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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: pogohere who wrote (81580)	10/18/2011 7:08:28 AM
From: elmatador	Respond to of 218505

Good point. Germany doing balancing act... need low currency for exporting, but does not want credit rating to go to the dogs. Thus benefitting from low currency because who's going to the dogs are the neighbors. I think we wrapped that up.

To: pogohere who wrote (81580)	10/20/2011 12:51:58 AM
From: pogohere	Read Replies (1) \| Respond to of 218505

Beware the credit event jabberwocky: Franco-German deadlock over ECB's role in rescue fund "If there isn't a solution by Sunday, everything is going to collapse," [Mr Sarkozy] told his inner circle before an emergency trip on Wednesday night to see German Chancellor Angela Merkel in Frankfurt. . . . Mr Sarkozy wants the fund to operate as a bank, able to leverage its rescue power by tapping the ECB's credit window. This is less likely to endanger France's AAA credit rating. Yet the idea is anathema to Germany and Bundesbank purists. . . . German finance minister Wolfgang Schäuble cannot stem the crisis by embracing eurobonds or fiscal union without a change in Germany's constitution, requiring a popular vote. He has instead offered an ungainly compromise to boost the EFSF to €1 trillion or so by turning it into a bond insurer, perhaps taking the "first loss" of 20pc on Club Med debt. Even this may be going too far in Berlin. Peter Schäffler, economics chief for the coalition's Free Democrats (FDP), said Mr Schäuble had broken a pledge given to the Bundestag when it voted for the revamped EFSF last month. "People feel deceived. He said there would be no leverage," he told The Telegraph. "It is absurd for him to claim that this plan is not leverage." Mr Schäffler said escalating liabilities threaten Germany's AAA credit rating. "That is what worries me about this whole situation." . . . Mr Redeker [currency chief at Morgan Stanley] said the proposals risk setting off a chain reaction in which France loses its AAA rating, followed by Germany and the creditor core as ever greater liabilities engulf them, too. (more) (emphasis added) http://www.telegraph.co.uk/finance/financialcrisis/8837424/Franco-German-deadlock-over-ECBs-role-in-rescue-fund.html

To: pogohere who wrote (81580)	10/25/2011 2:54:03 PM
From: pogohere	Read Replies (1) \| Respond to of 218505

Gonzalo Lira chimes in on why a "credit event" needs to be avoided and why he thinks it will be avoided at any cost: Waiting For Lehman So along with everyone else, I’ve been waiting for Lehman—and fruitlessly trying to guess which will be the Lehman-like event this time around. Will it be the bankruptcy of Dexia? BofA? UniCredit or SocGen or one of the Spanish banks? Will it be a war in the Middle East? Bad producer index numbers from China? A fart by a day-trader in Uzbekistan? When will Lehman arrive!?!? But lately, my thinking has changed: Like the characters in Godot, I think that we’re waiting in vain. The Lehman-like event will never arrive because it won’t be allowed to arrive. So this miserable slog we are going through will continue—indefinitely. (Yeah, I know: Sucks to be us.) Conclusions The situation we find ourselves in reminds me of the First World War: The European diplomatic situation back then was tied up among all the nations of the continent by way of a series of pacts, alliances and coalitions of mutual assistance. They were wrapped up so tightly that, when a relatively minor event happened—the assassination of Archduke Franz Ferdinand—it set off a chain reaction of obligations and consequences that eventually led to the whole continent going up in flames. The same thing is going on today, with regards the global financial markets: Everyone is obligated to everyone else, by way of credit instruments. Therefore, if one of these obligations is broken—that is, a default by one of the European countries, or a cash hole in one of the banks, or a spike in oil prices that creates a hole in someone’s balance sheet—the entire rickety structure is going to go up in flames. The central banks and the government authorities and regulators have made it clear that they will do absolutely anything to prevent this outcome: They will prevent a Lehman-like event from taking place, no matter what. In other words, they have made things predictable for us all. Insofar as these three areas I have outlined above—sovereign debt, weak banks, geopolitical crisis—there are tremendous opportunities, bought and paid for by way of this predictability. The fact that the markets will be waiting for Lehman allows people like us—who realize that Lehman will in all likelihood never arrive—to make some bets which could pay off big. The investment strategies I outlined above for each of those cases make it clear how lucrative it could potentially be. So long, of course, as Lehman never arrives. But caveat emptor: If Lehman doesarrive, all bets are off. zerohedge.com