October 07, 2008

The Euro, along with the European banks and the European economy, is collapsing in front of our eyes. And they blame it on the US.

They still blame the European collapse on the "US Subprime Meltdown". Oh, how little they know.

Yes, that started the ball rolling. But one day the Europeans will look around at their own Housing Ponzi Scheme, which was much, much, much, much, much bigger than the US bubble, and realize that people in overpriced glass flats that rent for a fraction of the cost of 'owning' shouldn't throw stones. Capiche?

The entire WORLD went crazy with debt and greed. The WORLD's governments fell in love with home price appreciation that fed consumption and tax receipts.

And now the WORLD pays the price.

It hath been foretold.


Anonymous said...

You, better than most Americans, should understand the difference between the UK, the eurozone, Iceland and its Nordic compadres, and eastern Europe.

The UK is a disaster - and the pound along with the British economy, is going to crater. But to the extent that the UK's economy was based on financial engineering and declining oil and gas production, it is really not a surprise. British debt levels and bubble expansion are worse than comparable American levels - but the UK is a somewhat disconnected part of 'Europe.'

The eurozone as such did not have an American style housing boom - Germany most certainly did not, and to the extent that both Italy and France did not allow American style accounting (especially 'equity extraction' or no downpayment loans), they will not have an American style crash. Spain will crash, but considering how much of the building was based on true need compared to speculation, the effects will be harder to judge over the long term. Of course, there was massive speculation also, and that will be a bust - and it will hurt the eurozone, though as much of the bubble was British financed, it will again be hard to judge the final tally at this point.

Iceland, all 300,000 people of it, it blowing up. But then, big buddy Norway, oil exporter with a few hundred billion stashed under the mattress, will likely ensure that no one will starve. And as for the lights? Iceland generates huge amounts of electricity - nobody will be freezing any time soon.

Eastern Europe is also likely to blow up - but you are aware that most of eastern Europe is not part of the eurozone, and that even compared to Spain, eastern Europe looks pretty puny.

What Europe is waking up to is the fact that American style fraud was a worldwide event, and that are along for the ride.

What Europe is also waking up to is that the free ride that Americans have been taking with their willing help is now at an end.

I don't think that the TGV or ICE will stop running through the EU. It is a very open question whether America will ever be able to finance and construct such infrastructure.

Anonymous said...

Poo poo I say to you unwashed masses as I fart in your general direction.
You may have some cake crumbs for all I care,i however sold enougth property to those suckers out there and socked away enougth to ride this out easy.
And in time il swoop in picking at your bones and flying away with your gold teeth.

Anonymous said...

A report came out about a year ago noting that of the housing "investors" in SW Florida, 52% were from outside the US.

Lots of foreclosures by Deutsche Bank in SW Florida.

Tough luck, Germany. Hey, you guys want to buy some tulip bulbs?

Anonymous said...

They went on a buying spree too.

Nobody told them they had to copy our housing ponzi scheme.

Anonymous said...

you must make up your mind, first you said it was the blacks, then you said it was the mexicans, then you said it was the greedy people on wall street, (i always felt it was the greedy WHITE people on wall street)you said it was MTV Cribs, you said it was rap stars, you said it was 50 cent (i say it all started with Robin Leach and Lifestyles of the Rich and Famous and I never saw any black people on that show) I never hear you say or insinuate that white people were the majority of the blame for this mess (your obsessive greed) so quit running around all over the page and find one fault. I have and it's greedy whites and asians who conspired to have these well performing portfolios and well asians are just money hungry and now the world has to pay.

Anonymous said...

Look at the tiny nation of Iceland. WTF???
A little country of 300,000 practically bought England on credit. Now they are broke.
WOW !!

Anonymous said...

Blame the US? I was in Barbados two years ago and I ran in to this English couple and they were buying up as much real estate (on credit) as they could find to flip and get rich - this housing bubble is world wide - condos in Spain, 2nd homes in Croatia et al. I worked for a European company and they are just as greedy and stupid as us. You were so right: KA-BOOM!

Anonymous said...

Anon 11:18 am said: "Lots of foreclosures by Deutsche Bank in SW Florida.

That's what you dumbshit Americans dont realize! The 700 BILLION Dollar Bailout (which is actually the blank check Bailout which will ultimatley cost TRILLIONS of DOLLARS) is going to bailout not the mortgages but the mortgage backed securities that were issued by banks and investment companies, such as AIG, such as Deutchbank, etc. etc.

Thats what all the ruckous was about last week. The big outrage was "Why should US taxpayers foot the bill for foreign companies such as Deutchbank, Swiss bank etc?"

There is a twofold problem here. First, banking is an international enterprise. Many, many banks and investment companies were complicit in this financial crime called the housing bubble. These included American banks and Foreign banks.

But Because the crisis unfolded in the US first, the first response naturally had to come from the US. That leads us to problem number 2. America has already approved a BLANK check bailout for these American and FOREIGN banks that were complicit in this debacle.

Therefore, for example, a Deutchbank that had problem loans from Spain but also had problem loans from Florida and California is going to get bailed out by stupid American taxpayer, aka Frank @Scottsdale Sucks.

So, if anything, whatever unfolds in Europe or to the Euro is going to be negligible compared to what happens to America and the dollar because we are footing the bill for this international crime.

Why do you think European countries havent owned up to their financial problems already? Answer: Cause they know, once again, that dumbshit Americans are footing the bill for whatever it takes to keep the world economy floating!

Anonymous said...

One is usually most upset when they have no one to blame but themselves.

Anonymous said...

Poor Eurotrash - all dressed up and nowhere to go. Greedy Europeans bought up bad debt because they wanted to play the game, and they got stung. Deal with it.

And to the European guy crying in his Chimay, please stop. You can insult Americans all you want, but you're visibly angry and that anger is actually directed back at yourself for being part of the greedy pack. You know it and I know it.

Archie said...

Besides the lapdog Brits who have lost any semblance of national identity as they've slavishly copied the bankrupt US model, the overwhelming number of European countries will come out of this a lot better than the Americano fat asses.
Europeans consume and can get by with less, unlike the Americano pigs obsessed with growth and "quality of lie" improvements.

By the next decade, United Europe will surpass the United States in all socio-economic categories, as they're ahead in most as of today.

The USA is a second world power in a matter of years.

foxwoodlief said...

Remember the German's gave us the pied piper. European smugness is...not attractive. Years ago on this site attention was drawn to the over priced and over valued european mortgage sector, especially in Ireland and England. The Euro? Could we see the lows right after its introduction? I think it could drop another 30%.

The cycle will turn, America will emerge stronger.

nature said...

Interesting how some argue a distinction between different European states.
Germany just like Briton will have a severe economic crash.
Even if we here in the US where having a thriving economy Europe would still be heading into a depression.
Not only has ‘ALL OF EUROPE’ experienced an historical housing mania, but real inflation on the ground for everyday Europeans has been so high that people can not afford basic items like groceries anymore.
It was not visible due to the Housing ATM and the weak dollar.

Over all Europe is over populated and over regulated with no natural resources add to that the whole stupid European Nationality inferiority complex, along with the lowest productivity output compare to even emerging markets, and we have a perfect recipe
for a very poor economy.

There is no-way Europe gets out of this one without a major disaster.

nature said...

anon said:
'One is usually most upset when they have no one to blame but themselves.'

Right on!

Anonymous said...

condos in Spain, 2nd homes in Croatia et al. I worked for a European company and they are just as greedy and stupid as us. You were so right: KA-BOOM!

My background is Croatian though I've practically lived my whole life in Canada. I couldn't believe the prices on the coast back there when I went to visit. I couldn't afford any of these places with my Canadian salary... and this where the average salary is about $500 a month.

I was ticked at how many germans, french, english, etc. speculated on the coast and drove the prices to ludicrous heights. I'll be glad when this crash happens - so that local yokels will finally be able to again afford buying a place in their own country.

It's unbelievable how foreigners came in and literally drove people away (by making it unaffordable) simply by using fiat money.

David said...

The coming economic collapses (and yeah, Germany and France are going down too, their economies held hostage by selfish, short-sighted unions demanding unlimited benefits) are going to reignite a lot of ugly nationalistic tensions.

In such times, the first instinct of the bitter & uneducated is to blame someone else. The "other." Last time around, after the collapse of Weimar, we saw the rise of a Viennese painter with a grudge and an amazing ability to maneuver in such a toxic environment; he found a perfect subgroup to blame for all the world's ills.

Fingers will be pointed at the U.S. for this. Gonna be a bit difficult for Americano tourists looking for friendly smiles and prompt service. Their croque monsieurs at the cafes near the Louvre might start arriving with just a little bit "extra" flavor in the sammich.

Ultimately, the difference between Europe and the U.S. is that the average citizen in Europe reads at least one, and usually two or three newspapers a day. Other than mental giants such as Sarah Palin, who as we all know, reads every paper every day, including the Economist, most Americans barely catch a 15-second newsbreak inbetween segments of Dancing with The Stars.

patrat said...

I believe the TV house flipper shows actually started in the UK. France has much more regulation over credit (and everything else!). They are not hurting as much.

SeattleMoose said...

Don't worry, the FED will bail out the EU welfare states before it worries about us. The FED is just a front for European bankers to control the U.S.

1776 - We broke the yoke of the European masters with a bloody and long war

1913 - The FED was established and in the dark of night the yoke was quietly put once again around our necks.

London, Brussels, and Frankfurt. This is where our true masters live. Bernanke is a puppet and our clueless government....morons.


slycapital.com said...

Love it! I live overseas now and lose it when Europeans try to blame their problems on the US.
The leverage in Euro banks is far worse than US banks. Deutsche bank has definitely had secret rescues already. Proof? Their leverage is over 60 to 1. So less than 2% losses = insolvency.
All of Wall Street fell with leverage topping out at around 30%.

Anonymous said...

I never hear you say or insinuate that white people were the majority of the blame for this mess (your obsessive greed) so quit running around all over the page and find one fault.

I have just one thing to say to you: Watch the program "The Real Housewives of Atlanta", on the Bravo channel. Please note that you'll need to take a shower afterwards.

Anonymous said...

The Germans who vacation in my building, located in FL, are desperate trying to sell their overpriced condo units. There was a ton of European wannabes trying to flip condos in FL: Germans, Brits, French, Spaniards. And you know those bastards don't make any money, because their socialist regimes take 40% out of their paychecks to support Muslims and Africans. Take European doctors and dentists, for instance. They can't get wealthy like the American doctors because of their universal health care system. In Germany, the gov even pays you to get a medical degree because you won't be making any good money.

Before you comrades come vomiting your Hussein talking points, let me remind you that 40% of the high cost of our American healthcare is due to fraud, ranging from Cubans committing Medicare fraud to Mexicans faking car accidents to stiff car insurance companies, and everything else in between.

Anonymous said...

It was about time for that lie called UE to come crumbing down, especially their overvalued currencies.

I've been calling BS on the value of euro and pound for a while now.

There's nothing to support those values: crappy socialist regime that destroys entrepreneurship, bureaucracy, infested with union parasites, no natural resources, aging workforce that will be replaced with third world parasites and radical freaks, crazy Russia with a hand on the oil pipeline faucet, no more American money to support their tourism or buy their wine...

The euro and pound should be around $0.50 USD.

knifecatcher said...

I told my brother about the Irish carpenter who bought a 1-bedroom Manhattan condo for a cool $1M earlier this year. He finally understood the housing bubble. The strawberry picker story didn't cut through the fog last year.
Anyhoo...I wonder if they're calling it a 'The Great Credit Famine' in Ireland?

Anonymous said...

Well, for one, the world's productive economies are places like South Korea, Taiwan, Singapore, Japan, etc where people make things, not just push paper.

The USA/UK, in the past two decades, have turned the western nations (this includes Europe) into a financial economy where places like Digital Equipment Corp, DuPont, and Texas Instruments can no longer flourish in a place of hedge funds and advertising firms (see Google) disguised as a tech companies.

What that means is that when the world's economies re-balance, the center of power will be where things are actually designed and created, east Asia. This is the world we're looking at, circa 2015. Europe, at most, will be petting zoo for those who like medieval architecture and you'll see hordes of Korean and Chinese perma-tourists living there for retirement. The US, in contrast, will look like a cross between the Jerry Springer crowd and the motorcycle gangs in the Mad Max series. All and all, it's the full blown decline of the west and the rise of east Asia (not South Asia, since their growth was due to US services offshoring as oppose to authentic production).

Anonymous said...

"My background is Croatian though I've practically lived my whole life in Canada."

(sigh) Then how about calling yourself a Canadian, eh?

Anonymous said...

"The Euro, along with the European banks and the European economy, is collapsing in front of our eyes. And they blame it on the US."
Damn all those Conservative Republicans/Neocons/Libertarins to hell. There was a reason that the Liberals put all those regulations on Capitalism in the 1930's. Now the conservatives can learn again why those regulations were put there.

Anonymous said...

"My background is Croatian though I've practically lived my whole life in Canada."

(sigh) Then how about calling yourself a Canadian, eh?

That's why I said my BACKGROUND was Croatian you dolt!

Anonymous said...

"That's why I said my BACKGROUND was Croatian you dolt!"

Don't you get it? Americans are very proud of being American so you'll seldom meet a Yank who'll say 'my background is Anglo/Irish and German/Slavic but I'd spent most of my life in [ New England, Cali, Penn, fill-in-the-region ]' even if one's parents were stationed in Germany for military service during childhood. That's a key difference between the two nations; Canadians have way too much of a tether to that British/Scottish lineage thing. I mean New England has so little of Olde England that its inhabitants have never developed this British Columbia or Nova Scotia, homeland away from the homeland complex. When I visit an uncle in London, I never say I'm going back to the homeland but that I'm visiting some family members in the old country.

Al Davis said...

I believe the TV house flipper shows actually started in the UK. France has much more regulation over credit (and everything else!). They are not hurting as much.

Uh, you means to say that regulation actually WORKS? Wow, tell that BUsh.

FWIW, Americano banks were pretty leveraged here, perhaps on the order of 20:1. Some of the European banks went MUCH DEEPER in on this, leveraging 40:1!

So yes, they're in for a similar, if not rockier, ride when all is said and done.