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Dying industries

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Tuesday, March 29, 2011

Dying industries

A new analysis by research firm IBIS World looks at 10 industries that appear to be dying. The list isn’t exactly shocking, but it represents a mix of sectors that are being left behind by technology or have been hurt by cheaper overseas competition.
The full list is below:

Sector Revenue 2010 (in millions) Decline 2000-2010 Forecast Decline 2010-2016 Establish- ments 2010 Decline 2000-2010 Forecast Decline 2010-2016
Wired Telecommunications Carriers $154,096 -54.9% -37.1% 23,474 -10.5% -15.9%
Mills $54,645 -50.2% -10.0% 9,553 -23.6% -12.8%
Newspaper Publishing $40,726 -35.9% -18.8% 6,128 -28.6% -17.6%
Apparel Manufacturing $12,800 -77.1% -8.5% 2,265 -60.5% -11.3%
DVD, Game & Video Rental $7,839 -35.7% -19.3% 17,369 -34.8% -11.2%
Manufactured Home Dealers $4,538 -73.7% -62.0% 3,968 -56.7% -58.7%
Video Postproduction Services $4,276 -24.9% -10.7% 1,789 -43.2% -37.8%
Record Stores $1,804 -76.3% -39.7% 2,916 -77.4% -11.6%
Photofinishing $1,603 -69.1% -39.1% 7,083 -59.3% -33.3%
Formal Wear & Costume Rental $736 -35.0% -14.6% 2,310 -28.5% -17.0%

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Eurozone update

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Tuesday, March 29, 2011

Eurozone update

Amid the general indifference of the media and the markets more bad news from the Eurozone:

UK
 
UK Prime Minister David Cameron refused to respond to suggestions that Britain may have to pledge billions of pounds to any emergency funding.  He said: “It’s not right to comment and speculate on another country’s finances, and I’m not going to do that.”  He has faced angry calls from his own Conservative MPs to refuse to contribute British money towards a bail-out. Well at the end it is a matter to save UK banks which are heavily exposed with the PIIGS as per chart below.

Spain

Moody’s put another nail in Spain’s coffin this morning, downgrading 30 Spanish banks by one or more notches. Interestingly, they left Santander and BBVA alone.

Portugal

There had been expectations that the two-day summit in Brussels would agree a resolution over rescuing Portugal.  But Portuguese ministers said they had no intention of following Greece and the Irish Republic in tapping the bail-out fund.  Even so, analysts believe it is only a matter of time before other countries are forced to provide support to the ailing economy. Portugal says it does not need aid, but many analysts say Lisbon is in denial.
The financial markets are also worried as Portugal must repay a large chunk of debt to lenders in April.  On Friday, Standard & Poor’s downgraded Portugal’s credit ratings by two notches to BBB and warned it could cut it further. S&P followed a two-notch cut by Fitch on Thursday.


Ireland

A quick deal has been put together to give Irish banks $80Bn to shore up their finances – also money that is being created out of nowhere but, on the whole, it’s keeping the EU markets stable so far.

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Italy immigration crisis

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Monday, March 28, 2011

Italy immigration crisis: Fear and Loathing in the Mediterranean

Since the start of revolution in North Africa a wave of boat people has been flooding the tiny island of Lampedusa south of Sicily looking for asylum in some cases while in others for an easy entry to Europe.
Last week many undocumented immigrants from Egypt and other countries declared themselves to the Italian authorities as Libyan to avail of the refugee status and a possible fast track to legal immigration.
Since January more than 15.000 immigrants have reached the coasts of Southern Italy trying and escape from the North African quagmire.
Lampedusa which has a population of 6000 is now making space for an additional 5300 with thousands more reaching the island each week. The Italian government has started to relocate immigrants to newly created camps on Sicily and the italian mainland to release some pressure on the island, but this has not prevented the start of violent protests of the people of Lampedusa against the Italian Government responsible according to them of not being able to handle the situation and asking the immediate relocation and assistance of the European Union on this issue.

The Great Italian Political Circus

The response of the Italian government has been as in previous occasions highly schizophrenic moving from racist declarations to apathy to pure hysteria.

