you have to be the management, and willing to risk violating the SEC regulations.
The only way pumping the stock affects someones income is if they sell the stock while it’s elevated. The difference between the price they sold it for and the price they bought it for is either a profit or loss, depending on how long they held the stock, its taxed as either capital gains or ordinary income.
LD:
It’s much more palatable to declare a dividend when your stock price is up, and when the people making the decision also own lots of stock, it’s also downright pleasurable.
““As we buy securities in the open market we both lower term premiums in the open market and we push investors into other kinds of investments like the stock market and corporate bonds and the like.”
– Ben Bernanke, March 2nd, 2011
If Obama goes around Congress to give the European banks $1T, he will be impeached.
If Bernanke does it, he will be impeached.
The environment in the US is ugly enough, and giving another $1T to the same Europeans who took several tens of $B of TARP money and QE money, and have used every imaginable opportunity to criticize, embarrass and undermine the US for the last decade, will unleash a firestorm.
What role does Russia play here? Europe has practically been on its knees toward Moscow in recent years. What is there play here? Is a Trillion even enough to fill this hole?
“It is a fear, the BBC says, which has been there for some time, like a nightmare lurking in the background, like the dim awareness that the bill from the credit card company is in the mail. And now the envelope has arrived, bearing the shiny bright logo of the finance company. And it’s all they can do to slit the envelope open and turn the page quiveringly to the page which says “amount due”.”
Bravo, Wretchard! One of the reasons I come here is writing like the above. I laughed when I read this because I’ve been in that position before. It takes every ounce of energy in your soul to open that envelope!
@16:
“It was June 1815, the last time a small town in Belgium (ht. Walt, as always) held center stage. Then it meant the end of United Europe I. Now, just 30 miles away, UEII is about to fail.”
This time around the Concert of Europe is starting to sound like a death metal concert where the band showers the audience with raw meat and blood.
I know many here think we have no money to lend, but Helo Ben lent out $16 trillion from 2008 to 2010, and who knows how much since. What’s another trillion among friends?
Turbo Tax and the Bernank will go to Buraq pretty soon and ask approval for the money. Buraq will give it to them., because he does what his masters tell him to do, no matter what the legality.
But after that new bailout is announced, who among the Republican Presidential Contenders will raise a honest to goodness fuss? That will separate the men/women from the boys and girls. I’m a thinkin all the announced contenders will go along because that’s what their masters have told them to do.
Enter Sarah stage right. It’l be her time to show who deserves to be Pres. Mama Grizzly will announce and eat the rest of the crowd for lunch with their me-tooism. I’m thinkin that’s what she is waiting for.
I suspect that nasty place called the BBC would like to totally bankrupt the entire world. They seem to be hoping Obama would do them the favor of obliging.
It is a very strange situation when the Donks want Berry gone and the Repugs are fighting to keep him in to run against.
What a long strange trip it’s been.
euro euro euro your boat, gently down the drain…..
If Europe collapses, it will be hard on China, India, Russia, and Islam, because they all sell a lot of stuff to Europe. China and India sell electronics and cheap manufactured goods, Russia and Islam sell gas & oil.
The only solution is to print Euros by the trainload, kill the debt holders with inflation, and then hit everyone with a millionaire’s tax because kids with good allowances will be millionaires.
We mostly buy stuff from Europe. That will all get cheaper if the Euro falls against the dollar. Who knows? Maybe instead of a small Honda, I can get a large Mercedes.
They don’t buy much from us other than grain, and all our grain surplus is going to be turned into ethanol anyway, because 15,000 farmers get to pick our candidates for the next Presidential election, so the foreign grain sales won’t be missed.
As was said above, there is no money to loan them. We already loaned the last cent and and $twelve trillion more than that to Congress for a 50 year spending spree.
In the important news; hackers stole naked pictures of Scareltt Johanssen from her cell phone and they are on TMZ and the FBI is on the case. That should lead the evening news. Who cares about a hard to understand European story with no good pictures?
re Three years later, it will be Angela Merkel talking to President Obama,Treasury Secretary Geithner and Federal Reserve Bank Chairman Ben Bernanke with exactly the same message. The United States government and the Federal Reserve must come to the rescue of the Eurozone or the ramifications will be catastrophic. And she will say that she needs roughly $1 trillion in financial guarantees and liquidity support. That’s the number that will calm the markets.
