Houston, we have a problem. Methinks folks are beginning to figure it out. Todaywas not a good day; it was a worse day than I suspect most people realize. Economic numbers over here continue to deteriorate; ditto for Euroland. The Troika is on it's way to Greece to tell them the till is empty and the bridge loan they were looking for to get them to the next bridge loan to get them to...oh, what's the difference, as I have said no one cares any more. Then there's Sr. Monti who was doing rather well until he saw fit to tell the world that he has a real problem with La Sigilia about whom everyone has forgotten and badda-bing the ten year goes to 6.50%. Politicians really should learn to keep their mouths shut especially when the problems of the island pale in comparison to the structural issues he must solve in the entire economy in order to make this thing work, and so far, try as he might, the 60 year imbedded bureaucracy of the Italian state has fought him at every turn. No matter perhaps, as it was pointed out last week Italy, with the lowest birth rate by far of any country in Euroland and perhaps the world, Italy might run out of Italians in 100 years. Problem solved. Perhaps a tax on any Italian male who continues to live with his mother after the age of 25 might work? It sure would bring in a bunch of money. Mario should consult with The Leader; he knows a lot about taxes.
As dicey as things are beginning to look in Italy, Spain is sliding closer to the brink and unfortunately those who just a week ago were rejoycing in a deal that would save the banking system and not impinge upon Spain's debt burden took a second look and figured out the point that this space has been trying to make that at the end of the day the credit extended to the banks becomes the obligation of the State if the banks cannot repay. As the funds are guaranteed to go right out the door a nano-second after they arrive, this is a real possibility. The ninnies who write about this stuff missed all of that and what they also missed is the fact that like the relationship between the Italian State and Sicily, Spain has its own autonomous states and regions to whom the State has financial obligations and who are broke. A couple of them rose last week from where they were hiding in plain sight and Badda-boom, the price of poker in Euroland just went up...to 7.53% in the ten year. Unsustainable.
Immediately, of course, increased cries for a Eurobond rose up once again. Memo to the town criers: NO BOD EE will buy the damn thing. Forget it and go away to think of something els...or better yet just go away. Would it work? In theory of course but I keep coming back to the Yogi-man: "In theory, theory and practice are the same; in practice they aint..." which I have been informed if the correct quote. Fortunately, here come the Olympics and all of Europe will be caught up in that and especially the Spanish whose soccer team will be trying to do what no other national side has ever done: win the World Cup, the European Cup and the Olympics back to back to back. Spectacles for the masses. Ave Caesar! Morituri te salutant! Round 2 of the Bond Holders vs. the Lions. Thumbs down for everyone. Tomorrow we see what else the geniuses have figured out.
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Just when you think it has reached the highest level of stupidity, the New York Times out does itself in it's leading article today. Libor was the subject and the Times nearly (figuratively) wet it's pants in revealing the the Justice Department is all over the banks. More importantly, however, the Times excoriated The Suit and demanded that he recuse himself from any investigation conducted by the Treasury. The Times than suggeated that in the next Obama administration The Suit be replaced by Garl Gensler.
Now Mr. Gensler is a very smart guy...the youngest partner ever made by...you guessed it...Goldman Sachs. He is also the head of the Commodities Futures Trading Commission, best buddies with John Corzine of MF Global fame (who is still walking about as a free man) and the guy who missed the shenanagans at PFG Best and about whom it can be said (and has been) that some of his greatest successes at Goldie can be found under a rock.
The Times was on a roll. On the op-ed page Little Paulie has a completely nonsensical piece on global warming, but the star of the day was Gar Alperovitz of the University of Maryland. Briefly, his deal was banks are too big to be regulated so nationalize the banks...and let the government manage them! Now you can look ol' Gar up and you will find that there are a hell of a lot of people who not only don't like him, disagree with him and in a couple of case accuse him of fradulent scholaship. Who knows, but one thing you should know is that he is highly regarded by The Leader. Take this article seriously. It is a message from the Times as to this administration's thinking in phase 2. Scary.
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