- Tsunami politico-financier aux États-Unis et fusion implosive de l’économie mondiale au 4e trimestre

Laboratoire européen d’anticipation politique GEAB 57

Le quatrième trimestre 2011 marque la fin des deux paradigmes-clés du monde d'avant la crise
La fusion implosive du quatrième trimestre va ainsi directement résulter de la rencontre entre deux nouvelles réalités qui contredisent deux conditions fondamentales d'existence du monde d'avant la crise :
. l'une, née en Europe, consiste à rejeter désormais l'idée que les opérateurs financiers privés, dont Wall Street et la City sont l'incarnation par excellence, ne sont pas pleinement responsables des risques qu'ils prennent. Or, depuis plusieurs décennies, c'était l'idée dominante qui a alimenté le formidable développement de l'économie financière : « Pile je gagne, face tu me renfloues ». L'existence même des grandes banques et assurances occidentales est devenue intrinsèquement liée à cette certitude. Les bilans des grands acteurs de Wall Street et de la City (et de nombreuses grandes banques de l'Euroland et du Japon) sont incapables de résister à ce formidable changement de paradigme (29).
. l'autre, générée aux Etats-Unis, est la fin avérée du moteur US de la croissance mondiale (30) sur fond de paralysie politique complète du pays qui de facto va terminer l'année 2011 comme la Grèce a terminé l'année 2009 : le monde découvre peu-à-peu que le pays a une dette qu'il n'est plus capable d'assumer, que ses créanciers ne veulent plus prêter et que son économie est incapable de faire face à une austérité significative sans plonger dans une profonde dépression (31). D'une certaine manière, l'analogie peut aller plus loin : tout comme l'UE et les banques, de 1982 à 2009, ont prêté à la Grèce sans compter … et sans lui demander sérieusement des comptes, sur la même période, le monde a prêté sans compter aux Etats-Unis en croyant sur parole ses dirigeants quant à l'état de l'économie et des finances du pays. Et dans les deux cas, l'argent a été gaspillé dans des booms immobiliers sans avenir, dans des politiques de clientélisme dispendieuses (aux Etats-Unis, le clientélisme, c'est Wall Street, l'industrie pétrolière, les opérateurs de santé), dans des dépenses militaires improductives. Et dans les deux cas, tout le monde découvre qu’on ne peut pas en quelques trimestres réparer des décennies d’inconscience.
Le « perfect storm » politico-financier US de Novembre 2011
Ainsi, en Novembre 2011 les Etats-Unis se préparent un « perfect storm » politico-financier qui fera ressembler les problèmes de l’été à une légère brise de mer. Les six éléments de la future crise sont déjà réunis (32) :
. le « supercomité » (33) chargé de décider des coupes budgétaires pour lesquels il n’y a eu aucun accord cet été s’avèrera incapable de résoudre les tensions entre les deux partis (34)
. l’automatisme des coupes budgétaires censé se mettre en place faute d’accord entraînera une crise politique majeure à Washington et des tensions croissantes notamment avec les militaires et les bénéficiaires des aides sociales. Dans le même temps, cet « automatisme » (une véritable abdication du pouvoir décisionnel par le Congrès et la Présidence des Etats-Unis) génèrera des troubles majeurs dans le fonctionnement de l’appareil d’Etat.
. les autres grandes agences de notation rejoindront S&P dans la dégradation de la note US et la diversification hors des Bons du Trésor US s’accélèrera, sachant que les Etats-Unis dépendent désormais essentiellement de financements à court terme (35)
. l’incapacité de la Fed à faire autre chose que parler et à manipuler les bourses ou les prix de l’essence aux Etats-Unis (36), rend désormais impossible tout « sauvetage » de dernière minute
. au cours des trois mois à venir, le déficit public US va s’accroître considérablement car les revenus fiscaux sont actuellement déjà en train de s’effondrer sous l’effet de la rechute en récession (37). Autant dire que le plafond d’endettement accru voté il y a quelques semaines sera atteint largement avant les élections de Novembre 2012 (38) … et c’est une information qui va se répandre comme une traînée de poudre dès le quatrième trimestre 2011 … renforçant toutes les craintes des investisseurs de voir les Etats-Unis suivre l’exemple de l’Euroland pour la Grèce et obliger leurs créanciers à assumer de lourdes pertes
. le nouveau plan de Barack Obama en matière de lutte contre le chômage n’aura aucun effet significatif. D’une part, il n’est pas à la hauteur du défi et ne peut pas de ce fait mobiliser les énergies du pays ; et d’autre part, il va être taillé en pièces par les Républicains qui ne conserveront que les réductions d’impôts … dont le seul résultat sera d’accroître encore plus l’endettement du pays (39).

Pour LEAP/E2020, c'est donc la conjonction de tous ces éléments fin 2011 qui va déclencher ce grand choc financier … une sorte de choc ultime projetant définitivement la planète hors du monde d'avant la crise. Mais il restera à construire le monde d'après car plusieurs avenirs sont possibles, à partir de 2012. Comme l'anticipe Franck Biancheri dans son livre, la période 2012-2016 constitue un carrefour historique. Il faudra essayer de ne pas se tromper de chemin (40) !



US Facing 'Dangerous' Threat From Euro Debt: Greenspan



The U.S. economy and stock market face severe consequences from the European financial crisis, which will not resolve itself without major debt restructuring, former Federal Reserve Chairman Alan Greenspan said.
Alan Greenspan CNBC
"I think it's very dangerous," Greenspan said in a CNBC interview. "Everyone's got their fingers crossed."
As global policy makers struggle to find a solution to the daunting problems Greece and other nations face with sovereign debt , the primary debate in the U.S. is how much contagion there will be for the domestic economy.
For Greenspan, there is no question: The threat from Europe is real and it is substantial.
While U.S. banks don't have a comparatively high level of exposure to the sovereign debt itself, he said the domestic financial system is nevertheless reliant on the stability of its European counterparts.
The stock market, meanwhile, has been heavily influenced on the daily news reports coming out of Europe and the plethora of proposed solutions that emerge.
"This is an integrated system. The presumption that somehow the huge American banking system...is independent of Europe is, I think, just utterly unrealistic," the former leader of the U.S. central bank said. "It looks independent until it isn't."
Rising productivity is one among several signs that the U.S. economy is improving. But as long as Europe fails to devise a solution to its problems dangers remain to a full recovery, he said.
Primary among the fixes he believes will have to happen is a restructuring of Greek debt with substantial reductions in principal for bondholders of the sovereign debt.
"There is no credible scenario for which I'm aware in which they can get by without very significant haircuts in their sovereign debt," Greenspan said. "The issue is one where, are they broke? Yeah, I think they're broke. Are they going to resolve the issue? In and of themselves I can't see how."
Anyone who thinks that isn't the case and that it won't affect the U.S. in a substantial way isn't facing reality, he said.
"If Europe wasn't out there...we would not be having the threat to our overall economy," Greenspan said. "The size of the problem coming from Europe — I don't think it could be overestimated. Economists who feel comfortable they can split the effects of Europe from the rest of the forces that generally impact the United States hasn't been around very long, I'm afraid."

- Greenspan: South Must Follow North for Euro to Survive


The euro zone is likely to need political unification to bridge the differences between the profligate south and the prudent north in order to save the euro, Alan Greenspan, former chairman of the US Federal Reserve, wrote in an opinion piece in the Financial Times.

"It seems inevitable that for the euro to prevail, something more formidable than the failed stability and growth pact is needed to constrain aberrant behavior," Greenspan wrote. "It may be that nothing short of a politically united euro zone, or Europe, will, in the end, be seen as the only way to embrace the valued single currency."
The crisis in the euro zone is not just one of debt but one of culture, as the burden is mainly on southern Europe, while northern countries' spreads against Germany are tight, he argued.
"If the euro [EUR=X 1.3494 0.0066 (+0.49%) ] is to remain a viable currency across the euro zone, members must behave in the responsible manner contemplated in the Maastricht treaty. But it is not clear that culture, so integral to a nation’s personality, can be easily altered," Greenspan wrote.
Looking at credit risk spreads by size across the euro zone last year, it can be seen that their ranking was almost identical to the ranking of the level of labor costs, and this suggests that higher labor costs and prices made the southern countries less competitive and therefore more subject to risk, he wrote.
Greenspan also said that there had been a continuous net transfer of goods and services from the north to the south between the creation of the euro in 1999 and the first quarter of 2011, with northern Europe effectively "subsidizing southern European consumption from the onset of the euro on January 1, 1999."
"Subsidized borrowing may have accounted for much of the acceleration in the ratio of euro-south consumption relative to that of Germany," he added.
The northern states, historically, had high savings rates and low inflation, because their culture emphasizes longer-term investment rather than consumption, while Greece and Portugal, for instance, have had negative saving rates indicating excess consumption since 2003, the former Fed chairman explained.
"There remains the question of whether most, or all, of the south would ever voluntarily adopt northern prudence," Greenspan wrote. "The future of the euro beyond a select group of northern countries with a similar culture will depend on the ability of all euro zone nations to follow suit."

