The Associated Press is reporting on an very appropriate comment from Antonio Borges, head of the IMF's Europe program, that he is retracting his earlier comment that they will intervene in bond markets to support Italy and Spain. Sure enough, this will not come as a surprise to our readers, after we said first thing today that "we find that the person tasked with destroying his credibility, after the market no longer trusts anything Lagarde says, is IMF European Department Director Antonio Borges who according to Reuters, said that Europe needs between 100 billion and 200 billion euros to recapitalize its banks to win back investor confidence and should carry out the plan across the continent, not in a staggered process." Consider credibility destroyed.
In a dramatic turnaround, a senior official for the International Monetary Fund on Wednesday retracted an earlier comment that the IMF could intervene in bond markets to support struggling Italy and Spain.
"The fund can only lend its resources to countries, and cannot use these resources to intervene in bond markets directly," Antonio Borges, the head of the IMF's Europe program, said in a statement.
"Any alternative lending modalities to what we do now would require a different legal structure" for the IMF, the statement continued, adding that such changes had not been discussed with the fund's members.
Earlier Wednesday, Borges had said at a news conference in Brussels that the IMF could possibly invest alongside the eurozone's bailout fund to help Italy and Spain.
Oh to have been a fly on the phone call from Christine Lagarde to Borges in which she, in a calm, cool, and collected manner, with little to no use of obscenities, and references to the Spaniard's mother, grandmother, and barn animals, explained to him to, very credibly, say he was only kidding.
What next: Steve Liesman reports X only to turn around 30 minutes later and say he was true to his name and it was all the teleprompter's fault.