The Official Greek PSI Website

The first press release from the Hellenic Republic Ministry of Finance, as per the official and newly created PSI website:


HELLENIC REPUBLICMINISTRY OF FINANCE
Press Release 
For Immediate Release 
24 February, 2012

Athens, Greece. The Ministerial Council of the Hellenic Republictoday approved the terms of invitations to be made to private sectorholders outside the United States of bonds issued or guaranteed by theRepublic and selected to participate in the exchange offers and/or consentsolicitations to be made by the Republic in furtherance of the 26 October2011 Euro Summit Statement and the 21 February 2012 EurogroupStatement, referred to as the Private Sector Involvement. The bondsinvited to participate in PSI (listed by series in Annex I) have an aggregateoutstanding face amount of approximately Euro 206 billion.

The exchange offers and/or consent solicitations will permit privatesector holders to exchange bonds selected to participate in PSI for (i) newbonds to be issued by the Republic on the PSI settlement date having aface amount equal to 31.5% of the face amount of their exchanged bonds,(ii) European Financial Stability Facility notes with a maturity date of twoyears or less from the PSI settlement date and having a face amountequal to 15% of the face amount of their exchanged bonds, and (iii)detachable GDP-linked securities issued by the Republic having a notionalamount equal to the face amount of each holder s new bonds. On the PSIsettlement date, the Republic will also deliver short-term EFSF notes indischarge of all unpaid interest accrued up to 24 February 2012 onexchanged bonds. The terms of the new bonds, GDP-linked securitiesand EFSF notes are summarized in Annex II.

The consent solicitation relating to Greek-law governed bondsissued by the Republic prior to 31 December, 2011 (having an aggregateoutstanding amount of approximately Euro 177 billion) will seek theconsent of the affected holders to the amendment of these bonds inreliance on Law 4050/2012 (the Greek Bondholder Act) enacted by theGreek Parliament on 23 February 2012. The proposed amendmentsprovide for the redemption of the affected bonds in exchange for the PSIconsideration described above. Under the collective action procedures

introduced by the Greek Bondholder Act, the proposed amendments willbecome binding on the holders of all the Republic s Greek-law governedbonds issued prior to 31 December 2011 identified in the act of theMinisterial Council approving the PSI invitations, if at least two thirds byface amount of a quorum of these bonds, voting collectively withoutdistinction by series, approve the proposed amendments. One half byface amount of all the Republic s bonds subject to the collective actionprocedures will constitute a quorum for these purposes. The Republic willalso separately solicit consents in favour of equivalent amendments fromthe holders of its foreign-law governed bonds and its foreign-lawguaranteed bonds in accordance with the terms of those bonds.

To satisfy regulatory requirements applicable in a number ofjurisdictions, the Republic will invite the holders of certain series of bondsto participate in the Republic s exchange offer but not its consentsolicitation, and holders of the Republic s Swiss-law governed bonds maynot exchange their bonds but will be solicited to consent to theiramendment. Holders will receive substantially the same considerationirrespective of whether they participate in the exchange offer and/or aconsent solicitation. The Republic also intends to invite holders in theUnited States of America to participate in a concurrent exchange offer andconsent solicitation on substantially the same terms. The Republic willnot, however, deliver any EFSF notes to holders in the United States ofAmerica, who will instead be paid the cash proceeds realized from thesale of the EFSF notes they would otherwise have received.

The full terms of each invitation will be made available in electronicform only through www.greekbonds.gr. In order to participate in aninvitation, holders will need to comply with the procedures and offer anddistribution restrictions described in the Republic s related invitationmemorandum available online at www.greekbonds.gr.

The invitations will be subject to certain conditions, including afinancing condition and a minimum participation condition. Under thefinancing condition, the Republic will not proceed with any of thetransactions contemplated in the invitations unless it meets all of theconditions under the financing agreements entered into with the EFSF forthe Republic to be entitled to receive the EFSF notes, which include theapproval by EWG, at its absolute discretion, of such disbursements.In addition, unless bonds representing at least 90% of theaggregate face amount of all bonds selected to participate in PSI arevalidly tendered for exchange, the Republic will not be required to settleany of the exchanges. However, if the Republic receives consents to theproposed amendments that would result in at least 90% of the aggregateface amount of all bonds selected to participate in PSI (including bondstendered for exchange) being exchanged on the terms proposed by theRepublic, the Republic intends, subject to all other conditions being satisfied and in consultation with its official sector creditors, to declare theproposed amendments effective and to complete the exchange of allbonds selected to participate in PSI that would be bound by the proposedamendments.

If at least 75% but less than 90% of the aggregate face amount ofall bonds selected to participate in PSI are validly tendered for exchange,the Republic, in consultation with its official sector creditors, may proceedto exchange the tendered bonds without putting any of the proposedamendments into effect. However, if less than 75% of the aggregate faceamount of the bonds selected to participate in PSI are validly tendered forexchange, and the Republic does not receive consents that would enableit to complete the proposed exchange with respect to bonds selected toparticipate in PSI representing at least 75% of the aggregate face amountof all bonds selected to participate in PSI, the Republic will not proceedwith any of the transactions described above.

Deutsche Bank AG, London Branch, and HSBC Bank plc havebeen appointed to act as Closing Agents for the invitations madeoutside the United States. Bondholder Communications Group LLCand Hellenic Exchanges, S.A. have been appointed to act as the jointInformation, Exchange and Tabulation Agent.

Conference Call Delayed

The conference call between Merkel, Sarkozy and Papandreou of Greece has been moved back one hour, and will now be held at 6PM London time.

The Comfort Call

Yesterday's conference call between Sarkozy, Merkel and Papandreou has offered the markets short term respite (in the form of a modest dead cat bounce).

However, it changes nothing as it was but a mere restatement of wishes and hopes. France and Germany offered their full support for Greece remaining in the Eurozone. However, they pleaded with Greece to implement the promised economic reforms as a way of stabilising the Eurozone.

Papandreou tried to convince the French and German leaders that Greece would follow through on its promises.

All very nice, maybe.

However, even if the three callers were comforted by their promises, the markets will need more than a comfort call to convince them that anything substantive will come from this. There is no plan, merely platitudes, reality will set in and Greece will default and leave the Eurozone.

BTW, tomorrow is the 19th anniversary of the UK being kicked out of the ERM.

The Global Liquidity Bailout

World Central Banks Announce Global Dollar Shortfall Funding Resolution

What does this mean?

It means that at least one country is close to defaulting, and that this mechanism has been put in place beforehand to stop global financial meltdown.

It also means that the central banks have taken away the responsibility for trying to resolve the economic crisis from the hands of the politicians.