- Greeks Strike Against Job Cuts as Aid Delayed

By Tom Stoukas -
Hundreds of thousands of Greeks are walking off their jobs at airports, schools, hospitals and even the Acropolis to protest Prime MinisterGeorge Papandreou’s 6.6 billion-euro ($8.7 billion) austerity plan, challenging a government seeking European bailout funds to stave off default.
Today’s 24-hour strike, the first this year that will shut the Athens International Airport for a full day, takes place after European Union ministers signaled they may renegotiate terms of Greece’s latest rescue, sending the nation’s stocks down the most in 17 months.
The country’s largest public-sector union, known as ADEDY and representing at least 400,000 state workers, called the walkout and a march on parliament to protest plans to put 30,000 public workers on reduced pay, raise property taxes and cut pensions and wages. The demonstration defies calls by the government to show unity in the struggle to avert a default.
“We are at the worst circumstances under the worst conditions,” Finance Minister Evangelos Venizelos said at a news conference in Athens yesterday. “We are dependent on the aid and loans of our institutional partners. That is the situation of the country. And we must make superhuman efforts to win this wager of history.”
Rising Debt
The government is dependent on outside financing as the economy contracts and the unemployment rate stands at more than doubleGermany’s. The Greek state, which employs about 750,000, carries a debt load that will reach 356.5 billion euros in 2011, or the equivalent of 161.8 percent of gross domestic product, the highest in the EU and three times the ratio of Poland.
The strike, which forced cancellation of flights into and out of theAthens International Airport and closed schools, followed a decision by euro area finance ministers to delay the release of the next 8 billion-euro loan installment under a 110 billion euro bailout approved in May 2010 until after Oct. 13. The government has enough cash to operate until mid-November, Venizelos said.
Greece’s 10-year bonds fell yesterday, pushing the yield up 50 basis points, or 0.50 percentage point, to 23.1 percent, more than double the rate on July 21, generic pricing for euro- denominated government securities shows. Greece’s 4.59 percent bond due in 2016 is trading at 35.5 cents on the euro for a yield of 35 percent, down from a price of 64 cents on July 22.
Stocks Slump
The nation’s ASE stock index lost 6.3 percent yesterday, the most since May 2010, led by a 15 percent slump in National Bank of Greece SA. (ETE) European equities dropped for a third day, the longest-losing streak in four weeks, as EU policy makers signaled private investors may need to take on bigger losses than earlier estimated as part of Greece’s bailout.
Violence during strikes in June caused 800,000 euros in damage to state property in Athensover two days as Papandreou battled for political survival in parliament.
The 59-year-old premier then won a confidence vote and backing for a new five-year package of budget cuts and state asset sales to secure further international aid by stemming defections from members of his Pasok party.
Venizelos introduced measures to plug the budget gap for 2011 and 2012, including a property tax approved by parliament on Sept. 27 and further cuts to pensions and wages for state workers, after inspectors from the International Monetary Fund and EU halted a review of Greece on Sept. 1.
While strikes and protests are common in Greece, the timing of the latest confrontation may cause investors to take notice, said Antonio Garcia Pascual, the chief southern European economist at Barclays Capital in London.
“It’s important to understand the degree of participation in these strikes,” he said in a telephone interview yesterday. “If it’s a massive demonstration with really large numbers, then surely investors will take note of that.”
Airports Shut
Air traffic controllers and employees at the Hellenic Civil Aviation Authority will cease work for 24 hours today, the first all-day work stoppage for aviation workers this year. Aegean Airlines SA (AEGN) canceled all its flights and Olympic Air axed 89 flights, according to an e-mailed statement from both Athens- based carriers. Schools, archaeological sites and museums also are closed.
“We have workers who have had their wages cut by 40 percent and with the new measures it will surpass 50 percent,” ADEDY Chairman Costas Tsikrikas said by phone from Athens. “These measures, and all the measures that have been passed so far, are putting the heaviest weight on workers and pensioners, not on those who earn the most and have sent their money outside Greece to foreign banks.”
General Strike
The General Confederation of Labor, or GSEE, the country’s largest private sector union that represents workers at state- run companies and utilities, plan to participate in the walkout and called a general strike for Oct. 19.
Greece’s average unemployment rate is expected to climb to 16.4 percent next year from 15.2 percent in 2011, according to ministry forecasts. Germany’s jobless rate was 6.9 percent in September. The economy contracted 4.5 percent in 2010 and will shrink 5.5 percent this year,Finance Ministry forecasts show.
“We have taken decisions as a government and as a parliament but as a society we have not taken a clear decision,” Venizelos said yesterday. “Unfortunately our society, our country, is hostage to great contradictions.”
Employees at Hellenic Railways Organization, Greece’s state-run rail company, and the suburban rail network surrounding Athens will also take part. Dockworkers, journalists, health-care and municipal workers plan to join the strike.
Public Transit
Public transit employees are working today in order to help carry protesters to central Athens for midday demonstrations and marches to parliament. Transit employees have held a series of 24-hour strikes and work stoppages since Sept. 2 to protest involuntary transfers and wage cuts that were part of an overhaul of the public transit industry adopted last year by Greece’s parliament.
Europe’s financial leaders are fighting on multiple fronts, trying to repair Greece’s economy while insulating Italy and Spain and shoring up banks that the IMF says face as much as 300 billion euros in credit risks.
Ministers are considering reshaping a July 21 agreement that foresaw investors contributing 50 billion euros to a second rescue package totaling 159 billion euros. The original accord calls for debt exchanges and rollovers, with private investors facing losses of 21 percent, according to the International Institute of Finance.


- Moody’s Cuts Italy Rating Following S&P

By Lorenzo Totaro -

Italy’s credit rating was cut by Moody’s Investors Service for the first time in almost two decades on concern that Prime Minister Silvio Berlusconi’s government will struggle to reduce the region’s second-largest debt amid chronically weak growth.
Moody’s lowered Italy’s rating three levels to A2 from Aa2, with a negative outlook, the New York-based company said in a statement yesterday. The action comes after Standard & Poor’s downgraded Italy on Sept. 20 for the first time in five years. Italy was last cut by Moody’s in May 1993.
Italy gave final approval last month to a 54 billion-euro ($72 billion) austerity plan aimed at balancing the budget in 2013 that convinced theEuropean Central Bank to buy the nation’s bonds. While the purchases initially brought down bond yields by about 100 basis points, Italy’s borrowing costs remain near record highs because of euro-area debt crisis contagion.
“The fragile market sentiment that continues to surround euro area sovereigns with high levels of debt implies materially increased financing costs and funding risks for Italy,” Moody’s said in the statement. “Although future policy actions within the euro area could reduce investors’ concerns and stabilize funding markets, the opposite is also increasingly possible.”
Moody’s decision “was expected,” Berlusconi’s office said in an e-mail yesterday. “The Italian government is working with the utmost commitment to meet its budget targets.”
The yield on Italy’s 10-year notes was at 5.49 percent yesterday, pushing the difference investors to hold Italian bonds instead of benchmark German bunds to 376 basis points. The cost of insuring Italian debt against default has more than double the level at the start of the year.
Italian Politics
European countries with ratings below the top Aaa level may see reductions, Moody’s said in a separate statement.
“All but the strongest euro-area sovereigns are likely to face sustained negative pressure on their ratings,” Moody’s said. “Consequently, Moody’s expects fewer countries below Aaa to retain high ratings.” It added that “there are no immediate pressures that could cause downgrades for Aaa-rated countries.”
Italy joined Spain, Ireland, Portugal, Cyprus and Greece as euro-region countries whose credit rating has been cut this year. Unlike Ireland and Portugal, which followed Greece in seeking bailouts from the European Union and the International Monetary Fund, Italy had until this summer managed to skirt the worst of the fallout from the debt crisis.
Funding Risks
The reasons for the downgrade include “increased funding risks for euro area sovereigns in general, such as Italy, with high levels of public debt,” Alexander Kockerbeck, a Frankfurt- based sovereign debt analyst with Moody’s, said in an interview yesterday. He also cited the risk of slower growth “due to macroeconomic structural weaknesses, and on top of that, a weakening global growth outlook.”
The downgrade may aggravate a volatile political situation. Berlusconi, battling to keep his ruling coalition together, faces four trials and calls from Italian employers, his long- time backers, to step down after a decade of virtually no economic growth undermined debt reduction. Italy’s debt of about 120 percent of gross domestic product is second in the region only to Greece.
S&P in May and Moody’s in June warned that they may downgrade Italy, saying the government may miss fiscal targets. Moody’s extended its review of Italy for one month on Sept. 16, four days before S&P cited growth concerns and Berlusconi’s “fragile” government as reasons for its downgrade.
IMF Estimate
Italy’s economy expanded an average 0.2 percent annually from 2001 to 2010, compared with 1.1 percent in the euro area. Gross domestic product grew 0.3 percent in the second quarter from the three months through March, when it grew 0.1 percent, national statistics institute Istat said on Sept. 9.
On Sept. 20, the International Monetary Fund cut its growth forecast for Italy, saying it will miss its goal of erasing the deficit. Two days later, the government cut its own forecast, while keeping its commitment for a balanced budget in 2013.
The Finance Ministry said the euro-region’s third-biggest economy will grow 0.7 percent in 2011 instead of the 1.1 percent forecast in April and 0.6 percent in 2012 rather than 1.3 percent. That compares with the growth forecasts by the IMF of 0.6 percent this year and 0.3 percent next.
Deficit Cuts
The ministry also forecast a budget deficit of 3.9 percent of GDP this year, 1.6 percent next year and 0.1 percent in 2013. The IMF projected the deficit to fall to 4 percent of GDP in 2011, 2.4 percent in 2012 and 1.1 percent in 2013.
Berlusconi has pushed through two packages of deficit cuts since mid-July totaling about 100 billion euros. Measures included raising the value-added tax by one percentage point to 21 percent and a levy on incomes of more than 300,000 euros to balance the budget by 2013. The second, announced on Aug. 5, was a condition of ECB support.
The negative outlook on Italy announced last month by S&P means there’s a one-in-three chance that the company will lower the nation’s rating again within the next 12 to 18 months,Moritz Kraemer, S&P’s managing director of European sovereign ratings, said Sept. 20.
Italy will have to find additional savings between 9 billion and 10 billion euros “to increase the chances of reaching a budget that is close to balanced by 2013,” Fabio Fois, European economist at Barclays Capital in London, wrote in a note before the new forecasts were unveiled. “We think that further fiscal measures are likely to be announced over the next couple of weeks.”



