We all live in a fiat money regime. So what is to stop the Greeks adding €377bn to their Bank of Greece accounts and repaying everyone?  Alternatively create the New Drachma. Valued (by sovereign decree) at par with the euro. And repay with that. I know that the secondary market wouldn't accept that it's valued at par but that's not the point. A sovereign state says their drachma is worth a euro. They give their creditors (except the IMF) lots of them. Lots of red faces and indignation but so what?  Alternatively Greece still has the mandate to print small denomination euro notes. So, provided that they have the paper, print loads and repay in cash. Super Mario would huff and puff and say that they were counterfeit but that would have the whole of Europe worried about their cash....The effect of a default would be extremely serious. Nobody lends money to a government that has just defaulted on existing debts. Rich Greeks have removed their Euros from Greek banks and cannot be forced to bring them back. Greeks in general simply do not pay their taxes. Where can they go now? When they have stripped the pension funds, there will be no pensions. When they leave the Euro, they will print Drachmas which will be devalued continuously until they are worthless. Greeks have mortgages denominated in Euros. The Drachma will be worth a few centimes, if that. I think life will get a lot harder for Greeks before it gets better. = This is false - did anybody hear about Brazil and/or Argentina ??? - these countries periodically file for bankruptcy !!!...Of course the great Europeans especially the "unionists" didn't today's Europeans are just as ill informed as the Americans ! - Well ...We are where we are. Hindsight is invariably quoted by opponents of how things have panned out. There is no doubt that matters could have been better planned from the start or the early days. In which case the whole movement might well never have got off the ground.

I see the EU and Euro as, say, 25% positive. It is a job in progress, not made easier by the ongoing crisis which did NOT started in the US, but in the "world". For whatever reason, there are 28 democratically elected (more or less) national governments who want their countries to stay in the EU with another half-dozen applying for membership (stupid). To date no-one has left. Can they all be wrong?

Europe was alight with speculation on Friday about verdicts on the financial health of the region’s 130 largest lenders.

The big question was - and, well 25 failed -  which banks might fail the central bank’s review and how much new capital might be needed for the banks to survive. Estimates of the capital shortfall varied widely, from about 10 billion euros, or about $12.6 billion, to as much as €50 billion. The central bank’s review was based on figures at the end of 2013. Banks that have not passed muster and have not taken steps to shore up their finances will have nine months to top up their reserves. Otherwise, they risk being shut down. The central bank noted the results would not be final until approved by its governing council Sunday morning. “Until that time, any media reports on the outcome of the tests are by their nature highly speculative,” it said. Banks were informed of the preliminary results of the review and stress tests on Thursday. They will not know for sure whether they passed or failed until Sunday, shortly before the public disclosure. Most analysts expected the shortfall to be relatively modest, in part because bankers have known for a year that the test was coming and have sold risky assets and raised more capital, money that is available to absorb losses and is crucial to a bank’s survival in a crisis. “The number of banks that would need to raise additional capital will be limited,” analysts at Barclays said in a note to clients on Friday. “This is due to the substantial pre-emptive measures that the banks have already undertaken.” Betting on which banks would do better or worse than expected was rampant on Friday. Trading was suspended on Friday in shares of the Italian bank Monte dei Paschi di Siena after they jumped more than 10 percent on the strength of speculation that it would fare better than expected under European Central Bank scrutiny. The larger question is whether the review, which included an audit of bank holdings followed by so-called stress tests of their ability to withstand a crisis, will remove doubts about the underlying health of eurozone lenders and make it easier for them to raise money that they can lend to customers.

Jörg Krämer, chief economist at Commerzbank in Frankfurt, was pessimistic about the effect that the review would have on the eurozone economy. The reason for declining credit in the eurozone is not that banks cannot lend, he said on Friday, but that businesses do not want to borrow. “The stress tests will help certain countries like Italy and Spain,” Mr. Krämer said in a meeting with a small group of journalists. “But it won’t be a breakthrough for the whole eurozone.” There could be a sell-off in financial markets on Monday if the central bank uncovers a bigger capital gap than expected. But there is also a risk of a negative market reaction if the review appears to be too lax. Previous stress tests by other regulators gave stamps of approval to banks that later failed, undermining trust in the whole banking system. The European Central Bank has a strong incentive to be tough. It will become the overall supervisor of eurozone banks on Nov. 4, and needs to show it has the skills and backbone to do the job. “If convincing enough, the assessment can support sentiment, the eurozone economy and the banks,” Suvi Kosonen, an analyst at ING Bank, said in a note on Friday.