The Greek Tragedy - Utterly Pathetic

Which world "leader" said this to his Cabinet yesterday?

"I can say that in 85%, the priorities we had put in August were implemented. 

This is a good rate. 

You see, because the remaining 15% had difficulties, some were biased. But to put such short-term goals is very important because we also have a direct orientation. 

We do, however, and a broader plan for the coming months to organize the best moves ahead. 

Good job."

(source Zero Hedge)

Why none other than Greek Prime Minister George Papandreou.

Completely and utterly pathetic!

Default Day 20th September

September 20th is Greek default day, as Mr 85% cancels his trip to the USA.

Greece Humiliated

Evangelos Venizelos, Greece's Finance Minister, is upset that Greece is (in his view) being made a "scapegoat" for the debt crisis in the eurozone.
The BBC s him as saying that European and international institutions were using Greece as an "easy excuse" to "hide their own lack of competence to manage the crisis", and that Greece has been "blackmailed and humiliated".

All very well, maybe. However, no one forced Greece to commit fraud and no one forced Greece to join the Euro.

Default Day Edges Closer

Greece looks set to default within 24 hours.

Reuters reports that the conference call today between Greek leaders and EU and IMF officials has been pushed back by four hours to 7pm Greek time (5pm UK time).

Earlier today it had been announced the call would be at 3pm.

Paul mason the Economics Editor of Newsnight has Tweeted the following:

"Just arrived in Greece where finmin makes fiery speech denouncing journalists as enemies of ppl, in land where protesters attack journalists"

It is very clear that for Greece, the game is over!

The End of Days

Yesterday's conference call between various EU/IMF bods (aka Troika) and the embattled Greek government ended with not a bang but a whimper. Various self serving platitudes were presented to the press which, reading between the lines, indicates no one has come up with any plan that will work.

Oh, I exaggerate a tad, they have come up with one plan....namely to have another conference call today!

Default for Greece is a certainty, the only question remaining is the exact day (today, tomorrow etc) on which it will officially occurs. Until that happens the EU and world economy remains in limbo, awaiting what the markets know but the politicians deny will happen.

To add to the febrile atmosphere in Europe, S&P downgraded Italy with an outlook "negative" and Moody's is expected to follow suit.

As if the above issues are not bad enough, the media reports that Siemens withdrew around ö800.5BN from a large French bank two weeks ago, and placed the money with the ECB

Michel Perebeau, Chairman of BNP, hotly denied this morning that it was his bank.

Whichever bank it is, the fact that a major European company has no faith in a major European bank shows just how bad things really are in Europe.

Sadly for the people of Europe we are being "governed" by a political "elite" whose vision of how the world works (or should work in their minds) has been shattered. Hence they are displaying symptoms of shock and depression, and are a danger to themselves and us.

Update

Reuters reports that a large market-making state bankin China's onshore foreign exchange market has stopped foreignexchange forwards and swaps trading with several European banks (including Societe Generale , Credit Agricole and BNP Paribas) because of the unfolding debt crisis in Europe.

Greece Enters The Twilight Zone BREAKING NEWS

The EC claims that "good progress" was made in yesterday's phone conference between Evangelos Venizelos, the Greek finance minister, and the troika.

Platitudes are all very well. However, it is the citizens of Greece who will have to endure the pain of the additional austerity measures being imposed on them.

Oddly enough the Greek government is currently in "silent" mode wrt communicating "progress" to its own people. Allegedly there will be a statement issued this afternoon, letting the people know what fresh pain they will have to endure.

Senior bods from the troika will return to Athens next week, to take a hard look at the figures and the reality of Greece's promises (so often broken in the past). It also seems that the troika will be discussing the 2011 budget next week.

The sharp eyed amongst you will have noticed that as we are now in September, there are but three months remaining of 2011.

Such is the absurdity of the "Twilight Zone" of Greek finances and the schemes of those who are trying to keep the dead parrot of the Euro experiment alive!

BTW, if you think that things can't get any worse then I suggest that you read this:

Greece has a EUR2bn zero-coupon bond due on 9/23 and a de minimus EUR13mm in interest payments due 9/30.

Source Zero Hedge.

UPDATE

The Cabinet meeting postponed till later this afternoon while the Greek Finance Minister faces objections to the new measures in Parliament.

BREAKING NEWS

Austerity measures being debated by Cabinet - public announcement might not be made till Monday

ECB Eases Rules

Judging by today's press release from the ECB, wrt abolishing eligibility requirements, it seems that they are making ready to accept defaulted Greek government bonds.

Do they know something that they haven't yet told anyone else?

21 September 2011 - ECB publishes an updated version of the General Documentation

The European Central Bank (ECB) has today published an updated consolidated version of The implementation of monetary policy in the euro area: General documentation on Eurosystem monetary policy instruments and procedures .

The version published today mainly includes changes on 3 aspects:

First, the Eurosystem has abolished the eligibility requirement (Sections 6.2.1.5 and 6.2.1.6) that debt instruments issued by credit institutions, other than covered bank bonds, are only eligible if they are admitted to trading on a regulated market. At the same time, the Eurosystem risk control measures for marketable assets (Section 6.4.2) have been amended.

Specifically, the Eurosystem has reduced the limit for the use of unsecured debt instruments issued by a credit institution or by any other entity with which the credit institution has close links. Such assets may only be used as collateral to the extent that the value assigned does not exceed 5% of the total value of collateral submitted (instead of 10%, as previously stipulated).

Dark Clouds

Despite the announcement by the Fed of Operation Twist, where it will buy $400BN in 6-year to 30-year Treasurys by June 2012 and over the same period sell $400BN of Treasurys maturing in 3 years or less, markets are in free fall.

For why?

The inclusion of more 30-year bonds than expected means that the Fed wants to keep very long-term rates lower for a long period. This means that the Fed views America's economic problems as being long term (they rubbed salt into the wounds by stating that the economy has "significant downside risks").

Aside from American economic woes, the shambles that is the Eurozone continues to sap the global economy.

Chris Williamson, chief economist at PMI compiler Markit, summed up the reality:

"The recovery has finished, we are now contracting. 

The forward looking indicators suggest that things will deteriorate further in the coming months."

Meanwhile, has anyone seen the Greek Prime Minister George Papandreou since he abruptly turned his plane around mid air and aborted his trip to the USA?

The 50% Haircut

Two Greek newspapers claim that the Greek Finance Minister, Evangelos Venizelos, told parliament that he sees three scenarios to resolve the debt crisis, including one involving an orderly default with a 50% haircut for bondholders.

Unsurprisingly, the government is denying he said any such thing.

