Elliott's Paul Singer On The 3 Things You Have To Believe To Be A Euro Bull

Tyler Durden's picture

Excerpted from Elliott Management's Letter to investors (via Paul Singer),

The Euro reminds us of the weather in London: One minute you are basking in sparkling sunshine, and the next minute the sky opens in a deluge reminiscent of Noah’s flood.

Could it really be that peripheral countries’ interest rates are plunging and borrowing costs have converged to pre-crisis levels, Greece is issuing debt, and the euro crisis is over forever, but Mario “Whatever-It-Takes” Draghi is musing about starting QE now? Have policymakers lost touch with reality to such a startling degree that they now reach for the QE bottle like it is some 1850s cure-all nostrum, regardless of what is wrong with the patient? All we can imagine is the good doctor, handle bar moustache and full regalia, sitting behind his desk: “You have the vapors? Take this QE, you’ll feel better. Ma’am, you have a little hysteria? QE is just the thing! Sir, this QE will cure that headache! Son, you need some inflation, so QE is just right for you.”

There is nothing – we repeat, nothing – that is being done at present to enable Europe to perform better economically, to encourage its unemployed to get off the dole, or to empower its peripheral countries to deal with their underperformance on a sustainable basis. In this context, the bloc’s primary focus on generating inflation is nothing short of astounding.

Indeed, one could analogize this currency union at the present moment to a labor camp in the middle of a frozen waste: It is really bad to be locked in, but if you are obedient, you will at least get your next serving of bailout gruel, whereas if you are not obedient, you will be cast out into the howling cold of devaluation and collapse. Lure them in, load them up with debt and whip them into line … is this the plan that the Brussels crowd devised in the 1990s?

This is obviously preferable to constant and terrible continental warfare, but is it sustainable? How will it end? The spectacle is akin to a hair-raising (albeit slow-motion) TV series. Two years ago, it was about to collapse. Today it is working. What will happen on the next episode?

All of this talk may seem flip and sardonic, but it is really amazing that this currency union sans sovereignty has lasted so long – long enough to make Rube Goldberg drool with jealousy. Nobody knows how it will ultimately turn out, but we must admire in a sense the gall of politicians who think they can stay the current course and therefore must believe that citizens will stand for no growth and high unemployment forever.

Below are some specific outcomes that must be assumed to justify continued stability in the Eurozone, given current pricing of stocks and bonds:

1. Italy’s current government will succeed in solving its problems in the promised 100 days, and there will be no talk of elections that might be won by the comedian (who wants out of the Euro).


2. The Spanish and Italian unemployed will wait patiently for the good jobs they want without causing any social unrest or political turmoil.


3. The higher trading value of the euro will not cause even more pain to the countries that would have already devalued their currencies more than 50% against the current euro price if they were not in the Eurozone. (Remember, if you cannot devalue, you have to increase productivity to be competitive with Germany and the rest of the world. Easy, right?)

Do any of these outcomes seem likely? Tune in next year...

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
trader1's picture

dear rich people who have entrusted your money with singer,


singer is officially clueless as to what's going on.  not even a mention that the EU parliamentary elections are happenning end of May.  if anyone has been following the media campaign and debates the last couple weeks, then one would know the outcome is going to be bigger than any draghi press conference...

the new EU is going to be vastly different.  think more integration, standardization and governance centralization, while at the same time preserving degrees of differentiation within the nations.  yes, it won't happen overnight, but markets are forward-looking, right?

oh, and piketty just released a new manifesto for europe:


get ready to give up more of your money anyways.  

question is do you want singer giving it up for you, or do you want to give it up yourself?



intelectualForeigner's picture

Disclaimer: I do not disagree with any opinion stated on ZH, but would like to add something to the view about the EU.


I live in Romania which (like every place on earth save the north-EU) has a decreptively corrupt guberment (and always has); trust me, our guys make Brussels look like saints, and to that chord joining the EU was probably the least-cheap booze on the table for the people of this land.


Granted, it still feels like a hangover each morning, but at least it's not waking up vomiting in a ditch ( which was the traditional romanian morning ); lots of funds from the EU came through bringing about road&building restorations across Romania, belonging to the EU made it more attractive to investors so now we're looking at having our first high-speed rail built by the Chineese who want to park some wealth here; and work on our yet-unfinished-highways picked up dramatically.


I just took a vacation and passed near a site-panel listing the funding for the specific strip of highway being built, and of the 6M euro price tag, 2M was co-founded by the Ro guberment, 4M by the EU ( see where this is going? it would never have been built if we werent in EU ); the importance of the highway for the romanian industry is huge but I wont  go into detail here.

