Markets today were "upbeat" about the prospects of an eventual Eurozone rescue... the basis? Some vague reports that the Germans are pushing for....? You guessed it, tougher fiscal rules. Exactly what Europe needs. Sigh. Just like Germany definitely needed another wage-and-price-cutting package in 1931. How is that going to help? Let's see... more austerity will be a tit-for-tat. In exchange, the ECB will buy everyone's bonds in a bid to make that nasty PSI aftertaste go away (that grand idea of scr**ing Greek bondholders so as to reassure the others). That is what some people think. It's part of that true-and-tested model that says - if things are really bad, they will get better, because now people need to do something. Except that they haven't. For about 18 months. My take? Never underestimate human stupidity. I will believe it when I see it. The German government has decided that, after pretending that Greece had a liquidity problem (when it actually had a solvency one), everyone now has a solvency problem (even if the issue is liquidity and self-fulfilling prophecy scambles for the exit). I am waiting for the market counterreaction when people realize that there is only tit, and no tat...
No comments:
Post a Comment