Draghi - whatever it takes (within my mandate).

http://www.telegraph.co.uk/finance/financialcrisis/9427721/Euro-exit-beats-begging-bowl-says-Spanish-elder-statesman.html

There’s no doubt Cascos is right, both as to the only rational remedy left to the Spanish people and to do it in a way that bankrupts all the German banks. He’s also right as to the utter incompetence of the Spanish government.

http://www.telegraph.co.uk/finance/financialcrisis/9433140/Debt-crisis-Angela-Merkel-and-Francois-Hollande-pledge-to-back-euro.html

http://www.telegraph.co.uk/finance/financialcrisis/9428894/Debt-crisis-Mario-Draghi-pledges-to-do-whatever-it-takes-to-save-euro.html

Achtung! – the Euro-Pols and monetary techno’s are at it again. "We’ll do “whatever it takes”" they chant as mantra. Except when it comes to the only moves that might work, they baulk (understandably) – at least the Prussians do. So they are trying to talk the Euro out of the ditch again. Or at least attempting to bridge to one more weekend; when with any luck the ineffable Mitt Romney telling the Brits they couldn’t run a p—s-up in an Olympic brewery, right as the opening ceremony starts, should divert attention. Notice they are only talking about Spain and Italy and sotto voce admitting that the Greeks are at the mercy of the Troika and big beast Barroso down Athens way trying to figure out the (cooked) books (probably all Greek to the lot of them). What they do know is that the wheels have fallen off the Greek chariot, all the oil has leaked out of the sump and the well-flogged nag is as dead as the Dodo bird in the traces. The only option for the wise men (that’s sarcasm pure and simple) is to get out the fudge cookbook and dream up something tasty, sweet, and cloying. The Bu-Bankers will spit it right out and laugh it to death, but who cares? That’s Frau Angela’s problem. The Greeks are Toast (that's German for toast!).

http://www.telegraph.co.uk/finance/financialcrisis/9430537/Sceptics-abound-as-Mario-Draghis-ECB-bond-bluff-electrifies-global-markets.html

Ambrose here. Plenty of commentary support for this being one more kicking of the can, a Hail Mary in football (USA style) parlance, a transparent attempt to create a bear covering squeeze before the Olympics obliterates all other news and allows the pols to head for the hills and hope the bond vigilantes have fallen asleep with boredom at hearing the same sorry story, over and over and over …. However capital looking for higher ground as the floods creep remorselessly upward rarely ceases. In this case it has its compass and GPS set to north. Switzerland, Germany, Denmark, Norway, UK, even Sweden. And for those still true believers, Uncle Sam’s own greenback. The great recycling continues via the ECB. You can bore some of the bond vigilantes some of the time but you can’t …

Draghi and his abettors are now seriously in hostage to their own rhetoric. If they start buying Spanish and Italian bonds by the truck-load next week (as they appear to have promised) they can expect to meet the Bu-Bank with all its heavy artillery pieces drawn up on the Siegfried Line. Draghi will be a brave man if he walks on into the blitzkrieg – cannon to right of him, cannon to left of him volleyed and thundered. Talking of Siegfried, last night was the season opening at Bayreuth with Frau Angela in attendance wearing the same dowdy frock as last year. Are the Germans that skint or was she making a point? Fortunately it was a highly controversial new production of Die Meistersinger von Nürnberg; directed by Katharina Wagner – complete with full frontal nudity – and not a revival of Götterdämmerung. Took everyone’s mind off Greek tragedy at least.

http://www.telegraph.co.uk/finance/financialcrisis/9434445/Germany-must-decide-if-it-really-wants-to-save-the-euro.html

http://www.telegraph.co.uk/finance/financialcrisis/9434768/ECB-president-Mario-Draghi-to-meet-Bundesbank-head-Jens-Weidmann.html

http://www.telegraph.co.uk/finance/financialcrisis/9434497/Spanish-bail-out-impossible-experts-warn.html

Evermore of what the Germans (and their Baltic and North Sea acolytes) have to do to save the Euro. Cartloads of the “whatever it takes” kumbaya. Except Das Volk doesn’t seem to agree and Herr Weidmann is convinced his compatriots are correct. It remains in the firm embrace of  Teutonic hair-shirtism. And who can blame it (das Volk, die Leute that is). But neither Jens and the Bu-Bankers nor Das Volk nor mercurial Wolfie Schäuble have yet been able to persuade die Kanzlerin to face up to the consequences and tell Hollande the gig is up. "Whatever it takes" is ultra vires everything that Germany believes to be existential. Sauve qui peût. Let the chips fall. Take the ECB – please. Adoption of the Deuro by Germany and Co is the only reality. The Euro and the ECB can be the playthings of those whose romantic illusions wished them into being against all sanity and rational economic discourse. Bring back Jack (Delors) to clear up his own mess.

When Gen George C Marshall rolled out his plan in 1945 to restore Germany’s economy, it was born of highly enlightened self-interest. It was vital also to keep our friendly ally Joe Stalin stalled on the Elbe for the next 50 years and limited to only a quarter of Berlin. JFK realized the challenge when Khrushchev’s adventurism and probing of US resolve was manifest in Cuba and the Berlin corridor in the 60’s. But I suspect the Germans themselves don’t see any parallel in a need to defend from another own goal of adopting the Euro and designing it like the D-Mark in the first place.

We are about to find out what Draghi means by “whatever it takes”. Always assuming he can deliver.

Simon

Dastardly Doings of the Dirty Digger

Oh, boy, the Old Bill and the DPP have brought the hammer down on two of the Dirty Digger’s deppity dirty diggers. Rebekah and Andy. Close personal friends and drinking buddies of Dodgy Dave and little Georgie O. of the Chipping Norton, riding-to-hounds, sherry-in-the-stirrup-cup set. Probably co-conspirators too in all manner of dodgy spin enterprises. Downing Street at both Numbers 10 and 11 must be feeling very squeamish about what these pillars of the London media and doctors of spin will be induced to say by the Queen’s prosecuting QC on the stand. Or will they be forced to cop a plea or remain silent in their own defense?