The central bank conducted the stress tests with the European Banking Authority, which will simultaneously release results on Sunday that include lenders in European Union countries that are not in the eurozone, like Britain and Sweden. Banks found short of capital will have two weeks to submit a plan to the central bank on how they will shore up their finances. Even banks that pass could find themselves under pressure to raise more capital, if they pass only narrowly. The audit will expose that banks may have been overvaluing their assets or failing to set aside enough money to cover bad loans.(source NYT)

When German Finance Minister Wolfgang Schäuble, a trained lawyer, announced an agreement on Wednesday night in Brussels on the long negotiated EU banking union, observers might have been left thinking that he is precisely this type of lawyer.

On paper, Schäuble and his negotiators are right about very many points. They succeeded in ensuring that in 2016, the Single Resolution Mechanism will go into effect alongside the European Union banking supervisory authority. The provision will mean that failing banks inside the euro zone can be liquidated in the future without requiring German taxpayers to cover the costs of mountains of debt built up by Italian or Spanish institutes.

They also backed the European Commission, which wanted to become the top decision-maker when it comes to liquidating banks. The Commission will now be allowed to make formal decisions, but only in close coordination with national ministers from the member states.

But it goes even farther. Negotiators from Berlin have also created an intergovernmental treaty, to be negotiated by the start of 2014, that they believe will protect Germany from any challenges at its Constitutional Court that might arise out of the banking union.

They also established a very strict "liability cascade" that will require bank shareholders, bond holders and depositors with assets of over €100,000 ($137,000) to cover the costs of a bank's liquidation before any other aid kicks in. The banks are also required to pay around €55 billion into an emergency fund over the next 10 years. Until that fund has been filled, in addition to national safeguards, the permanent euro bailout fund, the European Stability Mechanism, will also be available for aid. However, any funds would have to be borrowed by a national government on behalf of banks, and that country would also be liable for the loan. This provision is expected to be in place at least until 2026.

The government in Berlin put a strong emphasis on preventing the ESM, with its billions in funding, from being used to recapitalize debt-ridden European banks. Schäuble was alone with this position during negotiations, completely isolating himself from the other 16 finance ministers from euro-zone countries. Brussels insiders report that it was "extremely unusual because normally at least a few countries share Germany's position."

Goldman Sachs doubled its profits in the second quarter as the bank benefited from gains in fixed income, currency and commodity trading revenue. The Wall Street giant set out its latest quarterly earnings Tuesday morning announcing net income of $1.93bn, compared with $962m a year earlier. Net revenue, including net interest income, rose 30% to $8.61bn from $6.6bn last year.

The bank said it had set aside $3.7bn for compensation and benefits – including bonuses – in the second quarter, 27% higher than the second quarter of 2012. Goldman said the increase reflected "a significant increase in net revenues". "The firm's performance was solid especially in the context of mixed economic sentiment during the quarter," said Lloyd Blankfein, chairman and chief executive officer. "Improving economic conditions in the US drove client activity and the strength of our global client franchise allowed us to deliver positive performance across a number of our businesses. While the operating environment has shown noticeable signs of improvement, we continue to put a premium on disciplined risk management, particularly in regard to the firm's strong capital and liquidity levels."  Revenue from fixed income, currency and commodity trading totaled $2.46bn in the second quarter, versus $2.19bn a year earlier. Total equities revenue was $1.85bn, compared with $1.7bn a year earlier and $1.92bn in the first quarter.

Goldman Sachs ranked first worldwide in investment banking in the quarter. Net revenues in investment banking were $1.55bn, 29% higher than the second quarter of 2012 and essentially unchanged compared with the first quarter of 2013. Net revenues in financial advisory were $486m, slightly higher than the second quarter of 2012. Net revenues in the firm's underwriting business were $1.07bn, 45% higher than the second quarter of 2012.

Hungarian Central Bank Gyorgy Matolcsy: IMF office in Budapest not necessary any longer. A long-running dispute between Hungary and the International Monetary Fund escalated on Monday when the head of the country's central bank called on the IMF to close its office in Budapest, saying it was no longer needed. Relations between the government of Hungarian Prime Minister Viktor Orbán and the International Monetary Fund have never been especially good. Now they have hit rock bottom. Orbán's former economy minister and current central bank governor, Gyorgy Matolcsy, wrote a letter to IMF Managing Director Christine Lagarde on Monday calling on the fund to close its representative office in Budapest as it was "not necessary to maintain" it any longer. Hungary owes its economic survival to the IMF. When the country was caught up in the global financial crisis in 2008, the fund and the EU came to the rescue with a €20 billion ($26 billion) loan. At the time, Orbán's predecessor was in office. Ever since Orbán became prime minister in 2010, Hungary has had trouble with international institutions. His government pushed through a new constitution and many laws that curtailed democracy, the powers of the constitutional court, the justice system and press freedoms. The EU responded by launching several proceedings against Hungary for breaching EU treaties. In early July, the European Parliament passed a resolution calling on Hungary to repeal the "anti-democratic changes." Orbán angrily dismissed the demands as "Soviet-style" meddling. Under Orbán, all negotiations with the IMF about fresh aid have failed. On Monday, central bank chief Matolcsy said the country didn't need the IMF's money and that Hungary would repay the 2008 loan in full by the end of this year. He said the government had succeeded in pushing its budget deficit below the EU ceiling of 3 percent of GDP and had reduced government debt. Matolcsy is the architect of Orbán's unorthodox economic policy which is based on imposing heavy special taxes on large companies. He became central bank governor four months ago. The Hungarian economy shrank by 1.7 percent last year. The EU Commission expects it to return to weak growth in 2013. The budget deficit is expected to rise again, back up to 3 percent of GDP.

