As I Warned Yesterday, It Appears the Market Is Calling the Europeans Bluff – It’s Now Put Up Or Get Put Down

Reggie Middleton's picture

Yesterday I commented on the folly of promising big money to throw at
a myriad variety of highly indebted nation without a central authority
to enforce the structural change needed to actually cure the problems
that created the need for the monies in the first place. See  The
EU Has Set Up An Oppurtunistic Entry Point for Shorts Instead of
Expressly Offering a Solution to the Pan-European Sovereign Debt
and What
We Know About the Pan European Bailout Thus Far.
The primary flaw,
by far, that I perceive in this most grand of grand bailout schemes is
that it is just that – a bailout, not a solution. Methinks the market is
about to call the EU on their bluff pretty much along the same lines
that I espoused above. For those subscribers who follow my belief that
the ECB and EU leaders are making one of the largest policy blunders of
modern times, this may be an opportunity to set up a short position that
makes the Lehman Brothers’ debacle look like a day rally. All
subscribers are welcome to download our latest File Icon Euro Bank Sovereign Debt Exposure Preview.
A more verbose summary will be released for pro and institutional
subscribers shortly. Reference the following articles in this early
morning edition of Bloomberg:

Erases Gains as Optimism Cools; Stocks, Commodities Fall on China CPI

May 11 (Bloomberg) — The euro lost
all of yesterday’s gains on concern the almost $1 trillion lending plan
to bail out indebted nations in Europe will fail to avert a slowdown in
the region. Asian stocks, copper and U.S. index futures fell after
China’s inflation rate accelerated to an 18-month high.

The euro, after yesterday
strengthening as much as 2.7 percent against the dollar, traded 0.3
percent weaker than last week’s closing level as of 1:45 p.m. in Tokyo.
Asia Pacific Index
dropped 0.7 percent to 119.29 as declines in
mining companies and Japan’s banks countered positive earnings news from
corporations including Sony Corp. Standard & Poor’s 500 Index
futures lost 0.6 percent, following the biggest jump in U.S. stocks
since March 2009.

“Markets realized quickly that this
crisis won’t be cured by adding liquidity, no matter how big it is,”
said Toshihiko
, head of trading for currencies and financial products at
Mitsubishi UFJ Trust & Banking Corp. in Tokyo. “The structural
problems of the euro zone will persist. I’m not surprised at all the
euro is losing strength again.”

Greece may have its credit rating
lowered to junk within the next month, Moody’s Investors Service said
yesterday, citing the country’s “dismal” economic prospects. The
European Central Bank’s decision to buy government bonds, a move
designed to help reduce financing costs for countries including Greece,
poses “significant stability risks,” council member Axel

Inflation Accelerates as Loans Surge, Property Prices Rise by Record

– I led my Pan-European Debt Crisis series with a piece on
China macro for it is quite possible that a China bubble burst may be
the straw that breaks the European camels back. See Can
China Control the “Side-Effects” of its Stimulus-Led Growth? Let’s
Look at the Facts

May 11 (Bloomberg) — China’s inflation
accelerated, bank lending exceeded estimates and property prices jumped
by a record, increasing pressure on the government to raise interest
rates and let the currency appreciate.

Consumer prices rose 2.8 percent in
April from a year earlier, the fastest pace in 18 months, and property
prices jumped 12.8 percent, the statistics bureau said in statements
today. New
of 774 billion yuan ($113 billion), announced by the central
bank, was more than any of 24 economists forecast.

Asian stocks pared gains on concern
that Chinese officials will move to cool the fastest-growing major
economy, while yuan forwards rose. China’s top priority should be
preventing excessive increases in asset prices and liquidity after
Europe’s almost $1 trillion loan package reduced the risk of another
global slump, central bank adviser Li
said yesterday.