Damian Thomson below suggests that there are no adults in Downing Street; a charge with which it is hard to quibble. It’s regrettable that Eton College and Oxford University feature as suggested contributors to this political malaise. The list of PM’s and Chancellors of the Exchequer with similar educational backgrounds is a long one and many highly regarded statesmen are numbered among them.

http://blogs.telegraph.co.uk/news/damianthompson/100171984/cameron-osborne-and-friends-adolescent-snobbery-at-the-heart-of-government/

http://www.telegraph.co.uk/finance/debt-crisis-live/9422024/Debt-crisis-live.html

You have to read this live action piece of Euro-Farce and marvel if not wonder. The video of Nigel Farage speaking to the European parliament is a classic well worth the price of admission and not to be missed. (I know there are those among you who don’t rate NF too highly, but he sure pins one on that gutless, spineless wonder of a Brussels Troika – Van Rumply, Barroso and Renn. Not least because, in this instance, like the man or not, he’s right on. He’ll be doing UKIP’s numbers no harm among the Tory backwoodsmen with such sterling oratory). We are also told that the other Troika is almost Johnny on the spot in Athens and the huge news is that big Euro-Beast Barroso will be joining them. He’ll help them come to the conclusion that Greece is as bust as a sovereign can get. Massive debt redemptions looming in August, GDP in free fall, the Greeks “hugely off track” in imposing austerity upon themselves. Perhaps Barroso is there to threaten the Troika into donning the rose tinted specs so that another tranche of real money can be poured into the bottomless pit. Or is he there to tell Samaras that there is no scope to renegotiate so he should go quietly? And now fresh from Berlin, a suggestion that the Affens beautician should be sharpening the tools of his trade to apply another ‘aircut to a bunch of baldies.

http://www.telegraph.co.uk/finance/financialcrisis/9427192/Debt-crisis-Greeces-bondholders-could-face-more-losses-says-Berlin.html

http://www.telegraph.co.uk/finance/financialcrisis/9424793/Europe-is-sleepwalking-towards-imminent-disaster-warn-top-economists.html

http://www.telegraph.co.uk/finance/financialcrisis/9424923/Debt-crisis-Greece-to-run-out-of-money-by-August-20.html

And so, with the weather turning to serial scorchers in the Home Counties and Sarfeast and the Olympic spectacle imminently to begin, August just around the corner and traffic snarled from Swindon to Stepney-by-Bow, it may be a good time to ignore the Euro and its practitioners, settle back with the TV and a large G&T and allow the Euro Great & Good to head off to their summer fleshpots unmolested. It (the Euro-Crisis) has become less than funny and given its truly horrendous potential to destroy, hardly a good source or target of black humour and sarcasm. They are going to make an horrendous mess of it, that we can guarantee, so good taste suggests it’s time to grab a piece of Brighton Rock and bury our collective heads in the sands of Scarborough. When we emerge, something big may have been rent asunder with a bang or a whimper, but we can meanwhile continue to grow old with our trousers rolled. Die Kanzlerin would be well advised to take one of her long and bracing walks im Schwarzwald where Hollande, Rajoy, and the Mario’s cannot find her.

As for poor Spain, we can only weep – from Franco to Euro-purgatory in a heart-beat.

Simon

Pincher & Spanker

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100018824/germanys-twin-euro-martyrs-tell-merkel-to-put-up-or-break-up/

http://www.telegraph.co.uk/finance/financialcrisis/9410275/Monti-plans-Greek-style-takeover-of-Sicily-to-avert-default.html

http://www.telegraph.co.uk/news/worldnews/middleeast/syria/9410184/Syria-Assad-facing-the-end-after-Damascus-bomb-attacks.html

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100018882/imf-loses-all-faith-in-the-euro-project/

http://www.telegraph.co.uk/finance/financialcrisis/9413545/Spanish-debt-crisis-returns-as-Germany-nears-bailout-fatigue.html

For those of you not of a totally nautical persuasion, I should perhaps clarify my remark about Diamond Bob being a “serial pincher”. I did not mean to imply that he had or has a penchant for grabbing the flesh (of ladies’ derrières, for example) twixt thumb and forefinger. “Pinching” in the yachting context means steering a course that is closer than ideal, given the rig (or if you like, in Diamond Bob’s case the cut of his jib), to achieve that elusive objective of the optimal VMG to windward, aka to weather. “Sailing too close to the wind” is the Old Lady’s terminology and banking metaphor but “pinching” is linguistically much more economical. As far as I know, Bob has never worked for the BBC; where I believe the other kind of pinching is endemic. I believe “spanker” is also in nautical usage; though since it is a generally downwind piece of canvas, only experts can pinch and deploy the spanker at the same time.

It was a very bad day at the office yesterday for that nice, urbane, ex London optometrist, Bashir al-Assad, bin Haffez al-Assad. A substantial clique of his closest rels and buddies were inconvenienced with extreme prejudice while plotting further mayhem for their perceived enemies (any non card-carrying Alawite or close relative by marriage thereof inside or near Syria’s borders). Hard to feel too sorry for those in proximity to the blast. But very brave of Assad to summon up the courage within 36 hours or so of the detonation to be shown on Syrian TV swearing in the Army CoS as Defense Minister. How did they know there wasn’t another bomb in the flower pot?