- Moody's dégrade la note souveraine de la dette italienne



L'agence d'évaluation financière américaine Moody's a annoncé, mardi 4 octobre, qu'elle abaissait à A2 la note des obligations d'Etat italiennes contre Aa2 auparavant, en raison des risques pour le financement de la dette à long terme, de l'atonie de la croissance italienne et des incertitudes politiques. Moody's a assorti sa décision d'une perspective négative, ce qui signifie qu'elle pourrait encoreabaisser la note des obligations d'Etat italiennes à l'avenir.
Moody's a donné comme premier motif au déclassement de la dette italienne"l'accroissement des risques pour le financement des dettes publiques élevées dans la zone euro [pour des pays] comme l'Italie en raison de l'érosion soutenue et non cyclique de la confiance" des investisseurs.
"LACUNES STRUCTURELLES"
Deuxième raison : "Les risques négatifs croissants pour la croissance économique liés à des lacunes structurelles et à un affaiblissement des perspectives [de croissance] au niveau mondial". Selon Moody's, une troisième raison pourdéclasser l'Italie réside dans les "risques et le temps dont aura besoin le gouvernement pour atteindre ses objectifs de réduction du déficit et pour inverser la tendance [à l'accroissement] de la dette publique en raison des incertitudes économiques et politiques".
L'agence avait annoncé le 16 septembre qu'elle prolongeait la période d'examen de la note souveraine de l'Italie pour prendre le temps d'examiner les mesures budgétaires adoptées à la mi-septembre. Une autre agence de notation, Standard & Poor's, a par ailleurs abaissé la note italienne (à A contre A+) le 19 septembre en raison de perspectives de croissance jugées trop faibles.



- Les Bourses européennes et les banques s'effondrent de nouveau


Le CAC 40 a perdu 2,61 % mardi, soit une troisième séance de baisse d'affilée.AP/BERND KAMMERER
Les Bourses plongeaient, mardi 4 octobre, tourmentées par la crise de la dette dans la zone euro et les craintes ravivées d'un défaut de paiement de la Grèce.
Le CAC 40 a ainsi perdu 2,61 %, soit une troisième séance de baisse d'affilée, dans un volume d'échanges de 3,459 milliards d'euros. Les autres places européennes suivaient la même courbe descendante : Athènes plongeait de 6,28 %, au plus bas depuis dix-huit ans, Francfort de 2,98 %, Londres de 2,58 %, au plus bas depuis juillet 2010, Milan de 2,72 % et Lisbonne de 3,1 %.
Alors que le gouvernement grec a reconnu dimanche qu'il n'atteindrait pas ses objectifs de réduction du déficit cette année, les ministres des finances de la zone euro, réunis à Luxembourg, ont décidé lundi soir de reporter à nouveau les décisions concernant un prêt crucial à la Grèce, à laquelle ils ont demandé des efforts budgétaires supplémentaires.
"Le report de la réunion exceptionnelle du 13 octobre, qui devait décider ou non de l'octroi à la Grèce de la tranche d'aide de 8 milliards d'euros, est une mauvaise nouvelle qui perturbe les marchés", décryptent les stratégistes du Crédit mutuel-CIC. Autre motif d'inquiétude, la participation du secteur privé au second plan d'aide à Athènes devrait être revue à la hausse.
CHUTE DES VALEURS BANCAIRES
Partout en Europe, ce sont les valeurs bancaires qui ont le plus souffert, pénalisées par la crise mais aussi par l'effondrement de Dexia à Bruxelles. La banque franco-belge a terminé en chute libre (–22,4 %), après avoir décroché de près de 40 % à l'ouverture, les investisseurs redoutant un démantèlement du groupe. A Paris, le Crédit agricole a perdu 6,5 %, la Société générale 4,9 % et BNP Paribas 5,2 %.
Outre-Atlantique, la Bourse de New York remontait rapidement la pente mardi dans les dernières minutes de séance, effaçant les lourdes pertes enregistrées sous l'effet des craintes de défaut de la Grèce : le Dow Jones gagnait 1,44 % et le Nasdaq 2,98 %.
Wall Street a ainsi été quelque peu rassurée par les propos du président de la Réserve fédérale américaine, Ben Bernanke, qui a exhorté mardi les élus du Congrès à ne pas saper la reprise économique du pays, qu'il a jugée "proche de fléchir" et encore "léthargique" sur le front de l'emploi.
Le pétrole terminait par contre sur des records de faiblesse. Ainsi, le baril de "light sweet crude" pour livraison en novembre a perdu 1,94 dollar par rapport à lundi, pour s'adjuger sur le New York Mercantile Exchange à 75,67 dollars. Le brut texan négocié sur la place new-yorkaise a chuté en cours d'échanges jusqu'à 74,95 dollars, son plus bas niveau depuis le 24 septembre 2010.



- [ECONOMIE
La zone euro réfléchit à une restructuration plus radicale de la dette grecque->http://www.lepoint.fr/economie/la-zone-euro-reflechit-a-une-restructuration-plus-radicale-de-la-dette-grecque-04-10-2011-1380776_28.php]

Le Point.fr - Publié le 04/10/2011 à 19:37 - Modifié le 04/10/2011 à 19:44
L'Allemagne a confirmé mardi que la zone euro envisageait une perte plus importante que prévu pour les banques privées.
La zone euro réfléchit à une restructuration plus radicale de la dette grecque
Berlin pourrait imposer des pertes plus importantes que prévu aux banques européennes qui détiennent de la dette grecque. © Alina Novopashina / Maxppp
L'Allemagne a confirmé mardi que la zone euro réfléchissait à une perte plus importante que prévu des banques privées concernant leurs créances sur la Grèce, dans le cadre de leur contribution prévue au deuxième plan de sauvetage du pays. "Bien sûr qu'on en discute", a déclaré à ce propos à la presse le ministre allemand des Finances, Wolfgang Schäuble, à l'issue d'une réunion avec ses homologues européens à Luxembourg.
Le 21 juillet, les dirigeants des pays de la zone euro ont promis un deuxième plan de sauvetage à la Grèce, d'un montant de 109 milliards d'euros de prêts publics (Union monétaire et FMI), auquel s'ajoutera pour la première fois une contribution des banques et des fonds d'investissement privés qui détiennent de la dette grecque.
"Des pour et des contre"
Les banques avaient alors accepté une perte de 21 % à terme en moyenne sur leurs portefeuilles d'obligations grecques. À présent, "nous voulons voir si les conditions qui ont été fixées en juillet sont toujours pertinentes", a souligné Wolfgang Schäuble, n'excluant pas que les données de départ doivent être "adaptées".
La situation budgétaire de la Grèce s'est en effet encore dégradée entre-temps. Le chef de file des ministres des Finances de la zone euro, Jean-Claude Juncker, s'était déjà prononcé dans ce sens lundi soir à Luxembourg, parlant d'"ajustements techniques" nécessaires.
Le ministre allemand a toutefois reconnu qu'il y avait "des pour et des contre" dans l'Union monétaire au sujet d'une contribution plus importante que prévu du secteur privé. Si celle-ci devait se concrétiser, elle risquerait d'ajouter un élément d'incertitude sur les marchés financiers, déjà particulièrement agités, car ils redoutent un défaut de paiement au bout du compte de la Grèce.




