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Tuesday, September 20, 2011

The End of Days

Yesterday's conference call between various EU/IMF bods (aka Troika) and the embattled Greek government ended with not a bang but a whimper. Various self serving platitudes were presented to the press which, reading between the lines, indicates no one has come up with any plan that will work.

Oh, I exaggerate a tad, they have come up with one plan....namely to have another conference call today!

Default for Greece is a certainty, the only question remaining is the exact day (today, tomorrow etc) on which it will officially occurs. Until that happens the EU and world economy remains in limbo, awaiting what the markets know but the politicians deny will happen.

To add to the febrile atmosphere in Europe, S&P downgraded Italy with an outlook "negative" and Moody's is expected to follow suit.

As if the above issues are not bad enough, the media reports that Siemens withdrew around €0.5BN from a large French bank two weeks ago, and placed the money with the ECB

Michel Perebeau, Chairman of BNP, hotly denied this morning that it was his bank.

Whichever bank it is, the fact that a major European company has no faith in a major European bank shows just how bad things really are in Europe.

Sadly for the people of Europe we are being "governed" by a political "elite" whose vision of how the world works (or should work in their minds) has been shattered. Hence they are displaying symptoms of shock and depression, and are a danger to themselves and us.

Update

Reuters reports that a large market-making state bank in China's onshore foreign exchange market has stopped foreign exchange forwards and swaps trading with several European banks (including Societe Generale , Credit Agricole and BNP Paribas) because of the unfolding debt crisis in Europe.

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