According to press reports the redoubtable Wolfie Schäuble today successfully persuaded the Bundestag to approve Germany’s contribution to the Brussels sandbagging Spanish bank bailout. It seems the approved motion makes it quite clear that the terms are as stated by the Bu-Bank and bear no relationship to the deal that the other infamous Troika (Hollande, Monti and Rajoy) – the lame ones – believed they had extracted from die Kanzlerin. It appears they mistook the nodding of her head at 4.00am to be accession to their sandbag. Either way, Spain, the Sovereign is on the hook. Whether the loan can in practice ever be drawn on is another interesting question and we must await publication of the conditions precedent buried somewhere in the small print (helpfully written in German and subject only to Bu-Bank interpretation). It cannot bode well that the Bundestag approval relied on opposition SDP votes for passage. Doubtless you are all much better informed than I but it remains to me a mystery how this much-debated Spanish bank bail-out is going to work. Or is it a bail-in? (What’s the difference – sounds like heads I lose, tails the Bu-Bank wins? – Ed).  The EFSF funds go to the Spanish bad bank fund – as a loan at interest? But guaranteed by the Sovereign, that we know. A guarantee we also know to be essentially worthless. Not to worry, the funds are then transferred to the relevant banks. As equity, senior debt, subordinated debt, mezzanine debt with warrants, pref stock, via a holding company, or to repeat myself as bowls of paella? How do these EFSF funds rank relative to the man on the Barcelona omnibus’ checking account cash deposits. Many of these worthies in recent and very living memory were suckered into buying instruments of some sort (torture?) from these self-same banks, touted as sound high-yielding investments, only now to find they are being bailed-in and rendered worthless. Anything more conducive to a run to the bank, followed immediately by a run on the bank would be hard to devise.

Poor Super Mario 1 Monti. Right at the worst moment, up pops Il Regno di Sicilia with a threat to fail to pay its bills or make payroll. Ambrose tells us that the sitting Governor of the Autonomous Region, Rafaele Lombardo, is under investigation for Cosa Nostra links. You think! Thus do the Euro-Club-Med dominoes fall. The entire Mezzogiorno is trembling.

All facetious sarcasm and other high forms of witticism aside, the fate of Spain does appear – in spite of distracting explosions in Damascus and melodrama in Palermo – to be hanging by a thread tonight. In most recent photos it appears Rajoy hasn’t shaved for a week or so. Unemployment is reported to top 32% in Extremadura and public servants paraded in the streets throughout Spain today – no doubt during office hours – so who can blame him. The IMF is busy throwing fuel on the fire and clamoring for “more Europe” (little tax-cheater Timmy Geithner conducting the choir, no doubt), as the only way to appease the gods, the bond vigilantes, and those who would take their Euro’s and place them in the mattress, if they can’t get to the Bu-Bank first. The large fly in the IMF’s ointment and unguent is that Das Volk appears to be up to here with the amount of Europe they already have and are not exactly clamoring to take on more. The Court in Karlsruhe is studying tea leaves and is not about to release a cloud of white doves. Who knows what conversations are going on behind the German curtain? The Bu-Bankers have probably confiscated Die Kanzlerin’s passport to ensure she stays in Berlin where they can protect her from any more flying sandbags.

So the Euro-drama in umpteen acts continues to unfold. The players are exhausted, the orchestra is asleep in the pit, the conductor’s baton barely twitches, the director is tearing his hair and the prompter went home days ago. Bring on the Epilogue before we all die of boredom. Or perhaps the dog days of August will arrive first and we can all decamp to our hammocks in the sun; there to recharge our depleted batteries and return in September for - more of the same.

Simon

Bunga Bunga Mozzarella Risorgimento

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9404454/Libor-scandal-Diamond-gave-fix-order-says-former-right-hand-man.html

Poor Diamond Bob, they’re ganging up on him ‘cos he’s not a Brit from the right school. Always good to experience your chief subordinate plunging the stiletto between the blades, while chatting up a posse of MP’s in the House. With Cowes Week in the offing, it’s reassuring to learn the Old Lady (our Sir Merv of Teflon), and his buddies Turn’er and Tuck’er (the evil regulatory twins) believe that sailing too close to the wind (aka pinching) is OK but not five times and after four warnings. So out went the signal to Agius and Sir Somebody Rake (of Progress fame?), his Deppity Chair, to be summoned to the Star Chamber and there advised that Diamond Bob is a serial pincher, not “one of us” and needs to fall on his marlin spike. But Del Messier (is he English ? – Ed) got there with the stiletto first in the Commons Chamber.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9405794/Barclays-in-denial-over-regulators-lack-of-confidence-in-management.html

I guess the Barclays Board, under the gaze of Diamond Bob, decided, after applying its telescope to its blind eye when the semaphore and flags came fluttering from the Old Lady’s battlements, that throwing Marcus Agius overboard might be enough to appease the Sirens. But no, the signal clearly indicated it was Diamond Bob who was standing the Barclay’s Brig onto a lee shore and into imminent danger of pinching one time too many. One (English)man doing his duty was all well and good but (The Bank of) England expects everyman to behave as honourably and do his respective dooty. As for an American skipper: straight through the scuppers into the foaming main.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9407232/Barclays-hoped-to-tough-it-out-and-retain-Bob-Diamond-as-chief-executive.html

I doubt if “Barclays tried to tough it out and retain Diamond Bob, the indispensable”. It was Bob, by sheer force of his intellect, modesty, integrity (enough sarcastic plaudits – Ed) who thought he could hang tough and face the Board down. Once the Old Lady’s plucked eyebrows start twitching in earnest, Bob asked not for whom they twitched … and offered Agius the poisoned chalice.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9407257/HSBC-boss-quits-for-failing-to-stop-money-laundering.html

What a dangerous sport banking is. Now it’s HSBC’s turn in the dunk tank. Exfenestrating the CCO (Chief Compliance Officer to the uninitiated in banking parlance) is always a ritual move when the hard men with violin cases come calling. But surely it won’t be long before the Lilliputian regulators go for Gulliver himself and demand he tie himself down. Then it will be Lord Green (HM Minister of Trade and Industry), to have his collar felt by the Old Bill with an extradition warrant from the Feds. They’ll go down to a man counting their severance and spouting the bankers’ credo “accountable but not responsible – we had the CCO there to take the blame and the fall”. The CCO is only there to provide plausible deniability.

http://www.telegraph.co.uk/news/worldnews/europe/italy/9406507/Italys-Mozzarella-King-arrested-over-contaminated-cheese.html

From dirty deeds among the UK’s banking élite to the more prosaic world of high Italian corruption and cheese-making. The stuff is made near Napoli – who didn’t know the Camorra was running the show (and paying off all the politicians)? Whatever next – a Bunga Bunga Berlusconi Risorgimento??!!