How can 0bama & Co. give that kind of money away? I thought Congress had the power of the purse? It is hard for me to believe the Republican controlled house would meekly accept that. They have 0bama on the ropes, why would they allow it?
Cap’n PeachFuzz, I may have to track you down & punish you for that. I was drinking an ice-cold carbonated beverage when I read your post, and now it’s all over the monitor, and lodged in my sinuses.
Meanwhile,
The irony of our president castigating the Europeans for their lack of leadership, it’s enough to make me heave for a week.
The Fumbler-in-Chief doesn’t have the analytical skills to draw a chalk outline around a body on the sidewalk.
How can Europe erupt into war? I mean, who even has an army over there? (Other than the US)
51/Capt Peachfuzz
euro euro euro your boat, gently down the drain…..
scarily, scarily, scarily, scarily, it was all in vain…
“If you can keep your head when all about you
Are losing theirs and blaming it on you;
If you can trust yourself when all men doubt you,
But make allowance for their doubting too:
If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise;
“If you can dream—and not make dreams your master;
If you can think—and not make thoughts your aim,
If you can meet with Triumph and Disaster
And treat those two impostors just the same:
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build ’em up with worn-out tools;
“If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss:
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: “Hold on!”
“If you can talk with crowds and keep your virtue,
Or walk with Kings—nor lose the common touch,
If neither foes nor loving friends can hurt you,
If all men count with you, but none too much:
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it,
And—which is more—you’ll be a Man, my son!”
41. bobby b
Are you perhaps thinking of dividends?
There are many companies, especially tech companies, that do not pay dividends, and in any event, a change in the stock price of a company does not have much to do with the dividend that it pays, which is based on profitability and cash on hand.
So, my original comment still stands, I think.
When it all goes south, there is only one international organization with the captial and global network of governance to jump in and save the day. This would the be the HRCC or as its city state (nation) is know the Vatican. They have been saving, lending, and taxing money for over 1000 years, and I would assume have the reserves to bail out the entire global financial system. All in turn for being put in charge. You know, attend mass, and pay tithe (only a 10% global tax). It is prophsied to come to pass, and looks like will be sooner than later.
35, 38, 42:
Wrong. I own no stock, only mutual funds. You are taxed on distributed capital gains (capital gains rate) and dividends (regular income tax rate) without ever selling a share. If you sell a share you are also taxed on appreciation of the share. I have had this discussion with people who told me that can’t true be a great many times, I assure you. I have been taxed tens of thousands of dollars for mutual funds that ended up being worth far less at the time I paid the taxes than they were in the prior year. For the 2008 crash I was told I owed taxes on $85K in gains when in reality I ended up with a $300K loss by April 15. And there is no way to claim a loss because you did not sell anything.
Now if the price of stock goes up and the value of the mutual funds goes up accordingly that clearly figures into the taxable gains for the fund, regardless of corporate earnings of the indivdual stocks. Trying to figure out how much pumping up the stock market in time for the gains to be calculated affects the taxable income from mutual funds is too complicated for any one person to figure out – but I am sure that people in government have done so.
http://www.realclearpolitics.com/video/2011/09/14/geithner_were_in_an_early_stage_of_a_crisis.html
The logrolling idiocy of Geithner, Obama, and well the whole political class … as if they have this menu of great things they can do painlessly and effectively to boost the economy to any level they like.
… if only the evil, stupid, greedy Republicans did not get in the way.
It takes a deep breath and some reflection to even try to deconstruct what is wrong with it.
The basic idea that they have this menu of magic tricks, is false.
It is then obscured with politically agitation, hiding the lie, and effectively abandoning ab initio any serious attempt to address it.
Now, if there were NOTHING that could be done, that might be politically rational. But let’s assume that even if there are no magic tricks that will fix everything painlessly, there are some serious and helpful, probably painful, steps that we could all agree on and initiate. These won’t happen, because of the pissant attitude of the Dems, taking themselves out of the game the moment they speak, hoping to somehow drag their opponents down with them, or (unlikely though the geometry seems) throwing them somehow even lower.