I could expand the list but I think that gets my point accross. So while it might not be just honey&milk, I wouldnt go so far as to say NOTHING is being done to whip up europe more into shape.



The Abstraction of Justice's picture

You need to send those Hindus, otherwise known as Roma, back home to India.

Wahooo's picture

We have that in America. It's called the FSA, or Free Shit Army.  Once you're on the gravy train, you will find it impossible to get off without an armed conflict. So your path is one-way, no stops, no turns, no going back. That's what you signed up for.

The Abstraction of Justice's picture

3 things:





dearth vader's picture

When the Easy Bee becomes a QEasy Bee PIIGS will go flying...

Quinvarius's picture

And the Euro Bears still don't get it.  There is zero structural  or fundamental difference between the Euro and the Dollar.  ZERO.  Bears can blah blah blah all they want about how different economies in Europe are more different than economies in the US states.  They are the same setup.  Same with quality of government paper in a global QE environment.  The Euro is priced vs the USD by cooperating central banks who rig the FOREX markets the same way China rigs theirs.  Euro bears are as idiotic as deflationists.  The Euro is going to go to where the central bankers want it to go until the very last second.  And even then, it will probably be the USD that goes through the floor first.  You would have to not know anything about how the markets work to make a currency bet without inside info from a central bank like Soros gets.  He manages/launders personal money for those shitbag bankers and politicans that make the decisions.

smacker's picture

"...it is really amazing that this currency union sans sovereignty has lasted so long"

Not when you realise the huge political capital invested in the European Project by governments of every EU member state.

You cannot create a United States of Europe without a single currency, centralised decision making, abolition of national sovereignty and a merger of all things in member states, including financial systems, taxation, social laws etc etc.

And this unspoken process of ever more integration continues despite that economies of some member states have collapsed, impoverishment is rising and unemployment is at all time highs.

According to EU strategists, when socialism fails the solution is to have more socialism. It has always been thus.

Ghordius's picture

EU *federalism* strategists. Which are mainly our darling continental social-democrats, your darling British Labour and LibDems, and assorted others

continental conservatives are braking, they had enough. too bad your Torys don't even like to speak with them

I still laugh about eurofederalists attacking the EUR project "because it endangers the progress of the EU project" and steals political capital

financial systems? There the possibility of a break is the highest. And that is why The City turned around and is now against a Brixit. They realize the continent is one inch from creating a great embargo against them for sheer exasperation. Those in the know, of course

smacker's picture

I'm not sure what the significance is of your word "federalism", but everything else you say simply confirms what I have already posted.

It remains an irrefutable fact that the EU is slowly creating a United States of Europe - whatever it eventually chooses to call itself. And this is being carried out in a very devious incremental way to hide it from millions of European citizens, most of whom do not want it. But none of this is talked about by MSM and certainly not by the unelected political ruling elites. If necessary, it is denied by the very same people who are in the driving seat of this unstoppable monster. This European Project takes far higher priority over the dire consequences that have befallen Greece, Spain, Portugal, Ireland, Italy and others.

Ghordius's picture

indeed, we agree on many things. yet consider this: how can conservative Britons ever adress common european issues if they don't even want to understand how the much bigger continent ticks? I write EU-Federalists, i.e. those who want more democracy paired with more centralization. Opposed to them is the status quo, which I dub confederationism. Which is NOT working for the UK because the Torys sabotaging it, up to the point that they are pariahs in both EU parliament and council

smacker, there is something rotten in Westminster. and it stinks way more than Brussels, imho. watch closely where UKIP will be active most. Labour or Tory strongholds? remember that the EU MEPs elections are based on a proportional voting system

Mediocritas's picture

It's the international megabanksters that want a United States of Europe, on their way to a United States of Earth. One government, one judicial system, one language (english), one currency, and one culture.

Total homogenisation in the name of "efficiency", aka maximum exploitability. Homogenisation that eliminates all differences, thereby reducing potential for breakdown to occur, meaning that a homogenised, high entropy society is (supposedly) a less violent one.

Of course I don't support this because it's the differences between human populations, (diversity), that are required for long term security, interest and innovation, despite the risk of conflict. It's our heterogeneity (low entropy) that makes us interesting and creates the very potential for change.

This isn't just true for humans, it's a hallmark of life on earth. Genomic diversification is the foundation of evolution.

