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Citigroup send notes to clients: Eurozone is "Doomed" to Fall Apart

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posted on Apr, 21 2010 @ 03:24 PM
Let’s try to put this in perspective, shall we?

Total derivatives market= $450 Trillion
World GDP= $61.1 Trillion

Greece GDP= $356 Billion
Spain GDP= $1.6 Trillion
Portugal GDP= $243 Billion
Italy GDP= $2.3 Trillion
Ireland GDP= $268 Billion

The total GDP for the 5 countries Citigroup claims to be concerned about equals
$4.767 Trillion


At midyear—June 30, 2008—the Office of the Comptroller of the Currency says, Citi's primary banking unit, Citibank NA, held

$37.1 trillion
in total notional value derivatives.
Business Week Article

It seems to me that Citigroup has a bit more to be concerned about than the economic soundness of the EU.

But the reality is that there not concerned about the EU's well being one bit.

posted on Apr, 21 2010 @ 03:52 PM

Originally posted by pirhanna
Should be looked at with skepticism. Citi undoubtedly has other motives at work which are designed to increase it's profits. They want to profit on the failure of the Greek banking disaster.

Haven't we learned by now that we can't trust what the big banks in America say? They did just screw us.

No .. this is very serious .. Europe will stagnate as a political body if they cannot formally decide what their future will be.. I hope, they remain independent.. but the fiscal power is already consolidated, the political power will be a breeze.. once consolidation starts, its impossible to stop. I just hope there is resistance when it happens.. that people don't roll over and let their histories be raped and pillaged by corporate tools.

posted on Apr, 21 2010 @ 03:58 PM
reply to post by Oaktree

Uhmmm..ok I hear you. I never thought that they had a bleeding heart or anything for our friends across the pond. BUT I was concerned more about the accuracy of their prediction.

Will the EU fail??

I say yes, unless they do something about it, BUT it seems they are tied down with too much red tape and conflicts of interest. I say they are certainly on the brink and they will have to do something drastic.

posted on Apr, 21 2010 @ 04:33 PM

Originally posted by trueperspective
Will the EU fail??

I say yes, unless they do something about it, BUT it seems they are tied down with too much red tape and conflicts of interest. I say they are certainly on the brink and they will have to do something drastic.

Its an easy point to make.. Will the EU fail..

How exactly?

I don't think anyone has considered the alternative..

Or how flexible the system actually is . Once an issue has been sorted, the means for dealing with any similar issue in future has been created and needs no more than instant implementation..

Or how much politicians want it to succeed..

Ten years ago it was a loose economic partnership.. Today my EU citizenship and rights under the EU bill of rights and constitution overrule my Irish citizenship in almost every way & the EU makes 80% of Irish laws.. That goes to show how much and quickly it is changing..

The elites don't want it to fail, whether or not the majority of the people agree with it..

posted on Apr, 21 2010 @ 05:02 PM
reply to post by Dermo

Today my EU citizenship and rights under the EU bill of rights and constitution overrule my Irish citizenship in almost every way & the EU makes 80% of Irish laws.. That goes to show how much and quickly it is changing..

And how do you feel about that?

posted on Apr, 21 2010 @ 05:21 PM
reply to post by Dermo

Yeah! we are the elite's new favourites! - they actually love us!

Everyone should read this Newsweek article:

European firms Beat American Rivals

Why Europe Will Win

Forget the conventional wisdom. European firms are faster-growing, more profitable, and better at globalization than their American rivals.

It's become a truism that America is full of "can do" people and companies, while slow-moving Europeans are more likely to offer a "yes, but" when faced with challenge. American firms set the bar for corporate excellence, or so the story goes, coming up with the hottest new products and ideas, and then doing the best job of selling them in every corner of the planet.

While the U.S.-generated financial crisis has, of course, tarnished the patina of American banks, it really hasn't dented this idea about the supremacy of the American multinational, or the American corporate model. Indeed, the worries about Europe's ability to compete on an ever-tougher global playing field have only been heightened by the fact that, post-crisis, Europe is still trailing the U.S. in economic growth, even as it tries to stem its own high-profile problems like the threat of sovereign default in Greece, sky-rocketing deficits, and a plunging euro.

But as is so often the case, a close look at the numbers tells a different story. Contrary to the widespread cliché of American dynamism versus European economic stagnation, over the past decade Europe's top companies have beaten America's (not to mention Japan's) by an often substantial margin.

Despite the rise of China and the rest, Europe has held roughly steady, at about 17 percent, its share of world exports since 2000, while America's has fallen by more than a third, from 17 to 11 percent—a crude but significant indicator of global competitiveness. Since the early 1990s, Europe has steadily expanded its share of the world's 100 biggest multinationals compiled annually by the U.N. Conference on Trade and Development, from 57 in 1991 to 61 last year, while the U.S. number has dropped from 26 to 19.

Europe has moved up these and other corporate rankings with new and fast-expanding companies in such sectors as energy (Germany's E.On and France's GDF Suez), finance (Britain's HSBC and Italy's UniCredit), and telecommunications (Spain's Telefónica and Britain's Vodafone)—while America's roster of large global companies has been mostly static and declining, with new stars like Google the exception, not the rule.

What's more, Europe's growth has been highly profitable. According to a study of the top 3,000 global companies by the German business consultancy Roland Berger, the European companies in the group grew profits at an average rate of 13 percent a year over the decade from 1998 to 2008, almost double the 7 percent rate for their U.S. rivals.

Berger CEO Burkhard Schwenker says corporate Europe now has higher earning power than America Inc., with gross earnings in the Berger sample averaging 19.8 percent of 2008 revenues in Europe, versus 13 percent in the U.S. Some of these numbers must obviously be taken with a grain of salt—for example, 2009 earnings (a compilation of which Berger plans to release next month) show a significant rebound for U.S. companies versus their European rivals, who were hit later and harder by the recession.

But amid all the uncertainty over economic prospects coming out of the crisis, these numbers offer an important starting point. At the heart of the debate is the question over "rebalancing"—whether deficit economies like the United States' will need to move away from debt-driven consumption and imports and compete harder on world markets, as Barack Obama said in his State of the Union address in January, when he promised to double America's exports over the next five years.

Until now, that debate has centered on macroeconomic data—trade balances, currency-exchange pegs, and capital flows. But when you drill down to the level of actual companies, it's clear that in many sectors, European firms have out-competed American rivals across the globe, and Obama's dream of rebuilding a world-beating export sector in which American firms trump European ones could be an uphill slog, to say the least.

It's a picture that forces us to revise some old clichés about the European economy. "The myth of a sclerotic, no-growth Europe that is somehow doomed to fail is just wrong," says Charles Roxburgh, director at McKinsey Global Institute in London. In fact, European per capita GDP has grown slightly faster than the U.S. since 2000. That metric is crucial: because of its faster population growth, the U.S. must generate 1 percentage point more growth than Europe each year just so Americans can hold on to their level of prosperity. Roxburgh attributes the European edge to a sharp rise in employment after a series of labor-market reforms in the late 1990s and early 2000s.

He also says many European export-oriented companies have excelled when it comes to restructuring, increasing their competitiveness even as they face off against lower-cost rivals from China and other developing countries.


The key to the European model has been globalization. European companies have moved much faster and further to seize markets beyond their borders. Foreign sales—even when considering all of Europe as a single home market—are 39 percent, versus roughly 30 percent for U.S. and Japanese companies, and only 20 percent for big companies in the BRIC countries. The latter, far from conquering the world, remain mostly focused on their domestic markets. If one looks at strictly national markets (for example, German versus non-German sales for Volkswagen), the globalization effect is even higher.

Hermann Simon, a German entrepreneur and business professor who has studied the "hidden champions"—the small to midsize highly specialized manufacturing companies that dominate the German, Italian, and Scandinavian economies—says it is not unusual for these companies to have an export share of more than 80 percent.

That means a much larger share of EU growth has piggybacked on economic dynamism in the emerging markets—the BRICs, but also Eastern Europe and the big-spending OPEC states. If these markets continue to generate an increasing share of global growth, as most economists believe, then European companies are in a much better starting position.

European companies have written the book on how to grow and prosper in these markets—and not just via outsourcing, as Europe's healthy trade balance shows (the non-energy trade surplus was €15.6 billion in January). European automakers from Volkswagen to Renault and Fiat, high-speed train manufacturers like France's Alstom, not to mention countless highly specialized niche manufacturers, already dominate trade with the BRICs—and could make life hard for an America that thinks it can revive its manufacturing prowess and export its way to growth.

Europe's globalization prowess isn't as much a matter of management decision as of geographic fate. While American companies traditionally concentrate on their large home market, says Simon, European ones coming from smaller markets are forced to go global at a much earlier stage in their company's development, giving them a leg up on international markets.


Which model is better? The jury is still out on how much of either European or U.S. growth is truly sustainable. Henning Kagermann—ex-CEO of SAP, Europe's most successful software company—wonders the extent to which European corporate success is based on restructuring and incremental technological advancements, rather than the radical innovation that can upend entire industries, and at which American companies like Apple and Google still excel.

On the other hand, a lot of American growth is still fueled by debt spending, this time public instead of private. Europe has debt problems of its own, but its core economies, France and Germany, still have much healthier public finances. In any case, in a few year's time, says McKinsey's Roxburgh, the true competition won't be between Europe and America, but between Western companies and the new giants of the emerging world. In that race, slow Europe may prove to be the tortoise that wins.

Read the full 2 pages Newsweek article via the link.

Found the article in this thread by the author: OddTimeSignature

[edit on 21-4-2010 by Chevalerous]

posted on Apr, 23 2010 @ 10:43 AM

Originally posted by Rockpuck
And how do you feel about that?