Draw your own conclusions as to whether he said it or, most certainly secretly believes it.

Six Weeks To Save The Euro

Six weeks is too far away (even if there was a "solution" waiting there for them).

Political timescales and market timescales are out of synch.

Our so called political "elite" are presiding over the shattered wreckage of their "world vision". They are in shock and denial that their world view has been destroyed. As such they are a danger to themselves and a danger to the world economy, as they are attempting to put in place "solutions" for a world vision that no longer exists.

IMO, Germany should leave the Euro and allow those who remain to devalue it to bring their shattered economies back from the dead.

Sadly, because those in charge still cling to the their shattered vision, the reality will be a Greek exit coupled with the PIIGS falling one by one.

In other news, gold fell last week not because of the strength of the dollar (as incorrectly reported in the media) but because news leaked to a few that gold margins were to be increased (news officially only released yesterday).

The Grand Plan To Save The Euro

Here's just a few reasons why the plan to save the Euro won't work:

1 The EU wasted a year dithering etc etc..it was in a far better economic position last year to do this.

2 By the time the funding etc is in place, certain banks/countries will have already gone to the wall.

3 The Greek people will not accept the level of austerity required to keep them in the Euro.

4 The politicians are in denial, they won't accept that their view of how the world should work has been shattered.

5 The timing and content of the announcement is a "hail Mary" designed as a stop gap to put a bottom under the markets (form over substance). The markets will see through this, and the relentless pressure to force Greece out will not be abated.

6 The current design of the EU is unsustainable

7 Germany should leave the Euro, and let the PIIGS devalue the Euro to bring the dead economies back to life etc etc.

Catch 22 - The End of The Euro

The IMF and EU have got themselves into "right old pickle" by leaking snippets of a possible rescue plan, over this weekend, that may or may not save the failed Euro experiment.

The key element of this "plan" (were it to ever come to fruition) is an expansion by trillions of the EFSF (the European Financial Stability Facitlity), the EU version of printing money without having the collateral to back it up.

Unfortunately for the panicking Eurocrats (and believe me, they are panicking), leaking "plans" that have not been finalised, yet mention a 50% haircut on Greek debt, do nothing but further undermine and damage their ability to resolve this crisis. The fact that they claim the "plan" won't be ready for six weeks or so hardly adds to its credibility.

Unsurprisingly, the markets are pulling it apart.

Cue S&P, who have stepped up to the plate and specifically warned that if the EFSF is expanded, they will downgrade various countries in the region (including core EU members, ie France and Germany).

Why does this matter?

Downgrades will mean that the EFSF will be rendered useless, in other words the "plan" has been killed before it has even been finalised.

In other news, it seems likely that the ECB will announce an emergency rate cut of 0.5%.

Unsurprisingly the ECB denies this.

Oh, and one more point to brighten your Monday, the Greek haircut of 50% that everyone is talking about is of course nonsense; the actual haircut will in fact be 80%.

The EU "leaders" are displaying "bunker mentality", not a good sign.

Enjoy the rest of your Monday!

Distract The People With a Small War

Greek Prime Minister George Papandreou called for calm over Cyprus in a phone conversation with Turkish Prime Minister Tayyip Erdogan on Monday, a Greek government spokesman said, as regional tensions rise over oil exploration.

Sourece Reuters.

This will end badly.

An Honest Man - Alessio Rastani

A Dishonest Man

"Guarantee that Greece will live up to all its commitments."

Greek PM George Papandreou

Nonsense!

People are planning for a Greek default, the Greeks know it and everyone else knows it.

Greece will take the next tranche of bailout money, then default (as already planned by the EU and the Greeks).

For the reality, see my article posted a few minutes earlier (entitled An Honest Man)

Rumours Feed Markets - The End is Nigh

The European Investment Bank has stated the following today:

There have been media reports about a potential involvement of the EIB in a special purpose vehicle in connection with the EFSF, for the purpose of bailouts.

The EIB has not been approached and has no plans to be involved in this.

The EIB will continue to focus on its mission which is financing viable investment projects."

Why did these rumours start, and what purpose do they serve?

Markets have rallied briefly, in time for the month end, useful for traders et al looking to show a "good" month.

Those who doubt EIB's rebuttal, re read the last sentence:


"The EIB will continue to focus on its mission which is financing viable investment projects."

No one on the planet can call Greece a viable investment.

In fact Valor Economic reports that Brazil is now preparing for a Greek default within the week.

"Something must happen. Greece is a few days [from bankruptcy]" said a high official source."

The Solution To The EU Debt Crisis

Germany and USA Go To War, France Panics

It seems that the relationship between Germany and the USA has taken a nosedive.

The Telegraph reports that German finance minister, Wolfgang Schauble, has said that it would be a folly to boost the EU's bail-out machinery (EFSF) beyond its ö80440BN.

"I don't understand how anyone in the European Commission can have such a stupid idea. The result would be to endanger the AAA sovereign debt ratings of other member states. It makes no sense."

He then told Washington to mind its own business, after President Barack Obama rebuked EU leaders for failing to recapitalise banks and allowing the debt crisis to escalate to the point where it is "scaring the world".

Quote:

"It's always much easier to give advice to others than to decide for yourself. I am well prepared to give advice to the US government."

Well then!

In other news, the FT reports the following:

"A split has opened in the eurozone over the terms of Greece s second ö80109bn bail-out with as many as seven of the bloc s 17 members arguing for private creditors to swallow a bigger write down on their Greek bond holdings, according to senior European officials.

The divisions have emerged amid mounting concerns that Athens funding needs are much bigger than estimated just two months ago. They threaten to unpick a painfully negotiated deal reached with private sector bond holders in July."

The French are really panicking about the deal unravelling because, were it to do so, it would expose how under capitalised French banks really are as the banks would be forced to take a greater hit (one that they cannot afford).

The recent market rallies have been based on leaks spread by those with an interest in seeing a rally at month end, and by the gullible media.

Don't fall for the hype, there is no bailout plan!

Acropolis Now

Either the YesMen have infiltrated Italy's biggest, and most undercapitalied, bank, or the stress of constant, repeated lying and prevarication has finally gotten to the very people who know their livelihoods hang by a thread, and the second the great ponzi is unwound their jobs, careers, and entire way of life will be gone.

Such as the head of UniCredit global securities Attila Szalay-Berzeviczy, and former Chairman of the Hungarian stock exchange, who has written an unbelievable oped in the Hungarian portal Index.hu which, frankly, make Alessio "BBC Trader" Rastani's provocative speech seem like a bedtime story. Only this time one can't scapegoat Szalay-Berzeviczy "naivete" on inexperience or the desire to gain public prominence. If someone knows the truth, it is the guy at the top of UniCredit, which we expect to promptly trade limit down once we hit print.

