The Currency Implosion Heard Round the World

Monday, May 10, 2010 , , , 1 Comments

Last night, the Fed promised to support a controlled EU demolition.

Ambrose Evans-Pritchard via the Telegraph:

"It is an absolute general mobilization: we have decided to give the eurozone a veritable economic government," said French president Nicolas Sarkozy, once again basking as Europe's action man. "Today we have an attack on the whole of the eurozone. This is a systemic crisis: the response must be systemic. When the markets open on Monday morning we will be ready to defend the euro."
An attack.

But if the early reports are near true, the accord profoundly alters the character of the European Union. The walls of fiscal and economic sovereignty are being breached. The creation of an EU rescue mechanism with powers to issue bonds with Europe's AAA rating to help eurozone states in trouble -- apparently €60bn, with a separate facility that may be able to lever up to €600bn -- is to go far beyond the Lisbon Treaty. This new agency is an EU Treasury in all but name, managing an EU fiscal union where liabilities become shared. A European state is being created before our eyes.

No EMU country will be allowed to default, whatever the moral hazard. Mrs Merkel seems to have bowed to extreme pressure as contagion spread to Portugal, Ireland, and -- the two clinchers -- Spain and Italy. "We have a serious situation, not just in one country but in several," she said.

You wonder how bad the weekend looked for them to take this move - a paper promise the European Union can't deliver on (but Zimbabwe Ben is ready to help anyway) that leaves no way out except through a truly united Euro. Like they will blast the shit out of anyone who comes near them with $1 trillion in made up fucking money God damnit, this is serious (and "systemic," a word that worked quite well on America not that long ago).

Britain had rats running in the streets way before easy money whore psychopaths went chasing the March 2009 market all the way up so to say this problem in Europe is in any way new would be false. It's just that now it's started to fester while we've been busy remarking how much better things are.

"Nuclear". We've heard that before.

Someone tell me again Janet Yellen wasn't a strategic move and let me know if the SEC ever figures out what happened last Thursday.

Did you feel that? It was fucking nuclear.

Of course, now the ratings agencies are under attack. See, we should have attacked them back when they were slapping out AAA for Eurotrash but we didn't (we liked it that way); now that we can see junk for what it is without their help (at least I hope), we are pissed that they keep downgrading our shit. I see how that works.

Gobble it up, burn the straw men, and go back to whatever you were doing, we got this...

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


Anonymous said...

Bullard: Fed is a firefighter, not an asonist.

My comment: Welcome to the Great Chicago Fire - one might even argue that a former Chairman unwittingly served as Mrs. O'Leary's cow.