- Désastre bancaire et bûcher des vanités


Vingt ans après le Crédit lyonnais, la France connaît donc son deuxième désastre bancaire. Les 6 milliards d'euros engloutis en 2008 dans le sauvetage public de Dexia l'ont été en pure perte.
Vingt ans après le Crédit lyonnais, la France connaît donc son deuxième désastre bancaire. Les 6 milliards d'euros engloutis en 2008 dans le sauvetage public de Dexia l'ont été en pure perte.AP/Thanassis Stavrakis
Vingt ans après le Crédit lyonnais, la France connaît donc son deuxième désastre bancaire. Les 6 milliards d'euros engloutis en 2008 dans le sauvetage public de Dexia l'ont été en pure perte. Etats et banques centrales sont à nouveau à son chevet pour organiser tant bien que mal une faillite ordonnée, plongeant salariés, collectivités locales et petits actionnaires dans l'inconnu.

La crise financière actuelle a eu raison des belles paroles que tenait encore, en avril, Pierre Mariani, le patron de Dexia : "Nous avons retrouvé notre pleine autonomie de financement, attestant de la solidité des progrès accomplis en termes de structure financière."
En juillet, Dexia passait haut la main les "stress-tests", pour annoncer, en août, un retour aux bénéfices dès le troisième trimestre !
Cet aveuglement stupéfiant - ou cet inquiétant déni de réalité - ne constitue que l'épilogue d'une improbable fuite en avant qui débute il y a deux décennies. A l'époque, à la fin des années 1980, le développement local était assuré, dans le giron de la Caisse des dépôts et consignations, par des établissements publics qui n'avaient pour objectif que d'emprunter aux meilleures conditions sur les marchés, loin de toute spéculation.
L'engrenage fatal s'est enclenché avec l'émancipation, puis la privatisation du Crédit local de France (CLF), lancé dans le grand bain du marché en 1993, sous la houlette d'un haut fonctionnaire ambitieux, Pierre Richard. Pour doper ses profits et intéresser la Bourse, le CLF s'est alors transformé à marche forcée, chamboulant son modèle économique, qui l'avait, jusque-là, protégé des aléas du marché. Le rapprochement avec le belge CCB, en 1996, n'a fait que complexifier les choses en donnant naissance à une structure hybride et binationale qui n'a jamais bien fonctionné.
Dès lors, régions, départements et communes ont été incités à avaler des produits "structurés", c'est-à-dire des crédits complexes, opaques, aléatoires, bref spéculatifs. Pour faire tourner cette usine à gaz, Dexia s'est mis à jouer un jeu dangereux : emprunter à court terme pour financer des actifs à long terme offrant des taux plus élevés.
Ebranlé par la crise des subprimes, puis rattrapé par la crise de la dette souveraine, Dexia se retrouve aujourd'hui à la tête d'un fardeau de près de 100 milliards d'euros d'actifs, dont il n'a pas réussi à se débarrasser pendant le répit que lui avait accordé son sauvetage en 2008.
La question s'impose aujourd'hui : n'aurait-il pas mieux valu solder le passé à ce moment-là ? Au lieu de quoi l'on a préféré les solutions homéopathiques, pensant naïvement que les choses allaient rentrer dans l'ordre d'elles-mêmes. C'est tout le contraire qui s'est passé.
Après une privatisation improbable, un déficit de surveillance évident et un manque de courage politique en 2008, l'histoire de Dexia peut se résumer à la chronique d'une mort annoncée. Comme le symbole d'un capitalisme financier aussi cupide que coupable.



- Dexia, une bombe dans la zone euro



Fragilisée par ses montages financiers "toxiques", la banque franco-belge est au bord de la faillite. Pour certains, elle pourrait inaugurer une série de défaillances bancaires en Europe. Pour d'autres, c'est avant tout la crédibilité des Etats qui est en jeu.
"Ca s’accélère pour Dexia", titre De Standaard. Le 4 octobre, explique le quotidien flamand, Paris et Bruxelles se sont réunis d’urgence pour parler d’un plan de sauvetage pour la banque franco-belge en difficulté pour la deuxième fois en trois ans. Les deux pays se sont mis d’accord pour diviser la banque en deux, créant une "bad bank" dans laquelle seront placés les éléments toxiques (emprunts grecs et italiens, hypothèques américaines). Le rédacteur en chef du Standaard, Bart Sturtewagen, se demande pourquoi "les trois années écoulées n’ont pas suffi pour éviter que l’on se retrouve à nouveau dans une crise bancaire urgente" :
On savait que Dexia était une banque zombie, qui devait faire face à des défis structurels profonds. Un mariage franco-belge deséquilibré qui dépendait trop des oscillations des marchés bancaires pour être en sécurité. Une banque dont les parties saines […] n’auraient jamais dû avoir de problèmes si les règles du jeu avait été respectées. […] Dexia n’est que la pointe de l’iceberg. Depuis le début de la crise bancaire, on n’a fait que déplacer les dettes du secteur financier vers les gouvernements. Pour éviter une crise du système, on a essayé d’épargner les banques et leurs actionnaires, avec l’espoir que celles-ci auraient, à travers l’afflux en masse d’argent bon marché, suffisamment de temps pour renforcer leur structure de capital. [...] On arrive à la fin cette histoire. La suite sera écrite à l’encre rouge sang.
Comment en est-on arrivé là ? Après avoir emprunté à court terme(pas cher) pour financer à long terme (cher) par le biais de produits toxiques, Dexia s'est lancée "dans une boulimie d'acquisitions, d'activités ou même de portefeuilles. Espagne, Italie, Japon ou Etats-Unis… elle achète tout ce qui passe", rappelle Le Figaro. Dexia a ainsi crée "une monstrueuse position spéculative sur les taux". Dès octobre 2008, Dexia, tel un "boeuf dopé aux hormones se trouve pris de court", écrit le quotidien. Et la crise de la zone euro a finalement fait tomber un édifice extrêmement fragilisé, mais "c’est fort heureusement un spécimen rare".
Pour Les Echos, ce qui se joue avec la restructurations de la banque Dexia, c'est la crédibilité des Etats concernés :
Aussi grave que soient les fautes du passé, le scandale Dexia aurait pu être soldé il y a trois ans maintenant. Il aurait fallu pour cela que les Etats belge et français taillent dans le vif en octobre 2008. Mais ils ont préféré donner du temps au temps. Ils n'ont certes pas été les seuls. Plusieurs Etats européens ont fait le même pari. Trois ans après, ces établissements (espagnols, allemands, italiens...) ne sont toujours pas tirés d'affaire pour la plupart. Ils survivent comme des zombies grâce aux facilités de crédit de la BCE et sapent la confiance dans l'ensemble du secteur bancaire européen. Ce sont de véritables bombes à retardement. […] Et le problème, c'est que, entre temps, la crise financière est devenue une crise de la dette souveraine. Et que ce qui se joue aujourd'hui n'est plus seulement la mise en ordre du secteur bancaire, mais bien le crédit des Etats concernés sur les marchés.
“Dexia montre la voie aux banques européennes”, estime Cinco Días. Pour le quotidien économique espagnol :
Loin d'être un cas isolé, Dexia est devenue la première victime visible des graves dégâts structurels que la crise de la dette souveraine a provoqué dans les établissements financiers européens. Le fait qu’elle ait réussi avec une bonne note les tests de résistance de l’été dernier est la preuve de la fiabilité douteuse de ces tests mais aussi — et surtout — des importants changements qui se sont produits dans la “photo d’identité” du système bancaire depuis lors. Ce qui n’a rien d’étonnant, si l’on considère que les tests n’ont jamais pris en compte un défaut de paiement [de la part d’un Etat], pas même de la dette grecque. […] La voie prise par Dexia ne doit pas être un cas isolé, mais le premier pas d’un processus de sauvetage, d’assainissement et de restructuration du système financier qui ne peut plus attendre.