Oldwood's picture

Has there ever been a government or leadership that did not think the world would be a better place if there was but one government and they ran it? A one world government has been the wet dream of leadership since the beginning of time and they now feel they have never been closer. Their power over economies, information, surveillance and general manipulation have never been greater. Busily circling and corralling us while constantly reminding us of all the new "freedoms" they are endowing us with. They will do with dependency what was never able to do with physical threats, and many people will run into their arms. As has been said, the Greeks don't want to leave the EU and chance living back out in the cold. They are what we would consider "properly conditioned". Clay in their masters hands, willing to suffer any hardship AND humiliation to be in the EU's warm embrace.

Bemused Observer's picture

You got THAT right...a few decades of the Euro, and the Greeks cannot IMAGINE a life without it. A country that has been around for thousands of years, has played a significant role in history, contributed so much to our culture, can't imagine WHAT they'd do outside of this currency system that has been around for a a couple of decades...Talk about learned helplessness!

trader1's picture

what's to say a "United States of Europe" subordinates the "megabanksters" into a public utility?

and why do you rule out that diversity is completely lost in a "United States of Earth"?

last time i checked, we all derive from the same substance, but we come in many different colors, shapes, sizes, and intellects...


let's talk about the only current example of a "United States of Earth"...the UN.  essentially, it's a promise of a better future for most of the world, but it's controlled by conflicted interests who will remain unnamed.

here's a rhetorical question:

if EU citizens can indirectly elect a new President, then why cannot every citizen of any UN member country indirectly elect the Secretary General of the UN? 


the governance model of the UN requires change.

smacker's picture

"... there is something rotten in Westminster."

I certainly agree with that. It has been rotten for at least 800 years. The rot is systemic. Cromwell did not solve the problem. It is more rotten than Washington, although on a different scale, But events there are playing catch-up on a breathtaking scale, articles/comments on ZH are testament to that.

Britain is controlled and run by an unelected hidden ruling elite that includes the Royals, BoE, The City and The Establishment. The Met Police spend their time trying to crawl up the pecking order pole.


People outside of Britain struggle to understand "the totality of power" that exists in the hands of the United Kingdom ruling elite, despite having so-called democracy. What they will do to retain and protect that power has no limits. State spying (GCHQ), State sponsored murders (MI5/MI6), foreign wars (MI6) are all included on their list. Nothing is off limits.

The rest of your comments refer to the twisting, turning and wriggling going on inside the Tory Party to retain Westminster's hidden role in the Anglo-American Empire which emerged after the collapse of the British Empire.

JR's picture

Charles Seymour in The Intimate Papers of Colonel House tells how this “unseen guardian angel” was behind the passage of the Federal Reserve Act because without the Fed and the federal income tax, both which came to life in 1913,  America could not be speeded along toward the totalitarian socialism favored by Marx, House, and the current builders of the new world order.

House led the group that founded the Council on Foreign Relations from which was spawned the Trilateral Commission, with the intention to create a world monetary system. John McManus, in Financial Terrorism, explains that it is these two organizations that still are working to achieve House’s goals.

And therein lies the reason for establishment of the European Union; it is a regional third of the supranationalism that is to be politically controlled by the trilateral partners – world government.

“…the strategy and structure recognizes that economic ties will determine the strength or weakness of many international linkages in this new era, including security relations. At best, economic interdependence can become a new glue.” – Robert B. Zoellick (CFR), 1993

Not only had job expectations for college graduates in America to be lowered, but, according to Paul Volcker (CFR and TC), Federal Reserve Chairman (1979):

“The standard of living of the average American has to decline…”

In short,the peoples and cultures of the world are being collectivized into three regions, wherby the Trilateral partners will rule under the leadership and power of the international bankers; it is, of course, slavery for the people and total power for the bankers “to lead a stable and prosperous world economy .”

Bemused Observer's picture

The problem with these conspiracy theories is that you have to believe that so many people can stay focused on ONE goal, over a very long period of time, without any of the individuals involved deviating from the plan, changing their minds, etc...

Like the Rothschild banking family stuff I hear...apparently this family, over hundreds of years, numerous generations, and spanning countless societal changes, has maintained a laser-like focus on their plan to rule the world. And I think, "How realistic IS that?". Look at the wealthy families today...at how many second-generation wealthy deviate tremendously from their parent's sets of goals and priorities...THAT'S the tendency, not long-term lockstep unity. If there were Rothschild's out there who actively FIGHTING the conspiracy themselves, it would be more likely and believable that such a conspiracy exists. Because by THIS time. statistically the Rothschild's would have produced quite a number of rebels and those who completely reject the family values. And as Rothschild's, those rebels would have made some mark in history somewhere, and it wouldn't BE this big conspiracy. It would just be a very wealthy and powerful family with their claws in to banking and finance, and we'd be seeing their rebel offspring partying with Paris and Miley. Rich, obnoxious scumbags behaving badly, but hardly some hopelessly powerful family of 'gods' able to reach through the centuries and exert their control over the whole world...

As to our present-day bankers? I simply cannot see these folks as remotely capable of pulling off some long-range 'master plan' for the economy. These morons couldn't organize a beer run, never mind handling a world economy.  What they in fact ARE is a group of clever, sociopathic individuals in an industry that gives them access to the world's wealth. And they are of course stealing it, in amounts and at a pace that is destabilizing the entire economy. As the damage from this occurrs, they throw some 'fix' at it that will prop it up a bit longer...QE, bail-outs, etc.They comfort themselves with the notion that the "business cycle" will scoop them up again when it comes 'round. (only this time it's not COMING 'round...we're gonna be waiting here awhile...) In fact these folks have NO FUCKING IDEA what they're doing. There IS no plan, they are 'winging it'. They know some things about economics, enough to put together a semblance of competence when they act, perhaps it is THIS that gives it that 'conspiracy flavor' to some, I don't know. But this is nothing more than a bunch of increasingly desparate people who are petrified that they will be blamed for fucking up the economy they've been robbing, and trying everything they can think of, including outright lying, to keep the thing from going under right now. They REALLY believe they will be rescued by the business cycle, that all they have to do is keep the thing from going under until the current picks it back up and off we go again. They have no plan on how to get us to shore should the current fail to show this time.



DoChenRollingBearing's picture

That has been my take for sometime, Bemused, you just sketched out a more detailed reasoning than I have.  While I am no expert, I believe that our Elites are not monolithic either.  They are fractured.  My case:

"The Fractured Elite: The Only Reason We are not a Fascist State, Yet"


Oldwood's picture

But do yo not think that there can be a shared agenda that has been propagated in our education and media? What we are seeing requires knowing AND unknowing participation.

DoChenRollingBearing's picture

Yes, I do see that a "shared agenda" (eg, moar money 4 all of us!) is likely.  But, there are many hatreds, wild-cards and dim ones among the Elites.  So, yes, they have much in common, but they are not imminent in their Orwellian control over us.  Yet.

Bemused Observer's picture

And it has long been my opinion that conspiracy theories become a comforting refuge for people overwhelmed by what has happened to them. Their "reptile brain" knows it has been attacked and wants to respond, but the higher-functioning parts (in no hurry to don cammo, lock and load, and go through all that shit...) create this huge fantasy that tricks the lower brain into thinking it would be pointless and suicidal, that there's no hope of winning. Thus taking the pressure off to have to DO anything about the situation. Whatever the bothersome issue in your world is, the presence of an undefeatable 'enemy' makes it easier to evade the duty to take action, and to justify other negative behaviors as being unavoidable under the circumstances.

It allows you to take the easier road of playing defense instead of risking the effort to take the field.

JR's picture

My, my, you do go on and on. And these clueless bankers, now shaking in their boots with what’s been created, are the hapless descendents of the Rothschilds and the Morgans, and are far from the conspiracy plan of their ancestors? Give me a break.

But how best to explain that they these morons have access to the United States Treasury, that they are able to print their own money in any quantity they should desire, that they have a written contract with the United States government to operate a cartel monopoly whereby the money trust can charge interest on their loaned money, not earned but created out of nothing for their exclusive profit, without competition, that they manipulate the world's reserve currency and the IMF and its power over nations.

For Heaven’s sake, these “idiots” OWN the currency; their name appears on it; they can establish its value from day to day; they can steal from homeowners and savers and investors and pensioners with impunity; they can tax producers via inflation, they can deny competitors access to their fiat currency and give it their friends in incredible quantities. And they can finance war, world war.

This is not a conspiracy; it is the darned truth!

Bemused Observer's picture

The fact that the odds are stacked in their favor doesn't mean there's a conspiracy afloat in the sense 'conspiracy' is understood. The fact that some individuals, being in a position of authority and having free access to huge wealth that they can shuffle internationally, would use some of their ill-gotten gains to further their own interests by tweaking laws and rules should surprise no one.

This isn't conspiracy. It isn't the unfolding of a finely-honed master plan. It's the opportunistic 'grab' by a few because they were both well-positioned and greedy. They then used their wealth to 'buy' a few bennies for themselves that made it easier to grab more and more. They then grabbed more, from you, and so kept and expanded their bennies, and have profited further.

