Armaggedon

- La fin d'un monde est proche et le monde l'ignore encore

Englué dans diverses crises, le monde tel que nous l'avons pensé au XXe siècle se meurt. Assistons-nous aujourd'hui à la fin d'un système ? Et de quoi sera fait demain ?
Le soulagement avec lequel, tous les ans, puis tous les mois, puis presque toutes les semaines, l’on apprend que le système est sauvé, prouve on ne peut mieux qu’il touche à sa fin. Il ne s’agit pas seulement de l’euro ou de la dette. Plusieurs ombres, venues du fond de notre histoire, planent aujourd’hui sur la France.
L’ombre de la banqueroute, figure familière de la monarchie déclinante. L’État, boulimique, impuissant, ne doit sa survie qu’à d’éphémères combinaisons financières. Il n’a plus les moyens d’assurer la Providence. Alors il est devenu Fatalité, courant d’interdictions en réglementations après l’ombre de son autorité perdue.
L’ombre des grandes Jacqueries, à l’heure où les chômeurs se lassent de mendier un emploi ; où la foule des précaires erre d’un expédient à l’autre ; où les classes moyennes peinent à se loger et s’échinent dans les transports ; où la petite bourgeoisie rechigne devant un impôt écrasant et s’interdit de rêver à un sort meilleur.
L’ombre des guerres de religion, quand une foi nouvelle, invincible, s’empare des âmes et renverse les croyances établies.
L’ombre des Rouges, aux rangs grossis par les travailleurs déclassés, les étudiants désœuvrés, les générations sacrifiées.
L’ombre du « parti de l’étranger », représenté par une élite mondialisée, anglophone, exilée à Londres ou à Hong Kong, qui ne revient que pour épancher son mépris du pays.
L’ombre des Fascistes, assoiffés d’en découdre avec un gouvernement amolli, des parlementaires cumulards, une presse aux ordres.
L’ombre des barricades. Le peuple des villes a été chassé à leurs périphéries, mais il garde sa fougue, sa cruauté, son goût du sang et son rêve de justice. La Commune est devenue Cité.
L’ombre des hordes barbares, l’Extrême-Orient s’invitant soudain à nos frontières, et menaçant de tout emporter sur son passage.
L’ombre des piques, aiguisées par les bloggeurs, et destinées à une poignée de profiteurs, de flagorneurs, de discoureurs que l’on envie et que l’on hait.
Ces ombres arrivent dispersées. Elles ne sont qu’une superposition désordonnée de souvenirs, de frustrations, d’aspirations. Elles pourraient soudain s’amalgamer en un formidable nuage noir. Un orage.
Croyez-vous la France endormie derrière ses caddies, abrutie de télé, droguée aux allocations, amadouée par les 35 heures, assagie par la langue de bois ? La France ne dort que d’un œil. Quatre décennies seulement nous séparent de son dernier réveil. C’est un rythme dont notre histoire est familière. Écoutez bruire les « indignés », les « révoltés », les « émeutiers ». Ils sont prêts. Ils ont mille bonnes raisons. Il ne leur manque qu’une bonne idée.
L’ancien monde, exsangue et ricanant, se languit, se traîne et survit sans gaieté. « Tu vas guérir », lui disent les charlatans, et il les croit. « Encore un peu de morphine », implore-t-il – encore un peu de dette, encore un peu de débats médiatiques, encore un peu de sommets internationaux. A son chevet, toute l’élite se presse, jurant, la main sur le cœur, de servir une République qui ne profite plus qu’à elle-même.
Puis-je souhaiter la fin du système, moi, son enfant gâté ? Égoïstement, non. Politiquement, oui. Moralement, peut-être. De toute façon, la question n’est pas là. Les temps sont lourds.



- Frédéric Oudéa dénonce le «pessimisme excessif» des marchés

Frédéric Oudéa, PDG de la Société Générale, promet des tensions «au moins jusqu'à début novembre». Selon lui, les changements attendus par les investisseurs n'arriveront pas aussi vite que prévu.
Le vent de panique devrait encore souffler longtemps sur les valeurs bancaires en Bourse. C'est en tout cas ce que prédit Frédéric Oudéa, PDG de la Société Générale, dans un entretien au Journal du Dimanche. Ce dernier assure que «la nervosité peut durer au moins jusqu'à début novembre», c'est-à-dire au moment de la publication des résultats du troisième trimestre.