Among the stunning allegations (stunning in that an actual banker dares to tell the truth) are the following: "the euro is practically dead and Europe faces a financial earthquake from a Greek default"... The euro is beyond rescue ... The only remaining question is how many days the hopeless rearguard action of European governments and the European Central Bank can keep up Greece s spirits. ...."A Greek default will trigger an immediate magnitude 10 earthquake across Europe."..."Holders of Greek government bonds will have to write off their entire investment, the southern European nation will stop paying salaries and pensions and automated teller machines in the country will empty within minutes. In other words: welcome to the Apocalypse...

But wait, there's more. From Bloomberg:

The impact of a Greek default may rapidly spread across the continent, possibly prompting a run on the weaker banks of weaker countries, he said.

The panic escalating this way may sweep across Europe in a self-fulfilling fashion, leading to the breakup of the euro area, Szalay-Berzeviczy added.

Szalay-Berzeviczy has just arrived in Hungary from a trip abroad and can t be reached until later today, a UniCredit official, who asked not to be identified because she isn t authorized to speak to the press, said when Bloomberg called Szalay-Berzeviczy s Budapest office to seek further comment.

And now, for our European readers (first) and everyone else (next), it is really time to panic.

Source ZeroHedge

The Guilty Idiots

Angela Merkel has won the vote in the Bundestag to expand the EFSF. The expansion to the fund is too little and too late.

The Euro is collapsing under its own inherent weaknesses and contradictions.

Votes in the Bundestag will do nothing to stop that.

BTW, The Germans call the current iron eagle in Bundestag (the current version adopted is 1949) the PLEITEGEIER, ie the "CARRION BIRD OF DEFAULT"

The Death of The Greek Economy

The gullible elements of the media may well be reporting the hype from the Eurozone, that yesterday's vote by the German Parliament to approve a larger EFSF resolves the Euro crisis.

Well it doesn't!

1 The EFSF that the Germans have agreed to is not large enough

2 The implementation of the EFSF is not timely enough

3 Wise eyes are now focusing on Greece, which is not in a position to meet its obligations.

Greek Deputy Prime Minister Theodore Pangalos told AP:

"I believe that the tax limits of Greek society have been exhausted. I would say they have been exhausted for some time."

In the extremely unlikely event Greece tries to implement its much vaunted austerity measures, the knock on effect on GDP coupled with the rise in debt servicing costs and the inability to raise further taxes effectively means that the economy is dead and that they will have to default.

In October 2010 I wrote about the EU budget:

"The fact that budget rises of this kind are being pushed through, during a time when national governments are being forced to reduce their own budget deficits, shows just how out of touch with reality the EU has become.

The EU, by acts of folly such as this, will eventually engineer its own self destruction. Unfortunately, in the meantime the citizens of its member states will pay the price for the greed and intransigence of the MEPs."

Those "leading" the EU have lost touch with reality and the needs of its own citizens.

In Orwell's "1984" Winston Smith was told what the future would look like:

"Imagine a boot stamping on a human face forever".

Sadly we no longer need to read "1984" to visualise the future, we just have to watch what is happening to the Greek people courtesy of the Eurozone.

The Century Bond

Greece is making plans to kick its debt can a very long way down the road, seemingly around 100 years if Reuters has its facts right:

"One of the options the sovereign is looking at is offering a100-year bond in return for outstanding short-term debt, said abanker at one of the institutions advising Greece who said hesaw the plans being studied. 

Two senior Greek government officials denied that such aplan was being considered.

"We are obviously not working onthis"

Well they would say that, wouldn't they?

The Boil Must Be Lanced

Unsurprisingly, it has been confirmed that Greece will not meet it budget targets. The 2012 draft budget approved by the Greek cabinet on Sunday predicts a deficit of 8.5% of gross domestic product (GDP) for 2011, this is well short of its 7.6% target.

Markets around the world are falling, apparently they have been "surprised" by this news.

Why?

It has been obvious for months that Greece will not meet its targets and will default.

As neatly summed up in the Telegraph

"Until Greece defaults it's hard to see any resolution."

The boil must be lanced, and quickly.

Meanwhile, the Belgium bank Dexia (which ran out of cash this summer) is about to collapse/be nationalised.

A Finger of Fudge

As the Eurozone crisis worsens, and continues to play havoc with the global economy, Eurozone finance ministers have indulged in a large serving of fudge.

They have cancelled a meeting, scheduled for 13 October, when they were expected to sign off on the next tranche of Greek bailout money.

For why?

As reported yesterday, Greece has announced that it will miss its deficit reduction plan for 2011.

The Greek Finance Minister, Evangelos Venizelos, has said that a "delay" (note that the EU has "cancelled" the meeting, not "delayed" it)  will not cause Greece any problems as Greece has funds until November.

This is rather an "odd" admission, as Greece had previously said that it needed the money by mid October in order to avoid defaulting on its loans.

Does anyone believe anything the Greeks say anymore?

Anyhoo, the media are of the view that the "cancellation" or "delay" (depending on how optimistic you are) of the meeting is to enable the Eurozone to come up with a fudge; whereby the Eurozone's mandated budget targets for Greece for 2011 would be combined with the targets for 2012. Thereby fudging Greece's failure, and kicking the much kicked can further down the road to financial oblivion.

All very well if you are a Eurozone finance minister. However, the longer this farce continues the longer the global economy suffers.

In other news, Dexia SA (which is on the verge of collapse), BNP Paribas SA and Societe Generale SA are in a state of denial and are resisting pressure from regulators to accept more losses on their holdings of Greek government debt amid criticism that they haven't written down the bonds sufficiently.

The French and Belgium governments have pledged to prop Dexia up. However, they have overlooked one "small" detail"; namely the size of Dexia's exposure when compared to the host country's GDP.

Want to scare yourselves?

- Belgium - Dexia: 180% of GDP

Remember folks, Dexia passed its "stress test"!

Here are some other well known banks:

• France - BNP Paribas, Credit Agricole, SocGen: 237% of GDP
• Germany - Deutsche Bank: 84%
• Italy - Unicredit, Intesa Sanpaolo: 101%
• Netherlands - Fortis: 155%
• Spain - Banco Santander: 92%
• UK - RBS, Barclays, HSBC: 337%

 Source ZeroHedge

To put it bluntly the Eurozone hasn't a hope in hell of saving these banks, if they fall over. Dexia most certainly is going to collapse, and next up is rumoured to be Deutsche.

In other news, the rumour that Germany is printing Deutsche Marks in order that it may leave the Eurozone is doing the rounds again.

I for one would very much welcome that, as it would allow the remaining members of the Eurozone to devalue the currency and breath life into their dying/dead economies.

The New "Reality" From The Bunkers of Euroland

As the EU refuses to act to resolve the never ending crisis, markets have become used to the new "reality" of rumours/denials/promises/reneges being made by those allegedly "leading" Europe.

Unsurprisingly this febrile atmosphere, as we wait for Greece to finally/officially default and leave the Eurozone, has caused wild swings in the markets.

The latest round of news and rumours will do nothing to quell the volatility.

On the news front:

- Moodys' have downgraded Italy
- Greece is on strike (below is live footage from Syntagma Square)

Watch live streaming video from stopcarteltvgr at livestream.com
- Cameron (rather bizarrely) wants everyone to pay off their credit card debt (doesn't he understand that consumer economies are built on debt?) UPDATED Frightened by the ridicule heaped upon him, Cameron has changed that part of his speech.

On the rumour front:

The EU would have us believe that Dexia will be saved, and that European banks will be recapitalised. Oddly enough the markets actually believed this briefly and rallied. Commonsense then dawned, as the markets realised that this was in fact the normal bullshit being pumped out by the clueless bunker dwellers who "lead" the Eurozone.

As I noted yesterday, given Dexia's exposure (180% of Belgium's GDP), saving the bank is all but impossible. Add into the mix that other banks are also going to need saving (eg BNP and a number of Italian ones) and it becomes clear that the Eurozone is powerless to save them.

Unless the EFSF is expanded by to many trillions, it just can't be done. Germany has stated that it will not allow an expansion of EFSF.

Therefore, simply put, there is simply not enough money in Europe to save the banks without there being significant crystallisation of losses and a major print run of paper.

Meanwhile deep in the bunkers of the Eurozone our leaders are drafting the next rumour, which they hope will underpin the markets.

Fat chance!

France Rebuilds The Maginot Line

FRANCES WALL OF STEEL (aka FRANCE'S WALL OF STEEL - MAGINOT LINE)

Another day, another day of rumour, contradiction, denial, false hope and dithering in Europe.

Today the markets will be digesting two significant related pieces of news.

The FT reports that the European Banking Authority (EBA) will be conducting yet more stress tests on European banks (yes, those same stress tests that were so widely ridiculed before by the markets), in order to assess whether the banks can withstand a significant Greek haircut on their sovereign holdings.

In case anyone is wondering, they can't!

As the FT wrly observes the move is "a tacit admission that the European Banking Authority s two previous rounds of bank stress tests were not sufficiently robust."

Sadly for the EBA, whatever the findings of "Stress Test III", given the failings of "Stress Test I" and "Stress Test II" the markets will simply not believe the results.

The EBA claim that the new stress tests are not an indication that EU "leaders" are preparing for a Greek default. Instead, they claim that this is a precautionary measure intended to inform rapidly accelerating negotiations on EU-wide bank recapitalisations.

Well I don't think that anyone is dimwitted enough to believe that.

Indeed, as a portent of the likely results, Le Figaro reports that France is preparing a plan to nationalise "2 or 3 banks"..."just in case"; a financial version of the Maginot Line.

We all know what happened to the Maginot Line, don't we?

Dexia's Midnight Runners - Dexia Suspended

Share trading in Dexia has been suspended.

Oddly though their website has yet to mention it.

We can assume that the run on the bank (mentioned earlier today) will continue, and that Belgium (now that yields are rising) may well become the next Greece.

The Euro Crisis

Re the current Euro crisis, and rumours spread by Eurocrats and a certain leading London based financial newspaper (which relies on advertising revenue from banks) about plans to save the Euro and European banks:

Learn this,
Repeat this, and
Retweet this:

THERE IS NO PLAN!!

QEII Launched Into Choppy Waters

Hot on the heels of yesterday's launch by the Bank of England of QEII (valued at öa375BN),
Moody's cut its ratings on a number of British banks.

RBS was dropped by two notches from A2 to Aa3, Lloyds TSB dropped by one notch to A1 from Aa3, Santander UK, Co-operative Bank, Nationwide and seven other smaller British building societies were also dropped.

The rationale being that Moodys' is of the view that the British government may not support certain banks in the event that they face collapse.

Unsurprisingly, George Osborne stated that he has confidence in the viability of the UK's banks.

The Treasury, as it happens, is also fighting tooth and nail any attempt by the EU to force UK banks to increase their capitalisation as a result of the soon to premiere "Stress Test III".

Is the reluctance by the Treasury based on their confidence in the banks?

Errmm..no.

It is a reluctance based on pragmatism, namely that were RBS to require more capital, the Treasury would be forced to buy shares (using taxpayers' money) at around 50p (as per the agreement with RBS) compared to the current price of 23p.

The alternative would be for the government to fully nationalise RBS.

Neither option appeals to Osborne.

In other news, a certain London based financial newspaper (which heavily relies on advertising revenue from banks) is continuing to spread the rumour that there is a plan for saving the Euro and the European banking system.

However:

Learn this,
Repeat this, and
Retweet this:

THERE IS NO PLAN!!

EU In Denial

Dexia (the bank that passed "Stress Test II" a few months ago), as expected, was nationalised over the weekend.

After the nationalisation was announced, the French Finance Minister, Francois Baroin, stated that he didn't think any more banks would need to be rescued by governments.

"Ironically", following on from his statement, Greece's central bank has activated a bank rescue fund to save Proton Bank (ie they have nationalised it)!

Proton is under investigation for possible violation of anti money laundering laws.

EU Scared Witless

The EU (or rather the "leaders" of the EU) are scared witless today as the fate of the Euro experiment rests with the outcome of the vote in Slovakia today.

Based on this interview in Der Spiegel I can well understand why they are nervous.

Suffice to say, even if Slovakia votes in favour the inherent contradictions and systemic failings within the Eurozone's structure will ensure that the experiment will end in tears one way or another.

Is This a Plan?

According to Robert Peston:

"The European Banking Authority is proposing that eurozone banks should hold capital equivalent to between 9% and 10% of their risk-weighted assets, on a Basel 2.5 basis, with sovereign debt in trading books and banking books marked down to market prices."

He estimates that this will cost around öa3200BN. However, both France and Germany appear to be behind the "plan".

The question is, given the amount of lies and rumours spread by the Eurozone "leaders" in order to push up the markets, is this a plan or not?

That all depends on whether there is genuine agreement between France and Germany over this, and what they then actually do to implement it.