It’s an ill wind … The phoney war may not last the summer.

Simon

Clouseau de La Deuxième

http://news.yahoo.com/exclusive-barclays-diamond-turns-top-lawyer-libor-scandal-025358403--finance.html

Master of the Universe, Diamond Bob is here reported to have hired Jon Corzine’s ultra-high-priced defense (criminal) lawyer in NYC. Corzine is the ultra-pol/Master of the Universe, ex Goldman Sachs, ex Governor and ex-Senator from the well-known, Mafia and Union dominated state of New Joysey. Corzine appears prima facie to be responsible for the disappearance of $1 bil bucks of his now bankrupt firm’s clients’ money. So Diamond Bob is in good (criminal) company. Like most Masters of the Universe, Corzine’s a Democrat. Other notorious examples of the breed are Hank Paulson, Goldman Sachs (Chairman & CEO - ex), US Treasury Sec - ex.

http://www.telegraph.co.uk/finance/newsbysector/industry/9400090/Francois-Hollande-Peugeot-job-cuts-are-unacceptable.html

Hollande to Peugeot SA – of course you cannot reduce your workforce nor close a factory, even if you cannot sell enough cars to justify keeping them on. Why on earth do you think you’re in business at all? A) to follow government orders, B) to follow Union orders. (BTW, the government follows Union orders). Can we be more clear? Let MBZ and BMW eat cake.

http://www.telegraph.co.uk/news/politics/tony-blair/9397831/Tony-Blairs-back-and-hes-dangerous-for-the-Tories-and-Labour.html

Observe, read and be very afraid. Now that A. Blair and his consort Cherie have made their multi-millions fixing the Middle East and Kazakhstan (one of the Stans anyway), Tone is bored and is waiting to be called on to fix Europe.

http://www.telegraph.co.uk/finance/comment/rogerbootle/9401514/Eurozone-rescue-without-growth-means-Finland-could-be-first-to-leave.html

The Euro front is in a lull for the moment. Perhaps because the Karlsruhe redcoats say they are going to take their sweet time to save die Kanzlerin from submitting to the Brussels sand-bagging by Club-Med (where they probably slipped her some GHB). Bootle makes a good point about the True Finns. They live on a bracing diet of over-proof vodka, very hot steam baths, followed by self-flagellation with privet hedge and rolling in the snow naked. They should be able to see off Club-Med, no problem. The soft under-belly of Europe as Sir WSC reminds us.

So another phoney war among Euro-combatants appears for the time being to have broken out. We’ll just have to listen for the sound of crockery crashing to the floor somewhere in Madrid.

http://www.telegraph.co.uk/news/worldnews/nicolas-sarkozy/9401446/Christine-Lagarde-and-Nicolas-Sarkozy-embroiled-in-new-corruption-inquiry.html

You’ll enjoy the photos of Nicko and lovely Christine. The Deuxième has them both in its dodgy dossier for egregious ministerial misconduct; which usually has to do with off the books corrupt election funds. Can Insp Clouseau make this one stick?

Simon

Huffing, Puffing & Liboring

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/9390719/Germans-in-court-battle-to-block-eurozone-bailouts.htmlcoats

Ambrose is on a roll now. Delving ever deeper into the Prussian psyche to tease out the reality of the relationships zwischen der Kanzlerin, Herr Stäuble, Jens Weidmann, the Grundgesetz, the Bundestag, the federated Länder in the Bundesrat, the redcoats of Karlsruhe, dem Gebrüder Grimm and the Pied Piper of Hamelin. Looks like President Gauch has a more than ceremonial role to play to keep the government out of Spandau. Such constitutional niceties - the terms of treaties, the charter of the ECB and national laws are all foreign to the philosophy of arbitrary rule by self-electing, self-perpetuating élites that informs Club Med practice. Separation of powers - zut alors, ma derrière. (See also little Nicky Cleggy, the Deppity PM below). So they have a very hard time even paying lip service to such Anglo-Saxon peccadilloes. They have a pressing and desperate need, what they so lack is in the gift of Germany, ergo Germany should pay - pronto, subito, NOW! Can’t they feel our pain? It’s only our due under the secret codicils of the Treaty of Lisbon (Prop. Valéry Giscard d’Estaing), - or was it Nice? Whatever. Which simply say the French call the shots, the Germans carry water and chop wood (and hew coal if they feel inclined) and the Brits can pay but go to hell. Ask von Ribbentrop and Molotov.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9390668/Libor-scandal-Bob-Diamond-says-allegations-unfair-and-unfounded.html

“S’not fair!” cries Diamond Bob. “I wasn’t lying. In fact I cannot have been lying to, nor even misleading, the Commons. I’m a banker – we can no longer tell LIBOR from lying. I wasn’t even “less than candid” and you guys are now besmirching my reputation for probity, self-denial, modesty, honesty, integrity, my-word-is-my-bond, right down to my last pair of gold cuff links. It was Agius wot was lyin’; he’s a Brit so he’s hangin’ me out to dry. S’not fair at all. I demand a recount”.

