Europe Takes A Dump

The EU Referendum has the details in a piece called Oh Shit.

"We face extreme danger. Unless there is immediate intervention on every front by all the major powers acting in concert, we risk a disintegration of global finance within days. Nobody will be spared, unless they own gold bars."

This is Ambrose Evans-Pritchard giving his take on the fast unravelling crisis in Germany. Mind you, The Times is not much more encouraging and Euronews is citing an IMF spokesman saying that the Eurozone is facing its first "trial by ordeal".

Clearly, the "colleagues" see the danger. The Independent is reporting: "EU leaders tear up rules of eurozone". The headline is misleading as it seems to apply to the whole of the EU. The story tells us that: "Public spending curbs and rules against state subsidies will be thrown – temporarily – out of the window to rescue European banks from the abyss of the global financial crisis."

The EU guys have more with links. Give them a visit.

Bloomberg says the dollar is doing good against the Euro.

Oct. 6 (Bloomberg) -- Treasuries rose for a fourth day, sending two-year notes to their longest winning streak in six weeks, as stocks fell and European bank rescues added to evidence a global credit crunch is deepening.

Investors sought the safest assets as European governments rushed to shore up their faltering financial systems, pushing yields to a two-week low. Germany's government and financial institutions agreed a 50 billion euro ($68 billion) rescue package for Hypo Real Estate Holding AG and BNP Paribas SA joined a state-backed bailout of Fortis, Belgium's largest financial services company.

``The flight to quality into Treasuries is still king as we now see the financial crisis hit Europe at full scale,'' said David Schnautz, a fixed-income strategist in Frankfurt at Commerzbank AG, Germany's second-biggest lender. ``Treasuries are the overall safe haven.''

Big surprise there considering the state of the U.S. economy. I guess our consolation prize is that Europe is in much worse shape. It is a case of our central bankers being morons and theirs being idiots.