“Price pressures have been building
throughout the economy, strengthening the case for higher interest rates
and a stronger yuan,” said Brian
, a Hong Kong-based strategist at Royal Bank of Canada.
“China is at risk of overheating, with spot fires breaking out in
various parts of the economy.”

… The MSCI Asia Pacific Index
reversed a gain of as much as 0.7 percent after the China reports, to
trade 0.5 percent lower at 119.55 as of 12:03 p.m. Hong Kong time.
Non-deliverable yuan forwards rose 0.2 percent, indicating that the
government will scrap a peg to the dollar and let the currency gain 2.4
percent in the next year. The increase in consumer prices compared with
2.4 percent in March and the 2.7 percent median estimate of 30
economists surveyed by Bloomberg News. Producer
jumped 6.8 percent, also topping estimates, today’s release
from the statistics bureau showed. The jump in property prices in 70
cities was the biggest since data began in 2005, defying a government
crackdown on speculation that intensified last month.

Swaps, Libor Spreads Show Doubts Over Europe Bailout: Credit Markets

May 11 (Bloomberg) — Money markets and the cost
of protecting bank bonds from losses show investors are concerned the
almost $1 trillion rescue plan announced by European leaders may not be
enough to contain the region’s sovereign debt crisis.
Markit iTraxx Financial Index of credit-default swaps on 20 European
banks was last at 130.5 basis points compared to 100.25 basis points for
the Markit iTraxx Europe Index of 125 investment-grade companies, a
benchmark it traded an average 10 basis points below for three years,
according to CMA DataVision. The three-month Libor-OIS spread, which
widens as banks’ willingness to lend decreases, advanced to 19.17 basis
points from 18.92 yesterday and 6 on March 15.

The loan package for debt-laden
nations including Greece is part of an attempt to stem a decline in the
euro, which fell to a 14-month low last week, and stave off a sovereign
default that would threaten recovery from the worst global recession
since the 1930s. Banks’
potential losses stemming from the crisis are under scrutiny by
investors concerned financial institutions are owed too much by Europe’s
most-indebted countries
. [Look above for our latest take on this. Shorting into
European bank strength is the Reggie Contrarian Trade of the Day!

“Sovereign risk hasn’t gone away in
the slightest,” said Jim
, head of fundamental strategy in London for Deutsche Bank AG,
Germany’s biggest bank. “What this package has done is massively
reduced the tail risk in European markets without necessarily changing
the medium- to long-term dynamics of financial markets.”

Investor ‘Euphoria’ … Elsewhere in
credit markets, the extra yield investors demand to own corporate debt
instead of government securities fell 8 basis points to 169 basis
points, or 1.69 percentage point, after soaring 28 basis points last
week, according to Bank of America Merrill Lynch’s Global Broad Market
Corporate Index. It peaked at 511 basis points on March 30, 2009, and
dropped to as low as 142 on April 21. Average yields fell 0.5 basis
point to 4 percent.

The cost of protecting Asia-Pacific
bonds from default rose today as investor “euphoria” at the European
measures abated, according to Fumihito
, head of Japan credit research for UBS AG in Tokyo.

The Markit iTraxx Asia index of
credit-default swaps on 50 investment-grade borrowers outside Japan
climbed 3 basis points to 108 as of 11:27 a.m. in Singapore, Royal Bank
of Scotland Group Plc prices show. It declined 28 basis points
yesterday, according to CMA, after European Union finance chiefs agreed
to offer as much as 750 billion euros ($956 billion), including
International Monetary Fund backing, to countries facing deep budget
deficits and flagging investor confidence.

