The Leader got up today and told us why the U.S. economy has stunk for the past 3 1/2 years. It's because of Europe! Well I'll be damned. Who would have thought of that? I'm just soooo happy it's not our fault or my fault and especially happy that it's not his fault. I guess it's not George Bush's fault either although for 3 1/2 years he's been telling us that it is. It's hard not to like good ol' George so I'm real happy that The Leader has told us we don't have to hate him any more. It's been a good day.
And speaking of Europe, reports abound that Spain is going to ask the leaders of Euroland for a bank bailout from the recovery fund as early as tomorrow. Angie's guys insisted that the Spanish come to Brussels to do it in person, tugging at the fore-lock and cow-towing no doubt, or perhaps with a simple grovel. I would bet that this thing will take the form of funds injected from the bail-out facility in the form of bonds which can then be used as collateral at the ECB who will be pleased to inject cash into the system which will go right out th back door by depositors who will be waiting. Net effect? Nil...but it gets everybody past the Greek elections next week preserving the myth that Greece will not exit in a short period of time.
Yesterday, Spain had a rather successful 10 auction and while the yield climbed to over 6%, it was oversubscribed. That's the good news. The bad news is all the bidders were Spanish Banks and as described to you on these pages weeks ago, that is the current financing situation in all of Euroland: support your own. Discretionary lending has ceased to exist.
The Leader also indicated today that he was in constant contact with European leaders as to the solution to the crisis which would probably be the scariest thing that we have heard in some time except for the fact that nobody overthere listens to anything he has to say unless it's accompanied by a check and he aint offering that. What he did recommend was that they (and our states) adopt the Little Paulie Krugman approach and spend like hell in the short term to "create jobs" apparently overlooking the fact that most of the countries and the states can't borrow and he last time he tried it back in '09 it turned out to be a waste of $800 billion.
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Earlier in the week I lost one of my oldest and dearest friends from university. I'll be traveling to his funeral next week but when I learn the details of the Spanish request I'll be posting immediately. Therefore, look for comment over the weekend and the regular commentary resuming on Wednesday.
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