I wonder who’s advising Bob in his PR campaign to win the hearts and minds of John Bull six-pack. Were I to proffer counsel, it would involve getting into his G-V at dead of night for destinations unknown and taking the rest of the summer on the beach. Say in Saint Trop, where no one will recognize him nor care who he is. Very hard for a consummate Master of the Universe to keep a low profile. So he’ll go down fighting. As an alternative, I’d advise taking a charabanc load of inner city kids from Bow to Sarfend-on-Sea for whelks and ice-cream. Show a bit o’ class, Guv.

When bankers’ reputations plunge below even that of MP’s, we are at a pretty pass.

http://www.telegraph.co.uk/news/worldnews/francois-hollande/9391461/Francois-Hollande-falls-into-trap-to-look-like-dwarf-alongside-Coldstream-Guards.html

It will seem like I’m picking on poor François Hollande before even his little legs are under the Élysée desk. Bad enough his name is Dutch, he’s also 2” taller than the late unlamented Snarkozy but that doesn’t graduate him out of the vertically challenged category. So the Coldstreamers gave him all the deference he deserved while being reviewed in London. When a guardsman is 6’ 2” and then he wears two feet of busby on top of that, a Président of 5’ 7” is going to have a very hard time looking Presidential. The Brigade of Guards surely cannot have set him up intentionally? That would be unbecoming for the head of State of a close and much loved if not trusted ally. We won’t even mention the vertically challenged Corse and his days at Waterloo preparing for his long vac in St Helena. The story doesn’t advise if M. Hollande had arrived at La Gare de Waterloo via Eurostar. Maybe he can revive his spirits when returning to Paris via la Gare d’Austerlitz and Les Invalides.

http://blogs.telegraph.co.uk/news/iainmartin1/100170109/is-nick-clegg-a-bit-stupid/

I guess it had to happen – someone finally had to ask the question. Is the Deppity PM a bit of a dim bulb. Bright enough to catch Dodgy Dave in his headlights, I guess, but way too low a wattage to figure out the Tory back-benchers, back-woodsmen, lobby fodder, and little Englanders from the Shires fomenting subordination if not treason in the Commons watering holes. Fresh from his clinical castration on the subject of PR, he went for the prerogatives of the Lords spiritual and temporal and was quickly trapped with no way out, by the Tory pack in full cry. Just as well the Master of the Hounds was there to call them off before Cleggy was despatched in the traditional way (which of course is now proscribed by the warm and fuzzy Control of Foxhunting Act. The legal method involves the Master carrying a rifle to put the quarry out of its misery – which really would have represented a quandary for Dodgy Dave).

http://www.telegraph.co.uk/finance/comment/jeremy-warner/9393587/Proud-Spain-again-humbles-itself-to-the-euros-demands.html

The Greeks must be feeling very grateful to Spain. The Euro-limelight has been usurped by a much more prolific sinner. Rajoy has nowhere to turn. He must choose the rock (not Gibraltar – he’s played that card already) or the hard place. It is in Madrid that most likely something will crack with a loud report any day now. A run on Bankia perhaps with the ECB standing aside and letting the chips fall (on account of all Bankia collateral on offer smelling like old sardines). At that point, Rajoy will confront his only other option. Shut the banks and start printing nuevas Pesetas. When that happens, Super Mario 1 better be ready with a boat load of neo-Lira. It won’t be pretty.

Or the Germans could see the light and the Karlsruhe gang opine that “mein Euro-Haus ist dein Euro-Haus". We may not have to wait long to find out

Simon

Euro-Asteroid Alert

http://www.telegraph.co.uk/finance/comment/jeremy-warner/9387910/A-turkey-shoot-that-brings-little-good.html

http://www.telegraph.co.uk/finance/financialcrisis/9387970/Debt-crisis-ECB-pledges-action-as-southern-Europe-buckles.html

In case you were experiencing some mild concern, doubts, anxiety, palpitations, fainting episodes or even panic over the fate of the Euro and its Club-Med fraternité, Ambrose’s latest offering will moderate your symptoms if you believe fervently in dem Weihnachtsmann. We read “The European Central Bank has vowed to do whatever it takes to hold the Euro (€) together after the North-South gap in borrowing costs reached fresh extremes (today – July 9^th), pushing the two halves of monetary union closer to breaking point”. (How close can they get? – Ed). The occasion for such pledge can be found in all the signs of full, hair-tearing panic breaking out across Madrid. Plus the bond vigilantes pushing Spanish 10 year yields back over the witching 7% level. The Italians know Spain is the hors d’oeuvre and they are the main course.

It really just is not about Greece and Cyprus, Portugal nor Ireland any more. The water is pouring over the transom again for the two big Club-Med whales. So their respective Cap’n Ahabs are screaming for the Euro-Panacea of “massive ECB intervention to cap our yields, buy our worthless IOU’s which no one else will touch, please, pity please, guys, the ECB is the only finger left in the dyke with the money, fire-power, bazookas, (all aka the great printing press in the sky - Ed) to SOS. Now would be a good time to start SOS’ing because otherwise tomorrow we’ll have to ban the import of Mercedes Benz, BMW’s, machine tools, leder-hosen, brat-würst und sauer-kraut".

However, before you dispense (sic) with the Valium, there’s a bit of a snag. The keys to Super-Mario 2’s printing presses in Frankfurt are locked up in the Bu-Bank’s vaults in Berlin and schon die Kanzlerin den Schlüssel hat. If need be she knows how to turn out the lights at the ECB for non-payment of the bill.