In one way, Im delighted that Europe can become closer and more intertwined.. In another way, Pan European legislation can be a bit frustrating because it is so far from me..

I spent years being pissed over the whole loss of sovereignty thing until one day, in the middle of a rant about the Lisbon treaty to my Mother - who voted to Join the EEC 30 years ago - I began talking about how the EU is stealing our sovereignty and how we didn't ask for it or get a choice..

Her reply was.. "When we voted to enter the EU in the late 70's, we knew it was going to become a country eventually, how did we not get a vote in it? We knew where it was going.. Whats the problem?"

So basically, at this stage, while I might dislike various aspects of the EU, I am constantly traveling around it, working and staying in various places, all the while, still having a sense of camaraderie with everyone inside its borders.. even if I can't speak their language.. Without the EU, this would not be possible..

Also peace, prosperity, multiculturalism without wars, a new 'European' breed of people, a modern sense of identity whilst also keeping the fact that I am Irish even though I am also European and a myriad of other things completely outweigh the bad aspects of the EU for me..

I know it is an empire in the making and hope that end will never succeed but I apart from that, I hope it keeps progressing because it is civilized evolution.

And anyway.. at this stage, What is Ireland? A state? A non Country? What does a country do in this day and age? Nationalism is a taboo in Europe.. So loving your "country" in anything other than sports is a big no no..

The propaganda and conditioning for which is so subtle and subversive that is is funny.. And at this stage, I can't say i'm not happy about it.. Even though I know we are being played by the globalists.. Its kind of enlightening...

posted on Apr, 23 2010 @ 12:35 PM
Down with Europe!

Europe must fail if any of the "member states" is to have a future.

A Federal Europe is precisely what they want. It would fulfill decades of not getting their own way to a mega-dictatorship. Germany is already acting that way, as is France (both socalist, both rolled over for Hitler).

The way they've rail-roaded a lot of countries into rartifying the Treaty of Lisbon, despite holding a referendum, getting a "NO" and ignoring it anyway, to giving Ireland two votes, shows just what a Federal Europe would look like.

They don;t care about democracy, they don't care if anyone does well - they want total power and control, and nothing else.

It is about time people woke up from the delusion that everything in Euro land is good and see the reality for what it is - it is a wannabe Soviet State.

posted on Apr, 24 2010 @ 09:34 AM
reply to post by mirageofdeceit

Spoken like a true Brit

It was ok to try and keep dozens of countries under the same flag when it was the British empire.. But now that the Queen isn't in control, its evil??

Come on man, I understand the outlook of the English people but in fairness.. Its a bit hypocritical isn't it?

Also, give me a better system for unifying the people of Europe? Because I know you can't..

Its funny how quickly people forget the damage that was done during the thousands of years when Europe was splintered..

posted on Apr, 24 2010 @ 11:18 AM
I'm not defending the British Empire at all.

History shows that any time this kind of forcing together of different countries is attempted, it fails.

Why does Europe have to unite? "My country is bigger than yours" has to stop. It just looks like a bunch of kids arguing to me. Europe can live peacefully together - it is the fact they try and rule the whole lot that creates problems.

Germany can be Germany, France can be France, etc.. - we don't have to be called "Europe" for it to happen.

They are saying we need to be part of Europe to do trade with them. BS! We do not! As I've said before - what would be peoples reaction if China said that in order to do trade with them, that China had to have a say in the laws made in the country wishing to trade with them? I think it would be one of "not bloody likely!!".

[edit on 24-4-2010 by mirageofdeceit]

posted on Apr, 24 2010 @ 12:41 PM

Originally posted by mirageofdeceit
Why does Europe have to unite?

For me, its the civilized evolution of humanity towards unification.. Basically...

Unification of our species is a massive milestone that we will eventually overcome.. Similar to becoming completely sustainable or colonizing our Solar system..

And what "Europe" is becoming is forward momentum leading this advance..

Fair enough, if you want to keep your tribal views of nationalism and pride of your own, thats your own choice but at least view it from more that just a simplistic level of losing your sovereignty.

posted on Apr, 24 2010 @ 12:49 PM
alot of citi's clients trade FOREX...which is the market for exchange of currencies...euro/dollar, yen/dollar, euro/yen, pound/yen, pound/dollar, pound/euro...when you trade in millions of "dollars"..a few "cents" change, could mean a huge profit or loss.

posted on Apr, 29 2010 @ 10:31 PM
Greece isn't Vegas. What happens in greece has effects all over the world. Everything is connected like a string of dominos, and the right push can have a ripple efect on the whole world.

You can bet your life that all the big boys are concerned as to what happens to Greece. In one way or the other, they all have a dog in that fight.

I think the general public will soon find that everything is much worse than what they had ever imagined. I consider the world economic situation to be like a juggler trying to keep too many balls in the air at one time. One slip, and it's all over. We are close to the slip part now. I guess we will find out how many balls are being juggled soon enough. The only question is how many balls can the jugglers still keep in the air?

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