Eurozone Crisis is Compounded

Guest post of the day:
By Imogen Reed

With elections being held over this weekend to determine the future of Greece’s position in the Eurozone and plans afoot to give Spain a boost to the tune of £100bn euros ($125bn), it is clear that Europe’s economic problems are far from over.

Whilst the exact figure needed to help out Spain is still unclear, the country remains adamant the money should not be described as a bailout. However, with a massive cash injection needed to save its banks from collapse how could it not be described as such?

Not all bad apples

On the positive side not all banks in Spain are affected and even the IMF has said that a considerable portion of its banking sector is well run. This includes the likes of Santander and BBVA. However, despite a rationalization amongst the Spanish banks with smaller ones being merged or subsumed by others, there is no doubt the Spanish economy is struggling with this its second recession in recent times.

It remains to be seen whether or not any bailout cash would make that much difference as the country is still hampered by high unemployment and significant problems with the property market. Even if the banks recover their position it is doubtful that there would be enough affluence in the population to sustain any recovery.

With unemployment in excess of 50% amongst under 25’s, meaning disposable income is limited. Those that previously had money to invest have already taken out consolidation loans to keep afloat in the now weak property market, which is now down 20% on peak values.

Poor debt to GDP ratio

The other problem that Spain faces is that it already has a poor debt to GDP ratio and this cash boost could see that rise from 70% to 100%. This could make the borrowing an extremely expensive exercise especially if there are doubts over the deal. This comes off the back of news that global credit rating agency Moody’s has cut Spain’s rating from A3 to Baa3 with the added warning that this could be cut further within 3 months.

Where Spain is viewed differently to others in Europe that have needed a bailout such as Portugal, Ireland and Greece is that it is generally regarded as having acted responsibly, firstly through its banking rationalization and secondly for introducing austerity measures. The most recent measures are reported to be worth around 27bn euros and are the most severe for 30 years.

How bail out works

The bail out money itself comes from funds set aside by 17 eurozone members to help fellow members overcome financial woes. The European Financial Stability Facility (EFSF) will run in parallel to the European Stability Mechanism from July, with the former expiring in 2013.  

The members of the current EFSF raise money on open markets and it is viewed as a reliable source of borrowing. When replaced by the European Stability Mechanism it will boast a lending facility of 500bn euros.

Little confidence in bail out

Despite all this there are still question marks over these plans’ ability to restore confidence in failing European economies. Many argue that the measures simply aren’t enough to boost the economy to the level that it needs to be at.

The measures are seen as a quick fix and a sticking plaster over deep rooted financial crises and some experts say that a bail out of banks is just the start of a downward spiral for any country.

Whilst things in Spain continue to be debated and the finer details of monies needed ironed out the country is not the only one in trouble. Italy which has large debts coupled with a struggling economy could easily become next on the list to be bailed out.

Add to this the fact that Moody’s also cut Cyprus’ credit rating this week by two notches – Ba1 to Ba3. Cyprus is at risk due to the issues with the Greek situation and they have already had a bailout from Russia at the end of 2011 for 2.5bn euros.  It remains to be seen whether Cyprus could re-approach Russia for a further bail out or if they will try and access some of the eurozone pot.

Whatever happens there are still tough times ahead in Europe and there are few signs of recovery that will show any kind of longevity. 

This Book Written In 1858 On Greece Shows Nothing Has Changed In 150 Years

From The Business Insider:

Many wonder if history might tell us anything about how the Eurozone crisis might be resolved.
A few months ago, the German daily Frankfurter Allgemeine Zeitung dug up a quasi-travel guide on Greecewritten in 1858 by the French writer Edmond About.
Titled Contemporary Greece, the book discusses everything from the Attic climate to modern Hellenic culture. 
It also discusses the state of Greece's finances, such as they were.
As it turns out, Greece's books 154 years ago bear an eerily striking resemblance to those of today — which is to say, they were in ruins. 
Here's how that chapter on finances begins (translation ours):

"Greece is the only known example of a still-existing country that's been completely insolvent since its birth.

