Recovery Failure in Spain and Italy.

Just a snap shot of how well our fearless leaders’ solutions are working.

The Milan Index MIB

Its highest ever point was   44 364   on the week of 14 May 2007

Its lowest ever was                 12 895  on the week of 2nd March 2009

Today 8 May ’12                        13 936

So 3 solid years of hundreds of billions of Euros of Italian and European bank bail outs and the resultant austerity to pay for them and ….

Italy’s index is 1000 from the crisis low of ’09 and over 30 000 lower than the top.  Some recovery!

 

The Spanish IBEX

Its highest ever point was  15 759   on the week of Nov ’07

Its crisis low was                       7 815     in Mar ’09

Today 8 May ’12                        7 006    Lower than the point of crisis. LOWEST EVER!

Another stellar data point to support the case that our leaders fully understand the nature of the bank debt crisis, are not at all blinded by ideology and are definitely implementing the right policies to sort out the banks and share the pain equitably.

Spain and Italy are the two that no bail out fund yet devised, or ever likely to be, can possibly bail out. Yet Spain is, as we speak, bailing out another of its larger banks, Bankia, which just piles yet more debt on to the public purse which the bankers will then conveniently forget was due to them and claim instead as further proof of the failures of welfare and social spending.

The Greek stock market is now down at lows not seen since 1992. Greek bank stocks have lost 97% of their value since ’07.

The medicine of save the banks and cut spending on everything and everybody else is…. what?  The patient is dying. The doctors don’t give a shit.

The only good news from the day is this press release from the Greek Left coalition leader:

GREECE’S TSIPRAS SAYS WANTS INTERNATIONAL COMMISSION TO INVESTIGATE IF GREECE’S DEBT IS LEGAL

Now THAT would be epic. If it were to happen a lot of very dirty laundry would see the light of day and a lot of European and US banks and the polticians who have been bought by them (intellectually if not financially), would do everything within and without the law to prevent it.

 

38 thoughts on “Recovery Failure in Spain and Italy.”

  1. Golem,

    First of all, I hope my absence has been missed, I’m in the back of beyond with irrelegulat net access. It would help my ego if you just pretend! You raise a point I have being trying to make far and wide.

    It seems there is never any money for people, jobs or social causes, yey unlimited amounts for banks. This lie is now believed by almost nobody except a few Telegraph loons.

    I think recent elections proove that we are slowly winning. The blogs, like yours, are far more widely crfedible to real people than the utter tripe the MSN dish. JKeep it up Golem, I’m sure we’ll end up in the same gulag together.

  2. bill40,

    Hurrah! Only this morning were we all lamenting your absense and saying it had been too long by far since we heard from you. And now our prayer have been answered.

    How was that ? Any good?

    Seriously, where are you? What part of the back of beyond? Surely not the gulag already?

  3. The Dork of Cork

    @Goleum

    There was a brief report on RTE news showing a very hurried Irish CB governor entering some building.
    In it it said the authorties wish to create a central european authority to bail out insolvent banks !!!!

    So they wish to use our collective money for their pals.

    In the past such as Micheal Noonans famous letter of comfort they need our permission – the printing of money has always been a treasury function with CBs in Amercia for instance turning the stuff into Debt and currency (exclusively since the demise of the Greenback.)

    They have already broke article 123 – the part dealing with lending to insolvent banks (which goes against all CB / Treasury precedents) with this Anglo letter of comfort thingy (of course they still insist the production of goverments money must be created / loaned at interest)

    But this strikes me as a further banker centrialisation of power withen the eurozone – they will not even need our permission.

    This is much worse then the free banking crisis of the 19th century as they are using the actual coin of the realm for simple base extraction now.

    1. Yes I agree this is far worse. And like you I expect the financial class and their helpers will not allow mere laws to stand between them and doing whatever they deem necessary to protect their power and wealth.

      I do not think there is now anything they will not consider doing. Nothing.

      1. The Dork of Cork

        He has just produced 2 weird pieces of dialogue ,… a missive almost – as seen on the irish economy blog.

        He talks of Central banks being loaded up with unrenumerated paper as if CBs deserve to get interest off the states money supply…the medium of exchange.
        Even the FED gives back most of its interest since the 60s

        It was not non reserve base money which created this crisis ,

        I think Steve from Virgina says its best – lets print raw Treasuary paper into the medium and see how truely wasteful the CBs sisters bank “investments” truely are.