- Deux économistes démontrent que l'austérité augmente le risque de troubles sociaux

Dans une étude parue au début du mois d'août, deux économistes font le lien, preuves historiques à l'appui, entre politiques de rigueur économique et désordres sociaux en Europe. Explications.
Par Sébastian SEIBT (texte)
"Je pensais que seul un petit groupe de spécialistes allait s’intéresser à notre travail", s’amuse Hans-Joachim Voth, historien de l’économie. Mais depuis le début du mois d'août et la mise en ligne des conclusions de son étude baptisée "Austérité et anarchie : coupes budgétaires et troubles sociaux en Europe entre 1919 et 2009", le chercheur enchaîne les interviews. Ces travaux, il les a menés pendant plus d’un an avec son collègue de l’université Pompeu Fabra de Barcelone, Jacopo Ponticelli.
Selon ces deux spécialistes, l’austérité économique entraîne le désordre social et ils en apportent la preuve. Leurs conclusions prennent une dimension particulière à l’aune des manifestations qui se sont déroulées cette année en Grèce et en Espagne, où de drastiques plans d’économies budgétaires ont été adoptés. Mais elles font surtout écho aux émeutes qui ont secoué l'Angleterre la semaine dernière, apportant de l'eau au moulin des travaillistes qui n'ont pas hésité à faire un lien entre les violences et les mesures d’austérité décidées par le gouvernement de David Cameron.


- MOODY'S ANALYST BREAKS SILENCE: Says Ratings Agency Rotten To Core With Conflicts of Interest


A former senior analyst at Moody's has gone public with his story of how one of the country's most important rating agencies is corrupted to the core.
The analyst, William J. Harrington, worked for Moody's for 11 years, from 1999 until his resignation last year.
From 2006 to 2010, Harrington was a Senior Vice President in the derivative products group, which was responsible for producing many of the disastrous ratings Moody's issued during the housing bubble.
Harrington has made his story public in the form of a 78-page "comment" to the SEC's proposed rules about rating agency reform, which he submitted to the agency on August 8th. The comment is a scathing indictment of Moody's processes, conflicts of interests, and management, and it will likely make Harrington a star witness at any future litigation or hearings on this topic.

- Paranoia Run Amok: California Reporters Detained For Taking Pictures

- Stock Market Begins to Feed Economic Fear

The stock market is starting to feed economic fear, not just reflect it.
Stocks have fallen four weeks in a row. Some on Wall Street worry that the resulting blow to confidence, not to mention 401(k) statements, has set off a spiral of fear that could push prices even lower, cause people and businesses to pull back and tip the economy into a new recession.
"I'm nervous that fear will lead companies to stop hiring and people to stop spending," says Jim Paulsen, chief investment strategist of Wells Capital Management, famous for his usually bullish take on the markets.


- Social Security disability on verge of insolvency

WASHINGTON - Laid-off workers and aging baby boomers are flooding Social Security's disability program with benefit claims, pushing the financially strapped system toward the brink of insolvency.
Applications are up nearly 50 percent over a decade ago as people with disabilities lose their jobs and can't find new ones in an economy that has shed nearly 7 million jobs.
The stampede for benefits is adding to a growing backlog of applicants — many wait two years or more before their cases are resolved — and worsening the financial problems of a program that's been running in the red for years.
New congressional estimates say the trust fund that supports Social Security disability will run out of money by 2017, leaving the program unable to pay full benefits, unless Congress acts. About two decades later, Social Security's much larger retirement fund is projected to run dry as well.


- Layoffs sweep Wall Street, along with low morale

- Germany against euro bonds

A sculpture showing the euro currency sign is seen in front of the European Central Bank (ECB) headquarters in Frankfurt, April 1, 2010. REUTERS/Kai Pfaffenbach

By Annika Breidthardt (Reuters) - Germany strongly rejected mounting calls for the euro zone to issue joint debt at the weekend, but signaled it was open for the bloc to move toward a form of fiscal union, with the finance minister saying he personally supported a European counterpart.
"Euro bonds are exactly the wrong answer to the current crisis," German Chancellor Angela Merkel told ZDF public broadcaster in an interview on Sunday. "They lead us to a debt union and not to a stability union," she added.
Germany, which enjoys lower costs for issuing debt than its singlecurrency partners, has led resistance to common euro-denominated bonds.
That puts it at odds with a number of partners, including Belgium and Italy, and the European Commission, which this week said it was still studying the feasibility of such bonds and may present draft legislation for them.
Merkel's comments on Sunday chimed with those of her finance minister earlier this weekend. Wolfgang Schaeuble said the euro zone could only issue joint debt if it had common fiscal policy or risk creating inflation and destabilizing the currency bloc.
Pressure on Germany and France to take radical action on the debt crisis mounted this week as financial markets sagged further and Belgium added its support to calls for the region to issue euro bonds.