As a topic of debate, the Greek economy certainly seems to attract more than it's share of people keen to testify to their fervent belief in the heavenly mandate of the rights of property.

And the constant attempts to blame the economic situation there on the likes of taxi drivers, barbers and waiters certainly qualifies as one of the shabbier sophistries dragged into play.

It really needs to be stressed: they get the blame for the tax gap because otherwise the light would be shone on the real tax cheats - professionals and business owners large and small, in comfortable complicity with the Greek state. And that can't be allowed because it would undermine the moral authority of everything that the Greek people are being sacrificed to protect. Taxi drivers, waiters and barbers all come across as essentially plebeian -- so blaming them fits comfortably with the received wisdom that the rightful lot of the little people is externally-imposed discipline and obeisance to their betters. ...Blaming them solves any number of issues of cognitive dissonance - if we can speak of 'cognition' when referring to the beliefs of those whose world-view doesn't stray beyond kneejerk loyalty to the status quo....Over the past few weeks, Athens' top brass have been trying to convince the world that happy days are here again. Prime minister Antonis Samaras now talks of the Greek "success story". The boss of the central bank and the finance minister say Greece has turned a corner. Editorialists in the national press and parts of the international financial press dutifully nod their assent. And those with Greek or European assets to sell clap along: "Forget Grexit – it could be Greecovery instead," ran one particularly bone-headed "research" note I received on Friday....What's at stake here is a much bigger prize than whether an economy worth 2% of Europe's annual GDP really is on the mend. It's about justifying the shock therapy imposed on distressed members of the eurozone.

This was frankly put by Maria Paola Toschi, a market strategist at JP Morgan, in the FT last week. "If Greece can present itself as a recovering economy, having taken the medicine of fiscal austerity and supply-side reform, then the reform agenda of the European Central Bank and International Monetary Fund will be given a further boost."  If the elites of Europe and Washington can claim to have "healed" Greece, then they can shrug off criticisms of eurozone austerity. And they can also defend an economic model that just three years ago looked as if it had crashed into a wall.

Yet the exhibits the boosters are using do not a case make. Athens shares doubled in the past year? Cheap money from central banks and investors desperate for returns can play funny tricks. Wages have fallen? Yes, but the business investment that was meant to follow on from that hasn't materialised. The public finances are back in some kind of order? Taking an axe to the welfare state and public services will do that; still, few think Athens could go a day outside the sovereign version of debtor's jail.

And no one is seriously disputing that the economy remains badly sick; the OECD predicts Greece will face its seventh year of recession in a row in 2014. More than one in four Greeks are out of a job; of young Greeks, nearly two in three. Around 60% of those out of work haven't been employed in more than a year. According to a recent piece by Nick Malkoutzis and Yiannis Mouzakis for Ekathimerini, there are 400,000 families in Greece without a single breadwinner.

The yield on Spanish 10-year government bonds rose sharply Tuesday back above 6pc for the first time in over a week following a meeting of eurozone finance ministers where there was no movement on a possible Spanish bailout.

In early trading the yield rose to 6.095pc on the secondary market, compared to 5.714pc at Monday's close. It had been below 6pc, a level considered by many economists to be unsustainable in the long term, since September 28.

"At the Eurogroup meeting, no progress was made on other 'hot' topics which gather attention today, chief among them being the expected request by the Spanish government for a precautionary credit line from the ESM," said Credit Agricole economist Slavena Nazarova.

The eurozone on Monday unlocked its €500bn crisis war chest, the European Stability Mechanism (ESM) as Spain agonised over whether to seek a full bailout.

Spain's heavy debt refinancing burden and high borrowing costs are widely expected to force it to seek a bailout soon, with market pressure likely to rise on Madrid as it faces some 30 billion euros in repayments this month.

