That's the funny thing about momentum, it gathers strength and speed and mass - or at least, I seem to remember that was what I was taught as I dozed off during Physics lessons all those years ago. Anyway, it is certainly true when you apply it to the behaviour of markets, and when it comes to the market in euro debt owned by various European nations what began as a slight shift is rapidly turning into a landslide. I said in a post below:
The markets have shown scant enthusiasm for this Irish stitch-up, they know, because they can and will bring it about, that Portugal is next, and once that has been 'rescued' they will swivel their guns away from the tiddlers and towards a really big, prime target - Spain.
I was wrong! 'The force is with us' and the money-lenders are not content to take down one country at a time, they are looking to bring down the entire 'EUSSR'. Bond yields for Irish, Portugese and Spanish bonds have now reached heights not seen since the inception of the euro. So the indications are that whilst Portugal is already targeted, so too is Spain. And if their banks are forced to 'get honest' and 'fess up exactly how much their 'iffy' loans amount to the landslide will move towards a tectonic plate shift! One particular problem troubles the Spanish national government because most of their banks are regional and either owned or supervised by regional governments, and they have no idea exactly how much those banks are owed by the property developers who covered southern Spain in zillions and zillions of villas and appartment blocks which remain empty and unsaleable. And we need to worry because according to a report last April, Santander which moved into Britain and bought up so many of our building societies and banks to the point that it now almost dominates the High Streets was exposed to around 24bn euros of dodgy debt. Some experts are now even suggesting that France could be the next in line - quelle domage!
Brussels has its knickers in a twist because it know that even with their glittering new rescue fund they simply do not have enough 'readies' to bail everyone out. 'Kaiserin' Merkel was approached but 'she was not amused' and word is that the Germans will write out no more cheques:
The apparent disagreement between Brussels and Berlin comes amid uncertainty among financial-market participants over whether the funds that Europe has set aside for rescuing stricken euro-zone members would be enough to cope with a possible financial meltdown in Spain.
Support from Germany, Europe's largest economy and biggest contributor to the bailout fund, would be essential to push through any increase in the fund.
The Brussels hierarchy haven't a clue how much all those dodgy loans amount to because so far, I reckon, they have been very careful not to enquire too closely as they sit in their glass counting-houses crossing all their fingers - and their toes. It is enough to know that their Committee of European Banking Supervisors (please, that's very rude, show some respect!) produced a report last July stating that 84 of the 91 European banks inspected had passed their tests - that included Allied Irish Banks and Bank of Ireland. Oh, Paddy, it's the way you tell 'em!
Anyway, as I used to ask, many years ago until I gave up because answer came their none, did the earth move for you? No? Well stick around, kid, you ain't seen nothin' yet'!
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