服装店入股合同范本:Collateral Damage （4）

What If… ?

For some commentators, it is not a question of whether the euro zone will break up but of how and when it will break up. There is undoubtedly an increased risk of at least some (potentially disorderly) fracture in the euro zone. And some governments are rumored to be preparing just in case—by, for example, securing sufficient capacity to print new supplies of money. Not surprisingly, we have engaged with many clients to discuss this scenario and prepare for it. A country leaving the euro zone would need to do the following:

1、Announce and immediately impose capital controls.

2、Impose immediate trade controls (because companies would otherwise falsify imports in order to get their money out).

3、Impose immediate border controls (to prevent a flight of cash).

4、Implement a bank holiday (to stop citizens from withdrawing their money and running before the devaluation) and—although this is somewhat hard to imagine—stamp every euro note in the country, converting it back to the national currency.

5、Announce a new exchange rate (presumably not floating at the beginning, given capital and exchange controls) so that trade could continue.

6、Decide how to deal with existing outstanding euro-denominated debt, which would probably entail a major government and private-sector debt restructuring (that is, default). This might be easier in the case of government debt, which tends to be governed by domestic law, in contrast to the debt of major corporations, which is normally governed by U.K. law (but we would assume enactment of laws declaring a haircut here, as well).

7、Recapitalize the (insolvent) banks to make up for losses from defaults.

8、Determine what to do with the nonbank financial sector, the stock and bond markets, and every company account and commercial contract in the country.

Any breakup would lead to significant turbulence in financial markets—just think about the number of credit default swaps outstanding—and a worldwide recession. The OECD has warned that a breakup of the euro zone would lead to “massive wealth destruction, bankruptcies and a collapse in confidence in European integration and cooperation,” leading to “a deep depression in both the existing and remaining euro area countries as well as in the world economy.” Exhibit 4 describes a breakup scenario and its potential implications.

According to UBS, the economic costs of a breakup would be huge. Depending on whether the country leaving the EU is a “weak” or a “strong” country, the costs would range from €3,500 to €11,500 per inhabitant per year. Besides these implications for the countries of the euro zone, the world economy would be severely affected, with negative implications for the U.S.—amplifying existing recessionary and potentially deflationary pressures—and also for the emerging markets that depend on exports to the West.

The Year(s) Ahead

As they go into 2012, business leaders need to prepare for a difficult year, and perhaps for several difficult years. They should consider at least four scenarios:…

And with that, we close the year, as the letter would be too long otherwise. You can read their suggested scenarios at The Years Ahead Report. I strongly suggest you do. They made me think a lot about my own business and investments.

Auld Lang Syne

Music plays an important part in most of our lives. I grew up listening to gospel quartets and Irish tenors (my father’s favorite). Believe it or not, in my youth I sang as a high tenor with the Fort Worth Opera Chorus, in 1968. I had the privilege of being ten feet from Beverly Sills, the reigning operatic diva of the ’60s and ’70s as she sang the Mad Scene in Lucia di Lammermoor, the role for which she was best known. The next month we had some new Spanish tenor from the New York Opera, a guy named Placido Domingo, doing La Traviata. The most beautiful sound I have ever heard from a human voice was Domingo singing the death scene in soft, lilting head tones during the dress rehearsal, to save his voice. It was magical, and those of us who were privileged to be close have never forgotten that moment. Of course, he soon rocketed to fame.

I sang with folk groups, did some musicals, sang the tenor solos in The Messiah, tried to do a little rock and roll (I played guitar very badly), and joined various chorales. I could have had a voice scholarship, but wisely realized I would never be anything other than mediocre. I still feel a special thrill when I hear solid harmony and a beautiful tenor, but my repertoire of what I like has expanded. “Give me the beat, boys, and free my soul. I wanna get lost in your rock and roll, and drift away.”

I leave you with three links. The first is a short retrospective on the music of those who left us this last year.

And as we close out another year tonight, this barbershop version of “Auld Lang Syne” will convey my sentiments for a truly Happy New Year for you and yours.

And I leave you with a very bright note. Turn the sound up, and let 14-year-old Liam McNally of Britain simply take your breath away. That humans can make such wondrous sounds… If your soul does not soar with this, hasten to your soul doctor for a checkup.

Let me express my deep and heartfelt appreciation for you, my friends, as you give me the privilege of coming into your world each and every week. Because of you, I live a dream life that I could never have imagined would be possible. I am truly grateful.

Your wishing I could still hit that high note analyst,

John Mauldin

John@FrontlineThoughts.com