Sovereign debt bubble thread

[Tamas]

Pushing The Euro To The Brink

There is no more risk that the euro will implode," declared French President Nicolas Sarkozy on Friday, two days before the first round of the presidential election. Europe is "recovering," he said desperately. Thanks to his leadership. To make sure that Europe doesn't fall back into the hole, the French would need to reelect him. A few weeks ago, he'd proclaimed "The crisis is finished." But Spain may require an emergency bailout of such proportions that the IMF is already collecting hundreds of billions of dollars from around the world. Then there is Italy....

However, François Hollande, the socialist challenger and likely winner, has a prescription for fixing the very crisis that Sarkozy declared finished, he confirmed on Friday. If elected on May 6, he would immediately set out to implement his ambitious plan—though it might lead to the break-up of the Eurozone.

http://www.zerohedge.com/contributed/2012-16-20/pushing-euro-brink

Well, he might have a point with giving imaginary money straight to the states so they can make people feel the problems are solved. Now the same thing happens, except five percent or so of the make-believe money gets to the bankers, while it could go directly to politicans

[Ed Anger]

I'm getting the feeling I'm going to have to nursemaid my stocks every weekday again for awhile. 

[Sheilbh]

I'm getting the feeling I'm going to have to nursemaid my stocks every weekday again for awhile. 

Hopefully not.  This chart from the FT is rather striking:

[Ed Anger]

None of that really matters when the after hours market wets itself at 4am because the eurofaggits shoot themselves in the ass.

In other words, I'll trust my gut over your chart.

[Sheilbh]

On the Netherlands:

Dutch crisis puts eurozone debt rescue plans at risk
The Dutch prime minister will on Monday launch a bid to salvage his austerity budget amid political chaos that could cost the country its AAA credit rating and plunge Europe's debt rescue plans into disarray.
By Louise Armitstead9:00PM BST 22 Apr 2012

Mark Rutte, who is a key ally of Germany and the eurozone's "hardliners" on financial discipline, has called an emergency cabinet meeting after budget talks collapsed at the weekend.

He is expected to resign today and announce snap elections, pushing yet another "core" eurozone country into political and economic uncertainty.

In France, early polls pointed to a victory of Francois Hollande in the first round of the presidential elections setting the stage for a run-off between the socialist challenger and incumbent Nicolas Sarkozy on May 6th. Mr Hollande has pledged to renegotiate the European fiscal pact that binds countries to a 3pc deficit limit by next year.

The "non-negotiable" fiscal pact, which was vetoed by David Cameron, triggered the collapse of the coalition government in the Netherlands.

Geert Wilders, the far-right leader, said he could not support the €16bn (£13bn) of cuts needed to meet the 3pc target. He wouldn't allow Dutch citizens to "pay out of their pockets for the senseless demands of Brussels" he said.

"We don't want to follow Brussels' orders. We don't want to make our retirees bleed for Brussels' diktats," he said.

Last week Fitch warned that the Netherlands faces a credit downgrade if it failed to deliver its austerity cuts or let political conflict disrupt economic management.

Traders are braced for another volatile week as uncertainty over debt reduction plans spreads to the eurozone's northern core.

Hopes that the European Central Bank (ECB) will intervene and re-start its bond buying programme were doused by officials' comments at the International Monetary Fund (IMF) meeting in Washington.

Luc Coene, member of the ECB's governing council, told Bloomberg: "We have done what we can do so far within our mandate and within the possibilities we have. The only thing we could do is overstretch ourselves and then we would even lose the credibility we have at that moment."

The mounting crisis in Spain and Italy has already exposed the eurozone's rescue mechanisms as woefully under-resourced.
Christine Lagarde, the head of the International Monetary Fund (IMF), secured $430bn (£266.7bn) of extra funds from members to create a "global firewall" against the debt crisis. However experts said it is not enough to reassure markets that the debt crisis can be contained. Chinese Premier Wen Jiabao yesterday warned the crisis "is not over" during a visit to Germany.

Meanwhile Argentina accused the IMF of focusing too much of its resources on the debt crisis. Economy Minister Hernan Lorenzino, who was also speaking in Washington, said "far too much effort and human and financial resources have been devoted" to solving the crisis at the expense of other countries.