Europe Sovereigns… The European
Central Bank also said it will buy government and private debt. Credit
swaps on Greece tumbled 329.5 basis points to 586, the biggest decline
since March 2005, according to CMA. The swaps are still up from 364 on
April 12. Contracts on Portugal, which were 152 basis points four weeks
ago, dropped 170 to 255. Spain, which declined 65.5 to 173 yesterday, is
48 basis points higher than April 12. Italy, which fell 68.5 to 157
yesterday, was 124 basis points two weeks ago. “Maybe Greece won’t
default in the near term or even the medium term, but the debt hasn’t
gone away,” said John
, head of credit at Gartmore Investments in London. “Budget
deficits still need to be cut for the debt to be paid down.” Credit
swaps pay the buyer face value if a borrower fails to meet its
obligations, and prices decline as perceptions of creditworthiness
improve. A basis point equals $1,000 annually on a contract protecting
$10 million of debt.

Libor Rates… The three-month London
interbank offered rate in dollars, the rate banks pay for loans, fell to
42.1 basis points from 42.8 on May 7. The rate climbed 8.2 basis points
last week, the biggest increase
since October 2008, a month after Lehman Brothers Holdings Inc.’s
bankruptcy filing.

The difference between it and the
overnight indexed swap rate, the so-called Libor-OIS spread, climbed
yesterday even after the rescue announcement. Predictions for the spread
in the months ahead, based on contracts
trading in the forwards market, or so-called FRA/OIS spreads, are for
26.5 basis points by June, down from 38 on May 7 and still almost twice
the 14.5 basis points from two weeks ago, according to UBS AG data.

“People will remain somewhat on
edge,” said David
, a London-based strategist at CreditSights Inc. “There are
still a lot of hurdles to overcome before we get settled back to where
we were a month and a half to two months ago.”

The European bailout may unravel if
countries fail to meet austerity targets under terms of the loan
package, Watts wrote with strategist Louise
in a note to clients yesterday..

“You now have moral hazard at a
sovereign level and investors should still be wary of the whole
situation,” said Gartmore’s Anderson. “There are record deficits in just
about every country in Western Europe and something ultimately needs to
be done about them.”

Recovery Proves Short-Lived on Interest Rates, ECB’s Bond-

May 11 (Bloomberg) — Europe’s $1
trillion plan to rescue the region’s debt-laden governments may fail to
reverse the euro’s worst start to a year since 2000 amid bets the
central bank will keep interest rates at a record low for longer.

The currency surged by as much as 2.7
percent against the dollar yesterday before paring that gain, and
closing up 0.3 percent to $1.2787 in New York. It will probably decline
toward $1.20, according to UBS AG and Barclays Plc, ranked by Euromoney
Institutional Investor Plc as the world’s second- and third- largest
currency traders. Schneider Foreign Exchange, the third- most-accurate
forecaster of the euro against the dollar in the first quarter, also cut
its prediction.

Traders are betting the currency will
resume its decline as Europe’s economic recovery trails behind that in
the U.S., prompting the European Central Bank to keep its main
refinancing rate at 1 percent this year while the Federal Reserve starts
raising rates. The ECB’s decision to buy bonds may prompt investors to
question its independence and demand “a higher risk or credibility
premium,” Kenneth
, a senior market economist at Lloyds Banking Group Plc in
London, wrote in a client note.

“The cost of securing the future of
the euro is proving to be extremely high, as can be seen by the size of
the package, and there are a lot of long-term negative implications
attached,” said Ian
, a senior currency strategist at BNP Paribas in London.
While the rescue package “may provide some very near-term support for
the euro” it “doesn’t have an impact on the longer-term outlook,” he

The euro fell 0.5 percent to $1.2722
as of 6:36 a.m. in London, from yesterday in New York, and dropped 1.1
percent to trade at 117.99 yen. Europe’s common currency is
“endangered,” John
, who helps oversee $7.5 billion as chairman of New
York-based FX Concepts Inc., manager of the world’s largest currency
hedge fund, said in a Bloomberg Television interview. “The problem has
been found out. The king has no clothes.”

The 16-nation euro slumped 11 percent
since Jan. 1, its worst start since the year after its introduction, on
concern the debt crisis in countries from Greece to Portugal will slow
the region’s economic recovery and prompt the ECB to buy assets while
the Fed is exiting its own emergency measures.

