Euro-Zone Crisis

[Guest Jon Snow]

Just watching the live broadcast from Brussels On BBC news. Man we are fucked the guy speaking is mumbling, he knows it and everyone knows it the world economy is totally fucked. Do any of you think there's any ways back as lets face it, its looking pretty bleak at the moment.

[Pony Princess]

Just watching the live broadcast from Brussels On BBC news. Man we are fucked the guy speaking is mumbling, he knows it and everyone knows it the world economy is totally fucked. Do any of you think there's any ways back as lets face it, its looking pretty bleak at the moment.

 

My bank account is doing fine as is my ISA so personally, I don't give a shit. I think its all bollocks but I like it when things get a little weird, so bring on the countries going bankrupt and people riotting.

[Lee909]

 

[zigackly]

I for one welcome our new Chinese overlords.

[Guest Jon Snow]

Might be an improvement you never know.

[Whelan]

The Chinese economy is overheating and the Indian economy has stalled these past few months, so don't go looking to them for help.

 

Amazing isn't it, a credit agency can come out and say 'country A is looking a big iffy' and panic ensues, all the money is taken out of the economy of 'countryA', all loans to 'country A' have incredibly high interest rates and all because of the say so of a commision!

 

We'll panic, and everything will get back to normal in six months time. And the recovery (which most said would last ten years) will continue slowly and painfully.

[zigackly]

I'm wondering whether I should invest in a soup kitchen to get ahead of the game.

 

What do you think?

[Guest Jon Snow]

Just start growing your own chicken plants in the garden.

[Magic Sponge]

I've been hanging tea bags on the washing for the last 6 months.

[Cardie]

If things get a bit tight I'll just print a few more £9 notes.

[Major Tom]

The fundamentals are the same, have always been the same and will remain the same. The sentiment isn't though.

 

If we just all think positively, we'll be fine.

 

Also oil is falling. Another positive.

[dennis tooth]

There will be no recovery, fibonacci said.

[VladimirIlyich]

Ive got no serious money,never had and never will.

No change here.

[Gym Beglin]

A new, scary, frugal future.

 

Will that future be like in Back to the Future II, or will it be more like Blade Runner?

 

Either way, I'm buying shares in Smith and Wesson.

[Anubis]

Italian politicians fiddle while Rome burns. The Greeks are currently doing much the same.

 

 

BBC News - Italian crisis: Silvio Berlusconi faces calls to resign

 

 

Italian crisis: Silvio Berlusconi faces calls to resign

 

Italian PM Silvio Berlusconi is facing growing calls for his resignation, after apparently losing his majority in the lower house of parliament.

 

He won a budget vote, but received the votes of less than half of MPs.

 

After the vote, opposition leader Pierluigi Bersani urged him to step down. Allies including the Northern League had already said he should quit.

 

Borrowing rates have shot up in recent days, raising concerns over whether Italy can service its debts.

 

While Italy's deficit is relatively low, investors are concerned that the combination of Italy's low growth rate and 1.9tn euro (£1.63tn; $2.6tn) debt could make it the next country to fall in the eurozone debt crisis.

 

The European commissioner for economic affairs Ollie Rehn described the country's economic and financial situation as "very worrying".

 

Rival demonstrators gathered outside parliament, some shouting "Resign", others "We are not Greece".

 

Mr Berlusconi has so far refused to resign, but said he would make a decision on his future after the vote. He is now consulting with senior ministers

 

Correspondents say he faces two options:

 

*Handing his resignation to President Giorgio Napolitano

 

*Holding on to power, potentially prompting the opposition to call a vote of no confidence, to be held on Monday at the earliest

 

Reports say that Mr Berlusconi is going to see Mr Napolitano for discussions but not to resign.

 

"Let's wait for a few minutes, he'll decide what to do at the Quirinale," said Northern League leader Umberto Bossi, referring to Mr Napolitano's residence.

 

Mr Berlusconi has always maintained that he has enough support to continue to govern.

 

He spent the morning attempting to shore up his support with those MPs who had threatened to abandon him ahead of the vote.

 

But only 308 MPs voted for the budget, far below the 316 needed for an absolute majority.

 

None voted against, one abstained and 320 did not vote.

 

Many from the PM's own coalition refused to support him, joining the opposition in not voting.

 

"The government no longer has a majority in this chamber," Mr Bersani said immediately after the vote.

 

"I ask you, Mr Prime Minister, with all my strength, to finally take account of the situation... and resign.

 

"We all know that Italy is running the real risk in the days ahead of not having access to financial markets."

 

Before the vote, Mr Bossi said Mr Berlusconi had been asked to stand aside, adding that the former justice minister Angelino Alfano should take over.

 

Last month, the same budget measure was defeated in parliament by a single vote.

 

The BBC's Alan Johnston, in Rome, says Mr Berlusconi has survived more than 50 confidence motions in the past, but this crisis is different as it goes beyond Italian politics.

 

The international money markets are now forcing Italy to pay interest rates that could eventually ruin it, which means the pressure on Mr Berlusconi is extraordinary, he adds.

 

Doubt about Italy's governance and its ability to repay its debts have sent the markets seesawing over the past two days.

 

On Tuesday, the cost of government borrowing spiked at a new record of 6.76% after the vote, around the 7% threshold at which Portugal and Ireland were forced to accept bailouts.

[Guest Slim(fast)Shady]

Advice needed please..

 

Normally have a couple of holidays a year in summer and start collecting my spending money from now by on paydays or wins at bookies etc i start buying Euro's bit by bit and putting them away...

 

But is there any liklihood that if i collect about £1000's worth and at some point before the summer the Euro will vanish and be worthless??

 

Cheers in advance

[KopOut]

The European Stability Mechanism- A Dictatorship in waiting...

