BLACK MONDAY?

Germany is coming to their senses. They have run their country the right way, while the PIIGS have lived far above their means for decades. The entire European Union rests on the back of Germany. They’ve bailed out Ireland. They’ve bailed out Greece. It looks like they are going to tell Italy to fuck off. Most people don’t realize how big Italy is. They have the 8th highest GDP in the world. Their GDP is $2 trillion. Germany’s is $3.3 trillion. Germany will bankrupt itself trying to save the Italians. Plus, Germany knows that Spain is in worse shape than Italy. They have the 12th largest economy in the world.

If Germany is balking, then European stocks will crater on Monday. Asian stocks will crater in anticipation that Europe and the US markets will collapse on Monday. The earliest indication we have is Saudi Arabia, whose market is down 5.5%.

You can bet that the phone lines are buzzing between Timmy Geithner, Bennie Bernanke and their friendly puppet master CEOs – Lloyd Blankfein, Jamie Dimon, Vikrim Pandit, Ken Lewis, John Mack. These are the people trying to retain their wealth and power. They DO NOT care about you, the country, or the long term best interests of our nation. They care about their billions. This is a game to them. They are agreeing on a plan of attack to manipulate the markets on Monday.

It is highly likely that the markets will plunge at the opening as a knee jerk reaction to the S&P downgrade. The criminal Wall Street banks will then instruct their computers to buy stocks and an unbelievable rally will commence. This is supposed to pump confidence back into the investing public. CNBC will do their part and tell you to buy the fucking dip. This is all a show.

The S&P downgrade should have happened two years ago. The US is a  bad long term credit. We will default by printing money and paying interest to gullible foreigners in worthless pieces of paper. The US economy is in recession. Stocks fall 40% during recessions. The wheels are coming off this bus. It doesn’t matter whether stocks finish up or down on Monday. They will be at least 30% lower in the next year. You can Buy the Fucking Dip or you can focus on the facts and the truth. 

It Just Went From Bad To Far, Far Worse As Germany Says Italy Is Too Big For EFSF To Save, Refuses To Carry Euro Bailout Burden

Tyler Durden's picture

Submitted by Tyler Durden on 08/06/2011 12:20 -0400

Remember when we said (yesterday) that Germany will soon balk over the fact that it is pledging its entire economy to bail out an insolvent Europe? Well, that moment has come.

Dow Jones just hitting the tape referencing Spiegel

  • German Govt: Italy Too Big For EFSF To Save – Spiegel
  • German Govt: Doubts Whether Tripling EFSF Would Help It Save Italy
  • German Govt: Italy Must Make Savings, Reforms To Exit Crisis – Spiegel
  • Italy Debt Guarantee Could Raise Doubts Over Germany’s Finances – Spiegel
  • German Govt: EFSF Should Only Help Small, Mid-Size Countries – Spiegel

As a reminder, yesterday’s stopgap announcement by the ECB to expand its SMP purchases of secondary market Italian and Spanish bonds was merely as a precursor to full EFSF monetization until its comes fully online in September (or sooner) in a vastly expanded format (between €1.5 and €3.5 trillion).

If Germany is now against this, which appears to be the case, it pretty much means, well, game over.

Add the uncerainty over the unwind of the Europe rescue “gamechanger” as one of the more naive CNBC anchors said yesterday, and Monday is now guaranteed to be a bloodbath.

As for those saying China will gladly step in and fund a $5 trillion EFSF shortfall, they may want to read the following article from Reuters:

Italian Economy Minister Giulio Tremonti said on Thursday that Asian investors are reluctant to buy Italian bonds because it sees they are not being bought by the European Central Bank.

Speaking at a news conference, Tremonti also said it would be desirable for the central bank to follow the lead of the Japanese and Swiss central banks in taking expansionary steps to tackly the euro zone’s crisis.

“I note that the Bank of Japan today launched quantitative easing and the Swiss cen bank cut rates to zero, we are waiting for decisions if possible, but desirable (from the ECB),” Tremonti said.

When you talk to Asia they say: “We don’t understand what Europe is,” he continued. “The second point is that they say ‘if your central bank doesn’t buy your bonds, why should we buy them”?

P.S. Time to unwind that Bund short we suggested yesterday. In fact, if true, it is time for a big rush to safety.

GERMANS THINK WE’RE INSANE?

No this is not an Onion fake article. I’ve written plenty of America in decline articles, but I’ve never come to the conclusion that the solution is to expand our entitlement state. The Germans are appalled at how we treat our unemployed. Only 99 weeks of unemployment. How cruel. In Germany you can get permanent unemployment. Sounds great. Where do I sign up? Could they pick anyone less sympathetic than a moronic woman who somehow made $80,000 as a secretary on Wall Street and believed she deserved to live in a six bedroom McMansion. The tears are flowing freely as I read about her eating out of trash cans. I wonder what her plight would have been if she had lived in a three bedroom modest house and had saved the difference in a rainy day fund. How silly am I to state such a thing?

The Germans think we are cruel and insane for not expanding our social net. Have they noticed what is happening in Greece, Ireland, France, UK, Spain and Portugal? Their socialist fantasy is imploding. It hasn’t reached Germany yet, but one look at this chart will tell you all you need to know. The Germans should worry about their own plight. 

