CRASH 2: a gathering storm, episode 4.

Multiple can-kicking: the metal fights back

As Blockbuster strode robotically into insolvency earlier this week, the German economic march became stuck in the mud resulting from ClubMed and global downpours. Blockbuster Video was a retail outlet squashed between the rise and rise of internet shopping, and technological changes in streamed entertainment. Germany is in turn being squeezed between Euuropean hubris, American debt, and Asian overheating: the country’s key forecaster slashed its outlook by a whopping 60%.

Britain’s retail dinosaurs in particular are falling like flies (as I predicted they would) but now we can see the first signs of social cover breaking down in the face of economic obduracy: over 100,000 disabled people are having their home care reduced or removed, and the Leonard Cheshire organisation describes the system as “on the verge of breakdown”.

The yen languished after a forceful selloff in anticipation of the Bank of Japan taking radical action to tackle deflation. Under pressure from newish Prime Minister Shinzo Abe, the BoJ looks set to buy assets nonstop until 2% inflation is reached.

Japan has been flouncing about trying to escape from its hybrid problems for nearly a decade. This move is yet another turnaround for a central bank that appears cluelessly frozen in the headlights, but is being egged on by political desperation.

The Japanese represent yet another case of multiple problems colliding in a staggeringly pernicious manner: age demography, nuclear accidents, world trade crises, fiscal confusion, and the rise of China. The wages of sleepy can-kicking are death by a dozen boomerangs. Winner, 2013 mixed metaphor perhaps – so here’s something clearer from Mark J. Grant,  of Out of the Box fame.

‘….it is the inescapable conclusion that we have backed ourselves into a corner of our own making and that to escape this dark and dangerous place will be a painful experience….When the economies of Spain, Greece, Italy, Ireland, Portugal and France are in decline and yet their sovereign yields fall as supported by a conditional promise from the ECB, then trouble is in the making.When America spends money like it is without end because the Fed hands out the byproducts of the forest as if it was an unlimited supply, then the valuation of paper overtakes the use to which it is put. We are sitting with our little round plastic toys and blowing bubbles into the sky and when the turn comes, when the bubble is pricked, scant few will be able to run fast enough or get through the door quickly enough when the madding crowd is rushing in a collective push to get out of the burning theatre.’

I endorse every word, and repeat one of The Slog’s more consistent mantras: there is no such thing as a gradual panic. Those ahead of the panic are openly opting for the last place left offering financial long-term and physical short-term safety: top-end property.

Others still obsessed by the attraction of manipulation to gain their end-game money are also, however, at work. Some of the signs on this dirt-road are clearer than they were. I’ll be posting about this later today.

Stay tuned.

Last night at The Slog: Self-demonising Islamism

 

 

 

Forging the truth: the internet was meant to set us free…

…..but now it’s able to counterfeit reality

What is real? Who is real? The Invasion of the ID Snatchers at The Slog has achieved, in some ways, exactly what the perpetrator(s) hoped to stop: raising awareness among all Web users that ‘Trolls’ can no longer be dismissed as only Lee Harvey Oswald style nutters. Those like our schizoid friend here with 17 IP addresses (and as many identitities as his usefully empty brain can come up with) can’t be quite so easily explained away.

At the moment on this site, visitors are confused as to whether MaxC, Liz O’Donnell, me or a hundred other contributors are who they say they are.

There is one short term solution which doesn’t involve me pre-comment approving (see earlier post today) but will at a str0ke nip this outbreak in the bud. So I’ll be using that when I once again have 24/7 access to the site.

Medium to longer term, let’s just say I’m talking to one or two people who this Invasion Fleet would have you believe are figments of my  imagination.

I am, by the way, truly reassured that after nearly 72 hours of limited access, there seems to me a predictable (and predicted) march towards Berlin playing the ‘ordinary German voters’ card to put Greece under yet more pressure.

It’s too close to call at the moment. I will post about it as and when I have solid information of some interest to genuine Sloggers.

At the End of the Day

History is not a straight line. What goes around, comes around.

On 16th November 2011, Volker Kauder, a close ally of German Chancellor Angela Merkel, warned Britain that it would not “get away with” looking after its own interests at the expense of Europe. He said European nations “are now speaking German in that they are backing Chancellor Merkel”.

1930′s fascists Hitler and Mosley had “Europe A Nation” as their slogan. Hitler’s 1942 “Europäische Wirtschaftsgemeinschaft” translates to “European Economic Community”. Foreign Minister Carl Clodius said at the time there would be a currency and customs union across Europe.