- [ZONE EURO
L’heure de gloire des eurosceptiques->http://www.presseurop.eu/fr/content/article/1010371-l-heure-de-gloire-des-eurosceptiques]


A voir la zone euro aller de Charybde en Scylla, faut-il conclure que l’euro est condamné ? Deux Britanniques estiment que les eurosceptiques ont gagné et demandent des comptes aux partisans de la monnaie unique.
Peter Oborne - Frances Weaver
Dans l’histoire, peu de factions ou de mouvements ont remporté une victoire aussi complète et aussi écrasante que celle des conservateurs eurosceptiques aujourd’hui. Ce sont eux, aujourd’hui, les maîtres du jeu. Non seulement avaient-ils raison sur la monnaie unique, le plus grand enjeu économique de notre temps, mais ils avaient raison pour les bonnes raisons.
Ils avaient prévu avec une précision d’une lucidité quasi-prophétique comment et pourquoi l’euro allait entraîner dans son sillage la dévastation financière et l’effondrement des sociétés. Pendant ce temps, les pro-européens se retrouvent dans la même situation que les pacifistes en 1940, ou les communistes après la chute du mur de Berlin.
Ils sont parfaitement KO. Penchons-nous sur le cas du Financial Times, qui se targue d’être la meilleure publication économique de Grande-Bretagne : il y a 25 ans environ, leFT s’est mis à dérailler. Tournant le dos à ses lecteurs, le journal est alors tombé sous la coupe d’une clique de journalistes de gauche. Il y avait déjà eu un signe annonciateur de déraillement, quand le FT avait pris position contre l’invasion des Malouines [en 1982]. Naturellement, le quotidien a soutenu l’adhésion de la Grande-Bretagne au Mécanisme de taux de change européen en 1990.
Le FT s'est trompé dans tous ses grands jugements économiques
Depuis un quart de siècle, il s’est trompé dans tous ses grands jugements économiques. La plus grosse erreur du Financial Times moderne concerne l’euro. Le FTs’est jeté à corps perdu dans le camp des pro-euros, adhérant à leur cause avec une ferveur toute religieuse. Et il ne fut laissé aucune place au doute. Ecoutons un peu ce qu’avait à nous dire Lex dans sa chronique (censée être sceptique et anti-conformiste) le 8 janvier 2001 au sujet de l’entrée de la Grèce dans la zone euro. "Comme les échanges avec la Grèce se feront désormais en euros", écrivait Lex, "peu de gens pleureront la disparition de la drachme. Appartenir à la zone euro est le garant d’une stabilité économique à long terme" .
Le FT avait également réservé un accueil chaleureux à l’Irlande. Même en mai 2008, alors que le boom économique en Irlande et partout ailleurs commençait de toute évidence à montrer des signes de faiblesse, le journal gardait la foi : "l’Union monétaire européenne est sortie de sa chrysalide et a pris son envol, s’enthousiasmait le journal dans son éditorial. "Et si sur le papier le projet paraissait des plus improbables, il a abouti dans la vraie vie."
Pour un quotidien qui prétend faire autorité en matière financière, sa gestion de la monnaie unique a été des plus catastrophiques. Qu’en est-il de la BBC ? Au cours des neuf semaines qui ont précédé le 21 juillet 2000, au plus fort du débat sur l’euro, l’émission Today a interrogé 121 intervenants sur le sujet. 87 d’entre eux étaient favorables à l’euro et 34 y étaient hostiles.
Et deux fois plus de chiffres, d’interviews et de petites phrases défendaient la cause de l’euro. Les journalistes de la BBC avaient tendance à présenter la position pro-euro elle-même comme une voie médiane. Par conséquent, les voix même modérément eurosceptiques faisaient figure d’extrémistes, et étaient donc balayées avant même d’entrer dans le débat. La BBC adoptait systématiquement un ton alarmiste, agitant le spectre d’une catastrophe économique ou industrielle si le pays ne rejoignait pas la zone euro. Lorsque ces prévisions se sont révélées fausses, elle n’a pas pris la peine de corriger le tir.
Les entêtés finissent toujours par avoir raison
De fait, le Royaume-Uni a enregistré des niveaux record d’investissement étranger, mais lorsque les chiffres du Bureau des statistiques nationales l’ont confirmé, la BBC en a à peine parlé. Ce parti pris allait effectivement très loin. Rod Liddle, alors rédacteur en chef de l’émission Today sur Radio 4, se souvient d’une rencontre avec une très haut responsable de la BBC pour traiter des accusations de partialité portée par les eurosceptiques. "Rod, il vous absolument comprendre que ces gens sont cinglés. Ils sont fous".
En réalité, les eurosceptiques étaient parfaitement sains d’esprit. S’exprimant à la Chambre des communes en 1936, Winston Churchill – qui était à l’époque une personnalité marginale et largement méprisée – a prononcé ces mots : “se lamenter sur le passé, ‘c’est mener une action efficace dans le présent”. Alors, quelles sont les leçons à tirer du débat au Royaume-Uni sur l’euro ? En premier lieu, nous devrions chérir ce trait de caractère on ne peut plus britannique qu’est l’excentricité. Au plus fort du débat sur la monnaie unique, on a souvent vu les tenants de l'euro isoler leurs détracteurs en les traitant d'excentriques.
Voici ce que disait Andrew Rawnsley de l'Observer dans une chronique du 31 janvier 1999 : "Dans le camp des pro-euro, les milieux d'affaires, les syndicats, des personnalités politiques de premier plan, influentes, raisonnables. Dans l'autre camp, une ménagerie de vieilles gloires, d'illustres inconnus et de fous à lier". Mais en fait, ce sont encore et toujours les solitaires, les entêtés, ceux qui refusent l'orthodoxie de l'establishment, qui finissent par avoir le dernier mot. Il reste essentiel pour notre démocratie que le point de vue pro-euro se fasse entendre.
Mais avant toute chose, les partisans de l'euro doivent nous dire pourquoi ils ont essayé de pousser la Grande-Bretagne sur la voie calamiteuse de l'adhésion à la monnaie unique. Revenons sur une remarque faite par Danny Alexander, Premier secrétaire au Trésor, qui a déclaré que ceux qu'il qualifiait d'isolationnistes ou de nationalistes européens étaient “ennemis de la croissance”. Pendant cinq ans, M. Alexander a fait campagne en faveur de l'euro et s'il était arrivé à ses fins, il aurait mené la Grande-Bretagne droit à la catastrophe. Comment a-t-il osé dénoncer ainsi les Eurosceptiques ? Il serait grand temps que les partisans de l'euro rendent des comptes.





- [The World from Berlin
'The Finale of the Greek Drama Is Drawing Closer'->http://www.spiegel.de/international/europe/0,1518,789804,00.html]



