As Predicted RIGHT HERE and EVERYWHERE ELSE...

The EU summit would be big on plans, scarce on details.

Lets get started-this will be fun!

• EURO ZONE PLANS TO LEVERAGE EFSF BAILOUT FUND "SEVERAL FOLD", FINANCE MINISTERS TO DECIDE DETAILS IN NOVEMBER -- DRAFT EURO ZONE SUMMIT STATEMENT
• DRAFT EURO ZONE STATEMENT MAKES NO MENTION AT THIS STAGE OF ITALY'S REQUIRED BUDGET STEPS
• NO AMOUNTS SET FOR BANK RECAPITALIZATIONS

Point 1, the leverage of the EFSF was supposed to be decided today, I guess they are taking a page from Congress and maybe will create a super committee and kick the can down the road a bit further until they actually figure out what they are dealing with-which s to say, until they realize that they are in an impossible mess.

Point 2, Italy was pressured to make promised changes as of Sunday night, those changes seem to hard to come by in Italy, so lets just leave that one out and maybe no one will notice :) (smiley face)

Point 3, They already set bank recaps at $110 billion, now we are going backwards which actually makes perfect sense as pointed out before, 3 stress tests later and they still have no idea who has what and how much liability, very reminiscent of US sub-prime write downs circa 2008 when banks would tell us, "We have written down all of our subprime exposure" only to be followed by 4 consecutive bigger write downs.

Next Batch or Rumors-Statements:

First can we get some "Mission Impossible" theme music in the background?

• EU-27 RELEASES STATEMENT AFTER BRUSSELS SUMMIT
  
• EU-27 SAYS COMMISSION MUST URGENTLY EXPLORE BANK GUARANTEES
  
• EU SAYS BANKS SHOULD FIRST FIND PRIVATE SOURCES TO RAISE FUNDS
• EU SAYS STATE AID RULES ON BANKS SHOULD BE PROPORTIONAL
• EU SAYS MID-TERM BANK FUNDING MUST HEAD OFF CREDIT CRUNCH RISK

Point 2) Must urgently explore? This work should have been completed months ago, again they have no idea of who holds what and what ticking time bombs will blow when they embark on any policy course. The first step to solving a problem is identifying and understanding it-at this ground breaking summit to save Europe, they haven't even gotten that far.

Point 3) Banks have already made clear that valuations are too low for them to voluntarily seek out capital, it makes no sense for the banks to seek capital at fire sale prices, they made this clear weeks ago. Secondly, they also made clear that they are locked out of private capital markets and rightly so as no new investor will put money in to a bank when they have no way of knowing if that bank is about to implode. This is a pure, desperate, idiotic statement. What banks WILL DO is stop all EU lending and as I pointed out 2 weeks ago, European businesses use approximately 80% bank loans to run their businesses as compared to 30% in the US. You think the US credit freeze was bad, just wait and with that goes all hopes of green shoots when it comes to EU member's GDP.

Point 5) Directly contradicts point 3, explanation above. If a bank can't raise capital which they can't and the EFSF is not going to give it to them, then the policy will be shrinkage and as we know, that means no loans, this way they bring down their liabilities effectively nullifying point #5.

This is too easy, even for a hack like me.