–
Now, to deconstruct my own reaction, I’m assuming that taxing the rich to spend on construction projects and public worker unions, is not after all stimulative, and is in fact not a suggestion a serious person would consider.
Nor is printing an extra one or two trillion dollars for the same, nor borrowing an extra one or two trillion dollars, assuming it existed on the planet to be borrowed.
Now, OF these choices, I’ve said here that the printing of money, may actually be palliative and mostly harmless, far more harmless than the econ text books traditionally said.
But I haven’t heard that openly discussed. It was NOT in Obama’s latest.
Turkey must be rejoicing that it did not get to join the EU and Eurozone.
UK was also wise to keep its economic independence in the EU.
rwe @ 60: I haven’t exactly followed your branch of the discussion, about whether PPT boosting prices temporarily nets a nice tax dividend. I suppose it does, for cases like yours in which a mutual fund’s internal trading *realizes* some of that boost. Of course anyone simply holding stock as it goes up, pays no tax on the book increase, we are not (yet) taxed on a mark-to-market basis. And because gains are not adjusted for inflation, and capital loss deductions against income are horribly limited (have those numbers been adjusted in a generation?), churn does produce tax revenue at some loss to many investors, though it’s mainly the amateurs like you and me who suffer. I doubt it (churn) produces enough taxes to make it an intentional strategy. I’m sure the PPT takes a whole lot more for the mere performance of services than is produced from them in taxes, they do it for our universal benefit of course.
(shakes head sadly)
#53 feeblemind
I thought Congress had the power of the purse? It is hard for me to believe the Republican controlled house would meekly accept that.
According to a piece of paper we will celebrate this weekend, that is so. And especially the House. However, we have seen that the Institutional Republicans’ testosterone count is so low, that they may carry purses, but have no practical power over them.
Subotai Bahadur
@ 26. Gordon:
PPT = “Plunge Protection Team.” A (formerly) shadow cabal whose purpose is to artificially prop up the stock market in times such as these. Here’s an excellent essay on the subject.
The Saudis and the Chinese are the only governments with enough of a surplus to make Europe solvent again. The thing is that if Europe is not solvent, they will only have the US to sell to, and thanks to this president, we aren’t doing a whole lot better than the EU.
We have already bailed out the Euro once before. The Euro currency used to be very nearly one dollar in value. It has to return to that level once again. There is no way they can sustain their exports unless they devalue.
The thing is that they have never had to increase the money supply. Those Germans and French who worked so damned hard to make their money will see it evaporate while the slacker countries continue their trends.
Everyone knew this would happen sooner or later. One would think that someone would have thought about this before now.
Oh, and our states aren’t doing so well either. Thankfully, many of them are curbing their spending because they realize the extent of the financial danger they’re in. Greece, Spain, Portugal, Ireland, and Italy are still trying to figure out where all their debt is.
Wow. I hope they survive this and learn to embrace the reality of their capitalist limitations.
59. willy This would the be the HRCC or as its city state (nation) is know the Vatican. They have been saving, lending, and taxing money for over 1000 years, and I would assume have the reserves to bail out the entire global financial system.
You are kidding, right? The Lateran III council (1179) decreed that persons who accepted interest on loans could receive neither the sacraments nor Christian burial. Pope Sixtus V (d. 1590) condemned the practice of charging interest as “detestable to God and man, damned by the sacred canons and contrary to Christian charity.” The papal prohibition on usury meant that it was a sin to charge interest on a money loan.
10 josh: otoh, if it’s guarantees you want, talk to AIG – they issued untold trillions in CDS using nothing but an inkjet printer and a twitter page. impressive, huh? Bernie Madoff, eat your heart out.
Barack Obama figured Solyndra would be able to generate energy from all the sunshine coming out of his ass after the 2008 election.
Fear is doing the rounds down near the border with Mexico as well:
http://diversityischaos.blogspot.com/2011/09/social-media-users-who-denounce-drug.html
Some people would predict that we will start to see RPGs (*) and many of those AK 47s that the ATF exported to the cartels come into the border states in reasonable numbers soon.
Afghanistan in the US …
(*) No, not Role Playing Games, Rocket Propelled Grenades, like the venerable RPG-7.
