The End of the End of History
“Nobody should take for granted another 50 years of peace and prosperity in Europe. They are not for granted. That’s why I say: If the euro fails, Europe fails,” Merkel said, followed by a long applause from all political groups.
“We have a historical obligation: To protect by all means Europe’s unification process begun by our forefathers after centuries of hatred and blood spill. None of us can foresee what the consequences would be if we were to fail.” …
“But debt restructuring alone does not solve the problem. Painful structural reforms have to be made, otherwise even after debt restructuring we’re back to where we are today … It’s not enough that the troika comes and goes every three months. It would be desirable to have a permanent supervision in Greece.”
– Angela Merkel
Does Merkel have a choice? Or is she acting out the inevitable consequences of a policy that could have led only to one possible road — the one she finds herself on?
That goal was the creation of a single and powerful state encompassing all of Western and parts of Eastern Europe. The endeavor was begun on the assumption that would guarantee peace and growing prosperity into the indefinite future. Instead it finds itself in a crisis. The EU can neither guarantee its own existence (or solvency) nor say with certainty what may follow in the wake of its failure.
What went wrong? One line of thinking is that the project itself created the crisis. By growing like a tumor the European superstate stifled growth. It malinvested in “social programs” which produced no return, only sullen dependencies like Greece and whole classes of people who felt entitled to guaranteed incomes in both old age and early youth. According to this analysis, the EU is dying like the dinosaurs, of gigantism. Richard Epstein of New York University does his best to convince NPR that ordinary life holds up the world in despite of the best efforts by planners to enlist its fruits in the Great Projects.
The other line of thought maintains that the only reason projects like the EU have not succeeded is because they haven’t gone far enough. In that view the current economic crisis has been caused by a “crisis in capitalism”. The poverty and inequality that has apparently been returning over the last decade is final evidence that its early promise to the contrary, the market is no way to apportion and control production or consumption.
What is needed, according those lights, is to solve the problems of the world with the ‘wisdom and humor’ that is often found in idealistic youth and sometimes in older men like Bill Ayers, as Bill Ayers would himself humbly admit. It cannot at all events be left to mere shopkeepers and mall security guards or the army of men who are self avowedly ordinary. They have not the knowledge, sensitivity or perspicacity to set things to rights, nor mount on wings of foresight to lofty peaks. In the video below Ayers presents his point of view to Occupy protesters.
Two thousand and twelve promises to be a special year; not in the sense that it will bring a solution to the problems that have been brewing since September 11, 2001 and were further sharpened through the end of 2008, but in that it may clarify where things stand. By this time next year it may be clearer whether things are coming to an end or starting at a new beginning; whether the world is embarking on a crisis or had just passed one.
The play will not yet have begun, but with any luck everyone will have the program of entertainment, a bag of popcorn and a dixie cup of Dr. Pepper well in hand. And then the overture may begin to play. For it is sometime difficult to tell whether one is in the eye of the storm or leaving it behind. Those distinctions are best made — and are perhaps only possible — after the fact.
Dickens observed that revolutions were very much like every other time, except more obviously so. How the play turns out, not even the players can fully know. But in Dicken’s stories, when the great and the ghastly fades then ordinary life returns at last, the happiest ending of all.
They said of him, about the city that night, that it was the peacefullest man’s face ever beheld there. … If he had given any utterance … they would have been these:
“I see Barsad, and Cly, Defarge, The Vengeance, the Juryman, the Judge, long ranks of the new oppressors who have risen on the destruction of the old, perishing by this retributive instrument, before it shall cease out of its present use. I see a beautiful city and a brilliant people rising from this abyss, and, in their struggles to be truly free, in their triumphs and defeats, through long years to come, I see the evil of this time and of the previous time of which this is the natural birth, gradually making expiation for itself and wearing out.
“I see the lives for which I lay down my life, peaceful, useful, prosperous and happy, in that England which I shall see no more. I see Her with a child upon her bosom, who bears my name. I see her father, aged and bent, but otherwise restored, and faithful to all men in his healing office, and at peace. I see the good old man, so long their friend, in ten years’ time enriching them with all he has, and passing tranquilly to his reward.
“I see that I hold a sanctuary in their hearts, and in the hearts of their descendants, generations hence. I see her, an old woman, weeping for me on the anniversary of this day. I see her and her husband, their course done, lying side by side in their last earthly bed, and I know that each was not more honored and held sacred in the other’s soul, than I was in the souls of both.
“I see that child who lay upon her bosom and who bore my name, a man winning his way up in that path of life which once was mine. I see him winning it so well, that my name is made illustrious there by the light of his. I see the blots I threw upon it, faded away. I see him, fore-most of just judges and honored men, bringing a boy of my name, with a forehead that I know and golden hair, to this place–then fair to look upon, with not a trace of this day’s disfigurement–and I hear him tell the child my story, with a tender and a faltering voice.
“It is a far, far better thing that I do, than I have ever done; it is a far, far better rest that I go to than I have ever known.”
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I never thought I would see Wretchard paraphrase T.O. ‘get ya popcorn ready’ when he signed with the Dallas Cowboys in 2006.
“Permanent supervision” – in another era, that would have been called a protectorate.
What Angela Merkel is proposing is imperialism, pure and simple.
Yet, my objection is not to imperialism per se, but rather German hypocrisy in the pursuit of empire. German politicians not only attack “American imperialism” day and night, but they have effectively given themselves veto power over American foreign policy. Let’s face it – a small portion of the American electorate voted for Obama because Europeans in general and Germans in particular told them to; that is why Obama made a major campaign speech in Berlin – in 2008.
I remember how Germans were so insistent on telling Americans to vote for Jesse Jackson back in 1988 – similar demands were made in 2008 promoting Obama. Now, Germans are bossing around Greeks, whom German philosophers have wrongly idolized for the past two hundred fifty years.
Does that make Greeks the victims? Hardly. Modern Greek culture can be smug and arrogant, playing the victim for the Fourth Crusade yet acting as if medieval anti-Italian pogroms never happened. Greeks may call themselves “Western”, but remnants of the “Death to the Latins” mentality linger yet today.
Greece should never have become part of the “Euro” (which sounds like the Greek word for “urine”). More than that, Europeans should never have deluded themselves into thinking that Greece is part of the “West”. In many respects, Russia is more “western” than Greece.
Greece would have been better off as part of a Balkan Union, encompassing the successor states of Yugoslavia, Bulgaria, Romania, Moldova, Greece, and possibly even Albania and Hungary. Such an economic union could have healed the Balkans, but the European Union got greedy and is now reaping what it has sown.
Greece would be better off with its own currency – period. The sooner Greece leaves the “Eurozone”, the better. Of course Greece will run into inflation, possibly hyperinflation. Let it – it is better to let Greeks live with massive inflation than to force Greece to become a fiscal protectorate. Germany gains nothing from bailing out Greece, and Greece gains nothing from getting bailed out; let Germany and Greece part ways as amicably as they can.
It would be unwise to equate Europe with the European Union; these are two different things. Greece will always be part of Europe and so will Germany, but they would be better off under separate roofs. Expecting “Europe” to be a great empire is folly.
“A Tale of Two Cities” has confusing prose as to time and place and circumstance that makes it almost unreadable. “Jane Eyre” is much better.
And don’t tell me it’s a classic; I can think for myself.
Brilliant, as usual. But who is willing to make a sacrifice for the future?
O beautiful for spacious skies,
For amber waves of grain,
For purple mountain majesties
Above the fruited plain!
America! America!
God shed His grace on thee,
And crown thy good with brotherhood
From sea to shining sea!