"If France or England found themselves in this situation for just one year, we'd say it was a terrible catastrophe. Greece has lived more than 20 years in peace with bankruptcy. Every single one of its budgets, from the first to the last, has been in the red." 

He continues, discussing how the country is able to support itself: namely, the kindness of others:

"Greece's sponsor countries [Britain, France and Russia] have had to guarantee its solvency to allow it to negotiate external debt. 

"The resources furnished by this borrowing have been wasted by the government without any fruit for the country, and, once the money is spent, it's been up to the debtors, out of pure benevolence, pay the interest. Greece could not ever pay it.

About goes on to discuss the country's chaotic tax collecting regime (average Greeks "take pride" in not paying them), corrupt civil servants and overly influential aristocratic class.
In sum: 

"Today, it's given up all hope of self-sufficiency," About writes.

Pretty much speaks for itself.


You can purchase the book in the original French on PriceMinister.com.

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The Eurofiscal Corruption Contest – The Portuguese Entry

From Golem XIV - Thoughts: 

Portugal’s entry in the EuroFiscal Corruption Contest is a more modest affair than Spain’s. It centres round a simple fact, which I picked up a few days ago from Bloomberg, that

Isabel dos Santos, the daughter of Angola’s president, is the biggest shareholder in Portuguese cable-television company Zon Multimedia (ZON) SGPS SA, and holds 19 percent of Portuguese lender Banco BPI SA. (BPI)

On the surface it’s an innocent sentence. Someone owns a chunk of a bank. Except that 1) the person is the daughter of the man who has been ‘President’ of Angola since 1979, during which time he and his family have amassed a business empire currently estimated to be worth at least €1.5 billion, while the people of Angola live in poverty despite the billions in revenue from Angola’s Oil and other mineral riches, and 2) the bank she owns 19% of  is about to get a €1.5 billion bail out from the Portuguese tax payer.
A word about Angola’s oil revenue. It was reported by Human Rights Watch and has subsequently been admitted by the Angolan government, that $32 billion in oil revenue ( a third of Angola’s GDP) has gone missing and cannot be accounted for.  Though a clue of what might have happened comes from a 2010 US senate report into corruption and money laundering which found that ,

  ”Aguinaldo Jaime, who served as the governor of the Angolan Central Bank from 1999 to 2002… initiated a series of suspicious US$ 50 million transactions with US banks. For each attempt, the banks, concerned about the likelihood of fraud, ultimately rejected the transfer or returned the money shortly after receiving it. During Mr Jaime’s three-year tenure as central bank governor, the government could not account for approximately US$ 2.4 billion.”