So the crowing of le petit coquelet (nain, peût-être? – Ed) français François, des deux concubines, Mariano and Super Mario 1 (les concubines sont Valérie et Ségolène) after sandbagging Frau Angela at the last summit (which one was that – Ed?) was perhaps a trifle premature. Now they’re all arguing about who sandbagged whom and with what. Spain (the sovereign – Juan Carlos) will not be on the hook for its new €100 bil bank bailout from the ESM (doesn’t exist yet) says Brussels – oh, yes it will says Herr Schäuble – oh no it won’t says Mme Lagarde – oh yes it will … oh, no … first we have to create the supra-national banking supervisor, then you have to put all Spanish obligor assets in a bad bank (cf the Irish), then take the cripples out and euthanize same and then, but only then, if the ESM has been ratified by the Bundestag and if Herr Gauch hasn’t vetoed the legislation on account of a ruling from the wise guys and gals in Karlsruhe, and if the Dutch, the Austrians and the Finns agree in writing and are satisfied all Spanish gold has been shipped to the BuBank as collateral, we’ll authorize Super Mario 2 to buy a few bonds; recognizing always that all other Spanish (and Italian) creditors, bonded or otherwise, are thereby ipso facto, de riguer, do not pass Go, subordinated to …. No CAC’s, no haircuts, no pack drill, no …. Where was I? At least the bond vigilantes and little Georgie Soros are mighty impressed.

So when reading about an ECB pledge to do whatever it takes to -------- (insert your Euro-Fantasy here), please remember our lawyers are still drafting the small print, the (inordinate) cost of which will be added to the bill of all mendicant applicants, payable in cash, on the barrel-head, at the BuBank, in a hard currency of its choosing (probably CHF? – Ed) before your application will be accepted for processing. No refunds. Foreclose first, make the loan later – says the Queen of Hearts!

http://www.ft.com/intl/cms/s/0/c9de2906-c697-11e1-963a-00144feabdc0.html#axzz20BeK9LYS

Here’s Wolfie Münchau writing for the Financial Times of London. I think he’s onto something here. He concludes that at the last sand-bagging summit, the Euro-pols of the EZ did agree something – to wit to sand-bag one another. Honour is then even. I lie to you and you lie to me and we both know we’re lying when we see one another’s lips move – so that’s OK. We’ll say you agreed to bail us out but we all know, that you know, that when you get back to the BuBank bunker in Berlin, you’ll get a wigging from Herren Glauch und Weidmann and create all sorts of sine qua non’s and conditions precedent to initiating a discussion to come up with a plan. But that’s fine, because by the time the bond vigilantes twig to the ruse, it’ll be Monday and we’ll have enjoyed another weekend in the sun. Wolfie quite perceptively compares this behavior to the alcoholic, who by promising to himself and others that he’ll be in a position next week to give serious consideration to working out a plan to go on the wagon, can then with a clear conscience indulge the mother of all weekend benders. The whole Euro discourse and strategy boils down to presuming, ad arguando, that Monday won’t come. It’s quite subtle, dupes the masses and would impress George Orwell. The Aspidistra flies yet on the Road to Wigan Pier and Down and Out in Paris and London has been deferred, sine die. The probability that Monday won’t ever come is non-trivial given that one medium sized asteroid arriving in Europe could render the whole issue a nullity.

Münchau’s headline, however, strikes as being a non-sequitur. “Euro crisis will last for 20 years”. Hopelessly optimistic – by definition a crisis must break one way or another, and that quite quickly, or everyone gets bored with waiting and goes home. But he is quite right that no one can be seen to be contemplating the inevitable, with a view to mitigating its consequences, for fear and dread that so to be seen will itself precipitate the dénouement and Monday will dawn over a desolate landscape. It’s perhaps analogous to a super-saturated solution. The system has achieved an apparently stable quasi-equilibrium. But introduce one microscopic crystal and zap – everything goes pear-shaped in an instant.

http://www.ft.com/intl/cms/s/0/1385fc54-c699-11e1-963a-00144feabdc0.html#axzz20BeK9LYS

Also from the FT, Martin Taylor former CEO of Barclays Bank recounting his experience of Diamond Bob as a subordinate. In a few more words he describes him as an insubordinate crook. How will they provision for the legal costs alone of defending against every ambulance chasing tort bar spiv from the USA and beyond, hot on the trail of damages suffered by legions of widows and orphans from L’Affaire LIBOR de Barclays?

The road ahead appears as bumpy as ever.

Simon

German Poodles

http://online.barrons.com/article/SB50001424053111903857104577467200405790354.html?mod=BOL_hpp_cover#articleTabs_article%3D1

http://blogs.telegraph.co.uk/finance/jeremywarner/100018338/china-heads-for-a-hard-landing/

For those of you who find BRIC investing consistent with sleeping at night; here’s some less than favourable commentary about the future course of Chinese prosperity. This comes on top of serious doubts about the trajectories of other “miracle economies” – notably India, Brazil, and probably Vlad Vlad’s Russia (what with the price of oil and all). As an aside, a report in an edition of the WSJ just last week described India as the largest open air latrine in the world. All these economies/nation states are projected by numerous pundits to overtake the USA within 15 years in total GDP and GDP/head. Even with the USA in deep trouble and spotting them $15 trillion debt points, I’d still be wary of BRIC bonds. Stick with CHF and NKr for my money.

http://www.telegraph.co.uk/finance/financialcrisis/9379919/Debt-crisis-Greece-admits-its-off-track-on-bail-out-terms-as-troika-inspects.html

It’s very hard for the Fat Controller not to come clean and admit that Henry the Bad Engine and his whole train are “a bit off track”, when Henry and his rolling stock are lying on their respective sides at the bottom of a ravine. No doubt all 3HP of the Troika will find a way to un-de-rail them with the old rail-road rescue trick of smoke and mirrors.

http://www.telegraph.co.uk/news/worldnews/europe/cyprus/9378058/Cyprus-takes-over-EU-presidency-with-paean-to-Russia.html

