[eXpat]

Bad news both sides of the Atlantic. I actually hope the can is kicked at least till 2012.
US Default Inevitable: Fund Manager
$this->bbcode_second_pass_quote('', '&')quot;It's inevitable that the U.S. will default—it's essentially an empire which is overextended and in decline—and that its financial system will go with it," he said.

The question is: Does the U.S. default when it is forced to by the outside world, probably the Chinese, or does it take the option to default on its own terms in such a way that it may have a strategic advantage, Murrin said.

Republicans and Democrats are currently locked in a debate on how to cut the U.S. budget deficit, and on whether the $14.3 trillion debt ceiling should be raised. Both parties need to come to a consensus by Aug. 2, otherwise the country will be in a state of technical default.

In his book "Breaking the Code of History," Murrin argues that the balance of power has shifted away from the West, with America as the superpower, towards the East, led by China.

He believes the U.S. cannot afford to compete with the rise of Eastern powers.

"It's very simple, its (America's) empire system, its financial system is in decline, we've seen very little growth for over a decade apart from financial engineering and leveraging, which ultimately caused the debt crisis of 2008," Murrin said.

[dohboi]

Apologies if this has already been posted somewhere:

http://www.telegraph.co.uk/finance/financialcrisis/8584442/UK-banks-abandon-eurozone-over-Greek-default-fears.html

$this->bbcode_second_pass_quote('', '[')b]UK banks abandon eurozone over Greek default fears
UK banks have pulled billions of pounds of funding from the eurozone as fears grow about the impact of a “Lehman-style” event connected to a Greek default.

[eXpat]

The old economic bag of tricks is not working, both sides of the atlantic.
Europe Getting Smashed, US Futures Slide, As European $this->bbcode_second_pass_quote('', 'C')ommission President Basically Admits Defeat
Well it started off quiet in Europe today.

No longer.

European markets are getting smashed, as -- no surprise -- Italy leads the way with a 1.5% decline.

Other markets are in hot pursuit.

What's causing the consternation?

European Commission President José Manuel Barroso is talking about reassessing the various bailout funds that were bolstered just two weeks ago. He's also admitting that the latest bailout did not have the desired market effect.

[peripato]

$this->bbcode_second_pass_quote('eXpat', 'T')he old economic bag of tricks is not working, both sides of the atlantic.
Europe Getting Smashed, US Futures Slide, As European $this->bbcode_second_pass_quote('', 'C')ommission President Basically Admits Defeat
Well it started off quiet in Europe today.

No longer.

European markets are getting smashed, as -- no surprise -- Italy leads the way with a 1.5% decline.

Other markets are in hot pursuit.

What's causing the consternation?

European Commission President José Manuel Barroso is talking about reassessing the various bailout funds that were bolstered just two weeks ago. He's also admitting that the latest bailout did not have the desired market effect.

[eXpat]

$this->bbcode_second_pass_quote('peripato', '
')You'd think these clowns would at least read, if not follow, the script!

[Pops]

I'm not really sure what "markets" were thinking going into the US version of austerity with stock prices so high - do they actually pay attention to gov stats - they are the only indicator that shows things aren't that terrible... well, not until their fourth or fifth revision anyway.

Jobs are being eliminated [insert big July layoff story], personal debt is at a record, personal net worth is only improved because bankruptcies have reduced the number of negative worths and the cost of food and fuel is inflating.

Bush then Barry fiddled around with stimulating banks and filling potholes instead of doing anything meaningful with stimulus dollars - except in Iraq and Afghanistan that is. Now because the left decided they'd won in '08 and didn't need to show up in '10 the TEAs have taken the reins and will do their best to kill the beast, even if it takes their powerchairs down too.

There really aren't any levers left to pull aside from deflating the dollar. O said something about trade deals...pffft.

[Timo]

I frequent a healthclub downtown near my office most days over lunch to swim, run, or workout. The people there are the same people everyday, and we all get to talking about jobs, the economy and such. One guy works for the Federal Home Loan Bank and has mentioned that he travels to DC frequently to visit with members of congress and their staffs about things relative to his work and to the whole lending industry. He told me some time ago that nearly everyone in both parties inside the Beltway can see pretty clearly that our entire financial system is broken with no easy fix, and the main objective of the business there is to avoid doing anything that would reveal the truth of our predicament because that would cause a panic. It was his sense that tptb were trying to be responsible and "ease" we the people into our new reality without causing mass hysteria. Well, the Tea Bags greatly changed that sense between then and now. Last week i aked him how things looked from his perspective, and he point blank told me that if i could get out of debt now, do it! He didn't provide any other details other than that, but judging from the market's performance today, he knew something was up, or down, to be more precise. That got me thinking, i could pay off my house tomorrow and be completely debt free if i wanted to, but that would mean greatly reducing my retirement savings. Too bad there isn't a cost/benefit model to use in predicting certain actions in such an unknown future. To be debt free and broke, or not to be debt free and broke? That is the question.

[Leutnant]

I don't understand, Timo, the fed is soon gonna launch QE3, would'nt it make sense for you to leave your dollar-denominated debt as it is and let inflation eat into it, and use your retirment savings to buy gold?

[Pops]

$this->bbcode_second_pass_quote('Timo', 'T')o be debt free and broke, or not to be debt free and broke? That is the question.

[americandream]

$this->bbcode_second_pass_quote('Pops', 'I')'m not really sure what "markets" were thinking going into the US version of austerity with stock prices so high - do they actually pay attention to gov stats - they are the only indicator that shows things aren't that terrible... well, not until their fourth or fifth revision anyway.