  4. bill40

    Good to see you back 🙂

    The news from Greece looks very encouraging, I’m hoping this ‘left’ led group can put togther a decent coalition. Could be an interesting week.

    Although they’ve been described as ‘far left’ in MSM, Ch4 news tonight had quite a good interview with one them. Reasonable stuff. Want to work with Euro countries, esp France, Spain Italy Portugal, but cannot accept the Merkel imposed austerity to the death mantra.

    Irish politicians doing their usual spineless/’captured’ routine. Insisting the referendum goes ahead on the Fiscal Treaty that’s probably already toast.

  5. I missed you too, Bill 30.

    Here’s the full list of 5 demands from Tspirus:

    * The immediate cancellation of all impending measures that will impoverish Greeks further, such as cuts to pensions and salaries.

    * The immediate cancellation of all impending measures that undermine fundamental workers’ rights, such as the abolition of collective labour agreements.

    * The immediate abolition of a law granting MPs immunity from prosecution, reform of the electoral law and a general overhaul of the political system.

    * An investigation into Greek banks, and the immediate publication of the audit performed on the Greek banking sector by BlackRock.

    * The setting up of an international auditing committee to investigate the causes of Greece’s public deficit, with a moratorium on all debt servicing until the findings of the audit are published.

    Very interesting times ahead it seems, whatever happens it’s good to see something of a fight back. There seems to be some talk of promoting growth rather than just austerity, but people like Draghi, ( in my opinion ),are probably likely to mean the kind of growth that comes from lowering workers expectations, cutting wages etc. Seems to me that this is the reasoning behind the method of their madness.

    Possible big test for Hollande’s anti-austerity street cred. as Credit Agricole seems to be deep in Greek shite.

    http://hat4uk.wordpress.com/2012/05/08/breaking-credit-agricole-will-be-hollandes-first-challenge-say-sources-4/

  6. I do not wish to be a conspiracy theorist, but has not this been all done before ,by the banking cartel. Create a crisis ,drive down the stockmarket, step in and buy up assets at cents on the dollar.
    Or has their greed allowed things to get beyond even their control. Has the system become so debased by their invention of complex financial instruments ,even they cannot figure out the end game.
    Is it contrived or opportunism.
    Sometimes we need to step back and see the big picture.

    1. Everybody can smell the bullshit because it reeks so bad. So bad. No amount of glossy, mainstream production can deodorise this truth. Evil hates the light, so at this recent rate we’ll soon find out the answers to your questions.

      One good thing about allowing a lie to grow so large is that the questions that need answering in time only get bigger. With any luck this will be the mother load.

  7. Hi Bill40!

    DANIEL, you are correct. But that is how credit busts go. If the sheep get a shepherd, then the profits can be small or confiscated/nationalized. This outright theft has, as Bill40 says, been bleedin’ obvious, even to those who rely upon MSM for info. Bush and Spitzer etc!

    The Argentinians are leading the way by nationalizing assets, having nationalized debt in the decade before!

    As the 99% clearly outnumber the 1%, drastic remedies without regulation are always possible. A rerun of the French Revolution with rulers now bankers and puppet masters, being punished is in prospect. I fell no sympathy. There was no Spitzer solution for Grace Livingstone or Brian McCabe. They were killed to ensure that Irish banks could continue to grow with the use of money being laundered from tax evasion. Those who took over James Livingstone’s jobs learned a lesson and ignored the non policing of DIRT and did not seek out branches of banks where the ex-manager could produce a list of tax evaders pretending to be non-resident. Instead, The EU approved a scheme whereby taxpayers would give $$ to depositors who left money with banks for five years, increasing the amount by regular deposits. A mad scheme! EU complicity!

    Counter cyclical? Hell, no! Get that money into the multiplier!

    Now the multiplier is working in reverse and interest on free money is dragging down burdened economies. Of course it will change, but when? Argentina, Bolivia, Iceland all are making their way into the future. Insiders are selling off their shares and departing corporations in droves.

    As a lawyer, I can say the courts hate mortmain, dead hand, for many reasons. Corporations are worse than merely removing assets from taxation and active participation in public life. They have become engines of fraud with Finance, Insurance and Pension funds being the main ways to steal. Legalities will not be allowed to assist those with dirty hands, so they seek complete extraction from their engines while they can find somewhere to enjoy their haul…..

