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Title: Summer dithering could trigger autumn panic
Source:
The Telegraph (UK)
URL Source: http://www.telegraph.co.uk/comment/ ... ould-trigger-autumn-panic.html
Published: Aug 30, 2011
Author: The Telegraph View
Post Date: 2011-08-30 12:28:28 by nolu chan
Keywords: Euro, Germany, EU
Views: 2448
Comments: 3
Summer dithering could trigger autumn panic The direction must become clear soon because the financial markets are, by nature, impatient. By Telegraph View After a turbulent week or two in the middle of August, the markets managed to calm down despite witnessing the biggest falls in equity prices since the banking crisis of 2008. With summer now at an end and traders returning to their desks, this is the moment of greatest peril. The worst market panics in history have happened in the autumn, including the Wall Street Crash of October 1929, Black Monday of October 1987 and the ejection of sterling from the Exchange Rate Mechanism in September 1992. The sub-prime calamity of September 2007 and the collapse of Lehman Bros exactly a year later triggered the crisis from which the world’s economies are still struggling to recover. Historically, summer jitters in the markets are followed by an autumn crash. Will this year be different? One problem is that the underlying causes of market uncertainties have not been removed. If anything, political stasis over the summer has made things worse. The eurozone remains mired in seemingly intractable difficulties. Yesterday, Jean-Claude Trichet, president of the European Central Bank (ECB) became the latest leading financier to urge the political leaders to get a move on. The “full and timely” implementation of the July 21 deal to bail out the indebted Geek economy was essential, he told that singularly irrelevant body, the European Parliament. At the weekend, Christine Lagarde, the head of the IMF, suggested that Europe’s banks needed to accumulate more capital, or risk seeing the fragile recovery derailed. Neither of these interventions will ease the worries in the markets. They highlight the growing fear that the July 21 deal is beginning to unravel amid opposition in Germany that has left Angela Merkel, the Chancellor, looking dangerously exposed. Mrs Lagarde’s suggestions that banks remain undercapitalised – something denied by the ECB – will do little to revive confidence in their stock or in the prospect that Europe will begin to see even modest levels of growth without which it will be impossible to pay off debt. In the end, this remains Germany’s call. As Joschka Fischer, the former foreign minister, said in an interview yesterday, this issue has been badly handled by Berlin, though for understandable internal political reasons: any move towards greater EU fiscal integration will be funded by German taxpayers. None the less, it is important that the direction of travel becomes clear soon because the markets are, by nature, impatient. As a result of the summer’s dithering, political decisions that should have been taken with coolheads will now end up as a panicky response to another autumn crisis.
The Telegraph (UK)
8:34PM BST 29 Aug 2011
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#1. To: All (#0)
German Chancellor Angela Merkel no longer has enough coalition votes in the Bundestag to secure backing for Europe's revamped rescue machinery, threatening a consitutional crisis in Germany and a fresh eruption of the euro debt saga. By Ambrose Evans-Pritchard Mrs Merkel has cancelled a high-profile trip to Russia on September 7, the crucial day when the package goes to the Bundestag and the country's constitutional court rules on the legality of the EU's bail-out machinery. If the court rules that the €440bn rescue fund (EFSF) breaches Treaty law or undermines German fiscal sovereignty, it risks setting off an instant brushfire across monetary union. The seething discontent in Germany over Europe's debt crisis has spread to all the key institutions of the state. "Hysteria is sweeping Germany " said Klaus Regling, the EFSF's director. German media reported that the latest tally of votes in the Bundestag shows that 23 members from Mrs Merkel's own coalition plan to vote against the package, including twelve of the 44 members of Bavaria's Social Christians (CSU). This may force the Chancellor to rely on opposition votes, risking a government collapse. [snip]
that singularly irrelevant body, the European Parliament the IMF, suggested that Europe’s banks needed to accumulate more capital Since their primary concern is protecting the corrupt banksters, they'll print more money and pay their debt in devalued paper. Kicking the can down the road is their strategy, IMO. They're in the process of implementing plan B, WW III their real economic recovery scheme. It might work for a few days.
Obama's watch stopped on 24 May 2008, but he's been too busy smoking crack to notice.
Capitalists are that irrational? It is clear that this is now a gamed betting system not a finance system.
With the economy still in the dumper -- maybe permanently? -- and full-time jobs becoming as scarce as rain during a drought, huge percentages of Americans have had their (misplaced) faith in the American dream shaken, the upper-middle-class consumerist lifestyle is exposed as a mirage for anybody who plays by the rules. Capitalism and the America that embraced it as a way of life is now and forever more a failure. It does me good to know that the generation that voted in Reagan and his ideology will see their America die from that ideology before their very own eyes and knowing they had a hand in its destruction.
Euro bail-out in doubt as 'hysteria' sweeps Germany
The Telegraph (UK)
8:07PM BST 28 Aug 2011
#2. To: nolu chan (#0)
(Edited)
the European Central Bank (ECB)
"We (government) need to do a lot less, a lot sooner" ~Ron Paul
#3. To: nolu chan, hondo68 (#1)
With summer now at an end and traders returning to their desks, this is the moment of greatest peril.
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