A Greek Finance Ministry employee during a sit-in on Tuesday, when Ministry workers staged protests of austerity measures across Athens.
With Greece's next aid payment delayed following the release of dismal economic figures, insolvency is looming. European leaders have promised they won't abandon Athens, but some German commentators on Tuesday suggest that allowing the country to go bust may be the best option.
Info
The good news is that Greece will remain solvent until mid-November, despite the decision reached on Monday evening by euro-zone finance ministers meeting in Luxembourg to delay payment of the next tranche from the €110 bailout fund put together in 2010. That, at least, is what Greek Finance Minister Evangelos Venizelos said on Tuesday. Athens, he said, would have "no problem" meeting its domestic and international obligations.
The bad news, though, is that such reassurances are no longer enough to calm jittery markets. European stock markets plunged for the second day in a row on Tuesday amid growing concerns that avoiding insolvency may no longer be possible for Greece. Many see the delayed payment as yet more evidence that Athens has not fulfilled its austerity pledges made when the bailout package was assembled.
Furthermore, Greece revealed on Sunday that it's 2011 budget deficit would be a significantly larger proportion of its gross domestic product than it had promised in exchange for a second bailout, worth €109 billion, tentatively agreed to in July.Compounding the problem, on Monday new information also showed that the Greek economy would likely shrink further in 2012, instead of registering the slight growth officials had been hoping for.
Athens had originally insisted that funding would begin drying up by mid-October without the pending €8 billion payment tranche. That payment depends on the result of a report currently being assembled by the International Monetary Fund, the European Union and the European Central Bank, the so-called "troika."
A Means of Buying Time
Jean-Claude Juncker, who heads up meetings of euro-zone finance ministers, also said on Tuesday that Greece -- overwhelmed with debts that equal some 160 percent of its economic output -- would remain solvent until November without the payment. "Everything will be done to avoid (insolvency) and it will be avoided," Juncker told news agency AP early on Tuesday morning.
The payment delay is seen by some as a means of buying time until a better strategy can by found. Even as the European Financial Stability Facility (EFSF) is now being boosted to increase its lending capacity to €440 billion, many say that won't be enough and are calling for yet another expansion of the fund, though leaders in Berlin have firmly rejected such a course of action. Others would like to see the fund use its assets to borrow up to €2 trillion for potential bailouts.
"We need a more flexible and powerful EFSF as a financial firewall to contain contagion and allow for the recapitalization of weakened banks," said EU Monetary Affairs Commissioner Olli Rehn.
With pressure increasing on both Athens and the euro-zone leaders to stabilize the crisis, civil unrest continued to swell in Greece, with protestors blocking off federal ministries across the capital on Tuesday morning in protest of austerity measures.
German commentators assess the desperate situation on Tuesday, with some suggesting that a Greek exit from the euro zone may be the only way to ease the currency crisis.
Center-right daily Frankfurter Allgemeine Zeitung writes:
"The Greeks don't deserve this. It's been one bad news story after the next: The economy is shrinking even more quickly than feared. Correspondingly, the budget deficit is growing to dizzying heights. The population is groaning under the government's austerity measures, but they still aren't adequate. Meanwhile the European currency union lacks the proper perspective for helping the Greeks re-establish their country both politically and economically."
"The lack of such prospects are at the heart of the problem, beyond the emotional arguments within Germany's governing parties, and beyond the ever-larger -- and still insufficient -- rescue packages, and beyond the lines the rescuers draw in the sand."
"Only two options are plausible. Greece could choose what amounts to an orderly insolvency. The country would also have to resign itself to having its assets managed by an insolvency administrator just like a corporation, giving up rights that are indispensable to a sovereign land. Right now it doesn't seem like this solution will come into play. A closer look reveals the Greeks continue to block outside help … leaving only the second option: Greece's exit from the currency union and a debt haircut. After this the Greeks would again have room to breathe and prospects that would make it worthwhile to roll up their sleeves."
The left-leaning Berliner Zeitung writes:
"No, the Greeks should not fall. But as we've seen for years, the endless, unimaginative contribution of more money leads to a stagnation of the financial crisis rather than to its solution. Without the will of the country concerned, no therapeutic measures will work. But the cultural revolution that would spawn such a will has yet to begin, and can only be brought about by the Greeks."
"They must, however, be empowered to take action on their own. And this is not possible within the euro zone. Remaining under its support means a euro guardianship with protectorate-like conditions -- and that will lead to resistance. No, Greece needs the freedom to act, meaning its own currency which can then be devalued to stimulate the economy."
Center-left daily Süddeutsche Zeitung writes:
"The finale of the Greek drama is drawing inexorably closer.... But because the political decisions are highly complicated and happen much more slowly than the markets demand, the ministers appear to have become specialists in buying time. With assorted tricks -- such as the announced and then later delayed arrival of the troika in Athens, or the oft-renewed negotiations with the Greek government -- they are providing themselves with breathing room. At least until they can be sure that the final act will be played out with limited collateral damage."
"But that can only work -- if at all -- once the expanded European Financial Stability Facility (EFSF) is completely operational. So far it's not.... The conditions for assistance still need clarification too. Above all, there needs to be clarification over whether the current credit amount of €440 billion will be enough or not. As long as these things aren't clear, the ministers will have to continue to buy time."
Left-leaning daily Die Tageszeitung writes:
"Even as parliamentarians work on the second rescue package, Athens' new deficits show that soon a third rescue package will be necessary. A number of politicians and experts are thus yearning for an 'orderly insolvency' for Greece to finally stop the carousel of billion-euro loans."
"Actually an insolvency -- also called debt relief -- could be agreeable, because the Greeks will never be able to fully pay back their loans. Still insolvency is no solution, because only past loans will be settled. The Greeks, however, continue piling up new debts, as the current budget deficit shows."
"Thus Greece will continue to need help for a long time. But consolation can still be found: Europe can afford it. After all, Greece only has 11 million residents -- and an economic output equivalent to the German state of Hesse."



- Volatility intensifies as Franco-Belgian bank collapses and Italian debt downgraded


The eurozone financial crisis took several turns for the worse yesterday with the downgrading of Italian debt, collapse of the Franco-Belgian bank Dexia and a delay to the next instalment of the Greek rescue package. Wall Street perversely rallied in its final hour on a few comforting words from EU officials but Asian stocks later continued to sell-down.
These are volatile times on financial markets. The Greek tragedy is being played out by politicians and the twists and turns are so slow and drawn out it makes a mockery of technical analysis, or just shows its true limitations depending on your point of view.
Volatility indicator
However, one thing most technical and fundamental analysts would agree on is that volatility is not usually a good indicator for markets. Normally volatility ends in a crash – a capitulation sell-off that resets markets to levels from which they can gradually rally or flatline.
That ought to be caution enough for the perennial optimists who still have some money left and would like to buy back into these markets as soon as possible. As ArabianMoney explained at some length yesterday the so-called attractive valuations are meaningless because of the true outlook for profits and the highly artifical state of global interest rates (click here).
But what is going to bring this crisis to a head? For that is what needs to happen before we can have any peace. Well, it is obvious really. Greece has to default and the markets absorb the impact. That could happen as soon as October 13th or the eurozone can wrangle on for a bit longer.
Market solution
In the end markets will most likely have to force them into action, so paralysed is the decisionmaking process of the EU. One problem for dealing with the Dexia insolvency is that Belgium has not had a government for over a year. Italian debt is a far bigger problem that Greece.
Deutsche Bank yesterday scrapped its profit forecast and warned of a longer than expected downturn. Wall Street is looking for the easy way out of this crisis but it does not exist anymore than it did with Lehman Brothers in 2008.
If you’re really stupid you can convince yourself that this crisis has been around for so long that the players must know all the cards by now. Frankly that is just idiotic, when you are in the realms of chaos theory anything can and will happen.
Posted on 05 October 2011



- [Politicians under pressure as fear mounts over second credit crunch
On the eve of another Greek general strike, bank share prices were sent tumbling across Europe->http://www.guardian.co.uk/business/2011/oct/04/crisis-engulfs-european-banks]





David Gow in Luxembourg, Helena Smith in Athens and Jill Treanor
guardian.co.uk, Tuesday 4 October 2011 21.02 BST
Article history
man at greek finance ministry
A man stands behind a security fence at the blockaded Greek finance ministry. If we default, we will be worse off than Bangladesh, said one official yesterday Photograph: Petros Giannakouris/AP
Pressure to inject fresh capital into Europe's weakest banks mounted today as the chancellor, George Osborne, and officials in Brussels united in efforts to prevent contagion from the deepening Greek sovereign debt crisis.
Amid fears that €3.4bn (£2.9bn) of exposure to Greek debt would bring down Franco-Belgian bank Dexia, tensions were rising across the banking sector and pressure mounted on the European Central Bank to be more generous in loans to banks to prevent a rerun of the 2007 credit crunch.
The gloom that has lingered over the banking industry since August deepened further as Germany's biggest bank, Deutsche Bank, warned it would miss its profits target and the cost of insuring major US banks against default reached levels last hit in October 2008.
The share prices of many banks were tumbling as the chancellor and Anders Borg, the Swedish finance minister, urged colleagues to prop up banks with public funds, despite fierce resistance from the French who insist Europe is not at risk.
Senior officials led by Olli Rehn, EU economic and monetary affairs commissioner, backed their stance, which has also been promoted by Christine Lagarde, managing director of the International Monetary Fund. She has said that up to €300bn in capital may be required.
Senior figures are pressing for stress tests for Europe's banks to be brought forward from next year after Dexia passed the July tests with flying colours. Several officials referred to Dexia as "the canary in the coalmine".
Osborne said eurozone banks need to be strengthened. "We need to reflect the reality of the situation in the euro area and account for the reality of the sovereign risk the market can see out there and that requires more capital in some eurozone banks." Fresh capital would preferably be raised privately but a public backstop might be necessary.
Borg, also a non-zone minister, was blunter. "Government support is the best kind of backstop," he said.
Rehn said: "We need to get more firepower against contagion effects and support recapitalisation of the banks."
The head of the European regulator, the European Banking Authority, Andrea Enria, also called for action to fix the eurozone crisis. "It's a major issue that could go from Dexia to other banks, so it's important this is fixed and the sooner it's done the better," said Enria, who oversaw the July stress tests on banks.
Bob Diamond, the Barclays boss, speaking at a London conference, also called on European leaders to be decisive. "Confidence will not be restored until the EU sovereign debt issue is resolved. This is the most critical issue weighing on the markets right now," Diamond said. He called for greater fiscal union in Europe.
Investors are also urging leaders to restore confidence in the banking sector. Robert Talbut, chief investment officer at Royal London Asset Management, said: "The stress tests have once again been shown to have come up short in terms of what investors were looking for. Banks need a forced recapitalisation. It is exactly the right thing to do to rebuild confidence." He said that ideally banks should be split into "bad" and "good" banks and that a eurozone shock would threaten UK banks as well. "If Europe falls over, at least two of the UK's banks and possibly three will need recapitalisation."
The rare spot of upbeat news came from UBS, the Swiss bank hit by the alleged $2.3bn rogue trading scandal, which said it now expected to make a "modest" profit in the third quarter, having said previously warned of a loss. Analysts noted that the reason for the change was the falling price of UBS debt, which, under an accounting quirk, helps to bolster its profits.
At the London conference, UBS finance director Tom Naratil stressed clients had deserted the bank as had been feared and that he expected an improvement in the bank's performance.
At the same conference Stephen Hester, chief executive of RBS, put up a slide saying "return target under review in light of challenges" – referring to the gloomy economic backdrop and the effect of proposals banks should "ringfence" high street form investment banking. RBS shares fell 4% to 21.5p.
Lloyds Banking Group, the other bailed out UK bank, also tumbled as its chief executive António Horta-Osório also painted a gloomy picture. It fell 5% to 32p.
Deutsche Bank warned of 500 job cuts and admitted it would not reach its target for €10bn of profit this year. It was forced to take a €250m writedown. Its shares fell 4%. Pressure is also being felt on banks in the US. Gavan Nolan, director credit research at Markit, noted that the cost of insuring Morgan Stanley and Goldman Sachs hit levels last experienced during the October 2008 crisis.
It now costs $650,000 a year to insure $10m of Morgan Stanley debt and $445,000 to insure debt issued by Goldman Sachs.
Top bankers are hoping the ECB will decide on Thursday to extend credit to eurozone banks from three months to a year, or even two, in an effort to calm tensions.
Evangelos Venizelos, the Greek finance minister, insisted that last night's marathon seven-hour eurogroup meeting had been held in a "very friendly climate towards Greece." The decision to withhold €8bn in aid was a purely procedural matter, he said, taken to give all 17 euro area members the time to ratify the newly expanded European financial stability facility so as not to send the wrong signal to markets.
But Greeks are in shock over the EU's refusal to release fresh rescue funds. In private officials now say the government has enough money to tide it over until November when only weeks ago they were saying it would run out of cash by 15 October.
"When you're negotiating you say such things to speed up the process," one insider said after the press conference.
"The issue is not the sixth tranche of aid but the seventh, eighth and ninth instalments … ministers in Europe are very concerned about contagion. Default cannot be ruled out and that's what Greeks don't seem to realise.
"If we default, it's not just the domino effect. It will make Argentina look like small game. This place will become worse off than Bangladesh. People will be killed for a sandwich as they cross the road. It will be that bad."
Venizelos is first to admit the downward spiral of the Greek economy will continue for some time. It is forecast to contract by 5.5% this year.
"By the end of 2012 the economy will have shrunk by 15% [over four years] … what is important is that we go on to enforce corrective measures, not just fiscal consolidation measures."
Neither Venizelos nor any of his aides have been able to enter their own offices in recent days, such is the fury of protesting civil servants who have taken over an array of ministries including the finance ministry. "They'd beat me up if I tried to go in," one official said.
With the country braced for a 24-hour general strike Wednesday everyone is waiting with bated breath to see if mass rallies turn violent when unions take to the streets.



