Get ready for French views (as S&P queers the Greek deal) of the EZone as the 'new sovereign'. Deliciously delirious, the French. Utterly ignorant of birth rates, demographics and the growth of marginalized Muslim populations throughout France and Europe, things which will bedevil this 'new sovereign.' LOL!
The reference to Anglo-Saxon financial operators should get elmat properly spun-up. But no need to because, as the author incisively puts it, we are in this post-Clintonian era of Obamification becoming as French as the French.
I agree completely with the author: sooner or later, the Euro is toast; Greece is screwed, which means lots of Eurozone banks are screwed, which means the rescue facilities are out of moolah, which means Spain goes, which means......who knows, but whatever it is, it is not good for the EZone..
The present moment reminds me very much of the rumblings about subprime and the statements by all the grand pooh-bahs thaat it is contained, no big deal, etc, which I even briefly believed.
dailycapitalist.com
LEAP Before You Look: The State Of Thinking On The Continent
By Jeff Harding, on June 29th, 2011
I just read a piece from LEAP, a think-tank consortium in Europe, mostly French, which wrote a snide piece on the what they see as the dropping of the second shoe: the liquidation of the remaining malinvestment of bubble assets commencing this Autumn. Specifically they are predicting a drop in Treasurys as a result of our debt and lack of willingness to deal with it, as well as a collapse in European real estate. They also flirt with conspiracy theories about the “‘Anglo-Saxon financial operators”.
Here is how they put it:
The Anglo-Saxon financial operators have played sorcerer’s apprentice for the last year and a half and the first headlines in the Financial Times in December 2009 on the Greek crisis quickly became a so-called “Euro crisis”. We will not dwell on the vicissitudes of this enormous chicanery with a news item orchestrated from the City of London and Wall Street, as we have already devoted many pages to it in a number of GEAB [LEAP's newsletter] issues throughout this period. Suffice it to say that eighteen months later the Euro is doing well while the dollar continues its downward spiral against major world currencies; and that all those who bet on the collapse of the Eurozone have lost a lot of money. As we anticipated the crisis favors the emergence of a new sovereign, Euroland, which now allows the Eurozone to be much better prepared than Japan, the United States or the United Kingdom for the Autumn 2011 shock …
Were that but true. They got everything basically wrong. We Anglo-Saxons (what a quaint term) caused everything [?]. In a way they are right because Keynes was Anglo-Saxon. Which central bank accommodated all the euro debt? Where do they think the bailout money is going to come from? Could it be that the European Central Bank may be the culprit? And that would a bailout do what to the euro?
What they did say that was interesting is that they calculated that there were $30 trillion in bubble assets that need to be wiped out and the first leg wiped out $15 trillion and we have another $15 trillion to go. This is the part I believe. They had the same real estate bubble that we had. The big French, German, and Belgian banks that own euro denominated sovereign debt have serious problems. They are much more highly leveraged that U.S. banks and have the most to lose if Greece goes down. But it will be written down or defaulted on because there is no way Greece or the other PIIGS can pay it back.
LEAP way underestimates the eurozone problem. I am sure they have some important insights in their full report, but I’m not willing to find out for €200.
This kind of thinking is rampant on the Continent (especially France) and the evidence is everywhere. They still think we are a bunch of capitalist yahoo cowboys. Nothing could be farther from the truth (I wish): the fact is that we are becoming like them. Our intellectuals are just as fatuous and hollow as theirs. Our economic system is becoming a Nanny State just like theirs.
I’ll stick with my prediction that the big European banks are just as weak, if not weaker than, ours, that Greece will eventually default, Papandreou is toast, the Germans will rewrite the Maastricht Treaty, it will take years to resolve the debt, and the euro will be worth less than the dollar. |