I don’t  write this to join in the chorus of anti-German feeling about at the minute, but rather to make a much more intriguing point. There follow two news items from today:

Angry relatives of missing mine workers in South Africa complained that the authorities had failed to produce a central register of the 34 people shot dead last Thursday.

On 21 March 1960 at least 180 black Africans were injured and 69 killed when South African police opened fire on approximately 300 demonstrators.

How many people aged under 25 today, I wonder, would know the significance of the Sharpeville Massacre?

And….

Japanese politicians today set sail for a group of disputed islands, in the teeth of protests by China, which claims them for its own.

Over the past forty-five years, China and other countries have allowed Japanese war crimes to be forgotten. In fact, the only constant reminders of the victims of World War II in Asia were the events commemorating the Japanese who were killed by atomic bombs dropped by the United States. The young generations, Chinese and Japanese alike, are not kept informed about the consequences of imperialist militarism.

Those who ignore the lessons of history are doomed to make the same mistakes. German commentators like Wolfgang Munchau affect being disgusted by comparisons between the EU and the Nazi Grossdeutscherreich, but they have no right to be. Black South African politicians would no doubt regard comparisons between recent events there and Sharpeville as unaccaeptable Bwana racism, but they have no right to be so arrogant – or unconcerned by the comparison. And while the Japanese people have shown admirable self-restraint during a decade of unparalleled economic hardship, they have only ever grudgingly apologised for heinous war crimes committed with a barbarous disregard for human life.

As with the ludicrous feminist concept of a complete change in gender role within forty years (and without reference to hormonal instincts) so too those globalists who would deny cultural difference and nationalism are heading for a fall.

Cultural flaws should be honestly recognised where they occur. They should be closely observed and, under certain circumstances, feared. Europe is about to be tossed into an anarchic re-alignment. The original Asian tiger faces an uncertain future alongside the new bigger tiger on the block. And one day very soon, the father of the Rainbow Country is going to die.

We ignore these realities at our peril.

 

CRASH 2: A GLOBAL MORTGAGE CHAIN IS REVEALED….

Halo fellows not entirely well-met

…THAT WILL BREAK UP THE SALE OF OBAMA2

Those reading beyond the daily lies emanating from Athens will be aware that a screeching cat is now out of the bag and smelling of poo. Hellenic accountancy being what it is, whatever deal is ‘done’ with bondholders in the end, officials calculate that to maintain the country’s debts at a ‘sustainable’ level (allegedly 120% of GDP) the EU/IMF axis of confusion is going to need an extra €15bn. The truth is – and always has been – Greece is millstoneed with too much debt, too little growth and as of earlier this week, an even bigger budget hole.

Greece is broke. Does the EU have the stomach for this?

The OECD says no. The total bailout cost for Greece standing at €130bn, OECD boffins think the European Financial Stability Facility’s (EFSF) €440bn firepower is woefully underfunded, adding that the EU ‘has not found it easy to raise funds’. Or indeed, any funds at all. Somehow – and there’s still nobody with a sane answer to this beyond debt forgiveness – Greece, Portugal, Italy, Ireland and Spain need to repay a total of €700bn this year and €400bn next year.

The EU is broke. Does Germany have the stomach for this?

Angela Merkel’s Bundesbank has already coughed up €496bn to peripheral countries in trouble. Figures released last week show how its asset base has been depleted by the need to raise bailout monies….and as you’d expect, The Slog’s  Bankfurt Maulwurf is both angry and anxious. This morning, he told me:

“I have always maintained this would happen. Every month the cost of this disaster goes up and up. The German people are not being told the truth, and in my view the CDU is playing fast and loose with the Bundestag and the media. Attitudes in my industry are hardening against this madness. She [Merkel] has this massive patriotic wave behind her, but it will end in German insolvency. The time is now….or never. We must cut the cord. The dream is over.”

Although Angela Merkel has the stomach for it, Germany doesn’t have the money. Hence her appearance in Beijing, asking Wen Jaibao for help now. But he isn’t going to do anything unless the West piles in first. He has said this over and over again – but neither the MSM nor Merkel are listening.

Germany is broke. Does the US have the stomach for it?

No, it emphatically does not. A number of States are still in the red very badly; California, for instance, is relying on the tax revenues to be gained from its citizens benefiting from the Facebook flotation. Without those, chief accountant John Chiang admitted yesterday, the State will go bust – again – for a whopping $3.3 billion.

The emergence of the Tea Partiers (those folks who can see only the cup’s darkness plus some tealeaves) means that the GOP has had to come over all Ebeneezer Scrooge or lose millions of votes….and with the deficit hovering as ever perilously close to the ceiling, Obama has no room for maneouvre.

