Europe Is a Mess - Collapse Coming Soon

Let's look at just a few stories out of the fascist front -

On Jan. 13, 2012, we lowered to 'AA+' the long-term sovereign credit ratings on two of the European Financial Stability Facility's (EFSF's) previously 'AAA' rated guarantor member states, France and Austria.

The EFSF's obligations are no longer fully supported either by guarantees from EFSF members rated 'AAA' by Standard & Poor's, or by 'AAA' rated securities. We consider that credit enhancements sufficient to offset what we view as the reduced creditworthiness of guarantors are currently not in place.

We are therefore lowering our long-term issuer credit rating on the EFSF to 'AA+' from 'AAA'. We are also affirming the 'A-1+' short-term rating on EFSF.

 In short, the 'lifeboat' to save Europe also has holes in it. Guess that's what happens when you propose a global ponzi scheme to save a global ponzi scheme.

Next, we move to Greece -

Time for the dominos to fall where they may: head of sovereign ratings at S&P Kraemer spoke on Bloomberg TV, and said the following:

• KRAEMER: GREECE, CREDITORS `RUNNING OUT OF TIME' IN DEBT TALKS -BBG
• KRAEMER: EURO LEADERS HAVEN'T TACKLED CORE UNDERLYING PROBLEMS -BBG
• KRAEMER SAYS EUROPE MUST DEAL WITH IMBALANCES, COMPETITIVENESS -BBG

Portugal can't feel left out now...

Portuguese 10Y bond spreads to bunds just broke 1250bps, +180bps on the day and at record wides. Given the subordination concerns as ESM is accelerated, it is perhaps no surprise that the ECB's SMP has seemingly decided that Portugal has crossed the Rubicon into Greece territory

The Real Effect
As noted in a post from Dec of 2010 -

This is going to gain steam now, Portugal and Germany are blowing out, China is finally starting to slow and Yahoo is laying off 10 - 20% of its employees.

The music has stopped, now where are the chairs? If I were you, I would get cash, on hand. Buy silver, buy gold, and items to protect yourself because we're going in for a crash landing.

 Further, this was predicted back in 2008, before the US crisis hit it's nadir and was identified as an actual 'crisis' -

European Union -They will be hit by this economic downswing, but where the US will be ravaged by this downturn, the EU will "weather the storm" precisely because they are the EU. This will lead for calls to imitate them with the North American Union in order to survive. (Timeframe: 1 - 3 years)

The groundwork is being prepped for Europe's phoenix moment. But like the mythical bird of lore, before the new can come into being, first the old must burn.