‘Temporary Rally’… The currency
surged yesterday after governments pledged to make 440 billion euros
($562 billion) available as part of the package, with 60 billion euros
more from the European Union’s budget and as much as 250 billion euros
from the International
Monetary Fund
. It jumped 4.4 percent versus the yen in the two days
through yesterday, the biggest advance since November 2008. The gains
won’t be sustained, said Mansoor
, Singapore-based global head of currency strategy at
UBS, forecasting a “temporary rally” toward $1.35 before a drop. “The
euro will definitely hit what we call its long-term fair value at $1.20
and it may easily overshoot that if difficulties in Europe persist,” he
said. “The policy mix in Europe is becoming very unfavorable to the

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Matto's picture

There was one small sentence i noticed in my course work i was reading at about the same time as the European bail out was being announced (it was in regards to personal lending, credit cards, etc) that has stuck in my mind:

"It is much easier to get into debt than it is to get out."

And that just about sums it up as far as im concerned.


Adam Selene's picture

Don't worry about black swans, everyone. They will be drawn into the black hole, and all will surely be well.

/sarcasm off/

The world is now so completely demented that ZH is the only place that I can go to hear rational discourse. That is a very sobering thought indeed.

Thank you Reggie. This is good stuff.

Panafrican Funktron Robot's picture

"For Pete's sake, they do not want a stronger euro. Do any of you understand basic macroeconomics?"

OK, since your introducing basic macroeconomics into the equation, please answer the following:

1.  What is the enforcement mechanism for the austerity measures?

2.  Are the austerity measures achievable?


AnAnonymous's picture

What other enforcement mechanism than impossibility to sustain do you wish for?

JR's picture

Reggie, you run in front of the pack. That’s it exactly: it’s a bailout, not a solution. Put simply, centrally controlled socialist economies don’t work.

It’s interesting that Karl Marx didn’t lay down specific rules on how to set up a socialist economy, except perhaps his old Marxian principle: “From each according to his ability; to each according to his needs.”  Lenin himself said: “We have knowledge of socialism, but as for knowledge of…the organization and distribution of commodities—that we have not.  This the old Bolshevik leaders did not teach us…”

And so, during Russia’s cruel socialist experiment and resultant famines, it was production from U.S. capitalism that sent in large quantities of food to feed the Russian people while Russia’s despots produced war weapons.  And still, the toll from famine was staggering.

The Union of Soviet Socialist Republics finally fell of its own non-producing lightweight at the end of the 1980’s as its trade gap progressively emptied its coffers, leading to bankruptcy in 1991. 

But, central planners never learn, or don’t want to learn.  Current socialists and their “new economies” are at it again, and failing. Deliberately falsified statistics (the ones past doctoring they simply suppress) belie the evidence.

And, now, as U.S. capitalism morphs down The Road to Serfdom under the banner of the world’s central banker triumvirate—Bernanke (FRS) , Trichet (ECB) and Fischer (BOI)—who will come to the rescue of the American people should famine happen here?  Who will feed Europe?

Is more proof needed that central planning by a world banking cabal is simply the place for criminals to make money off the system, using socialism as a bridge to despotism?  On April 29, 2010, in the article ECB President Favors Global Governance, reported:

"...In his prepared printed and spoken remarks to the Council on Foreign Relations, Trichet emphasized that politicians, economists, and financiers must work across the Atlantic and collaborate on methods to create an international set of standards. It is his belief that through global governance, the resiliency of the global financial system can be assured, noting that ultimately it was governments' use of taxpayer's money, equivalent to around 25% of GDP on both sides of the Atlantic, that prevented another catastrophic great depression from occurring."

And, then, little more than a week later, on May 9,  Trichet announced Europe’s $1 Trillion taxpayer bailout to end all bailouts—a bailout, not a solution.


