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George Soros Issues 3 month Warning For Europe

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After Robert Zoellick issued his warning, George Soros had to get in on the act. His full speech can be found on his website but ZeroHedge did a great analysis of it.

although Soros said

Germany and its central bank are unlikely to lead the way out of the euro zone debt crisis within three months time, after which it will be too late, U.S. billionaire George Soros said on Saturday.

….

Soros said he expected Greek elections in June to produce a government willing to stick by the current bailout agreements, but which would find it impossible to do so.

ZH replied with

We disagree: the next Greek elections will be merely a rerun of the first – lots of sound and fury, signifying no government, as the country becomes the next Belgium (as we noted here before the outcome of the first election was even known), ends up an anarchy state, without a government, as what little money the Treasury has goes to pay English-law bondholders, until finally there is nothing left. But that is neither here nor there, because at this point it is not about Greece any more:

But both Soros and ZH  agree on 3 months timeline.

Click for full ZeroHedge article.

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World Bank Head Warns Europe Heading To Danger Zone

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Its not as if you needed a reminder of this, but Robert Zoellick the head of the World Bank is now getting in on the act and issuing his own warning for Europe. It does not give much confidence in the crisis being resolved after nearly 3 years of bumbling along by our European leaders.

The head of the World Bank yesterday warned that financial markets face a rerun of the Great Panic of 2008.

On the bleakest day for the global economy this year,  Robert Zoellick said crisis-torn Europe was heading for the ‘danger zone’.

Mr Zoellick, who stands down at the end of the month after five years in charge of the watchdog, said it was ‘far from clear that eurozone leaders have steeled themselves’ for the looming  catastrophe amid fears of a Greek exit from the single currency and meltdown in Spain.

The flow of money into so-called ‘safe havens’ such as UK, German and US government debt turned into a stampede yesterday.

In Berlin the two-year government bond yield fell below zero for the first time, with the bizarre result that jittery international investors are now  paying – rather than being paid – for lending to Germany.

here was a raft of dismal economic news from around the world, with manufacturing output falling in Britain and Europe, unemployment jumping in the eurozone and America, and fast-emerging economies such as Brazil and China showing signs of running out of steam.

The FTSE 100 index fell 60.67 points to a new 2012 low of 5260.19 in London and the pound tumbled against the US dollar to $1.5234 – a level not seen since January.

The Dow Jones Industrial Average shed more than 200 points in New York, wiping out all its gains this year.

Borrowing costs in Spain and Italy have soared back above 6 per cent towards the 7 per cent level that triggered bailouts in Greece, Ireland and Portugal.

Mr Zoellick warned that the coming months could be as bad as the collapse of US investment bank Lehman Brothers in 2008.

Mr Zoellick said: ‘Eurozone leaders need to be prepared to recapitalise banks. In the eurozone, the guarantees of some national sovereigns are unlikely to be sufficient and only that of the “euro-sovereign” will suffice.

‘It is far from clear that eurozone leaders have steeled themselves for this step. Eurozone leaders need to be ready.

‘There will not be time for meetings of finance ministers to discuss the outlook and debate the politics.

‘In panicked markets, investors flee to safe assets, sparking other flames.’

Yesterday investors scrambling for lifelines piled into German, US and UK government debt.

Not only did the German two-year bond yield fall below zero for the first time, but also the yield on ten-year UK gilts – the benchmark borrowing cost for the British Government – hit a record low of 1.44 per cent.

The yield on the equivalent US treasuries fell to 1.46 per cent – the lowest in over 200 years of records.

‘People’s objective is the return of their capital, not the return they get on their capital,’ said Sam Hill, a strategist at Royal Bank of Canada.

George Carlin: How The System Works

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George Carlin sums it up best as always

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