This isn't called conspiracy. It's called inevitable result. These people have brought us to the edge not because it was all part of their diabolical plan, but because this is where what they do obviously leads to unless it is stopped. It's like watching a toddler tear apart a room and sitting there helplessly because he threatens to tell Mommy you beat him...there's no 'conspiracy' between him and Mom that prevents you from acting...get off your ass and STOP that fucking kid!

If you don't, it's not conspiracy at work. It's complacency. If this economy goes down, it won't be because of some unstoppable force we had no control over. It will be because not enough people gave a fuck to do anything about it.


JR's picture

The Fed was conceived in conspiracy. In fact, it is the biggest conspiracy ever conceived by man.

The American people in 1910 wanted the New York money trust broken. Congress established the National Monetary Commission, chaired by Senator Nelson Aldrich, to do just that, to propose legislation to reform banking that would break the grip of a few large banks in New York on Wall Street.

But instead of breaking the money trust, Aldrich assembled on Jekyll Island the seven men who represented the money trust to write the legislation in secret that would instead solidify the money trust. These men who represented one-fourth of the wealth of the world conspired to deceive the Congress and the people of the United States in one of the most dastardly conspiracies of all time. That was the reason for their secrecy; it was a conspiracy against the American people.

In short, the purpose of the banking bill that was intended to break the grip of the money trust was written by the money trust to strengthen the money trust.

Says G. Edward Griffin, author of The Creature From Jekyll Island, It “was like asking the fox to build the henhouse and install the security system. And who were the foxes? The Morgans, the Rockefellers, Kuhn, Loeb & Company, the Rothschilds and the Warburgs.

Why did these men conspire to establish a central bank that they would privately control, in secret?

“They were major competitors in the field of investment and banking in those days; these were the giants. Prior to this period they were beating their heads against each other, blood all over the battlefield fighting for dominance in the financial markets….And here they were sitting around a table coming to an agreement… Prior to this point, American business had been operating under the principles of private enterprise -- free enterprise competition in what made America great, what caused it to surpass all of the other economies of the world…

"This was the point in history where the shift was going away from competition toward monopoly…the dawning of the era of the cartel and this was what was happening. For the fifteen year period prior to the meeting on Jekyll Island, the very investment groups about which we are speaking were coming together more and more and engaging in joint ventures rather than competing with each other… they came together completely and decided not to compete -- they formed a cartel…a group of independently owned businesses which come together for the purpose of reducing or eliminating competition between themselves to enhance their profit margin or to secure their positions in the markets.”

And, so, “the Federal Reserve System, although it parades around looking as though it’s a government operation of some kind, is merely a cartel of banks right under our noses and it is protected by law…”

To understand the Fed and its deceptions, “just remember that it is a scam” and “then you’ll have no trouble comprehending what’s going on…”

In interviews in later years, these men admitted that because they were competitors, if the Federals Reserve System had not been conceived in secrecy and presented as a deception, Congress would never have passed the Federal Reserve Act.

Excerpt from The Creature from Jekyll Island speech by G. Edward Griffin:

“What are [the Federal Reserve’s] objectives? What are the objectives of any cartel? To make money for the members of the cartel, to improve the profit margins of the members of the cartel and to stabilize themselves in the marketplace. That is the true objective of the Federal Reserve System.

“What are they spending it for? They’re not buying more yachts and mansions with this money, they’ve already got all of those the possibly want.

“When a person has all the wealth that you could possibly want for the material pleasures of life, what is left? Power. They are using this river of wealth to acquire power over you and me and our children.

“They are spending it to acquire control over the power centers of society. The power centers are those groups and institutions through which individuals live and act and rely on for their information. They are literally buying up the world but not the real estate and the hardware; they’re buying control over the organizations, the group and institutions that control people.

“They are buying control over politicians, political parties, television networks, cable networks, newspapers, magazines, publishing houses, wire services, motion picture studios, universities, labor unions, church organizations, trade associations, tax exempt foundations, multinational corporations, Boy Scouts, Girl Scouts, you name it.” –1994, Los Angeles

Bemused Observer's picture

They are TRYING to create it. They will fail. Because they don't have the proper mindset to pull it off.

Ask anyone from across the pond how they identify themselves, and you'll get, "I'm German, I'm Irish, I'm Swiss," etc. Then if you press them, they may go on to describe themselves as European.

An American, asked the same questions, says "I'm an American." Whether he's from California, New Jersey, Montana, whatever. First and foremost he's an American. Americans identify FIRST as part of the collective, THEN as members of this state or that state. Europeans identify as members of their particular countries FIRST, then as part of the collective.

That tells you why there will never be a "United States of Europe".

smacker's picture

I understand the points you make, but I disagree.

