Poor
Christine has had to eat some Euro-Crow over Facebook (how about that IPO, Mr.
Suckerberg?). Hard to know why she didn’t stick to her guns. But as we recall
from little tax-cheater Geithner (head of US Treasury and IRS); pols who live
in glass houses shouldn’t cast the first stone (pace mixing of metaphors).
Christine
is a member of the international Euro-Élite, so surely no one expected her to
be involved in anything so plebeian as paying taxes. That’s only for the little
people (to quote the charming Leona). All civil servants pay and perks should
be tax free. Look what a bang up job they are doing. They are of course also
now our civil masters; so all the more reason to keep them in the style to
which they have become accustomed. Maybe a little humility will creep into
Christine’s utterances as she reflects on the dire straits that hubris and
Gallic sex appeal have visited upon her predecessor.
Really
a quiet entre-acte in the Euro-crumbling soap opera today. The Irish voted (a
handful of them). The majority probably stayed home. The outcome has not yet
been vouchsafed; which in any event is of little if any consequence. The Irish
part of the saga is now in the rear view mirror and it’s Spain’s turn sitting
above the dunk tank. Friday in Europe will soon dawn; where all the Euro-pols
are praying they can make it to the weekend without a major disaster and maybe
Monday will never come. Two big holidays to kick off the week in London for Her
Majesty to cruise the Thames in her new special barge. That’ll take everyone’s
mind off reality for a couple of days. Which gets us to Wednesday, by which
time anything could happen in Euro-land – Deutschen Herzen könnten in eine
Berline Frühling Minute schmelzen, vielleicht.
How
long can this show run?
Simon
It’s
been a bad day (Wed) in the markets (except for the $/€) in case you hadn’t noticed.
Including oil (down – which makes it a good day), and little movement in gold.
Ambrose
tells us the proximate cause is chaos in Espana. The Greeks are already in
purgatory; awaiting the crossing to Hell (scheduled for June 17) and so the
dreadful speculators (you know who you are Georgie Soros) have decided it’s
time to dunk Spain in the barrel and see how much water-boarding Rajoy can
take. One might have thought they’d pick little Portugal off first, but
evidently the decision has been made to castrate a big bull and just outflank
Lisbon – leaving it as a morsel to be mopped up by the reserve divisions. First
the Picadors, then the Toreadors and now the Matador with the coup-de-grace.
Watch for Rajoy’s ear being held aloft any day. Probably on account of it being
hard to figure who owns how much of whose worthless bonds between the Spanish
Sovereign and its banks. (Remember the Irish banks). I suspect King Juan Carlos
can hang up his African hunting double rifle permanently. Taking in one
another’s dirty laundry never added much to GDP nor to sound money.
As
Ambrose correctly observes, the Euro is now doing for Europe what so many of
its anti-prognosticators, Jeremiah’s, lunatic Euro-sceptics, and other low
forms of economic punditry and Little-Englander pond scum (including your
humble blogster) have been saying for as long as EMU was a glint in Jack Delors
eye; to wit, driving the constituent nation states apart and continuously
amplifying the mutual invective. Murphy’s Law of unintended consequences is
un-repealed. The Euro-Toast is going to land marmalade side down. The Spanish
Prime Minister is at the end of his rope (the Guv of the Banca de Espana has
quit), Greece doesn’t have a PM, and their respective peoples are now screaming
for relief from whatever it is that ails them – relief which they all believe
should take the form of Berlin sending over bundles of X series Euro’s until
they all feel better and can go back to their siestas in peace. All dressed up
as some flim-flam scheme to self-inject (mainline I think the term is) bundles
of pieces of paper that start with “I promise to pay …”, which can then be
hypothecated, traded, reinjected, discounted, coupon-clipped, disintermediated
and defeased until by some miracle they wind up via Mario Draghi’s ECB in the
vaults of the BuBank. Euro-prestidigitation raised to the high art of the
illusionist. All will then be well. Save for one small problem. Die Frau Angela
and the BuBankers saw the wheeze coming and have slammed the window on Rajoy’s
fingers. Which has set him off screaming again.
Jeremy
can see Eurogeddon in his crystal ball. Some punters are suggesting the world
will end on June 17th (right after the Greek election Round 2 – the
wrong result may make Round 3 moot). Probably worth a flutter. The poor Greek
pony is going to pull up lame; whatever the punters may predict. The € closed
under $1.24. How crazy is it that Germany has a depreciating currency? The
Swiss are trying to staunch the flow by threatening inward capital controls and
negative interest rates (again). Just as well that Spain has no Swiss border
but the Italians know where to find Lugano.
The
Euro-conundrum is, as Jeremy plainly states, now exposed in all its ghastly
inevitability. What was designed by the Utopians to bring together is driving
asunder. Running room for demagogues of all persuasions is opening up. All must
still claim to love the Euro and it must be saved at all costs. But no one is
able or willing to pick up the All Costs tab. And who can blame them; when All
Costs is an unbounded, unknowable, unpredictable but definitively a very large
sum indeed. Nor borrower nor lender be. Yet they say the Irish will follow
their leader (lemmings) and like turkeys vote Yes for Christmas tomorrow.
Farce
sinks into tragedy; a state of affairs where Schadenfreude has no place. It can
only end very, very badly for everyone – and that just the financial and
economic chapter. The political chapter becomes incalculable. The democratic
deficit is off the charts. Unless, unless Die Kanzlerin is wrestling with the
biggest U-turn in Euro-history. If she is, she’s left it until mere seconds
before the final curtain. Somehow that outcome strikes as unlikely; even for
those who don’t believe it would amount to kicking the can one last time.
Simon
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