As Euroland continues to grapple with Greece, a successor has already been found to the Greek Deputy Prime Minister in the category “What Not To Say, Whether Bailing Or Bailing Out”:
Luxembourg Prime Minister Jean-Claude Juncker would not say exactly how the EU might combat speculators but told the German business daily Handelsblatt: “We have the torture equipment in the cellar, and we will show them if needed.”
Gorilla thinks: “Time to speculate on who’s off the rack next!”
Possibly not the best phrase to use when you need a bailout!
But here’s how the Deputy Prime Minister of Greece described the country’s chats with Euroland:
“They took away the gold that was in the Bank of Greece, and they never gave it back. They shouldn’t complain so much about stealing and not being very specific about economic dealings”.
Twisting the knife further, he said the current crop of EU leaders were of “very poor quality” and had botched this month’s crisis summit in Brussels. “The people who are managing the fortunes of Europe were not up to the task,” he said.
Gorilla says: “The glory that was Greece is now the farce that never ends!”
Austerity is promised, but loans are ponied up…
Spain and Portugal are next, there’s little doubt about that now!
Gorilla thinks: “I guess they call it the PIIGS in clover society!”
You can almost hear the pips pop (or the Bavarians’ hops pop) as Euroland says it will help out the Greeks.
Short covering has begun, but remember that Greece is a tiny economy; the problems in Spain are much bigger.
And the Germans may well want to encourage a bit of currency decline to help their own flagging export economy and undercapitalized banks.
Gorilla says: “A bushel and a peck and a Euro, what the heck!”
Simon Johnson, almost as big a bear as Roubini, has a good analysis of what’s wrong with the Eurozone, and how it may push the world into a double dip recession.
Paul Krugman also has a useful note on the Spanish problem.
The more or less solvent Northern Europeans (Germany and the Netherlands) once again are faced with having to bail out the so-called PIIGS (Portugal, Ireland, Italy, Greece, and Spain).
Johnson’s great fear is a speculative attack on the Euro, followed by a cataclysmic event like the Germans or Greeks leaving the Eurozone.
He believes the banks there, and the banks here, are too weak to stem the inevitable losses that will come.
Krugman sees the Spanish difficulty as emblematic of a currency union that’s not working.
The US, as usual, seems to be in cloud cuckooland, fantasizing that more robust growth is just around the corner.
Consumer and business demand say this is utter nonsense.
Will our undercapitalized banks be back at Uncle Sam’s trough if the dollar carry trade suddenly goes the other way?
Gorilla’s only slightly more optimistic: “Simon says, and Brussels pays!”
A missile shield in Romania, an angry bear in Moscow!
It’s difficult to understand the strategy behind US policy. What are we trying to accomplish with missile defense?
On the one hand, missile defense doesn’t work.
On the other hand, the alleged missile attacker is Iran, despite there being no evidence that Tehran wishes to engage in national suicide by lobbing a few bombs at Euroland.
On the foot, the Russians, who remain a far more serious problem for European interests, feel surrounded, thus justifying their very lukewarm approach to American proposed sanctions against Iran.
Gorilla asks: “How are we free with SM-3?”
