Thread: Bad To Far Worse As Germany Says Italy Too Big To Save

It Just Went From Bad To Far, Far Worse As Germany Says Italy Is Too Big For EFSF To Save, Refuses To Carry Euro Bailout Burden

ZeroHedge
Submitted by Tyler Durden on 08/06/2011 12:20 -0400

P.S. Time to unwind that Bund short we suggested yesterday. In fact, if true, it is time for a big rush to safety.

Remember when we said (yesterday) that Germany will soon balk over the fact that it is pledging its entire economy to bail out an insolvent Europe? Well, that moment has come.

Dow Jones just hitting the tape referencing Spiegel

* German Govt: Italy Too Big For EFSF To Save - Spiegel
* German Govt: Doubts Whether Tripling EFSF Would Help It Save Italy
* German Govt: Italy Must Make Savings, Reforms To Exit Crisis - Spiegel
* Italy Debt Guarantee Could Raise Doubts Over Germany's Finances - Spiegel
* German Govt: EFSF Should Only Help Small, Mid-Size Countries - Spiegel

As a reminder, yesterday's stopgap announcement by the ECB to expand its SMP purchases of secondary market Italian and Spanish bonds was merely as a precursor to full EFSF monetization until its comes fully online in September (or sooner) in a vastly expanded format (between €1.5 and €3.5 trillion).

If Germany is now against this, which appears to be the case, it pretty much means, well, game over.

Add the uncerainty over the unwind of the Europe rescue "gamechanger" as one of the more naive CNBC anchors said yesterday, and Monday is now guaranteed to be a bloodbath.

As for those saying China will gladly step in and fund a $5 trillion EFSF shortfall, they may want to read the following article from Reuters:

Italian Economy Minister Giulio Tremonti said on Thursday that Asian investors are reluctant to buy Italian bonds because it sees they are not being bought by the European Central Bank.

Speaking at a news conference, Tremonti also said it would be desirable for the central bank to follow the lead of the Japanese and Swiss central banks in taking expansionary steps to tackly the euro zone's crisis.

"I note that the Bank of Japan today launched quantitative easing and the Swiss cen bank cut rates to zero, we are waiting for decisions if possible, but desirable (from the ECB)," Tremonti said.

When you talk to Asia they say: "We don't understand what Europe is," he continued. "The second point is that they say 'if your central bank doesn't buy your bonds, why should we buy them"?

P.S. Time to unwind that Bund short we suggested yesterday. In fact, if true, it is time for a big rush to safety.

h/t London Dude Trader

Source: http://www.zerohedge.com/news/it-just-w ... o-bailout-

Why is it that Germany appears to always be on top of things

Originally Posted by JohnnyYuma

Why is it that Germany appears to always be on top of things

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Germany has played by all the EU rules and has come out smelling like a rose with the most stable economy in Europe.

The US is in a free-for-all dive into a Depression, but our economy is based on the US Dollar.

The EU's economy is based on the Euro, which is dependent on at least six other national economies within the European Union.

Of note here is that the EU is China's largest export customer.

If the EU goes belly up from the Domino Effect, that means millions of Chinese workers will be unemployed within 48 hours.

This, and the US Dollar implosion have all been well predicted, with NONE of this coming as a surprise.

It doesn't matter if Chinese workers go belly up to China, because they are all pathetic slaves. They work in squalor, and live in huts, and their slave wage is subsidized ( like welfare) by the Communist Chinese Government. I think it is part of a plan to take over the world. They have many, many single men, and no female partners for them, and they have amassed them into a humungous military, using awesome Russian weaponry. We will be hurting if it happens. Folks here need to get to working, instead of sucking off the gubment bottle, if we are going to survive Chinese agression. Let me just put it this way.... this is horrible news.

Originally Posted by JohnnyYuma

It doesn't matter if Chinese workers go belly up to China, because they are all pathetic slaves. They work in squalor, and live in huts, and their slave wage is subsidized ( like welfare) by the Communist Chinese Government. I think it is part of a plan to take over the world. They have many, many single men, and no female partners for them, and they have amassed them into a humungous military, using awesome Russian weaponry. We will be hurting if it happens. Folks here need to get to working, instead of sucking off the gubment bottle, if we are going to survive Chinese agression. Let me just put it this way.... this is horrible news.

=======================================

related

WRAPUP 7-China tells US "good old days" of borrowing are over
http://www.reuters.com/article/2011/08/ ... 4R20110806

Hal Lindsey touched on some of this last night.