I wrote that the EU is creating a USE. That is a matter of provable fact.

The creation of a USE is not an overnight event, it has been going on surreptitiously for years and will not be complete for more years.

What you assert is that they will fail. You may be right and I hope you are.

Also, I know a few Americans who proudly claim to be Texan first, American second.


Add: I know a guy who lives in Houston who once said to me: "I wasn't born in Texas, but I got here as fast as I could".


Bemused Observer's picture

Oh yeah, we have our state-lovers, some even want to seceed. But I'm pretty sure they'd be among the first storming the capital if the United States was on track to becoming a region of some global entity...:-)

You are forgetting the history factor. Our states DO have their history of not getting along, but it is a SHARED history that began with a common goal, and is of fairly recent origin. In Europe, you are dealing with thousands of years of people and nations often developing separately and at odds with each other. There are a lot of hard feelings that get really dug-in over that kind of time line, especially if you were never 'united' to begin with. The fact that we began with the ideal of unity makes it easier to weather the occasional head-buttings between groups. and makes it easier to come back together afterwards. But Europe didn't begin with an agreement to all get along. It developed over thousands of years as different groups staking claims to territory, and ending up together by default.

As acrimonius as it can get here, especially over issues left over from the Civil War, we just aren't going to reach the level of "raw" that exists between some of the nations and peoples of Europe. Our history gives us a different psychology than Europe.

Bemused Observer's picture

that last sentence ruined your comment...ROOOOOOONED it!

I wish everyone would agree NOT to use the word socialism unless it is understood what it means.

What is happening over there is NOT a 'failure of socialism'. It is a failure to understand that you cannot have a United States of Europe because those entities are NOT states, they are COUNTRIES. Sovereign nations, with their own long histories of BEING sovereign nations. Our system works for us because OUR different squabbling entities AGREED to hand over their independent status to the central authorities in a way that those countries could never do. CAN never do. Knowing that, they imposed the single currency anyway, and created a situation where a laid-back tourist economy like Greece gets to compete with economic powerhouse Germany...

To function like the United States, the Europeans would have to accept the fact that some of it's members are just never going to be able to keep up with the rest. And that they will need to be carried by those with better means. We have many states that take more than they give...We in New York do NOT impose "austerity" on Mississippi because they need fiscal discipline, we do not go in there and start mucking about with their finances in order to straighten their asses out. We bitch about them, poke fun at their 'backwardness', and go ahead and send them what they need, even if it is more than they pay in. Because they're fellow Americans. They may be ignorant hicks, but they're OUR ignorant hicks dammit! And we take care of our own. (or so the theory goes...)

Now look how the Europeans handled Greece...

If anything, you could say they are failing because they aren't applying ENOUGH socialism!

smacker's picture

"I wish everyone would agree NOT to use the word socialism unless it is understood what it means."

Trust me, I understand what socialism is. However, I'm aware that millions of people do not. Fwiw: I normally use socialism as an umbrella term that includes various Left-wing extremes like communism, Maoism (Barroso), fascism and a whole bunch of others due to socialists re-inventing themselves endlessly.

Regarding your USE comments. Has it not occurred to you that even though the EU member countries (referred to as "states" by Brussels) are actually countries, not "states" in the American sense, the EU Project aims to change that and turn these European countries into "states" in a greater USE. The term "region" has also often been uttered. So Britain would become a "region" of the USE, France another "region" and so on. Imagine that(!)

Regarding the differing levels of economic activity across the EU; I agree with you on this. I believe the plan is to introduce some sort of "transfer payment" system similar to what exists in the US between the rich and poor states. This will effectively attempt to level out the difference between (eg) Greece and Germany. This system already operates thru the backdoor.

Bemused Observer's picture

Your second paragraph is a perfect example of why we run into so many problems...People plan things that sound good, and for the right reasons, but they fail to consider human nature as a factor that might screw up the plans. When that happens, you point to the nobility of the goals and see the problems as the result of nay-sayers and reactionary-thinkers.

There's nothing wrong with your goals in Europe, and it sure as hell wouldn't hurt them to work as a team whenever possible. But the fact is that human nature tells us that national identity is as personal to people as their names are. I'll put it into a different perspective, see if you can understand...

Let's say that America joins some trade or other global group, and as a condition of acceptance they had to agree to give up their status as a country and become a "region" of that greater entity? They could still call themselves Americans if they want, but they would for all intents and purposes become "A region of XXX..."