O beautiful for pilgrim feet
Whose stern impassion’d stress
A thoroughfare for freedom beat
Across the wilderness.
America! America!
God mend thine ev’ry flaw,
Confirm thy soul in self-control,
Thy liberty in law.
O beautiful for heroes prov’d
In liberating strife,
Who more than self their country lov’d,
And mercy more than life.
America! America!
May God thy gold refine
Till all success be nobleness,
And ev’ry gain divine.
O beautiful for patriot dream
That sees beyond the years
Thine alabaster cities gleam
Undimmed by human tears.
America! America!
God shed His grace on thee,
And crown thy good with brotherhood
From sea to shining sea.
Who would now become that hero proved in liberating strife? Who more than self their country loved, and mercy more than life?
Who among the #ows crowd agrees with the line, “Confirm thy soul in self control, thy liberty in law?” Who says, “Till all success be nobleness, and ev’ry gain divine?”
Who of them would make the speech Sydney Carton spoke and who would make his sacrifice?
I don’t know whether to be optimistic, pessimistic, or just expectant. Actually, I do know.
Titus Antoninus Pius . . . diffused order and tranquillity over the greatest part of the earth. His reign is marked by the rare advantage of furnishing very few materials for history; which is, indeed, little more than the register of the crimes, follies, and misfortunes of mankind.
The History of The Decline and Fall of the Roman Empire by Edward Gibbon: Book I; Chapter III, Part II
http://gutenberg.net/dirs/etext96/1dfre10.txt
…a Balkan Union…
That’s pretty funny. (Made my morning, at least….) Herding cats comes to mind….
In fact, it’s almost as funny as Merkel’s “If the euro fails, Europe fails.”
What irresponsible rhetoric. If that’s what’s considered leadership in Europe, then they’re in real trouble. At this point, nothing she says should be taken seriously.
Maybe what she should have said is, “When Europe’s leaders (like me) fail, then Europe fails.”
File under: L’etat c’est bwah
Germany is only 100 years old and in that time they started two world wars and carried out the holocaust. Perhaps they should keep quiet about other people possibly disturbing the peace.
I read Merkel’s words and thought, “she’s gone all-in. Jumped the shark. This is it, the last argument of princes.”. Her rhetoric betrays an intellectual (and personal) exhaustion. These people have been stuck in a death march of summits and conferences and emergency meetings and special consultations for EVER. Or so it seems to them: months and months and more months, and no end in sight except financial Armageddon or political suicide or, most likely, both.
They are out of ideas, out of money, out of time.
I give the situation at most another week. Maybe All Hallows’ Eve. How very appropriate. The proper garb for the trendy trick-or-treated will be Bankrupt Citizen of “Europe.”
Great thread by the way with the characteristic surprising gifts from commenters: all the lyrics of a great anthem, and a quote from Gibbon. It almost compensates for the rant by Bill Ayers.
Check out Epstein’s podcasts at econtalk.org.
When you think about it, Sydney Carton’s lost future was simply the forfeiture of the chance to lead an ordinary life. Everything he idealizes in the famous peroration at the end of Tale of Two Cities is ordinary; the loss of the chance to pursue a career; to grow old; to be mourned.
He wasn’t sitting around the base of the guillotine regretting the loss of his condo, stock portfolio and yacht. It was the ordinary stuff he regretted losing.
Those who read my book will remember that ordinariness was Alex’s lost dream as well. All he ever thought he wanted was to be part of a group of “friends clustered around a black and white TV set watching a basketball game”. The same was true, in a different way for Ramon. But in Ramon’s case it was worse because his ordinary life existed in another place and time, seen second hand from Golden Age TV.
And for the rest of their lives my two literary protagonists would struggle between the desire to live life and the temptation of returning to The Life, which for all its excitement, was always somewhat dirty. The problem — almost the curse — was that they were better at The Life than at life.
What a crisis principally does is interrupt normalcy and the whole point of resolving it is to get back to the place we were before. How did Vera Lynn put it?
The interesting thing is that even after the crisis is resolved, the old world never comes back. The pre-war days that Vera Lynn sang about were gone, never to return. Instead they had the post-war world. What people get is a new normal. Like my two heroes in the book, they are forever tainted by the recent passage; some wounded beyond healing and none exempted from change.
OT. One of the most interesting factoids about the Tale of Two Cities it was it serialized. People in those days rushed to buy the latest installment of their favorite magazines in the same way that moderns await the next episode of Lost or something. By coincidence, the other story that started at the same time as Tale of Two Cities was Wilkie Collin’s The Woman in White. Imagine that. Dickens and Collins in the same serial. Pulp fiction in those days was a hell of a thing. It was the best of times and the worst of times. But Dickens said that already.
Wretcherd “The interesting thing is that even after the crisis is resolved, the old world never comes back. The pre-war days that Vera Lynn sang about were gone, never to return. Instead they had the post-war world.”
Yep, what hasn’t cleared yet is the enormous number of people on all sides who want someone to take things back to where they were before the crisis. That’s why I think 2012 will not be the first election of a new era, but rather the last of the old. A lot has to do with what actually happens between now and then, but if the powers that be can keep the ball in the air until then we won’t see a transformational election. People are too scared, while at the same time not realizing the razors edge we’re on.
Hope and Change will have to give way to reality before people will support the policies, and philosophy, that are needed to rebuild from the ashes of the previous situation. I certainly hope I’m wrong, but whoever gets in in 2012, we can expect to see half measures that will be effectively blocked by the other side. And we’ll be lucky if those half measures have a snowballs chance of righting the ship in the first place.
The thread references to Balkans, and Merkel’s crazy talk, just reminded me of an old quote: “some damned foolish thing in the Balkans.” How many times must we go through this?
What, exactly, will this Euro war be fought with? Weapons they never developed or bought? The armies they no longer have? Children they no longer produce?
Sounds like a small war, Ms Merkel.
I could wile away the hours
Conferrin’ with the powers
Consultin’ with those who reign
And my head I’d be scratchin’
While my leaders were busy hatchin’
If they only had a brain
They’d unravel any riddle
Mandate each individ’le
Making trouble causin’ pain
(Angela)
Bail out Greece you’d be thinkin’
You could be another Lincoln
If we only had a brain
(PIIGS in Unison)
Oh, I could tell you why
The ocean’s near the shore
I could think of handouts I never thunk before
And then I’d sit and think some more
I would not be just a nuffin’
My account’s all full of stuffin’
My entitlements’ a drain
I would dance and be merry
Life would be a pickin’ cherry
If we only had a brain
Cheapest way for the yurps to protect themselves from themselves is to pay us to station a quarter million of our guys there permanently. Doesn’t a half century of peace prove something, given the yurps’ history?
Be worth every penny.
Great comments all. The point made above about no possibility of more wars is really the main response to Angela Merkel. I actually feel sorry for the poor fraulein. She is the most intelligent and most nonideological (ie, pragmatic and reasonable) leader Europe has had in decades. She is actually a likeable person with real Euro-leadership skills, which for a German leader is quite an accomplishment after 140 years of -as commented above – 2 horrendous world wars and a holocaust.
But, she clearly is exhausted and worn out by the terminally stupid and unworkable arrangements she now finds herself enmeshed in. She is is a scientist by training, and what she is being asked to preside over is not a solution to a problem, which is what she was trained to do, but the dismantling of the European collective enterprise under the guise of debt-resolution arrangements. There won’t be any wars any more in Europe. There aren’t enough men of draft age, enough morale, enough espirit de corps, or anything else.
The situation reminds one of the lyrics of a Gilbert and Sullivan song from The Gondoliers: “In enterprise of martial kind, when there was any fighting. He led his regiment from behind, he found it less exciting. But when away the regiment ran, his place was at the fore, O. That celebrated, cultivated, underrated nobleman, the Duke of Plaza Toro!”
