Spain will be the next Lehman Brother. Greece is just the dessert.

MADRID—Spain's worsening financial crisis remains a strangely low-key affair. One in five people here are out of work, but generous unemployment benefits, strong family support networks and a bustling informal economy are helping maintain people's lifestyles. Bars and restaurants in the city center are doing brisk business.

"It seems to me the situation here is less bad than in Greece," says Manuel Herrera, a 30-year-old Peruvian immigrant, who has seen the recent images of angry mobs protesting in Athens. "Here in Spain, the crisis is not so noticeable: People still go out for beers, to buy cigarettes, whatever."

But the Asian-restaurant chain he works for as a cook has closed down four of its 12 restaurants, and Mr. Herrera says he sees a sense of hopelessness setting in that could point to prolonged economic stagnation.

"The Spanish were not ready for this crisis," he says. "The situation's not getting any worse, but it's not getting any better either."

For years, Spain was one of the euro zone's biggest success stories. Membership in the common currency in 1999 brought historically low interest rates that fueled a credit and construction boom, which transformed the country into one of Europe's chief growth engines. Through 2007, Spain created more than one-third of all euro-zone jobs and absorbed four million immigrants.

The global financial crisis brought that crashing down. Spain is grappling with 20% unemployment and a double-digit budget deficit that threatens to land the country in a Greek-style financial crisis.

Though the government expects the economy to return to growth in the first quarter, that follows contractions in six consecutive quarters.

On Wednesday, Standard & Poor's cited low growth prospects resulting from mounting banking-system stress, high household debt levels and low export capacity as primary factors behind its decision to downgrade Spain's sovereign debt.

Thirty-year-old Eduardo lost his job as a computer programmer a year ago and says many of his friends are also out of work. He still isn't ready to take just any job: "There are jobs out there, but most of them don't pay to well, or they require higher levels of experience."

A Good Video to think about. Crisis in June or July?

What a shame. The rally still going on. The Outcome will be bad.

Surveys show that the usual investors in major rallies – pension funds, hedge funds and retail investors – have not been net buyers of equities. And he says the most likely explanation for this anomaly in the biggest stock market rally since the 1930s is that major investment banks are the anxious buyers.

“Their buying would appear to be for one of two reasons. Firstly because they think the authorities will prevail in their (so far unsuccessful) efforts to inflate their way out of debt liquidation; or secondly because they are too big to fail and so can afford to take a huge gamble that enough buying will convince others to rush in and buy their inventory of risk assets at even higher prices."

Financial Times, Equity Rally Not Driven by the Usual Investors, Financial Times, April 28

And it should be noted that the Wall Street demimonde, the financial media, the financial commentators regulators and legislators, are widely supportive of this, because they draw they pay and employment prospects from an enlarged financial sector. So they are natural enthusiasts.

And of course there is the mainstream media, which is generally silent, or simply pleads confusion and ignorance, when things financial are discussed out of deference to their corporate owners, and the difficulties of actually engaging in investigative journalism, rather than acting as a guest host to a competitive debate among lobbyists and ideologues. It is the path of least resistance, and greatest returns. And it leads to an economy that consists of little else besides usury, propaganda, and fraud.

Roubini: "In A Few Days Time, There Might Not Be A Eurozone For Us To Discuss"

Roubini: "In A Few Days Time, There Might Not Be A Eurozone For Us To Discuss"





When it comes to the PIIGS, Dr. Doom is in full-on doom mode.

Felix Salmon has some good notes on a PIIGS panel from the Milken Global Conference, which included Nouriel Roubini, who is in his wheelhouse when talking about sovereign debt crises.

Nouriel, of course, takes that kind of thinking to its logical conclusion, and kicked off the panel by announcing that it was just in time: “in a few days,” he said, “there might not be a eurozone for us to discuss.” There's no way that Greece can implement the 10% spending cut it needs to do in order to stop its debt spiralling out of control at current interest rates — and even if it did, the economic effects would be disastrous.

Nouriel's base case, then, is Argentina 2001: after all, Greece has a much higher debt-to-GDP ratio, much higher deficit-to-GDP ratio, and much higher current-account deficit than Argentina had back then. And if that's the base case, there's no way that Greek debt should be trading anywhere near its current levels.

And guess what: Spain is worse than Greece, says Roubini. Ugh.

German leaders are practically begging Greece to quit euro.

Now top German leaders are practically begging Greece to quit the damn euro.

Reuters (via Alea):

Greece might have to quit the euro zone for a time if the country failed to tighten its belt sufficiently to qualify for emergency aid, a budget expert with Germany's junior coalition party said on Tuesday.