    Hurry up Golem and publicise these things!

  8. backwardsevolution

    “Mariano Rajoy, Prime Minister of Spain, made a very interesting comment in the Senate today. He told the politicians that virtually EVERYONE in Spain, including banks, corporations and regional governments, have been locked out of credit markets. The only institution that is still able to issue debt, according to Rajoy, is the Spanish Treasury itself. Now, that’s a frightening statement for the leader of a country to make in public – yet what’s even more frightening for the Spanish people, one-fourth of whom are unemployed, is that it can’t be too far from the truth.”

    http://theautomaticearth.org/Finance/spain-has-been-shut-out.html

    1. Hi

      This headline/story is two month olds.

      Your linked source is sensationalist and poor. Please note there is no date in your link just a mention of today.

      Joe.

      1. backwardsevolution

        Joe R, you are correct, there is no date. But here is another link that does have a date of Friday, 11 May 2012:

        http://www.ifre.com/spanish-banks-face-funding-lock-out/21011391.article

        Here’s a link from Bloomberg dated May 8, 2012:

        “Prime Minister Mariano Rajoy said the debt agency is the only borrower left in Spain that can finance itself on markets as banks, companies and regional administrations have been shut out.

        “Today, the Treasury is practically the only one that finances itself on the markets,” he said in the Senate in Madrid today. Being locked out of debt markets isn’t “theoretical” as it’s “happening to the immense majority of regions, our whole financial sector and most big companies.”

        And here’s a comment re the above article from a site called Acting Man and it’s dated May 10, 2012:

        “Translation: we’re flat broke. It is easy to see from this that if the treasury is the ‘only entity that still finances itself on the markets’, Spain is only a tiny step away from not getting any financing at all. Credit default swaps have soared across the euro area this week, with those on Spain going out at a new all time high.”

        http://www.acting-man.com/?p=16791

        Have they all got it wrong?

        1. Can you stop quoting panicky, out of date, badly translated or deliberately mis-representational quotes at me from opinion piece blogs please. These are not facts!

          Here is an El Pais article from the day Rajoy was in the the Senate and did a legger on the journalists outside. The date is the 10th of April 2012. Not the Bloomberg date. There is no menton of a market shut-out for Spain.

          http://politica.elpais.com/politica/2012/04/10/actualidad/1334072678_847823.html

          He returned to the Senate and answered a few questions in front of a committee on his budget cuts during the week, with no dramatic announcements about the financial market –

          http://www.periodistadigital.com/politica/gobierno/2012/05/08/rajoy-respondera-hoy-en-el-senado-sobre-el-incumplimiento-de-su-programa.shtml

          This rubbish of what Rajoy puportedly did or said is circulating in the ANGLO-PHONE media just like a silly transfer rumour in the football taloids.

          Rajoy said nothing such as you are quoting above in Spanish, that I can find at least. If you can find it in the original Spanish please post it and prove me wrong.

          Bankia, and its bail-out, is a separate matter.

  9. backwardsevolution

    Someone else posted this comment:

    “The Dual State: A Contribution To The Theory Of Dictatorship”

    Originally published: New York: Oxford University Press, 1941. xvi, 248 pp. This classic study is one of the standard works on constitutional law, jurisprudence and judicial administration in Nazi Germany. Also considered one of the finest analyses of totalitarianism, it was written in Germany in the late 1930s and completed in the United States in 1940, where Fraenkel [1898-1975] lived after fleeing the Nazis in 1938. The title derives from Fraenkel’s thesis that National Socialism divided the law into two co-existing areas. The first of these, The Normative State, protects the legal order as expressed in statutes, decisions of courts and the activities of administrative agencies. Its counterpart is the Prerogative State, which is governed by the party. It exercised “unlimited arbitrariness and violence unchecked by any legal guarantees” (xiii).”

    http://books.google.ca/books?id=1Mkwe5DY4kYC&printsec=frontcover&source=gbs_ViewAPI&redir_esc=y#v=onepage&q&f=false

    Take a look at the table of contents of this book. Some of the chapters are: The Abolition of Constitutional Restraints, The Abolition of Legal Restraints, The Abolition of Restraints on Police Power, The Abolition of Judicial Review, the Persecution of the Heretics (yikes).