- Amid Austerity, Britons Cut Back on Groceries



By: Reuters

Pressure on British consumers was laid bare on Wednesday as top retailer Tesco posted one of its biggest-ever falls in underlying sales and rival J Sainsbury reported only modest growth.
The results showed Britons are cutting back on groceries, traditionally the most resilient area of spending, as disposable incomes are squeezed by rising prices [cnbc explains] , muted wage growth and a government austerity drive.
With household spending accounting for about two-thirds of gross domestic product, that trend could add to fears about Britain's fragile economic recovery and strengthen calls for the government to slow its drive to reduce the deficit.
"UK customers, obviously, are having a very tough time," Tesco Finance Director Laurie McIlwee told reporters, warning second-half UK profits would be broadly flat after the group moved last month to invest 500 million pounds ($770.3 million) in cutting prices in an attempt to boost demand and stem market share losses.
For the business as a whole, Tesco [TSCO-LN 381.00 0.90 (+0.24%)] said it was "broadly comfortable" with analysts' full-year profit forecasts.
Tesco, which takes more than one in every 10 pounds spent in British shops, said sales at stores open for more than a year fell 0.7 percent in its fiscal second quarter, excluding fuel and adjusted for changes in VAT sales tax.
That was the third successive quarterly decline and compared with a drop of 0.4 percent in the previous quarter.
Tesco, which makes about two-thirds of sales in Britain, has been suffering more than rivals in its home market because it sells a larger proportion of discretionary goods, where shoppers have been cutting back most.
Sainsbury's [SBRY-LN 287.90 13.20 (+4.81%)], British No.3 behind Tesco and Wal-Mart[WMT 52.88 0.92 (+1.77%) ] Stores' Asda, said its second-quarter sales rose around 1.1 percent on a broadly comparable basis, helped by store extensions and its expansion into convenience stores, online shopping and non-food ranges.
With food prices rising around 5 percent, however, that suggests shoppers are cutting back on the number of groceries they buy.
Heavy Toll
Tesco boss Phil Clarke said higher petrol prices had taken a particularly heavy toll on British shoppers, with customers spending an extra 750 million pounds on filling up their cars in the first half compared with the same time last year.
At a group level, Tesco's weak performance in Britain was offset by its expansion in faster-growing Asian markets and reduced losses at its U.S. chain Fresh & Easy.
The world's No.3 retailer said its operating profit rose 3.7 percent to 1.77 billion pounds in the 26 weeks to Aug. 27 on a 7.8 percent rise in sales to 31.8 billion, excluding VAT.
Analysts had forecast an operating profit of about 1.83 billion pounds and sales of 31.9 billion.
The figures compare favorably with bigger international rivals Carrefour and Wal-Mart, which also face weak demand in their home markets.
Tesco, with around 5,400 stores in 14 countries, said profit rose 19 percent in Asia, 4.5 percent in Britain and 12 percent in other European markets, while U.S. losses narrowed to 73 million pounds from 95 million the year before.
Clarke, who succeeded long-serving predecessor Terry Leahy in March, has pledged to slash U.S. losses this year and drive the business into profit by the end of fiscal 2013, as part of a goal to lift investment returns.



- Greek Strike Grounds Flights, Shuts Schools


Airliners were grounded, trains halted and tax offices shut on Wednesday as Greek state workers walked off the job to protest against austerity, defying a plea by the government to rally behind its effort to fend off national bankruptcy.
Greek Labor Unions Strike
AP
Hospitals ran on emergency staff and some state schools closed in the first nationwide strike against EU/IMF-prescribed salary cuts and layoffs after a summer lull.
In Athens' airport, more than 400 domestic and international flights were cancelled, an airport spokeswoman said.
The country's main labour unions ADEDY and GSEE expect hundreds of thousands of people to strike and thousands to take to the streets, while EU and IMF inspectors continue an inspection of Greece's finances that will decide on the release of an aid tranche Athens needs to pay wages and bills.
"Unfortunately the new measures are just extending the unfair and barbaric policies which suck dry workers' rights and revenues and push the economy deeper into recession and debt," GSEE spokesman Stathis Anestis told Reuters.
"With this strike, the government, the EU and the IMF will be forced to reconsider these disastrous policies." The Greek government shocked international financial markets this week by announcing that it would miss 2011 deficit targets set as conditions of a bailout aimed at staving off bankruptcy, despite a series of tax hikes and spending cuts.
Finance Minister Evangelos Venizelos said on Tuesday Greek finances for this year could slip still further if the country failed to rally round the reforms and show "national cohesion and solidarity".
State workers, students and pensioners will start gathering in central Athens.
A few hours later they will march on the capital's central Syntagma Square and protest outside parliament.
"If we don't take our lives back into our own hands and go on strike, how will we survive?," said Athens resident Maria Bargiadaki, a public sector worker.
Communist union group PAME is expected to stage a separate rally.
Police, fire brigade and coastguard unions said they would join the central Athens demonstrations.
Government "Panicking"
The country's main labour unions, representing about half Greece's 5 million-strong workforce, have staged repeated strikes since Athens asked the European Union and the International Monetary Fund for a 110 billion-euro bailout last year.
They say a new wave of salary and pension cuts, tax hikes and layoffs announced last month is hurting only the poor and pushing the economy deeper into recession .
They have called a general strike on Oct 19.Workers at state utilities marked for privatisation, such as dock workers at the country's ports in Piraeus and Thessaloniki and Public Power Corporation, will join the strike on Wednesday.
"The government is panicking and has no strategy," said Thessaloniki port unionist, Fani Gourgouri.
"These measures are only extending poverty. We'd be willing to shoulder the cost and say 'yes' to austerity if they proceeded with reforms that would create jobs instead of cutting them."
About 1,000 police will be deployed in central Athens throughout the day, a police official said, fewer than in similar anti-austerity protests in June, when 100 were injured during clashes with riot police.
Analysts say the ruling Socialists, who face dissent within their own ranks and lag behind the conservatives in polls, have no choice but to implement the EU/IMF-prescribed reforms despite protests, to keep receiving aid and send a message at home and abroad that it is delivering on pledges to reform.
"I expect a lively and big protest, but not violence like the riots in 2008," said Theodore Couloumbis of the ELIAMEP think-tank.
"The government is not expected to change course." The state workers are particularly angry about a plan to put 30,000 of them on the road to redundancy as early as this year.
They will be placed in a "labour reserve" with reduced pay and at least 12 months to find a new job or be fired.
In a further sign of the difficulty to push through unpopular reform, Socialist lawmaker and former Labour Minister Louka Katseli said she would vote against a reform of labour rules, asked by the EU and IMF, if it was put to parliament.
"I stated clearly and I mean it that I cannot vote for an abolition of the collective labour agreement," Katseli told Mega TV.
"It is important for our partners to know where the red lines are." Euro zone ministers postponed on Monday a vital aid payment to Greece until mid-November and talked of reopening a private sector bond swap deal.
Venizelos said the country had enough cash to cope until then and insisted that ministers are not preparing for a Greek default, despite the ominous delay.




