09:44 – I got 28 sets of the hazardous chemical subassemblies made up yesterday, with about 90 minutes’ work. It was a nice break from writing. Barbara won’t be home until Sunday afternoon, so the remaining work involved in building those 28 kits will have to wait for the following weekend, but we will be ready to start shipping chemistry kits again the week of 4 December.
On the heels of Germany’s disastrous bond auction Wednesday, Italy held an even more disastrous bond auction yesterday, with yields averaging more than 7.2%. It’s now obvious even to the biggest euro proponents that investors–individuals, banks, and foreign governments–are no longer willing to risk their money in euro-denominated instruments. Death of a currency as eurogeddon approaches. If you have any assets in euro-denominated instruments or funds, get out now, today, while you still can. The collapse, when it comes, won’t be gradual. And it will come, sooner rather than later.
13:38 – It really is time for any sane person to get as far away from the euro as possible as quickly as possible. At this point, we’re talking about the euro becoming a smoking pile of rubble within weeks, if not sooner. Don’t be lulled by the idea that Germany might save the euro. In the first place, it won’t because it’s not willing to take on responsibility for the debts of the other eurozone countries. In the second place, even if it were willing to do so, it can’t. Even if Germany were willing to beggar itself to save the euro, it doesn’t have sufficient assets to do so. Nor will Germany form a currency union with Finland, Austria, and the Netherlands. Germany will ultimately have no choice but to revert to the D-mark. All of them, including Merkel, know this, and you can bet that Germany has been frantically printing new D-marks in huge quantities for the last several weeks, if not months.
Euro armageddon: David Cameron fills the sandbags.
15:03 – And I see that S&P just downgraded Belgium from AA+ to AA, which is preposterous. Not that S&P cut Belgium’s rating, but that it left it ridiculously high. The ratings agencies obviously didn’t learn their lesson after the Lehman crisis, during which they were still rating junk derivatives AAA literally days before they crashed. The same is true now for sovereign credit ratings. A credit rating is supposed to reflect the likelihood of a country defaulting on at least some of its debts. On that basis, only the US really deserves the top credit rating, because it will never default. It may inflate the hell out of the dollar, which amounts to the same thing, but it will pay off its debts in dollars, regardless of what those dollars are then actually worth. So, if you assume that the US deserves the highest credit rating among all the world’s countries, although that rating is in fact crap, where should the major EU countries be rated? Well, let me fix that for them, using the descriptions from Wikipedia:
UK: BBB (An obligor has ADEQUATE capacity to meet its financial commitments. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments.)
Germany, Finland, the Netherlands: BB (An obligor is LESS VULNERABLE in the near term than other lower-rated obligors. However, it faces major ongoing uncertainties and exposure to adverse business, financial, or economic conditions which could lead to the obligor’s inadequate capacity to meet its financial commitments.)
France, Belgium, Austria: B (An obligor is MORE VULNERABLE than the obligors rated ‘BB’, but the obligor currently has the capacity to meet its financial commitments. Adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitments.)
Italy, Spain: CC (An obligor is CURRENTLY HIGHLY-VULNERABLE.)
I’m not sure why the three major agencies haven’t assigned these ratings to these countries, because that would reflect reality. It may be that the agencies, as usual, are behind the curve, or it may be that they are coming under immense pressure from the countries in question. Well, there’s no doubt they’re under intense pressure from the EU governments and the EU itself, but I’m not sure that fully explains their failure to assign accurate ratings. Note that, of this group, only the UK with its BBB rating can still be considered “investment grade”, and it’s teetering on the edge. Germany and all of the other nations rated BB or lower are actually “junk grade”. And, as we all know, changing a bond’s rating to junk causes all sorts of unpleasant things to happen, not least of which are mass sell-offs by banks and investment companies that are not allowed to carry junk bonds on their books.
Grab a look at this right away, as it may be gone before you know it.
http://www.youtube.com/watch?v=RcVnPuIsrJo
A Russian newswoman is supposed to be off-camera, but they switched to the video late, and she gives the finger while mentioning Obama, thinking she is off-camera. She got fired over the incident, which happened just yesterday Russian time.
Actually, there is some conflict over the whole issue, as that gesture is meaningless in Russia — there is another one they use. Same for most of Europe, outside the UK.
If that clip is gone, do a video search for “Tatiana Limanova”. YouTube is removing the video claiming copyright infringement, even though the copyright owner is fine with the video being shown. #20: Regardless of the Constitution and Bill of Rights, free speech does not exist in America.
Also search the variant “Tatyana Limanova”.
I read that she was swearing at someone behind the camera. Weird vid, either way.
Yeah, I heard that, too, and suspect that is the more likely scenario. Most likely pure coincidence it happened during the story on Obama. She did apologize and admit that she did it, however.
We have a 16 year old German exchange student living with us for a year. It will be interesting to see how she reacts to the collapse.
Rick in Portland
We had a German exchange student living with us for a semester here a couple of years ago, from the northern coast there, her dad being a veterinarian. She is about six feet tall with long blonde hair and blue eyes, of course. Her grandfathers were, naturally, in der Wehrmacht back when, but she had very little to say about that.