Lampedusa which is under administrative control of Sicily has witnessed recently a grand tour of famous Sicilian and national politicians flying to the crowded island to assess the situation and shoot some of their finest rethoric to the upset population.

The Sicilian governor Lombardi has asked immediately for the North of Italy to share the burden of the relocation and requested a naval blockade of the strait against the hordes of boat people invading the island while mentioning he was going to bring with him a machine gun while visiting the island.

Interior minister Roberto Maroni labelled the immigrants as “clandestine” dismissing calls for any possible asylum evaluation as refugees.

Silvio Berlusconi is as usual silent when it comes to important matters since he is quite busy with a trial for corruption where he was standing as accused today in Milan and bracing for the underage prostitution trial due to start in April.

Frattini the Italian foreign minister more diplomatically suggested to pay 2000 euros to each immigrant willing to go back (back where and how? He was not able to say; maybe he was thinking of giving them a ride on the jet fighters that are bombing Libya) and promise to not come back.

Bossi the leader of the xenophobic Lega Nord dismissed any payment solution and in his usual refined style simply asked to throw them out.

The Italian president Napolitano having to mantain a decorum even considering he was in visit abroad to the United States sent a message of peace and love reminding us of the favourite anecdote of any italian politician pretending to be liberal minded and telling us of how the italians were immigrants many years ago and how we should now extend the same courtesy.

We want Money!

After this coreographic ballet of fear and loathing in the Mediterranean, the Italian Government has started to put pressure on the European Union to help dealing with this issue which has been described as a possible apocalyptic scenario, where war, riots and misery in North Africa will drive hundred of thousands if not millions on the shores of Europe.

Cardinal Bagnasco invoked the european brotherhood in dealing with an issue which is European and not only Italian.

The leader of Lega Nord, Umberto Bossi sticking to his typical vaudevillan character threatened throwing out of Italy and into Germany and France all the immigrants arriving on Italian shores.

The Italian President Napolitano asked for European unity which means he wants money.

The European Union confirmed they will assist with extra personnel if necessary but that is it. According to the Schengen Treaty it is responsability of the first port of entry to Europe to deal with any immigration issue, other countries can of course provide support but not certainly pay money to the Italian government who should have all the means at his disposal to deal with 15000 immigrants or 150000. After all when Eastern Europe immigrants moved to Germany in millions, the German government did not go begging help to the European Union managed them without even sweating too much.

The reality is that a lot of politicians are seeing this new emergency as a way to get extra EU subsidies in form of financial help to deal with an emergency and to spread this money to their cronies and electoral affiliates in a fraudolent way as it happened and it still happens with every subsidy from farm to industrial provided to Italy by the EU.

This emergency which is being artificially inflated by the Italian media under directives from the leading political parties is seen by some as an opportunity to make a lot of money out of the desperation of thousands of immigrants reaching our shores.

Wikileaks last year leaked a cable from the US Embassy describing correctly what was the failed immigration policy of the Italian government and correctly putting in focus the issue of the illegal immigration; the following is an excerpt of the original cable:

The dramatic plight of the boat people, most of whom are
undocumented, masks the fact that they constitute less than
15 percent of total arrivals of irregular migrants (although
there was a 75 percent surge in the number of immigrants
arriving by boat in 2008 and the trend line in the first
quarter of 2009 appears constant). The majority of irregular
immigrants present in Italy — estimated to number up to
650,000 but the number is likely even higher — arrive by
land, air or sea. Arriving from non-EU countries, primarily
Morocco, Albania, China, Ukraine and the Philippines, they
have obtained visitors visas and overstay, encouraged by
Italy’s porous borders and history of “”regularizing”” illegal
immigrants. Although Italy successfully expelled some 25,000
persons in 2008, a majority of expulsion orders are not
executed because of a lack of resources; Italy has less than
3,000 available beds for detention. In addition to the
irregular migrants from non-EU countries, Italy is a popular
destination for migrants from Eastern European countries such
as Romania and Bulgaria, whose citizens are able to move
freely following EU accession in 2007.