    These things are happening in the U.S. Constitutional restraints? The elite are ignoring the Constitution. Legal restraints? Rules have been bent right, left and centre, laws are broken, fraud has exploded, and yet no one is being prosecuted. Police power? Occupy Wall Street has been hammered.

  10. backwardsevolution

    Nothing like a good holding down!

    “So, for example, Fed Chairman Alan Greenspan, at the time when he was still “Saint Alan” — hailed by the economics profession as one of the greatest economists of all time (this was before the crash for which he was substantially responsible) — was testifying to Congress in the Clinton years, and he explained the wonders of the great economy that he was supervising.

    He said a lot of its success was based substantially on what he called “growing worker insecurity.” If working people are insecure, if they’re part of the precariat, living precarious existences, they’re not going to make demands, they’re not going to try to get better wages, they won’t get improved benefits. We can kick ’em out, if we don’t need ’em. And that’s what’s called a “healthy” economy, technically speaking. And he was highly praised for this, greatly admired.”

    http://www.counterpunch.org/2012/05/08/on-the-history-of-the-u-s-economy-in-decline/

    1. Thanks for the interesting link backwardsevolution.

      And I found it surprising that Chomsky brings up the term ‘precariat’. I had just recently encountered a version of the term’s origin in an interview to Melenchon, the Front de Gauche candidate in the last presidential election. I translated part of the interview a couple of days ago:

      https://www.golemxiv.co.uk/2012/05/etfs-part-2/#comment-17554

  11. Desmond Dillon

    Stagflation

    sailing on without a plan
    except to continue with the scam
    twiddling thumbs and kicking the can
    further down the road.

    gods own piggy wiggies
    sociopathic to a man
    the cats who owe their fatness to
    the jiggle in the can
    the one that says to you
    ‘come on be a man
    you can pay the debt we make
    you will, you know you can.’

    selling debt is all they do
    and it enslaves both me and you
    then to blame and frame us
    for what they did and do.
    then to make us pay… ..their dues.

    then to print the paper
    that will increase the stink
    send in the squids debasing
    with poisonous ink
    to make more structured products
    for their dollarized pomp
    and add to the stench
    of the globalized swamp
    ….. that stagflates.

  12. Tsipras wants the setting up of an international auditing committee, wonder where that idea came from. Seems this blog reaches parts that others don’t.
    I’m hoping the light at the end of the tunnel is a train coming the other way to smash into the bankers that caused all this mess.

  13. Good piece featuring the very interesting former central banker Bernard Lietaer at heteconomist.com

    “Economic orthodoxy = Intellectual dishonesty”

    But most of all, enjoy the Krishnamurti exchange in the comments between Tom Hickey & jrbarch.

    http://heteconomist.com/?p=5175#more-5175

    I’ve seen Tom writing similarly in comments at other (MMT) blogs. It was one of the most pleasant surprises I’ve ever had to discover this among the MMT advocates. In the hindsight of many years, I believe I probably never needed to read anything more than Krishnamurti on the subject of conciousness. 🙂

  14. Isn’t this what Tsipras is talking about?

    http://en.wikipedia.org/wiki/Odious_debt

    It would be very interesting to see if this argument can hold water in a supposed democracy – it could set a very interesting precedent for the Western world, especially as jubilee seems to nowadays only be a word used for monarchs.

    1. ‘Odious Debt’ was the legal principle the US used to cancel the debts of the Saddam Hussein regime after they had invaded & taken over the country.

      At the same time, the US seized $20 billion of $ denominated Iraqi assets, printed it up in $100 bills & shipped it into the country. It was ‘disbursed’ by US military & their adminstration. US auditors could later find no records of where most of it went.

      Argentina used the Odious Debt principal to cancel many of their debts from the collapse of the dollar peg mess.

  15. It’s true that a lot of people read this blog.

    RE ; Odious debt. A quote from Golem’s original article ; « The Commission’s next job is to establish if any of that debt was Odious, Illegitimate, Illegal or Unsustainable »

    However the title was ; « Ireland, Greece and Portugal should Default. » So should Spain, probably Italy and even France now be included? Or any other late comers, as it is also likely that the EU is being attacked as a whole. Partially in order to keep the dollar as a reserve currency by eliminating competition, and partially by the major Banks and the International criminal classes who simply want to plunder,

    Which prompts the thought that since the debt problems are so generalised that some coordinated effort would be worthwhile. Or a total debt default ( Jubilee ?) Couldn’t be based on an «EU commission». As someone once said – « if you want nothing to happen, form a commission ». Or more practically, these are now lacking in credibility as the EU (Brussels) has become a « free-market facilitator » and less a social compact.