Who is Trichet? From Wikipedia, the free encyclopdia…

Jean-Claude Trichet (born 20 December 1942) is a French civil servant who is the current president of the European Central Bank, a position he has held since 2003. He is also a member of the Board of Directors of the Bank for International Settlements. Trichet ranks 5th on Newsweek's list of the world's most powerful along with economic triumvirs Ben Bernanke (4th) and Masaaki Shirakawa (6th) [Governor of the Bank of Japan].

Trichet was born in Lyon, France to a Jewish family. He was educated at the École des Mines de Nancy, from which he graduated in 1964..

In 1987 Trichet became a member of an influential Washington-based financial advisory body, the Group of Thirty. Later, in 1993 he was appointed governor of Banque de France. On 1 November 2003 he took Wim Duisenberg's place as president of the European Central Bank. (Most European Union leaders present at a 1998 special summit believed that Wim Duisenberg had agreed to a compromise with the French representatives and would step down from his office halfway through his eight-year term.)

In January 2003 Trichet was put on trial with 8 others charged with irregularities at Credit Lyonnais, one of France's biggest banks. Trichet was in charge of the French treasury at that time. He was cleared in June 2003 which left the way clear for him to move to the ECB.

WaterWings's picture

Ah, another excellent post.

And thank you, Reggie.

Steve Garrison's picture

Anybody have a handle on how much of the IMF's 250 billion is being supplied

by the US?

Jim in MN's picture

Aren't we usually 17%?  A cool $42.5 billion?


Give or take $10 billion depending on whether it's worth assuming a non-parity USD:Euro exchange rate....hardly seems worth the bother under the circumstances....

Steve Garrison's picture

I believe the amount depends on the reason for the monetary expansion. No

figures are forthcoming from our government.

This is another of the many reasons for "transparency."

pezhead's picture

Don't forget the Fed Reserve black ops - the men who show up in the middle of the night carry bags of money

Jim Billy Bob James IV's picture

It appears that the more the central banks get involved, the more complicated the process becomes.  The ECB has prevented the roof of the house of cards from collapsing, but ultimately the house will collapse unless the foundation is solid.  It looks to me that the EC has the same problem as the U.S. - the only feasible way out is to inflate out and everytime you kick the can down the road the required amount  of needed inflation goes up exponentially.

Kina's picture

They are desperate to end green is so obvious, who do they think they are fooling?

Kina's picture

That would be a future super balck swan if it gets into the gulf stream.

Robert J Moran's picture

Short selling will be banned and 'rigorously strengthened' Circuit Breakers will be in place!  Downward movement in the market WILL NOT be tolerated!  We have decreed it to be SO!  Bernanke et all are at the Event Horizon of the Deflationary Black Hole and they don't like the view... 

Husk-Erzulie's picture

The S&P 5 day looks pretty flippin cool right now.  What to call this slab sided new construct?  manipulation  ditch?  HFT trough?  Volatility Club limbo dancing?

Jim in MN's picture

Slab is good.  As in morgue.  Also has a nice clumsy ring to it which is appropriate.

How about Technocrats' Slab chart formation?

tim73's picture

One black swan could still be the Gulf oil spill. is estimating that it is already 21 MILLION gallons and daily outflow rate is one million gallons. is quite shocking video (ships as teacups!) . We are talking about possible millions of NEW unemployed in the Gulf region and quite soon...

WaterWings's picture

Good post. The area could be a total dead zone. Think about hurricanes spraying the south with it.

Consider an attack on Iran, and "retaliation" on US soil by August, when Iraqi AF takes over the skies and will no longer "approve" Israeli fighters on an "emergency" warpath.

Cammy Le Flage's picture

Thank you for having key insight.   Markets now must pay attention to other factors that are not totally "financial".  I said it before, and I will say it again.   The oil hits the Florida Keys - ALL bets are off.   That gulf gusher is not a "spill" by the way.  I would dare to say a "spill" is finite.

markar's picture

Did these idiots really believe pouring more debt onto the Eurozone and buying its trash was going to strengthen the currency?