European Stability Mechanism: Dictatorship in Waiting? [Apparently, this is circulating widely on the internet.] | 2012: What's the 'real' truth?

[KopOut]

Shareable: Beat the Bank: Five Community-Driven Alternatives

[silverlining]

God, I thought for one horrible moment that thick fucking spastic Jon Snow was back.

[Paulie Dangerously]

Can someone explain in one paragraph how it will affect me please?

[stringvest]

Can someone explain in one paragraph how it will affect me please?

 

Your penis will shrink and you'll grow a large abscess on the inner wall of your rectum. Damp and black mould will blight your bathroom, the milk will go off, and you will be susceptible to violent mood swings. The missus will run off with the man who comes to collect the bins and your internet will start talking to you in French.

[Tyler Durden]

Can someone explain in one paragraph how it will affect me please?

 

[robslappa]

Your penis will shrink and you'll grow a large abscess on the inner wall of your rectum. Damp and black mould will blight your bathroom, the milk will go off, and you will be susceptible to violent mood swings. The missus will run off with the man who comes to collect the bins and your internet will start talking to you in French.

 

French? Really? This is bad.

[Einch]

The Baroso turd was talking about how it is illegal for EU member states to be outside the single currency. War seems to be mentioned far more often than it was even two months ago by the gaggle of cunts running the show to force acceptance of the euro and the austerity policies.

[Anubis]

Eurozone Crisis: Why Italy Is Shaking The World Markets

 

 

Eurozone Crisis: Why Italy Is Shaking The World Markets

 

First Posted: 10/11/11 13:28 GMT

 

Italy's cost of borrowing slipped back below the 7% mark on Thursday morning after hitting record highs on Wednesday, fuelling concerns that the eurozone crisis could spiral out of control, with contagion spreading across the global banking sector.

 

An Italian bond auction on Thursday saw yields fall back to 6.9% on ten-year debt. The yield is the interest rate that the country must pay on its borrowing. The higher it is, the more investors demand in return for carrying the risk of financing the country.

 

The 7% number is seen as a critical watershed because it was the level at which Greece, Ireland and Portugal needed to ask for international bailouts. Whether the country's debt is above or below that mark, the cost of servicing its debt - currently at 120% of its gross domestic product (GDP) - is prohibitively high.

 

The Italian economy is not growing quickly enough for tax returns and other government revenues to keep up both interest payments and public expenditure. The government had committed to spending cuts which would in theory have seen it return to solvency and guarantee that that could pay off its debts.

 

The country has continued to borrow to ensure that it has enough cash flow to pay off loans that are maturing, a process known as "rolling over" its debts. The country is expected to have to roll over around €300bn in debt in the near term, and with yields rising, its solvency is increasingly in doubt.

 

Political turmoil has left the markets unconvinced that those government cuts will be made on time, giving them a further reason to be concerned about their investments in Italian debt.

 

These two things feed into each other - fear over the government's ability to pay off its debts leads to investors demanding higher interest rates, making the debts harder to pay off.

 

International bailouts are supposed to end this downward spiral by resolving the short term funding needs and giving countries breathing room to reform their economies. They come with strict and often painful conditions on the level of reforms.

 

Bailing out Greece, Ireland and Portugal was a major milestone in the European crisis, as it demonstrated that the European Union and eurozone members were willing to break with convention in order to support weaker partners. However, all three countries were relatively small compared with the economic giants of Germany and France.

 

Italy, by contrast, is the third largest economy in the eurozone and the fourth in the EU. Bailing it out would take an enormous amount of money. That money is not available.

 

In response to the unfolding crisis, eurozone leaders over the summer created a vehicle - the European Financial Stability Facility (EFSF) - that would be able to buy bonds and shore up weaker economies. It was then expanded to include the ability to put money into the European banking sector, as there were growing concerns that, should peripheral countries default on their debts, the losses at banks would be so great that they would themselves become either insolvent or so cash poor that they would stop lending to businesses and consumers, plunging economies into recession.

 

By October, it was clear that the EFSF did not have the capital needed to deal with the scale of the evolving problem. In the Brussels summit, held on October 26, it was agreed that the fund would need to be increased, with financial engineering used to boost its firepower, and a separate special investment vehicle created. EU leaders went to the G20 the following week to try to fill that second vehicle with capital from cash-rich emerging economies, including China and Brazil. That capital was not forthcoming, in part due to the decision by Greek Prime Minister George Papandreou to call a referendum on the Greek portion of the deal, highlighting further divisions within eurozone politics.

 

The delay might not have been critical, had the markets not began to focus on the increasingly dysfunctional Italian government a week later. Berlusconi's weakening coalition was seen as incapable of pushing through unpopular austerity measures and bring the country back on track towards long-term solvency.

 

There have only been two things holding the markets back from giving up on Italy - the belief that an economy of that scale and sophistication was capable of pushing through reforms, and the belief that if it failed to do so it could get additional support in the form of a bailout. In either scenario, bond holders would get paid.

 

With confidence in the former faltering, the absence of a big enough bailout mechanism came into focus. With neither there, markets had to countenance the possibility - however remote - that Italy might have to look at some kind of write-down on its debts, or may even default.

 

The scale of that event would be unprecedented in recent market history. Italy's bonds have been held as relatively high quality, low risk investments for years by banks, pension funds, insurance companies and governments. Their total value is enormous, and even a small "haircut" would wipe billions of dollars off balance sheets around the world. Banks would struggle to meet the levels of redemptions, which would rise as depositors withdraw money from institutions that would appear on the verge of failure. Governments would need to bailout banks again, putting enormous pressure on state finances. The "contagion" would likely spread to developed markets worldwide, risking recession.