That was the name of a very popular soap opera over here in the colonies (it may be still around for all I know). I swear to goodness, whats going on out here and over there is like a soap opera except for the fact that NONE of the actors are in any way likable.
As I (nearly) predicted, I don't think there will be a negotiated rise in the debt limit in the United States. The people on both sides genuinely despise one another and with The Leader at least it's all about politics. One can say that the Repubs are stuck on this "no new taxes" mantra but it is a fact that the Senate has not passed a budget in over two years and The Leader, in violation of U.S. law has not proposed a budget within the specified time fram unless one is made to believe that the joke voted down 97-0 by the Senate a few months back puts him in compliance. I've written about what should have happened too many times and to do so again would simply bore you to tears so let us look at one of the side shows outside of the activity occuring in the Big Tent, to wit, the rating agencies.
Has there ever been a more self-serving, phony, sanctimonious ignorant bunch of buggers that these guys? In a confluence of the United States meeting Europe, this mob actually thinks they have something to offer. Having been absent for the last five years and having done almost as much damage to the financial condition of the western world as the Congress of the United States, the Banks and the loan brokers, these clowns actually feel it is their duty...DUTY...to tell us that Greece is broke and that if the U.S. defaults there may be a problem. Realizing that the howls of protest over their past performance has put their monopoly and future at risk, they have taken to elucidating the obvious with breathtaking, ear-shattering screaming that accomplishes nothing. If anything good is to come out of this mess it should be the elimination of these people from any role other than that of a mere commentator, removing forever the power they hold over investors who are, in some cases, limited in their investments to that which they bless in a certain manner. It would be better for all if investors really did their own credit reviews and forcing the S & Ps of this world to compete as an information provider in an open market place. When their "skill" was needed they opted instead to protect their business model; their time is past. They have earned their elimination.
Meantime, while the political sparring continues, on the other side of the pond the realization is dawning that the game is up concerning Greece and that folks better start trying to figure out some face saving mechanism to keep the banks afloat while Greece graciously defaults on its debt. It is because of times like this that we have guys like Charles Delara to explain to us when a default is not really a default, a skill which he probably learned while attempting to convince his wife that she was just a little bit pregnant. Come on, Chuck, she didn't believe you then and nobody is going to believe you now. The only hang-up in this thing is M. Trichet who is still babbling on about the eligibility of Greek paper when everybody and his brother knows that eligibility is what someone decides it to be and that there are no hard and fast rules at this level unless one chooses to be a French bureaucrat all one's life. I gave you guys a couple of ideas on how do do it and some thoughts as to how not to. Get rolling.
The Euros are at a crossroad. They can come clean with one another and their voters and explain that there is simply no alternative to a bank bail out while at the same time rationalizing their systems which may mean the dissolution of a caja or a landesbank or two. If I be they, I would do it real soon--cetainly before the results of the latest "stress test" are made public--when I suspect the entire world is going to find out what a bucket of crap was the first one of last year. At the same time I would make it quite clear that downgrades of the type that occured to Ireland yesterday are not at all appreciated during these delicate moments and unless the rating agencies want to have about six European commissions swarming all over them, they perhaps should SHUT UP. An admirable thing about the Euros is that they can do something like that pretty much on a whim. Admirable, unless of course it's done to you.
We over here should also take note that whilst we speak of Euroland as a single entity, it remains very much a collection of diverse and independent states and of peoples. Unlike Greece, the Italians moved smartly the other day in full compliance with their partners' request for an austere budget, and from all appearances the "risk on" trade for Italy remains. Italy's capital market is large and deep and as mentioned the other day, the country has financed itself through its internal market very well. As long as the non-bank investors--and they are the majority--remain in place, I think Italy makes it. We'll keep watching.
No comments:
Post a Comment