Leo Kolivakis's picture

For Pete's sake, they do not want a stronger euro. Do any of you understand basic macroeconomics? Financial conditions need to be loosened, and with interest rates next to zero, they're hoping the euro's slide will help buffer the economic shock.

Blindweb's picture

Perfectly illustrating why fiat and central planning will collapse.  The games played and resources wasted to devalue a currency, something that should happen organically.

Anton LaVey's picture

Quite true... BUT:

(A) This means Europe likes inflation more than deflation. Weaker currency = more expensive raw materials and, especially, oil. Europe imports most of its oil from the Middle East and a weaker Euro means filling the tank of your car is going to be a lot more expensive if you live in Euroland. Inflation, ultimately, is not going to be good for the European economy (not to mention Eurozone unity). Germans, in particular, hate inflation...

(B) "Beggar thy neighbour" is all nice and good, but what if no one else is doing well enough to buy European products? This could be dampened somewhat by the fact that most trading of European countries is within the Eurozone, but exporting outside of it is going to be a real problem... Especially since the USA are going to go the devaluation way as well.

All in all, this is going to be bad for the European economy as a whole. Especially for European countries (UK, Sweden, etc...) that are part of the European Union, but not the Eurozone.

Again, Europeans are, in my opinion, paying the price for an opaque, bureaucracy-dominated elite, that refused to respect the opinion of the man on the street, and turned a blind eye to the antics of the Greek government (and others, Italy comes to mind). I am afraid this is NOT going to end well.

Assetman's picture

Again, Europeans are, in my opinion, paying the price for an opaque, bureaucracy-dominated elite, that refused to respect the opinion of the man on the street, and turned a blind eye to the antics of the Greek government (and others, Italy comes to mind). I am afraid this is NOT going to end well.

Agreed, for the most part.

The antics of the Greek government was pretty widely known-- and they called the EU's bluff in a very big way-- and "won".  Of course, I'm sure G-Pap warned the EU and ECB leadership that "there will be rioting in the streets of Athens" when they announced austerity plans.  And this is the reponse we get after going this far.  Everyone should call the EU's bluff.

The EU may well like inflation... but Germans still don't appear to like it at all.  The "Weimar event" is still too deeply ingrained in the sovereign psyche there.  Don't think for a minute that the Merkel party defeat in last week's election didn't have an impact.  The French can live with higher inflation, so long as the French banks are protected, it appears. 

It also appears that those pulling the strings in Germany felt like protecting German banks and bondholders of Greek (PIIGS) debt-- and the deflatoinary events from sovereign defaults-- were more important than risking an massive inflationary event.  Though politically unpopular, time will tell on that gamble.

Mitchman's picture

Great post Reggie.  Spot on as always!

Fish Gone Bad's picture

I love your work Reggie.

Tense INDIAN's picture

Hi reggie....should i buy PUTS nor for june...

I need more asshats's picture

reggie will let you know..... In June. Depending on how they turn out he will proclaim that he was on the winning side of the trade. You can read about it if you subscribe to his blog.

Rogerwilco's picture

$1T is not enough? Of course it's not enough, black holes are never sated.

Leo Kolivakis's picture


I will call you and raise you another trillion. Buy this dip folks, the next move will be parabolic up. Tech, energy, alternative energy, should be your focus. If you feel the world is coming to an end, buy yourself a ticket to the Greek islands and enjoy!

merehuman's picture

Hopium now in 10 oz bottles. get your 6pack now!

Reggie Middleton's picture

There you go again Leo. A sovereign default does not equate to the world ending. If that was the case, the world probably ended 1,000 times already. I don't doubt we may get a parabolic move upwards (thats what risk management is for) but net-net, Europe is looking bearish.

They haven't, and apparently they refuse, to address and solve the problems at hand in the short term. Everyone sees this, thus the only one's who will be there to drive prices up will be the disloyal, hot money, prop desk/momo crowd (including the buy the dips crew) who simply inject instability int an asset class when they drive it very high.

I don't see any lifeftime savers looking to put their retirement funds into Greek debt. Do you?

Leo Kolivakis's picture


Sovereign default is deflationary. At this juncture Bernanke, Trichet et al. will do anything it takes to avoid this outcome. As for addressing issues, I think Europeans are smarter than you Americans think. In fact, they may a lot smarter than you give them credit for.

Reggie Middleton's picture

Sovereign default is deflationary. At this juncture Bernanke, Trichet et al. will do anything it takes to avoid this outcome

Correction. They will do "anything within their ability to avoid this outcome". Their abilities are limited, and it appears that any cheerleaders think of centra bankers as omnipotent and all knowing. Until the lord Odin or Zeus himself decides to take the chair of the ECB, I would lower my expectations. If the CBs were all that good, we wouldn't be where we are now because the problems were very easy to see coming at least a year in advance. I saw many of them and I am far from being alone.

I need more asshats's picture

Oh yes reggie you see everything. You have magical powers, you are so great, you are the immortal market oracle. When reggie talks the universe listens.

i.knoknot's picture

now there's a productive reply, inmAH.

i think i'll re-work a few of my investment strategies...

keep up the good work.

WaterWings's picture

Hey, ass! Well, nothing. I just wanted to say it. Nice avatar.

ZackAttack's picture

 At this juncture Bernanke, Trichet et al. will do anything it takes to avoid this outcome

Why would we have the slightest expectation they'll be any more successful than Japan has been these last, lost two decades? Japan failed with every secular wind at its back - cheap energy, strong world growth, the ability to debase its currency at will, social cohesiveness, a strong export economy, a bubble that was largely confined to CRE rather than RRE. The western world currently has none of these advantages.  

Perhaps what's really happening is that Western central banks are misdiagnosing and mistreating a secular demographic shift as an issue of confidence and liquidity; and for this reason, real estate really *is* the bubble-of-last-resort.

I also object to the characterization that those who aren't wildly bullish must necessarily believe it's 'the end of the world.'

Missing_Link's picture

Being "smart" doesn't translate into an ability to execute.  It's completely different from the ability to work cohesively with the discipline and teamwork required to get themselves out of their current situation  ...  and those are far greater virtues than raw intelligence in the long run.

I don't think anyone believes the Europeans are stupid.  On the contrary, they're too clever by half.  It's just that none of their brilliant ideas have any correlation to reality.

Jim in MN's picture

Income graduated (progressive) bond haircuts.  The fact that you've never seen these words in the same sentance before tells you everything you need to know.

They will take us all down with them.

ZackAttack's picture

Get your penny bids in!

anony's picture

Sports guy chest bump!  )(

hp12c's picture

Those Hair clippers keep getting closer and closer to the bond holders heads..

The Alarmist's picture

The irony being that it is to finance the early retirements of greek hairdressers, who can retire at 50 because they have hazardous duties (they work with dangerous chemicals) and possibly even to subsidize their retirement travels, since EU minister of Industry believes vacation travel is a right and should be subsidised for pensioners. Haircut indeed.

silvertrain's picture

 Those people get 14 months vacation for every 12 months worked, come on, we havent heard the last of the german people about this yet......


williambanzai7's picture

We have reached the point where a Trillion is not enough! Think about that...


i.knoknot's picture

tnx reggie,

i've noted that these 'trillions' are not really transferred, but rather 'allocated', which seems like a PR move. kind of like GLD vs physical delivery.

serious question: if the euro keeps tanking, does anyone think the IMF/ECB/Fed will actually deliver on their weekend promises, or does that become a mute (moot?) point?

KD points out that greece has been 'saved' a bunch of times this month, and nothing has actually been done to 'save' them. just press releases...

"watch the other hand"