Slovenia May Request Bailout Next Month PM Says

Domino number 6 … … th-pm-says

Slovenia has been struggling badly. Its indiginous manufacturing industries have been dying off and it’s been unable to reform its public spending, particularly its pensions.

**Bloomberg: Slovenian Bond Yields surge over 7%, deepening banking crisis. ** … escue.html

Yes but some time back the Slovenian state blocked one of the troubled banks from selling a stock of a Slovenian retail giant Mercator to a Croatian retail company. Had they sold the stock, this bank would not be in the need of bailout but now they are going cap in hand to EU.

Not a bother, they can wheel out Draghi to chat the yields down. I just don’t get that the markets are still falling for this chit-chat.

Btw Rick Santelli was saying the other day that this 7% threshold is a completely arbitrary figure and that historically the bond yields stood much higher on average than the 3-4% desired these days. The problem, he said, was solvency and not the 7% yield. He’s got a point.

Bloomberg: Slovenian Bailout Looms … -says.html

BusinessWeek: Slovenia Bond Yield Rises to Highest This Year on Bailout Risk … ilout-risk

6 down just 11 more to go but the economic problems are all the fault of the individual countries don’t you know.

The Greeks are lazy and won’t pay taxes, the Irish and the Spanish went mad building, the Cypriots allowed their banks to become warehouses for dirty Russian money, the Portuguese are um too Portuguese. No doubt our friends in he European Commission are busy thinking of a stereotype for Slovenians as we speak. Italy will be next.

How many countries need to experience an economic collapse before the penny drops that the Euro is the problem?

When reading all these news, it feels like anti-europe/Germany terrorism will be next.
Too many people have lost too much in this game.

Reuters: Is Slovenia the next shoe to drop? … e-to-drop/

Slovenia must issue bond by June 6 to avoid trouble: former PM … 0N20130321

There must have been a team of specialist bank-building speculators landing in each Eurozone country when they joined the Euro pumping up their banks as they’ve all suddenly expanded to several times their pre-Euro times.

A bit like the ghost estates in the midlands, each developer building sufficient for the entire housing requirement father than a percentage of it!

Slovenia’s problem? Indexing debt to Maribor instead of Euribor


Still short T-Bonds Larry? How about JGBs?!


If Santelli had a brain, which he quite evidently doesn’t, then he’d understand that, though rates have often been higher than 7%, the problem is their relative level to a) The base rate and b) The benchmark sovereign rate (in this case Germany). Clearly as the spread increases the monetary transmission mechanism from the Central Bank is diminished.

And, by the way, if Draghi said tomorrow that the ECB were fully committed to Slovenian debt being at 3% - then it would go there in an hour.

We do not need a bailout. … VVg3-MwJ5Q

Guardian: Troubled banking sector that threatens to bring down economy … ne-bailout

Yes but draghi appears to have gone missing since before the Cyprus crisis. Maybe he is sitting back watching the rest make a shambles of things, thereby strengthening his hand. I don’t expect him to do much for Slovenia.

Each country does have individual problems, problems which when they had their own currency these countries could avoid facing and simply monetize away the financial troubles they cause (ie lower ordinary people’s real earnings and savings through inflation to pay for these problems).

The Euro removes this easy escape and exposes all these problems at the same time which has led to this terrible period of uncertainty. However, it is not the cause of these problems and if we can get through this first crisis period it will lead to all the eurozone countries managing their finances and economies in a much better manner.

The Euro is a secondary part of the real problem; and that problem is the limitations to growth caused by the physical constraints imposed on the economy by the price & availability of fuel and raw materials.

Plus the reduction in consumer spending caused by wages being undercut by “developing” countries.

Slovenia is not the next Cyprus, say officials … -1.1343400

Sounds like Lenihan telling the world in 2010 “we’re fully funded up till next year so we dont need any bailout”.

A classic case of “The market can stay irrational longer than you can stay solvent”.