Above all, 2012 is an Election year: Obama needs every cent he can get his hands on to make things look good. The word has gone out from the Obamites in Washington: sure, we don’t want contagion blowback from Europe – but we don’t want to lose the White House either. For the politicians, Europe is a sideshow.

It isn’t for Geithner at the Fed or Lagarde at the IMF: they know perfectly well what will happen….because they too can see the mortgage chain. But I understand that Christine Lagarde has been told to extricate the IMF from further Greek exposure that involves American money; and Geithner turned up to the Poland debt session last year with his pockets immaculately sewn up.

America is broke. Does Wall Street have the stomach for it?

You bet. For eighteen months now, the Reptile House has been lobbying Washington and the regulators to let it bet on bond defaults. They are mad of course – but encouragingly, the Washington set has been holding back the pressure by saying they just can’t see how it could be safe….in the sense that if they let the bankers do such a thing, the American people might lynch them. Wall Street’s big bananas now admit that the ruse is going nowhere.

Wall Street is being told no. Does the Stock Market have the stomach for it?

In a real world, probably not. But we must factor in the fact that Ben Bernanke is not of this world. In Ben’s Universe, beard neatness and facial stasis are everything. They create confidence, and confidence can achieve anything when accompanied by more free money from the Government. Armed with a 50mg shot of Valium, Ben will descend unto the multitudes pretty soon, stare through those catatonic eyes, and spray everything with dollars. Then the banks and multinationals will hoover it all up, dividend results will be even better….and stock prices will rise.

America’s faux recovery will be in place, and an Obama White House thus ensured by a winning combo of feelgood bollocks and Mitt Romney. The flaw in this theory is that once contagion starts, it isn’t going to pay much heed to arbitrary stuff like elections and dud Presidents in search of second terms.

I believe now that the sale of the White House will very probably fall through, because the pressure from the mortgage chain won’t wait until next September. It’s possible that an international geopolitical event will intervene to change all this dramatically: there are plenty to choose from – Chinese Yuan jiggerpokery, Iranian lunacy, Israeli frustration-fuelled blood to the head, Russia deciding to turn the screws on an EU peripheral….and so on and on and on.

But one thing I think can no longer be put off by daily announcements that a deal is only days away is the ClubMed debt crisis. The situation is very, very clearly laid out for anyone to see, because the option mirages are fading rapidly in the cool light of dawn. There is no more money to be found without printing the stuff on a massive scale.

This doesn’t mean I can guarantee that there won’t be printing on that scale: there are plenty of folks in Brussels mad enough to do it. But there are no people like that in Frankfurt or Berlin. The Germans remain fixated with the Weimar Inflation: if the price to be paid for eurozone survival (in anything like its current form) is a repeat of it, not even Angela Merkel will be up for the mission. Eurozone defaults are now, in my view, a certainty.

Greece is going to break the mortgage chain, and other ClubMeds will then scupper the entire process. Whether Obama gets a Second Term is down to how skillfully Merkel, Draghi and Sarkozy can skate on thin ice while being pelted with stones by peripheral Sovereign bondholders. Sarkozy faces an election, and the German Chancellor is facing a serious rebellion from her own business and financial community. I don’t think even Mario Draghi can pull this one off alone.

As I keep saying, the Tulip Moment is coming.

Related: Why the Tulip Moment can no longer be postponed.

What The Slog is all about

 

EU SKETCH: From this point, anything is possible

The Slog interviews some experts on the subject of Sovereign Identity

Following the German proposal for a system of Gauleiters throughout the eurozone, merchant and investment banks have been quick to respond with ideas as to how the EU as a whole could be monetized, and thus wipe out its sovereign debt problem. Already, leading lights in the New York Stock and Chicago Mercantile Exchanges have begun to involve the Frankfurt Dax in a scheme to create the world’s first Sovereign Exchange Market (SEM), in which shares in the 27 EU States might ultimately be offered on various bourses, subject to the success or otherwise of the Initial Public Offering (IPO) planned for Greece on two new Singapore and Shanghai SEMs later this year.

“Basically, I think we have to view this new space as, you know, kind of like when VW bought Skoda,” explained Todd Runtwolski, newly appointed Head of Nation State Marketing at Metro-Goering-Norodny in New York. “So although nobody wants to buy Greece right on account of it’s just donkeys struggling under the weight of obese tax evaders, now the actual sovereignty has been the subject of a takeover by Merkel, Schauble, Draghi, then we think investors will see this as a one-off mega-mezzanine opportunity.”

