he said "can’t cover its payments without Russian gas and the government is asking citizens to conserve energy to leave more for industry." He then elaborated that "Minsky moments are triggered by excessive financial leverage, and in the context of supply chains, leverage means excessive operating leverage: in Germany, $2 trillion of value added depends on $20 billion of gas from Russia… …that’s 100-times leverage – much more than Lehman’s." (Zoltan's entire note is a must read for everyone with a passing interest in what comes next). Austria, which announced it would bail out the country's main energy supplier with a two-billion-euro ($2 billion) loan, the AFP reported. Chancellor Karl Nehammer said the loan to Wien Energie was an "extraordinary rescue measure" to ensure its two million customers - mainly Vienna households - continue to receive electricity. It will run until next April. Wien Energie asked for a bailout this weekend after suffering financial trouble amid soaring energy prices and speculation the company mismanaged their funds. Nehammer said Wien Energie, which is owned by Vienna, would have to answer questions as to how they got into trouble.
Sweden announced it will give emergency liquidity support to
electricity producers after the government said it feared Russia’s
decision to halt gas deliveries to Europe could place its financial
system under severe strain. Prime minister Magdalena
Andersson said the government would offer hundreds of billions of kroner
in support to electricity producers, the FT reported. The PM warned that, left unchecked, rising
collateral demands for electricity producers could ripple through the
main Nasdaq Clearing market in Stockholm and, in the worst case, spark a
financial crisis.... just as Zoltan warned almost half a year ago. " ZH
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