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Emperor's New Clothes: Resurrection of Eurozone Crisis Imminent?

London, UK - 31st October 2011, 8:55 GMT

Dear ATCA Open & Philanthropia Friends

[Please note that the views presented by individual contributors are not necessarily representative of the views of ATCA, which is neutral. ATCA conducts collective Socratic dialogue on global opportunities and threats.]

How fine are the emperor’s new clothes? How beautifully spun is the yarn? Eurozone crisis may resurrect in the coming weeks because:


Resurrection of Eurozone Crisis

1. China may only make a token contribution, rather than ploughing in the exorbitant amounts they are expected to invest, in the trillion euro common pot;

2. Italian 10-year bond yields are at the highest level since the third largest industrial economy joined the Eurozone, which is a sign of stress increasing not decreasing as contagion spreads;

3. “Voluntary” write-downs of 50% of Greek debt have not triggered credit default swaps and the amounts written down are still less than what the market value suggests, indicating further write-downs in future;

4. European Financial Stability Fund – EFSF – may guarantee 20% of losses on future debt issuance but the potential for deeper haircuts, as witnessed in the case of Greece, would still require abnormally high yields to attract investors;

5. Solution of the Eurozone crisis demands new money on the table in trillions of euros and all that has been provided to date are old promises, smoke and mirrors and no new cash to contain the crisis;

6. Fundamental assumptions in regard to economic growth and cost of servicing national debt are overly optimistic and may have to be substantially revised in the wake of intensified austerity measures;

7. If the banks have to improve their tier-1 capital to asset ratio, for many it will be more attractive to reduce lending and jettison parts of the loan book than to seek tier-1 capital increases in tough market conditions, thereby inadvertently slowing their national economies; and

8. All the 13 previous Eurozone summits, prior to the latest one, have mostly enjoyed short-lived stock market rallies in their aftermath which lose steam; why should this latest “solution” be any different?

Fundamental Question: How many times can European leaders present ultimate “comprehensive” solutions to solve the Eurozone crisis once and for all, only to find that “solution” was inadequate in a matter of weeks? At what point does the credibility of European leaders get questioned by financial markets?

[STOPS]

What are your thoughts, observations and views? We are hosting an Expert roundtable on this issue at ATCA 24/7 on Yammer.

[ENDS]

Expert Roundtables

Expert roundtables are the newly launched ATCA 24/7 Q&A private exclusive club service. They seek to become the killer application in strategic intelligence by delivering an unprecedented competitive advantage to our distinguished members. They can only be accessed online at https://www.yammer.com/atca

Q1: How to become a privileged member of ATCA 24/7 to participate in the expert roundtables?

A1: i. If you are a distinguished member of ATCA 5000, ATCA Open, The Philanthropia or HQR affiliated groups you may be allowed to become a privileged member of this new and exclusive private club.

ii. If you are pre-invited, visit the private intelligence network -- PIN -- by going to https://www.yammer.com/atca [Note: In https:// 's' is for security and encryption]

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A3: ATCA 24/7 has now created an exclusive private intelligence watering hole and expert roundtable at the highest level where interesting and sophisticated questions are being asked from around the world, and intelligent answers are being provided, almost always by experts who have deep domain-specific knowledge. Come and check out the exclusive club, take it for a strategic test drive, which sign-of-intelligent life are you waiting for?

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We welcome your thoughts, observations and views. To reflect further on this subject and others, please respond within Twitter, Facebook and LinkedIn's ATCA Open and related discussion platform of HQR. Should you wish to connect directly with real time Twitter feeds, please click as appropriate:

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Best wishes


ATCA: The Asymmetric Threats Contingency Alliance is a philanthropic expert initiative founded in 2001 to resolve complex global challenges through collective Socratic dialogue and joint executive action to build a wisdom based global economy. Adhering to the doctrine of non-violence, ATCA addresses asymmetric threats and social opportunities arising from climate chaos and the environment; radical poverty and microfinance; geo-politics and energy; organised crime & extremism; advanced technologies -- bio, info, nano, robo & AI; demographic skews and resource shortages; pandemics; financial systems and systemic risk; as well as transhumanism and ethics. Present membership of ATCA is by invitation only and has over 5,000 distinguished members from over 120 countries: including 1,000 Parliamentarians; 1,500 Chairmen and CEOs of corporations; 1,000 Heads of NGOs; 750 Directors at Academic Centres of Excellence; 500 Inventors and Original thinkers; as well as 250 Editors-in-Chief of major media.

The Philanthropia, founded in 2005, brings together over 1,000 leading individual and private philanthropists, family offices, foundations, private banks, non-governmental organisations and specialist advisors to address complex global challenges such as countering climate chaos, reducing radical poverty and developing global leadership for the younger generation through the appliance of science and technology, leveraging acumen and finance, as well as encouraging collaboration with a strong commitment to ethics. Philanthropia emphasises multi-faith spiritual values: introspection, healthy living and ecology. Philanthropia Targets: Countering climate chaos and carbon neutrality; Eliminating radical poverty -- through micro-credit schemes, empowerment of women and more responsible capitalism; Leadership for the Younger Generation; and Corporate and social responsibility.



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