Markets  |  October 30, 2012 13:06:27

Socialist hurricane Brussels

While in the U.S. the largest wildfire currently raging over the last decades if not centuries (Sandy), raging in the eurozone something similar, only that while nezaplavuje street. Rozbiehajú is the final rescue the euro zone and the strike are enormous. Damage in the U.S. who may be at the level to $ 20 billion during the next few days, the socialist hurricane in the eurozone may be of the order committing greater damage for a longer period. But let us go poporiadku.

In the U.S., currently in what expansiveness (1400 1500 km in average) raging storm, yet what it says in the Atlantic should not unprecedented.Len Sandy hurricane itself is huge and the Bahamas has left dozens of victims. There is, however, that are not yet connected with a winter storm with Midwest and arctic air flowing from the north. The situation is serious, streets are flooded, businesses odkladajú disclosure of results and even macroeconomic outcomes will be deferred. Not to mention the fact that for the second day of the trading floors are closed. 3.6 million homes are without electric current. Today should be severozápádným slowly move west direction, and during the next two days should slow down (current velocity 105 km / h) as it will be directed to New York. About the study's insurance companies, refineries and the transport company we have been writing yesterdaymarkets to hurricane activity manifests languid-trade (equities rather to the side), a fall in oil prices (lower demand from the refinery) and growth in prices of gasoline (low inventories and limited production).

And the euro area is "fun" and account information, with whom and who negotiates wherein, it is evident that for the rest of the year will be very hot. Greece about not so much. Months is discussed about whether Greece will get tranche of aid, but these negotiations are increasingly beginning to resemble the grotesque, which can have two results. Greeks fulfill the conditions and receive money, or fail to comply with terms and receive a reprimand and more time in order to qualify. In addition, the European Commission would no longer like best full discussion of Grexite banned. The euro is irreversible, the resistance is unavailing. Like Manhattan streets are flooded, it is flooded Greece behold thy will be a long and behold, whom it will not be drained in the form of haircut. Since the Greek government had now saves so they do not pay their suppliers and consolidation efforts are equal outpouring vedierok water tanker in which the hole-size Mercedes.

And it also came to the IMF, which is still pushing for the Greek haircut came second. I mean that governments described the portion of their loans to Greece, that is admitted loss. Political suicide. Germany is strongly opposed to the IMF and thus severally negotiates with France (yesterday) and Germany (today). Germany already saw Plan B wants to give funds to Greece, so this could make a purchase private debt markets, the cost and reduce the overall team commitments.Should this should work, it would have happened secretly. Because otherwise the market buyout Greek bonds and also no longer cheap and it will not take effect. Still, Greece may speak, that is in the eye of the hurricane.

That's where the hurricane currently implements most (flax effects not seen due to the restraints ECB) in circumference similar to Spain and Italy. Italy has currently had a good auction, but the situation does not change it much. Needs two things to reach an agreement with Berlusconi (convicted of tax fraud, threaten to let the government fall ) and convince Spaniards that have asked for help. The team would achieve a reduction of their earnings, while bearing the costs would Spaniel (supervisory Troika).Italian Prime Minister Monti literally said that spaniel have to activate anti-spredový nechanizmus (team thought surely the ECB, which is there primarily to price stability).

Behold spaniel have fun at home. In doing so it is not currently on public debt, which is on this year almost refinancing. And those days are not concerned regions (which, however, sooner or later, will solicit additional funds). This is the banking sector, which has been promised an aid package of months € 100 billion, but his condition is rub through a bad bank. Plan exists, but is the realization of his problems and time is mine. While we're used to in the eurozone that the terms can be easily (and regularly) Move your, banks make use of this stress on the enforcement fuses.They want the government is calling on the aid for the certainty of already asked in those days, even though the government was considering to apply end of the year.

In short, well, again, the cooks something great and first consequences can see it in front of the historic Summit scheduled for December. Regarding Greece, tomorrow will Teleconferencing and would be able to finally have your say behold Threesome. Even before this Conference should be terminated negotiation vs. IMF. Germany and France, which are almost certainly concerned the Greek. So clear you should have all interested parties.

On the fiscal debt deluge Brussels responds by running socialist intervention hurricane that should this flood of uniformly distributed over the whole euro area.

Summarize it: the European Commission has already overtly rejects Grexit. IMF pushes for further haircut on Greek debt, Germany overprints alternative, buying up Greek debt. At the same time pushing it to Spain and Italy have asked for help jointly and to finally take steps to fiscal union. ECB governor Draghi defends periphery bond purchases in the German parliament. Underway large discussion on the way, as they could recapitalize banks through ESM. However, their condition is clarification, which, however, calls for time and Spanish banks would again like to have support from the government. No one wants to bear the cost of their decisions and therefore the majority eurozóny seductively that costs have others bear.Brussels it uses to enforce massive intervention and redistributive mechanisms (ECB, ESM, transaction tax, steps towards fiscal union) in order solidárneho burden-sharing (read transfer of wealth) and všeobjímajúcej stability. Just bring us this hurricane interventions nezatopil yet.

Todays Nevele interesting trade ran well received results Deutsche Bank , and the result is better than expected GDP of Spain. But, as the graph view, short-term trend is declining and soon we come to a point when the market or inquire German shares have to maintain the medium-term trend of increasing growth. BeholdGermany awaits challenges that even today expressed their weakest labor market outcomes over the past three years.

Today, we expect more data realitného the U.S. market, but it is not certain and will be published as planned and where, lo, the U.S. markets are closed and the reaction will probably be retiring.

Author: Thomas Swimmer | TRIM Broker, as | Trading on exchanges TRIM Broker

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