2. (SBU) …. Although Interior Ministry officials have told the
embassy that they believe there is little terrorist threat
from irregular immigrants, and government statistics reveal
an overall drop in crime in all major Italian cities in 2008,
Prime Minister Berlusconi, Interior Minister Maroni, other
senior officials, and the Italian press (of which Berlusconi
controls a majority) continuously hype a connection between
crime and terrorism and illegal immigrants. Critics of the
government’s approach argue that Italy needs a comprehensive
integration policy that acknowledges the demographic changes
in Italian society — an aging population, a declining birth
rate and the presence of some four million foreign residents
in a population of 60 million. They argue that immigration
should be treated as a resource, not a threat, and fear that
scapegoating irregular immigrants will radicalize Italy’s
“”second generation”” of legal migrants, including more than
one million Muslim immigrants.


8. (C) Overstayers. Government and NGO officials tell us,
however, that the majority of irregular immigrants enter
Italy with a visa and then overstay. Italian border police
chief Rodolfo Ronconi asserted that 57 percent of immigrants
who enter Italy with a visa overstay. Most arrive through
the land border in the northeast but also through air and sea
ports. Vincenzo Delicato, a senior director of the National
Police, told us that these illegal immigrants are primarily
from Morocco, Albania, China, Ukraine and the Philippines.
He explained that the border police do not screen EU
residents and conduct only spot checks on non-EU residents.
Interior Ministry statistics for 2008 record 70,625
“”stranieri rintracciati”” (or “”tracked foreigners,”” an
implicit acknowledgement of a population of untracked
foreigners), of whom only 24,234 were repatriated. The
remaining 46,931 were considered not in compliance with
expulsion orders. The 2007 statistics are comparable. Other
government statistics indicate that only 20 percent of
illegal immigrants subject to an expulsion order are actually
repatriated. For example, in Milan in 2007, only 653 persons
out of 3,088 subject to an expulsion order were in fact
repatriated.

9. (C) Insufficient capacity. There are several
explanations for this large presence of irregular immigrants.
First, according to the vice president of immigration for
Caritas, Le Quyen Ngo Dinh, “”Italy does not really know how
they arrive and how many they are,”” meaning that most
visitors are not subject to border control or judicial
review. Second, for those who come into contact with the
state and are judged as irregular, Italy has limited
detention space: nationwide there are 10 centers of
identification and expulsion, with a capacity of fewer than
3,000 beds, and a handful of “”welcome”” centers near southern
Italian seaports to screen immigrants arriving by boat. The
result is that Italy cannot detain all those subject to
expulsion order, which means many of them simply fail to
comply. Moreover, some of those expelled return, gambling
correctly that they can again slip through Italy’s porous
borders, including 1,500 miles of coastline. Third, many
governments of source countries refuse to cooperate with
Italian authorities in identifying undocumented immigrants.
These individuals can still be subject to expulsion orders
but cannot be repatriated without an identity.
Fundamentally, argues Ngo Dinh, Italy lacks the structural
capacity to manage the large numbers of illegal migrants to
the country. As Paolo Ciani, who helps immigrants for the
Italian charity Sant’Egidio, said simply: “”Not only is the
government policy (dealing with immigrants) morally wrong,
it’s ineffective.””

The analysis of the US Embassy although dating back to 2009 is still today accurate, nothing of the above has changed and the scaremongering of the boat people in Lampedusa is simply another propaganda tool to raise approval for a failed government and prime minister, to try and swindle some money out of the European Union in order to cover the lack of money and resources described above (it is even worst now after the last budget cuts) and to spread some subsidies to corrupted officials and their cronies while leaving the situation deteriorate.

Goodfellas coming!

Another interesting line of business though is being recently explored by the hyperactive mafias of Southern Italy which it seems started to enter into the business of transporting immigrants to Italy. Few of them have been arrested while transporting immigrants on the coast of Sicily. After all with war and riots all over North Africa the business is set for a boom in the future.

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TEPCO admit possible reactor breach

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Monday, March 28, 2011

TEPCO admit possibility of reactor breach

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From Asahi Shinbun

Tokyo Electric Power Company (TEPCO) admitted to the possibility in its early March 28 press conference that the steel Reactor Pressure Vessels that hold nuclear fuel rods in the Reactors 1, 2, 3 at Fukushima I Nuclear Plant may have broken. TEPCO explained the situation “Imagine there’s a hole.” Because of this “hole”, contaminated water that’s been poured into the Pressure Vessels to cool the fuel rods continues to leak, it is assumed.