Angela Merkel now plays the Duke, and Greece will have to become a dependency of either Germany or France or both, to keep the banks solvent. Someday, the Germans and French will become too tired to shoulder these burdens and the Chinese will step in.
13. no mo uro What, exactly, will this Euro war be fought with? Weapons they never developed or bought? The armies they no longer have? Children they no longer produce? Sounds like a small war, Ms Merkel.
Europe is a mass icepick murderer who was caught and did sixty years in prison. Merkel is on the parole board warning if Europe gets out there’s gonna be even more mayhem, but when that day actually comes Europe will roll stately out of the joint in a wheel chair smelling like Ben-Gay and Depends.
“We have a historical obligation: To protect by all means Europe’s unification process begun by our forefathers after centuries of hatred and blood spill. None of us can foresee what the consequences would be if we were to fail.” …
I can almost hear the Little Corporal himself saying exactly that from a torchlit podium with that odious flag behind him.
2. Alexis
If I recall correctly England and France did this sort of thing with Egypt a century or so ago conquest justified by defaulted loans, and Europe played around in Latin America offering ruinous loans to nations that didn’t have the proverbial snowball’s chance of paying them back. At least now they are keeping it within the confines of their own continent. Too bad the financial blow-up will spread like wildfire.
12. oMan
Quite right, I was reading an article the other day wherin some Econ PHD was explaining that, due to the inter-relatedness of worldwide finance and industry, an outbreak of war was simply not possible. The same arguments were advanced in Europe about 1910.
13. no mo uro
Small war, most certainly (this mighty alliance had trouble taking down a Third-World dictator) but ANY war would be more than enough to collapse the rickety house of cards that is the Europen financial system, heck even some serious civil distrubances might be enough. Due to the above noted inter-relations if one goes the rest follow. They all have the same money, a conflict fought in Europe would see one side printing money like mad to destroy the others economy. It would play out like a rejected Marx Brothers movie script (Groucho for Sarkozy, Harpo as Merkel).
17. Teresita
“Europe is a mass icepick murderer who was caught and did sixty years in prison. Merkel is on the parole board warning if Europe gets out there’s gonna be even more mayhem, but when that day actually comes Europe will roll stately out of the joint in a wheel chair smelling like Ben-Gay and Depends”
I just spit coffee all over my keyboard because of that one. My co-workers are looking at me like I’m a looney; giggling and drooling cofee, I must look the part.
What Merkel is saying, is that the concept of an EU democracy has failed. The Greeks can no longer be allowed to vote themselves benefits that the rest of EU must pay for. What’s needed is for Greece, and the rest of Europe, to submit to a benevolent dictatorship of unelected EU bureaucrats who will run things in a responsible manner, and keep Europe unified and solvent.
This is what the European elites have been working towards for decades.
The alternative, to teach the Greeks self-control by letting the consequences of their irresponsibility fall entirely on the Greeks, is unthinkable, as is the idea of making the banks bear the consequences of their own irresponsibility, and telling them to not lend money to entities that have little ability to pay, in the expectation of being beneficiaries of a last-minute bailout.
In spite of Frau Merkel’s labored contrivances, it would be prudent for “the Hun” to remember the end result for the Titanic, even after all the deck chair rearranging, was it still sunk.
@15. Richard Aubrey
“Cheapest way for the yurps to protect themselves from themselves is to pay us to station a quarter million of our guys there permanently. ”
No, the cheapest way for the yurps to protect themselves is for the US to pay to station a quarter of million of our guys there permanently. That has been their strategy for the last half century, and it will be for the next half century as well. They will not pay for US protection, they will demand it, they will claim to be entitled to it.
When I was stationed in Germany, in preparation for a trip to a balkan babysitting job, we went to an old US Army base. It was where the 11th Armored Calvary Regiment proudly guarded the Fulda Gap for decades, but were chased out by both strong local anti-American sentiment as well as the peace dividend.
It was a base in only the partial sense. It was a base in the sense that it was owned by the (German) military, it had barracks and ranges. It was not a base in the sense that there was no one there…no troops, no combat power, no activity. It was a base in the same way that a ghost town is a town.
We went there because we were a tank unit, but deploying without out our tanks…so we were basically retraining as something between infantry and military police. Our base did not have a range where we could train with shoulder fired anti-tank rockets (why would we?)…this old base did. It was somewhat humiliating…if I was facing a tank, I would want an Abrams under me, not a shoulder fired rocket. Some of the best trained tankers in the world…but we were stripped of our primary tool.
When our convoy first pulled up the locals were ecstatic, one inkeeper ran out into the street as we passed by and was yelling, “The Americans are back! The Americans are back!” What had once been a fairly affluent area, largely fueled by the US troops spending their paychecks, had become quite depressed. When I told him we were just doing prep work for a four day stay, the look on his face was memorable. From the expression, I would guess he was one of the most vehement Anti-Ami’s, but only later figured out the consequences of his position. Dealing with drunk GIs nightly probably was not fun for an innkeep, but it was profitable. I am sure that as he agitated for them to go he was thinking about the first clause of that sentence, but it was clear he was thinking about the latter clause after a few years.
Wars fought by weak powers can be very nasty, because they are more likely to reach for the biggest stick they have. For example Argentina is making noise about the Falklands again. I suppose they think that with Obama’s anti-Brit bias and the UK’s draw down of forces they have nothing to worry about. I would suggest that If I was Emperor of England with access to submarines, nuclear weapons, EMP, air bursts, experienced and well trained commandos, harbor mines, cruise missiles, and ships that could launch attack helicopters after Argentina’s air defenses were down, I would make sure that it would be a long, long, time before Argentina would have the economy to be a military threat to a troop of boy scouts and other nations would take heed from the example….But then I’ll never be the Emperor.
How come the same people who object to calling the United States “America” call the European Union “Europe”? Never mind.
Seems like George Soros did the Brits a favor when he scuttled the Pound back when the Brits joined the currency peg with the Mark in a run up to the Euro. Basically, everyone knew the Euro would not work as structured. It was hoped that as the train wreck approached the switches would be tossed just in time to avoid it. Everyone pledged not to use smoke and mirrors to mask what was happening. Instead they used CGI — Accounting Lite and Magic!
I stumbled across this interview with Richard Epstein last night and was transfixed by his commentary and his effortless parrying of the interviewer. Where do we get such men? I incidentally thought the interviewer might be punished by his fascist supervisors for allowing “unapproved” opinions on the program.
The only way socialism can succeed is to breed and educate its own class of slaves and then it must expand in order to contain the aspirations of the entrepreneurial class by limiting competition. Finally it must be sustained by wars of conquest and put to the sword 30% or more of the world’s population. The Soviet Union nearly succeeded because of the isolation of its frontiers but ultimately failed because they were unable to muster the requisite brutality to maintain uniformity of thought at the edges of empire. A US neo-socialist administration was the best environment for the EU project to incubate yet their weak usurpation of democracy and velvet glove policies have failed. We shall see what lessons they learn from their failure.
We are witness to the end of “Freedom” and “Free Capitalism” and the beginning of Hybred Imperialism with Social Serfdom or possibly the spreading of the Chinese form of Capitalist driven Communism… Next year indeed will be a Major Harbinger and 2013 will be the volatile birthing of the Progression of one of the two (Hybred Imperialism or Capitalist Communism) or the regression back to Freedom and Free Capitalism minus the Social Cradle to Grave super nets that are killing Freedom and Free Capitalism. If Herman Cain or Ron Paul win then Freedom and Free Capitalism with less Social Safety Nets will struggle back and real violence will erupt in the streets both here (America) and across the world while poverty, crime and despair will advance under the other two, which ever happens only the elitist class (Political/Mega Rich) will stay on top all others will become sieved into Serfs with the non-conforming being eliminated by whatever means necessary.
Angela Merkel, shortened: “Europe neeeeeeeeeeeds us. Or else.”
Her spiel reminds me of an old anti-virus software program that, even though my trial subscription ended two years ago, continues to pop-up annoyingly on my screen to tell me I need to renew its protections. Or else.
“You neeeeeeeeeeed me! Or you’re gonna get a virus, or something.”
Anyone notice the Democrat(ic)s are pushing the same tonic on America’s loose federation, too? “Vote “D,” or else.” Well it hasn’t turned out well for European nations. There’s no reason it’ll work any better for states like Arizona, Oregon or New Hampshire.
“None of us can foresee what the consequences would be if we were to fail.” Merkel is right, of course. But two variations on a consequence that she cannot deny, by her own statement, are as probable as the negative ones she implies are these:
1) The Euro zone breaks into two essential pieces separate from each other: a more homogeneous whole than the current setup that is “northern” and Eastern Europe, nations that have a measure of fiscal discipline (possibly with the exception of France) and of social thought about individual responsibility, and another more homogeneous whole consisting of the spendthrift Mediterranean countries. The two resulting common currencies will be more stable because the polities using them will view their respective currencies more consistently.
2) The Euro zone breaks up and goes back to separate individual nations of Europe, perhaps maintaining a free trade zone. With this break up, no nation will be subsidizing any other.
Eric Hines
Daedalus
The yurps’ cheapest option is to pay us. We will no longer pay. That leaves them or nobody.
Given the tragedy of war, I reproach myself for thinking schadenfreudely of them doing it to themselves again. But the cumulative effect of the cumulative effect of their bullshit is getting to me.
I used to work with exchange students (AFS). Once, at a function, an Aussie kid asked a Norwegian kid if they had the draft. They still did at the time. Was it tough training, the Aussie asked. Nope. Not a big deal. If anything happened, snickered the Norwegian, we know who will take care of it. Really got my preserves jarred.
Real tough not to say SCROOM.
Toadold/23: Agree. I think of Yugoslavia and, way back when, the protracted struggles across the face of Europe. If two strong powers fight, e.g. today with nukes, there is enormous destruction and then it’s done (and probably none of us would be around to reflect on the outcome). If a strong power fights a weak one, it should be quick and fairly merciful. Or else the weak power fights asymmetrically, outside the laws of war, with guerrilla tactics (see: Iraq, IEDs, etc). When weak powers fight each other, what else can they do except fight dirty? Which provokes a race to the bottom, neighbor preemptively slaughtering neighbor in the dead of night.
I certainly hope we don’t see that. But when the currency collapses, I think the disorder to date will go up a lot. If any bankers in Greece survive the pogrom, they will probably be trading not Euros but warehouse receipts for imaginary olive harvests, and negotiable weeks at those Aegean timeshares.
Alexis
Spot on !
The Greeks are the people that can compete with the Russian mafia, remember how Onassis became rich, and I think that they will never play our game, but will let the situation rotten, and get the money come free to them, while their savings are in Swiss bank accounts. Of course the little popole will suffer, like everywhere, in finale it’s a elites manipulation contest
John Bolton (Former US Amb to the UN) has some comments on the EU mess that I think are pretty relevant, e.g. the repeated can-kicking over the past two years which has produced only broken toes and a very badly bent can. I worry a lot that the can will turn out to have been sold secretly at a very high price to the US taxpayer.
http://www.nypost.com/p/news/opinion/opedcolumnists/let_europeans_handle_their_own_crisis_IMNRoI57THBsotQmJnCNUL
This is #3 of 4 and I’m done…
What would a war between the Yurps achieve?
Usually a war is fought by a nations’ leaders because:
A. You want territory
B. You are afraid of a military threat
C. You are a imperialistic ego maniac and just want to control more people.
As to A, there is no reason to fight for territory; more territory in this case just means more debts.
As to B, there are no military threats to overcome because most of Europe hardly has a military.
Only in C, do we find a whiff of rationale. Merkel’s “It would be desirable to have a permanent supervision in Greece.” statement somehow seems to envision some kind of occupation force to enforce that supervision. But would a nation like Germany really want to waste the live’s of thousands of it’s finest young men and women and the enormous treasure it would take to “supervise”, just to punish the Greeks or Italians or whomever for being socialist spendthrifts? Or is it that the “idea of Europe”is so important to the Elites that it must be enforced through military means?
Unsk @ 33,
“War” could also be triggered as the desperate bands of displaced people go staggering over former national borders in search of food and fuel. Things will be pretty bad at that point, so it might be hard to tell when a war actually begins.
u @ 33: Usually a war is fought by a nations’ leaders because:
D. The king is broke, the peasants are already in revolt because of taxes, so the king trumps up a cause and attacks his neighbor, giving the peasants a chance to get rich by looting. This doesn’t work because there’s nothing to steal, but it reduces the population and sickens them of fighting, so the king can rule for another five years.
Bill Ayers, the man who said he wanted to send 30 million Americans to concentration camps, criticizes his old friend and partner Barack Obama for killing US citizens with drone strikes. The worm turns.
All this time and energy that is expended by Merkel and others, all this education and subtlety and political capital consumed, not to deal with the problems of occupation and subversion by an alien culture or weakness in the face of real threats, but merely to find someone to pick up the check for Greek pensioners and featherbedding civil servants. The banality stands out. Did the invading Huns had find Rome preoccupied with such trivialities?
Time may be running backwards in Europe, especially in the Balkans. Where will the clock stop? Is it 1914 again or will the Turks and Russians squabble over the pieces as in an earlier time? Do the Islamists dream of reviving the Sublime Porte until they stand again at the Gates of Vienna?
Their are benefits to trade. The political benefits of trade are often overrated. In 1914 the greatest trade partners in the world were the British and German empires.
On the “Peace on Earth” thread I said the following:
We need to consider whether the current level of leadership in world capitals is really worse than it has been in other periods. If so why and if not then is it merely technology that exposes their flaws? Were the men, they were almost all men, who lead the world into conflagrations, 30 Years War, War of the Spanish Succession, Napoleonic and Franco-Prussian Wars, World War I & II, in every century over the last 500 years really more statesmanlike and serious than the current crop?
Problem solving starts with accurately defining the problem. I’ve been struggling to find an analogy to tell the story. The closest one I’ve been able to come up with is:
They are trying to create a United States of Europe using the Articles of Confederation as an organizing guide. The Europeans appear to have learned nothing from our own experience because they have multiplied the flaws by layering a common currency onto sovereign nations. There is no European government or federal reserve with a monopoly on currency issuance.
They have created an insoluble problem. One logical solution is to create a more perfect union, where nations in Europe become states, in the American sense. You don’t see the average Frenchmen or German marching in the streets demanding that solution. Another choice is to disestablish the European experiment. You don’t see the elites of Europe proposing that solution because their motivation is to save their phony baloney jobs.
There are no good choices, only least worst choices. Under those circumstances, the leaders will continue to shovel masses of Euros, wrung from their taxpayers, into a financial Verdun. It will only end once they have exhausted themselves. Or, perhaps when the public comes to the realization that they are as ill used as the French soldiers of the Nivelle Offensive. Who bleated baa, baa, baa as they filed into their assault trenches.
“It would be desirable to have a permanent supervision in Greece.”
That’s the ticket!
A chicken in every pot!
And a panzer in every village.
