Investors have lost confidence in the euro-zone countries and in their ability to rescue the common currency. Not even the recent changes of government in Italy, Greece and Spain have been enough to persuade them otherwise.Apparently the only solution left to preserve the European Union and in particular the Euro currency, is to grant powers well beyond those contained in its constitution to the European Central Bank. How will the Greeks, Hungarians, Spanish, Irish, Beligians, and others react to seeing their elected Parliament's rendered impotent when it comes to defining their countries fiscal direction because the EU bureaucracy has to make these decisions...and the ECB spends hundreds of billions invoking another round of quantitative easing? This is a crisis that is surpassing that of 2008-9 for the EU nations.
There is a growing sense of fear, both in the financial markets and in government offices. Even serious bankers who exude confidence in public admit privately that the monetary union could soon fall apart.
The previous bailout attempts have been worthless, they say, noting that Europe must finally reach for the only weapon whose firepower is endless, the European Central Bank. The ECB must finance the debtor nations, even if its own constitution bars it from doing so. The central bank has enough money, and it can also print money if necessary.
Most European leaders share this realization by now -- all except Merkel. She remains resistant, concerned about the central bank's independence and monetary stability. She is also staunchly opposed to all attempts to pool the debts of euro nations through jointly issued debt known as euro bonds.
As noted in today's summary of Doom by Monty on Ace of Spades...
The Eurozone problem was dogged by two interrelated pieces of European folly: one, a badly-designed monetary union; and two, a deeply undemocratic process that put the wishes of the citizens behind those of the bureaucrats. America’s monetary union works in part because America's federal system of sovereign states compromise an actual nation.Moving beyond the establishment of simple cooperative treaties and policies was a fundamental mistake of overreach by the nations of the European Union in forming their union. Striving for a common market, free trade, and common immigration policies are one thing - trying to reduce nations to the levels of 'states' was not something that could succeed given the differences.
UK's Telegraph comments that the Euro is for all practical purposes already a dead currency - that the return to each member nation's original currency is a foregone conclusion. Moody's shares this level of pessimism, reporting that all nations in Europe are threatened by this crisis and that they envision multiple defaults with several nations leaving the EU / Euro. The Financial Times opines that the Eurozone has 10 days at most left before this happens. We'll be seeing a foreshadowing of this today as the Italian government is trying to sell $11 billion in bonds and Spain has a far larger bond sale scheduled for Thursday. A spike in yields or a poor reception and the 10 day countdown may seem extravagant.
President Barack Obama is asserting that the US taxpayer will not be providing financial assistance or a bailout for the Eurozone. The Obama WH is letting the Eurozone know that they have the support of the US - verbally.....but not where it is needed the most, financially. This brings into question as to how / where the IMF will get the $800 billion they say is needed to bailout Italy and Greece - or if the IMF actually can commit to the bailout.
Strong sales numbers from Cyber Monday continued the momentum from the first major holiday weekend retail sales, but the perception is still that we need to be wary of the economy given the national fiscal crisis. This morning, the parent company for American Airlines filed for Chapter 11 bankruptcy protection as they seek to reduce their labor costs and shed their heavy debt load.
Under reported in much of the media, Fitch announced yesterday that it is maintaining it's assessment of the US credit rating at AAA, but it is cutting its outlook towards the long term fiscal viability of the US to negative. This is as the US government remains adrift in their efforts to address the fiscal irresponsibility being pushed by the President and his Congressional allies.
The official reason stated by Massachusetts Representative Barney Frank's decision to retire remains a combination of his age and the redistricting of Massachusetts's Congressional districts. The redistricting fundamentally changed Frank's district from one that was a reliable and save progressive vote to one that would have gone for Republican Senator Scott Brown by 10%. Frank, who survived a tough 2010 challenge, didn't want the fight or the possibility of an electoral loss. He is the 17th Democrat in the House to announce their retirement. Another reason, given the political environment, it is very unlikely that the Democrats will regain the House, so Frank, ever the bully, would have to remain a member of the minority - unable to wield the power as he liked to do.
Given Franks' role and massive contributions towards the 2008 financial crisis, one would think that his departure from the House Banking Committee as the senior minority member would be good news for the Republic. That is until we learn who will be stepping up to the plate. That would be none other than California socialist Maxine Waters...
That is, if Maxine Waters can survive the Congressional investigation currently underway into corruption charges - where Waters pressured the Department of Treasury to bail out a bank that her husband had a substantial financial exposure in.
Earlier today, Iranian 'students' stormed the British Embassy in Tehran and occupied the Embassy, vandalizing the buildings and offices, and burning the Union Jack. This was said to be in response to the British decision to support the US efforts to increase economic sanctions on Iran for that country's continued efforts to develop nuclear weapons. Other than expressing outrage, however, there is little that Britain can do.
Britain's military is a shadow of what it once was. The Royal Navy, the enabler and enforcer of the British Empire, is slated to be reduced to just 29,000 members - too small to operate the two aircraft carriers that the RN is trying to obtain....
The UK will "certainly" not be able to operate both Queen Elizabeth class aircraft carriers in 2020 if the Royal Navy is reduced to 29,000 personnel in line with current planning, the head of the Royal Navy has said.Inside St. Paul's Cathedral, if not already because of Occupy London's use of the Cathedral as a toilet, Lord Horatio Nelson is spinning in his crypt.
First Sea Lord Admiral Sir Mark Stanhope, speaking at a Henry Jackson Society event on 24 November, said that manpower was one of his most "significant concerns" regarding the future of the navy.
Current navy assumptions will see the second-in-class aircraft carrier fitted with catapults and arrestor wire ready to operate the F-35C Joint Strike Fighter carrier variant in 2020, but the fate of HMS Queen Elizabeth, which will launch first and be used to train crews in handling HMS Prince of Wales, is less certain.
About 33 hours after the expiration of his ultimatum to OccupyLA, Mayor Villiaragosa continues to dither and delay in cleaning up the OccupyLA encampment. Meanwhile, OccupyLA is trying to do what OccupyWallStreet, OccupyOakland, and OccupyPortland were unable to do - find a judge that will accept their encampment as being an expression of First Amendment rights of free speech. Reports on OccupyLA by the networks remains full of selective amnesia as they continue to stress the 'peaceful' nature of the protesters...forgetting these events...