For instance, were they to allow banks to achieve the improved capital ratios by reducing the size of their balance sheets then this would have disastrous consequences for lending just at a time when Europe needs to haul itself out of recession.

In essence, if it really is a plan it may not be a very good one.

Death By a Thousand Cuts

The slow torture death of the Eurozone continues, with the announcement by Fitch that they have cut the long-term sovereign credit ratings on Spain to 'AA-' from 'AA'.

There is a G20 meeting in Paris today, at which the Euro crisis will be discussed. However, those who expect some form of coherent plan to be announced will be severely disappointed.

Angela Merkel is playing down expectations of a quick solution to the eurozone crisis,  in her view the euro crisis cannot be solved overnight and there is no "big bang" solution.

Had the Eurozone "leaders" put some effort into resolving this mess last year, then one might have had some sympathy/respect for her view. However, the situation is critical, the markets are ahead of the curve whilst the politicians are months behind it.

Six Days To Save The World

Reuters reports that finance ministers and central bankers of the Group of 20 major economies said they expected an October 23 European Union summit to "decisively address the current challenges through a comprehensive plan".

The French Finance Minister, Francois Baroin, said that Berlin and Paris were well on the way to agreeing a plan to reduce Greece's debt, stop contagion and protect Europe's banks.

I will believe that when I see it.

As I have noted many times before on this site, there is no plan!

Am I being too cynical?

No, I am not.

Angela Merkel has made it clear that dreams that are taking hold again now that with this package everything will be solved and everything will be over on Monday won t be able to be fulfilled."

The Global Debt Clock

Source The Economist

By the way, the above debt figures EXCLUDE unfunded pensions, welfare payments, healthcare costs etc.

Dexia Rescue "Plan" Starts To Unravel

Belgium's hopes of rescuing Dexia, in a clean and market pleasing manner, have been dashed.

The European Commission has started to investigate the "plan", and assess whether the Euro4BN paid by Belgium contains state aid and, if so, whether it complies with EU rules on restructuring support.

As with all Eurozone rescue "plans", this appears to have been made up on the spur of the moment in a state of panic.

Now repeat after me:

THERE IS NO PLAN!

Strike

As Greek Prime Minister, George Papandreou, appeals for support from Greeks ahead of a vote later today on tax hikes, wage cuts and layoffs Greece has gone on a 48 hour strike. The strike will shut down government departments, businesses, public services and even shops and bakeries.

Sadly for the people of Greece, if the austerity measures are actually implemented (which of course they won't be, even if the vote passes) it will not make one jot of difference wrt improving the country's (or indeed the citizens') financial situation. 

Greece went bust a long time ago, and is only being kept going by grudging handouts from the EU.


The only solution is for Greece to leave the Eurozone, and devalue its debts under a "new" Drachma.

Why Greece is a Busted Flush

As our "respected" Eurozone "leaders" contemplate pumping more money into Greece, and the Greek parliament considers inflicting more austerity measures on the hard pressed Greek people, here is why the efforts of both the Eurozone and Greek governments will achieve nothing.

The text below is an open letter from Greek journalist, Kostas Vaxevanis, to Greek Finance Minister (and formerly Justice Minister) Evangelos Venizelos.

The letter highlights why Greece (sadly for its people) is in effect a busted flush, and why further bailouts and austerity measures will fail. Any further bailouts (which are not offered by the Eurozone out of sympathy, but in order to protect the status quo and vested interests of the Eurozone ruling "elite") will be syphoned off by corrupt officials/organisations, and will not resolve the systemic failings within the Greek economy.

In order for Greece to extricate itself from the self inflicted mess that it is in, Greece needs to address its internal corruption, leave the Euro and deflate its debts using a "new" Drachma.

Source Pastebin

A translation by the AnonLegionGR team.

Open letter of Greek Journalist Kostas Vaxevanis to Greek Finance Minister (and formerly Justice Minister) Evangelos Venizelos

The original Greek text is here.

"Mr. Venizelos,

What I am writing is well-known to both you and me. It is suspected, I believe, by the people as well. I would have stopped at our "showdown" on Nikos Chatzinikolaou's TV show, had you not stepped on my toes with your "you are a journalist of the State TV and you are paid by the Greek people" line. I hope you do not mean what everyone understood you meant.

So, I am a journalist and at this time I happen to work in the Public Television, and not State TV, as you call it. This is of great importance, as it reflects the perception each one has about ERT. It is a journalist's job to scrutinise those in power. The fact that I am "paid by the Greek people" is an additional responsibility for me, as I must be "worthy of my wage". The conclusion is that we are both paid by the Greek people. You are being paid by the Greek people since 1989, I am being paid by the Greek people for the past 2-3 years that I am part of ERT's staff.

The second thing that sounded as a threat on that show was that you would publicise journalists' origin of wealth. Amen to that! For the time being, do publicise on the internet the origin of wealth of Greek Parliament Members, as dictated by Law 3979/2011 (the Ragousis Law), because at the time I write these lines you are in violation of the Law. I would also suggest to examine the origin of the assets owned by our millionaire MPs and tax it. It is far more ethical and effective than slashing 300-euro pensions. I do not accuse any Greek politician of being a thief. But you do know what they say about Caesar's wife. Although it seems that in the Greek Parliament, Caesar is the MP's wife, who also simply happened to have a significant dowry.

Now, on to more difficult matters. Mr. Venizelos, you are a very important unit of what we call the political system. The system that is, in no small part, responsible for what the country is. We like to talk in general terms about it, but I have learnt to speak specifically. In the Ministries you have served, I keep encountering your laws (yes, I know, they are the Parliament's laws, but you know very well what I am talking about) during my investigations, finding they act as a "protection shield" for the political system and its vital space. The "Ministers' Responsibility" law, i.e. the law that grants complete unaccountability, immunity and impunity to Greek Ministers, is a creation of yours. This abomination that leads to a complete lack of punishment, that measures the duration of the Statute of Limitations by (hear, hear) terms an MP has served in the Parliament; this abomination that is a provocation against society. This is the law that Mr. Constantinos Karamanlis used to "erase" the crimes of his Ministers in the Vatopedi scandal - and beyond.

Yours is also the law that governs how TV stations work. In this country, one cannot even open a cigarette-selling kiosk without a permit. But TV stations can. These power centers work on temporary permits. Thus, media owers and governments can blackmail each other and "self-regulate" themselves.

Yours is also the law that "regulated" the debts of the Football (n.b. for our American readers: read "soccer" here) Clubs, i.e. a number of S.A.'s, under the "public demand" of football fans. These corporations were thrown deeply in the red by their owners (they even issued fake invoices) and you erased their debts. The money their owners stole. You took my money and gave it to the scoundrels and the ones that have been (and keep) setting football (soccer) games up.