Surely you realize that this would NOT go well. It would be seen as so threatening it would rouse nationalistic outrage overnight. Even the most wildly optimistic scenario would have to go through that phase first. You just don't DO that to people and expect it to work. So, knowing that, why would you decide to go with a plan that depends on that to succeed? Why not acknowledge the realities of human nature and draw up a plan that takes that into mind? Who of sound mind and any knowledge of history could ever look at such a plan and envision it succeeding in Europe? Well, I guess it would depend on what "success" is. If success involves the rapid rise of Neo-Nazi sentiment, to the point of seeing Fascists seize control of Europe's governments one by one and ushering a whole new era of conflict on the continent, then yeah, I'd say it could work. But I thought it was about a currency...

Building a united Europe while ignoring human nature is like building a skyscraper that disregards the law of gravity. It's a lovely PLAN intellectually speaking, but it's just not a real, buildable structure. And stubbornly trying anyway is just going to waste a lot of money and effort, and get a bunch of people hurt or killed. Stop it, just stop it.


Ghordius's picture

interesting discussion. my two cents: countries, not states. which means sovereign, aka armed

sure, should all those who would profit from it achieve their goal of ramming those damned eurobonds down the throat of the eurozone... then goodbye national armed forces

that's so easy: eurobonds. they are the line in the sand between a de facto current confederation of sovereign countries and a future United States of Europe, because common debt requires at the end a common army and navy

for the rest, all I see is convoluted, treaty based cooperation resulting in common regulations for 28 sovereigns

even the EUR is undeniably a very complex (also treaty based, btw) multicurrency peg. a form of cooperation, too

of course our socialists would love to have more centralization and a more powerful EU parliament. but methinks their efforts have peaked, for a while

and without the EUR, the damage of the last years would have been immense. I'm fully convinced of that. This EUR project is as much a good idea as the Latin Monetary Union was... and it's behaving in a similar way


I disagree with your ultra-liberal "socialism" tag. conservativism can spoil into fascism, socialism can spoil into communism, and liberalism can spoil into... a globalized world where only money counts and votes, and where profit trumps all, including all values except freedom of contract of atomized economic units without any social glue

there can be "too much" of everything. moar is good... until it isn't anymore

Bemused Observer's picture

None of the "isms" are a cause of our problems. The "Socialism" tag just particularly troubles me because it is so frequently used as an insult, and gets stained with any problem that arises in a state deemed to be, or calling itself, Socialist. Here in America, it is aggressively derided by many with Cold War enthusiasm. (because the "ism" itself has replaced the USSR.) Because socialist principles have more obvious relevance to the running of the social welfare programs I care about, it leads to a "this stuff writes itself!" situation where it is nearly impossible to even DISCUSS social issues without raising the spectre of an inevitable spiral into Stalinism. School lunch programs are given sneering, curled-lip contempt as if they were just another step closer to the gulag. Compassion is seen as a criminally naive "feel good" emotion, and us "socialists" as a cancer that must be stopped. (how do you have dialogue on ANYTHING with someone who thinks that way?)

The fact is that ALL societies employ varying degrees of all the "isms". They differ in ratio and application only. The problems we are discussing are a result of the application of the isms in their own societies. They apply too many or too few, or try to apply certain cherry-picked favorites to an unsuitable segment of their society with the expected awful results.

Certain large and influential societies become the 'poster boy' for an "isms", like us for capitalism, or russia for communism, the chinese for, well, whatever you call what they're doing over there...then when that society makes a REAL boo-boo, and fucks up royally, that "ism" comes to be seen as the cause. Russians make a mess of restructuring labor's place in the food chain and communism gets blamed for the gulag. Americans ass-fuck the global economy, and capitalism is blamed for mass unemployment.

Atomizer's picture

Slice, dice, and short.

Ghordius's picture

"Indeed, one could analogize this currency union at the present moment to a labor camp in the middle of a frozen waste: It is really bad to be locked in, but if you are obedient, you will at least get your next serving of bailout gruel, whereas if you are not obedient, you will be cast out into the howling cold of devaluation and collapse."

so what is the advice given? to break out to the howling cold of devaluation and collapse? which is the *true* "jailer"?

or to be helped by peers, and stay in the camp, and eat the next serving of "bailout gruel", and remember how the Squid helped cooking the books with derivatives? and wait for better times, and better options?

the sweet spot for a great debt restructuration or a partial/total default for Greece is around 2017, btw. until then, it's the question if the economy heals enough for such actions

Oldwood's picture

From reading your posts I gather you believe all of this somehow works out better than before it was started or than it is now. The further concentration of power and control, largely through financial leverage and debt, shows very little promise for things getting better to me. "Progress" marches on and the challenge for these people is to keep our perceptions in line with our evolving realities.

