Friday, November 29, 2013


On the day after Thanksgiving the lead story out of Europe was the downgrade handed to the Dutch by S & P from AAA to AA+.  The Dutch?  The DUTCH???!  Seems as though either Mr. Poors or Mr. Standard didn't like the prospects for growth…which of course has absolutely nothing whatsoever to do with the credit of the Dutch for the next ten years who must be holding on to a gazillion in reserves of some sort--so much that I doubt if anyone has really looked for God-knows how many years.  But it is a bit of fun in any case and one can only hope that the next to fall will be Germany…Any bets as to when?

And as promised, here cometh the remarkable tale of Mrs. James' little boy Charlie agreeing with the IMF.  Seemingly out of no where comes this august organization suddenly deciding that in the next sovereign debt crisis bond holders will have to take a hit.  Quell awful.  Like somebody, somewhere, decreed way back when that "countries don't go broke…" hang, on, somebody did.  Of course, if you happened to be the Chairman of the biggest international bank in the world that might seem to be a perfectly logical position but after the debt crisis of the eighties some dissension seemed to slip into the ranks to the point that in the following crises, damn few American banks got caught with their knickers down having learned the lesson of Gen. Patton that it was better if the other dumb S.O.B. died for his bank rather than you for yours, leaving the Europeans holding the can in the latest go-rounds, thank you very much indeed.

Now of course what our Euro banking buddies have been doing is financing the welfare state for the politicians with whom they have been in bed since the Big One, which is not to say that we create banking geniuses by the bucket load but at least we piss away shareholder value in far more creative ways than simple sovereign lending.  We are far too smart for that.  But over there, when the piggy bank finally broke a couple of years ago, the poor dumb-ass populace was forced to pay for the, ah, misdemeanors of the banker/political classes (and are still paying) and woe to him who suggests that maybe it might be a good idea if we learned something from all of this like it will be the banker who loses his job and pension and status rather than the poor schub who must sacrifice at the altar of "belt-tightening."   I mean, after all, look at the tragic demise of Westdeutsche Landesbank Girocentrale.  How many of these human tragedies can we bear?   Quite a few one would hope, and fearing that, maybe, just maybe, we can keep corrupt politicians and dumb and greedy bankers apart.  Dodd/Frank without 2800 pages of regulation.  Of course, if anybody Over There gets it into their heads to create a diversified capital market, maybe some of this risk might in the future be disintermediated.  I'm not holding my breath with this monetary system from hell.  So go get 'em Chrissie baby!  Might cost you a banquette in Le Grande Vefour but boy, will it be worth it!

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