The Spanish Cross Of Forbearance
The
wind picked up across the plains, the windmill began to turn and “The
Ingenious Gentleman Don Quixote of La Mancha” rode out once more to do
battle. The ever faithful Sancho Panza, not wishing to be left behind,
was in attendance and the windmills were now the banks and the regional
debt of the country. You see, the Troubadour, Mariano Rajoy, does not
wish the country to take any responsibility. It is to be the banks, not
to injure the pride of the nation, that are the culprits and the banks,
run by the empanada consortium, who are to be blamed. The IMF has
released a statement claiming the banks need about $46bn which is the
typical posture of the IMF these days; underestimating liabilities and
then finding that more money is needed later; which they already knew of
course. “Under estimate the liabilities and over estimate the assets”
is the mantra sung at the IMF these days at the morning prayers as their
credibility is as certain as the stature of the giants fought by Don
Quixote. The extra money, suggested in the IMF report to ring wall the
banks, is another gust of wind as it is directed to the regional debts
of course which no one wants to mention as the faceless Men in Black
ride into Madrid to claim their latest victim. The beating of chests
can be heard in Andalusia as there is no ESM; it does not yet
exist regardless of the panderings of the savants that ride the
airwaves. Germany has not even voted on it yet so that that ballyhoo
that the ESM is the “Saving Grace” is the stuff and fluff from which
nonsense is composed.
As European FinMins Discuss Giving Spain €100 Billion, Spain Has Yet To Request A Bailout
The
European financial ministers' meeting started at 4:00 pm CET. What are
they discussing? According to the WSJ, nothing short of "a commitment to provide as much as €100 billion ($125 billion) in support for Spain's ailing banking sector."
At least we now know that that Spanish bank trot so widely avoided by
the mainstream media was just a little more kinetically-charged than
previously expected, because for Spain to actually demand the money,
even if implicitly, it means it has a capital shortfall, which can only arise from an outflow of liquidity, as mere real estate impairments do not have any impact on liquidity. So far so good. There is only one problem: Spain has yet to formally request the money! According to newspaper ABC, "Spain wants to convince European partners that IMF shouldn’t participate in aid for country’s banks because of potential stigma. Aim of talks taking place today is to agree legal framework and conditions for a potential rescue, newspaper
says." Potential rescue you see: not an actual one. Just because, as
we explained patiently to the 5 year old algos out there, Spain will
have none of this "conditionality" that would be imposed on it by
Germany, and the IMF, should it actually be formally a bail out target.
Which of course would also have the unpleasant side effect of pushing
its spreads tighter for a few hours, then blowing them out
parabolically once carbon-based investors out there realize what has
just happened. As for the ultimate question: just where will €1 of money come from in this broke continent, let alone €100 billion... why, better not to bother with details.How Will A Spanish Bailout Deal Effect The Greek Elections ?
Spain is holding out for a better bailout deal. Spanish banks need an estimated €40 billion but will likely need much more than that. (see definition of ‘recipriversexcluson’) The ECB wants to lend the money to Spain so that it can then bailout it’s own banks but Spain wants the ECB to lend the money directly to the Spanish banks, in this way the ‘loan’ is not a Spanish sovereign liability but a liability of the banks themselves. The ECB, correctly, perceive that those Spanish banks don’t have an assured future even with a bailout, whereas, the country of Spain is unlikely to disappear from the map of Europe anytime soon, and they have a better chance of getting their money bank from Spain than if they bailed out the banks directly. This issue is at the heart of the negotiations which have taken place over the last week and look set to be concuded by teleconference this afternoon. I’ve written above that it’s the ECB negotiating with Spain but in reality it’s Germany and some other Northern Eurozone countries who are driving the ECB position.
All this wrangling appears rather interesting if you happen to be a Greek trying to decide who to vote for in the upcoming Greek election.