- Greek Finance Minister says bailout hinges on political will

Greek Finance Minister Evangelos Venizelos walks to an Institute of International Finance meeting in Washington, July 25, 2011. REUTERS/Jason Reed

(Reuters) - Greece's Finance Minister said the issues addressed in the debt-choked country's new bailout deal concern the euro zone as a whole, not onlyGreece, and the right package hinges on the bloc's political will.


- [
La Finlande menace le plan de sauvetage de la Grèce->http://www.lefigaro.fr/conjoncture/2011/08/19/04016-20110819ARTFIG00556-la-finlande-menace-le-plan-de-sauvetage-de-la-grece.php]





Publié le 19/08/2011 à 22:36 Le ministre grec des Finances Evangelos Venizelos et son homologue finlandais Jutta Urpilainen en juin à Bruxelles.
Le ministre grec des Finances Evangelos Venizelos et son homologue finlandais Jutta Urpilainen en juin à Bruxelles. Crédits photo : Virginia Mayo/AP
Helsinki a négocié avec Athènes des contreparties financières à son aide. Un geste qui pourrait faire tache d'huile.
La Grèce inquiète de nouveau sérieusement les marchés. D'abord à cause de ses nouvelles prévisions économiques alarmantes: le ministre des Finances, Evangelos Venizélos, a admis hier que le plan de rigueur allait provoquer une récession plus importante que prévu, avec un recul du PIB désormais estimé à 4,5 % «au moins» en 2011 contre 3,8 % avant.
Mais surtout parce que le deuxième plan d'aide de 158,6 milliards d'euros, concocté par les chefs d'État le 21 juillet dernier et qui doit encore être ratifié par tous les membres de la zone euro, vient d'être sérieusement ébranlé par la Finlande.



- Europe's Debt Crisis Won't End Until Greece Defaults



Allowing deeply indebted European countries the chance to restructure their obligations seems to be the most direct approach to resolving the problem, yet has been met with resistance that likely will only prolong the crisis.
Aris Messinis | AFP | Getty Images
The reason: What once was thought to be a minor problem involving only some smaller peripheral nations in the European Union is now increasingly being recognized as a global train wreck about to happen.
"The problem in Europe is that the banking and national interests have been uncommonly incestuous over the years with banks in France owning the debts of companies in Spain and Spanish sovereign debt, while the banks in Spain own the debts of French companies and the French sovereign," Dennis Gartman, hedge fund manager and author of The Gartman Letter, wrote Friday. "In that environment, as one area of the economy contracts, others do also in a rush to liquidity and to the detriment of all."




- Franc suisse menace Europe centrale

La flambée du franc suisse menace la croissance en Europe centrale, particulièrement en Hongrie, où les ménages peinent de plus en plus à rembourser leurs emprunts dans cette devise, autrefois très populaire, estiment des économistes.

- Grèce/PIB: le recul atteindrait 4,5%

Le produit intérieur brut (PIB) grec pourrait se contracter de plus de 4,5% en 2011, contre 3,8% prévu jusqu'à présent a indiqué vendredi le ministre grec des Finances, Evangélos Vénizélos. "Les premières prévisions tablaient sur un recul de 3,5%, mais ensuite cela a changé (...) et nous sommes maintenant au niveau de -3,8%.-3,9%", a affirmé le ministre dans un entretien à la radio athénienne Skaï. "Désormais, il y a une fourchette de prévisions qui peut aller au-delà de -4,5%", a ajouté le ministre.

- La révolte des laissés-pour-compte britanniques




- L'agence rattrapée aux Etats-Unis par son passé "subprimes"


Pas très sérieuses, pas tout à fait indépendantes, voire peu pertinentes... Les critiques à l'encontre des agences de notation sont récurrentes. D'une crise à l'autre, leurs travers - souvent les mêmes - se révèlent. La tempête financière de 2007 ne fait pas exception. Aucun des trois grands acteurs du secteur (Moody's, Standard & Poor's, Fitch) n'avait su détecter la nocivité des "subprimes", ces crédits hypothécaires américains toxiques qui ont contaminé le système financier. Mais une seule agence a eu l'audace, quatre ans plus tard, de s'attaquer aux Etats-Unis : S & P. Le 5 août, elle dégradait la note de la dette américaine de AAA à AA+. Du jamais-vu.
Paie-t-elle aujourd'hui pour cet affront ? Dans son édition du 17 août, le New YorkTimes révèle que le département de la justice a lancé une enquête à son encontre. Les faits sont graves, passibles d'être portés au civil et d'entacher la réputation de l'agence. Le quotidien, citant une source interrogée par la justice, révèle que des douzaines de crédits hypothécaires américains auraient été surnotés par S&P, en toute conscience.
- Les banques casquent pour leur cache-cash
L’absence de transparence des établissements financiers alimente la spéculation sur leur manque de liquidités.
Par CHRISTIAN LOSSON et CATHERINE MAUSSION
Le siège de la Société Générale, à la Défense. (John Schults / Reuters)

Dans l’œil du cyclone. Les grandes banques européennes sont dans le collimateur des investisseurs, à l’image des trois plus grandes banques françaises qui ont perdu plus de 40% de leur capitalisation boursière depuis début juillet. Ebranlées par leur exposition aux dettes publiques ; par la possibilité de devoir repasser des provisions en cas de rééchelonnement de l’ardoise des Etats ; par l’éventualité de voir leurs actifs souverains dégradés en cas de défaut de paiement d’un gouvernement....

- Espagne: un nouveau paquet anti-crise en pleine tempête financière

Les nouvelles mesures de rigueur devraient rapporter jusqu’à 4,9 milliards d’euros supplémentaires dans les caisses de l’Etat.
Jose Luis Rodriguez Zapatero et le ministre de l'économie Elena Salgado. (REUTERS)

Le gouvernement espagnol a annoncé vendredi de nouvelles mesures de rigueur qu’il espère faire adopter «en urgence» au Parlement, alors que le pays est au cœur d’une nouvelle tourmente financière qui menace toute la zone euro.
La ministre de l’Economie Elena Salgado a détaillé une baisse de la TVA de 8% à 4% sur l’achat de logements neufs, une réforme de l’impôt sur les sociétés et l’obligation de recourir aux médicaments génériques, moins chers.
Le gouvernement a confirmé qu’il demandait une session extraordinaire du Parlement pour une adoption «rapide» des mesures, peut-être dès la semaine prochaine, qui devraient rapporter jusqu’à 4,9 milliards d’euros supplémentaires dans les caisses de l’Etat.



- [Iraq and the Pentagon - Leaving on a jet plane
_ The American military prepares for a difficult departure from Mesopotamia->http://www.economist.com/node/21526399]


The bags with medals go second on the left
BLAKE HALL is a muscly entrepreneur in Washington, DC, who hunted Islamic insurgents and buried friends before he was 25 years old. He is one of about 1.5m Iraq veterans and, like many, he feels frustrated that America’s mission is coming to a close without much fanfare. “At a great cost of blood and treasure, we achieved nothing tangible,” he says. Many disagree. Iraq is no longer a dictatorship, though still something of a violent police state. On August 15th a few dozen bombs exploded across the country, killing at least 89 Iraqis.
More than eight years after a barnstorming invasion, the last 45,000 American troops are preparing to leave by Christmas, ending a mission that has cost $1 trillion and nearly 4,500 American lives. A small military presence may remain beyond this year. Iraq’s security forces cannot yet secure the country. They rely on American help, notably for intelligence co-ordination and air-traffic control. But for the most part American diplomats will take over tasks so far performed by soldiers. The embassy in Baghdad plans to hire and manage thousands of private contractors to operate helicopters and air defence systems. It is ill-equipped to do so. Officials insist they can cope but many contractors believe “the suits” are out of their depth.
Even a minimal American military presence in Iraq depends on a request from the Iraqi government, an indecisive and divided body. Some factions are in favour, while others stress the need for a new start. Muqtada al-Sadr, a popular cleric, has threatened to reconstitute his Mahdi Army militia to drive out any remaining Americans. Ordinary Iraqis are torn between a desire to see the occupiers leave and a fear that life will become even more dangerous.





- Who Is John Paulson, And Why Should The Globe And Mail Care?


They say that the simplest analysis is always the most powerful one. That appears to certainly have been the case with our presentation of global banks' Tangible Common Equity ("TCE") ratio to total assets from last Thursday, and specifically our observation of the glaringly obvious, namely that of the 30 most undercapitalized banks in the world, Canadian ones represented a whopping 33% of all. Note: this was not an attack on Canada, this was not some hedge-fund inspired start of a bear-raid on the Canadian banking system, this was nothing but an attempt to warn our readers of, again, what is out there for anyone (who is not blinded by cognitive bias) to see for themselves. Alas, the reaction to that post, particularly in the Canadian media, has been swift and severe, provoking such respected publications as The Globe And Mail to pen not one but two responses, one being the by now so-oft discredited attempt to ignore the message and target the messenger (Who is Zero Hedge, and why should we care?), followed by a more coherent attempt to debunk the claim that a painfully low TCE ratio is never a good thing (Is Zero Hedge looking at the wrong numbers?). The argument of G&M's Boyd Erman boils down to the statement that TCE is not a fair indicator of balance sheet stress and instead one should focus on a "Tier 1" approach of risk estimation, one that includes Risk Weighted Assets. Here we could provide the reference to Lehman's Tier 1 ratio, which was well in the double digits on the day when it filed for bankruptcy, even as the bank's true leverage was about 40x, a number which eventually brought on the biggest bankruptcy in history. We could but we won't, instead we will ask, rhetorically, who is John Paulson, and why should the Globe and Mail care?
Because while those "oddballs" at Zero Hedge may be hyperventilating or whatever the verb du jour may be, the (one time legendary) hedge fund's opinion probably should count for something, even in the G&M's esteemed opinion. And specifically his take on the whole Tier 1 vs TCE debate...
Back in March 2009, John Paulson (when he still was actually making money for his LPs, perhaps because he was rightfully quite bearish on the financial system, and wasn't running the world's smallest mutual fund) and JPM's Chairman of China Equities, Jing Ulrich, sat down and discussed the then-imploding economy, in a Q&A which we are confident is about to get much more airplay over the next several weeks. What is most notable about this discussion, in addition to what a difference two years can make to a person's P&L and outlook on the world, is that it was Paulson himself who chimed in, well in advance of the current debate on TCE vs Tier 1, with his personal thoughts on the issue. We present them below as we preemptively answer the rhetorical question posed above with a resounding yes.
Jing Ulrich: Things seem to be getting worse in the financial services area – how much worse is it going to get? Do you think we now know the true extent of the underlying problems?

John Paulson: The problem with financials is that they are very leveraged and don’t have enough tangible common equity to absorb anticipated losses. Large American and European banks have on average 40:1 leverage, defined as Total Assets / Tangible Common Equity. The Tier 1 capital ratios commonly used by banks present a misleading picture as to the capital adequacy of banks. The Tier 1 ratio includes preferred stock, hybrids and subordinated debt as capital and then risk weights assets, leading to a risk weighted asset number that is much less than the total asset number. This can lead to a situation where banks have high Tier One Ratios but very low tangible common equity ratios (see graph below). As a common shareholder, we only care about tangible common equity.
Hence, while we are confident that McKinsey is more than capable of putting together any analysis goalseeked as per the paying customer's demands (because at the end of the day, consultants and rating agencies are the same: they both tell their clients what they want to hear, and somehow this is only now being discovered for S&P and Moody's), we will go with the facts, as per what the world's (once upon a time) most vaunted investor had to say.
So while we relegate this simplistic debate over whether TCE or Tier 1 is more appropriate (best to just ask Dick Fuld) to the compost heap of legacy media click-thru monetization attempts, we leave our readers with the following far more fascinating interview with John Paulson, which provides some much overdue flashbacks to why he was, at one time, one of the world's most respected asset managers. Something tells us the topics discussed in it will become yet again quite salient in the immediate future.



Ambrose Evans-Pritchard
- Bond markets signal 'Japanese' slump for US and Europe

The global credit markets are braced for deflation and perhaps depression.
Euro crisis: it's holiday time for the officials but how long has the latest Greek bail-out really won them?
Jacques Delors, ex-president of the European Commission, said French policy had been reduced to "trying to stop Germany abandoning ship".
By Ambrose Evans-Pritchard, International business editor

Panic flight to safety has pushed the yield on 10-year US Treasuries below 2pc for the first time in modern American history, exceeding the extremes of the Lehman crisis and the banking crash of the 1930s.
Investors scrambled to buy the bonds of strongest industrial states on Thursday on fears of a double-dip recession on both sides of the Atlantic and a European banking crash, driving down their returns to investors. German yields fell to 2.08pc and Switzerland's 3-month rates have turned deeply negative.
Markets were stunned by a plunge in the manufacturing index of the Philadelphia Federal Reserve to minus 30.7 in August from plus 3.2 in July, one of the most violent falls ever recorded.
"It is a catastrophic collapse," said Rob Carnell from ING. "Markets are in a fearful state right now, and data like this gives them plenty of excuses to panic."



- [The Cases of Spain, Greece, Ireland and Portugal
_ Crisis and Class Struggle in the Eurozone->http://counterpunch.org/navarro08192011.html]

By VICENTE NAVARRO
To understand the situation in the countries at the periphery of the European Union, four countries within the Eurozone, Portugal, Ireland, Greece and Spain, we have to understand the political context they have in common. All of them were governed by fascist or fascist-like dictatorships (Spain, Portugal, and Greece) or by authoritarian right-wing regimes (Ireland) for most of the period from the late 1930s or early 1940s until the late 1970s. This history is usually ignored in analyses of these countries.
This shared history, however, has determined the nature of their states, a critical variable for understanding countries’ economic behavior. Their states have been very repressive. Even today, these countries have the largest number of policemen per 10,000 individuals in the EU-15. Another shared characteristic is their very low level of state revenues and their highly regressive fiscal policies. The revenues to the state are much lower than the EU-15 average: approximately 34% of GNP in Spain, 37% in Greece, 39% in Portugal, and 34% in Ireland, compared with the EU-15 average of 44%, and compared with 54% in Sweden – the EU-15 country where the left has governed for the longest period. The low state revenues result from extremely regressive policies. The super-rich, rich, and high-income upper middle classes do not pay taxes at the same level and intensity as those in most of the central and northern EU-15 countries – a consequence of a history of government by ultra-right-wing parties. Of course, progress has been made since the dictatorships ended. But the dominance of conservative forces in the political and civil lives of these countries explains why their state revenues are still so low.


-The markets fear a fresh disaster - A failure of political leadership in the US and EU is making the economic crisis worse.


Panic has replaced the traditional torpor in the financial markets this summer - The markets fear a fresh disaster

By Telegraph View - August is traditionally a quiet month on the stock markets. With many traders away on holiday, the volume of business tends to be low and a late summer torpor descends upon the City of London, Wall Street and other financial centres. Not this year. The turbulence of the past few weeks, which have witnessed the biggest falls in equity prices since the financial crash of 2008, is especially worrying because it is so unusual. Fear has gripped the markets: fear of another recession; fear of an unresolved crisis in the eurozone; fear of a further banking debacle – fear, in short, that the calamity that was staved off by concerted international action three years ago is about to hit at last. We have had the earthquake; now for the tsunami.
To what extent is this panic justified? The markets see little to confound their growing expectations of a double-dip recession (or worse) in Europe and America. This week’s GDP figures, showing that the German economy started to stall during the second quarter of the year, were followed by equally worrying employment statistics from America. Any hopes that China might drag the rest of the world into growth also seem forlorn. Both Germany and China rely on selling their goods; but with consumer demand in decline, they are finding it increasingly hard to do so. Japan, meanwhile, remains in the doldrums where it has been becalmed for more than 10 years: the possible fate now awaiting the rest of the industrialised world.
Worse, this stubborn refusal of the West’s economies to return to sustained growth, despite historically cheap credit, has coincided with the eurozone’s sovereign debt crisis, and the abject failure of the EU’s leaders to resolve it. This week’s inconclusive summit in Paris between President Sarkozy and Angela Merkel arguably spooked the markets more than if the two leaders had stayed on the beach. Observers imagined, perhaps naively, that the meeting might build on the measures agreed on July 21 for bailing out Greece and preventing the contagion spreading. The expectation was of a decisive move to a new “eurobond” as a precursor to fiscal union in the eurozone. While this may yet happen, it was left hanging dangerously in the air. Where clarity was needed, the summit managed to produce yet more uncertainty.
A similar failure of leadership has been evident across the Atlantic, where the brinkmanship in Washington earlier in the summer over lifting America’s debt ceiling has contributed to the jitters now afflicting the markets. Indeed, there is none of the political urgency that was seen in 2008, when world leaders and financiers used every mechanism at their disposal to stave off a slide into a 1930s-style depression. Banks were bailed out, interest rates were slashed and billions of pounds, dollars and euros were printed and poured into the economy. The really alarming aspect of the current upheaval is the dawning realisation that all the weapons appear to have been used, and the armoury is empty.
Where this is going is hard to tell, but the worst-case scenario is that the economic and debt crises are accompanied (and exacerbated) by a rerun of the banking crash. It was fear of this scenario that propelled the precipitous fall in bank shares this week. Yet there are still some flickers of light through the gloom. Stocks are relatively cheap; as traders return to their desks, they might see the opportunity for bargains, pushing the markets back up. The corporate sector looks healthy, having cut costs and hoarded cash. And there are parts of the world, such as India and Latin America, where economies are still growing strongly, even if they are too small to pull the rest of the world along.




- Nervous investors go for gold as panic grips stock markets - Jittery traders focus on 'safe haven' investments as collapsing shares fuel panic at the exchanges
Larry Elliott Economics editor and Julia Kollewe - Stormy stock markets has promted investors to buy gold pushing the price of the metal to $1,881 an ounce. Photograph Chris Collins/Corbis
Fresh turmoil on the world's financial markets on Friday saw gold rise to record levels, the dollar sink to its lowest-ever level against the Japanese yen, and share prices gyrate wildly in Europe and North America.



- The War in Libya - Are German Soldiers Secretly Helping Fight Gadhafi?
By Matthias Gebauer

A NATO bomb explodes in Tripoli, Libya, in June 2011. Are German soldiers secretly helping with NATO targeting?

Germany shocked the world in March went it opposed NATO action against Libyan dictator Moammar Gadhafi. But recently released documents show that German soldiers serving in NATO units in Italy are helping to select targets for alliance airstrikes.



- [The Goulash Archipelago
_ EU Remains Silent as Hungary Veers Off Course->http://www.spiegel.de/international/europe/0,1518,780794,00.html]
By Walter Mayr - Supporters of Hungarian Prime Minister Viktor Orbán say he has a strict leadership style, while critics warn of the threat of forced political conformity, Jew-baiting and labor camps. Meanwhile, the European Union is saying nothing, apparently accepting the fact that a member state is getting out of control.


- Damning Poll on Leadership - Germans Don't Trust Merkel to Handle Euro Crisis


In a photo from June, an activist wearing a mask bearing the face of German Chancellor Angela Merkel demonstrates outside the Chancellery in Berlin.

Good news and bad for German Chancellor Angela Merkel: Three-quarters of Germans disapprove of her efforts to solve the problems plaguing the euro, according to a poll released Friday. But at least the French trust her more than their own president, Nicolas Sarkozy.
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A poll released Friday indicates Germans know little about the current euro crisis -- but are overwhelmingly opposed to the way it is being handled by German Chancellor Angela Merkel and French President Nicolas Sarkozy, the two leaders spearheading efforts to solve the crisis.
The survey of 1,001 Germans conducted for the public broadcaster ARD by pollster Infratest Dimap found that three-quarters of Germans were either not very confident or not at all confident in Merkel's leadership during the euro crisis. Only 22 percent said they had strong faith in her leadership.
Those surveyed had even less confidence in Sarkozy. While 83 percent expressed doubts in his leadership, only 15 percent voiced approval.
Indeed, even the French seem to have more faith in Merkel than in their own leader -- and they have more faith in her than her own people do. In a French poll released last Thursday, 46 percent expressed faith in Merkel while only 33 percent did so in Sarkozy.
Despite their poor views of Merkel's and Sarkozy's crisis-management skills, respondents to the German poll also indicated they had a hard time grasping what the crisis was all about. While 27 percent claimed to understand what is happening, 71 percent admitted to being either partially or completely in the dark about the technical reasons behind the crisis.