The fact is that Angola is a corrupt country and Isabel dos Santos’s father has presided over it for over thirty years. During which time he and his daughters have become personally very wealthy while the Angolan people are still malnourished.
Now perhaps I’ve led a sheltered life, but something about Portuguese tax payers bailing out the  daughter of the President of Angola, especially given the reality of Angola, strikes me as perverse  if not outrageous. And let’s be clear this is what is happening. The bank, a private business, has got itself in deep trouble and would go bankrupt which would ruin its owners. Except that the  Portuguese government has decided to force the Portuguese tax payers to put €1.5 billion of their  money in to the bank so that it can remain profitable for its owners. I put it like that  because…that is actually how it is. Banks can and often do go bankrupt without the depositors  being effected. Bankers and politicians will always warn of the risks to ordinary people but it is their own wealth and power that they are really looking out for. Hundreds of banks have gone bankrupt in America for example and none of the depositors have lost a cent. When banks go bankrupt the people who use the bank are protected. They go in and out as usual. But the owners, the share holders, lose everything. As do the bond holders starting with the most junior and working up to the most senior, each losing their money until the banks’ debts are paid off. That is how it should be. ‘Saving’ banks is about protecting the owners, the bond holders and those politicians whose power and prestige is aligned with that of the owners, and very often also tied into the bad deals which brought the bank to its knees in the first place.
The point is this, if any citizen of Europe, or any ordinary person, were to walk in to Banco BPI (the bank in question) and try to deposit €10 000 in cash that transaction would be reported to the Central bank under international anti money-laundering regulations. If the central bank had suspicions they would in turn alert the relevant police authorities. But, it seems, if the daughter of the President of Angola walks in with 50 million euros, which is what her initial stake in Banco BPI cost, no one thinks to ask where that money came from.
For ordinary people ‘Where did you get the money’ is the question that the law says must be answered. For the scions of the global elite it is the question that is never asked.  Which bothers me. Remind me again of why ordinary people must respect and obey the law? Just run by me the philosophical justification please, for I feel it slipping away from me.
The Portuguese bank authorities should have asked if Isobel dos Santos was a fit and proper person to own a controlling stake in a Portuguese bank. Would anyone think it fine for Al Capone to own a bank? Why not? Because he was a gangster who stole the money he was spending? Of course, you could say Al Capone was a criminal whereas we have no proof that Isobel or her father are criminals. Her father is the president for goodness sake. Yes quite! That is what bothers me. You see I somehow doubt the €50 million she invested in Banko BPI, is covered by the President of Angola’s salary. Or is it just a standard thing that all daughters of presidents own 20% of a bank?
Time to take a step back and look more closely at Isobel and the dos Santos financial empire.
In fact Isabel owns stakes in three banks not one and may, as far as I can see, have a stake in at least two others, Banco Espirito Santo and  Banco de Fomento de Angola, via her and her father’s various holding companies. Isabel owns 25% of Angolan Bank, Banco BIC. She also sits on its board. The bank was created in 2008. Just about the time all those billions went missing… Just saying. She owns 19% of Portugal’s Banco BPI. Actually she used to own about 10% of it but about a month before the bail out was announced she bought another 9.4% from one of the failing Spanish banks, Caixabank for €46.7 million. BPI in turn owns a 50.1% stake in Banco de Fomento Angola. So Isabel and her father have quite a hold on banking in Angola.
Back in Portugal the dos Santos presence is considerable as well. Isabel also owns a large stake in another troubled Portuguese bank, Banco Portugues de Negocios. This too is a new bank having been created in 1993. It didn’t last long. In 2008 it had to be nationalized. This bank too was badly run. In fact at the point of its nationalization the man who had been its CEO from 1998 – 2007, Jose Oliveira e Costa, was arrested on charges of tax fraud, money laundering, forgery, abuse of credit and illegal gains.
It is worth noting that when I say ‘Isabel owns’ this is a short hand for saying that various holding companies owned by her and her father ‘own’. There are several such companies the first of which was Geni Holdings. This was founded by her and her father along with Leopoldino Fragoso Nascimento, Anthony Van Dunen and Manuel Augusto da Fonseca. An august sounding group. Nascimento is a Brigadier General in the Angolan Army, van Dunen is a former secretary of the Council of Ministers in Angola and Fonseca is Head of Legal Affairs for Sanangol the Angolan state oil company. How they all became rather wealthy international businessmen on their salaries is another mystery.
Nascimento was recently exposed by the FT, along with another cabal of high ranking Angolan officials as having concealed shares in an oil exploration venture called Cobalt. According to various FT articles in April  this year,

… three of the most powerful officials in Angola have held concealed interests in the Goldman Sachs-backed group’s oil venture in the African country.

The company declined to comment but did not deny the story. Angola, it is worth noting is part of the West African oil frontier that Western banks, Oil majors and nations are all scrambling to get a stake in.  Banks like Goldman Sachs, oil revenue, and Presidents who rule for 30 years and more – certainly no cause for concern there.
So taking a look over the above, you tell me, is Isabel dos Santos, her father and their money fit and proper to own Portuguese banks? Should the Portuguese people be taking on billions in debt and suffering austerity cuts, in order to bail them out?
The fact is, that Europe’s bankers do not ask where money comes from, how it was gotten, who was hurt, what blood was spilled or what misery went in to its accumulation. They do not care. But we should because we are the ones who are being forced to shoulder the cost of protecting and further enriching the entire stinking, corrupt heap.
When all is said and done two things remain. First, Portugal’s entry is quite modest by European standards. I have mentioned it because it is more revealed for what it is, than similar corruption in other countries. Second, much has been written about how the West needs to help the ‘third world’ to become more like us.We like to tell ourselves that we are helping ‘to build their institutions’, ‘reduce their corruption’ and export to them our values and ways of doing things. The truth however, is that via our putrid and rotten financial system and the small elite who own and run it, we have been busy importing their corruption to add to our own, allowing our institutions to become as corrupt and in-the-service of the guilded few, as theirs.
Remind me how wonderful our democracy is, how healthy and robust it is, how the rule of law is sacrosanct in Europe and stands ready to protect the many against the powerful few. Just remind me … if you can.

