Europe’s train-wreck and the inevitable collapse of the global economy

Read more: http://theeconomiccollapseblog.com/archives/oh-crud-19-reasons-why-it-is-time-to-start-freaking-out-about-the-global-economy
June 20, 2012 – ECONOMY – Yes, it is officially time to start freaking out about the global economy. The European financial system is falling apart and it is going to go down hard. If Europe was going to be saved, it would have happened by now. The big money insiders have already pulled their funds from vulnerable positions and they are ready to ride the coming chaos out. Over the next few months, the slow motion train-wrecks currently unfolding in Europe will continue to play out and things will likely really start really heating up in the fall, once summer vacations are over. Most Americans greatly underestimate how much Europe can affect the global economy. Europe actually has a larger population than the United States does. Europe also has a significantly larger economy and a much larger banking system. The world is more interconnected today than ever before, and a collapse of the financial system in Europe will cause a massive global recession. Once the global economy slides into another major recession, it is going to take years to recover. The pain is going to be immense. Yes, that is going to include the United States. Sadly, we never recovered from the last recession, and it is frightening to think about how much farther this next recession is going to knock us down. The big problem is that there is simply way, way, way too much debt in the United States and Europe. It has been a lot of fun spending all of this borrowed money, but now we get to pay the price. Citigroup Chief Economist Willem Buiter says that both Italy and Spain are going to need major bailouts and despite the new Greek elections in favor of a continual bailout by Euro nations, Greece will have to bite the austerity bullet with no chance of the loan payments being restructured as many Greeks are hoping. German Chancellor Angela Merkel has declared that Germany will not budge at all on the terms of the Greek bailout. If you are looking for some kind of a global financial miracle; you can stop watching. If European leaders had a master plan to save Europe, they would have shown it by now. The entire house of cards is starting to come down and things are going to get really messy. A lot of people both in the United States and in Europe are going to lose their jobs and their homes over the next few years. It is likely that the next recession will be even more painful than the last one was. –The Economic Collapse

June 20, 2012 – ECONOMY – We seem to be heading towards an economic downturn equivalent to the Great Depression of the 1930s. This isn’t a secret. The synthesis below is derived from: Lawrence Summers, Nouriel Roubini, Simon Johnson, Niall Ferguson, and Paul Krugman to name just a few. This crisis is not happening quickly. It’s more of a slow-motion train wreck—Greece’s crisis started in 2009. But that leaves a puzzle—why is the American stock market not reacting to obvious warning signs? Greece and Spain already have unemployment rates exceeding 20 percent. If that isn’t a depression, what is? Greece is in very deep trouble. Spain (the Euro’s fourth largest economy) just needed a $125 billion bank bailout. The weaker economies (Portugal, Ireland, Italy, Greece, Spain) face severe credit crunches as local banks lose deposits (withdrawn because of credit concerns and fear of forced devaluations following a Euro exit). Serious discussion is already taking place about the demise of the Euro, or even worse the break-up of the European common market—in which case unemployment rates across Europe will exceed 20 percent. National incomes will decline sharply, resulting in large-scale corporate insolvencies, with the crisis spilling over into the U.S. and Asia. The U.S. faces a recession next year if the Budget Control Act takes effect, which is likely if Obama wins and partisan gridlock continues. House Speaker Boehner already announced that if Obama’s re-elected, the GOP will treat us to another debt ceiling confrontation. If Romney wins, the Democrats (having learnt their lesson from the Republicans) would be as disruptive as possible. If the U.S. faces a major economic crisis triggered by the Euro’s collapse, bipartisan consensus on how to resolve it is unlikely. China’s growth model may be reaching its limit. If the rest of the world’s problem is too much ideology, China’s is arguably the absence of any ideology except kleptocracy. China lacks a functioning legal system. Its officials are disciplined by shadowy communist party entities, rather than accountable to a transparent legal system. Nominally ruling in the name of the proletarian vanguard, China is governed by princelings and kleptocrats, with friction escalating among the kleptocrats. Internationally, another regional war appears increasingly likely in the Middle East. The U.S. and/or Israel might have a military confrontation with Iran, over Iran’s nuclear ambitions. The Syrian situation has the potential to become a regional conflict (Syria, Iran and Russia fighting Syrian dissidents supported by some coalition of Saudi Arabia, the U.S., Turkey and other countries). A Middle Eastern war would lead to significant oil price increases, and trigger a global recession (at a minimum). Compared to the financial crisis of 2008, governments everywhere are far more constrained by weaker balance sheets, loss of public trust and crisis fatigue. –Business Insider


