FedUpUSA

We have to be REALLY broke!

TRICHET SAYS ECB WILL SUSPEND COLLATERAL RULES FOR PORTUGAL
Trichet to bury the ECB……2 year Portugese bonds down 2.25 points, yield of 17.9%

Of course this is after they stuffed themselves, directly and indirectly, with Greek debt that is now worth much less than it was.

When you’re going bankrupt it’s really, really important to make sure you’re really, balls-to-the-wall bankrupt!  Just a little bankrupt will not do!

Oh, incidentally: May Trichet perform an anatomically impossible act.

Hattip Bearshort on the forum for the grab off the wires.

Remember, “it’s all contained.”  Uh huh….

European governments sought to quell the market turmoil menacing the euro, handing Ireland an 85 billion-euro ($113 billion) aid package and diluting proposals to force bondholders to bear some cost of future bailouts.

Yeah, right.  Incidentally, the interest rate on that package is 5.8%.  That means that if my math is right this has larded up $1,473 per year in interest costs on every man, woman and child.

This of course has to be paid each and every year, which means taxes are going up and government services are going down – by a lot, given that there’s plenty of people who don’t work in Ireland. 

How any government gets away with this sort of thing is beyond me.  But they all have thus far – our banks, Greek banks, now Irish banks.  All ripped off the people with false claims of “growth” and “prosperity” and when exposed they then get the politicians to take their losses onto the public balance sheet and bail them out, effectively charging the citizens for the costs of their original robbery!

The market is not impressed, and yet the market is the alleged reason this is being done.  To “stabilize” the market.  To provide “confidence.”

Yet CON is the root of CONfidence, and conned is exactly what you’ve had served up – by Paulson, by Geithner, by Congress and by our President, both past and present.

People keep saying that while these actions might have been “unseemly” and “unacceptable” they weren’t illegal.  They keep forgetting that operating a bank is a privilege granted by the government, not a right, because banks inherently trade on the credit of the sovereign state behind them.

Yet we the people of this nation continue to allow our government to pull this crap.  We do it repeatedly despite plenty of evidence that we’re getting screwed repeatedly.  Asset “inflation” is thought of as good, but it’s really bad – if you want to buy a house you want it to be cheap, not expensive, just as you do for your DVD player, computer or television.  We allow ourselves to be scared into believing that Deflation is the “bogeyman” even when we’re talking about deflating previous inflation, and even though anyone with a fifth-grade understanding of math can easily determine that the alternative is literally impossible – which means attempting it won’t end in happiness and smiles but rather in collapse and tears.

Never mind that the market doesn’t care if you believe in the candy-crapping unicorn or not.  This morning it has “moved on” and blown spreads wide on Portugal and Spain, and will continue to do so until the truth is recognized.

We are choosing only how long we would like to avoid what has to happen, and how much damage we’re willing to sustain through that waiting - damage that is compounding the longer we wait - not whether we can succeed on the path we’re on.

The possibility of success there is not determined by wants or desires, but by what can be done, and the simple fact of the matter is that the path our government, and those of Europe, are on cannot lead to success.

Why of course they did….

As part of the tests, 91 of Europe’s largest banks were required to reveal how much government debt from European countries they held on their balance sheets. Regulators said the figures showed banks’ total holdings of that debt as of March 31.

But……

An examination of the banks’ disclosures indicates that some banks didn’t provide as comprehensive a picture of their government-debt holdings as regulators claimed. Some banks excluded certain bonds, and many reduced the sums to account for “short” positions they held—facts that neither regulators nor most banks disclosed when the test results were published in late July.

“Didn’t provide as comprehensive a picture … as regulators claimed” = they lied.

Of course the so-called “regulators” didn’t regulate, as if they had they would have called these people out on this, and forced them to provide accurate disclosures.

But that didn’t happen.

How much “understatement” was involved here?  Oh, we have a decent guess….

BIS data from March 31 indicates that French banks were holding about €20 billion of Greek sovereign debt and €35 billion of Spanish sovereign debt. In the stress tests, four French banks, which represent nearly 80% of the assets in France’s banking system, reported holding a total of €11.6 billion of Greek government debt and €6.6 billion of Spanish debt.

So the European banks may have reported about one half to one fifth of the actual amounts held?

This morning we’ve seen some selling over in Europe which Bloomberg attributes to:

“Banks still face problems in regards to their capital ratios,” said Michael Koehler, head of strategy at Landesbank Baden-Wuerttemberg in Mainz, Germany. “Investors will keep worrying about a possible double dip in the next few weeks,” he said, referring to a renewed recession.

Uh huh.

How about this?

Investors are starting to wake up to the fact that the government lied about sovereign debt exposure, and now with Greece’s spreads widening and concern about Ireland, they have every reason to be wide awake – all night.

Psst: Listen to what is being said (quietly) in certain circles….. smell smoke yet?

Meanwhile…..

Hungary, Romania, Serbia Struggling to Find Buyers for Debt

Serbia failed to attract enough bids to cover offers in six out of 25 debt auctions since the start of June, while Romania failed to sell any debt in four auctions since the launch of an austerity program in July and had only partial sales in 10 other auctions. Hungary’s auction last week also came up short.
Hungary, Romania and Serbia, which turned to bailouts in 2009, are struggling to find buyers for their debt as spending cuts weaken government power and concerns grow about a stalled recovery.