Wednesday, February 17, 2010

Beware July

"Answer July—
Where is the Bee—
Where is the Blush—
Where is
the Hay?

Ah, said July—
Where is the Seed—
Where is the Bud—
Where is the May—
Answer Thee—Me—"

- Emily Dickinson, Answer July

If there is one month to fear this coming year, it would have to be July.

The financial sector is very unstable and all hell could break loose at anytime, but July has special problems.

Via FT Alpha, below is a bar chart put together by Barclay Capital's Barry Knapp. It shows the money that the PIIGS will have to raise this year.



If we somehow make it past the money needs of Greece in April and May and that is a big if, the next significant money raise will need to be done by Italy

In addition to a sizable money raise in March, Italy needs to raise significant amounts of money in June. It won't necessarily be the easiest thing to get done, but FT tells us:
Italy, apparently, has a “robust domestic banking system,” meaning there should be no problem absorbing the due supply of Italian government paper

Don't bet your house on this, even if it is underwater, but maybe the Italians can pull it off. Remember the head of Italy's central bank, Mario Draghi, is a former Goldman man.

Following the heavy Italian money needs comes Spain. Let's put it this way about Spain, Spain does not have a “robust domestic banking system,” where the money will come from. The best FT can do is say that the global economy will be out of recession by the time Spain needs to raise its money. It won't. The month of the Spanish money demands? July.

Back on the domestic front, Los Angeles faces a budget shortfall of nearly a billion dollars. The first hurdle is a $200 million deficit that some how has to be funded. The month of this deficit? July.

I repeat, the entire global government connected financial sector is teetering and could collapse at any time. But July seems to have more intense problems. Indeed, where is the hay, July?

7 comments:

  1. I will not be surprised if a mysterious hedge fund or equivalent operator appears from the Caribbean and snaps up all the debt slop the PIGS can roll around in. With a fiat hose pouring an endless stream of worthless paper wherever pointed, all the formerly sovereign countries need to do is sell their population a bit more into slavery and their debt bomb will be delayed another day.

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  2. Mr. Solomon is wise. That is what health care is really all about-getting the Feds' hooks in deeper to convince US bond buyers to keep buying. Increased tax starts immediately, alleged "benefits" don't start for years.

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  3. Solomon sez: "I will not be surprised if a mysterious hedge fund or equivalent operator appears from the Caribbean and snaps up all the debt slop the PIGS can roll around in."

    Personally, I will not be surprised if the "Carribean" lets the PIIGS and the rest of the Eurozone drown in their own slop.

    The US is engaged in economic warfare with the rest of the developed world, and Europe, the UK, Japan and China are at the moment falling right in line with the program.

    The US is the largest economic and military force in the world (unfortunately) and they are not about to give up their hegemony.

    Just a thought experiment, guys.

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  4. "The US is the largest economic and military force in the world (unfortunately) and they are not about to give up their hegemony."

    Certainly true of anyone. All humans hate to lose power. But the implication that PIGS troubles are because of US Economic Warfare is silly.

    The US is the Pilot of this crashing airliner. As will go the PIGS so must go the US.

    Your implication is that the US is committing economic suicide in order to damage the PIGS. Do you truly think the captain will crash the plane so that he can go into the passenger compartment and shoot some passengers?

    Wow. Humans are stupid.

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  5. Gordo:

    In your analogy, the pilot has a parachute, and many of the passengers are Americans.

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  6. I won't import the tables here, because I'm too tired and too lazy, but Reggie Middleton showed this week that France, Italy, and Ireland were actually the worst of the bunch. Italy is likely to hit first, then Ireland (a minimal hit), then France.
    Even Germany cannot support this bunch; they have their own debt problems. The Euro shall soon be history.

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  7. The mad and self-imagined "pilot crew" of the spaceship earth is not the US or any other state. It's the global class of financial game-obsessed psychos, who have long ago lost any connection whatsoever with reality. They think their mad maths can overrule the laws of nature, fx. the greenhouse effect.

    Let's just hope that a good, ashy blast from Iceland's Katla will keep them grounded for a solid portion of time soon. It'll do them good. Because these restless psychotic idiots are of course slaves of swirling the upper troposphere, trying to fullfill their paranoid dreams of safeguarding their "offspring" and escaping Damocles' sword.

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