Runtwolski…’mezzanine opportunity’

Critics point out that The Gauleiter Memorandum* represents a hostile takeover widely opposed by Greece’s current owners the Greeks, but Mr Runtwolski brushed this aside as “negadive thinking”.

“Look, we’re all here for the shareholders in the end, right?” he asked assertively, “It’s all a question of ‘are you in or are you out?’ There’s 11.5 million of these guys and they’re starving. They’ll take the money if we cut them in. And if they don’t, then we’ll cut them out. It’s a win-win from our perspective”.

Asked about how MGN would set about the knotty problem of valuation, Runtwolski added, “It’s all a question of directional money-flow. Traditionally, the German State has been associated – unfairly in my view – with a one-way upstream surge of stuff that cynics might call asset-stripping. But really that only happened in minority sectors like Renaissance paintings, national treasures and slave workers. This time we expect the wealth of Germany to trickle down to Athens. It’s simple tried and tested Reaganomics really.”

But Todd was more circumspect on the subject of rebranding.

“That’s an area of some sensidividy,” he conceded, “Greece is a fairly well-established brand with strong associations of holidays, and a very strong smell of kebabs. But in the sovereign investor space, it mainly has connotations of crooks, food-poisoning, and a widespread lack of paperwork. So I guess we’re gonna need a liddle consultancy input on that one”.

I spoke about this issue to leading Sovereign Image advisers Bellend & Pottingshed. High-flying account director Jeremy Gnome-Orrals ran the lucrative Gadaffi account until its unfortunate demise last year, but from his newly-created position as Rogue State Business Developer, he gave us the benefit of his experience.

Gnome-Orrals….bottom-feeder

“Rebranding would be essential,” opined Jems, “And off the top of my head I’d suggest something like New Hellenic Enterprises or whatever. But that’s just dealing off the top of my head. Dealing from the bottom of the pack – do we have a salute here? – Zorba Creative Industries.  We’d need to go back to the classic history as a feint to help the target market forget, well, pretty much everything after 1670 really.”

Further down the line, I asked him, could other rebranding be adopted as the Berlin-dominated EU gradually took over fiscal responsibility for every sovereign member?

“Absolutely,” he enthused, “I mean, gosh, the possibilities are endless. Belgium, you see, is pretty useless and largely thought of in terms of bureacrats, mayonnaise and chips. But rebranded as Lower Goldman Saxony…..well, the sky’s the limit.”

After the events of the last week, I’m not sure there are any limits now. We shall see.

* The Gauleiter Memorandum, soon to be a Hollywood blockbuster starring people who don’t look anything like Tim Geithner, Angela Merkel, Mario Draghi, Wolfgang Schauble, Nicolas Sarkozy or Lucas Papademos.

CRASH 2: US AND EU TRAPPED IN WEB OF GREEK DEBT

West’s governments face war of attrition in four dimensions

No doubt it is Sod’s Law, but at the very time when we are at last paying attention to the Murdoch cancer we’ve been growing for forty years, an enormous double-decker truck is rumbling towards us – and hardly anyone seems to have noticed.

Sources in Berlin are tonight confirming that Frau Merkel’s Government is retreating in the face of banking intransigence about Greek default. And in turn, US sources are talking about rising panic in Wall Street regarding an unwinnable war on two fronts: one against Washington’s inability to agree on a debt ceiling, and the other against horrendous eurobank insolvency insurance claims they’ll have to pay out on, as and when Greece defaults.

I agree, it doesn’t make sense: but bankers are bankers, and they want cream on the jam on their bread buttered on both sides: they have put Brussels on alert with a clear demand that taxpayers should cough up for 60 cents on every dollar of Greek debt…..while they pick up at most 10 cents of the hit; and they’ve told Wall Street that should this bargaining ploy fail, they want every cent to which the US insurance entitles them.

This has (as you’d expect) had the phone satellites between Washington and Berlin jumping out of orbit on the subject of who is or isn’t going to pay for what and by when. And the equally predictable result is that it is going to be taxpayers or bust. Otherwise, the US is screwed royally either way.

This is the scenario: Germany’s Wolfgang Schäuble is admitting, I understand, that the most the banks are prepared to wear as a hit is €2.5 -3 billion. The EU needs, over the next few months, to plough in around €120billion. The IMF appears to have told Brussels that without that commitment, they won’t put any more monies in – indeed, the IMF’s articles won’t let them. But if they don’t, then of course the win-win banks will call in their Wall Street insurance.

Meanwhile, the US debt ceiling that was a done deal ten days ago is now completely undone.

Push is coming to shove. And nobody knows what to do.