Let us now leave your previous legislative work aside and move on to the second. That is, the Proton Bank scandal. I note, preliminarily, that all evidence shows that this is all a personal machination on your behalf and not a government decision. This has nothing to do with a personal "aggressive planning" on my behalf but with reality. In the Cabinet, you were fiercely attacked for the Proton Bank case, but you proceeded anyway.

The newspaper "Eleftherotypia" revealed that, in July 2011, you decided to give 100 million euros from the State's undisposed funds to the Proton Bank of Mr. Lavrentiadis. At that time, Mr. Lavrentiadis and his bank were under investigation for embezzlement. Furthermore, the 2362/1995 Law (a law created specifically to prevent new Koskotas-like embezzlement scandals) did not permit you to fund the bank. The State General Accounting Office's staff had told you this is illegal. You did it anyway. During our on air confrontation, you said the decision of the staff of the State General Accounting Office "was illegal because it was published in a newspaper". Now this is something new. The legality of an action is determined by whether it complies to the Law and not by the newspapers' circulation. The one that broke the Law was you, according to the 1995 law.

You knew it well. This is why you proceeded to create another legislation. In an unrelated law, the 4002/2011, you added an article that gives you pre-emptive immunity and impunity. You legislated that, when it comes to issues of banks' systemic stability, you have the right to decide on banks' funding. This "systemic stability" thing is a new invention. As if that was not enough, the law immunises Finance Ministers (including you, of course), since 1997. Why 1997? Did we have "systemic instability" back then or is a certain Minister of the Simitis government facing an instability problem?

After you gave the bank the 100 Million euros, you now put the State deeper in debt by making it pay 800 Million euros extra for the nationalisation of the bank. Of course, the fall of Proton Bank has nothing to do with the recession and the crisis. It is a result of its mismanagement by its bosses. They funded themselves. Instead of recruiting the Bank of Greece (another sinful story: a private bank presenting itself as an institutional instrument of the Greek State) to investigate the matter, you funded them and saddled us with this extra burden.

And you did not stop at that. Mr. Lavrentiadis, who allegedly embezzled 51 Million euros, will not go to jail. There will not be so much as a prosecution. The reason is another law you have passed. Your signature is on this law, too. With the 3904/2010 law, you legislate immunity and impunity for those who embezzle funds but return them before being prosecuted. So, Mr. Lavrentiadis, by returning the 51 Million euros (after investing this money, profiting from it or whatever else), has immunity. This is another legal "revolution" under the pretext of relieving prisons from overcrowding. As a former Justice Minister, you know that various laws "against the overcrowding of prisons" hid the release of a few famous convicts. In the past, in the name of "relieving prisons from overcrowding", Makis Psomiadis and various lawyer-fraudsters from Thessaloniki were released...

I can tell you a lot more. A lot, and it is my job to tell you. How are these things called in Court when a lawsuit against a journalist (another law of yours) is judged? "Facts and evaluational judgments". That is precisely what I am doing. One more reason is that I am being "paid by the Greek people", as someone who works in the Public TV that governments view as their personal property. I would urge you to respect it. And waste a little of your alleged intelligence and eloquence on giving me a reply. Because this is your obligation. Unless you prefer to fire me."

EU Summit Statement

If anyone is interested, the Telegraph has a copy of the EU Summit Statement (for the forthcoming EU Summit scheduled for this weekend).

Aside from the fact that it is still full of gaps, there is one other problem. It would appear that this weekend's Euro Summit has been cancelled.

Learn this for prep:

- There is no plan

- There never was a plan

- There never will be a plan.

Eurozone Descends Into Chaos

Yesterday I wrote that Sunday's EU Summit to save the Euro had been cancelled.

The Eurozone "heavyweights" (Germany and France) claim that is not true.

A statement released by the Elysee Palace said that Nicolas Sarkozy and Angela Merkel will meet to discuss their "ambitious and comprehensive response" to the crisis ahead of the European Council summit on Sunday.

So it's not been cancelled then?

Ahem, actually it has been postponed to (apparently) Wednesday, the statement added that resolutions would be "finally adopted" at a "second meeting no later than Wednesday".

In other words the meeting on Sunday is to save face, and to talk about a future meeting (the exact date of which is not yet known).

This is not "leadership", this is not "a plan".

Learn this:

- There is no plan
- There never was a plan
- There never will be a plan

Europe is Fucked II - Oh The Irony

"The options are ugly and, officials freely admit, smack of "smoke and mirrors" with too much reliance on the very leveraging and financial products the EU has previously blamed for causing the initial banking crisis. It was that mess, of course, which spilled over into the sovereign debt crisis that has threatened to tear down the euro. 

"Can the euro be saved by spreading the debt and slicing and dicing the EFSF's capital or guarantees into highly complex financial products?" asked one national finance ministry official. "It's looking much more like a fiendishly clever conjuring trick, or even a Ponzi scheme, than the big bang the markets want." 

Source Telegraph

Repeat after me, and learn this for prep:

- There is no plan
- There was no plan
- There never will be a plan

Of Mice and Men

Despite the rancorous meetings over the weekend between various "leaders" of the Eurozone and other leaders from non Eurozone countries, the markets are optimistic that a deal will be reached by Wednesday that will resolve the Eurocrisis.

Sadly this optimism is somewhat misplaced.

Aside from rumours that Wednesday's "solve the Eurocrisis" meeting (the one that was postponed from Sunday) may in fact be postponed, today's economic news for the Eurozone is not good.

Goldman Sachs have published manufacturing and services PMI numbers that show a decline to 47.2 in October down from 49.1 in September. This is the sixth consecutive monthly decline, and it clearly shows that the Eurozone is in a recession.

Does this matter?

Yes, it does matter, aside from the obvious negative effects on people's standards of living it will also increase the pressure on ratings agencies to downgrade France's rating. In the event that this happens, the calculations behind the "plans" for the Eurozone bailout will go out of the window.

Now repeat after me and learn this for prep:

- There is no plan
- There was no plan
- There will never be a plan

Another Day, Another Crisis in The Eurozone

Another day of rumour, tension and dashed hopes in the ongoing farce that is the Eurozone crisis.

Today Eurozone "leaders" are meeting in Brussels, to allegedly hammer out a rescue package for Greece and the beleaguered Eurozone.

Tensions are running high, not least because it is apparent that only in the last week have the "leaders" bothered to look closely at the figures required to save the Eurozone. Seemingly they got quite a shock.

