PIIGSUK = Portugal, Ireland, Italy, Greece, Spain, United Kingdom.
A collection of six financially precarious economies in the Euro zone, most of which have their financial bollocks firmly grasped by a handful of bankers in Germany and France.
Well Portugal, Ireland, Greece and Spain were in the news this week.
Mike Shedlock ran with some data here.
S&P Cuts Greek Debt 2 Notches Deeper in Junk Cites 50% to 70% Haircuts: CDS at Record High, Probability of Default is 68%
Last week Trichet reiterated for the nth time "restructuring is not on the agenda". This follows his February pronouncement the "whole world" approves the bailout program.
Today, once again, the market refuses for the nth time to believe Trichet's nonsense, and Credit Default Swaps on Greek debt and Irish debt hit a new record high. Greece is now the lowest rated country in Europe.
UPI had more good PIG news here.
Note that last line.
Indeed, Jurgen Stark, chief economist of the European Central Bank, has warned that it would provoke the same kind of crash as the Lehman Brothers bankruptcy of 2008.
What of the Irish? The Daily Mail ran a rather poignant piece here.
We won't pay off our debt... Fine Gael Minister admits Ireland plans to restructure €250bn borrowings as economist warns Ireland is bankrupt
Ireland will never repay the €250bn it has borrowed from the EU and IMF, senior government insiders have admitted – but we will not default until our EU partners agree we have no choice.
A senior minister last night told the Irish Mail on Sunday that the Cabinet expects our crippling debts to be ‘restructured’ within three years.
However, Fine Gael is pinning its hopes on the EU being forced by outside events, such as the collapse of the Greek economy, into a realisation that Ireland cannot hope to pay off the debt mountain accumulated by our rogue banks.
Did you get that? The Irish are hoping the Greeks go under so their sucking chest wound will get more favourable treatment. If thats an union I'd hate to see them divided.
Restructure is finspeak code for if you invested in us, you're in trouble.
The admission came as Professor Morgan Kelly, the economist who predicted our property crash and the bank crisis, warned that without a restructuring, Ireland will be crushed by its quarter of a trillion euro debt.
And Spain? Mike Shedlock dug out some data on Spain this week here.
The deficit compromises growth objectives for 2012 through 2014. Staff reductions are increasingly difficult. Spain is in a very problematic situation. Personal income taxes are down 19.4% Corporate incomes taxes are down 42.7% VAT collection is down 22.4% Excise duties are down 40%
If credit froze in GFC Act I when a low level US investment bank went under what will Euro led GFC Act II bring? In 2008 commodities, risk currencies, stocks etc all went south and rapidly. However in July 2008 if you bought $US with $AU you made 70% in months as the AUD tumbled from 0.98 to 0.60. If you leveraged short you are probably retired.
Now couple a credit freeze with an Australian govt in deficit and tumbling Australian house prices, exposed banks and 0.60 on AUD could be generously high.
This could take a year or 2 but you can feel the first stirrings of an updraft.