Things are bad but with enough hope and faith in our "leaders" things are bound to get better. Stay the course, maintain your confidence, dig ever deeper for surely we shall eventually hit the spring of prosperity, or as many religious people believe, reach the blessed land in the house of God.

People nearer the top of the food chain believe in their own intelligence, their superiority and their role as a leader of men, dragging them when necessary to a higher plain. And no matter how bad it gets, its for a higher purpose. I suggest this path of enlightenment of the masses will come as it did in medieval times, tortured till we see the light. Those that resist the enlightenment will perish, as is always required to maintain the faith. The world, as always, is full of choices and as has been stated here, most are not good.

Yet every disaster in humanity has come from waiting for better choices. There will never be an acceptance that we have peaked, passed the point of "as good as it gets".

shovelhead's picture

Somehow I can't shake the image that the Fed & The ECB are toxic waste dumps and QE is the nice playgrounds they are building on top of them.

See? No problem. A Community service provided by your friendly Central bank.

buzzsaw99's picture

There is nothing – we repeat, nothing – that is being done at present to stop the kleptocrats from pillaging, exploiting, looting, raping, robbing the other 99.9% of the people on earth. FIXED IT.

dizzyfingers's picture

"All we can imagine is the good doctor, handle bar moustache and full regalia, sitting behind his desk: “You have the vapors? Take this QE, you’ll feel better. Ma’am, you have a little hysteria? QE is just the thing! Sir, this QE will cure that headache! Son, you need some inflation, so QE is just right for you.”

...substitute "war" for QE...

JR's picture

Lately, has there been a more revealing description of the breakdown in confidence of the financial leadership in the West than Singer’s recent statement on Zero Hedge:

"The leaders of the Developed World have chipped away at the solidity that would ordinarily justify confidence in their leadership, markets and currencies, such that confidence can be lost at any moment. If confidence in a sound system is unfairly lost, then countertrend forces can act to stem the panic and restore stability. But a justified loss of confidence in an unsound system would generate much more damage and be, for a period of time and price, unstoppable. That result is what governments have risked by their poor policies, their lack of attention to the risks posed by the inventions of the modern financial system, and their neglect of the fiscal balance sheet. Since this combination is relatively new, particularly the enormity of Developed World debt and obligations, as well as the complexity and extraordinarily high leverage of the financial system (especially given the size of derivatives books), there is no way to tell exactly how it all will end. Badly, we guess." - Paul Singer, 4/29, 2014


all-priced-in's picture

What the EU really needs to do is impose some harsh economic sanctions on Russia - that will always makes things better.



Bemused Observer's picture

"to encourage its unemployed to get off the dole,"

Hmmm, wouldn't a better word be "enable"? Encourage makes it sound as if the problem was simply that those unemployed aren't trying hard enough. A little 'kick in the pants' is in order...But if there aren't enough jobs, or they all pay crap, what are you 'encouraging' them to DO?

Seems like a small thing to notice, I guess. But to me, indicative of a problem, and I ee it everywhere when people talk about the economy. People invested in the system still think it can be fixed...the trouble is that this or that particular group just isn't trying hard enough. Whether it's the unemployed, the 1%, politicians, the disabled, whatever, the system would be better able to fix its problems if THEY would just get with the program. You can see it in their phrasing, like above.

I guess that kind of thinking would make it easier to accept the status quo, and avoid the not-inconsiderable work of fixing it. If unemployment is just a matter of getting the lazy bums to start TAKING the jobs that are out there, then the fact that the economy is so awful it isn't PRODUCING jobs doesn't even have to be addressed...

Oldwood's picture

For people to invest in their future they need to believe in that future. Even in our broken corrupt markets today, those gamblers still have a belief in a future. Not a good future, one of corruption and standing in the right place when the cash flows.

Most people don't live that way. They get up and go to work because they have personal needs to feed, but if you want them to go out and bust their ass, do more than is just the base requirement for survival, they must believe the future is there for them.

Our leadership has destroyed that future. They have demonstrated blatant corruption that only serves those at the top of the food chain, and everyone knows it. We have watched this happening for many generations but now we cannot ignore it because it is eating our asses every day. Our government and financial industries have stolen our future by demonstrating the futility of trying to overcome their corruption, while also stealing what wealth we might have for our future through financialization, selling every possible future cash flow and profit for as many years into the future as anyone can possibly see or imagine.

Dien Bien Poo's picture

This is called "Talking ones book". Period. Elliott is obviously short and getting spanked. I should have a laugh and try and find their latest quarter results post fees. i bet its not pretty. 

Another compensation scheme in action.