Personal Note: One of the key phrases I read in numerous financial reports is economic growth model. Years back growth was dependent upon quality - not quantity. Has anyone thought to put quality back into what it means to produce something? Better yet - instead of growth model why not a self-sustaining model where resources are put back into the infrastructure? What would it take to clean up the environment where there is clean air, water and the earth is back to sustaining itself as compared to the current situation of badly sustainable where fish, foul and life on the planet are dying off due to current pollutants. Wouldn't a focus on sustainable living really be a growth model that would be of benefit to life itself. Since the early 1900s - a hundred years ago, the myopic eye of business has been on the bottom line at the expense of the environment and condition of life on the planet. Is humankind so completely stupid to not understand this type of business mindset is detrimental to all life on the planet? Or is this just the mindset of a few out to get what they can for themselves at the expense of the rest of life on the planet? Clearly one can say what has been happening over the past 100 years with respect to pollution is a mitigated disaster. Just look and nuclear energy. I knew back in the 70s nuclear energy was a very bad idea. In fact, anyone with the facts at hand in terms of the risk to our precious environment would come to the logical conclusion that using nuclear energy was a significant disaster waiting to happen.

What really galls me is that free energy has been available since Tesla and ever since the days of Tesla, the few, the powerful and the rich sought to exploit the many for their own self-serving purposes. Free energy exists. That's a fact. Free energy that does not pollute exists. That's a fact. The breakaway civilization that lives underground in secret cities and off-world use it. That's a fact. Keeping nations in a state of war where they scramble for the few resources that are available to them is also a tragic fact. Especially when all that needs to happen is to open the door where information and resources are freely given to those who live on the surface of this planet. The self-serving oligarchy needs to end. There really is enough for everyone if resources were managed where even the youth were given and taught the basis in self-sustaining living which involves building shelter from the earth itself, raising vertical gardens/fish and harvesting water from the air - energy from the sun. All of this is possible, viable and yet does not happen. Why? What will it take to break up the bottleneck and get self-sustainable life on the right track?

We know vehicles can be powered by air, by magnetics, by water, by vegetable oil. Why so dependent upon oil which is abiotic?

Knowledge is freedom to pursue self-sustainability without harm to our earthly environment. If this were the bottom line of corporate world can you imagine the type of world we would all be living in?

FEDERAL RESERVE EXTENDS OPERATION TWIST, MARKETS FALLING MORE
Read more: http://www.businessinsider.com#ixzz1yLuHWood

I really liked what you said, Carol. I keep wondering if Earth Economics has everything to do with maximizing the money and resources going off-world -- as both punishment and payment???!!! Earth seems to be a Galactic Debtor's Prison Planet. Consider S.R. Haddon in 'Contact'. Remember when he spoke of how much he had 'taken' from Earth??? The bottom-line is the bottom-line. Follow the Money (all the way to the Moon, Mars, Sirius, and Orion???). BTW -- I like the idea of replacing 'Free-Enterprise' with 'Responsible-Enterprise' wherein 'Responsibility is Rewarded' and 'Irresponsibility is Punished'. Imagine a cross between Palmer Joss and Rachael Constantine (in 'Contact')!!! I liked both of them!!!

Carol wrote: Personal Note: One of the key phrases I read in numerous financial reports is economic growth model. Years back growth was dependent upon quality - not quantity. Has anyone thought to put quality back into what it means to produce something? Better yet - instead of growth model why not a self-sustaining model where resources are put back into the infrastructure? What would it take to clean up the environment where there is clean air, water and the earth is back to sustaining itself as compared to the current situation of badly sustainable where fish, foul and life on the planet are dying off due to current pollutants. Wouldn't a focus on sustainable living really be a growth model that would be of benefit to life itself. Since the early 1900s - a hundred years ago, the myopic eye of business has been on the bottom line at the expense of the environment and condition of life on the planet. Is humankind so completely stupid to not understand this type of business mindset is detrimental to all life on the planet? Or is this just the mindset of a few out to get what they can for themselves at the expense of the rest of life on the planet? Clearly one can say what has been happening over the past 100 years with respect to pollution is a mitigated disaster. Just look and nuclear energy. I knew back in the 70s nuclear energy was a very bad idea. In fact, anyone with the facts at hand in terms of the risk to our precious environment would come to the logical conclusion that using nuclear energy was a significant disaster waiting to happen.