Eurocracies: The ESM can take all Euroserfs' propertiesand is unaccountable

By Jane Burgermeister

The German government has named the nine lawmakers who can decide in total secrecy what happens to hundreds of millions if not billions of German tax payer’s money in the next few years if the parliament votes „Yes“ to  the ESM euro facility on June 29th.
http://www.freiewelt.net/nachricht-10116/diese-neun-entscheiden-%FCber-ihr-geld.html
http://www.deutsche-mittelstands-nachrichten.de/2012/06/43622/


The ESM spells taxation without representation. It is the end of all democracy. Germans can sign a petition against the ESM glorified debt collector agency here:
https://epetitionen.bundestag.de/index.php?action=petition%3Bsa%3Ddetails%3Bpetition%3D25090%3


The ESM is accountable to no parliament, no people.
It can demand 800 billion euros in its first phase of operation and virtually unlimited sums thereafter from all eurozone government.
It  appears to be authorized to take not only all the tax money a government collects. It appears to be able make a grab for all the assets of a country, including your personal property and other assets. Its staff stand above all laws.
They cannot be prosecuted no matter how great their crime.


This is the — illegal! –basis of the ESM. It violates the German constitution and the German constitutional court and parliament are breaking the law by signing this document in clear violation of the constitutional and recognized legal norms and in violation of the legal principles of the Nuremberg Trial.
In 1933, the German parliament also handed over all powers to the dictator Adolf Hitler. The post war German constitution was designed to prevent the parliament ever again betraying the people and handing key governmetn powers to an authoritarian body.


The power to tax and spend is a central power of every government. The ESM violates the German constitution. Taxing and spending are the responsible of parliaments representing the people. A nine person parliamentary budget gremium acting in secret does not fulfil the criteria in any honest court of law.
The ESM uses the money to make interest payments to banks on souvereign and bank debt. This is created largely by our privatised money supply with its interest and compound interest, the corsett of the euro currency and corruption. As such, it functions as a redistributor of wealth from the many to the few bankers and ultra rich.


The money paid out to the super rich will be gone for ever. The notion any of the creditor states will ever get any money from states forced into default is a fairytale. Taking the gold reserves and assets of impoverished countries and populations is politically impossible. It will spell war.


The only solution to the current crisis is sound money. The ECB must be allowed to give money directly and without charging interest to governments and businesses. This will stimulate economic activity without creating the excessive debt inherent in a privatised money system.


The modern fractional reserve banking system allows banks to create 97% of the money in the eurozone charging interest and compound interest even though they only have about 3% capital reserves.


The ESM and Eurobonds must be stopped. The usher in a centralised fascist government controlled by the banks, impoverishment and civil war of Europe.
Act now before it is to late!
_____


Related:

Are the Germans Father Christmas of the Euro zone?

Monday Will Not Be The End Of The World, Sorry

From ZeroHedge, by Tyler Durden on 06/15/2012

Via Mark Grant, author of Out of the Box,

It was January 13, 2010 when I first wrote in my commentary that I thought Greece would go belly up. It was in May 2010 when they first needed to be bailed out. This small country with a giant debt of $1.3 trillion has engaged the markets ever since. Sunday the country votes and whoever wins I expect no massive explosion in the short term. The new Greek government will try to renegotiate the terms and conditions of their bailouts and we shall see just how far anyone is willing to go. It will be a game of chicken with Germany in the end and a solution perhaps will be found but no good one as Greece could not pay back their current debts if Hercules arrived to help; much less any new debts which will be required to keep the country afloat. Any “Big Bang,” if it comes, will not come on Monday morning as that will just be the beginning of the process to scream and shout and dance around like some Opa bar with Ireland, Portugal and Spain demanding equal terms and, oh yes, Spain will be in the hand-out line soon enough along with their banks.

Perhaps that all of this has gone on for so long or perhaps because we keep hearing the cries of “Wolf” each week for the last several years that the markets are impervious to any new cries for help. An odd kind of complacency seems to have set in where nothing matters too much and everything will just be fine.Yesterday’s equity market rally based upon the central banks providing liquidity is just what any serious observer would expect and yet the stock markets rallied as if this was something out of the ordinary which clearly demonstrates either the market’s lack of understanding of real world events or it represents the hype of some hedge fund that was tossed around in the media like it was a new product at Apple. In any event, don’t wake up on Monday morning and think that Greece will have left the Eurozone and returned to the Drachma. That is not how things will play out.

At some point, in the next few weeks, it will come down to a calculation of just how much money the EU is willing to spend to support Greece and not cause a default and if Greece is to leave the Euro I think it is much more likely that they will be forced out rather than leave on their own decision. In the meantime the situation in Spain will worsen as the needs of their banks and of their Regional debts throw the country past the borderline of self-help. Aid will be called for in increments and it will probably total $350-400 billion by the time the final tally is made. Europe cannot afford this and I would not be surprised to see one of the funding countries saying that is it for them which will throw Europe into a tailspin. Effectively there are bank runs underway in both Greece and Spain currently and while no central bank will talk about it and no politician mentions it there is every indication that this is what is taking place each and every day now. It would not surprise me to see the imposition of capital controls and then a new round of havoc will ensue.

In the final analysis it probably all comes down to what price the Germans are willing to pay for dominating Europe. I suspect that when the Germans find themselves with a lower standard of living for paying off everyone else’s debt that the mood in Berlin will become much more somber as the cost of “living the dream” becomes so burdensome that tempers begin to flare. The French and the troubled nations are all calling for a single standard of living really and I just cannot imagine that Germany is ready to undertake that cost without serious consternation. Due to the recession and to the European methodology of counting debt to GDP ratios and to their allowance of “funny accounting” at their banks the downgrades continue, such is in the Netherlands today, and you can see the financial deterioration that is taking place all across Europe. The European Union is sinking under its own weight and it is not only questionable if the Germans and their partners want to pay but if they have the capacity to pay without all of Europe becoming a BBB+ credit if, to quote Chancellor Merkel, “more Europe” actually takes place.

“Enter Stranger, but take heed

Of what awaits the sin of greed

For those who take but do not earn,

Must pay dearly in their turn.

                                          -The Front Doors of Gringott’s Bank

$46 Trillion Debt Bubble Found

From Financial Armageddon, June 14, 2012

The NIghtmare Waiting In the Wings

I know it's not the sort of thing that people talk about when they are focused on what band-aid-cum-can-kicking "solution" authorities are going to come up with in the next 24 hours, but even if by some miracle they sort out the current round of problems, just look at what's waiting for us in the wings:

"Treasurers Face $46 Trillion Financing Cliff" (CFO.com)

A massive amount of global corporate debt matures in the next four years, and it’s causing treasurers to refocus their efforts on securing access to credit.

A measure of the scale of the refinancing problem is revealed in a recent report by Standard & Poor’s Ratings Services. S&P suggests there is as much as a $46 trillion “credit overhang” — the amount of money corporates will need to raise between 2012 and 2016 to refinance their soon-to-mature debts and to fund capital expenditure and working capital growth.

The combination of bank balance-sheet restructuring, a euro zone crisis, a softening U.S. recovery, and the prospect of slower growth in China could make for what S&P calls “a perfect storm” in credit markets. S&P’s working assumption is that “global banks and debt capital markets will largely be able to continue to provide the majority of liquidity to allow most corporate issuers to proactively manage their forthcoming refinancings.” However, S&P warns, “the balance is fragile” and there is the threat of financing disruptions “even for borrowers that are not highly leveraged.”

New money requirements from 2012 to 2016 could be as much as $2.3 trillion in the euro area and the United Kingdom, $3 trillion in the United States, almost $10 trillion in China, and $1 trillion in Japan. (Those numbers assume corporate debt grows at 1.2 times the rate of GDP over the next five years.)