So, as a good socialist I transfer the debt to the average Joe

The vast majority of the EU states are socialist, so I believe, the main aim of socialism is to transfer wealth from those that have to those that have not to make it a fairer society.--- So as a good socialist I transfer the debt to the average Joe tax payer to protect the wealth of shareholders, bondholders and depositors. So Joe tax payer gets poorer and the rich get richer.---So I am a capitalist, I believe in a free market....Joe tax payer is protected for small amounts by the government i.e. all taxpayers. Its just insurance really Joe taxpayer has already paid for with his taxes. The bank goes bust free market forces. The shareholders, bondholders and wealthy depositors get stuffed. Wealth redistribution at a stroke with out the need for expensive tax collection and redistribution....I am sure all the educated people will tell me were I am going wrong....The wealthy by winning the competition have power to circumvent the market forces. So no pure market exists or is possible, and if ever it happened it would destroy itself in monopoly. It is even doing a good job of this at the moment without this 'purity'....Question - rhetoric : With so much continuing financial doom and gloom around Europe, the Euro and Spanish banks why have European stock markets followed far East markets and risen by more than 1% on opening this morning?. Is there something happening out there in the 'markets' that only a select few are aware of?... The ECB has  let the broader M3 money supply contract for the whole eurozone late last year, badly breaching its own 4.5pc growth target. This was not purist hard-money discipline. Let us not dress it up with the bunting of ideology, or false authority. It was incompetence, on a par with the errors of 1931.

Spain’s Bankia fiasco has merely brought matters to head, though the details are shocking enough. A €4bn bail-out in mid-May. A €23bn bail-out two weeks later. You couldn’t make it up.

As he desperately tries to squash a popular rebellion, Libyan ruler Moammar Gaddafi is banking on the loyalty of a close circle of relatives and security officials whose personal fates depend on his survival, according to U.S. officials and analysts. Among them are four of his sons and two longtime spy chiefs accused of directing a series of assassination and terrorist plots during Gaddafi's four decades in power. While numerous Libyan diplomats and government officials have defected or abandoned Gaddafi in recent days, analysts said it is unlikely that his inner core will follow suit.
"The people who are in the bunker with him, they have pretty good reasons for sticking by Gaddafi," said John Hamilton, a Libya expert with Cross Border International, a British publishing and consulting firm that specializes in North Africa. "It's a bit late for the sons to revolt against their father . . . There's really nowhere for the others to turn, either." (W.P)

Mămăliga din Orientul Mijlociu" ("Middle East Polenta") that is the title chosen by Shachar Shaine, the former head of Tuborg Romania, for his speech delivered at the luxury Loft restaurant in Bucharest, held by a businessman closely connected to the beverage industry, Pepe Berciu, on Wednesday night. Shaine, 42, said goodbye to his co-workers, as well as to competitors in a relaxed atmosphere, pointing out that Romania was definitely "the country worth living and investing in". The manager who spent the last six years at the helm of United Romanian Breweries Bereprod (URBB), the bottler of Tuborg and Carlsberg, says he decided to stay in Romania, despite propositions from shareholders for whom he had worked to take over similar businesses in other countries. "I will stay and develop business here," Shaine said without providing further details. He is one of the managers with the longest-standing career in the beer industry, having worked for the same company for the last eleven years. Israeli-born Shaine has repeatedly said he loves Romania and even became a Romanian citizen six months ago.(Z.F.) BCE,ECB,IMF,Germany,France,Euro,currency,forex,investments,bucharest,Romania,cluj,

The story of Mokotów is one of the prominent bright spots in the history of how the commercial property developed in Poland. The former industrial district of Mokotow, Służewiec Przemysłowy has rapidly been transformed into Warsaw’s ultimate office hub, where fully-leased projects from leading developers are regularly snapped up by leading investors. In fact, Colliers International claims that investor demand has intensified so much over the past 12 months that that along with being the hottest office district in Central Europe, Mokotów can actually be considered one of the most liquid markets anywhere in Europe. Is this just marketing overkill from the Polish office of an international agency? After all, with just over 900,000 sqm, Mokotów is hardly among the biggest on the Continent. But according to Neil Gregory-Eaves, Colliers’ international director of CEE investment services, one shouldn’t look at total stock, but instead at how much of it has changed hands in the last 12 months.
“Over the past 12 months, Moktów has had six major office investment transactions which represent approximately 18 percent of the total gross lettable area. The total volume of these transactions is approaching €500m. These kinds of figures mean that Mokotow has easily been the most active office investment sub-district in all of CEE both in terms of the number of transactions and total investment volume,” says Gregory-Eaves.BCE, Citigroup, Comisia Europeana, FMI, Federal Reserve, Germania, Grecia, Irlanda, Marea Britanie, PIB, Rusia, SUA, Spania, Standard and Poor's, Ungaria, Uniunea Europeana,