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Archive for 11/17/2011

Chief Economist Believes Europe Could Just Have Days Before A Financial Catastrophe, Moody’s Downgrades 10 German Banks, Fitch Warns US Banks

11/17/2011 2 comments

By Joe Weisenthal – “This is a fantastic interview with Citi’s Willem Buiter on Bloomberg TV.

You can hear the anger in his voice as he argues that Europe may have a matter of days before an unnecessary default and a financial catastrophe.

The answer: the ECB must act fast, and ignore the Germans who don’t get it. While some people don’t think that the ECB can really monetize sovereign debt this way, Buiter believes there’s absolutely nothing preventing the ECB from doing whatever it wants on the secondary market…

Buiter on Europe’s crisis:

‘Time is running out fast. I think we have maybe a few months — it could be weeks, it could be days — before there is a material risk of a fundamentally unnecessary default by a country like Spain or Italy which would be a financial catastrophe dragging the European banking system and North America with it. So they have to act now.’

‘The only two guns in town, one is only theoretical, and that is increasing the size of the EFSF to 3 trillion. It should happen but it can’t for political reasons. The other one, the only remaining share is the ECB. They may have to hold their noses while they do it, and if they don’t do it, it’s the end of the euro zone.'” Read more.

Moody’s downgrades 10 German public banks – “Moody’s downgraded on Wednesday its ratings of 10 German public-sector banks including BayernLB and Deutsche Hypo saying they were now less likely to receive state support if needed. ‘The rating actions reflect Moody’s assumption that there is now a lower likelihood that these banks would receive external support, if required,’ it said. It noted that EU rules restricted support and that Germany had set up a bank resolution scheme.” Read more.

Ratings agency Fitch issues warning for U.S. banks – “Fitch Ratings warned that it may reduce its “stable” rating outlook for U.S. banks with large capital markets businesses because of contagion from problems in troubled European markets. ‘Unless the euro zone debt crisis is resolved in a timely and orderly manner, the broad outlook for U.S. banks will darken,’ Fitch said. ‘The risks of a negative shock are rising.’ The warning was aimed at the entire U.S. banking sector …” Read more.

Categories: Man-Made Disasters

Syria on the Brink: Army Defectors Strike Pro-Regime Office, Russia: Latest Events Are ‘Quite Similar To A True Civil War’

11/17/2011 Leave a comment

“(CNN) — Army defectors in northwestern Syria — armed with rocket-propelled grenades — attacked a pro-government youth group office and clashed with Syrian security personnel Thursday, activist groups said.

Security forces also arrested dozens during raids in Harasta, the location of the air intelligence base outside Damascus that was attacked a day before by the Free Syrian Army, a band of military defectors confronting Syrian President Bashar al-Assad’s regime.

The developments stoke fears that the violence will spread.

‘This was quite similar to a true civil war,’ Russian Foreign Minister Sergey Lavrov said Thursday about the strike on the air intelligence base.

The defectors Thursday targeted the Revolutionary Youth Association office in the Idlib province town of Maaret Al Nu’man, and fought Syrian security personnel at the scene, according to the the Syrian Observatory for Human Rights and the Local Coordination Committees of Syria.

The groups didn’t identify the assailants as Free Syrian Army members.

There was no word of casualties in the Maaret Al Nu’man incident, but security personnel killed at least 12 people across Syria and explosions and gunfire rocked the suburbs of the capital Damascus, the LCC said.” Read more.

‘Syrian army planting mines along Jordanian border’ – “The Syrian army planted landmines at the border with Jordan in order to ‘restrict Syrians access to humanitarian asylum in Jordan,’ a week after reports that Syria was laying explosives on the border with Lebanon as well, Jordanian daily Al Ghad reported Wednesday. Syria was laying mines on its border with the Hashemite Kingdom in order to prevent Syrian evacuees from the Deraa governate and the city of Ramtha from entering Jordan, according to an informed source speaking on condition of anonymity to Al Ghad. ‘[Syrians] are fleeing the deteriorating security situation in their country,’ the source said according to Al Ghad. Tensions between Jordan and Syria have hit a low since King Abdullah II called on Syrian President Bashar Assad to step down, and Syrian activists loyal to their president stormed the Jordanian mission in Damascus.” Read more.

Categories: Wars and Rumors of War

Russia’s Military Chief Warns That Heightened Risks of Conflict Near Borders May Turn Nuclear as NATO Expands to Include Former Soviet Republics

11/17/2011 Leave a comment

“MOSCOW — Russia is facing a heightened risk of being drawn into conflicts at its borders that have the potential of turning nuclear, the nation’s top military officer said Thursday.

Gen. Nikolai Makarov, chief of the General Staff of the Russian armed forces, cautioned over NATO’s expansion eastward and warned that the risks for Russia to be pulled into local conflicts have ‘risen sharply.’

Makarov added, according to Russian news agencies, that ‘under certain conditions local and regional conflicts may develop into a full-scale war involving nuclear weapons.’

A steady decline in Russia’s conventional forces has prompted the Kremlin to rely increasingly on its nuclear deterrent.

The nation’s military doctrine says it may use nuclear weapons to counter a nuclear attack on Russia or an ally, or a large-scale conventional attack that threatens Russia’s existence.

Russia sees NATO’s expansion to include former Soviet republics and ex-members of the Soviet bloc in eastern and central Europe as a key threat to Russia’s security.

Makarov specifically referred to NATO’s plans to offer membership to Georgia and Ukraine as potentially threatening Russia’s security. Russia routed Georgian forces in a brief August 2008 war over a separatist province of South Ossetia. Moscow later recognized South Ossettia and another breakaway Georgian province of Abkhazia as independent states and increased its military presence there.” Read more.

Categories: Wars and Rumors of War