In the Reactors 1, 2, and 3, the water level within the Pressure Vessels are not rising as much as desired. TEPCO admitted in the March 28 press conference that the reason why the Pressure Vessels haven’t been filled with water was “probably a hole near the bottom, that’s the image we have”. Asked why there was a hole, TEPCO answered they did not know.

The Reactor Pressure Vessels (RPVs) are the most important of the 5-layer protection against radiation leak (other 4 are the fuel pellets, cladding of fuel rods, Container Vessels, and the Reactor buildings). The RPVs at Fukushima I Nuclear Power Plant is made of 16-centimeter thick steel, and it has an outlet at the bottom to insert measuring instruments. It is possible that the leak is from that area.

TEPCO also admitted to the possibility of the exposed nuclear fuel rods overheating and damaging the RPVs. According to the nuclear experts, if the fuel rods get damaged and start to melt, it will fall to the bottom of the RPVs and settle. It then becomes harder to cool with water effectively, because the surface area is smaller. It is possible that the melted fuel rods melted the wall of the RPVs with high temperature and created a hole.

On the other hand, TEPCO said it didn’t think the RPVs are completely broken, because the pressures inside the RPVs were higher than the atmosphere. “It is not like Chernobyl where the RPV exploded and the fuels were outside the RPV.” TEPCO continued to believe in the integrity of the RPVs.

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TEPCO asking for outside help

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Monday, March 28, 2011

TEPCO asking for outside help

Reuters reports that TEPCO, which has conceded it faces a protracted and uncertain operation to contain the crisis, sought outside help, asking help from French firms including Electricite de France SA and Areva SA. The news comes after TEPCO announced highly radioactive water has leaked from a reactor at Japan’s crippled nuclear complex, as environmental group Greenpeace said it had detected high levels of radiation outside an exclusion zone.

Greenpeace said its experts had confirmed radiation levels of up to 10 microsieverts per hour in a village 40 km (25 miles) northwest of the plant. It called for the extension of a 20-km (12-mile) evacuation zone.

The TEPCO head office
“It is clearly not safe for people to remain in Iitate, especially children and pregnant women, when it could mean receiving the maximum allowed annual dose of radiation in only a few days,” Greenpeace said in a statement, referring to the village where the radiation reading was taken.

Reuters reported that the Japan Nuclear Agency says Greenpeace’s radiation measurements outside evacuation zone can’t be considered reliable.

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Japanese companies shutdown update

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Monday, March 28, 2011

Japanese companies shutdown update

Japanese companies are not only reeling from damage to factories and suppliers in quake-hit northeastern Japan but are also suffering from fuel shortages nationwide and power outages in the Tokyo area that are affecting production, distribution and the ability of staff to get to work.
Sony Building, Ginza, Tokyo, Japan
AUTO MAKERS

* Toyota Motor Corp halted most operations at 18 factories that assemble Toyota and Lexus vehicles in Japan. It has restarted production of three hybrid models, the Prius, Lexus HS250h and CT200h, from March 28 at two factories but will suspend output for one day this week, on March 30. Toyota is making car parts at plants near its base in Toyota City, central Japan, for overseas assembly facilities and for repair parts. Toyota will delay the launch of the Prius wagon and minivan models in Japan from the original plan for the end of April.
* Honda Motor Co extended its production halt in Japan to April 3. On Monday, Honda said a fifth of its Japan-based Tier 1 suppliers affected by the earthquake would take more than a week to recover. Honda made 69,170 cars in January in Japan, accounting for around a quarter of its production. On Thursday the company said it would resume production of motorcycles and power products at its Kumamoto plant in Kyushu, southern Japan.
* Nissan Motor Co resumed vehicle production at all assembly plants in Japan from Thursday, March 24, while supplies last. It resumed production of parts for overseas manufacturing and repair parts on March 21. Restoration continues at its damaged Iwaki engine factory in Tochigi prefecture, north of Tokyo. Nissan made 81,851 cars in January in Japan, where it manufactures 23 percent of its vehicles. Goldman Sachs has calculated that one day’s lost production costs Nissan about 2 billion yen ($25 million) in profit.
* Mazda Motor Corp said on Thursday it would suspend production of vehicle repair parts and parts for overseas production at its Hofu factory in Yamaguchi on March 28, after having resumed limited operations there earlier this week. Its Hiroshima factory will continue limited production until further notice, a spokeswoman said.
* Suzuki Motor Corp will keep car production halted at its three assembly plants in Japan through March 29, and resume assembly of commercial trucks and vans at one of those plants for one shift on March 28 and 29. It will continue operating an engine factory using parts in its inventory. It has not decided on production plans for March 30 and beyond.
* Fuji Heavy Industries Co said all five of the car and parts-related plants for its Subaru-brand vehicles in Gunma prefecture, north of Tokyo, will be shut at least until Monday, pushing back a restart that had been due on Tuesday. Production of vehicle parts to be shipped to overseas manufacturing plants started on Wednesday and production of vehicle repair parts began Thursday.