It seems China is not so fast as expected to buy (Italian) Eurobonds but rather setting preconditions. Could be similar to those made to Iceland (and as a consequence China ends up by owning 0.3% of Icelandic territory)? Surely they will build hotels and resorts there (as opposed to radar/nuclear submarine base close to NATO zone).
Thank heavens for Barry and his non-interventionist policies.
“This is a fight for the jobs and prosperity of families in all our member states. This is a fight for the economic and political future of Europe. This is a fight for what Europe represents in the world. This is a fight for European integration itself.”
Sounds worth a trillion dollars to me. We get the whole thing right? We can break it up into little pieces and sell off the crappy parts. Let me see.
Spain to Mexico.
Germany to Turkey.
France to Canada.
Italy to Morocco
England to Hong Kong
Portugal to Brazil
…
When you default on your home, you get evicted. We can turn the good parts into the world largest tourist trap and have Disney manage it. The concessions can sell Napa Valley wine.
Ship all of the dead weight to Africa as slave labor. Ought to about settle most the books for the last millennia or two. The Euros want to forget about their heritage and be a part of the greater global community, breaking it up and selling off the assets is the best way to do it. Beats debtor prison.
“Are you perhaps thinking of dividends?”
Well, yeah. Wasn’t the original post about the government’s desire to pump up the market and thus the payment of dividends because that’s a tax event for the shareholder and the government can levy a tax right now and boy oh boy does the government ever want to levy that tax right now . . . ?
If we took a turn off of dividends and I missed it, sorry, my bad.
Turkey wins
The only place solar makes economic sense is in MENA.
Turkey is now the economic model and leader of that region.
Turkey has the only world class engineering, science and medical graduate schools in MENA–they need to replicate their success template to the the broader MENA–which they are now doing
73. bobby b
The original comment I criticized mentioned both dividends and capital gains and implied that unrealized capital gains would be treated as taxable income just as dividends are.
Unrealized capital gains are never taxed IMO, and the following article talks about capital gains in the hands of mutual funds (where they are actually realized capital gains that the mutual fund then distributes).
http://taxes.about.com/od/capitalgains/a/CapitalGainsTax_5.htm
So, I disagree with the original poster’s claim about the issue and dividends are based on company profitability and cash holdings, not stock price (if they do issue dividends, and a lot of tech companies do not).
“Turkey wins”
Vic old bean, Turkey has an average IQ of 90. It isn’t going anywhere.
As for AttackWatch, hoping we get a post on that soon. Meanwhile, since they are asking us to report “attacks,” I plan on reporting many, many unfair, slanderous attacks by the MSM on conservatives. I figure they’ll find it good reading. Why don’t ya’ll join me?
he said. “If you love me, you gotta help me pass this bill.”
But I’m just not that into you
“a comment that must surely rank as among the most banal and content-free of platitudes ever uttered on the world stage by one incompetent to another”
—————————————————————————–
A phrase that must rank as one of the most perspicacious ever uttered. Wow!
Most points have been covered (which is not usual on this blog).
Economically speaking, for the short term the debt crisis in the Europe will relieve pressure on the US dollar – but will not solve the US debt problem. Some investments will surely flow into the US dollar. This is a good time to sell into the rallies and get into cash and gold.
As the 14 month clock ticks down it will be more difficult to sell into rallies. Keep your powder dry and remember that 0bama is gone – only when he is gone – and not before.
” . . . dividends are based on company profitability and cash holdings, not stock price . . . ”
As an aspirational statement, I can’t disagree.
But will you agree that more dividends are paid when stock prices are high than when they’re low?
Turkey is now the economic model and leader of that region.
Got that right.
http://hurryupharry.org/2011/09/15/syria-turkey-and-lt-general-husain-harmoush/
So, the Euros will come to us for a trillion dollars. Haven’t we given those people enough over the past 100 or so years? Hundreds of thousands of lives in war, the Marshall Plan, low or non-existent tariffs on their products… now they want more?
No. Enough!
