• The Eurozone sovereign debt bomb is about to explode! You cannot solve a debt problem with more debts at exorbitant interest rates! Do we really believe that Greece will not default when 1 year Greek bonds are at 60%, 2 years Greek bonds at 46%? This coming collapse will start in the Eurozone, bring down the financial/banking system and spread to UK, Japan and finally USA. Of course, by the end the whole world will be ‘in flames’! No country will escape this coming collapse.
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  Greek Bonds Plunge on Aid Deal Worries
  By NEELABH CHATURVEDI , http://online.wsj.com/home-page
  LONDON—Greek bonds fell sharply with two-year and five-year yields hitting euro-era highs as investors trained their guns back on the cash-strapped ountry amid signs of discord over a bailout package. Bonds issued by other highly indebted euro-zone countries also fell as traders fretted over the Italian government’s ability to push through fiscal tightening measures.
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  The two-year Greek bond yield rose by 2.64 percentage points to 45.92%, widening the yield spread over similarly dated German schatz by 2.47 percentage points to 45.39%. The five-year yield rose by 0.83 percentage point to 28.56%, while the 10-year yield climbed by 0.16 percentage point to 17.54%.
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  Sovereign Debt Worries Flare Again in Europe
  By MATTHEW SALTMARSH AND NIKI KITSANTONIS , http://www.nytimes.com/
  LONDON — Concerns about the euro zone’s ability to cohesively respond to its debt crisis resurfaced Friday after talks between Greece and its foreign creditors were interrupted and the head of the European Central Bank warned Italy to stick to its austerity program.
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  European stocks were sagging even before a disappointing U.S. jobs report added to concerns about the global economy, dragged lower by those companies most tied to growth like car makers, banks and insurers.       
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  Yields on 10-year Italian bonds rose almost a tenth of a percentage point to 5.21 percent — well above the 5 percent level that is considered to be the top rate desired by policy makers.       
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  The yield on Spain’s 10-year securities climbed slightly to 5.06 percent, despite passage in the lower house of the Spanish Parliament on Friday of an amendment that will enshrine stricter budgetary discipline in the Constitution.       
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  The E.C.B. on Aug. 8 began the extraordinary step of buying Italian and Spanish debt to help calm markets after 10-year rates had spiked to around the 6 percent level.       
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  “There’s still no genuine investor demand for Spanish and Italian government bonds,” he said. Sentiment was hit after the team of European and International Monetary Fund officials pulled out of Athens early as they apparently disagreed over the country’s deficit figures and how to make up for a growing budget shortfall. The mission had been sent to determine whether Greece would meet the conditions for the next tranche of emergency loans, due in September.  
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  An initial loan package, agreed to last year, has since been supplemented by a second bailout deal that was hammered out in Brussels in July, but which now hangs in the balance amid demands by some euro zone countries for guarantees from Greece in the form of collateral. Without that fresh aid, Athens could default on its obligations.
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  One issue that dominated talks, which concluded in the early hours of Friday morning, was a deeper-than-expected recession in Greece that would necessitate “some additional elaboration to ensure there is no divergence” from deficit reduction targets, Mr. Venizelos said. 
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  Mr. Venizelos also said that Greece’s economy was expected to contract by “up to 5 percent” but would not give a figure for the Greek budget deficit, broadly expected to overshoot a deficit target of 7.6 percent for 2011 by up to one percentage point. 
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  …. for the full article click here!

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• Quite obviously the bought and paid for politicians will bailout their masters: the Illuminist banksters! It is all about bailing out the banks and not Main Street. It is about financially raping the sheeple by taking their monies and giving it to the banks! Don’t be taken for a ride! (emphasis mine)
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  Choice for EU: Bail Out Greece or Bail Your Banks
  By ALEN MATTICH, http://online.wsj.com/home-page
  The yield on Greek one-year government bills hit 60% Tuesday.
  Not only does this suggest default is now all but certain and will come soon, it also implies that the terms of the default will be particularly brutal for investors, with recovery rates possibly even lower than the currently anticipated 50%.
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  European governments are being forced to face up to the significance of a Greek default. This is perhaps the underlying message from International Monetary Fund Managing Director Christine Lagarde‘s warning that Europe’s banks “need urgent recapitalization.” She may have been warning about the costly alternative to a solution to the Greek sovereign crisis. But it could well be too late.
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  Finnish insistence on additional collateral against any further bailout loans it makes to Greece threatens to scupper Europe’s rescue vehicle, the European Financial Stability Facility. Without EFSF funds, Greece will almost certainly have no choice but to default on its obligations.
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  And default will damage Europe’s already fragile banks.
  Getting to the nub of their exposure to Greece is tricky. On the face of it, their direct holdings of Greek government debt as a fraction of existing capital is probably not too scary. UBS estimates the exposure of European banks, except Greek banks, to Greek sovereign debt at €46 billion (£66 billion), with French and German institutions holding €9.4 billion and €7.9 billion, respectively.
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  Although these exposures are fairly significant for some banks—for instance, Dexia‘s exposure to Greek government debt is estimated at 39% of its equity capital, and Commerzbank‘s at 27%—most outside of Greece have much more manageable positions.
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  But these crises are seldom neatly contained.
  “The problem with situations like this is that it is hard to quantify what the second- and third-round effects will be,” warns Stephen Lewis, economist at Monument Securities.
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  Any default would hit the Greek economy more generally and banks have considerably more exposure to Greece than simply to its sovereign debt. According to the Bank for International Settlements, European banks have a total exposure of €94 billion to the Greek economy, with French institutions on the hook for €40 billion and Germany’s €24 billion.
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  Given that in mid-August, the 32 members of the Stoxx euro-zone banks index had a total market capitalization of some €240 billion, Greece has the potential to put a huge dent in their balance sheets. What’s more, the International Accounting Standards Board is worried that European financial institutions have been fudging their exposure to Greece in their recent results by underproviding against potential losses on these assets. When the default finally hits and banks are forced to recognize their true positions, the results could look very ugly indeed.
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  But that’s not where it ends. These estimates don’t include the exposure to Greece by non-banking institutions such as insurers. As they’re damaged by the Greek fallout, domestic banks will be affected further still.
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  … for the full article click here!

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