That’s what it would take, since the Greeks will never vote themselves into responsibility. Not any more than the Occupy Wall St. protesters will suddenly crawl out from under their tarps one morning and realize that if they were going to live like that they might as well get jobs as itinerant farm workers and demand that the immigration laws be enforced so they can displace some Mexicans.
While we are at it, how about a “permanent supervision” in California, New York, Illinois, and the other Blue strongholds who are basically trying to emulate Greece? I know, we could send forces from some other states, such as SC, GA, AL, MS, LA, TX, TN. They even have a flag still in production they could use.
Dickens wrote A Tale of Two Cities in the 1850′s, a time when he was deeply worried that Britain might be ripe for rebellion as Europe had been only a few years before.
Dickens had a very different notion of how to deal with the “root causes” that could lead to rebellion. To him, the influence and building up of the emerging middle class of the then-new Victorian Era provided the greatest hope for stability. His contemporary, Karl Marx, did not agree, since he saw this “Bourgeoise” as the enemy. Marx often quoted Dickens’ novels, but Dickens never quoted Marx.
Permanent Supervision does not automatically imply military occupation. It can be as simple as taking over Greece’s Central Bank, that is abolishing the current bank and replacing it with an EU managed (German & French) bank, with veto power over the total bottom line national budget…no line item control, just bottom line.
Now, I am not saying that that would solve the overall problem, I am just pointing out that panzers in the villages are not the only meaning of Merkel’s comment. The Greeks, regardless, will take to the streets.
Merkel: “Painful structural reforms have to be made, otherwise even after debt restructuring we’re back to where we are today … It’s not enough that the troika comes and goes every three months. It would be desirable to have a permanent supervision in Greece.”
It’s funny, generation after generation, the Germans never seem to be able to understand that saying “You Vill do vot vee tell you to Do, Ven vee tell you to Do It!” never works. They keep trying it, in different iterations; maybe because it works on Germans. But nobody else.
Michael @ 40:
What is the point of the “permanent supervision”? Is it:
A. Someway to collect the interest and principal on Greek Debt? Like that is going to happen. Or is it:
B. Someway to keep the Greeks in line so the European Union can stay together as it is? Or is it:
C. A way to punish the Greeks for destroying the “United States of Europe” dreams of the Elite?
“Permanent supervision in Greece.”
That is one of the most astounding–and ominous–utterances by a national leader in a long time. The verbal equivalent of opening Pandora’s box. A statement fraught with wickedness and mischief.
In their hearts, the French and the Germans still harbor delusions of grandeur and imperial conquest. It is a sign of the senility and bankruptcy of Euro-leadership that their justification for the USSE, THE UnitedSoviet States of Europe, is to prevent future imperial wars of the nature we saw for centuries. There is no possibility that their coddled metrosexual spawn will ever march to the marshal tunes of yore. They are now Citizens Of The World!, and therefore have no nations to defend.
No – the future wars of Europe are tragic rear-guard actions fought from their suburbs towards their city centers, centers which Muslims (and others) are completely dominating. Gradually, territory will be demanded in exchange for temporary peace, just as it is demanded by the Muslims of Israel, Cyprus, India, Armenia, Somalia, Kenya, and all the seething sink-holes where parasitical Islam is gnawing on their hosts. If not uprooted, virtually every Muslim enclave will eventually evolve into a violent threatening Sharia enclave, nurtured on, ignoramce, hatred, and bottomless, unappeasable grievance, holding out notorious lies that territory may be swapped for peace with the Muslims. It will never happen.
The cancers eating Europe are debt, demographics, self-loathing for their magnificent legacy, and the opportunistic infection of millions of Muslim hyenas, fangs flashing at the prospect of devouring what is left the carcass of a once superior civilization. It will be a slow motion kind of thing, punctuated by the same violent flareups we see in places like Kashmir, Gaza, Somalia, et al. That’s how Islam and Jihad works. But most, lacking an understanding of the eternal nature of Islam, are incapable of seeing the method to the madness of Islam. They misinterpret the chaos, violence, and suppression rife within all Muslim societies as bugs. They are not. These horrors are features of Islam – it flourishes where these nightmares dominate.
I don’t think Merkel actually means to imply any more than some permanent bureaucracy that will be foisted by political and economic pressure on the Greeks as “supervision”. She doesn’t intend Panzers in the Balkans. But her speech does the invaluable service to implying where the EU line of thinking, taken to its logical conclusion, ends up.
Farage is probably right. It is “political union or bust” in the minds of some. Well it’s bust and the only way to save the political union is to progressively expand its scope so that eventually, taken to the limit, it means a Panzer in the village. But that is absurd! And it is precisely in this reductio ad absurdum that the value of Merkel’s speech lies.
#wwws
exactly
see Maher comments on TE, he discribed well the german process
“What is it with you Germans? These persistent attempts to turn all of Europe into your prison bitch are really getting very tiresome….”
https://www.economist.com/user/3279321/comments
I can understand how frustrated Germany is – on a personal level, nothing is more maddening than being owed a pile of money by someone who isn’t scared of you and who doesn’t think you can do anything about it. It sucks to be there.
Hey Merkel, trust me on this: you either figure out how to do something about it that does *not* involve the other party’s consent, or you just walk away, girl. And if all the money they took is really gone and they’re truly broke, then you ain’t gonna squeeze any blood out of that stone no matter how mad you are. My advice to you: just let it go and don’t let yourself get put in this ridiculous position again. Anything else is just gonna waste your time and end up making you feel even stupider than you do already.
Wretchard
The Germans have no army that could do this job anymore, just that the people are influenced but the image of Germany seriousness and virtue, but if you scratch a little, then you’ll see that they aren’t better than the others, their banks played casino, their national debt is above Spain and France until october… it’s their surpluses that impress the minds,
I wonder what the China peripheric countries are telling of China
Off topic but interesting:
More than once at Belmont Club, I speculated whether Gadaffi’s mercenaries had South African officers. The mercenary force that Gadaffi assembled was widely known to have black Africans as foot soldiers. However African mercenaries typically have white South African’s as officers. It so happens the South African ANC government was very friendly towards Gadaffi and would have quietly approved of Gadaffi using South African mercenaries. Now the word is getting out that Gadaffi’s mercenaries included South Africans, refer to the following and scroll to the bottom:
http://www.google.com/hostednews/afp/article/ALeqM5iRSiwv56VKmv6I-KK0Lb-9K04KMA?docId=CNG.4cdb1e22c9f3043dd3649d8950960620.851
Supposedly South African mercenaries found a significant amount of work in Iraq working under American contract. I suspect that guns-for-hire are becoming a major income source for South Africa.
I’d think that Merkel’s remarks are aimed at the French while trying to protect her standing in German political opinion.
Her party has recently lost big in Land elections and her party’s control is weakening. German voters are NOT willing to get stuck with the bill yet that’s the prime objective of the French government in order to protect French banks.
The 50% haircut is inadequate yet the moneys committed so far can’t cover that.
By “permanent supervision” she’s saying we’ll need to somehow prevent the Greeks from going full 100% haircut and ignoring their Euro debts. Don’t know how that’s going to happen since Greek finance ministry and Greek tax collectors are willing to go on strike to stop any give-backs.
So, no, this is not the solution nor is it the beginning of a solution. Merkel gave up too much already yet it won’t stop the bleeding.