Listen for warnings of calamities to come should America not fork over a TRILLION (????!!!!) dollars. Wars, plagues, invasions, the rise of totalitarian states as if the European SOVIET isn’t a soft tyranny already. All the stops will be pulled in an effort to scare the world (America) into financial hostage taking. And this will be the chance to throw America down the deep chasm of insolvency that the Creature in the White House will seize. Never. Should anyone in our government propose a financial rescue for the European Soviet, they could start by kissing the arses of millions of Americas and then go elsewhere. Let them suffer the inevitable result of their insanity. They deserve it because every last one of their grand designs were hatched in the minds of the delusional. Socialism SUX on stilts. It’s time the world learned that lesson. Permanently.
The Eurozone and the Euro itself was always doomed to fail, simply because Europe is made up of independent states with their own interests and their own rivalries.
In fact a lot of down to earth economists and real politik Europeans predicted that the Euro wouldn’t last 10 years. Well the Euro has been around for about 9 years and it may not make it to the tenth.
But maybe Barack Obama will make a magic, spellbinding speech and sprinkle some of his verbal “pixie dust” over the Euro and presto chango, Europe will be saved just like Obama “saved” America!
God help ‘em!
Victor is an Israeli spy.
Once the banks start failing, the derivatives market will collapse. We are already in a world-wide depression (NOT recession). Total banking collapse is just around the corner. 3 years, no more.
I’ve noticed over the past twelve years so many euro countries reject support and even seek to punish Israel, following suit since Erdogan gave his infamous “Davos” speech in Johannisberg in 2000.
One wonders whether or not euro woes are connected to that bible verse- “He who blesses Israel, I will bless. He who curses Israel, I will curse”.
?…
Sometimes superstition, in moderation of course, is probably can be a good thing.
Gad, it all sounds like the Onion, or it would be if the following were to be the next news flash-
(the) Ben Bernanke has been appointed Supreme EU Financial Minister today….Ben bernanke has been appointed to the post of Supreme Financial Minister for European Budget Office today. When asked whether he would resign his current position as fed chairman, Bernanke said “…uh, no, I won’t be resigning. Retaining my position at the Fed with help facilitate things. There won’t be any red tape or forms to fill out, or having to ask anybody for anything, in order to move the money, which is the best where moving money around and the government are concerned.”
What we’re looking at here is a large-scale version of the Japanese “economic bubble” collapse of the early 1990s, with the European nation-states playing the roles’ of the various Japanese industrial and financial concerns who caused it by overinvesting in “assets” that ultimately had their values based mainly on imagination, as opposed to actual worth. At least one example was land speculation during the 1980s building boom in the Japanese cities; at one point, based on trade value alone, it could be mathematically “proven” that the land under Tokyo was worth more that the total of the land area of the United States between Long island, NY and Lompoc, CA. (The parallel to the stock speculation and leveraged buying that led to the 1929 Wall street collapse is obvious.)
The most notable parallel here is that when a Japanese combine was in financial straits, they would seek aid from other combines- and generally get it. Anything to avoid a member of the “ruling class” going down. When the lot became overextended, they sought help in both financial and legislative forms from the government. In the process, they caused the collapse of two governments.
The EU situation is a larger expression of the same mindset, with the EU council in the role of the Diet. And, I suspect, the U.S. being seen as the Prime Minister.
A final “out” for the European states may be to copy the behavior of Third World countries which pile up massive debt through loans from the IMF, etc., and then ask for “debt forgiveness” to avoid having to pay them back. Generally because even with such loans, most such states still operate on the kleptocracy system (i.e,., those on top are thieves), and so they have no money to “pay back” with.
I could imagine Greece, Spain, etc., asking for- or in fact demanding- that all their debts, to anyone, be wiped clean. Followed by demands for “more assistance”, meaning more unsecured loans. If they get away with it, they can keep on rolling out the socialist barrel to hold power- at least until the next crisis due to overspending and underproducing occurs.
In fact, if they get it, I could see Obama trying it, too. It would appeal to his self-righteousness.
The question is, is China going to give The One, and his like-minded “elites’” in Europe, what they want?
clear ether
eon
“Europe wants a trillion from . . . us?”
And in return we want 10 million engineers, scientists, etc. to work for one-quarter wages for us for the rest of their lives. They must move to the US, finance their own transportation and and housing and renounce forever US citizenship. We will however, like Obama’s cabinet, the House, and Senate, exempt them from income taxes.