What really galls me is that free energy has been available since Tesla and ever since the days of Tesla, the few, the powerful and the rich sought to exploit the many for their own self-serving purposes. Free energy exists. That's a fact. Free energy that does not pollute exists. That's a fact. The breakaway civilization that lives underground in secret cities and off-world use it. That's a fact. Keeping nations in a state of war where they scramble for the few resources that are available to them is also a tragic fact. Especially when all that needs to happen is to open the door where information and resources are freely given to those who live on the surface of this planet. The self-serving oligarchy needs to end. There really is enough for everyone if resources were managed where even the youth were given and taught the basis in self-sustaining living which involves building shelter from the earth itself, raising vertical gardens/fish and harvesting water from the air - energy from the sun. All of this is possible, viable and yet does not happen. Why? What will it take to break up the bottleneck and get self-sustainable life on the right track?

We know vehicles can be powered by air, by magnetics, by water, by vegetable oil. Why so dependent upon oil which is abiotic? Knowledge is freedom to pursue self-sustainability without harm to our earthly environment. If this were the bottom line of corporate world can you imagine the type of world we would all be living in?

orthodoxymoron wrote:I really liked what you said, Carol. I keep wondering if Earth Economics has everything to do with maximizing the money and resources going off-world -- as both punishment and payment???!!! Earth seems to be a Galactic Debtor's Prison Planet. Consider S.R. Haddon in 'Contact'. Remember when he spoke of how much he had 'taken' from Earth??? The bottom-line is the bottom-line. Follow the Money (all the way to the Moon, Mars, Sirius, and Orion???). BTW -- I like the idea of replacing 'Free-Enterprise' with 'Responsible-Enterprise' wherein 'Responsibility is Rewarded' and 'Irresponsibility is Punished'. Imagine a cross between Palmer Joss and Rachael Constantine in 'Contact'!!! I liked both of them!!!

Carol wrote: Personal Note: One of the key phrases I read in numerous financial reports is economic growth model. Years back growth was dependent upon quality - not quantity. Has anyone thought to put quality back into what it means to produce something? Better yet - instead of growth model why not a self-sustaining model where resources are put back into the infrastructure? What would it take to clean up the environment where there is clean air, water and the earth is back to sustaining itself as compared to the current situation of badly sustainable where fish, foul and life on the planet are dying off due to current pollutants. Wouldn't a focus on sustainable living really be a growth model that would be of benefit to life itself. Since the early 1900s - a hundred years ago, the myopic eye of business has been on the bottom line at the expense of the environment and condition of life on the planet. Is humankind so completely stupid to not understand this type of business mindset is detrimental to all life on the planet? Or is this just the mindset of a few out to get what they can for themselves at the expense of the rest of life on the planet? Clearly one can say what has been happening over the past 100 years with respect to pollution is a mitigated disaster. Just look and nuclear energy. I knew back in the 70s nuclear energy was a very bad idea. In fact, anyone with the facts at hand in terms of the risk to our precious environment would come to the logical conclusion that using nuclear energy was a significant disaster waiting to happen.

What really galls me is that free energy has been available since Tesla and ever since the days of Tesla, the few, the powerful and the rich sought to exploit the many for their own self-serving purposes. Free energy exists. That's a fact. Free energy that does not pollute exists. That's a fact. The breakaway civilization that lives underground in secret cities and off-world use it. That's a fact. Keeping nations in a state of war where they scramble for the few resources that are available to them is also a tragic fact. Especially when all that needs to happen is to open the door where information and resources are freely given to those who live on the surface of this planet. The self-serving oligarchy needs to end. There really is enough for everyone if resources were managed where even the youth were given and taught the basis in self-sustaining living which involves building shelter from the earth itself, raising vertical gardens/fish and harvesting water from the air - energy from the sun. All of this is possible, viable and yet does not happen. Why? What will it take to break up the bottleneck and get self-sustainable life on the right track?