ELECTRONICS MAKERS:

* Sony Corp  said shortages of parts and raw materials would force it to suspend or reduce production at five plants in central and southern Japan making digital cameras, camera lenses, flat-screen televisions and other goods. Another plant may be affected by rolling power blackouts. Six production sites in northern Japan have been halted since the quake. If shortages continue, Sony may consider temporarily shifting some production overseas.
* Toshiba said output was suspended at a factory in Iwate prefecture making system LSI chips for microprocessors and image sensors, with no time frame yet for a resumption of output. An assembly line at a plant making small liquid crystal displays for smartphones and other devices will be closed for a month to repair damaged machinery.
* Canon said it re-started operations at two plants on Friday, but two camera plants remained closed and the company was not sure which factories it would be able to operate next week, amid a shortage of parts.
* Panasonic said some plants in northeast Japan remained closed including one making optical pick-ups and another assembling cameras and audio equipment.
* Renesas Electronics, the world’s No.5 chipmaker, said production at three of its 22 factories in Japan is still halted while output at three other assembly plants has been affected by power outages imposed by utilities unable to meet electricity demand in the wake of the earthquake.

OTHERS

* Shin-Etsu Chemical, the world’s leading maker of silicon wafers, said its biggest wafer plant remained offline, along with a PVC factory. The firm has not said when it will restart operations. Some of the wafers made in Japan are shipped to chip companies overseas. Shin-Etsu is trying to boost production elsewhere, particularly of 300-mm wafers, to make up the shortfall.

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Ireland to impose losses on junior debt

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Sunday, March 27, 2011

Ireland to impose losses on junior debt

Unfortunately burden-sharing is coming too late to make a real difference in avoiding a (un?)controlled default though it could be useful as a propaganda tool for the Irish government when it will ask the population for more blood and tears. It will change absolutely nothing since it will not affect the senior debt.

from Reuters:

Dublin wants to impose losses on banks’ senior unsecured bonds not covered by a state guarantee, which currently amount to over 16 billion euros, as part of a new deal with the European Union, the European Central Bank (ECB) and the International Monetary Fund (IMF).

“A sustainable and comprehensive solution for Irish banking that involves recapitalization but also involves an element of burden-sharing … That is certainly the outcome that the government is looking for,” Simon Coveney, minister for agriculture, told state broadcaster RTE.

Under an EU-IMF bailout agreed late last year Ireland can impose losses on banks’ junior debt, but the ECB is opposed to treating senior bondholders, which are ranked on a par with depositors, in the same fashion for fear of a contagion risk.

Ireland’s new government, elected in February, has said the state cannot afford the current EU-IMF bailout deal and European finance ministers will decide on what sort of concessions they can offer Dublin in coming weeks.

They are awaiting the results of fresh stress tests on Ireland’s banks, expected to show a capital hole of around 25 billion euros, on March 31 before deciding on any new deal.

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Fear and Chaos in Fukushima

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Sunday, March 27, 2011

Fear and confusion in Fukushima

Earlier today, TEPCO announced that the radiation in the water pool of reactor #2 had been measured at 1,000 millisieverts/h (1 sievert/h) – the highest reading so far recorded since the Fukushima disaster started. As a reminder, the U.S. Environmental Protection Agency says a single dose of 1,000 millisieverts is enough to cause haemorrhaging, while a ten hour exposure to this dose is enough to result in death.
From Kyodo: “Plant operator Tokyo Electric Power Co. said the concentration of radioactive substances of the puddle was 10 million times higher than that seen usually in water in a reactor core, but later decided to reanalyze the data because it found some errors.”

Ocean contamination

In the meantime the leak into the ocean keeps getting worse: “Radioactive iodine-131 at a concentration 1,850.5 times the legal limit was detected in a seawater sample taken around 330 meters south of the plant, near a drainage outlet of the four troubled reactors, compared with 1,250.8 times the limit found Friday, TEPCO said.”

Entombment Solution

If this is the situation why are they not proceeding with a concrete entombment, which as in Chernobyl it would guarantee an 80 km non-inhabitable radius around Fukushima in perpetuity.
The “experts” are warming up to this idea athough as per Reuters: “Experts say there is still too much heat in the reactor cores and spent fuel at the Fukushima plant for a similar last-ditch solution to be considered yet.”

Plutonium testing

Making things much worse is that, apparently for the first time, TEPCO has ordered tests for highly toxic and extremely lethal plutonium on the site. As the worst atomic accident since Chernobyl entered its third week, the government said soil near the Fukushima plant would be tested for plutonium contamination. The radioactive metal was used in one of the reactors and its presence outside the plant would suggest the fuel rods were damaged. Soil samples have been taken and will be tested for plutonium, TEPCO told reporters.
Radiation leaks have contaminated vegetables in regions around the plant and sparked scares over tap water in Tokyo, 227 kilometers (140 miles) southwest of the Tokyo Electric Power Co. Dai-Ichi power station.
Which of course means that up until now nobody had been measuring for plutonium fall out.

Sorry, we make mistakes

After scaring the entire country TEPCO rectified on Monday that a very high radiation reading that had sent workers fleeing the No. 2 reactor was erroneous. Tokyo Electric Power Co. (TEPCO) vice-president Sakae Muto apologised for Sunday’s error.

Either TEPCO is completely useless and it has lost complete control of the situation or they are well aware of the tragic situation and are trying to do damage control simply on a PR level, either way the situation is far from under control and dangerously under-reported by the press.

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How to Have a Rational Discussion

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Sunday, March 27, 2011

How to Have a Rational Discussion

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Euro Bailout Explained

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Sunday, March 27, 2011

Euro bailout explained

As It appears that Portugal will have to be saved by the EFSF, let us see what is the EFSF and how it works:

The EFSF practically does the following, it takes bad loans, and by putting them together, turns them into good loans. It uses a financial instrument similar to that used by institutions in the run-up to the 2008 financial meltdown – whereby subprime mortgages were bundled together with other loans and sold as one good loan. These instruments are known as collateralised debt obligations or CDO.
In February 2011 the Financial Times explained that, technically, the EFSF is not a collateralised debt obligation ‘but a special purpose vehicle that essentially pools guarantees and loans from stronger euro members to give it a top triple A credit rating.’
The economist Nouriel Roubini wrote in January 2011 that the EFSF was an instrument whereby ‘you take a bunch of dodgy less than AAA sovereigns (& some semi-insolvent) and try to package a vehicle that gets [an] AAA rating’. And it is this process of bundling bad debt into bonds which are guaranteed by good lenders which makes it akin to the ‘financial weapons of mass destruction’ which almost brought down the US and European banking systems.
The loans are still bad, the sovereign states are still distressed – it is only the guarantee that has changed. The bonds are valued not so much on the loans themselves, but on the guarantee which comes with them.
The risk has not gone away. It has merely shifted from one place to another, from bad lenders to good lenders as Germany. The main effect of this shift is to spread the cancer affecting one country to all the other countries of the EU. The reasons why the sovereign states find themselves distressed in the first place are not addressed in any shape or form.
If Portugal is forced to leave the money markets, as has happened to Greece and Ireland, ’the EFSF would then have to issue new debt on behalf of the remaining eurozone countries, to help Portugal’. In other words, 14 countries rasing money for three, until another defaults, then it’s 13 countries raising for four, and so on ‘until the bank of nations within the EFSF is so small that they cannot bear the burden of total debt on their shoulders.’

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