It seems that there may be a plan afoot to inflate the debts away through currency swaps.
http://www.zerohedge.com/news/global-liquidity-bailout-arrives-ecb-announces-emergency-liquidity-providing-operations-conjunc
This is a very interesting article – read the comments.
#85 Annoy Mouse
Victor is an Israeli spy.
Hmm. Interesting. I make him as most likely SVR or GRU; either a Turk in their employ or a Russian posing as a Turkish sympathizer. I have wondered at times, if he is local, if he could be from the Obama For America internet operation as a low probability alternative. The idea that he might be an Israeli agent trying to stir up anger against the Turks or Russians by obvious, blatant anti-Israeli agitation had not occurred to me. Dezinformatsia and Taqqiya overlap naturally. But in the hall of mirrors that is information warfare, one’s identity is always nebulous.
#92 harry
Interesting. The problem, of course, is that they are treating the problem as one of liquidity and not one of solvency. And their every effort digs the hole deeper. A little later in the morning is an analysis of the effects of the intervention.
http://www.zerohedge.com/news/global-central-bank-intervention-impact-total-retrace#comments
Appropriately, it is right above another posting about how the Misery Index [inflation + unemployment] here is back to 1983 levels, and presumably heading for the halcyon days of 1979.
They have to keep hitting the panic button harder and more frequently to avoid the organic waste from meeting the rotating airfoil. That is not a good long term [or even medium term] plan of action.
Subotai Bahadur
Bluntly, we have been in the midst of a civil war for quite a while now over welfare state debt bondage (slavery). Up until now, it has been fairly subliminal, but as we see with Greece, things can get nasty quickly. As the European house of cards collapses, it will eventually prove contagious and pull down our own larger sand castle on the beech (just to mix metaphors of disaster). This can’t be avoided, but the civil war we will experience may be channeled, and that is what the Tea Party is really trying to do. Here is a book about “Surviving Civil War II” http://www.futurnamics.com/civilwar.php
…or posing as a Turkish sympathizer.
Um, no, Victor is “genuine”. (That AM is such a card!)
But the Turks DO need all the help they can get, the poor dears:
http://www.commentarymagazine.com/2011/09/15/erdogan-turks/
http://www.atimes.com/atimes/Middle_East/MH10Ak01.html
File under: Time to cut the Istanbul….
I thought it was Eurabia. It’s time for the urabia part to fork over some dough.
The apparatchiks in Brussels are, so far, completely immune to anything so mundane as democratic pressures. They look at the disastrous state of the economies in the various nations of Europe and see nothing but an opportunity. People who always opposed the creation of the euro and others who passionately advocated it have long agreed on one thing, that monetary union could not work, without political union: a single government, with a single tax policy. The sceptics are saying, rightly, “I told you so.” The true-believers, on the other hand, are using the train-wreck as a pretext to push for yet more powers for the undemocratic centre, refusing to accept the blatant fact that the euro was always an all too predictable catastrophe.
I certainly don’t think that the hard-pressed American taxpayer should supply a single cent to save the euro. In Britain, we don’t use the euro, but we have still been stung for billions of pounds in the euro’s cause and I object to every penny. The half-hearted attempts by our current government to reduce the deficit have been entirely negated by the same government’s acquiescence in costly, but entirely futile (and blatantly illegal), attempts to prop up the moribund euro. We are told that the consequence of a euro-collapse will be disastrous, which may well be true; the problem is that we are throwing huge sums of money at measures which show no sign of preventing, or even of mitigating, the eventual collapse. There is every reason to think that the postponement of the denouement will merely amplify its impact.
While I think that the American taxpayer should take every step to shield himself or herself from the disaster unfolding in Europe, successive administrations can’t escape the blame. Clinton, Bush and Obama have all lent their blessing to the undemocratic, centralising, self-appointed elite in Europe, who have foisted the euro on unenthusiastic nations; I don’t think that any electorate has yet voted explicitly in favour of joining the euro. Obama continues to urge on the euro-centralisers, even as the euro approaches the edge of the cliff. Blind support for the euro tends to go hand in hand with visceral anti-Americanism in Europe. Not sure what that says about the forty-fourth President of the United States.
…And fear is coursing through the Turkish government:
http://www.ynetnews.com/articles/0,7340,L-4122972,00.html
Who and what will save Erdogan?
File under: Brinksmanship par excellence