America in Decline: Why Germans Think We’re Insane

By Democrats Ramshield, AlterNet
Posted on December 26, 2010, Printed on December 27, 2010
http://www.alternet.org/story/149324/

As an American expat living in the European Union, I’ve started to see America from a different perspective. 

The European Union has a larger economy and more people than America does. Though it spends less — right around 9 percent of GNP on medical, whereas we in the U.S. spend close to between 15 to 16 percent of GNP on medical — the EU pretty much insures 100 percent of its population. 

The U.S. has 59 million people medically uninsured; 132 million without dental insurance; 60 million without paid sick leave; 40 million on food stamps. Everybody in the European Union has cradle-to-grave access to universal medical and a dental plan by law. The law also requires paid sick leave; paid annual leave; paid maternity leave. When you realize all of that, it becomes easy to understand why many Europeans think America has gone insane. 

Der Spiegel has run an interesting feature called “A Superpower in Decline,” which attempts to explain to a German audience such odd phenomena as the rise of the Tea Party, without the hedging or attempts at “balance” found in mainstream U.S. media. On the Tea Parties: 

Full of Hatred: “The Tea Party, that group of white, older voters who claim that they want their country back, is angry. Fox News host Glenn Beck, a recovering alcoholic who likens Obama to Adolf Hitler, is angry. Beck doesn’t quite know what he wants to be — maybe a politician, maybe president, maybe a preacher — and he doesn’t know what he wants to do, either, or least he hasn’t come up with any specific ideas or plans. But he is full of hatred.” 

The piece continues with the sobering assessment that America’s actual unemployment rate isn’t really 10 percent, but close to 20 percent when we factor in the number of people who have stopped looking for work. 

Some social scientists think that making sure large-scale crime or fascism never takes root in Europe again requires a taxpayer investment in a strong social safety net. Can we learn from Europe? Isn’t it better to invest in a social safety net than in a large criminal justice system? (In America over 2 million people are incarcerated.) 

Jobless Benefits That Never Run Out 

Unlike here, in Germany jobless benefits never run out. Not only that — as part of their social safety net, all job seekers continue to be medically insured, as are their families. 

In the German jobless benefit system, when “jobless benefit 1” runs out, “jobless benefit 2,” also known as HartzIV, kicks in. That one never gets cut off. The jobless also have contributions made for their pensions. They receive other types of insurance coverage from the state. As you can imagine, the estimated 2 million unemployed Americans who almost had no benefits this Christmas seems a particular horror show to Europeans, made worse by the fact that the U.S. government does not provide any medical insurance to American unemployment recipients. Europeans routinely recoil at that in disbelief and disgust. 

In another piece the Spiegel magazine steps away from statistics and tells the story of Pam Brown, who personifies what is coming to be known as the Nouveau American poor. Pam Brown was a former executive assistant on Wall Street, and her shocking decline has become part of the American story: 

 American society is breaking apart. Millions of people have lost their jobs and fallen into poverty. Among them, for the first time, are many middle-class families. Meet Pam Brown from New York, whose life changed overnight.  The crisis caught her unprepared. “It was horrible,” Pam Brown remembers. “Overnight I found myself on the wrong side of the fence. It never occurred to me that something like this could happen to me. I got very depressed.”  Brown sits in a cheap diner on West 14th Street in Manhattan, stirring her $1.35 coffee. That’s all she orders — it’s too late for breakfast and too early for lunch.  She also needs to save money. Until early 2009, Brown worked as an executive assistant on Wall Street, earning more than $80,000 a year, living in a six-bedroom house with her three sons. Today, she’s long-term unemployed and has to make do with a tiny one-bedroom in the Bronx. 

It’s important to note that no country in the European Union uses food stamps in order to humiliate its disadvantaged citizens in the grocery checkout line. Even worse is the fact that even the humbling food stamp allotment may not provide enough food for America’s jobless families. So it is on a reoccurring basis that some of these families report eating out of garbage cans to the European media.  

 For Pam Brown, last winter was the worst. One day she ran out of food completely and had to go through trash cans. She fell into a deep depression … For many, like Brown, the downfall is a Kafkaesque odyssey, a humiliation hard to comprehend. Help is not in sight: their government and their society have abandoned them. 

Pam Brown and her children were disturbingly, indeed incomprehensibly, allowed to fall straight to the bottom. The richest country in the world becomes morally bankrupt when someone like Pam Brown and her children have to pick through trash to eat, abandoned with a callous disregard by the American government. People like Brown have found themselves dispossessed due to the robber baron actions of the Wall Street elite. 

Hunger in the Land of the Big Mac 

A shocking headline from a Swiss newspaper reads (Berner Zeitung) “Hunger in the Land of the Big Mac.” Though the article is in German, the pictures are worth 1,000 words and need no translation. Given the fact that the Swiss virtually eliminated hunger, how do we as Americans think they will view these pictures, to which the American population has apparently been desensitized. 

 

This appears to be a picture of two mothers collecting food boxes from the charity Feed the Children. 

Perhaps the only way for us to remember what we really look like in America is to see ourselves through the eyes of others. While it is true that we can all be proud Americans, surely we don’t have to be proud of the broken American social safety net. Surely we can do better than that. Can a European-style social safety net rescue the American working and middle classes from GOP and Tea Party warfare?