Tuesday morning, CNBC opened with an exclusive from Steve Liesman which appeared to quote European sources that an agreement had been reached in principal for a European debt solution involving, among other things, the setting up of a new financial institution to be capitalized by the Euro members which would act as the purchaser of soverign debt to perhaps in excess of 2 trillion Euros in conjunction with an agreement for a TARP-like recapitalization of the European banking system. Steve appeared quite pleased with himself, the crisis was declared nearly over and market futures went through the roof in anticipation of the financial equivalent of "Peace in Our Time." None of it was accurate.
Now Liesman is a pretty good reporter who has won many awards including a Pulitizer so one may ask just how he could have gotten this wrong and it would be a damn good question. The answer in my mind would be that he trusted his source implicitly. As we discussed yesterday it is highly unlikely the story originated in Europe for none of the people I talked to in Euroland had any knowledge of such an agreement and while my sources are not nearly as extensive as Mr, Liesmans', they generally have a pretty good idea of what's going on. Further, I doubt that Liesman would have gone with the story in such a completely positive manner with nary a disclaimer unless he was absolutely certain that the source was unquestioned. In my mind that points to the source being no other than The Suit himself, the Secretary of the Treasury of the United States.
Remember that Mr. Geithner was interviewed by Liesman prior to his trip and said with nary a doubt that Greece would not default and that the Euros had a plan which wrong footed everybody as all signs would have led one to an opposite conclusion. Off he goes to Poland, lectures the Euros as to what they should do (which looks very much like our acts c. 2009), back he comes and lo and behold Liesman announces a solution very much along the lines of what The Suit was suggesting. Except it wasn't real. Poor ol' Steve Liesman was bagged.
What Liesman suggested was never remotely possible to achieve and he should have known it. I have no sympathy for him but nothing but distain for CNBC for allowing crap like this to be broadcast, influencing markets and allowing itself to be used for the bases of purposes. That was my view yesterday and still is, but I got a call today from my political friend Jerry, that got me thinking about something that had been troubling me but which I couldn't quite articulate.
"Good one yesterday, Charlie. I laughed like hell."
"Thanks. Praise is always welcome."
"I know where you're going with this but you better ask yourself something."
"What?"
"Why."
"Why what?"
"Why did he do all this. He's out of character. There's a reason and not a simple one. Think about it."
...and he rang off. So I REALLY thought about it all morning because Jerry had articulated it for me and then I read the leading article in the NY Times and a terribly uncomfortable thought occured.
Remember, just a few days ago in writing about Little Paulie lastest shill job for The Leader I mentioned that one should watch what the Times prints because there is a tendency for its words to reappear in the not too distant future as a major position of The Leader and his party. Today's editorial was about--among other things--the failure of Europe and its finances.
At Ft. Benning, Georgia, the home of the Infantry, as you enter there is a bronze statue of a soldier with a rifle waving to his colleagues behind him with the inscription, "I am the Infantry, FOLLOW ME!" The Suit was never an infantryman. The Suit is never out front. He is not unintelligent but he establishes consensus rather than demanding agreement. He doesn't lead, he agrees. And so, all of his statements and actions over the past few weeks have been completely out of character and I missed it, flat missed it. Then why, I asked myself, and Self came back with an answer that troubles me greatly. Perhaps the Geithner/Liesman interplay wasn't about self-esteem but about creating a legend. Perhaps it wasn't about financial solutions at all, but all about creating a fall guy if you think, nay, truly believe that things are going to get a lot worse between now and next November. Dubya doesn't work any more; you need a REALLY BIG fall guy. How about Europe, and if the New York Times begins to blame our decline and the global financial decline on Europe and China (unimportant for these purposes) so much the better. And this morning, there it was in the Times. I'm not sure, but it just may be that The Suit didn't go to Europe, he was sent.
Last evening, Frau Merkel received the supporting votes she needed for Germany to agree to the bail-out package of nearly 500 billion Euros which had been in considerable doubt. The promises and deals she had to make I'm sure cost her dearly in a political sense but she got it done. Good on her. Of course it changes little: Greece will get the money they need for the next payment and down the road will go the can. It's still all about the banks and perhaps they can work on that in the time that I think has been created but without the soverign debt situation rationalized...
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