Two-And-A-Half Minutes To Midnight

Move More Deck Chairs To Starboard, And Ignore That Iceberg


Not Sure The Word "Ignition" Should Be Used Near The Global Economy --
And, We Didn't Make Up The Headline (Business Insider, 11/25/11)

There are plentiful signs that the 'Euro crisis', an exceptionally complex situation, cannot come to a good end no matter how brave a face Little Angela and Nicky put on it.

... according to Gareth Gore in the International Financing Review(:)

European banks are being forced to abandon their efforts to sell off trillions of euros worth of loans, mortgages and real estate after a series of talks with potential investors broke down, leaving many already struggling firms with piles of assets they can barely support.

Lenders have instead turned their attention to reducing the burden of carrying such assets over months and years, with many looking at popular pre-crisis “capital alchemy” arrangements to minimise capital requirements and boost their ability to use the assets to tap central banks for cash.

Deadlocked talks with potential buyers – a mix of private equity firms, hedge funds, foreign banks and insurers – show little sign of making breakthroughs, say bankers taking part in those negotiations, with the stalemate threatening to block the industry’s ability to save itself from collapse through a mass deleveraging.

“European banks have spent far too long saying everything is fine, when it really isn’t,” said one banker at a US bank who has been advising European clients on their options. “They are slowly realising that they just won’t be able to do what the market is expecting. We are edging slowly closer to the depths of the crisis.”

Some of Europe’s largest banks, including BNP Paribas and Societe Generale, have in recent weeks pledged to sell assets. Together, firms are expected to shrink their balance sheets by as much as €5trn over the next three years – equivalent to about 20% of the region’s total annual economic output – through a combination of sales, asset run-off and recapitalisations.

(The banks want to sell their assets near "par"--the value the banks are carrying the assets for on their books--because then the banks won't have to take losses that would further deplete their capital. The buyers, meanwhile, want deals, and they know that time is working in their favor.)

So now that banks are moving to Plan B... which is financial engineering.

Specifically, the banks are packaging up bunches of crap assets, putting pretty bows on the packages, and then using the packages as "collateral" with which to obtain emergency loans from the ECB...

Even if the European banks can engineer a way to get themselves the funding they need to survive, they're still planning to significantly reduce the amount of credit they're extending. And although this is wise for the banks, it's bad news for the economy.

No EU leader, or The American President and Timmeh! Giethner, and Helicopter Ben, the Secret Lizard from Acturus, will change their economic policies. The EU leaders can't, or (they believe) risk dissolving the Euro and unraveling the "idea" of a United Europe. They want Austerity and low growth, because it will keep Yurp's Bad Bad Rotten To The Core Banks from failing, and so imploding the international 'Markets'.

Here in America, Herr Obama is playing a game of electoral Chicken, hoping that the mass of citizens will see the Evil Rethug Tea Partei as the Enemy Of All That Is Good. He wants to make the Presidential election about a choice between Darth Vader and the Empire, or the plucky Rebellion, even though he will deny it's a Good-vs-Evil drama if asked.

Meanwhile, the Right continues to hijack the country by derailing the Doomed-To-Fail SuperChicken Committee, where they refuse to raise taxes because poor should pay and the rich should be pampered, live softly, and have treats. And the dirty hippies in the street? Ahhh, Fuck 'em. We beat, arrested, shot them and derided them forty-four years ago; we can do it again.


Only The Spirit Of The Past Can Save Us, Say Republican Stalwarts

And no matter what Bucky, The 'Chunky BoBo' Beaver says, The Rethugs are playing their own game of Chicken: They want Europe to implode. They're hoping the economy will deteriorate even further, and if human beings suffer in the process... well, it's all in a good and sacred cause -- to retake control of the country for god and jesus, and Unimpeded Free Enterprise. Gotta break a few eggs, sometimes, ya know; gotta see the Bigger Picture! YAAAH-Hooo YAAAH-Hooo YAAAH-Hooo!!

It's a full court press. The Democrats keep wanting to compromise, when that's an impossibility. They're dealing with sociopathic predators who only know and respect power, and for whom winning is everything. Whenever Democrats respond in kind, the Rethugs whine and scream: Class Warfare! Muslim Islam Mormon Catholic UN Black Helicopter Socialist Dirty George Soros Hippie One World Gov'mint!!!


Crazy Lady Says Only Hoping For The Apocalypse Will Save America From Porn, And Muslims

The higher the unemployment rate, the more the Rethugs can lie to the country through the huge megaphone of Little Rupert's NewCorp ... that it's all the fault of that Bad Illegitimate Socialist Kenyan Nigra Up The White House what thinks he Prestident. They'll repeat it over, and over and over and over.

And just to show you what kind of Edge-Of-The-Volcano? Let's Dance! times we live in, there's a misbegotten freakshow rumor making the rounds inside the Beltway -- the only part of America that matters, you see -- that retired ex-Senator Mutant Zombie Republican DINO Evan Bayh might try to run as a third-party / primary challenger to Obama... because he's a 'centrist', and someone who can rise above the partisan fray, and lead America back to its Destiny, and that's So Just What We Need Now. So there.

Right. Meanwhile, no one in a responsible position of authority does... anything.

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