Imminent Global Tsunami: Euro Crisis To Worsen As Greece Could Exit euro And Nobody Wants The ECB Bailout, Canadian Housing Bubble Goes Into Full Mania Mode, China & Russia Sound Alarm on Global Economy And Fitch Lower Short Term Bonds

Sunday, September 9, 2012
By Paul Martin

Investmentwatchblog.com
September 8th, 2012

“Europe is going to be in a very difficult position during the next six to 12 months” Sweden FinMin Anders Borg

STOCKHOLM: The eurozone crisis will get worse before it gets better and Greece could exit the single currency bloc within a year, Swedish Finance MinisterAnders Borg said in an interview on Saturday.

“I don’t think we’ve seen the worst yet in countries like Spain and Greece. They have such serious problems that Europe is going to be in a very difficult position during the next six to 12 months,” Borg told public broadcaster Swedish Radio.

The Swedish finance minister, whose country is not a member of the eurozone, said he would not be surprised if Athens had to leave the 17-member eurobloc in the foreseeable future.

He stressed that while there was “much support” for the country in Europe, “we can’t rule out the possibility that Greece will end up in a situation where it in practice leaves the euro in six, nine or 12 months.”

Suddenly, Nobody In Europe Wants The ECB Bailout

It took the ECB a year of endless behind the scenes Machiavellian scheming to restart the SMP program (which was conceived by Jean-Claude Trichet in May 2010, concurrent with the first Greek bailout). The markets soared with euphoria that this time will be different, and that the program which is a masterclass in central planning paradox, as it is “unlimited” yet “sterilized”, while based on “conditions” none of which have been disclosed, and will somehow be pari passu for new bond purchases while it retains seniority for previous purchases of Greek and other PIGS bonds, will work – it won’t, and the third time will not be the charm as we showed before. Yet it has been just 48 hours since the “bailout” announcement and already Europe is being Europe: namely, it turns out that nobody wants the bailout.

On one hand there’s Germany for obvious reasons – not only are they footing the cost, but it is for them that the threat of an inflationary spike as a result of “unlimited” bond buys is most acute. But on the other, just as we predicted all along, are Spain and France, the biggest beneficiaries of the bailout, and whose bonds soared on expectations the ECB may buy them, who overnight have had a change of heart and say they never actually needed the bailout. Why? Because its politicians have suddenly had a change of heart and realize they will be sacked the second they hand over sovereignty over to the Troika or whatever supernational entity is in charge of the country following the submission of the bailout request.

More importantly, and as explained before, as long as the yield on the bonds of insolvent European countries is sub 8%, not one country will demand a bailout.

The Rest…HERE

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