Argentina is being ostracised by some IMF members following its repatriation of YPF-Repsol last week.

Is it just me or is it madness for the Netherlands to be facing a downgrade or any real market pressures? 

Edit:  Here's Gilders this morning, 'We want to be the master of our own house and our own country, so we say yes to the guilder. Bring it on.'  I could be wrong but I don't think he was ever going to back a deal.

This piece on the background's pretty good:
http://www.guardian.co.uk/business/2012/mar/13/dutch-government-lockdown-eu-rulebook

[Crazy_Ivan80]

http://www.knack.be/opinie/columns/johan-van-overtveldt/wat-komt-na-merkozy-mer-lande-of-kortweg-mer-de-johan-van-overtveldt/opinie-4000084528884.htm

Merkozy to be replaced by Mer-lande or just Mer-de?

http://www.knack.be/opinie/columns/johan-van-overtveldt/imf-vernedering-voor-eurozone/opinie-4000084398748.htm

IMF refinancing not all that good for Europe.


You'll have to run both through a translator though, but the general gist is that things keep going the wrong way. And that they'll keep going wrong if Hollande tries to execute a left-wing economic policy* in France (with, basically, german money).
*Like Mitterand tried to do back in the 80s

[Sheilbh]

IMF refinancing not all that good for Europe.

On the IMF I broadly agree with this article:
http://www.cer.org.uk/in-the-press/eurozone-chutzpah-and-imf

[MadImmortalMan]

IMF refinancing not all that good for Europe.

On the IMF I broadly agree with this article:
http://www.cer.org.uk/in-the-press/eurozone-chutzpah-and-imf

Lots of valid points in that one.

[Zanza]

Is the Eurozone member of the IMF or are the separate countries members?

[Sheilbh]

Is the Eurozone member of the IMF or are the separate countries members?

Isn't the issue here the Eurozone firewall, whether the ESM or a combination of it and EFSF?  In which case, surely, they're dealing with a Eurozone institution.  They're helping provide some of the finance and technical guidance needed by the Eurozone.

It's different from, say, the Greek or Irish IMF programs.

[Admiral Yi]

Is the Eurozone member of the IMF or are the separate countries members?

Separate countries.

I think there might be an EU observer, but don't quote me on it.

[Crazy_Ivan80]

https://www.facebook.com/home.php?ref=home#!/notes/jean-pierre-van-rossem/13042012-dexia-of-de-koninginneweg-naar-een-verzekerd-griekenland-aan-de-schelde/10150740699228734

not sure if this'll be accessible.
Run it through the translator.
It's about Dexia.
De Standaard -referred in article- is one of the big newpapers in the country.
(http://www.standaard.be/artikel/detail.aspx?artikelid=ME3OI5II&word=dexia: the article in the newpaper, only for subscribers though )

I'm sure you'll be aware that DExia is/was one of the many bad banks Belgium-France has produced.
what is less well known is that our government -in their endless stupidity- has guaranteed that bank for 50 billion euro. Money that isn't available.
However, the situation is now of this nature that if things go wrong the belgian state could end up as owner of the whole badbank. Meaning that not 50 billion would be added to the debt, but a staggering 400 billion. More than the GDP of the country.
Greece of the North indeed but without the redeeming weather.

[Sheilbh]

Horrible set of news for Spain today.  The worst is that the unemployment rate is now around 25% another increase of over 1% in the last quarter, apparently a third of the Eurozone's unemployed (17.1 million) now live in Spain (5.6million)

However, the situation is now of this nature that if things go wrong the belgian state could end up as owner of the whole badbank. Meaning that not 50 billion would be added to the debt, but a staggering 400 billion. More than the GDP of the country.
Greece of the North indeed but without the redeeming weather.

Sounds nearer to Ireland.  A bank with a state attached

[Tamas]

It's not like any of these things are slowing the stock markets!

[Iormlund]

Horrible set of news for Spain today.  The worst is that the unemployment rate is now around 25% another increase of over 1% in the last quarter, apparently a third of the Eurozone's unemployed (17.1 million) now live in Spain (5.6million)

I told you we'd get close to 30% this year. Only Hod knows what the real number is though.