The 'No Bailout' Clause

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	Wednesday September 7, 2011 Email Me | Visit our Blog | Subscribe | Unsubscribe Trouble Reading this Email? - Click Here The "No Bailout" Clause Perma-Bear Wants Stimulus The Mortgage Pinata Fellow Investor, The Lisbon Treaty was signed by EU member nations in 2007, as a sort of make-up treaty to correct some of the mistakes from previous EU treaties. Turns out, there's a "no bailout" clause in the Lisbon Treaty. Who knew? And by the time you read this edition of the Daily Profit, Germany's Constitutional Court will have voted as to whether the EU's bailout fund for Greece et al violates Germany's democratic constitution. This constitutionality question adds a new twist to the EU bailout issues because Germany is the only healthy European with enough loot to fund the bailouts of Spain, Portugal and Italy. It's easy to see that, in a sense, Germany is being held hostage by its EU mates, and that Germany's own democratic process is being subverted by the will of the indebted nations, and even the nations who may not be insolvent now, but might become so if Greece, or Italy, or Spain defaults. German leaders Merkel and Wulff are not in an enviable position. It's been estimated that the EU bailout fund, the EFSF, needs nearly $1.5 trillion to effectively handle all of Europe's sovereign debt problems. Many believe that Germany will not foot the bill. Italy has to rollover 62 billion euro by the end of September and 170 billion euro by the end of the year. Who's going to buy the bonds to keep the Italian government solvent? Only the ECB. And as The Telegraph asks: can the ECB continue to buy Italian (and Spanish and Greek) bonds if Germany declares such action unconstitutional? Inquiring minds want to know. The potential threat to German democracy is also the reason that Germany's Angela Merkel has denounced the idea of a euro-bond, backed by all the countries in the EU. Clearly, such a move would make Germany directly financially responsible for the actions of other EU members. That's about as anti-democratic as you can get. What's the consequence of Germany's refusal to bankroll the EU anymore? It could mean dissolution of the Union, which UBS estimates would cost the indebted countries 40%-50% of GDP - in the first year alone... [continue reading at WyattResearch.com]       Click to view the remainder of the article... Two Dividend-Paying Companies to Consider Today History shows that quality dividend-paying stocks are the way to beat a volatile market. By discovering these "Dividend Aristocrats" -- companies with a 25-year history of raising their dividends each and every year -- you could see yields between 3% - 4%. 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Gain complimentary access here.   Market Snapshot US Markets - Sept 6 Close Dow Jones 11,139.30 -100.96 (-0.90%) S&P 500 1,165.24 -8.73 (-0.74%) Nasdaq 2,473.83 -6.50 (-0.26%) Currencies EUR/USD 1.4034 +0.003 (+0.197%) USD/JPY 77.315 -0.20 (0.258%) GBP/USD 1.595 -0.001 (-0.005%) Recent issues of Daily Profit The Buffett Floor Investors Enter September With High Hopes S&P, You've Got To Be Kidding more» Valuable Investment Ideas From Wyatt Investment Research How to Appropriately Allocate Your Investments Wyatt Research Options Strategist Andrew Crowder answers the FAQ: How much of your net worth should you allocate to each investment class? more» What The European Debt Crisis Means for Gold The Euro is in big trouble, and so is every country in the Euro-zone and beyond that's tied to it. more» The Government Lies About Inflation We know the government lies to us about inflation. 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