Added to this are estimated refinancing needs of $8.6 trillion in the euro area and the United Kingdom, $8.6 trillion in the United States, $7 trillion in China, and $5.8 trillion in Japan.

But then again, it's only money, right? If we need more, we can just print it.

___

Related:
The Greatest Hoax Ever Perpetrated on Mankind - by Rob Kirby

Just What Is Mario Draghi Hiding? ECB Declines To Respond To Bloomberg FOIA Request On Greek-Goldman Swaps

From Zero Hedge, by Tyler Durden 06/14/2012

Back in February 2010, in the aftermath of the discovery that none other than Goldman Sachs had facilitated for nearly a decade the masking of the true magnitude of non-Maastricht conforming Greek debt, Zero Hedge first identified the prospectus for a Goldman underwritten swap agreement securitization titled Titlos PLC. We titled the analysis "Is Titlos PLC The Downgrade Catalyst Trigger Which Will Destroy Greece?" because for all intents and purposes it was: at that time a rating agency downgrade of the country would lead to a chain of events which would make billions in assets ineligible for ECB collateral, forcing a massive margin call on the National Bank of Greece, which likely would have precipitated a Greek default there and then.

In retrospect, considering the two years of pain that Greece has already suffered, this may have been the better option as the country would have taken its bitter medicine, and become a second Iceland case study by now, growing at a brisk pace, unencumbered by debt, free from the clutches of the Euro, instead of having its economy collapse by nearly 10% every year without any resolution in sight.

But that is irrelevant for the time being: what is relevant is Titlos itself, and what Bloomberg did after we posted the analysis. It turns out that following in the footsteps of Mark Pittman, Bloomberg sued the ECB under Freedom of Information rules requesting "access to two internal papers drafted for the central bank’s six-member Executive Board. They show how Greece used swaps to hide its borrowings, according to a March 3, 2010, note attached to the papers and obtained by Bloomberg News. The first document is entitled “The impact on government deficit and debt from off-market swaps: the Greek case.” The second reviews Titlos Plc, a securitization that allowed National Bank of Greece SA, the country’s biggest lender, to exchange swaps on Greek government debt for funding from the ECB, the Executive Board said in the cover note. The ECB's response: "The European Central Bank said it can’t release files showing how Greece may have used derivatives to hide its borrowings because disclosure could still inflame the crisis threatening the future of the single currency."

Maybe.

But what is far more likely is that the reason why the ECB, headed by none other than former Goldmanite Mario Draghi, is desperate to keep these documents secret is for another reason. A very simple reason:

Mario Draghi - 2002-2005:  Vice Chairman and Managing Director at Goldman Sachs International

In other words, Draghi was a key executive at Goldman at precisely the time when none other than Goldman Sachs was hired to create and facilitate the active hiding of the true extent of the Greek debt problem.

In yet other words: could it be that none other than the head of the European Central Bank is refusing to cooperate with a Bloomberg FOIA, something even the US Federal Reserve ultimately succumbed to which led the revelation that the Fed had handed out trillions in secret loans to banks all around the world  - and that includes tens of billions in under the table loans to JPM, contrary to Dimon's defense that he did not need the TARP money in Senate yesterday: he did, and much more, but since when is perjury a crime before a kangaroo court of bought politicians:

But this is not about JPM for once. Let's go back to that infernal mollusc which everyone loved to hate in all of 2009 and 2010 until JP Morgan became the world's Fed-backstopped, prop trading pinata, and the response that the ECB did provide to Bloomberg as a reason for not handing out the required information:

Disclosing the files when Bloomberg News first sought them in 2010 would have “fueled negative perceptions about Greece’s ability to honor its debt,” ECB lawyer Marta Lopez Torres said at a hearing of the European Union’s General Court in Luxembourg today. “It’s the same now with Spain” which “isn’t able to borrow money,” she said. “Markets are reacting in very volatile ways. It’s affecting the euro economy.”

In other words from Mutual Assured Destruction as a means to push through policy propaganda, M.A.D. is now the only option for heads of central banks from being exposed to the world as the very same people who enabled the current financial collapse in the first place?