50. Whitehall
ditto DT, not surprising from you, it’s all but for french banks, LMAO
But Mrkel was talking for the Bundestag, with the aim that it would vote the ESFS big plan, not to the French
Establishing a “bureaucratic protectorate” over Greece may be the current intent. Plans rarely survive the first contact with the enemy unscathed. The Greeks aren’t willing to listen to their own government unless it is handing out goodies. Those goodies are not going to be there. What are they going to do when their own government is doing the bidding of what they view as hostile foreigners? I don’t know what the Greek equivalent of the “Mandate of Heaven” is, but I am pretty sure that it is going to disappear right smartly.
After the “Lord-Protector’s men” flee, scattering their ledgers and rulebooks as they go; what is the fallback of the EU. Sternly worded memos? Or some attempt at coercion?
Second point, this is not all the financial covering that has to be done. Looking at the enforced haircuts that bondholders are getting, Ireland, Spain, and Italy [in that order I believe today] are saying that they need to get new terms too. There is not enough money in Europe to cover them and Greece.
Causes of war noted above. I agree with Josh’s “D” and Idaho Spudboy’s “roving bands”. I would add that dealing with unassimilated minorities spices the mix.
Toadold mentioned Argentina. Watch them carefully. Argentina has had multiple complete economic collapses in the last century. The last Argentinian attempt on the Falklands was triggered as a distraction from internal Argentinean economic and political difficulties.
Christina Fernandez was just re-elected as Argentinean president by an overwhelming vote. Her first acts were orders to have the Argentine government take control of all pension plans AND to order all Argentine oil and mining companies to immediately repatriate all profits and that all further profits not be invested overseas. The stated reason was to stop a massive flight of capital out of the country. For obvious reasons, no foreign capital is going to want to invest in Argentina, for fear it will be seized. The spiral is beginning. And Fernandez is going to need a distraction, right smartly.
Given the ham-handedness and wrong-footedness of the Brit governing Coalition; the odds are that they will yield the Falklands without a fight. Right now the Brit electorate is not particularly happy with economic and social conditions; and the latest 3 line whip attempt to block an EU referendum [all major parties repeatedly promise one, and all have reneged] and a craven abandonment of fellow Brits may mean some interesting political results in the UK.
Wretchard is right. The next year is going to be “special” and the interconnectedness of the world is going to complicate things, not ameliorate them.
Subotai Bahadur
#51 Marie Claude,
According to ZeroHedge, the French banks are the most exposed to sovreign default but most Euro-zone banks share dangerously high exposures.
She’s been trying to find some middle ground between the rock of her legislature and voters and hard place of the French. Who was she negotiating with for 8 hours?
Whitehall @ 50 said:
“The 50% haircut is inadequate yet the moneys committed so far can’t cover that. … this is not the solution nor is it the beginning of a solution.”
I agree. However our own stock market is having an orgasm over this agreement along with the tarted up numbers concerning the GDP, refer to following concerning the GDP numbers:
http://market-ticker.org/akcs-www?post=196634
Also, Obama’s popularity scales with the perceived health of the economy. His Gallup poll just popped up 6 percent from October lows, refer to:
http://www.gallup.com/poll/150374/Obama-Job-Approval-Showing-Modest-Improvement.aspx
The situation with Obama is less worrying than the stock market manipulation because the PPT can defy gravity for only so long. A major economic crash in early 2012 is likely given that no real structural change has taken place in the American economy. My biggest worry concerning Obama is the Republicans may snatch defeat from the jaws of victory and nominate Romney. Running against Romney is probably the Won’s dearest dream while running against Cain would be Obama’s worst nightmare.
53. Whitehall
yet Zerohedge doesn’t take into account waht is private debt and public debt
BIS april 20011
http://av.r.ftdata.co.uk/files/2011/06/table9greece.jpg
hmm Merkel is securing her own corporations markets who put her in the place
if you understand french, it’s well explained in this video: China, Germany same combat, same strategy
http://www.dailymotion.com/video/xl4pq0_jean-michel-quatrepoint-mourir-pour-le-yuan-comment-eviter-une-guerre-mondiale-bfm-business-12-09-20_news
Germany’s goal is discussed at the end
I remember a britsh comedian about ten years ago saying words to the effect that “the europeon union has to work. It just has to work…” . (Or… Or… …what? One might ask). As if it was simply some sort of moral imperative or something. Now I may be paraphrasing, but what Merkel is saying is essentially the same, except in the negative. ["If the euro fails, Eorope fails"] . But still no explanation as to why there should be a Europeon Union in the first place.
Prior to the establishment of E.U. the premise must have been one (or both simultaneously) of these two- A) things are pretty darn good, but they will be even better once we establish a Europeon union. Or
B) things just plain suck, so the establishment of a E.U. will get an unsavory and mal-influence off our backs (the U.S.A. ?) and we won’t be beholden to their influence any more and we can be who we want to be.
Spengler says that the über E.U. elite steadfastly refuses to give up its’ grip on this power over the polyglot super state, but if they did, or would, things would get back to normal in relatively short order.
“I see Barsad, and Cly, Defarge, The Vengeance, the Juryman, the Judge, long ranks of the new oppressors who have risen on the destruction of the old, perishing by this retributive instrument, before it shall cease out of its present use.”
Substitute the word “re-distributive” for “retributive” (above) and you’ve got your answer.
I dunno but the US stock market is jumpin’ today.
Bunch of stocks are up 15% from two weeks ago even while US 10-year treasuries have gone down (interest rates back “up” to 2.3%).
I shoulda, woulda, coulda … but I never imagined this spike. US earnings are mixed. Is this jump related to putative fixes for Greece and the Euro?
BTW I doubt anybody is proposing more than about a 10% haircut on the Greek bonds, that’s 10% principle plus some interest “forgiven”. And I would think the “supervision” is along the lines of not letting Greece vote even more bad finance into law.
There is no end (of the end) to European history, only a repitend Chaucer, Swift, Orwell, Churchill and Python response to Engels-Marx, Freud, and Monty Python divisors. Even Wagner was unable to score the unmythical end.
Here’s the Spengler link-
http://pjmedia.com/spengler/2011/10/03/a-beautiful-mess/
and here’s another related one. about eco probs here.
http://pjmedia.com/spengler/2011/10/06/wall-street-protesters-have-met-the-enemy-and-it-is-they/
take note of the graph.
THE ROAD TO BRUSSELS FAIR
Capitalism, nationalism, wealth and strife, or socialism, poverty and death. Those are the options. After WW2 Europe had a choice. Which road to take, the road to life or the road to Brussels.
The crossroads beckoned up ahead
The weary traveler stopped
And looked about in fear and dread
Which path should he adopt?
One road led on to Brussels Fair
Bright roses lined the way
The other led to who knows where
What price be there to pay?
He chose the road where roses in
Profusion did proclaim
Bad weather never closes in
And one wins every game
And so it was for many miles
Bright skies and weather fair
While in the distance Brussels smiles
And becks the traveler there
A gleaming city on a hill
Aglow with golden light
He bade his racing heart be still
And walked on through the night
Oh at first ‘twas as desired
On the carousel, content
Even unemployed were hired
And the city paid the rent
But the wine soon left the fountains
Some folks worked while others played
And the debt grew high as mountains
And the city grew afraid
As the leaders wept and dithered
While great fissures were laid bare
And the roses died and withered
On the road to Brussels Fair
a re-distributive retributive [blunt] instrument.
Out with the old, and back in again with the not-nearly-as-old,
not by a long shot.
Josh @ 57 said:
“I shoulda, woulda, coulda … but I never imagined this spike. US earnings are mixed. Is this jump related to putative fixes for Greece and the Euro?”
Obviously, the PPT are up to their old tricks. The Greek bailout provided the perfect cover story.
Josh also said:
“BTW I doubt anybody is proposing more than about a 10% haircut on the Greek bonds, that’s 10% principle plus some interest “forgiven”.”