Jobs are being eliminated [insert big July layoff story], personal debt is at a record, personal net worth is only improved because bankruptcies have reduced the number of negative worths and the cost of food and fuel is inflating.

Bush then Barry fiddled around with stimulating banks and filling potholes instead of doing anything meaningful with stimulus dollars - except in Iraq and Afghanistan that is. Now because the left decided they'd won in '08 and didn't need to show up in '10 the TEAs have taken the reins and will do their best to kill the beast, even if it takes their powerchairs down too.

There really aren't any levers left to pull aside from deflating the dollar. O said something about trade deals...pffft.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('Leutnant', 'I') don't understand, Timo, the fed is soon gonna launch QE3, would'nt it make sense for you to leave your dollar-denominated debt as it is and let inflation eat into it, and use your retirment savings to buy gold?

[Pops]

$this->bbcode_second_pass_quote('americandream', 'T')he markets are very bullish at future profit prospects.

[americandream]

$this->bbcode_second_pass_quote('Pops', '')$this->bbcode_second_pass_quote('americandream', 'T')he markets are very bullish at future profit prospects.

[eXpat]

Euro rescue plan fizzles, Germany has lost at the roulette table
$this->bbcode_second_pass_quote('', 'T')he federal government has with the tax money does not even bailed children conceived and played roulette. Everywhere now begins to escape from the new soft-currency euro.
There are hardly any economic news is not reported in the escape from the euro. Europe is financially at the end . Greece goes on the quiet bank runs. In May alone, the Greeks raised five billion euros from their bank accounts and managed to secure foreign countries outside the euro zone. Italy from September 2011 has no more money and then stands there like the Greeks before the last Euro-top rescue. . And in the case of Spain is distinguished from the same location . The risk premium on Italian and Spanish government bonds to rise even to an absolute record high.

There are signs now following realistic situation: Sometime in mid-September will turn Italy and Spain as a donor for Greece . And that is for the Germans in the Euro-rescue extremely expensive. For we Germans indeed vouch for those who can not pay more into the euro rescue systems (or no longer want to pay). The less countries pay into the rescue fund, the greater the financial burden in Germany. The result is that agencies will downgrade the creditworthiness of Germany.
Hardly seems the drama American debt temporarily solved, here comes the European back with a vengeance . It is clear that the average debt for Greece inevitably is. The German tax payers will be among the big losers.
The rest, can soothe the markets in which the politics are getting shorter.And the debt crisis in Europe will peak soon after the crisis of serious proportions in Greece again. Investors flee to gold because the price of the Euro slumps ever further. And it is visible to the dullest that has lost Angela Merkel at the roulette table, the German mission to rescue the soft-currency euro. Must then pay the bill to taxpayers. Maybe we do as the Icelanders . We simply refuse a referendum, to pay our debts and not vouch for others. For the great collapse in Europe is now inevitable in any case.

[eXpat]

Italy in eye of the storm as cash runs low
$this->bbcode_second_pass_quote('', 'F')ears of a double-dip downturn on both sides of the Atlantic have set off fresh mayhem in Southern European bond markets, dashing hopes that Europe's summit deal in late July would contain the escalating crisis.
Italy's 10-year yields spiked through 6pc in wild trading and hit a record post-EMU spread over German Bunds, snuffing out a brief relief rally following Washington's debt deal. Spain's yields once again flirted with danger at 6.2pc.

"The markets know that the EU's bail-out find (EFSF) won't be able to buy Italian and Spanish bonds on the secondary market for another three or four months because the deal has to be ratified by national parliaments," said David Owen from Jefferies Fixed Income.

The summit accord did not increase the EFSF's firepower above €440bn (£380bn), leaving it unclear how EU leaders expect to cope as contagion engulfs the eurozone's bigger players. The fund has just €275bn left after pledges to Greece, Ireland, and Portugal. City analysts say it may take €2 trillion and a clearer German commitment to halt the panic.

"The longer this paralysis goes on, the more investors fear a break-up scenario where the core countries pull out and leave the rest with the euro," Mr Owen said.

JP Morgan warned clients that Italy has a thin margin of safety and risks running out of cash to cover spending as soon as September. "Italy and Spain will run out of cash in September and February respectively, if they lose access to funding markets," said the bank's fixed income team of Pavan Wadhwa and Gianluca Salford. Worries about Italy's immediate cash level risks leading to "a self-fulfilling negative spiral."

[americandream]

Europe is in for some very severe deregulating. Not only has capital moved offshore in Europe as well, it has created the perfect conditions for the complete destruction of European social democracy by luring them into debt ridden lifestyles from afar.

[Serial_Worrier]

American companies are making record amounts of profits and sitting on gigantic cash piles. Yet unemployment increases. Maybe what we need is a massive infrastructure jobs program.

[Sixstrings]

$this->bbcode_second_pass_quote('americandream', 'E')urope is in for some very severe deregulating. Not only has capital moved offshore in Europe as well, it has created the perfect conditions for the complete destruction of European social democracy by luring them into debt ridden lifestyles from afar.

[AdTheNad]

$this->bbcode_second_pass_quote('Sixstrings', 'E')uropeans are accustomed to four or five weeks vacation per year, guaranteed by law. I think the French only work four days a week on top of that. Europeans are accustomed to not facing homelessness if they get laid off.

It will all be interesting.. how long can they keep their social programs.. the French won't go down without a fight, can you imagine the protests and national shutdown if they instituted American policies?

[americandream]

$this->bbcode_second_pass_quote('Sixstrings', 'I')t will all be interesting.. how long can they keep their social programs.. the French won't go down without a fight, can you imagine the protests and national shutdown if they instituted American policies?