Now we see...

More from Bloomberg, which explains the reasoning for demanding access to the two abovementioned docs:

These documents “played a role” in shaping policy and “highlighted there were issues” when the ECB undertook a review of its eligibility criteria for collateral in its funding operations, the ECB lawyer told the court.

The cornerstone of the ECB’s response to the crisis is to give banks as much money as they needed in return for collateral. In October 2010, the ECB changed the rules on the asset-backed securities it accepted and gave itself more discretionary power to reject collateral if necessary.

“The public has a right to know how EU authorities may have allowed Greece to hide its deficit, which helped trigger Europe’s sovereign debt crisis,” said Matthew Winkler, editor- in-chief of Bloomberg News. “Greater transparency results in more accountability, and we seek this information to understand how this debt debacle unfolded in an effort to avoid repeating it.”

The Greek government didn’t originally disclose the swaps, designed to help it comply with the deficit and debt rules it agreed to meet when it joined the euro in 2001. The swaps allowed the country to increase borrowings by 5.3 billion euros, Eurostat, the EU’s statistics agency, said in November 2010.

In April 2009 -- seven months before the Greek crisis erupted -- ECB officials spotted “a swap operation in unusual terms,” according to the March 2010 document.

And back to Goldman, who in the 2001 onward period was the sole bank provider of shady currency swap transactions:

In the largest derivative transaction disclosed so far, Greece borrowed 2.8 billion euros from Goldman Sachs Group Inc. in 2001 through a derivative that swapped dollar- and yen- denominated debt issued by the nation for euros using a historical exchange rate, a move that generated an implied reduction in total borrowings.

“The Greek authorities had never informed Eurostat about this complex issue, and no opinion on the accounting treatment had been requested,” Eurostat, the Luxembourg-based statistics agency, said in a statement. The watchdog had only “general” discussions with financial institutions over its debt and deficit guidelines when the swap was executed in 2001.

“It is possible that Goldman Sachs (GS) asked us for general clarifications,” Eurostat said, declining to elaborate further.

Spokesmen for Goldman Sachs in London couldn’t immediately comment after the hearing.

How about asking that other Goldman Sachs spokesman, Mario Dragi? Perhaps at the next ECB press conference journalists can finally grow a pair and start asking the really important questions instead of listening to the violins as the European titanic is steadily sinking?
___


Related:

The EU Smiled While Spain’s Banks Cooked the Books

Federal Reserve Board Members Gave Their Own Banks $4 Trillion in Bailouts

From AllGov, Thursday, June 14, 2012:

Following the 2008 financial crisis, the Federal Reserve provided more than $4 trillion in near zero-interest loans and other help to banks and businesses whose executives also served as directors for the national bank.

At least 18 current and former Fed regional bank directors had a direct stake in the trillion-dollar bailout given to teetering institutions, according to a report produced by the Government Accountability Office, but released by Senator Bernie Sanders (I-Vermont).

“This report reveals the inherent conflicts of interest that exist at the Federal Reserve,” Sanders said in a prepared statement. “At a time when small businesses could not get affordable loans to create jobs, the Fed was providing trillions in secret loans to some of the largest banks and corporations in America that were well represented on the boards of the Federal Reserve Banks.”

Sanders wants to end the potential conflicts of interest that come with having bank executives serving on the Fed’s boards. The senator introduced legislation in May that would prohibit banking industry and business executives from serving as directors of the Fed’s 12 regional banks.

To bolster his case, Sanders cited the example of Jamie Dimon, chief executive officer of JPMorgan Chase. A director of the Federal Reserve Bank of New York since 2007, Dimon was part of the Fed’s leadership when it approved $391 billion in emergency funds to JPMorgan Chase to help it through the Wall Street chaos.

In another example, Jeffrey Immelt, the CEO of General Electric, was a member of the New York Federal Reserve when it created the Commercial Paper Funding Facility, which then lent $16 billion to…General Electric.