Friday Dump Complete: Moody's Warns Of Spanish Downgrade, Threatens AAA-Countries In Case Of Grexit
First we got Spain miraculously announcing late at night local time, but certainly after close of market US time, that the bailout so many algorithms had taken for granted in ramping stocks into the close may not be coming, because, picture this, Germany may have conditions when bailing the broke country's banks out, and Spain is just not cool with that, and now, after the close of FX and futures trading, we get Moody's giving us the warning the after Egan-Jones, S&P, and Fitch, it is now its turn to cut the Spanish A3 rating."As Spain moves closer to the need for direct external support from its European partners, the increased risk to the country's creditors may prompt further rating actions. The official estimates of recapitalising Spain's banking system have risen significantly and the country's indirect reliance on European Central Bank (ECB) funding via its banks has been growing. Moody's is assessing the implications of these increased pressures and will take any rating actions necessary to reflect the risk to Spanish government creditors. Moody's rating on Spain is currently A3 with a negative outlook." Moody's also warns, what everyone has known for about 2 years now, that Italy could be next: "However, Spain's banking problem is largely specific to the country and is not likely to be a major source of contagion to other euro area countries, except for Italy, which likewise has a growing funding reliance on the ECB through its banks." Of course none of this is unexpected. What will be, however, to the market, is when all 3 rating agencies have Spain at BBB+ or below, which as ZH first pointed out at the end of April will result in a 5% increase in repo haircuts on Spanish Government Bonds, resulting in yet another epic collateral squeeze for the country which already is forced to pledge Spiderman towels to the central bank.from thevictoryreport1 :
This week I had the opportunity to talk with the one and only Jim Willie of GoldenJackass.com. Forgive the less than stellar audio. Jim’s message is important and worth any struggle you might confront in order to listen. Note: Working towards improved audio in the future.
In Part One:
Jim talks about life prior to GoldenJackass, zero percent interest rates, interest rate swaps, derivatives, the deep trigger, US dollar, and Fort Knox and COMEX gold and silver.
In Part Two: Jim discusses the characteristics and rational for a continued gold and silver bull market, and concludes with his ideas for bringing criminal banksters to justice.
from KingWorldNews:
Nigel Farage: Member of the European Parliament (MEP) & Founding
Member of the UK Independence Party (UKIP) – Nigel is MEP for the South
East region and is the leader of the parliamentary party in the EU
parliament.
He has worked for British, French and American companies operating in the commodity markets, especially the London Metal Exchange (since 1982).
The central aim of the party is the UK’s withdrawal from the European Union and to regain control of this nation’s governance through our own Parliament at Westminster.
Nigel was a Conservative activist from his schooldays until the overthrow of Margaret Thatcher; John Major’s signing of the Maastricht Treaty brought his membership to an end.
LISTEN NOW @ KingWorldNews.com
Nigel Farage: Member of the European Parliament (MEP) & Founding
Member of the UK Independence Party (UKIP) – Nigel is MEP for the South
East region and is the leader of the parliamentary party in the EU
parliament.He has worked for British, French and American companies operating in the commodity markets, especially the London Metal Exchange (since 1982).
The central aim of the party is the UK’s withdrawal from the European Union and to regain control of this nation’s governance through our own Parliament at Westminster.
Nigel was a Conservative activist from his schooldays until the overthrow of Margaret Thatcher; John Major’s signing of the Maastricht Treaty brought his membership to an end.
LISTEN NOW @ KingWorldNews.com
Do You Have Systemic Insurance?
Eric De Groot at Eric De Groot - 1 hour ago
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Spain officially asks for a bailout/Italy in the wings/Gold and silver rebound from a brutal raid/
Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 1 hour ago
Good
morning Ladies and Gentlemen:
Gold closed the comex session at $1590.10 up $3.50. Silver fell by only
6 cents to $28.46. Our two precious metals were down badly early in
the Asian session heading into the European time zone. Usually the
bankers try to enhance the momentum downward as they continued to supply
paper gold and silver.
However on Friday, huge demand surfaced probably from
The Global Economic Restructuring
Admin at Jim Rogers Blog - 1 hour ago
The global economic restructuring from England to America came with the
economic and financial crisis made by politics at that time. The world now
sees a similar change again, the transition from America to Asia. Moreover,
this financial crisis is also led by these mistakes from policy makers. - *in
MW *
*Jim Rogers is an author, financial commentator and successful
international investor. He has been frequently featured in Time, The New
York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The
Financial Times and is a regular guest on Bloomberg and CNBC.*
Staggering Amounts of Gold & Silver Being Purchased
Eric De Groot at Eric De Groot - 3 hours ago
Those expecting the mainstream media to confirm huge physical purchases
through London will be disappointed. Gold will be trading at significantly
higher prices by the time China reports its actual reserves So as I said
earlier, the bullion banks are ringing the register at both ends, while
trying to extricate themselves from their short positions in the paper
market. They are attempting to...