We know vehicles can be powered by air, by magnetics, by water, by vegetable oil. Why so dependent upon oil which is abiotic? Knowledge is freedom to pursue self-sustainability without harm to our earthly environment. If this were the bottom line of corporate world can you imagine the type of world we would all be living in?

nice note Carol!

ortho, imho we should not follow the money to galaxies.... we should follow happiness

soul is naturally responsible, the true knowledge is taken away from this earth, this is why it is prison.

my 2 cnts

devakas, when seeking the source of criminal-activity, it is often useful to 'follow the money' to who is REALLY behind the murder and mayhem -- and not just stop with the hit-men and errand-boys. People are mad at the Federal Reserve, the Internal Revenue Service, the Rockefellers, the Rothschilds, the Royals, the Pope, et al -- but who do the Powers That Be take orders from??? There's a Cancer Growing on the Galaxy...

Here in Italy things are looking very bad from en economic point of view . We have a new unelected government headed by a so called professor of economic in a private university . He worked in the past for Goldman Sachs .
The first thing the new government did was to change the retirement age of the workers . Already in Italy workers receive some of the lowest salaries in the whole of EU . No only that but the employers are forced to pay almost the equivalent of a salary to the government for retirement benefit that will accrue when a person either has worked for 40 years or has reached the age of 70 . Then came a new tax on dwellings , a property tax , and in a few months the real estate market has entered a death spiral . The cost of petrol went up suddenly and as a results the sales of petrol took a dive of about 20% with the consequence that the government income is gone down too .
The private firms big or small have a silent partner . This silent partner is the government that demands often 50 % of the nett income in taxes . I have to tell you this because , I am sure that BS like this doesn't happens in any other country in the world . Assume a new shop of fruit and vegies is opened in a suburb , how does the finance police determines how much tax the owner should pay ? Simple they use a tape measure to measure up the place and the tax in calculated on the basis of the square meters of the shop . Very often people pay astronomic taxes even though the income of the business in relatively low . With the rip off tax rate present today , no surprise that people cheat the state by evading taxes . For this reason a lot of small firms pack up and move to Austria , Slovenia and Serbia . Those neighbors have a small company tax of about 20 % that compared to the Italian company tax is seen as paradise . So Italy ha suffered from the departure of many multinationals and now small companies that want to survive and not become victims of strangulation from the greedy state are escaping too. So the people are not spending money and unemployment is going up . The government cannot reduce the tax burden of the population because there is the debt to be serviced and there is the money to be spent on the most highly paid politicians , buying new fighter planes from the USA and participating to wars initiated by the colonial power that has over 100 military bases in Italy ....... Then there is the political interference in Italian affairs by the pedophiles in the Vatican .
Today ,in the newspapers , there is speculation that the state at one stage made a deal with the mafia .

http://it.wikipedia.org/wiki/Presunta_trattativa_tra_Stato_italiano_e_%22Cosa_nostra%22

This place is so corrupt that a small asteroid hitting the Vatican and pulverizing Rome would be welcome . I suppose that every western capital deserves an asteroid .....

Thanks for your posts enemyofNWO.

I remember in Hawaii local man said. Why in the world I have to wake up early, go to work everyday, wait for salary, drive to Costco retail store and stay in line to change money to bananas. I can take banana from the tree just by opening my window.

yes agree something wrong in this world, somebody had wrong ideas.

orthodoxymoron wrote:devakas, when seeking the source of criminal-activity, it is often useful to 'follow the money' to who is REALLY behind the murder and mayhem -- and not just stop with the hit-men and errand-boys. People are mad at the Federal Reserve, the Internal Revenue Service, the Rockefellers, the Rothschilds, the Royals, the Pope, et al -- but who do the Powers That Be take orders from??? There's a Cancer Growing on the Galaxy...

I hear you brother, but one astronaut said if only people know that universe if full of gold, there is no shortage.....

I'm just trying to make sense out of the last 10,000 years -- from a very non-traditional theological perspective -- which might be very important if we are on the brink of extinction -- as sinners in the hands of an angry god and/or goddess. I really think we should carefully consider all of the possibilities -- and I am simply modeling one or two possibilites -- relative to a reptilian v grey v human uncivil-war among soul-relatives -- going way back. I'm considering a non-ideal theological history -- with the hope of an idealistic theological future. Hope springs eternal.

Wow. Poor Italy. Well they are run by the mafiosa but so is much of the world including the US at some levels with their own style of mafiosa.

