With this week dominated by the Euro rescue summit I have chosen a song apt for the French farce and German comedy. I must admit I agree with Max Keiser's assessment of this week's decisions, the fixes come up with are akin to fixing a flat tyre by just re-inflating it, or in the case with Greece 50% inflating it. The clowns are defiantly on centre stage. I suppose it could be worse, at least the fat woman hasn't started singing yet.
Sally Ann Howes ~ Send in the Clowns
Isn't it rich?
Are we a pair?
Me here at last on the ground,
You in mid-air.
Send in the clowns.
Don't you love farce?
My fault I fear.
I thought that you'd want what I want.
Sorry, my dear.
But where are the clowns?
Quick, send in the clowns.
Don't bother, they're here.
Data released by the European Central Bank show that real M1 deposits in Portugal have fallen at an annualised rate of 21pc over the past six months, buckling violently in September.
"Portugal appears to have entered a Grecian vortex and monetary trends have deteriorated sharply in Spain, with a decline of 8.4pc," said Simon Ward, from Henderson Global Investors. Mr Ward said the ECB must cut interest rates "immediately" and launch a full-scale blitz of quantitative easing of up to 10pc of eurozone GDP.
The M1 data - cash and current accounts - is watched by experts as a leading indicator for the economy six months to a year ahead. It has been an accurate warning signal for each stage of the crisis since 2007.
A mix of fiscal austerity and monetary tightening by the ECB earlier this year appear to have tipped the Iberian region into a downward slide. "The trends are less awful in Ireland and Italy, suggesting that both are rescuable if the ECB acts aggressively," said Mr Ward.
A shrinking money supply is dangerous for countries with a high debt stock. Portugal’s public and private debt will reach 360pc of GDP by next year, far higher than in Greece.....read on
Congressional Democrats are asking regulators whether they explored possible risks connected to Bank of America Corp. (BAC)’s moving of derivatives from Merrill Lynch into its deposit-taking unit after a credit downgrade.
Eighteen lawmakers signed onto letters from Representative Brad Miller and Senator Sherrod Brown seeking information about whether agencies consulted on the transfer considered the potential impact on the bank’s health and customer accounts.
“Because of the favored treatment of derivative contracts in receivership, it appears highly likely that losses on derivatives would result in losses to insured deposits ultimately borne by taxpayers,” Miller wrote in his letter, which was signed by eight House Democrats. The transfers were first reported by Bloomberg News on Oct. 18.
Democratic lawmakers, many of whom sought Dodd-Frank Act amendments to wall off banks’ customer deposits from risky businesses such as derivatives trading, are pressing the Financial Stability Oversight Council for information on its role and oversight of the transaction.
Bank of America, based in Charlotte, North Carolina, transferred derivatives after a September downgrade by Moody’s Investors Service spurred some partners of the bank’s Merrill Lynch brokerage unit to ask that contracts be moved to the higher-rated retail bank, according to people familiar with the transactions....read on
The Australian dollar hit US$1.075 in overnight trading as the "risk on" trade resumed with the announcement of the latest (doomed) rescue plan for the Euro Zone and Greek debt haircuts (perhaps the rioters in Athens could become skinheads and call for 100% haircuts on Greek debt).
You have to love this plucky volatile metal, with all the attention on the EU debt summit and Gold's reaction to the outcome silver has been overlooked as usual. Whilst Gold has gained an impressive 5.5% over the last 3 days it's lunatic little sister has risen 10.5%...Nice.
Gold gained for a fifth day, the longest streak in two months, as a drop in the US dollar may spur demand for precious metals as an alternative asset.
The US dollar fell to a record against the yen and declined against the euro after European leaders agreed to expand a bailout fund by four or five times, to about 1 trillion euros. Gold has climbed 23 per cent this year as the dollar fell 5.7 per cent against the euro.
"The dollar's weakness and inflationary fears because of Europe's actions are making people move towards gold," Frank Lesh, a trader at FuturePath Trading in Chicago, said.
With the euphoria over the deals reached
at Brussels dying down, the numbers are now being pored over by
economists and experts to see if they add up. One of them is RT's Max
Keiser who believes nothing's changed - the EU's still fighting debt
European leaders achieved a breakthrough early on Thursday to write off half of Greece's debt and seek foreign capital to double the eurozone's bailout fund to around €1 trillion. But crucial details on the fund's size were left for finance ministers to decide end of November.
Two weeks ago, British Prime Minister David Cameron called on his eurozone colleagues to make use of a "big bazooka" to quickly end the euro crisis.
After Sunday's inconclusive summit, eurozone leaders very early on Thursday agreed on what French President Nicolas Sarkozy described as "a global, an ambitious and a credible answer" to the eurozone crisis.
Nicolas Sarkozy, President of France: I believe the results will be received with relief by the entire world that is waiting for strong decisions in the eurozone.
Angela Merkel, Chancellor of Germany: We Europeans have demonstrated this night that we can make the right decisions. We have named and indentified the causes of this crisis and we have moved a step closer to a solution.
Eurozone leaders agreed on a new €100-billion package to save Greece from default, with the participation of the private sector that requires banks and others who hold Greek government debt to give up 50% of their investments. As a result, it becomes feasible to bring down its total debt to manageable proportions by the end of this decade.
Giorgos Papandreou, Prime Minister of Greece:
"We can claim that a new day has come for Greece, and let's hope that this day is not only for Greece but also for Europe."
Jean-Claude Trichet, President of the European Central Bank: "It is good that these decisions are taken and orientations are taken which I trust are going in the right direction. But again: no complacency. Hard work now. Hard work for all those that have to implement those decisions of the heads."
The second big decision was to increase the financial capacity of the European Financial Stability Facility, the EFSF, from its initial €440 billion to €1 trillion. This increase will be achieved by turning the EFSF into an insurance company, which means no additional money needs to be put into the fund. The fund will also be opened up to foreign investors such as Brazil and China.
Barroso, President of the European Commission: "We have agreed two options for leveraging the EFSF. Together this will allow us to more effectively prevent contagion." "Look. Don't ask me at this time for exact figures."
Herman van Rompuy, President of the European Council: "We took a further step last night in agreeing that for Euro area member states in an excessive deficit procedure, the commission and the council will be able to examine national budgets and adopt an opinion on them before their adoption by the relevant national parliaments."
Financial markets on Thursday welcomed the agreement. That also happened after the July agreement to save Greece, which during the summer proved not strong enough. The initial enthusiasm with which this deal may be received may be short-lived if EU leaders don't follow up on their promises.
After all, even a big bazooka can fail. Raymond Frenken. EUX.TV
This week Max Keiser and co-host, Stacy
Herbert, discuss David Cameron, STFU going viral, Riot Granny in Athens
and Gaddafi's alleged net worth. In the second half of the show, Max
interviews John Perry Barlow about financial activism, capitalism,
Marxism and a plutocratic cancer on the economy.