- [Saudi police open fire on civilians as protests gain momentum
Insecure Saudis crack down on freedom protest->http://www.independent.co.uk/news/world/middle-east/saudi-police-open-fire-on-civilians-as-protests-gain-momentum-2365614.html]

By Patrick Cockburn

Pro-democracy protests which swept the Arab world earlier in the year have erupted in eastern Saudi Arabia over the past three days, with police opening fire with live rounds and many people injured, opposition activists say.
Saudi Arabia last night confirmed there had been fighting in the region and that 11 security personnel and three civilians had been injured in al-Qatif, a large Shia city on the coast of Saudi Arabia's oil-rich Eastern Province. The opposition say that 24 men and three women were wounded on Monday night and taken to al-Qatif hospital.
The Independent has been given exclusive details of how the protests developed by local activists. They say unrest began on Sunday in al-Awamiyah, a Shia town of about 25,000 people, when Saudi security forces arrested a 60-year-old man to force his son – an activist – to give himself up.
Ahmad Al-Rayah, a spokesman for the Society for Development and Change, which is based in the area, said that most of the civilians hit were wounded in heavy firing by the security forces after 8pm on Monday. "A crowd was throwing stones at a police station and when a local human rights activist named Fadel al-Mansaf went into the station to talk to them and was arrested," he said.
Mr Rayah added that "there have been protests for democracy and civil rights since February, but in the past the police fired into the air. This is the first time they have fired live rounds directly into a crowd." He could not confirm if anybody had been killed.
The Shia of Saudi Arabia, mostly concentrated in the Eastern Province, have long complained of discrimination against them by the fundamentalist Sunni Saudi monarchy. The Wahhabi variant of Islam, the dominant faith in Saudi Arabia, holds Shia to be heretics who are not real Muslims.
The US, as the main ally of Saudi Arabia, is likely to be alarmed by the spread of pro-democracy protests to the Kingdom and particularly to that part of it which contains the largest oil reserves in the world. The Saudi Shia have been angered at the crushing of the pro-democracy movement in Bahrain since March, with many protesters jailed, tortured or killed, according Western human rights organisations.
Hamza al-Hassan, an opponent of the Saudi government from Eastern Province living in Britain, predicted that protests would spread to more cities. "I am frightened when I see video film of events because most people in this region have guns brought in over the years from Iraq and Yemen and will use them [against government security men]," he said. He gave a slightly different account of the start of the riots in al-Awamiyah, saying that two elderly men had been arrested by the security forces, one of whom had a heart attack.
"Since September there has been a huge presence of Saudi security forces in al-Qatif and all other Shia centres," he said. Al-Qatif was the scene of similar protests in March, which were swiftly quashed by security forces.
The Saudi statement alleges that the recent protests were stirred up by an unnamed foreign power, by which it invariably means Iran. The interior ministry was quoted on Saudi television as saying that "a foreign country is trying to undermine national security by inciting strife in al-Qatif". Saudi Arabia and the Sunni monarchies of the western Gulf have traditionally blamed Iran for any unrest by local Shia, but have never produced any evidence other than to point at sympathetic treatment of the demonstrations on Iranian television.
The 20 doctors in Bahrain sentenced to up to 15 years in prison last week say their interrogators tortured them repeatedly to force them to make false confessions that Iran was behind the protests. The counter-revolution in Bahrain was heralded by the arrival of a 1,500-strong Saudi-led military force, which is still there.
Mr Rayah, who flew from Saudi Arabia to Beirut to be free to talk about the protests, said: "People want a change and a new way of living." He said that, in particular, they were demanding a constitution and a free assembly for the Eastern Province. He also wanted the Society for Development and Change legally registered.
Mr Hassan blamed the protests on the fact "that there has been no political breakthrough".
"I am from the city of al-Safwa, which is very close to al-Awamiyah, and there is very high unemployment in both," he said. Some 70 per cent of the Saudi population is believed to be under 30 and many do not have jobs. "We were hoping for municipal reforms and regional elections for years but we got nothing."
He said reforms reported in the Western media were meaningless and that only a few Saudis had bothered to vote in the most recent local elections because local councils had no power.



- Is US Economy Flirting With 'Modern-Day Depression'?


While economists have made no secret of their fears that another recession is about to strike, the real danger could be worse.
Unemployment in Spain
Dominique Faget | AFP | Getty Images
People wait in line at a government employment office in the center of Madrid.
Instead, the country could be headed for a 21st century version of a depression, an economic term that, unlike a recession, defies a standard definition but instead conjures images of soup lines, 25 percent unemployment and a devastated economy.
A drastic view? Perhaps. But with the US economy facing growth well below expectations two years after a recession, and an increasingly ominous European debt crisis, the superlatives being used to describe conditions are gaining in intensity.
“Here we are today, with a severe recession (2007-09) followed by the weakest recovery on record and now on the precipice of another economic downturn,” David Rosenberg, senior economist and strategist at Gluskin Sheff in Toronto wrote in a special analysis. “This is a modern-day depression, not entirely dissimilar to Japan’s post-bubble experience of the past two decades.”
Rosenberg takes issue with the standard issue of a recession being two consecutive quarters of negative growth, and rather says it measures peaks in sales activity, jobs, industrial production and income growth.
The US already has had something of a lost decade, Rosenberg reasons, citing stock values still around 1998 levels and little net job growth.
This is occurring even despite unprecedented policy measures including a massive monetary easing campaign from the Federal Reserve and about $800 billion in government stimulus.
”Simply put, an economic depression occurs only once it becomes painfully obvious that the markets and the economy are failing to respond to repeated bouts of policy stimulus,” Rosenberg said.
While Rosenberg is certainly out of the consensus in discussing a depression, he is not alone.
Harvard professor and economist Niall Ferguson recently projected a “mild depression” (if there can be such a thing) as have other economists including the noted “Dr. Doom” Nouriel Roubini and HSBC’s Stephen King. The latter two, though, have raised risks of a depression and have not stated, like Rosenberg, that one is actually under way.
Most economists, rather, have confined their predictions to recessions and mild ones at that.
Jan Hatzius at Goldman Sachs [GS 94.68 -3.25 (-3.32%) ] recently said there’s a 40 percent chance of recession, but even at that sees “the main downside scenario as a shallow recession followed by a slow recovery.” Similarly, Deutsche Bank economists recently noted that if leaders fail to find satisfactory solutions to the European debt crisis, “the prospects for a moderate dip in GDP will grow.”
Some economists, though, have been doing their utmost to find silver linings that defy recession probabilities. Jeffrey Greenberg at Nomura Securities, for instance, cited a rise in construction spending in August to reason that second-quarter gross domestic product growth would come in at a decidedly nonrecessionary 2.5 percent.
Recession-themed newsprint cuttings
Representing many of the economic voices out there, Citigroup’s Robert V. DiClemente pondered whether the current period should redefine the way recoveries are considered.
“Perhaps we should label this period a convalescence instead of a recovery in recognition of the ongoing attention to saving, deleveraging and balance sheet rebuilding,” DiClemente said in a note. “Flat is the new up and subpar growth has redefined optimism.”
Yet it is some of those very conditions—the slashing of consumer debt (or deleveraging), reticence to spend and general risk aversion—that helps drive Rosenberg’s depression case.
“It will take time and shared burden by lenders, households and future generations of taxpayers before we hit bottom in this credit contraction,” he wrote. “Time is certainly going to be a big part of the solution, and history tells us that the deleveraging cycles last years.”
Indeed, ominous signs abound.
Strategists at Bank of America Merrill Lynch earlier this week published a note with the sub-heading of, “The chart that keeps us up at night.” The particular chart in question tracks the bond yield differences, or spreads, in the European financial credit default swaps market .
The instruments are insurance against debt defaults and the spreads, BofAML says, have gone 0.70 percentage points or so beyond their levels at the 2008 financial crisis apex. The same spread for US financials is only about 0.40 percentage points away from late 2008, while high yield spreads are right at the point they were the day before Lehman Brothers went bankrupt.
Scary stuff, even for a firm saying that the chance of a recession remains below 50 percent.
“The experience of 2008 has taught us that once the level of distress in the financial system reaches a certain level, it can become an uncontrollable force, with the potential to push market participants into deleveraging as counterparty exposures are being cut,” the firm said.
“We may not be at that point yet, but we believe we might not be too far away from it, and with the markets behaving the way they have over the past few weeks, we could get there quickly.”