I'm now of the opinion that politicians should not receive a salary and no benefits. If they had to pay out of pocket to serve maybe they would be better at doing their job. And these days they could work from home with tele-conferences and such. This certainly is a radical approach to government but since government isn't working and the populace has such a low opinion of government officials - getting rid of the deep pockets would be the way to go.

Just abiding by the US Constitution and eliminating all laws that are not in alignment with the Constitution would be a healthy start.

Oxy - from what I've read of the off-worlders from contactees - they are just as much in conflict over their various different agendas as humanity is. It would seem that the good, the bad and the ugly exist across the universe. What you're seeking is the evolutions of spiritual beings across the board where they all work toward a common "good" goal. Yet as long as one is self-serving (which often is based upon basic survival needs at one level or another) this is likely not going to happen. Why? Because there are different survival needs at the different stages of spiritual and physical evolution. If we were to examine Maslow's hierarchy of needs -these needs emphasize the importance of self-actualization. He identified physiological, security, social, and esteem needs as deficiency needs, meaning that these needs arise due to deprivation. Satisfying these lower-level needs is important in order to avoid unpleasant feelings or consequences. Growth needs do not stem from a lack of something, but rather from a desire to grow as a person. Subsequently, self-actualizing people are self-aware, concerned with personal growth, less concerned with the opinions of others, and interested fulfilling their potential.

I suspect that most of us recognize that most people on the planet are just interested in basic survival. This is legitimate. However, I personally have family members who chucked it all to follow the spiritual path and to them this is what survival is all about. They own next to nothing and live in spiritual communities. Even Krishna chucked it all to spiritually fulfill himself. But again he was a prince who came from a wealthy background and as a youth/young adult never had to struggle to get his basic needs met.

Ironically, we have one friend who once said if the worst was to come she would just go live in a Buddhist monastery and eat rice. And so she did for 7 years.

Wow, Carol, you keep hitting homeruns with your posts!! I completely agree.

Carol wrote:Wow. Poor Italy. Well they are run by the mafiosa but so is much of the world including the US at some levels with their own style of mafiosa.

I'm now of the opinion that politicians should not receive a salary and no benefits. If they had to pay out of pocket to serve maybe they would be better at doing their job. And these days they could work from home with tele-conferences and such. This certainly is a radical approach to government but since government isn't working and the populace has such a low opinion of government officials - getting rid of the deep pockets would be the way to go.

Just abiding by the US Constitution and eliminating all laws that are not in alignment with the Constitution would be a healthy start.

Oxy - from what I've read of the off-worlders from contactees - they are just as much in conflict over their various different agendas as humanity is. It would seem that the good, the bad and the ugly exist across the universe. What you're seeking is the evolutions of spiritual beings across the board where they all work toward a common "good" goal. Yet as long as one is self-serving (which often is based upon basic survival needs at one level or another) this is likely not going to happen. Why? Because there are different survival needs at the different stages of spiritual and physical evolution. If we were to examine Maslow's hierarchy of needs -these needs emphasize the importance of self-actualization. He identified physiological, security, social, and esteem needs as deficiency needs, meaning that these needs arise due to deprivation. Satisfying these lower-level needs is important in order to avoid unpleasant feelings or consequences. Growth needs do not stem from a lack of something, but rather from a desire to grow as a person. Subsequently, self-actualizing people are self-aware, concerned with personal growth, less concerned with the opinions of others, and interested fulfilling their potential.

I suspect that most of us recognize that most people on the planet are just interested in basic survival. This is legitimate. However, I personally have family members who chucked it all to follow the spiritual path and to them this is what survival is all about. They own next to nothing and live in spiritual communities. Even Krishna chucked it all to spiritually fulfill himself. But again he was a prince who came from a wealthy background and as a youth/young adult never had to struggle to get his basic needs met.

Ironically, we have one friend who once said if the worst was to come she would just go live in a Buddhist monastery and eat rice. And so she did for 7 years.

No this is incorrect Carol. It would be called ...... from the basic survival POV view. He was not ordinary human as we are. He can never be called that. Ordinary humans tried to hurt him as they did not see him different then they are ordinary humans with basic survival rude habits.



but maybe you had in mind Buddha biography. Then it make sense.

orthodoxymoron wrote:I'm just trying to make sense out of the last 10,000 years -- from a very non-traditional theological perspective -- which might be very important if we are on the brink of extinction -- as sinners in the hands of an angry god and/or goddess. I really think we should carefully consider all of the possibilities -- and I am simply modeling one or two possibilites -- relative to a reptilian v grey v human uncivil-war among soul-relatives -- going way back. I'm considering a non-ideal theological history -- with the hope of an idealistic theological future. Hope springs eternal.