The question I’m asking is how much of a haircut can be administered to the Greek bonds before it triggers a Credit Default Swap (CDS)? Supposedly the EU governments forced this haircut to protect their own banks from full default. However if their own banks previously sold CDS to the Greek bond holders then in theory their banks are still hosed. Again, my reading is this is pure theater aimed at the MSM so the PPT can do their thing and the EU live for another day.
Wonderful, Walt. The images in the Road to Brussels Fair are vivid and are animated by a stimulating idea. The reversal in the end reminds me of Keats, or more recently of the archaeologist who chose poorly in the movie Indiana Jones and the Holy Grail. Spielberg does this reversal often, as when they open the Ark of the Covenant and apparently beautiful spirits emerge, only to turn into avenging demons. The false dream with the sudden reversal is a powerful device. Here is Keat’s doing it:
And that may be what the European project is: a beautiful and lethal dream. They may in fact know it, but like the youth in the poem, are still held by a vision they cannot forsake. Winston Churchill used the same literary device to foreshadow the rise of Nazism in Europe. It’s power comes from the fact that until events proved Winston right, until the reversal, most people thought that Churchill was seeing ghosts.
Of course it may be different this time; history rhymes but it never repeats. Still it is probably prudent not to rush things. After all, Europe has all of future time to unite, and doubtless it can be done without setting a permanent watch on Greece.
Perhaps the key to understanding Merkel’s speech lies in the action taken yesterday by the Bundestag to cap Germany’s bailout guarantee to the EFSF at 211 billion euros. We might see this vote as representing the final end of WW2 reparations, as seen from Germany’s perspective.
In the context of this Bundestag vote, Merkel’s speech was both strategic and tactical. The tactical message: “If you want to continue to use the Eurozone to contain Germany’s political ambitions, you will need to cough up the 1.5 trillion additional euros estimated to be needed by the EFSF.”
Given the difficulty experienced in raising 500 million for the EFSF so far, Merkel’s intended audience clearly included good ole ‘deep pockets’ Uncle Sam as well as any others who might be troubled by the specter of a new Bismarkian Germany in central Europe.
Speaking of Python, I remember a sketch where an Army Colonel is addressing a briefing about a spy operation wherein the colonel says that infiltration of the enemy will be accomplished by giving the enemy town “…a false sense of security by giving them good homes and a steady job”.
For Greece it seems giving them a chance to be on the dole and giving them a credit card with no real spending limit was or is considered a job as such. (Greece is the most recent country to join as a member state of the E.U.) Must be hard work running up all that credit card debt so fast, and then there’s where to put all the stuff you acquire …
Ha! They (Greece) fell for the plan as planned all along! And it goes further to explain how 0bama reconciled all outstanding differences between europeans and 0bama’s “United States” back when 0bama gave that campaign speech in 2008 in Berlin (at the Wha?)
All is reconciled. Euro and Amero interests are now joined at last, noo need for further disagreements among us anymore as both entities have united around the same objective and 0bama has been doing a Greece with (to) a subset of the U.S. population himself. Euro’s know that now. No restive feelings between the two super powers anymore, no more friction, no more competing non-mutual self interests, no animosities whatsoever- they have all been banished altogether forever!
Achtung! :: The word “re-distributive” has now been officially changed to “re-cycling” from now on evermore. (Refrain from use of the former and substitute the latter where necessary)
Please make the requisite changes as applies regarding further use of [the] proscribed word[s] and then destroy all correspondences of this Achtung Proscription/Imperative Announcement. Your steadfast and loyal co-operation and obedience is appreciated, and shall of course, be rewarded, somewhere down the line, perhaps after the election, if we decide to have one. Black Panthers permitting.
Morton Doodslag #44:
“The cancers eating Europe are debt, demographics, self-loathing for their magnificent legacy.”
Re: the self loathing – I am reminded of an archeological find in England of an old Roman villa that was equipped of a hypocaust against the cold, damp nights. While digging and exploring, the scientists found remains of a campfire in the middle of the largest room which dated only four generations after the last use of the hypocaust.
Going from knowing how to build and use central heating to huddling around campfires in 100 years is what results from self-loathing for a magnificent legacy. Unless something is done soon about this self-loathing, and the other things you mentioned as well, the great-grandkids of todays leftist, collectivist Euro mandarins will no doubt be huddled around campfires themselves, as the descendants of civlized Romans once were.
It CAN happen.
Hoskins #40, Wretchard #45
This brings to mind the oft-heard statement, “We are socially liberal and fiscally conservative.” While it sounds nice, inevitably the “socially liberal” part drives the “fiscally conservative” budget and things eventually go to hell in a handbasket, both socially and fiscally.
While you might have a Gov Jesse Ventura saying that and also having the guts to say to an unwed mother about her complaints of inadequate state support, “Don’t complain to me about that. Where’s your husband?” – eventually you have the “reasonable people” insisting that we don’t have time to discuss things like that because of the immediate problem of moms sleeping with their kids in the back of a 75 Vega.
And then if the people of Greece are as stupid as they have a right to be, the “Greater Reich Bank” ends up saying “Well, you can’t give radio announcers retirement at age 50 and have unwed mothers sleeping in the back of 75 Vegas. So we’ll give you more money but don’t waste it this time. But no more!”
In DC they even have a name for this approach. It is called “The Gold Watch.” You choose to spend the money in horribly inefficient ways, leaving truly valuable services unfunded. At one point the Customs people responded to budget cutbacks with plans to lay off all of the customs inspectors and leave the actual bureaucracy untouched.
Anyway, one thing leads to another and eventually you have unwed Greek mothers sleeping in the back of the panzers the Germans send in hope of imposing a Final Solution on the Greek Problem
well of course I’m just wrong about the size of the “haircut”, the gross number being kicked about is 50%, which after recapitalizing the banks is supposed to be more like 22%.
Which with a little further negotiation may be pretty close to my 10% capital plus some forgiven interest, after all. Especially after the banks then deduct their 50% losses without bothering to declare their 28% recapitalization. Good trick hey.
And I guess the idea is that since this is all “voluntary” it does not trigger the CDS … even partially?
It is hard to take any of this seriously, hard to understand where ANYBODY’s enlightened self-interest really lies. And it being the way of all high finance, you can expect that little percentages (of billions of dollars) will disappear at each step along the way, “carrying charges my boy, carrying charges” as Signor Ferrari explained in Casablanca.
#OWS has called for a general strike on Nov. 2.
They mean for the rest of us to rise up and strike.
Who’s with me? Who else will toss his wooden shoe into the machinery come next Wednesday to show solidarity with our urinators-in-chief?
Scenario A @64, RE intended audiences and deep pockets:
I’ve been wondering why President Bush Jr. sent so much of American tax-payers monies to German and French banks just as he was leaving office in 2008.
Was it so America could tell Europe’s beggars when they come a-knockin’ in 2012, “Sorry, we already gave at the door?”
At the time, it was hard to decipher a Republican President’s reasons for such profligate giving to an ostensibly anti-American project. But now, almost four years later, and with all of the Chirac/Schroeder-ian bluffs called, it’s looking like Bush/Cheney were 2-steps ahead of the Euros’ game: they determined in advance of the collapse that the best way to limit America’s skin in Europe’s crack-up was to appear to be generous early, so that we could be tactically frugal later, all this while maintaining our graces intact.
If so, nice going, Boys!
Otherwise, it’s clear that cap-n-trade was supposed to put America’s taxpayers on the hook for Europe’s follies. Laundered thru UN offices, the dues would surely have wound up in Belgium’s, France’s, Greece’s and others’ accounts just in time to keep the circus tent from collapsing. Some slush-fund it would have been, too. With every breath of their nemesis’ economy across ‘the pond,’ the Euros’ project’d get a big infusion of money. Sure beats working for a living!