It must be comforting to the Euro-great-and-good that finally they have a fully paid-up Commie from a tin-pot, half-Greek, half-Ottoman nation somewhere buried in the Sea of Islam, to act as their President. At the same time the President (of Cyprus and now the EU too) tells us he can get better terms for his much needed bail-out from his old buddy Vlad Vlad; whose only non-negotiable demand in return is access to a comfortable warm water port for his navy to rust to bits in the sun. Limassol will do just fine thank you and could he please eject the RAF from Akrotiri while he’s at it. Tartus is looking a bit dodgy right now.

http://www.telegraph.co.uk/finance/financialcrisis/9380851/Finland-could-leave-the-eurozone-rather-than-pay-other-nations-debts-says-Jutta-Urpilainen.htm

Here’s a pretty true Finn starting to give some cover for Angela’s retreat from Rome, Paris and Madrid.

http://www.telegraph.co.uk/comment/9383356/Britains-only-EU-hope-lies-hidden-in-Lisbon.html

Booker puts his finger on the need for the Euro-Sceptic part of the Tory Party really to start getting on Dodgy Dave’s case about his endless dissembling, prevaricating and double-talk over the rise of Euro-Fascism and where, if anywhere, his line in the Brussels sand-pit might be found.

http://www.telegraph.co.uk/finance/financialcrisis/9385231/German-president-tells-Angela-Merkel-to-come-clean-on-EU-debt-deal.html

Well finally we’ve heard from Ambrose. He must have been vacationing in Berlin. Which I guess may establish the end of our break from the slo-mo Euro-Train-Wreck; while we conclude sending our collective commiserations to poor Diamond Bob, a big beast of Euro-banking, whose modesty, invisible ego and brain-power proved inadequate to save him from the pillory, Tyburn and outer darkness beyond the limits of the Square Mile (where the pots of banker gold are buried). Clearly his Board comprises a bunch of self-serving, pusillanimous invertebrates who tossed Big Bob out with the bathwater as soon as the Tweets started arriving from Dodgy Dave, little Georgie O, Nicky Cleggy, Vince (another big beast), Millipede Ed and the Old Lady herself, Lord Merv of QE and Lord Turnover of FSA. Not to mention the mighty Lord Balls himself, a man whose self-worth evaluation eclipses even Diamond Bob. It wasn’t a real fight, so the ref never had to step in to save Bob’s bacon and the Board fluttered the white towel over Lombard Street for him long before he stepped in the ring. They’d have delivered his head on a pike at Temple Bar if it had been hinted by Merv that such a spectacle might save the Board’s own personal perquisites.

In any event, back to Ambrose. I’ve been wondering what Merkel’s next move would be after she was so comprehensively sand-bagged in Rome and other points Euro. Ambrose tells us she und Das Volk are not going to rely on a Kanzlerin volte face. With her hand-picked Wolfie the Poodle, the ex President, gone and Herr Gauck installed to replaced him; the latter seems to be taking his constitutional role and obligations quite seriously. As well he should, along with the Karslruhe gang in the red hats. They are either constitutionally relevant with legitimate powers to deploy and prerogatives to safeguard, or they are poodles too. (The same highly germane question could be posed to HM the Queen; she of the recent Diamond Jubilee (sorry Bob – ask not for whom the Bow bells toll), her Privy Council and other worthy advisors. Her 60 years on the throne has been one long transfer of the People’s Sovereignty (which I believe is in some way vested in her and the very word is used to describe her person to go with Her Britannic Majesty) to unworthy usurpers in Europe; who appear not to give a tinker’s damn about the UK, its history, nor the importance of its Commonwealth and the English Speaking Peoples around the world. And what of the Lords; whether in ermine or acting as the Highest Court of Law in HM’s Kingdom (now much reduced in stature by the modernising influence of barbarian forces, including successive Lords Chancellor, to “The Supreme Court” – very original)? Where is the Master of the Rolls when we need him? Whither has Walter Bagehot’s mysterious part of the UK’s constitutional construction evaporated; bequeathing the polity a vacuum at its heart?

It’s going to be another very testing week for that Club-Med Troika, the horseless ones, Francois, Mariano and Mario. I wouldn’t be betting on growff over austerity just yet. Christine, bless her, is fading fast into a bit part player calling monotonously for the sky to fall. She needs a new jingle to rescue her fading brand.

Simon

Le Greasy Pole Francais

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9374167/Stage-set-for-fireworks-after-Barclays-board-meltdown.html

Oh boy, the waters of the Thames from Blackfriar’s (memories of Roberto Calvi & the Banco Ambrosiano imbroglio), to Traitor’s Gate of the White Tower, to Wapping Steps, to the Isle of Dogs (aka Canary Wharf) are more than a little roiled this coming July 4^th by L’Affaire Barclays de LIBOR. Diamond Bob, a man known for his self-effacement, modest remuneration and controlled ego, plus his sybaritic Godolphin & Princeton daughter via Twitter, have just thrown the whole omelette simultaneously in the faces of Mervyn King, The Old Lady of Threadneedle Street herself, little Georgie O (temporarily of 11 Downing Street) and probably Uncle Tom Cobley an’ all. Quite a Prologue to a little chat and a cupp’a with the Treasury Select Committee in the Commons tomorrow. A very forceful move by an under-paid American in London to slag off the Government of the day, HM Treasury and the BofE with one fell swoop. He can forget the honorary KCVO or any other gong right now; rather being assured that the gong does indeed toll for him. The merits be damned, a City banker of any nationality, gender or sexual orientation has quite a short career half-life after explaining “It were the Deppity Guv’nor what made me do it, honest”. I think Diamond Bob’s pass to the biggest hospitality tent of them all in SW19 may be up for grabs, if the rain stops for the rest of the week, and those of his Chairman and COO too.

