Ex Dame Pansi wrote on Mar 4^th, 2012 at 1:26pm:


Well, your not on your lonesome there, Pansi!

I'm finding my own time is pretty restricted, owing to my fathers fall in early January and some of the changes that are taking place, since then.

So, you may have noticed, my own postings have been well down on what I had been doing, are this site and almost none existent at some of the other OZ & US sites that I used to frequent!

But, you are correct in saying, regrettably, that the train wreck is becoming more evident & imminent!

Spain edges toward economic abyss amid Europe woes

Investors concerned that Spain is fast becoming Europe's riskiest economic link and could be the next bailout candidate have plenty to worry about this week.

On Thursday, much of the country will shut down in a general strike against labor market reforms that make it cheaper for companies to fire and offers incentives for them to hire.

The next day, new center-right Prime Minister Mariano Rajoy is expected to unveil about (EURO)30 billion ($40 billion) in spending cuts and tax hikes in a deficit-slashing budget. This comes fast on the heels of a similar (EURO)15 billion austerity package unveiled less than three months ago as part of Spain's push to avoid joining the ranks of bailed-out Greece, Portugal and Ireland.

So far, Rajoy has only given hints about what's in store in the next round of fiscal pain for Spain, which is already lurching toward recession and is battered with an unemployment rate of nearly 23 percent, the highest among the 17 countries that use the euro.

But economists predict that government workers could face additional pay freezes or cuts, and that Spain's important regional governments may be forced to lay off temporary teachers and unveil reviled co-payments under which patients would pay part of the cost for national health care.

Spain has already gone through successive rounds of cuts, tax hikes and deep fears that the country -- reeling from the bursting of a massive property bubble -- could be next in line for a bailout.

The country's economy is almost twice the size of the economies of Greece, Ireland and Portugal combined -- sparking fears that its financial failure would send shockwaves throughout the region and the world's markets. More importantly, financial troubles in Spain would likely trigger a run on Italy and could ultimately lead to a breakup of the currency union.

"If you put Spain in danger, Italy is in danger and maybe even France," said Antonio Barroso, an London-based analyst with the Eurasia Group consulting firm.

Fears over Spain's future grew more intense in February when Rajoy's conservative Popular Party, which ousted the left-of-center Socialists in November, revealed that the country's 2011 deficit came in at 8.5 percent of economic output -- far above an earlier 6 percent estimate.

Italy's premier, Mario Monti, fed the concerns last weekend when he told business leaders that Spain "is giving the EU concern because the interest rates have risen, and it doesn't take much to re-create contagion that could spread" to the rest of Europe.

Others worry that overly hasty cuts in a country that used to one of the continent's top fiscal performers will further batter an economy whose downfall was largely triggered by the collapsing real-estate boom.

The global credit crunch of 2008 burst Spain's property bubble, triggering a steady rise in unemployment, and reducing government spending will likely put more people out of work, forcing them to fall behind on their mortgages.

That, in turn, could leave Spain's struggling banks with even bigger bad loan burdens and toxic property assets and push them to seek financial assistance from the state. Some economists fear that further bank bailouts could drive up Spain's debt much faster than a few years of higher government deficits.

Complicating the picture is the political risk of how angry Spaniards will get about rising unemployment -- which is already forcing many to seek jobs abroad.

The sheer scope of the anticipated cuts and the recent labor reforms are expected to push the unemployment rate beyond 25 percent, putting Spain's economy at risk of sputtering or contracting for an extended period, economists say.

"There is a risk of greater economic depression and a drop in revenue, but it is true that you have to correct public spending and get rid of some inefficient parts, even though that involves layoffs," said Juan Carlos Martinez, an economics professor with Madrid's IE Business School.

"We're going to see things happening in health and education in reducing the services and increasing some of the costs," Moreno said. "You have to get those millions of euros somewhere. It's a very straightforward way to do it, but it hurts the economy by hurting consumption."

Link -
http://www.businessweek.com/ap/2012-03/D9TPJABO1.htm
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Watch what happens, when Consumption Demand plummets, as it is a prelude to what can be expected here!

<<Spain edges toward economic abyss amid Europe woes>>

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Economic unrest leads to social unrest.

Labor rage: Arrests as General Strike locks Spain

At least 58 people have been arrested and nine injured in Spain, as thousands take part in a general strike and rally against recent labor reforms. Flag-waving protesters fear the decree will undo employers’ hands and thus rob them of their rights.

The 24-hour general strike began before dawn, along with pickets and sporadic clashes with police. Most of those arrested were detained in the early hours, after trying to stop night shift workers getting to their jobs on public transport, in factories and in wholesale markets.

Demonstrators burnt mattresses, tires and other debris in an attempt to keep workers from their jobs. A Molotov cocktail was even thrown at a police car in the eastern city of Murcia. The car was destroyed and two officers were injured by the flames.

Hundreds of flights were cancelled, several local TV stations went off air, and several factories shut down for the day, including the Nissan and Seat facilities in Catalonia. Hospitals provided only minimal care, while at least a third of public transport was halted.

Major demos took part later in the day, with some protests joined by those who had finished work.

Initially unions claimed over 250,000 people would join the strike and demonstrations in more than 100 towns and cities across the country.

"They want to end labor and social rights and finish off everything," is the theme of Thursday’s protest in Spain.

Later, unions claimed that 85% of workers had joined the strike.

There were no reports of serious violence during the demonstrations aside from street fires in Madrid and Barcelona, where roads into the city were blocked.

There are also reports that in Barcelona, demonstrators broke windows and lit a bonfire outside the Barcelona Stock Exchange. Several arrests have reportedly been made.

http://rt.com/news/spain-labor-strike-protest-720/

This is a really interesting interview Perce, if you want to have a squizzy, and anyone else that's interested of course. It's long so I'll just give the link. Das is one of the few who saw the 2008 GFC before it happened.
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Welcome to the latest in our In Conversation series, between risk analyst and author Satyajit Das and Kevin Davis, Research Director of the Australian Centre for Financial Studies.

http://theconversation.edu.au/satyajit-das-europe-will-have-far-reaching-consequ...

May, may have arrived earlier this year?

http://au.finance.yahoo.com/q?s=^DJI

Global Data Dampens Market Sentiment

Stocks fell, putting the S&P 500-stock index on course for its biggest weekly decline this year, after disappointing news from China and Spain damped sentiment.

http://www.marketwatch.com/video/asset/global-data-dampens-market-sentiment-2012...
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The DOW finished the week down 137 on the day, it is now down 482 on it's recent 12 month & post GFC high of 13,332 & volatility is returning ahead of the usual May trepidations!
http://au.finance.yahoo.com/q/bc?s=^DJI&t=3m&l=on&z=l&q=l&c=

Europe also fell.
http://www.forexpros.com/indices/major-indices

Grey wrote on Apr 15^th, 2012 at 4:03pm:


That would depend?

Chaostan, we're living in it.
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There is a place you may have been but do not know.

It's called Chaostan.

It covers a third of the world - from North Africa to the Middle East to the former Soviet Union and most of Asia. We've been there ourselves. Without realising at the time.

Richard Maybury, a geopolitical analyst and editor of the American publication U.S. & World Early Warning Report, coined the term and concept of Chaostan in 1992. Maybury's encyclopaedic knowledge of history has earned him the tag of "the 2,500-year-old man". For two decades, his predictions have proven eerily prescient.

On Chaostan, he says:

"Chaostan is the primary area that never developed rational legal systems, or at least not rational legal systems that governments are required to obey. As a result, throughout history they have suffered, and will continue to suffer, political, economic and social upheaval... chaos."

Chaostan - riddled with tribal rivalries, phony national borders and lacking any tradition of sound political or legal systems - is "a vast sea of blood and destruction". It's a fascinating concept. Consider the following world hotspots: Libya, Egypt, Syria, Lebanon, Iraq, Iran, Afghanistan, Kashmir, Chechnya.

All inside Chaostan.

But to our mind, the key idea to consider is this: Within its imaginary borders, Chaostan has three of the four fabled BRIC nations.

Most importantly, China.

But just how stable is China? A glaring assumption in the West is an industrialising China will slowly morph into a consumer society under the heavy handed but stable Communist Party. But recent events in China have put a small crack in this idea. On Tuesday, Dan Denning took up the trail.

In November a British businessman named Neil Heywood was found dead in the city of Chongqing. His death has lifted the curtain on the internal rivalries within the Chinese Communist party. At stake is the legitimacy of the Party itself and its centrality in Chinese political and economic life.

It took the self-immolation of a North African fruit seller to ignite the Arab Spring. Is it so preposterous to believe something similar could happen in China? After all, we've been here before in other nation states. Dan Denning continued on Wednesday:

Maybe the rot is already too deep. Maybe the economic and political forces unleashed by China's furious two decades of growth are too wild and powerful for the Politburo and the Communist Party to channel and contain. It wouldn't be the first time a small group of elite technocrats placed too much faith in their own ability to manage a complex system. It's what Hayek called the fatal conceit.

A lot of people are prepared to consider a China slowdown. Not many would be considering a Chinese political breakdown or civil war - and its impact on stocks.

Now that calls for a drink.

Lucky it's the weekend.


from thedailyreckoning.com.au