-Noel Brinkerhoff

To Learn More:

Fed Board Member Conflicts Detailed by GAO: Banks and Businesses Took $4 Trillion in Bailouts (Senator Bernie Sanders)

Jamie Dimon Is Not Alone (Senator Bernie Sanders) (pdf)

International Treaty Negotiated In Secret – Hidden Even from Congressmen Who Oversee Treaties – Threatens to Destroy National Sovereignty

From WashingtonsBlog, June 14, 2012 

Treaty Threatens Global Government … Run by Giant Corporations

The normally-reserved Yves Smith asks whether Obama should be impeached over it.

Democratic Senator Wyden – the head of the committee which is supposed to oversee it – is so furious about the lack of access that he has introduced legislation to force disclosure.

Republican House Oversight Committee Chairman Darrell Issa is so upset by it that he has leaked a document on his website to show what’s going on.

What is everyone so furious about?

An international treaty being negotiated in secret which would not only crack down on Internet privacymuch more than SOPA or ACTA, but would actually destroy the sovereignty of the U.S. and all other signatories.

It is called the Trans-Pacific Partnership (TPP).

Wyden is the chairman of the trade committee in the Senate … the committee which is supposed to havejurisdiction over the TPP. Wyden is also on the Senate Intelligence Committee, and so he and his staff have high security clearances and are normally able to look at classified documents.

And yet Wyden and his staff have been denied access to the TPP’s text.

This is similar to other recent incidences showing that we’ve gone from a nation of laws to a nation of powerful men making laws in secret.

For example,  in the summer 2007, Congressman Peter DeFazio – who is on the Homeland Security Committee (and so has proper security access to be briefed on so-called “Continuity of Government” issues) – inquired about continuity of government plans, and was refused access. Indeed, DeFazio told Congress that the entire Homeland Security Committee of the U.S. Congress has been denied access to the plans by the White House (video; or here is the transcript). The Homeland Security Committee has full clearance to view all information about COG plans. DeFazio concluded: “Maybe the people who think there’s a conspiracy out there are right”.

As University of California Berkeley Professor Emeritus Peter Dale Scott warned:

If members of the Homeland Security Committee cannot enforce their right to read secret plans of the Executive Branch, then the systems of checks and balances established by the U.S. Constitution would seem to be failing.

To put it another way, if the White House is successful in frustrating DeFazio, then Continuity of Government planning has arguably already superseded the Constitution as a higher authority.

Watch this interview from today explaining why TPP is so dangerous to America … and the rest of the world:

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 Related:
Document Reveals Draconian Details of Obama’s Secret Globalist Trade Pact

TFMR Podcast #23 - The Jim Willie Trifecta

From TF MetalsReport, Thursday, June 14, 2012 

Download Podcast (Right Click + 'Save As')

On Wednesday, I spoke again with the inimitable Golden Jackass, Jim Willie. 

First of all, I hope you've got some time to devote to listening as this baby clocks in at about 55 minutes. I tell you what, though, it's well worth your time. Think of it as two acts. In the opening act, Jim answers some of the Turdite questions that were submitted earlier this week. We tried to cover as many as we could but we only got to 5 or 6 of them. The questions were so good that it took a while to answer them but we tried our best to hit the most popular queries. In act two, Jim and I discuss current events and the developing "black hole" of the U.S. treasury market and U.S. government deficit funding.

Jim's on his game here so sit back, relax, maybe crack a cold one and enjoy. 

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Jim Willie

Jim Willie is an original. If you want to be official about it, you can call Jim a "statistical analyst" as Jim has a PhD in statistics from Carnegie Mellon. Since 2004, however, he's simply been known as "The Golden Jackass".

Through his website http://www.goldenjackass.com/ Jim has developed a subscription-based newsletter service which is second-to-none in its quality and its "outside-the-box" thinking. Jim's very affordable service, The Hat Trick Letter, can be found here: http://www.goldenjackass.com/subscribe.html

p.s. As you can tell by his bio picture, he has an extraordinarily large brain, which he uses to all of our benefit. 

Podcast Episodes

• TFMR Podcast #23 - The Jim Willie Trifecta
  Thursday, June 14, 2012
• TFMR Podcast #21 - Jim Willie Returns
  Friday, May 25, 2012
• TFMR Podcast #19 - Jim Willie
  Friday, May 11, 2012