imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
Features
latest news
best of news
syndication
commentary


KILLRADIO

VozMob

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN List




IMC Network:

Original Cities

www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Eurozone Bailout Deal: Hold the Cheers

by Stephen Lendman Sunday, Oct. 30, 2011 at 9:43 PM
lendmanstephen@sbcglobal.net

class war

Eurozone Bailout Deal: Hold the Cheers - by Stephen Lendman

More debt agreed on exacerbates an out-of-control problem. Only its final resolution is delayed. The longer crisis conditions continue and grow, the worse they'll be when day of reckoning time arrives.

Nemesis, the goddess of vengeance and punisher of hubris and arrogance in Greek mythology, may have final say.

She's here among us, unseen, patiently stalking, and awaiting when she'll make her presence known. Wagner's Brunnhilde in Der Ring des Nibelungen collects heros, not fools and hypocrites. However, they both announce themselves the same way, saying "Only the doomed see me."

Predatory Wall Street and Eurozone bankers will feel their sting. It's just a matter of time. Rage across hundreds of US and European cities hastens their day of reckoning. Hopefully it's coming soon. Nemesis will decide, but won't announce it.

Pledging an "ambitious and comprehensive" debt crisis solution, Eurozone leaders sold out to bankers. Europe's debt problem is too great to solve. Throwing good money after bad compounds it.

Greece and other troubled countries owe up to trillion. Germany, France, other donor countries, and the European Financial Stability Facility (EFSF) don't have enough resources to contribute without wrecking Eurozone economies.

As a result, doubts are being raised about optimistic assumptions, sketchy details, and important unanswered questions.

On October 28, the Wall Street Journal's Matthew Karnitschnig headlined, "Cheers and Skepticism Greet European Deal," saying:

Doubts remain about how the plan will work. "European leaders offered few details....signaling that it would take weeks, if not months, to work out the fine print."

As a result, many experts are skeptical. Speaking in Munich, Bundesbank president Jens Weidmann said:

"The envisaged leverage instruments are similar to those which were among the origins of the (2008) crisis, because they temporarily masked the risks."

RBC Dominion Securities currency strategist Stewart Hall believes funding the package "may prove a tough sell." Bond Vigilantes already expressed skepticism. More on that below.

Even if investors embrace the deal, bailing out out banks won't fix sick economies. As a result, economic weakness will deepen and remain protracted with no policy measure considered to boost growth.

Britain's Financial Times (FT) headlined, "Italy gives EU a post-party hangover," saying:

"Italy's borrowing costs have climbed to euro-era highs a day after European leaders agreed on a new plan to reverse the region's spiraling debt crisis, a worrying sign they have failed to regain the confidence of key financial markets."

Bond investors know that raising debt levels compounds an out-of-control problem. As a result, they responded negatively to the deal.

Because of its size, Italy's troubled economy threatens contagion if it needs a Greece-type bailout package as many expect.

Senior Italian financial officials warned Eurozone leaders that "plans to recapitalize banks have not been properly thought out and risk pushing Italy, and other economies, into recession, by forcing banks to withhold funding from businesses and consumers."

According to one unnamed official:

"This situation has not been fully considered and there is a severe risk that half (or more) of Europe ends up in recession."

Spain faces similar problems. As a result, bond yields jumped there as well to a deal investors believe falls short of resolution.

Germany's powerful constitutional court issued an injunction requiring full Bundestag approval for any urgent European Financial Stability Facility bond-buying operations.

Moreover, Eurozone finance ministers haven't agreed on ways to implement their announced leverage plan to provide around .3 trillion in bailout aid.

An end of November deadline was set to approve final details, but many experts doubt the viability of what's eventually announced. Moreover, some think months will pass before anything substantive is known.

On October 28, FT's Peter Spiegel headlined, "Deal widens Paris-Berlin divisions," saying:

Differences between the two countries run deep. During negotiations, they occasionally flared. An unnamed European official said:

"It is not about day-to-day things. There is a political and economic structure behind the two countries that is just too different."

As they go (along with Britain), so goes Europe. Since the crisis began, German officials "pushed for Greek bond investors to take losses on their holdings as a way to lance the boil of Greece's unsustainable debt levels."

Berlin worries about moral hazard risks. Germany finally got bondholders to take a 50% haircut, but not as announced. If enforced, it only applies to some Greek bonds.

Moreover, troubled banks in greater trouble from haircuts will get bailout help to compensate. In other words, taxpayers will bear most pain, not bankers responsible for today's crisis.

On October 28, New York Times writers Jack Ewing and David Jolly headlined, "Hitches Signal Further Difficulties for Euro Zone," saying:

Friday "(s)obriety displaced (Thursday's) euphoria," signaling a debt crisis far from resolved. Interest rates in troubled economies are rising, exacerbating conditions there. Bond vigilantes reacted negatively to a bad deal, even though details are unclear.

Investors lost confidence in Greece, Italy, Spain and other Eurozone countries. Fragile conditions signal trouble. Wednesday's deal solved nothing. According to UBS economist Martin Lueck:

"If you ask someone (in Germany), they'll say they want the Deutschemark back." Authorities already printed a supply just in case.

Regular Progressive Radio News Hour contributor Bob Chapman said "Europe doesn't know what to do and neither does the Fed and Bank of England." Their solutions exacerbate the mess they made, so they keep throwing money at it counterproductively instead of taking constructive resolution steps.

Conditions now are so out-of-control, "there are no solutions offered to solve the problem." Major US and European banks are insolvent. "Many carry two sets of books. Without a total audit one does not know the actual condition of these financial institutions. Market players and investors don't want the truth because they can't handle it. It means the game is over."

"Almost everywhere we look, problems are being extended and thrown into the future. How long it will take for the world monetary system to collapse no one knows, but it's inevitable."