Talking of half-lives and in other strange news, a Swiss lab, acting on behalf of Al Jazeera, suggests that the noble and Nobel freedom fighter Yasser Arafat, aka Abu Ammar, may have been poisoned, on account of traces of that very nasty isotopic toxin Polonium 210 being found on his dishdasha or his frilly white unmentionables. Was he having tea with Mr. Litvinenko in the Ritz one afternoon, or was it with his buddy Vlad Vlad Putin? Surely not the same guys who bred the Stuxnet worm!

http://www.telegraph.co.uk/news/politics/nick-clegg/9374618/Nick-Clegg-I-feel-lobotomised-by-Government.html

I had always wondered what it was about little Lib Dem Deppity PM’y Nicky Cloggy. Now he reveals it was what we suspected all along – self-inflicted brain damage. Very sad. Worryingly, he suggests this should require new and ever more lunatic “policies”. Let’s hope the men in white coats take care of him first and help him into a room with upholstered walls; where he cannot hurt himself (or us plebes).

Of much more real concern and sadness is that two RAF Tornado’s could have collided over the North Sea with the apparent loss of two crew members (and death of a third).

http://www.telegraph.co.uk/news/worldnews/nicolas-sarkozy/9373919/Nicolas-Sarkozy-and-Carla-Brunis-house-raided-by-police.html

Le Vieux Guillaume à Paris has raided the home in the 16^th of M. and Mme. Carla Bruni; showing just how careless of them it was to let Francois and his courtesans take over l’Élysée. As in Italy, the most important reason to be top chien is that it bestows immunity from prosecution for a boat-load of crimes committed while clawing and scratching up the greasy pole. For Chirac, senility and dementia were a viable defense but the Bruni’s will find that one hard to pull off.

The Euro crisis is taking a break while the Troika tries to reconcile Greek debits and credits. There must be some mistake as the debits vastly exceed the credits until the books have been grilled, sautéed and deep fried. Normal service will be resumed next week.

Simon

Bankers in the Dock

http://www.telegraph.co.uk/finance/financialcrisis/9371153/Debt-crisis-Finland-threat-to-plans-to-unleash-ESM.html

The Finns are not going to follow Die Haus-Frau over the cliff (maybe).

http://www.telegraph.co.uk/news/obituaries/9365640/Count-Robert-de-La-Rochefoucauld.html

Just in case my tirades against le vieux ennemi is a sure sign of bigotry, please read this obituary. A Frenchman of great stature, courage, resourcefulness, humour and self-abnegation. Un vrai héros. A giant among pygmies.

http://www.telegraph.co.uk/finance/financialcrisis/9371196/Eurozone-joblessness-among-young-rises.html

This is Monti achieving reform success. Frightening to think what failure might look like.

http://www.telegraph.co.uk/comment/9366090/The-EU-has-opted-to-do-nothing-and-die.html

Look at the photo of von Rumply. A pitiful figure of a man. The President of Europe. Hard not to understand why even little Tony Bliar is so peeved at being passed over – for that! A man who couldn’t induce fear in a pork pie. Don’t even get me started on Barroso.

http://www.telegraph.co.uk/comment/telegraph-view/9364950/Merkels-retreat-will-not-solve-Europes-problems.html

Die Kapitulation der Kanzlerin. What does it mean and why did she do it? Why on earth did she give that petulant little nobody, Francois Hollande de deux maîtresses, the grinning pleasure of telling the world dass er ihn zu blinzeln geaufzwingen hat? Especially after all the fighting words to the Bundestag earlier last week. She may well have signed her own political death warrant. For what? But Richard; for Wales??!!

I guess it can be interpreted as one more kick of the can down the road. The sound of a death rattle. But look what it did to Euro12: the Italians were all over ihrem Jungen. Busted morale at home and a huge fillip to the enemy camp. To watch Monti, after failing to get any serious reform going in Italy, gloating at her must have brought back pictures of Mussolini hanging by his heels.

There are possible explanations, I suppose. Merkel is scared to death of being accused of bringing the Euro-house-of-straw down. So she’d rather run the clock a little longer. Bury the deal in the small print. Rely on the Dutch, the Finns and maybe the Austrians to do the dirty work for her. (Remind them of Der Anschluß). Pray for rain to wash the game out. The number of players left on the creditor side of the EFSF/ESM ledger is dwindling by the day. The mendicant numbers swell correspondingly. On which side will La Belle France end up when the chips are down? (I can hazard a guess at that one). Socialism writ large – eventually you really do run out of other peoples’ money to spend. (See the USA and the UK). Maybe the judges in funny red hats in Karlsruhe will do for her what John Roberts of SCOTUS fame could not do for the good of the USA. There’s many a slip …. And most of the time they’re all talking promises, promises (which is cheap talk as we know). They seem to have figured out how to spend the same Euro thrice at least.

So we’ve arrived at another Euro-vacuum. The can duly kicked, more empty promises made, the Troika in black suits heading for Athens where they’ll find the books still cooked and the gap between wishful thinking and fiscal reality widening by the hour. Another big slug of Euro-cash will be needed to allow the Greeks to continue vital imports, which they may or may not pay for. Another haircut all around is a fighting certainty. Summer silly season is upon us when the Euro great and good all repair to their seasonal villas and pretend it will all go away come September.

We’ll have to wait and see if they are right. Meanwhile I have to confess I mis-read the intestinal fortitude der Deutscher Führerin.

What is it about City bankers? Barclays’ Diamond (American) gone; Lloyds’ Daniels (American) gone, Lloyds’ Horsa-Ortario (Portuguese) still recovering, Barclays’ Agius (token Brit) gone, RBS’ Fred the Shred Goodwin (Scot) gone to the pillory, title stripped, bowler hat punched through. Can’t the Square Mile generate any native born world class bank execs these days?

I wish you all a very happy July 4^th wherever you may be.

Simon