[[ This is a content summary only. Visit my website for full links, other
content, and more! ]]I would like to Thank Kevin O. our 7th donor, for his very generous donation.
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The Trouble with Rand Paul
Rand Paul just endorsed a man who is deeply hostile to human liberty.
Perhaps that’s Rand’s idea of playing politics? Come to the table,
strike a deal, get what you can. Trouble is, it’s tough striking a good
deal when the guy on the other side of the table believes that the
government should be allowed to claim — without having to produce any evidence whatsoever
— that certain people are terrorists, and therefore should be detained
indefinitely without any kind of due process. John Aziz has always been uncomfortable with the children of politicians becoming politicians. Every anointed child feels like a step away from meritocracy. Dynasties are dangerous, because the dynasty itself comes to be more important than the qualities of the politicians.
Who would Rand Paul be if he wasn’t Ron Paul’s son? Just another
neocon. They just ride on the establishment steamroller, into foreign
occupations, empire building, corporate welfare, and banking bailouts.
Into Iraq, and soon into Iran. Rand Paul just got on the steamroller.from BrotherJohnF:
By The Daily Reckoning, Daily Reckoning:
The glorified European currency union
that was to fix all that was wrong with Europe is falling apart. The
patchwork bailout schemes introduced month by month delay the collapse.
But the time between fixes is growing shorter and shorter.
And the only real fix of dramatic spending cuts, sound money and banking, deregulation, debt repudiation, and liquidation are politically unviable. That’s because the political elites would not benefit from such policies, and their interests are not aligned with those of the people.
In the United States, the combination of stagnant labor markets and struggling stock markets has cast a spell of doom over nearly everyone. For most American observers who look only at superficial signs of economic health, this is a perfect storm. So long as stocks are rising, even a real zombie apocalypse wouldn’t be noted. But if stocks are struggling, everything seems wrong with the world.
Read More @ DailyReckoning.com.au
I would like to Thank Kevin O. our 7th donor, for his very generous donation.
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The glorified European currency union
that was to fix all that was wrong with Europe is falling apart. The
patchwork bailout schemes introduced month by month delay the collapse.
But the time between fixes is growing shorter and shorter. And the only real fix of dramatic spending cuts, sound money and banking, deregulation, debt repudiation, and liquidation are politically unviable. That’s because the political elites would not benefit from such policies, and their interests are not aligned with those of the people.
In the United States, the combination of stagnant labor markets and struggling stock markets has cast a spell of doom over nearly everyone. For most American observers who look only at superficial signs of economic health, this is a perfect storm. So long as stocks are rising, even a real zombie apocalypse wouldn’t be noted. But if stocks are struggling, everything seems wrong with the world.
Read More @ DailyReckoning.com.au
by Stephen Lendman, SJLendman.Blogspot.com:
This writer’s recent book titled “How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War” includes a chapter on America’s student loan racket. It discusses the issue in detail.
It explains a disturbing government/corporate partnership. Students are exploited for profit. Providers are enriched. For many, rising tuition and fees make higher education unaffordable. Others need large loans to attend. As a result, they become debt entrapped.
Some face burdens up to $100,000 or higher. If unpaid after 30 years, it’s a $500,000 obligation. If default or declare bankruptcy, it’s unforgiven. Bondage is permanent.
Lenders thrive from defaults. Wages can be garnished. So can portions of Social Security and other retirement benefits. A conspiratorial alliance of lenders, guarantors, servicers, and collection companies derive income from debt service and inflated collection fees.
Read More @ SJLendman.Blogspot.com
This writer’s recent book titled “How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War” includes a chapter on America’s student loan racket. It discusses the issue in detail.It explains a disturbing government/corporate partnership. Students are exploited for profit. Providers are enriched. For many, rising tuition and fees make higher education unaffordable. Others need large loans to attend. As a result, they become debt entrapped.
Some face burdens up to $100,000 or higher. If unpaid after 30 years, it’s a $500,000 obligation. If default or declare bankruptcy, it’s unforgiven. Bondage is permanent.
Lenders thrive from defaults. Wages can be garnished. So can portions of Social Security and other retirement benefits. A conspiratorial alliance of lenders, guarantors, servicers, and collection companies derive income from debt service and inflated collection fees.
Read More @ SJLendman.Blogspot.com
by David Galland, Casey Research
In April of 2011, writing in The Casey Report,
I warned readers of a pending shift in the Fed’s accommodative monetary
policy. My view at the time was that the shift would result in a
rebound in the dollar, which was in a state of near collapse at the
time.