    …….

    Could we add another type of description, while not legal as the others were, is visually elegant ?
    I propose « Orbital debt ». Where debts circle in some sort of vacuum, in free-fall, with no visible means of support, and where one follows the next in indefinitely prolonged orbits. (All tied to an inert asset in the shape of a rock, and held from flying off by a piece of string whilst whirling them around your head,. – Which I was told as a kiddy, is how gravity works.). Think of indefinite chains of CDO’s, Rehypothecation and now EFT’s with no visible means of support – each relying on the one in front, (or behind ?). When one lets go – duck.

  16. Surely we must have a debt swap to reduce the pressure?
    It would not sovle the problem, but it would reduce the quite impossible sums owed, sums that cannot ever be repaid.
    For the eurozone to continue this must happen, surely?

    (Don’t call me Shirley)

    1. Hello didihno,

      In case you haven’t seen it you might be interested in a piece I wrote some time ago called “How to destroy the web of debt”. You can find it above under Featured posts.

  17. Award all the debt to the shysters, then ignore it and get on with your life.

    Why not! After all’s said and done it is they who created the debt, gambled on it and lived high on its speculation whether they gained or lost in the digital figures juggle.

    Afford it concern and you give it substance – give it substance and you afford it coherence – from coherence it establishes legitimacy and through legitimacy tyranny.

    Money has been distorted into a mythology and as such there is no sensible way to correct or modify a myth even in this – now you see it now you don’t – acceleration incorporated in this electronic age.

    It now claims the omnipotence that was claimed by religions to belong solely to their gods along with the abstract nonsense of an inalienable right for its will to be done.

    As in religion, the money game will never make sense as the prime mover or measure of civilisation or societies values.

  18. I read your site to learn and do not comment often. Some are stating the new leader of the left party in Greece is nothing more then a crisis caused by the banks. I think the young man may cause a stir with asking for audits and investigating the legality of the Greek debt.

    This would be eye opening to me anyways and maybe, just maybe, expose to the people what is actually happening to them behind closed doors between the bankers and their politicians. I tipped my hat to Tspirus for wanting to find out the truth for a change. Does this mean it is all bullcrap? Only time will tell.

    Looks like the EU is prepping to drop Greece from the EU, or so the USA media is spinning it that way.

    1. Mike

      The sooner the better for many reasons not least the fact that one of the justifications for it was to ensure a peaceful Europe all together in one big happy family. I’m not sure where policies that have resulted in the resurgence of the far right in Greece fits in with this, especially as the country if it stays in the Troika’s clutches will then be forced into at least a 10 year period of conditions that would be similar to a kind of Weimar republic. Probably resulting in another type of contagion that would be likely to spread amongst Europe’s ever growing army of disenfranchised youth.

      So much for the happy family, the Germans are nimbys.

    2. My favourite part on Keynes:

      “..he envisaged an IMF which would have the power not merely to impose conditionality on countries experiencing external deficits, but equally on those – like Germany and China today – running excessive external surpluses.

      Underlying Europe’s private and public financial crisis is a balance of payments crisis. The market has failed to channel trade surpluses into capital flows to the periphery designed to raise their investment in export productivity – any more than it did in the 1920s and 1930s..”

      What a wonderfully wholistic sense of balance. Nations running massive deficits should be called to book AND nations running massive surpluses need to be taken to task too! It’s an international interpretation of progressive taxation.

      As an aside:
      Why is there so much imbalance with everything skewed in one direction?
      Nature is cyclical – but economic ‘growth’ is expected(nay must!) continue unchecked.
      All things decay – but money must never lose value.
      Resources are finite – but the market will always provide.
      Everything is interdependent – but the rich are self made.

      I think it comes from ignorance or forgetting the intrinsic membership/kinship with nature and society, the delusion whereby an individualistic separation exists outside an objective universe.

  19. I liked up to you will obtain carried out right here. The sketch is tasteful, your authored subject matter stylish. however, you command get got an impatience over that you want be delivering the following. ill definitely come more previously again since exactly the same nearly very ceaselessly within case you protect this hike.

Leave a Comment

Your email address will not be published.