Creating more of it can't solve debt problems. Economies are wrecked to save banks. Eventually, Greece will default. When it goes, so does Europe and America because financial systems in these countries are inter-connected.

A Final Comment

Kentwillard.com headlined "Euro Bailout Failure," saying:

"Have so many ever been so enthusiastic over a plan to beg, borrow, and steal .5 trillion?"

These type policies don't instill confidence. Most important, they don't work. At best, they buy time, creating a greater problem instead of solving current crisis conditions.

As explained above, the agreed Greek bond 50% haircut is far less than announced. Private investors were asked voluntarily to go along. Some will. Others won't. Moreover, default is certain.

Excluding German and French banks, others have to recapitalize. Italian, Spanish, Portuguese, Irish, and Greek banks need lots of help. Where it's coming from isn't clear. Who'll buy their countries' depreciating debt? Who'll buy theirs?

Eurozone leaders want China and Japan to help. They have their own troubles to resolve. Neither will throw good money after bad without something in return. Moreover, no nation will guarantee another trillion in debt, especially from troubled economies.

Out-of-control debt isn't resolved by more of it. So far, proposed solutions offer little else. In other words, years of failed policies are being repeated.

Nemesis will have final say on when culpable bankers and corrupted officials will be held accountable. Everyone, however, will share pain more severely than already. Expect hard times indeed to get harder.

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

http://www.progressiveradionetwork.com/the-progressive-news-hour/.

Report this post as:

Local News

GUIDE TO REBEL CITY LOS ANGELES AVAILABLE A12 5:39PM

lausd whistle blower A10 11:58PM

Website Upgrade A10 3:02AM

Help KCET and UCLA identify 60s-70s Chicano images A04 1:02PM

UCLA Luskin: Casting Youth Justice in a Different Light A02 11:58AM

Change Links April 2018 A01 11:27AM

Nuclear Shutdown News March 2018 M31 6:57PM

Join The Protest Rally in Glendale on April 10, 2018! M29 7:00PM

Join The Protest Rally in Glendale on April 10, 2018! M29 6:38PM

Spring 2018 National Immigrant Solidarity Network News Alert! M19 2:02PM

Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A. M16 5:40PM

Steve Mnuchin video at UCLA released M15 12:34AM

Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups M06 12:10PM

After Being Told He's 'Full of Sh*t' at School Event, Mnuchin Demands UCLA Suppress Video M02 11:44AM

Resolution of the Rent Strike in Boyle Heights M01 6:28PM

What Big Brother Knows About You and What You Can Do About It M01 3:30PM

Step Up As LAPD Chief Charlie Beck Steps Down F14 2:44PM

Our House Grief Support Center Hosts 9th Annual Run For Hope, April 29 F13 12:51PM

Don’t let this LA County Probation Department overhaul proposal sit on the shelf F13 11:04AM

Echo Park Residents Sue LA Over Controversial Development F12 8:51AM

Former Signal Hill police officer pleads guilty in road-rage incident in Irvine F09 10:25PM

Calif. Police Accused of 'Collusion' With Neo-Nazis After Release of Court Documents F09 7:14PM

Center for the Study of Political Graphics exhibit on Police Abuse posters F07 9:50AM

City Agrees to Settle Lawsuit Claiming Pasadena Police Officer Had His Sister Falsely Arre F04 3:17PM

Professor's Study Highlights Health Risks of Urban Oil Drilling F04 12:42PM

Claims paid involving Pasadena Police Department 2014 to present F04 10:52AM

Pasadenans - get your license plate reader records from police F03 11:11PM

LA Times Homicide Report F03 1:57PM

More Local News...

Other/Breaking News

Doxa du lobby A25 2:03AM

Tech workers organize A24 6:24PM

Architect Stephen Francis Jones A24 3:01PM

UN Forum Wrestles with Economic Policies 10 Years After Financial Crisis Islands Call for A24 12:34PM

Xyloglossie attitudinale A23 8:07AM

Shadowgun Legends Hack and Cheats A23 7:24AM

What does the Quran Say About Islamic Dress?? A21 4:15PM

Biodiversité ou la nature privatisée A20 11:22AM

The Market is a Universal Totalitarian Religion A20 7:14AM

Book Available about Hispanics and US Civil War by National Park Service A19 5:52PM

The Shortwave Report 04/20/18 Listen Globally! A19 4:01PM

The Republican 'Prolife' Party Is the Party of War, Execution, and Bear Cub Murder A19 11:48AM

Neurogenèse involutive A18 9:21AM

Paraphysique de la dictature étatique A16 10:13AM

Book Review: "The New Bonapartists" A16 3:45AM

The West Must Take the First Steps to Russia A14 12:25PM

Théorie générale de la révolution ou hommage à feu Mikhaïl Bakounine A14 3:30AM

The Shortwave Report 04/13/18 Listen Globally! A12 3:50PM

“Lost in a Dream” Singing Competition Winner to Be Chosen on April 15 for ,000 Prize! A12 3:48PM

The World Dependent on Central Banks A12 4:43AM

Ohio Governor Race: Dennis Kucinich & Richard Cordray Run Against Mike DeWine A11 9:40PM

March 2018 Honduras Coup Again Update A10 10:52PM

Apologie du zadisme insurrectionnel A10 3:33PM

ICE contract with license plate reader company A10 1:14PM

Palimpseste sisyphéen A09 11:23PM

Black Portraiture(S) IV: The Color of Silence...Cuba No...Cambridge Yes A09 5:32AM

Prohibiting Micro-Second Betting on the Exchanges A09 4:18AM

Prosecutors treat Muslims harsher than non-Muslims for the same crimes A08 10:33PM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy