Home » Posts tagged 'europe'

Tag Archives: europe

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

What’s to Be Done Now with All These Zombie Companies?

What’s to Be Done Now with All These Zombie Companies?

Saving the Zombies in Europe.

Europe’s zombie firms are multiplying like never before. In Germany, one of the few European economies that has weathered the virus crisis reasonably well, an estimated 550,000 firms — roughly one-sixth of the total — could already be classified as “zombies”, according to research by the credit agency Creditreform. It’s a similar story in Switzerland.

Zombie firms are over-leveraged, high-risk companies with a business model that is not remotely self-sustaining, since they need to constantly raise fresh money from new creditors to pay off existing creditors. According to the Bank for International Settlements’ definition, they are unable to cover debt servicing costs with their EBIT (earnings before interest and taxes) over an extended period.

The number of zombie companies has been rising across Europe and the Anglosphere — due to of two main factors:

  • Central banks’ easy money forever policies, which brought interest rates down to such low levels that even firms with a reasonable chance of default have been able to continue issuing debt at serviceable rates. Many large zombie firms have also been bailed out, in some cases more than once. Spanish green energy giant Abengoa has been bailed out three times in five years.
  • The tendency of poorly capitalized banks to continually roll over or restructure bad loans. This is particularly prevalent in parts of the Eurozone where banks are especially weak, such as Italy.

A Bank of America report from July posits that the UK accounts for a staggering one third of all zombie companies in Europe. They represent 20% of all companies in the U.K, up four percentage points since March, according to a new paper by the conservative think tank Onward. In the two hardest-hit sectors — accommodation and food services, and arts, entertainment and recreation — the proportion of zombie firms has soared by 9 and 11 percentage points respectively, to 23% and 26%.

…click on the above link to read the rest of the article…

Cheap Mediterranean Natural Gas Could Spell the End for the NATO Alliance

Turkey NATO Natural Gas Feature photo

Cheap Mediterranean Natural Gas Could Spell the End for the NATO Alliance

It’s a strange and unprecedented spectacle when countries like Israel, Greece, Egypt, Libya, Turkey, and others lay claims over the Mediterranean, while NATO scrambles to stave off an outright war, among its own members.

How Poor Leadership can Create Collapse or Make It Faster: Lessons from European History

How Poor Leadership can Create Collapse or Make It Faster: Lessons from European History

The damage that a bad leader can generate is simply fearsome, especially if that leader has a lot of power and he is nearly impossible to remove from his position. If then that leader controls a large military apparatus, even including nuclear weapons, then the disasters that can happen are beyond the imaginable. If you, like me, doubt the competence of our current leaders, there is plenty to be worried about.

The problem seems to be that our system of choosing leaders guarantees to propel to the top all sorts of power-mongering psychopaths. And as the power we manage increases, going from nuclear weapons to the control of the Web, the chances for truly disastrous damage created by an incompetent leader also increase.

Maybe there should be a science of incompetent leaders that might be a branch of the more general “science of evil.” In this post, I propose a brief exploration of this field that starts with the idea that the past is the way to understand the future. So I repropose a theme that I had already examined: that of Louis Napoleon (Napoleon III) (1808-1873) one of the best examples we have of an incompetent leader who ruined the state he was leading. At that time, fortunately, there were no nuclear weapons available and Luis Napoleon himself was not so aggressive and bloodthirsty as other famously bad leaders. Nevertheless, the damage he generated was considerable and we can learn something from his story.

Napoleon 3rd: how to destroy an empire in the making.  

…click on the above link to read the rest of the article…

 

The anatomy of a financial crisis

In this blog, we present the anatomy of a financial crisis. A characteristic feature of a banking crisis is that it tends to follow, more-or-less, the same path regardless of the ‘shock’ or ‘trigger’ that initiates it.

The next phase of the crisis is likely to be a global financial crisis, as we have been anticipating for quite some time (see, e.g., Q-Review 4/2017). However, few understand what a financial crisis is, though it is probably among the most feared economic phenomena of mankind.

So, let’s dive in.

The initiation

If a banking system is sound and robust, it can usually withstand financial and economic shocks.

But a banking system may be fragile. Usually this is due to high leverage levels, where banks have either lent aggressively or carry risky financial investments on their balance sheets—usually both. Banks can also have a weak financial position, with chronically low profitability and insufficient reserves. As we have explained earlier, this is exactly the state the European banking sector finds itself in.

The onset of a financial crisis requires a trigger. The most common is a recession or the expectation of recession among consumers and investors.

Recession leads to diminished income and defaults by both corporations and households. This increases the share of non-performing loans in bank loan portfolios, reducing the value of loan collateral and increasing bank risks and capital needs. As write-downs and losses increase, mistrust among other banks and depositors and investors does as well. The bank’s share price will usually start to reflect this.

A ‘bank run’

If suspicion spreads, banks will be apprehensive about counterparty risk and will be unwilling to lend to one another even on an overnight basis.  If allowed to continue, this will have a calamitous impact on liquidity in money markets.

…click on the above link to read the rest of the article…

Europeans Are Waking Up to Government Covid Tyranny. Why Are We Still Asleep?

Europeans Are Waking Up to Government Covid Tyranny. Why Are We Still Asleep?

Tens of thousands of Germans marched through Berlin on Saturday, proclaiming a “Day of Freedom” and demanding an end to government-mandated face masks and “social distancing.” The UK and Netherlands also saw large protests against their governments’ tyrannical actions in response to the coronavirus outbreak.

According to media accounts, the Berlin protesters held signs reading “We are being forced to wear a muzzle,” “Natural defense instead of vaccination,” and “We are making noise because you are stealing our freedom!”

Good for them!

The New York Times Tweeted that the masses of Berlin demonstrators were all “Nazis” and “conspiracy theorists.” Does the “paper of record” really want us to believe there were perhaps a million Nazis active in the streets of Berlin? Wouldn’t that be alarming?

The fact is, Europeans are realizing that their government-mandated lockdowns did little or nothing to protect them from the virus, while causing economic catastrophe and untold human suffering.

They likely looked around and noticed that Sweden, which never locked down its economy, rejected face masks, and kept its restaurants and other places of business open, did not fare any worse than the countries that have been turned into open air prisons for much of the year. In fact, Sweden had a lower death rate from the virus than strict lockdown states like the UK and France. No wonder people are starting to get angry.

Unfortunately, while the Europeans are waking up, Americans are still asleep as our freedoms continue to be trampled. While Europeans demand an end to government tyranny, here we see states with minuscule new deaths returning to lockdown. It is as if all the wannabe tyrants from mayors to governors are finally realizing their secret dreams of ruling by decree. Their dreams are our nightmares!

…click on the above link to read the rest of the article…

US Threatens European backers of Nord Stream 2 Pipeline, NATO in DC’s Crosshairs

US Threatens European backers of Nord Stream 2 Pipeline, NATO in DC’s Crosshairs

The Nord Stream 2 pipeline is nearing completion despite all the best efforts by the U.S. to stop its construction, causing a rift between Washington and its largest European ally and the potential end of NATO.

The U.S. is starting to fret about the imminent completion of the Nord Stream 2 pipeline, the second of two underwater gas pipelines running from the Russian Baltic city of Ust-Luga to Greifswald, Germany, and has begun issuing informal threats of repercussions to companies who are backing the nearly-finished project. 

According to unnamed sources, at least a dozen American officials from three separate departments held video conference calls with European contractors working on the pipeline, while U.S. Secretary of State, Mike Pompeo reportedly warned private European backers of “risk[ing] the consequences” of continuing their support for the key energy infrastructure project.

Several European energy concerns, such as France’s Engie, Germany’s Wintershall Dea and Uniper and Anglo-Dutch Royal Dutch Shell have indirect financial ties to the massive $11.7 billion-dollar underwater oil pipeline being constructed by Russia’s partially state-owned Gazprom, which will double Russia’s oil export capacity to Europe and seriously infringe on Atlanticist designs over the old continent.

Only six percent of the 1,200-mile pipeline remains to be laid in Danish waters, which is stalled due to U.S. sanctions against the European contractors working on that particular stretch. However, Denmark has recently circumvented the sanctions by licensing different vessels, and construction is set to resume by September.

Gazprom CEO, Alexei Miller disregarded claims that U.S. sanctions would stop the project from being completed, and Russian President Vladimir Putin announced that the pipeline would be commissioned before the end of this year. The completion of the Russian pipeline would mean a practical end to the viability of American LNG exports to Europe; a fate the U.S. has been trying to avoid since the project’s beginning in 2012.

…click on the above link to read the rest of the article…

Europe Has Been Preparing a Global Gold Standard Since the 1970s

Europe Has Been Preparing a Global Gold Standard Since the 1970s

Research reveals that European central banks have prepared a new international gold standard. Since the 1970s, policies that paved the way for an equitable and durable monetary system have gradually been implemented.

In my view, the current fiat international monetary system is ending—unconventional monetary policy has entered a dead end street and can’t reverse. I have written about this before, and will not repeat this message in today’s article. Instead, we will discuss a topic that deserves more attention, namely that European central banks saw this coming decades ago when the world shifted to a pure paper money standard. Accordingly, European central banks have carefully prepared a new monetary system based on gold.

When the last vestige of the gold standard was terminated by the U.S. in 1971, circumstances forced European central banks go along with the dollar hegemony, for the time being. Sentiment in Europe, however, was to counter dollar dominance and slowly prepare a new arrangement. Currently, central banks in Europe are signaling that a new system that incorporates gold is approaching.

If you want to read a summary of this article you can skip to the conclusion.

Contents:

  • The Rise and Fall of Bretton Woods
  • Europe Equalizes Gold Reserves Internationally
  • Private Gold Ownership Distribution
  • Setting the Stage for a Gold Standard
  • Conclusion
  •  Sources

The Rise and Fall of Bretton Woods

At the end of the Second World War, a new international monetary system called Bretton Woods was ratified. Under Bretton Woods, the U.S. dollar was officially the world reserve currency, backed by gold at a parity of $35 per ounce. The United States owned 60% of all monetary gold—more than 18,000 tonnes—and promised the dollar to be “as good as gold.” All other participating countries committed to peg their currencies to the dollar. Bretton Woods was a typical gold exchange standard.

…click on the above link to read the rest of the article…

Russia Denies Causing Latest Radioactivity Over Europe; UN Agency Says Origin “Still Unclear”

Russia Denies Causing Latest Radioactivity Over Europe; UN Agency Says Origin “Still Unclear”

Last Friday monitors with the Comprehensive Nuclear-Test-Ban Treaty Organization (CTBTO) issued an alarming report that its radiation sensors based in Scandinavia picked up abnormal radioactivity levels in the air over the Baltics and Scandanavia. Its ultra-sensitive networked sensors set up across Europe and the world are capable of picking up nuclear weapons testing or possible nuclear power plant leakage anywhere around the globe.Leningrad plant in the town of Sosnovy Bor. TASS/Getty Images.

The Stockholm monitoring station “detected 3 isotopes; Cs-134, Cs-137 & Ru-103 associated with Nuclear fission at higher than usual levels,”according to CTBTO chief Lassina Zerbo. The UN nuclear agency has been investigating the ‘mystery’ radioactivity, which while not considered in large enough concentrations to harm humans, still “are certainly nuclear fission products, most likely from a civil source,” according to the prior CTBTO statement. “We are able to indicate the likely region of the source, but it’s outside the CTBTO’s mandate to identify the exact origin.” 

However it’s clear that there was a release of “very low” levels of man-made radioactivity.

The UN watchdog said Tuesday that the small amounts of radioactive isotopes detected over a significant area spanning from western Russia to Baltic countries to parts of Scandinavia still have an unclear origin and cause.  

The International Atomic Energy Agency’s (IAEA) director general, Rafael Grossi, also sought to assure the public that “the levels reported to the IAEA are very low and pose no risk to human health and the environment.”

According to the AP, European countries are being asked to self-report any radiation releases. So far at least 29 have voluntarily reported no known incidents within their borders, including Russia. Map issues by the CTBTO showing a spike in radioactivity over Nordic countries. 

…click on the above link to read the rest of the article…

Europe On Alert After Unknown Radioactivity Spike Detected Over Baltic Sea

Europe On Alert After Unknown Radioactivity Spike Detected Over Baltic Sea

Almost a year ago Russia admitted to releasing significant amounts of radiation into the air that triggered warning alerts in the region of the far north Arctic Circle port cities of Arkhangelsk and Severodvinsk, after a failed weapons test involving a “small-scale nuclear reactor” that killed Russian scientists – which was believed connected to Russia’s hypersonics program. 

We can’t help but recall that incident now with new reports of radiation sensors based in Scandinavia again picking up abnormal radioactivity levels in the air. Perhaps there’s some further failed weapons tests happening somewhere in the region?: 

“Radiation sensors in Stockholm have detected higher-than-usual but still harmless levels of isotopes produced by nuclear fission, probably from somewhere on or near the Baltic Sea, a body running a worldwide network of the sensors said on Friday,” Reuters reports.

The Comprehensive Nuclear-Test-Ban Treaty Organization (CTBTO) confirmed the higher than normal activity.

Its ultra-sensitive networked sensors set up across Europe and the world are capable of picking up nuclear weapons testing when it occurs anywhere around the globe.

As Reuters reports further, the Stockholm monitoring station “detected 3 isotopes; Cs-134, Cs-137 & Ru-103 associated with Nuclear fission at higher than usual levels,” according to CTBTO chief Lassina Zerbo, who made the announcement on Friday. 

The additional particles were picked up by the sensors last Monday and Tuesday, and confirmed by the nuclear monitoring organization. Zerbo pointed out, however, that it wasn’t at levels harmful for human health.

Russian nuclear plant in Saint Petersburg, AFP via Getty. 

“These are certainly nuclear fission products, most likely from a civil source,” the CTBTO said in a statement. “We are able to indicate the likely region of the source, but it’s outside the CTBTO’s mandate to identify the exact origin.” 

The organization further speculated that the source could have come from anywhere spanning from western Russia to Baltic countries to parts of Scandinavia

European Civil Unrest Erupting in Germany & the Netherlands

European Civil Unrest Erupting in Germany & the Netherlands

Riots are erupting all over Europe. In Stuttgart, a total of 400 to 500 people participated in the riots since Sunday night with 19 police officers injured. The same is unfolding in the Hague in the Netherlands. These politicians know nothing about human nature. Our studies of time and riots warned that a simple correlation provided a forecast that the civil unrest would turn violent after 4 to 6 weeks. We have even provided a listing of US civil unrest incidents.

These politicians are clueless as to what they are trying to do, using this virus as the excuse to civilly imprison people until they destroy all CO2 producing companies. They are fully conspiring with the climate change people by using the virus as the excuse to destroy the world economy.

Blain’s Morning Porridge – May 19 2020 – Yoorp Kicks The Can

Blain’s Morning Porridge – May 19 2020 – Yoorp Kicks The Can

“I don’t think I could stand another ten years of this fighting…”

Yesterday afternoon I set out to cure Coronavirus. I set up a new company, Splurgeldrug.Com, issuing our first press release about promising new drug trials, followed by another reporting how lab rats responded favourably to the first press release, and how confident of a vaccine in the near future we are. Splugeldrug.com stock went to $600 by teatime, and I currently negotiating the leveraged acquisition of a drug major… 

It’s that kind of market. Rumour and sigh abounds.. 

As a wiser heads than I have noted… most drugs take years to get to market, and less than 1% are ever approved. We still don’t have an effective vaccine for the constantly evolving and mutating annual flu. To bet the farm on a successful vaccine would seem reckless… 

Let’s be honest.. if we get a successful vaccine it will help speed global recovery, but it won’t undo the brutal economic damage that’s already been done. A vaccine will simply flatten the depth of the recession – not reverse it, and certainly not magically convert Q2 Earnings into positive numbers…  

Markets are not thriving because they expect a vaccine miracle. They are simply arbing governments and central banks. When Powell says he’s “not out of ammunition by a long-shot”, that’s a massive buy signal. Any positive news helps.. and as the central banks have got out backs, just ignore the bad stuff… 

(Oh dear… I suspect this will end badly…)

Yoorp – The Decline of the West, part 5826

Thankfully, I have something more significant and real(ish) to write about this morning… Yet again, for all the wrong reasons, it’s time to buy European distressed European Sovereign bonds. Wait for the them to tighten. Sell, then wait for the next crisis. 

…click on the above link to read the rest of the article…

Third Mega-Crisis in 12 Years: Eurozone Economy Plunges at Fastest Rate on Record

Third Mega-Crisis in 12 Years: Eurozone Economy Plunges at Fastest Rate on Record

First the Global Financial Crisis, then the Euro Debt Crisis, now the Big One.

In its 21 years of official existence, the Eurozone has already been through two brutal crises — the Global Financial Crisis and one of its own doing, the Euro Debt Crisis — that nearly tore the bloc apart. Now, it is in the grip of another one that is already exacting a larger toll than the first two, despite having barely begun.

The preliminary GDP in the first quarter for the Eurozone, GDP fell by 3.8%, according to Eurostat’s flash estimates (for the entire EU, it fell by 3.5%), “the sharpest declines observed since the time series started in 1995,” Eurostat said. This is despite the fact that most of the region’s lockdowns did not begin until mid-March:

All things considered, the Euro Area’s biggest economy, Germany, got off relatively lightly. It shrank by just (!!) 2.2% compared to the previous quarter. It was still its biggest contraction since the the Global Financial Crisis, more than a decade ago. German industrial production was particularly hard hit, tumbling by 11.6% year-on-year in March, when the lockdown forced factories to close. In Q4 2019, Germany’s GDP growth rate was already negative (-0.1%).

But many other Euro Area countries fared a lot worse. Of the four worst performing economies, three are the bloc’s second, third and fourth largest, France, Italy and Spain, which between them account for almost 45% of Euro Area GDP. The other was Slovakia. Spain, Italy and France suffered more cases of Covid-19 and resulting fatalities than any other countries in the Euro Area. They also imposed the most draconian lockdowns. The impact on their economies has been brutal.

…click on the above link to read the rest of the article…

Farm-Labor Crisis under COVID-19 Sends Countries Scrambling

Farm-Labor Crisis under COVID-19 Sends Countries Scrambling

Miserable, crowded living conditions of Europe’s foreign farm workers put them at much greater risk. And they’re staying away.

In one of the many paradoxes of the new world we live in, Western European countries that have seen millions of jobs wiped out in a matter of weeks are now facing an acute shortage of agricultural laborers.

Farmers in Germany, France, Italy, Spain, the UK and other parts of Western Europe have come to rely on huge numbers of cheap labor from Eastern Europe, North Africa, and Sub-Saharan Africa. Now, those workers are either no longer able to make it to the farms or are choosing to stay with their families in their home countries.

This is leading to an “alarming” shortage of farmhands, warns the EU in an as yet unpublished report. The report blames the shortage on two main factors:

  • The restrictions on the movement of workers between EU countries to combat the spread of Covid-19;
  • And the miserable, crowded living conditions in which many imported farm workers live, which put them at much greater risk of contracting the virus.

In Spain a record 900,000 workers dropped off Spain’s social security register of employees in the last two and a half weeks of March, yet farm associations are complaining that they’re short of over 100,000 workers to help pick the fruit, vegetables and tobacco that are now ready for harvest.

“Vineyards are paralyzed because there’s no one to install the conduction system; there are no day laborers to prune the olive trees or remove the weeds in the onion farms; there are not even enough hands to tie the garlic bundles”, says agricultural engineer Arturo Serrano. “All of these crops have work cycles that are governed by nature and cannot be postponed.”

…click on the above link to read the rest of the article…

Covid-19 Shatters the Facade of European Union

Covid-19 Shatters the Facade of European Union 

The new coronavirus and its accompanying disease Covid-19 has stopped the globe in its tracks. Governments, markets and news cycles have become dominated by the pandemic. Europe is now the epicenter for the disease, with reportedly more fatal cases of infection than China where the virus first erupted in December.

Several European Union countries have declared themselves states of emergencies, including Belgium, France, Portugal, Spain and Italy. The 27-member bloc has sealed off external borders. Some states, such as Poland, have begun closing borders with other EU members. Brussels, the administrative center of the EU, is alarmed because the much-vaunted single market and its core principles of free movement of goods and people is at risk of collapsing.

The European entity which proclaims solidarity and supranational status is reverting to a collection of nation states, each desperately fighting for their own survival amid the Covid-19 pandemic. EU leaders have been criticized for showing lack of central leadership and solidarity. When Italy first reported a surge in infections a few weeks ago, the rest of Europe was slow to respond with the necessary prompt assistance. Now Italy is such a grip of the disease – with thousands dead – that in some parts of the country normal funeral services reportedly cannot even cope with the number of deceased.

In blistering remarks this week, the Serbian President Alexander Vucic  lamented that there was “no European solidarity”. Serbia is a prospective member of the EU along with several other Balkan states, but Vucic said his country has received little in the way of aid from the EU in face of the coronavirus threat. Indeed, by contrast, the Serb leader extolled the generosity of China which has sent large shipments of equipment to combat the disease. Beijing has also dispatched aid cargoes and medical teams to Italy and other EU members to help them cope with their outbreaks.

…click on the above link to read the rest of the article…

Italy Goes Full “Wuhan”, Orders Most Restrictive Lockdown Yet, As Global Case Total Passes 300k: Live Updates

Italy Goes Full “Wuhan”, Orders Most Restrictive Lockdown Yet, As Global Case Total Passes 300k: Live Updates

Summary:

  • Massive surge in number of deaths and cases in UK, Germany, Spain, Italy, and France
  • New York, New Jersey deaths, cases accelerate
  • Italy goes under full lockdown
  • NY Gov Cuomo: “months, not weeks” to control virus
  • Ukraine declares total quarantine
  • Belgium sees 25% jump in cases
  • Saudi Arabia reports 10% spike
  • German gov’t ends years of fiscal restraint with 365 billion euro aid package
  • NYC airspace closed after positive Air Traffic Controller test
  • NJ declares full state lockdown; “will take action” for people not following precautions
  • FDA authorizes first 45-minute COVID-19 test
  • US Fiscal Aid package around $2 trillion (10% of GDP), Kudlow
  • Officials increasingly calling for the cancellation of the Tokyo Olympics

*  *  *

Update (1835ET): Even after threatening Italians in some areas with serious criminal penalties for violating their stringent quarantine orders, it seems Italy’s coronavirus containment efforts have failed.

After reporting another shocking jump in deaths, the Italian government has gone full “Wuhan”, ordering a complete shutdown of industrial production for 15 days.

In a speech delivered just before midnight on Saturday in Rome, Prime Minister Giuseppe Conte announced that he is ordering ALL non-essential businesses to be closed, and for Italians to stay home.

These measures are slightly more restrictive than the current measures, which allow Italians more freedom to move about their towns and communities. They will also likely result in a much larger economic hit, as Italy’s industrial stalwarts are forced to pause operation.

And just like that, an entire country – 60 million Italians – is now under ‘shelter in place.’

Elsewhere, as Middle Eastern countries escalate their crackdowns, Kuwait announced that it would start imposing a curfew between 5pm and 4am due to what the government called “non-compliance with Ministry of Health’s instructions to stay indoors.” Meanwhile, the UAE has closed beaches and parks for two weeks.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
Click on image to purchase