In April of 2011, writing in The Casey Report,
I warned readers of a pending shift in the Fed’s accommodative monetary
policy. My view at the time was that the shift would result in a
rebound in the dollar, which was in a state of near collapse at the
time.
Should the Fed not end its
quantitative easing on schedule in June, but rather roll straight into a
new round of easing (QE3), it will send an unequivocal signal to the
market that the dollar is to be sacrificed for political expediency. At
which point the waterfall collapse in the world’s reserve currency could
very well occur and any potential Treasury bond buyers – outside of the
Fed, that is – will begin demanding higher interest rates. Those
demands will have to be met, because the day that the Fed is effectively
the sole buyer of Treasury debt will be the day the dollar dies.
Read More @ CaseyResearch.com
by Bruce Krasting Bruce Krasting Blog:
The Swiss National Bank (SNB) intervened in support of its 1.2000
currency peg against the Euro to the tune of CHF 60 billion ($66B) in
the month of May. The vast majority of this intervention occurred during
European trading hours. That means that the SNB bought, on average, the
equivalent of $7mm worth of Euros every minute during the month. That’s
a staggering number to me.
I was aware that there was ongoing intervention. I thought it would end up being a big number. At one point late in the month I was advised that a big American bank dropped Euro 7B on the SNB in a single ticket (think Cetacea). But I’m blown out by the 28% increase in reserves in a single month.
The SNB was clearly concerned with its rapidly growing holdings of Euros. In an effort to diversify its newly acquired Euro reserves it sold Euro 25B and bought dollars, Yen, Sterling and the Canadian and Aussie dollar.
Read More @ BruceKrasting.blogspot.com
from BrotherJohnF:
The Swiss National Bank (SNB) intervened in support of its 1.2000
currency peg against the Euro to the tune of CHF 60 billion ($66B) in
the month of May. The vast majority of this intervention occurred during
European trading hours. That means that the SNB bought, on average, the
equivalent of $7mm worth of Euros every minute during the month. That’s
a staggering number to me.I was aware that there was ongoing intervention. I thought it would end up being a big number. At one point late in the month I was advised that a big American bank dropped Euro 7B on the SNB in a single ticket (think Cetacea). But I’m blown out by the 28% increase in reserves in a single month.
The SNB was clearly concerned with its rapidly growing holdings of Euros. In an effort to diversify its newly acquired Euro reserves it sold Euro 25B and bought dollars, Yen, Sterling and the Canadian and Aussie dollar.
Read More @ BruceKrasting.blogspot.com
from BrotherJohnF:
By Paul Craig Roberts, The Market Oracle:
Ever since the beginning of the financial crisis and Quantitative
Easing, the question has been before us: How can the Federal Reserve
maintain zero interest rates for banks and negative real interest rates
for savers and bond holders when the US government is adding $1.5
trillion to the national debt every year via its budget deficits? Not
long ago the Fed announced that it was going to continue this policy for
another 2 or 3 years. Indeed, the Fed is locked into the policy.
Without the artificially low interest rates, the debt service on the
national debt would be so large that it would raise questions about the
US Treasury’s credit rating and the viability of the dollar, and the
trillions of dollars in Interest Rate Swaps and other derivatives would
come unglued.
In other words, financial deregulation leading to Wall Street’s gambles, the US government’s decision to bail out the banks and to keep them afloat, and the Federal Reserve’s zero interest rate policy have put the economic future of the US and its currency in an untenable and dangerous position. It will not be possible to continue to flood the bond markets with $1.5 trillion in new issues each year when the interest rate on the bonds is less than the rate of inflation. Everyone who purchases a Treasury bond is purchasing a depreciating asset.
Read More @ TheMarketOracle.co.uk
Ever since the beginning of the financial crisis and Quantitative
Easing, the question has been before us: How can the Federal Reserve
maintain zero interest rates for banks and negative real interest rates
for savers and bond holders when the US government is adding $1.5
trillion to the national debt every year via its budget deficits? Not
long ago the Fed announced that it was going to continue this policy for
another 2 or 3 years. Indeed, the Fed is locked into the policy.
Without the artificially low interest rates, the debt service on the
national debt would be so large that it would raise questions about the
US Treasury’s credit rating and the viability of the dollar, and the
trillions of dollars in Interest Rate Swaps and other derivatives would
come unglued. In other words, financial deregulation leading to Wall Street’s gambles, the US government’s decision to bail out the banks and to keep them afloat, and the Federal Reserve’s zero interest rate policy have put the economic future of the US and its currency in an untenable and dangerous position. It will not be possible to continue to flood the bond markets with $1.5 trillion in new issues each year when the interest rate on the bonds is less than the rate of inflation. Everyone who purchases a Treasury bond is purchasing a depreciating asset.
Read More @ TheMarketOracle.co.uk
from Detroit Free Press:
Detroit will run out of cash a week from today if a lawsuit
challenging the validity of the city’s consent agreement with the state
is not withdrawn, city officials said this morning.
Jack Martin, the city’s new chief financial officer, said the city will be broke by June 15 but should be able to make payroll for its employees. He said the city will be operating in a deficit situation if the state withholds payments on a portion of the $80 million in bond money needed to help keep the city afloat.
The battle ultimately could lead to an emergency manager if state officials deem the city to be in violation of the consent agreement that gives the state significant control over Detroit’s finances.
Deputy Treasurer Thomas Saxton told the city Thursday that the lawsuit against the consent agreement could force the state to hold back $80 million in revenue sharing that was used, essentially, as collateral for interim refinancing of bonds issued in March so Detroit would not run out of cash.
Detroit has already used $35 million of the $80 million. The money is in an escrow account, but based on Saxton’s letter city officials will not be able to draw down any more of the money, Martin said.
Read More @ Freep.com
Detroit will run out of cash a week from today if a lawsuit
challenging the validity of the city’s consent agreement with the state
is not withdrawn, city officials said this morning.Jack Martin, the city’s new chief financial officer, said the city will be broke by June 15 but should be able to make payroll for its employees. He said the city will be operating in a deficit situation if the state withholds payments on a portion of the $80 million in bond money needed to help keep the city afloat.
The battle ultimately could lead to an emergency manager if state officials deem the city to be in violation of the consent agreement that gives the state significant control over Detroit’s finances.
Deputy Treasurer Thomas Saxton told the city Thursday that the lawsuit against the consent agreement could force the state to hold back $80 million in revenue sharing that was used, essentially, as collateral for interim refinancing of bonds issued in March so Detroit would not run out of cash.
Detroit has already used $35 million of the $80 million. The money is in an escrow account, but based on Saxton’s letter city officials will not be able to draw down any more of the money, Martin said.
Read More @ Freep.com
by Charlie Spiering, The Washington Examiner:
Fans of the “Ron Paul Revolution” were not happy with his son Sen.
Rand Paul after he endorsed Mitt Romney last night on Sean Hannity’s Fox
News Show.
Paul explained that although his “first choice was always my father,” he insisted that he had a lot in common with Romney, who signaled to him that he was serious about a number of government reforms.
But the backlash on Sen. Paul’s Facebook page was fierce as the vocal supporters of the Ron Paul Revolution, took to the comments section to denounce his son. As of this morning, over 2,000 comments were posted, a majority of them negative. Supporters blasted Rand Paul for “selling out” the legacy of his father to the “Republican establishment.”
A few fans approved of Rand Paul’s decision, but only 270 people “liked” his endorsement message.
Others even speculated that Rand Paul was threatened or bribed into supporting Romney, by the Bilderberg group, suggesting that it wasn’t a coincidence that his endorsement came after their conference.
Read More @ WashingtonExaminer.com
Fans of the “Ron Paul Revolution” were not happy with his son Sen.
Rand Paul after he endorsed Mitt Romney last night on Sean Hannity’s Fox
News Show.Paul explained that although his “first choice was always my father,” he insisted that he had a lot in common with Romney, who signaled to him that he was serious about a number of government reforms.
But the backlash on Sen. Paul’s Facebook page was fierce as the vocal supporters of the Ron Paul Revolution, took to the comments section to denounce his son. As of this morning, over 2,000 comments were posted, a majority of them negative. Supporters blasted Rand Paul for “selling out” the legacy of his father to the “Republican establishment.”
A few fans approved of Rand Paul’s decision, but only 270 people “liked” his endorsement message.
Others even speculated that Rand Paul was threatened or bribed into supporting Romney, by the Bilderberg group, suggesting that it wasn’t a coincidence that his endorsement came after their conference.
Read More @ WashingtonExaminer.com
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