I heard quite a while back that Germany was busily printing out D-marks by the tons all along.
We have a 16 year old German exchange student living with us for a year.
So do we. Where in Germany is your exchange student from? Our student is from a small town near the Black Forest. This will be our seventh exchange student from Germany.
Jim Kunstler in upstate NY around Saratoga Springs has some choice commentary over the last month or so on The Current Situation, and also some invective directed at the impression many Americans must make as they travel about the world. I don’t travel around the world, not anymore, but if what he says is even half-true, it is truly embarrassing. Also some stuff that dovetails a bit with the discussions here on the economic and financial situations that threaten all of us.
“…I have come from a nation populated by monstrous quasi-human creatures who might be described as land-whales, and who generally present themselves in clothing that a five-year-old European would be embarrassed to wear. But that might be superficial and fatuous, too.
No, there is more going on with this. I first noticed it at the boarding gate area at JFK airport in New York, waiting for the flight to Berlin. For some reason there were a lot of teenagers on the flight. They were Euro teenagers. They were distinct from American teens. The Euro-teens acted like civilized people with what can only be called a sense of decorum. They were not costumed like clowns, criminals, sports stars, or zombies. Every day is not Halloween for them. Being a person seemed enough for them, as though the human condition were an honorable state-of-being. There were no obese Euro-teens. They were not stuffing their faces with pizza, French fries, and cinnabons. They were not obsessed with texting or other cell phone demonstrations of their social status. They waited patiently through the boarding delay and appeared to enjoy each other’s company without impulsive demonstrations, tantrums, tears, fights, or fits.
When I got to Europe seven hours later I found myself in a world of purposeful adults who take care of themselves and the place they live in. It was the weekend. I was there for an architecture conference beginning Monday (hence the delay in this blog). For two days I walked all over Gothenburg, Sweden’s second-largest city, about the size of Buffalo, New York, in population, but far denser, more alive, and in much better condition. The streets of the little city were filled with these beautiful super-model people and their children. I saw something that is virtually unknown in the US: both parents enjoying the day in public places with their kids. As described above, there were no emotional histrionics from the kids, no tears and tantrums, even from the tiny ones. This detail was startling for one who lives in a nation where six-year-olds are called “motherfucker” by their moms.”
And naturally, being an old fart with a rotten short-term memory, I forgot to include the damn link:
http://kunstler.com/blog/
I followed some of the links provided by our host, and saw that one of the columnists was projecting that the Pound would become the de facto currency of the EU. I knew years ago that the Poms’ decision not to abandon the Pound was a good one, but I didn’t know *how* good it was. I never understood how the Euro idea was supposed to work without full political union, even though one of my well informed pals who used to be in merchant banking said it would.
Oh, and didn’t someone here say a week or two back that he was real busy, and that his posts here would be short and sweet? I knew I was right not to take that seriously.
Our student is from a small town (about 15,000) in Baden-Württemberg near Stuttgart. To her, Portland is a huge city. Portland is the smallest city I have ever lived in.
She is short (about 5′ 2″), not a 6′ tall Valkyrie.
Rick in Portland (the one in the upper left hand corner of the map).
We had the Valkyrie, but she was about as smart as a bag of hammers, and kinda spoiled. A perfect stereotype of the dumb blonde joke.
I was interested in her grandfathers’ WWII history but as has been my experience for the past fifty years, that generation and the ones following (of Germans) have been very silent on the subject. YMMV.
As for the Euros, even though we have long since shoved the Brits out the door, when they got a bit too controlling and nosy a couple of times, I am of their mind on suspicion of EU stuff and think it better that they stay out. They have troubles aplenty of their own right now, as do we.
Boy, you guys sure take Black Friday seriously…
http://www.abc.net.au/news/2011-11-26/violence-erupts-during-us-holiday-sales/3696676
We had a German exchange student in our class in Year 11. A tall blonde valkyrie she was not. She was nearly as tall lying down as standing up. The class goddess was of German heritage (but born here as far as I know): blonde, tall, slim and outrageously beautiful, and dating the scruffiest guy I’d ever seen to that time. Shows how little stereotypes are worth.
Our student is smart and exceeding helpful. Our kitchen has been much cleaner than usual since she has been here and she does it voluntarily. Setting a good example for our daughter.
Yeah, I do miss clean. Just got in from picking up trash in the yard that came in from blowing around the neighborhood. We just never had visible trash anywhere in Berlin — except for cigarette butts flipped onto the railroad tracks at train stations (extraordinary number of smokers in Germany, stupidly).
Even when walking into the airport after returning from a visit to London, it was shocking to see how clean the floors were — spotless and polished right out to the wall molding.
When we lived in Zehlendorf, the guy across the street worked in admissions at Frei Universität. He said there were many German kids who wanted to spend time studying in America, but hardly any Americans who wanted to study in Germany. He said that the German government is so keen to get those numbers up, that any American kid who wanted to study in Germany could get their full educational freight and living expenses paid for. I tried desperately to get my kids to do that, when they were still high school and college age, but with no success at all.