Germany takes hot seat as Europe falls into the abyss

Source: The Telegraph

By Ambrose Evans-Pritchard
Last Updated: 11:05AM BST 06 Oct 2008

We face extreme danger. Unless there is immediate intervention on every front by all the major powers acting in concert, we risk a disintegration of global finance within days. Nobody will be spared, unless they own gold bars.

Investors will learn today whether the Paulson bail-out - fattened to $850bn (£480bn) by Congress - can begin to halt the death spiral in the credit system. So far, the response looks terrible.
Germany is now in the hot seat. The collapse of a rescue deal for Hypo Real Estate on Saturday threatens a €400bn (£311bn) bankruptcy that nearly matches the Lehman Brothers debacle for sheer scale.

Read more: http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3141428/Germany-takes-hot-seat-as-Europe-falls-into-the-abyss.html

---

The strong Euro - will it be seen as a kind of a Smoot-Hartley by future generations?

The Smoot-Hawley Tariff Act was an act signed into law in 1930 by President Hoover. It raised U.S. tariffs on over 20,000 imported goods to record levels. After it was passed, many countries retaliated with their own increased tariffs on U.S. goods, and American exports and imports plunged by more than half.

Alot of people believe the Smoot-Hawley Act was partially responsible for the severity of the Great Depression, but there is no universal agreement about its effect.

...correcting my digital dyslexsia.

...the entire global financial system is imploding because of corruption, fraud and the corrosion of the very principles of imperialism, oligarchy and exploitation it has been based on for some 37 years.

The major powers have failed to apply true physical economics in its policies relying only on monetary system eating away and disposing of the very productive, creative and innovative capabilities of nearly every nation in the world.

The two are connected. The toxic mortgage derivatives did come about because of corruption, but at the core of the problem is that people can't pay their mortgages. If those mortgages were paid off then this problem wouldn't be here.

Derivatives allow for spreading risk, for equilibrating exchange rates of currencies by pricing in future expectations, and lots of other useful economic functions.

But when markets are deceived about the actual value of huge amounts of holdings (all those worthless mortgage-backed securities), then derivatives can be a problem

for calculating the risk were very complicated and people didn't understand their real values.

underlying assets are toxic? Why even have a stock market? :eyes:

Mortgages were lent to people who could not pay them back. It built up over years, and Fannie and Freddie covered up the problem. Eventually it was going to hit like a ton of bricks. That eventually is now.

War, disease, and pestilence thrown in for nostalgia's sake

..then are the 10's the new 30's?

:kick: