InvestorMind

The eurozone crisis took a fresh turn for the worse Tuesday after ratings agency Moody's threatened to cut Germany's coveted top credit rating amid fears the bloc's difficulties could pull it apart. The shock decision to slash the outlook of Germany, Europe's top economy and paymaster, from "stable" to "negative" came as auditors arrived in debt-wracked Greece and Spain's top finance official headed to Berlin for talks. The news pushed Spain's borrowing costs above 7.5 percent -- well above the seven-percent mark that forced others into bailouts -- but European stocks rebounded slightly as positive Chinese data offset the Moody's bombshell. Moody's said its decision was based on "rising uncertainty regarding the outcome of the euro area debt crisis (and the) ... increased likelihood of Greece's exit from the euro area." Even if Greece manages to stay in the 17-member bloc, Moody's said there was "an inc...

As I’ve assessed in earlier pieces, neither the Fed, nor the IMF, nor the EFSF, nor the ECB has the firepower or the political backing to prop up Spain or the EU. This ultimately leaves the ESM, the permanent European Stability Mechanism… which technically doesn’t even exist yet (it’s supposed to be ratified by July 2012). That’s right… the bailout fund which is meant to SAVE Europe doesn’t even exist yet. And it’s not clear that it will anytime soon either… Indeed, in order for the ESM to be ratified it needs the individual EU member states that will contribute 90% of its capitalization to first ratify it on an individual basis. Here’s the list of countries that represent that 90% of capital as well as the status of their individual ratifications and the percentage of funding they are to provide. Read the full article at Zero Hedge

RT's Capital Account with Lauren Lyster.

The Little Currency That Couldn’t The euro should now be recognized as an experiment that failed. This failure, which has come after just over a dozen years since the euro was introduced, in 1999, was not an accident or the result of bureaucratic mismanagement but rather the inevitable consequence of imposing a single currency on a very heterogeneous group of countries. The adverse economic consequences of the euro include the sovereign debt crises in several European countries, the fragile condition of major European banks, high levels of unemployment across the eurozone, and the large trade deficits that now plague most eurozone countries. The political goal of creating a harmonious Europe has also failed. France and Germany have dictated painful austerity measures in Greece and Italy as a condition of their financial help, and Paris and Berlin have clashed over the role of the European Central Bank (ECB) and over how the burden of financial assistance will be shared. The initi...

Dec. 16 - Rob Cox is joined by James Rickards, author of Currency Wars, and Breakingviews columnist Martin Hutchinson to discuss how a global competition to devalue currencies can be avoided.

If readers have the sense there has been a deluge of Kyle Bass reading (and viewing) materials on Zero Hedge in the past two weeks, it is because there has been: and why not - after all, unlike all other cheap talking heads, and know-nothing pundits who merely need a suit to make an appearance on one of the TV's financial comedy channels, Kyle has been consistent in the most important thing - telling the truth. Today, he took his resurgent popularity to CNBC which always knows which way the winds blow, and told David Faber more or less everything that Zero Hedge readers know already about Europe's collapse, on why the ECB will print but only after a default, and about the inevitable global debt restructuring. There was a twist: as most regulars here know, the key topic of the past week, of December, and potentially of 2011, is the limitless "fractional Prime Broker lending" of assets-cum-liabilities (and when it comes to the realization that one's gold itself m...