Arjuna asked the same questions... It seems nothing new under the sun.

maybe even others quite famous

devakas wrote:No this is incorrect Carol. It would be called ...... from the basic survival POV view. He was not ordinary human as we are. He can never be called that. Ordinary humans tried to hurt him as they did not see him different then they are ordinary humans with basic survival rude habits.



but maybe you had in mind Buddha biography. Then it make sense.

Hmm, thank you for your point of clarification devakas. Buddha biography would best fit what is attempted to be illustrated in this particular context.

I like your Hope springs eternal. outlook Oxy.

Just for you.

Thank-you Carol. That was a cool video. I'm simply attempting to merge with internet-traffic on the information-superhighway, without having a head-on collision with a brutal gang of facts.

June 22, 2012 – ECONOMY – If you want to be scared, truly terrified, listen to Mark J. Grant. He might be right. For the past two years, Grant, a managing director at a regional investment bank in Florida, has been predicting the bankruptcy of Greece and a cascade of chaos across the global economy, attracting quite a following on Wall Street in the process. “Greece will be forced to return to the drachma and devalue, and the default will cause bank runs and money flowing into Germany and the United States as the only viable safe haven bets,” he declared in the days before Sunday’s Greek elections, irrespective of which party would win. “Greece will default because there is no other choice regardless of anyone’s politics.” He then walked through the falling dominoes: “It will hit the [European Central Bank], the banks on the other side of the derivatives contracts, all of the Greek banks who are really in default at present and being carried by Europe as well as the nation, and the Greek default will spread the infection in many places that we cannot imagine because so much is hidden and tucked away in the European financial system.” Welcome to Doomsday, brought to you by Grant. He says he doesn’t think of it as such; he calls it “reality.” He told me, almost hopelessly, “There’s only so much money to go around.” In a January 13, 2010, report Grant forecast that Greece would default on its government debts, one of the first to publish such a prognostication. Grant could be the Nouriel Roubini (Dr. Doom) of the European crisis. Roubini, the New York University economist, said the subprime-debt sky was falling for a long time before it fell. Few people listened, in part, because nobody had ever heard of him. Then, of course, the sky fell. Now everybody has heard of him. Time will tell, but soon everybody could know Grant. The January 2010 report, written two years before Greece did indeed default, has made him the go-to forecaster of Europe’s collapse for some of the world’s largest investors. Nicknamed the Wizard, Grant, who works for Southwest Securities, sends out a daily report, often frightening in its detail and matter-of-factness, by email to a who’s who of the world’s biggest institutions, hedge funds and sovereign wealth funds. Subscribers like Bill Gross, a founder of Pimco, the world’s largest bond fund, pay thousands of dollars a year to receive Grant’s views in their in-boxes. Never one to sugarcoat his views, his success is partly a function of his plain-spoken way of making complex ideas simple. -SMH

June 22, 2012 – ITALY - Italy’s Prime Minister, Mario Monti, has warned of the apocalyptic consequences of failure at next week’s summit of EU leaders, outlining a potential death spiral whose consequences would become more political than economic. The Italian leader is to hold talks with Chancellor Angela Merkel of Germany, the French president, François Hollande, and Spain’s prime minister, Mariano Rajoy, in the hope that the single currency’s big four countries can pave the way for a breakthrough at next week’s meeting. Speaking to the Guardian and a group of leading European newspapers, Monti said that, without a successful outcome at the summit, “there would be progressively greater speculative attacks on individual countries, with harassment of the weaker countries.” The attacks would be focused not only on those who had failed to respect EU guidelines, but also on those like Italy, which he said had abided by the rules “but which carry with them from the past a high debt.” Monti warned: “A large part of Europe would find itself having to continue to put up with very high interest rates that would then impact on the states and also indirectly on firms. This is the direct opposite of what is needed for economic growth.” Outlining the result of a failure at the talks, Monti said that, faced with creeping economic paralysis, “the frustration of the public towards Europe would grow,’ creating a vicious circle. “To emerge in good shape from this crisis of the eurozone and the European economy, ever more integration is needed,” said Monti. Yet, if the summit failed to resolve the problems quickly, “public opinion, but also that of the governments and parliament… will turn against that greater integration.” Monti said he could see the beginnings of the process “even in the Italian parliament, which has traditionally been pro-European and no longer is.”