A temporary exit from the single currency might benefit Athens if accompanied by a devaluation, the Free Democrats' (FDP) Juergen Koppelin told Deutschlandfunk radio.

Greece can become the next Montenegro

The day after a formal default, Greek banks would no longer have access to the regular monetary policy operations of the European Central Bank because the ECB could no longer accept their collateral—Greek debt—which would immediately have junk status. The country would thus effectively cease to be part of the euro area. Its status would resemble that of Montenegro, which adopted the euro as legal tender without officially being a member of the single currency zone.

In Greece, following a messy default, euro notes and coins would still circulate in the economy, but one euro in a Greek bank account would no longer be automatically equivalent to a euro in a bank account elsewhere in the euro area, as Greek banks might immediately become insolvent and thus be shut out of the payment systems. Until Greek solvency was re-established, the euro zone would thus de facto have lost one of its members, even though the Greek Central Bank head would still sit on the Governing Council of the ECB and the Greek finance minister would still be a member of the Euro Group, with their normal voting powers intact.

Saving Greece Is Mission Impossible

http://www.businessinsider.com/greece-mission-impossible-2010-4

Everyone is still talking about Greece, as its EU-IMF bailout teeters on the brink because the Germans don't believe the Greek's have the stomach for deep budget cuts.

Germany doesn't want to invest in a country that doesn't fulfill its promises, and who can blame them looking at the horrors of the Greek debt situation.

This is a country that is still banking on near 6% GDP growth to power its recovery and help it pay down its debt. But it has creditors at the door, and increasing interest payments that the proposed €45 billion ($60 billion) may not even be able to meet.

Barclays Capital has the breakdown, looking at just how bad Greece is and who is going to be impacted by the spread of debt worries.

Taiwan Mafia Funeral video

Finnish Air Force shows Jet Engines damage by Ash Clouds

The Finnish air force has released images showing the effects of volcanic dust ingestion from inside the engines of a Boeing F-18 Hornet fighter, while it prepares to make inspections on several additional aircraft.
Five of the air force’s Hornets were involved in a training exercise on the morning of 15 April, just hours before the imposition of airspace restrictions due to the ash cloud spreading from a major volcanic eruption in Iceland.
One aircraft’s engines have been inspected so far using a boroscope, with melted ash clearly visible on its inside surface. The air force decided to release the images to show the potentially damaging effects of current flight activities, says chief information officer Joni Malkamäki.

“The images show that short-term flying can cause substantial damage to an aircraft engine,” the air force says. Continued operation could lead to overheating and potentially pose a threat to the aircraft and its pilot, it adds.
Checks will soon be made on the other four aircraft involved, and some engines will be removed to help Finnish company Patria – which provides in-service support for the nation’s F-18 fleet – to assess the extent of any damage caused. Its fleet comprises 55 single-seat F-18Cs and seven two-seat trainers, with each powered by two General Electric F404-402 engines.
Finland halted air force training flights yesterday, but the air force will continue to perform operational sorties as required, such as air policing missions and national security tasks.
One of its BAE Systems Hawk jet trainers also flew from Kauhava air base twice yesterday carrying an air sampling pod which collected dust from the atmosphere at various altitudes

Ash Clouds Moving Toward America.

The airlines may want to fly. However, If one of those planes suffer wear and tear due to the ashes after a few flights and crash. Who will want to answer for it?

Mauldin: There's A 50-50 Chance Of A Double Dip, And A 40% Correction In 2011

A whole new idea " Balance Sheet Recession"

This video will scare everyone. However, Japanese are not American. They prefer to blow up everything in style.

A very excellent Nouriel Roubini video

Asia property bubble may burst as early as this year

China’s property market is a bubble that may burst by as early as this year, according to hedge fund manager James Chanos.



The world’s third-biggest economy may need to keep up the pace of property investment because up to 60 percent of its gross domestic product relies on construction, said Chanos. The bubble may begin to “run its course” in late-2010 or 2011, he said in an interview on “The Charlie Rose Show” that will air on PBS and Bloomberg TV.

China is “on a treadmill to hell,” said Chanos, who said in January the nation is Dubai times a thousand. “They can’t afford to get off this heroin of property development. It is the only thing keeping the economic growth numbers growing.”
 
Johnlaw2012: Just look at the valuation of asia property you will think they need 3 generations to pay one house which sounds crazy. China may not be Japan but we have not seem a china recession for sometime seem 1995 when Mr Zhu tighten the market. I think it about time for china to has recession like the japanese during 1970.

Getting Very Worry. The Real Economy not Picking up and Famine coming

1943 China Famine, A chinese boy  begging for food.

 A few moment later, he finally fainted or die of starvation.

More Pictures of the 1943 china famine can be seem from here

http://www.6park.com/news/messages/49669.html