In Greece the Finance Minister, Evangelos Venizelos, has finally got around to presenting Greek bankers with a plan for a 50% write down in debts (something that has been known about for several weeks). The real resistance to any write down is coming from French bankers, therefore I wonder when he will be making his presentation to them?

In the Bundestag Chancellor Merkel has told fellow MPs that Greece "needs permanent monitoring".

That will go down well in Syntagma Square!

Meanwhile rumours abound that the chief clown of Italy (Berlusconi) has done a deal with the Northern League that he will resign by year end, in exchange for their support of an increase in retirement age.

That's nice, the question is will the Italian people accept that?

Unsurprisingly the IMF is a "tad fed up" with the ongoing circus and wants to see a resolution. As such it is expected to take matter into its own hands in the not very distant future, as and when the circus in Brussels fails to achieve anything tangible.

It is going to be a long day!

As our "leaders" continue to make fools of themselves and create havoc in the markets, they may care to remember that this ongoing farce, the outcome of their decisions and the promises that they make is having/will have a direct impact on the lives of the millions of people living and working within the EU.

Draft Statement of EU Heads of State

Pathetic!

Source 

DRAFT STATEMENT OF EU HEADS OF STATE OR GOVERNMENT

At today's meeting, in line with paragraph 7 of the European Council conclusions o3 October concerning relations between the EU and the Euro area, the members of the European Council were informed by President Van Rompuy about the state of preparations of the Euro Summit that will take place later in the day.

They welcomed the consensus proposal on measures to restore confidence in the banking sector reached by the Council (ECOFIN) on 22 October. On this basis, they agreed the text annexed to this statement. The measures indicated in this text form part of a broader package, alongside the decisions taken by today's meeting of the EuroSummit. The Council will adopt the necessary follow up measures.

ANNEX

Consensus on banking package
1. Measures for restoring confidence in the banking sector (banking package) are urgently needed and are necessary in the context of strengthening prudential control of the EU banking sector. These measures should address:
a.
The need to ensure the medium-term funding of banks, in order to avoid a credit crunch and to safeguard the flow of credit to the real economy, and to coordinate measures to achieve this.
b.
The need to enhance the quality and quantity of capital of banks to withstand shocks and to demonstrate this enhancement in a reliable and harmonised way.
Term funding
2.
Guarantees on bank liabilities would be required to provide more direct suppo11 for banks in accessing term funding (Sho11-term funding being available at the ECB and relevant national central banks), where appropriate. This is also an essential part of the strategy to limit deleveraging actions.
3.
A simple repetition of the 2008 experience with full national discretion in the setting-up of liquidity schemes may not provide a satisfactory solution under current market conditions. Therefore a truly coordinated approach at EU-level is needed regarding entry criteria, pricing and conditions. The Commission should urgently explore together with the EBA, EIB, ECB the options for achieving this objective and report to the EFC.
Capitalisation of banks
4.
Capital target: There is broad agreement on requiring a significantly higher capital ratio of 9 % of the highest quality capital and after accounting for market valuation of sovereign debt exposures, both as of 30 September 2011, to create a temporary buffer. This quantitative capital target will have to be attained by 30 June 2012, based on plans agreed with national supervisors and coordinated by EBA. This prudent valuation would not affect the relevant financial repo11ing rules. National supervisory authorities, under the auspices of the EBA, must ensure that banks' plans to strengthen capital do not lead to excessive deleveraging, including maintaining the credit flow to the real economy or undue pressure on sovereign debt markets.
5.
Financing of capital increase: Banks should first use private sources of capital, including through restructuring and conversion of debt to equity instruments. Banks should be subject to constraints regarding the distribution of dividends and bonus payments until the target has been attained. If necessary, national governments should provide support, and if this support is not available, recapitalisation should be funded via a loan from the EFSF in the case of Eurozone countries.
State Aid
6. Any form of public support, whether at a national or ED-level, will be subject to the conditionality of the current special state aid crisis framework, which the Commission has indicated will be applied with the necessary proportionality in view of the systemic character of the crisis.

The Eurozone Agreement

After much pantomime and farce, there has been agreement of sorts on a way forward to try to save the Eurozone from collapse.

The key points are:

- Banks will take a 50% "haircut" on Greek debt

- The bailout fund will be leveraged to Euro1Trillion

- Banks have 6 months to raise Euro106BN

So, will this work?

It has bought some time. However, the Eurozone (in its current) form will eventually implode because of its inherent internal contradictions (eg you cannot have one monetary policy when there is such a disparity of growth between the member states).

That being said, there are some "issues" that may well unravel this sooner than the "leaders" of the Eurozone would like:

1 The "haircut" is, despite the spin (seemingly, according to the Euro spin machine the "haircut" is voluntary, therefore it is not a default!), a default.

Does this matter?

Yes, it does matter.

By defining it as not a default, the Eurozone has null and voided sovereign hedging via CDS (this has not gone down well with those who hedged against default).

2 According to George Osborne, the IMF cannot contribute to the bailout fund.

Therefore where will the money come from?

Seemingly Sarkozy is on the phone to China (as I write this) trying to persuade them to put money in.

Good luck with that then!

3 Many commentators are of the view that the fund (even if money is found to beef it up) is not large enough to appease the markets.

4 A large part of the Greek debt being "haircut" is tied up with Greek pension funds, ie the value of Greek pensions has been halved. Quite what the views of the Greek people will be, when they realise that their financial future has been cut in half is anyone's guess!

Real people are being affected by the decisions made by the clowns "leading" the Eurozone, the clowns would do well to remember that they only remain in office under the sufferance of the people.

Where's The Money Hunny?

Despite all the hoopla exuded by the Eurozone "leaders" over their "plan" to save the Euro, there are quite a few nagging questions over the details of that "plan".

Not least, the elephant in the room, where is the money coming from?

Klaus Regling, the head of the eurozone bail-out fund, has popped over to China today to try to twist some arms there.

Good luck with that then, as China has already indicated it will only put money in via an IMF backed scheme. Note, the IMF cannot put money into the EFSF.

In other news, Italian bond yields have risen today above 6%, in the event they reach 7% then it's game over.

Meanwhile in Greece, where the country's pension funds have been cut in half by the rescue "plan", the people marked National Day by forcing state officials to leave the parades by hurling eggs, yogurts, raising banners with Swastikas proclaiming "No to 4th Reich" and chanting Thieves!

This video shows students marchingin Athens, and raising their hands holding black handkerchiefs.



Whatever the hype and spin from the Eurozone bunker, the decisions made by the "leaders" of the Eurozone have had, and are having, very real and unpleasant consequences for the people of Europe.