June 21, 2012 – LONDON – British banks are set to be downgraded by a leading credit ratings agency, it was claimed today. Royal Bank of Scotland, Lloyds Banking Group and Barclays are all in line for a downgrade by ratings agency Moody’s over fears the eurozone crisis threatens their stability. In a move that would cost financial institutions billions of pounds and could have a knock-on effect on the cost of credit to business and consumers, Moody’s is set to push some banks down two notches, sources said. Moody’s will also downgrade a number of the biggest banks around the world, it was claimed, a decision that would show how the eurozone sovereign debt crisis is hitting all areas of global finance. The cuts are part of a wider review by Moody’s of the global banking sector that Sky Newssaid is likely to be unveiled tonight after the US market closes. The downgrades, which are expected to range in scope from one notch to three notches, will follow joint efforts by the Bank of England and Treasury to boost cash flows in Britain’s banks through a multibillion pound cheap loan scheme. The banking industry has been hit by higher funding costs as the eurozone troubles escalated and has been hoarding money for fear of another worrying phase in the crisis. The Bank held its first auction under the new scheme yesterday, offering£5 billion in cheap loans with a rate of 0.75 per cent, which was entirely taken up by the country’s lenders. Moody’s has said it will release the ratings reviews, which include significant downgrades for many banks, by the end of June. A spokeswoman for Moody’s declined to comment on the exact timing. There has been speculation the downgrades were imminent for several days.

U.S. banks hammered with downgrades: Moody’s Investors Service lowered the credit ratings of 15 the world’s largest banks late Thursday, including Bank of America, JPMorgan Chase and Goldman Sachs, saying their long-term prospects for profitability and growth are shrinking. The ratings agency said it was especially concerned about banks with significant financial markets businesses because those markets have become so volatile. Some of the largest European banks were also downgraded, including Barclays, Deutsche Bank and HSBC. The downgrades mean Moody’s is more concerned about the ability of the banks to repay their debts. Moody’s had said in February that it was considering downgrading the credit ratings of major banks in the U.S. and in Europe. A downgrade usually means that it becomes more costly for banks to raise money by selling debt. Investors demand higher interest for riskier debt, which is what the downgrades represent. However, with interest rates already at rock-bottom levels, the downgrades may not affect the cost of funding for the banks that much. The stock market has also priced in any negative impact from the ratings downgrades, according to Bert Ely, a banking consultant in the Washington, D.C. area. “They’ve been telegraphing this thing for months,” Ely said. The downgrades come at a time of great uncertainty in the global economy. Europe’s currency union is under threat from bad bank loans. The U.S. economy is slowing and the fast-growing emerging economies of India, Brazil and China are also cooling. Financial markets have also been volatile. –LA Times http://www.latimes.com/news/la-fiw-moodys-downgrade-06212012,0,1235973.story

June 21, 2012 – ECONOMY - Global growth worries slammed stocks, triggering a bearish recommendation from Goldman Sachs that accelerated declines and helped drive major benchmarks to their second-biggest losses of the year. The Dow Jones Industrial Average dropped 250.82 points, or 2%, to 12573.57, while Standard & Poor’s 500-stock index fell 30.18 points, or 2.2%, to 1325.51. The Nasdaq Composite shed 71.36 points, or 2.4%, to 2859.09, pacing to snap a five-session streak of gains. The Dow inched higher at the open, but quickly turned red after Mid-Atlantic manufacturers said that business conditions deteriorated sharply this month, according to the Federal Reserve Bank of Philadelphia. Another sour reading from the jobs market also weighed. The number of Americans filing for jobless benefits fell slightly last week, though the prior week’s figure was revised higher, indicating the labor market is sputtering. “What we’re seeing is the job market slowing to a crawl,” said Saira Malik, head of global equity research for TIAA-CREF in San Francisco. Stocks slid to session lows after analysts at Goldman Sachs recommended that clients set up short positions in the S&P 500. The analysts set a short target for the benchmark index at 1285, or more than 5% lower than Thursday’s close, writing that Thursday’s soft U.S. reports “provides further evidence that weakness has extended into June.” Short sellers borrow shares from other investors and sell them in the hope of buying them back at a lower price later. Traders also cited rumors that the tab for Spain’s bank bailout may be higher than previously reported. Energy and materials stocks led all 10 of the S&P 500′s sectors lower after reports showed that business activity in the euro zone and manufacturing activity in China each contracted in June. Additionally, traders cited lingering disappointment that the Federal Reserve held off on announcing more aggressive stimulus measures on Wednesday.

June 21, 2012 – SPAIN - Spain’s medium-term borrowing costs spiraled to a euro-era record at an auction on Thursday, hours before an independent audit was due to reveal how big a capital hole in Spanish banks needs to be filled by a euro zone bailout. Euro zone finance ministers will discuss later in the day how to channel up to 100 billion euros ($126 billion) in rescue loans to Spanish lenders weighed down by bad loans from a burst property bubble. Many in the markets see the package as a mere prelude to a full program for the Spanish state. Spain’s financial weakness is in focus a week before a European Union summit tackles long-term plans for closer fiscal and banking union in an effort to strengthen the euro’s foundations, after bailouts for Greece, Ireland and Portugal failed to end a 2-1/2-year old debt crisis. To pave the way for that, the leaders of Germany, Italy, France and Spain will meet in Rome on Friday. Madrid sold 2.2 billion euros in medium-term bonds and attracted strong demand. But yields on 5-year paper rose to a 15-year high of 6.07 percent, a level regarded by analysts as unaffordable for any prolonged period. The runaway Spanish yields contrasted with a French auction in which the yield on 5-year benchmark paper hit an all-time low of 1.43 percent. “The first worry is can they (Spain) fund from the markets? They raised 2.2 billion versus a 2 billion target, so they can raise the money,” said Achilleas Georgolopoulos, a strategist at Lloyds in London. “Then the (question is), are the yields threatening for the medium term? And yes, clearly they are much higher than the previous auction … But still they can continue for a few months to fund at these levels.”

Greece's new finance minister rushed to hospital after fainting... as eurozone leaders agree to push for €130BILLION growth package and say euro WILL survive
Leaders of Germany, France, Italy and Spain met at 12noon in Rome
France, Italy and Spain were expected to pressure Merkel to ease measures
FTSE 100 down 0.93%; DAX down 0.93%; CAC 40 down 0.50%


Read more: http://www.dailymail.co.uk/news/article-2163094/Greek-finance-minister-Vassilis-Rapanos-rushed-hospital-fainting.html#ixzz1yZbe6Qzu

America On Board for 'Financial Train Wreck', Economist Warns
Read more: http://www.moneynews.com/StreetTalk/Geithner-Economy-Fiscal-Wreck/2012/04/23/id/436786?PROMO_CODE=EB8F-1


Jim Rogers: European Bailouts May Lead to Another World War
Read more: http://www.moneynews.com/

Nobel laureate economist Paul Krugman repeated his assertion this week that the United States could benefit economically if the government began pouring money into anti-ET defense in preparation for a possible alien invasion of Earth.

Even a faked war of the worlds scare might help, he suggested.

The Huffington Post reached out to some experts who share an intense interest in the idea that earthlings are not the only intelligent game in town -- or space.

We asked, If there were an ET threat and if the U.S. government were to suddenly rechannel its budgets into preparing an anti-alien defense, would that ultimately save our economy? Their responses varied, ranging from skepticism to enthusiasm...

Here is a sampling of their replies emailed to HuffPost:

"I assume the alien attack is a euphemism designed to gain public support for that spending effort. Therefore, my position would be that the alien invasion he proposes to prepare for is with the mythical aliens. They are Hollywood contrivances and conveniently always have fatal vulnerabilities that humans can exploit. The good news in that scenario is we both defeat the evil aliens, and in this case, restore our economy." -- John Alexander, a retired Army colonel and developer of the concept of nonlethal defense at Los Alamos National Laboratory

"Any aliens that have the capability to come here and ruin our whole day by vaporizing Earth or terrorizing its hominid inhabitants, would be centuries -- perhaps millennia -- beyond our technical level. To spend effort preparing for such a lugubrious possibility would be like the Neanderthals organizing their society to defend themselves against the U.S. Air Force. That won't do them much good on the battlefield. But who's to say? Maybe it would improve the Neanderthal economy." -- Seth Shostak, a senior astronomer at the SETI Institute and chair of the International Academy of Astronautics' SETI Permanent Committee