This morning’s key headlines from GenerationalDynamics.com.
- Spain is expected to ask for a bailout on Saturday
- Bipolar investors pop champagne corks after week on Wall Street
- Greece’s debt: $1.3 trillion
- Israel’s Netanyahu announces plans for 851 new West Bank settlements
- Northeastern India gripped by ‘spider terror’ panic
Spain is expected to ask for a bailout on Saturday
Spain’s senior officials, led by Prime Minister Mariano Rajoy, have been issuing statements for weeks, each one more vehement than the last, that Spain will absolutely, positively NOT ask for a bailout. These statements continued all through the day on Friday, as rumors swirled that Spain was about to ask for a bailout over the weekend. But leaks emanating from unnamed EU officials in Brussels and Berlin are saying that an announcement will be made on Saturday afternoon that Spain is seeking a bailout. The amount of the bailout has yet to be determined, but the IMF has estimated that Spain’s banks alone will require a €40-90 billion bailout just to recapitalize them. Other estimates that include government debt and writing down toxic assets are in the range of €300-400 billion. Spain has to rush, since it’s thought that the EU has to reach a decision before Greece’s June 17 election, which might trigger a market panic. Reuters
Bipolar investors pop champagne corks after week on Wall Street
Wall Street stocks ended their best week of 2012, following one of the worst weeks in a while. The manic-depressive behavior of Wall Street investors has absolutely nothing to to do with the value of stocks or the choice of the best investments. Wall Street is totally disconnected from the real world or any form of reality these days. This week’s surge in stock prices occurred because the economic news has been so bad all week that investors are convinced that the Fed and the European Central Bank (ECB) are going to “print” trillions more money, pouring it into the banking system, after which it will drift into the stock market. The fact that bad economic news causes investors to buy stocks is a major feature of today’s Wall Street culture of fraud and extortion. Reuters
Greece’s debt: $1.3 trillion
Mark Grant, Southwest Securities Managing Director, was interviewed on CNBC on Friday morning, and said the following (my transcript):
When Europe talks about debt to GDP ratios, they don’t include any contingent liabilities, which is derivatives, which is sovereign guaranteed bank bonds, sovereign guaranteed state bonds, or regional debt.
So if you look at it — and this is just addition – this is not magic or Mark Grant’s opinion — you take all the debt say, of this little teeny country of Greece, It’s $1.3 trillion dollars. The debt to GDP ratio of greece is 453%. If you include all of their obligations, then you begin to understand why this is such a huge problem.
Grant then turned to commentary about Spain:
The numbers don’t add up for Spain. They don’t have enough money to bail out the regional debt and bail out the banks at the same time, and it’s all going to add up. The EU can step in, but they only have so much money to step in with. So you can wander over the cliff here at any point in time in the next 60-90 days.
It’s unusual to hear someone on CNBC who isn’t saying that everything is great, since a negative outlook spooks their advertisers. One of the anchors tried to coax Grant into saying that we’re not going to go over the edge of the cliff, even though we’re at the edge. Grant replied: “There’s a lot of danger when you’re standing on the edge of the cliff.”
Israel’s Netanyahu announces plans for 851 new West Bank settlements
Israel’s Prime Minister Benjamin Netanyahu and Housing Minister Ariel Atias announced plans to build an additional 851 housing units for Jewish settlers in the West Bank. The announcement followed the defeat in the Knesset (legislature) of a bill, sponsored by pro-settlement Jewish activists, to legalize existing West Bank settlements that Israel’s High Court had declared illegal. The announced plans to build 851 new settlements was immediately greeted by condemnation from Washington and London as undermining the “peace process.” Haaretz
Northeastern India gripped by ‘spider terror’ panic
A large and hairy, tarantula-like spider species has created panic in Assam, a state in northeastern India, after reports of fatal attack on humans, cause panic-stricken people have resorted to killing spiders by the dozens. The panic spread across the state after media reports of the death of two people, allegedly from spider bites. According to entomologist Ratul Rajkhowa:
The reports of death of two persons due to spider attack are not authentic. No one has confirmed that they died of spider venom. Such venomous spiders do not exist in Assam. The widespread media reports have created panic among the people and they have resorted to killing spiders wherever they are found.
Spiders are a very important component of our ecosystem and eradication of such a component by large scale killing will lead to multi-headed ecological problems.