The next leg down is going to be political chaos in Europe. It looks like Ireland is the first one to step up to the plate:
"DUBLIN – Irish Prime Minister Brian Cowen faced a fight for political survival Sunday as he rebuffed pressure to resign and a senior Cabinet colleague announced he would challenge him for the party leadership.
Foreign Minister Micheal Martin said he had "reluctantly concluded" that Cowen would have to be forced from office since he refused to go voluntarily. The two face a showdown Tuesday when lawmakers of the long-ruling Fianna Fail party gather to vote whether to keep Cowen or promote Martin.
At stake is the course of Ireland's fightback from a European-record deficit amid a euro67.5 billion ($90 billion) international bailout. The leadership tussle within Fianna Fail — "Soldiers of Destiny" in Gaelic — raised new doubt over whether lawmakers would be able to pass a deficit-slashing bill without a national election first.
Hours later Martin — one of three Cabinet ministers who have signaled their desire to succeed Cowen — became the first to declare a challenge. Martin said he had tendered his resignation as foreign minister because he no longer supported Cowen and would ask lawmakers to back him instead Tuesday.
"The longer (the Irish government) stays in power, the greater the damage that is being done to the economy and to our international reputation. This government should go," said Gerry Adams, leader of the Irish nationalist Sinn Fein party."
This is serious stuff folks. We just saw a mini version of political chaos in Tunisia last week. We also saw it in Iceland last year.
The next huge debate(which I predict will trigger a financial panic) will be the people of various nations rising up against government and the banks.
You see, the politicians of these various PIIGS are all making a huge mistake as they accept these bailouts. The money is great but it comes at a steel price.
Essentially when they sign these deals, the politicians of these various nations have decided to bail out the banks at the expense of the people. The reason I say this is the loans come with certain "terms".
The terms of course are to slash spending and agree to start paying off debt. In other words, they force the governments to make catastrophic job and spending cuts in exchange for the money. The problem is the money never trickles down to Main St. It's used to clean up the trillions of dollars of losses that the bankers made on bad bets like housing.
The problem for the politicians who have taken these bailouts is the people are starting to wisen up. The people are starting to understand that it's their jobs(not the banks) that will disappear as the government is forced to slash spending.
The Bottom Line
As you can see above, the people of Ireland want to toss out their government who sold them down the river. If they are successful then I expect the new regime to tell the ECB to "take their bailout and shove it where the sun doesn't shine".
The arrogant ass that's in power and signed the bailout is toast at this point. His tight associations with the bankers pretty much seal his fate IMO. Time will tell if the people will successfully throw him out of office. I would guess that they will be. The fact that someone from his own party has already agreed to challenge him in an election tells you all you need to know.
The markets are going to panic if Ireland is able overthrow the government and then decides to tell the ECB to "shove it". The US banking exposure to Ireland is estimated to be around $200 billion. The European banks are much more heavily exposed.
All I can say is Go Irish! Take down the bums that got you into this mess. This financial nightmare is not your fault. YOu should NOT be forced to pay for the mistakes of greedy bankers.
This whole thing just infuriates me. The idea that the banking cartel actually thought they could force the taxpayers to pay off their losses is beyond insane.
Expect more and more anger in Europe as the recovery fails to materialize and living conditions become worse due to extreme austerity measures.
Whats scary to me here are the ramifications if Ireland is successful in it's attempt to reject the bailout. You can be sure Greece will right behind them demanding the same. Hell they almost burnt the country down a few months ago.
Countries like Portugal and Spain will also eagerly be watching.
The people of the world are realizing they are selling their souls to the devil by agreeing to the brutally fiscal terms of these government bailouts.
The people know that there are far better deals to be made which will include the bankers taking large haircuts.
The banks are about to learn there is no free lunch. All I can say is it couldn't have happened to a nicer group of people.