The Latest Dexia News: Nothing Set Yet, Despite $4 Billion Proposed Purchase Of "Good Bank" By Government, 60% Of Belgium Bad Bank

The latest from Bloomberg on the story that just won't quit: "Belgium received approval from France to buy as much as 100 percent of Dexia SA (DEXB)’s Belgian consumer bank as part of proposals to dismantle the French-Belgian lender, three people with knowledge of the talks said. [read: Good Bank is fully nationalized; only Dexia's approval is now needed, and that has not come yet...] The price of the Belgian bank is under discussion at a meeting of Dexia’s board of directors in Brussels, and an agreement on that transaction may be announced as soon as tonight, said the people, who declined to be identified because the talks are private."



Slovakia On Why It Votes "No" To EFSF Expansion: "The Greatest Threat To The Euro Is The Bailout Fund Itself"

Yesterday we reported that tiny Slovakia's refusal to ratify the expansion of the EFSF 2.0 (even though a 4.0 version will be required this week after the "Dexia-event"), may throw the Eurozone into a tailspin as all 17 countries have to agree to agree to kick the can down the road: even one defector kills the entire Swiss Watch plan. Yet an interview conducted between German Spiegel and Slovakia party head Richard Sulik confirms that tiny does not mean irrelevant, and certainly not stupid. In fact, just the opposite: his words are precisely what the heads ot the bigger and far less credible countries should be saying. Alas they are not. Which is precisely why the euro is doomed.



Part 1





Part 2

Goldman Presents The European Flowchart Of Life (Happiness) And Death (Default Misery)

Goldman knows a thing or two about European equilibria (and the lack thereof): after all, it was its "bleeding financial innovation edge" currency swaps that allowed perpetual fiscal transgressors such as Greece (and who knows who else) to be allowed into the Eurozone in the first place despite never meeting the required Maastricht criteria of 3% deficit/GDP in the first place. Which is why we are happy to bring to our readers not only the latest in peak amusement in the form a podcast from GSAM head Jim O'Neill, but GSAM's "European Game Of Life" where in flowchart form, the Squid summarizes the various good/bad equilibria outcomes for Europe that lead to either Happiness or Misery. Frankly, we fail to see how any country in the European periphery, and soon, core, does not belong in the bottom left. But we are confident that Goldman will tell us, even as it hatches yet another scheme with its top clients on how to short the countries that paid Goldman the big bux for the pig lipstick a few short years ago...

"Planning To Plan" - Merkozy Reach Yet Another "Agreement", Adding "It Is Too Early To Enter Into Details"

No, the day is not August 7, 2011 when we had the first joint Merkozy statement attempting to prevent the latest and greatest round of the global financial crisis with nothing but pure rhetoric, in which however the word Dexia was strangely missing. The day is October 9, and yet we get another statement from the two, this time far more desperate. From Reuters: "We are very conscious that France and Germany have a particular responsibility for stabilizing the euro," Sarkozy said at a joint news conference with Chancellor Angela Merkel in Berlin. "We need to deliver a response that is sustainable and comprehensive. We have decided to provide this response by the end of the month because Europe must solve its problems by the G20 summit in Cannes." And the kicker: Merkozy "suggested that their proposals would include a plan for recapitalizing European banks, accelerating economic coordination in the euro zone and dealing with Greece's debt problems." In other words fix absolutely everything. But the punchline remains the same as always: Sarzkoy "added saying it was too early to enter into details." Ah yes, those ever elusive details, which nobody can ever provide, because, THEY SIMPLY DON'T EXIST, at least not in a universe in which 2 + 2 is still 4.

Market Snapshot: Open Modestly Positive (For Now)

S&P futures just opened mildly positive in line with the recovery in EURUSD from its Sunday afternoon lows (having broken below 1.335). As we post, Gold has opened very noisily but remains a little higher than Friday's close at around 1642. It seems the apparent no news from Dexia (which is clearly terrible news) is yet to be considered by reality but as we noted on Friday, the fact that Treasuries are closed suggests reactions may be a little unexpected with no immediate safe haven to flood to. JPY crosses are slightly higher sustaining the very small bid under ES for now as it tracks a small range around 1157-8. Very early runs in credit land show a small compression in Main and further senior-sub decompression in financials.






God, Gold, Groceries, and Guns
By: Gary North, Mises on Money




It’s the money supply stupid, what some investors still don’t get about silver and gold
By: Peter Cooper, Arabian Money




COT Gold, Silver and US Dollar Index Report - October 7, 2011
By: GoldSeek.com






Inflation, Money Circulation = Gangrenous Liquidity, Rising Gold Price
By: Julian D. W. Phillips, GoldForecaster.com

Our world is now ruled by finance: Its presence has displaced real value in the economy  

link is here.

Banks are warned not to rely on future bailouts to survive

The link is here.

 

 

 

The Ticking Euro Bomb: What Options Are Left for the Common Currency?

I ran Part 1 of this history of the Euro a couple of days back...and the final two installments are now posted at the spiegel.de website...and the link to all three of them is here.

 

 

 

Greek austerity breeds new generation of homeless

There are no surprises here, but it's still a sad read. It was posted over at the france24.com website yesterday...and the link is here.

 

 

 

And the sheeplez sleep...

Gold shines amid gloom of 'worst economic crisis ever'

Fears that quantitative easing will boost inflation and devalue paper money helped propel the gold price $23 higher to close at $1,646 (£1,068) per ounce.

Bank of England Governor Mervyn King’s prediction that this financial crisis could be “the most serious we’ve ever seen” will add to bullion bulls’ conviction that the precious metal is the only safe store of value.

This story appeared in yesterday's edition of The Telegraph...and the photo itself is worth the trip. This is Roy's last offering of the day...and the link is here.

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