Markets plunge following resignation of German ECB official Jürgen Stark

[CHIMO]

The dramatic resignation of a senior European central banker sent stock markets plunging, amid fears that Greece is on the brink of default and the fragile consensus in Berlin over support for the ailing Italian and Spanish economies was close to disintegration.

Bank stocks, down more than 5% in some cases, were the worst affected as the Dow Jones dropped almost 3% to below 11,000. European exchanges joined the panic with the FTSE falling more than 100 points to 5230. Speculation that several French and German banks would soon embark on massive capital raising schemes to offset write-offs on holdings of Greek debt, added to the febrile atmosphere.

Greece issued a statement to say it remained solvent and would not need to seek funds beyond the sums already agreed with the EU and International Monetary Fund. Deputy prime minister Evangelos Venizelos said: "It is not the first time we see an organised wave of "rumours" about an upcoming Greek default. This is a game of a very bad taste."

But the statement from Athens failed to rally markets, which have remained wary of assurances by EU leaders that they will do everything necessary to keep peripheral eurozone countries afloat.

http://www.guardian.co.uk/business/2011/sep/09/stark-ecb-resignation-sends-markets-reeling

G7 leaders scramble to reassure amid Greece worries
http://www.theglobeandmail.com/report-on-business/economy/flaherty-raises-spectre-of-greece-leaving-euro-zone/article2159452/

[dixiegrrrrl]

1. but there is this:

Germany is now reported to be working a plan to recapitalize their banks if Greece defaults.
This in turn means three things:

* A Greek default is considered credible by Germany and they are taking official actions related to that possibility. So much for the denials.

* German banks (and presumably French banks and all the other big banks too) are insolvent as they are carrying these bonds at well above their actual value in the marketplace. If the bonds were carried at the claimed "loss" values, which is quoted as 50%, then there would be no need to recapitalize them would there? This is an official statement of proof that the banks are lying about asset values and are in fact insolvent.

* Remember that we were just told days ago that these banks were fine and needed no capital and in fact calls for more capital by the IMF were officially refused. The same claim has been made about our banks. You were just told officially by Germany that their claim of adequate capital just days ago was a lie as they are now planning to recapitalize the banks. Do you believe our banks are not similarly exposed and also insolvent?

Plus:
Coincident with this hitting the wires there was a massive flow of money into the Japanese Yen - and out of the Euro. A monstrous safety trade - people fleeing the European common currency for what they perceive as a "safe haven." At the same time our markets are down 300 DOW points, the S&P is down 2.5% on the day and more than forty points off the early-morning top -- and there's no sign that things are stabilizing at all.
http://market-ticker.org/akcs-www?blog=Market-Ticker


Fleeing the Euro for ....Japan??????

If that does not tell you something...........