Thank God we defeated that ruse.
Don’t mess with Frau Hermann:
“unverschämt” … “[Überwachung]“.
…-
“The catch is in the “given time.” Ten years ago, we still had that time. If this were just a matter of national parliaments and plebiscites, we would still have that time. But it isn’t and we don’t. The markets could pull the rug on the euro tomorrow.
Answers, anyone?”
http://www.theglobeandmail.com/news/opinions/opinion/tick-tock-euro-talk-market-shock/article2214938/
Steveaz…
Let’s not change history…
The FED sent giga-bucks to the French and German banks — not Bush.
They did so via Freddie and Fannie swaps — that was the collateral they were stumping up. The US Dollars they were receiving had to be either bought or collateralized.
The Europeans held these insecurities in US Domestic institutions — wholly owned by European parents. They were arb’ing the spread — that’s why they had so many on their books.
The entire process operated in the blind — even the White House would be kept in the dark WRT specifics.
—–
The rest of your supposition does not follow.
Cap N Trade was the Wan’s own true love — on Marxist principles alone.
70. steveaz
Bush didn’t give any money to our banks, but insurances did, and by any hazard these were hold by american companies such AIG. So, put the blame on your banksters first, that sold their junk shorts to the world wide !
ah, Blert, the reasonable man !
Josh @57,
Two words explain the market’s rise of late: Capital Flight!
Argentina is forcing repatriation of overseas funds to its new socialist experiment. Germans of wealth are seeing their worth pinched to bail-out indigents like Greece and Italy. People from Britain to Ireland to even China, are shielding their wealth from government seizure by stashing it in America’s markets.
The magnet of America’s markets still works, especially in times like these, and despite the Democrats’ best efforts to demagnetize it. It is no accident that Soros’ monkeys are gearing up to picket “Wall Street” at exactly the moment flows of capital begin to surge our way from his favored pet-projects.
If the Axelrod wing of the Democrat(ic) Party weren’t so busy foisting the Detroit model on the rest of the nation, they’d be working with Republicans to increase America’s magnetism for foreign investors. Unfortunately, that means checking the teachers’ unions, and lowering labor costs, drill-baby-drilling!, and cutting taxes generally. Every one of which requires pissing off the Democrats’ clients too much.
So, signs are, we’ll need to schuck-off the Dems before we can really start reeling-in the dough. But, once we do…watch out for Dow 14,000!
Don Rodrigo #69:
How about we all rise up and strike – the OWS clowns over the head with a hunk of rebar on 2 Nov?
“The FED sent giga-bucks to the French and German banks — not Bush.”
Yes, as the M.D. from Texas who dare not have his name mentioned here at PJM except to be ridiculed has pointed out, with a little help from Bloomberg (but I doubt Hizz’unuh the boss wants too much of that, as the news operation wouldn’t be so fat if the banks that subscribe to the terminals weren’t bailed out by the Fed).
Like I said, as someone who’s spent some time in Moscow looking at those steel hedgehogs outside Sheremetyevo where the Werhmacht’s machine guns froze on December 4, 1941, I can sympathize with Marie’s misgivings about the 4th Reich.
blert @72,
Linky: French and German banks got billions from the US in the AIG bail-out. ‘Member, the AIG bail-out was part of Bush’s TARP1 bill passed through Congress. And it focused much of its relief at Europe’s overstretched banks.
I recall, too, a lot of shuttle diplomacy ’round that time. Bush flying to Germany, etc.
Mind you, I’m being generous to Bush, here. I think the gesture Bush made to Europe’s bankrupt-ing European federal state was classic Oil Patch-Classy. That is to say: he saw the panhandler early and read its character quickly, then made a modest tithing before the con could make his pitch.
So that, when the pitch finally comes, we can all sigh dejectedly, then say in earnest, “Aw shucks! I’ll be darned if Americans haven’t already been taxed for this failure. We already gave at the door.”
After TARP1, it’s nigh-on impossible to argue that Americans should have to pay that bum another nickel.
Eggplant @ 62:The question I’m asking is how much of a haircut can be administered to the Greek bonds before it triggers a Credit Default Swap (CDS)? …. and the answer is:
http://www.zerohedge.com/news/farce-complete-isda-finds-50-haircut-not-credit-event
Yes, Ladies and Gentlemen the Ruling Elites have redefined ‘credit event” just in the nick of time so that 50% haircut is not a credit event anymore. Wow! Who would have seen that coming? Just move those goal posts one more time!
The saying is that Greece is a poor country of rich people. I have a hard time reconciling the idea of Greece, the country, being the scofflaw of Europe and my experiences with Greek people in the US, an amazingly unified and self-sufficient group, neither stupid nor spendthrift. The healthy black economy in Greece answers the question partly as to national poverty; I’m wondering if that’s a product of hopeless corruption (as is described) or is that a deliberate hedge against the EU.
I’ve always felt that the EU thinks of itself as the anti-US superpower, positioned against our hegemonic culture, imperialistic aggression, etc, and naturally the fate of the world rests upon its continued success. And that the Bush administration was the epitome of grace in the matter. I’m all for continued good manners, but no cash.
Unsk…
The insiders don’t want the side-bets to pay off.
This, folks, is the bigger problem: we’ve got a global casino wherein the hegdies are permitted to make astounding side bets on this or that — which require all of society to backstop.
This is the terminal problem of quango-banking.
Privatized profits — Socialized pay-ins.
The private parties are ALWAYS betting against CENTRAL PLANNING…
It’s as simple as that.
We need to kick the impulse.
Unsk@79 – yes they kicked this can just a little further down the street one more time but it doesn’t really change a thing. Who eats the 50%? Who recapitalizes the banks? Who now is going to buy Spanish and Portuguese and Italian bonds? Are they more attractive buys now that Greek bond holders were burnt or less attractive?
The US equities markets responded with great good glee apparently or was that European money looking for a safe haven outside of Greece, Italy, Spain, Portugal, and Belgium?
This whole EFSF bailout amounts to putting a half billion in IOUs into a pot and then leveraging up to a trillion and all this borrowed money is supposed to guarantee some other borrowed money? It makes as much sense as using your maxed out credit card to collateralize your neighbors purchase of Solyndra. It is one bankrupt vouching for another who is trying to buy a lame horse.
Merkel put on her Ruby slippers and clicked her heels together and for one magic moment everyone thinks they are back in Aachen with Charlemagne. By the end of next week I predict the reality of the situation will sink in once more and the can will be seen to be not really very far down the street.
“When weak powers fight each other, what else can they do except fight dirty?”
You fight to win, clean or dirty has nothing to do with anything.
I wondered why Wall street jumped. It seemed illogical to me. Why would anybody expect doing what hasn’t worked before to work this time?
Capital flight didn’t occur to me. Flight where? China? Japan? Russia? All police states where the best you can expect is some of your capital back. Getting 80 cents on the dollar back is the sort of investment I try to avoid, Then again, I’m not a professional.
I settled on the weather. I figure that 8″ of snow ( 208 mm’s, IIRC) will put an end to OWS. That ties in with the call to arms for the 2nd. Big storm headed for the New England area. 8″ might be a break. With any luck, New York will get .7 meters of snow and OWS and Wall Street employees can have the worlds largest snowball fight.
Union thugs think they are tuff but the average wall street stock broker can out ruthless a shark.
Download a site map from the CCTV anti-crime program so one knows where the outdoor toilet areas are. Once they are covered with snow, you have a type of IED. Make sure the Union thugs go face first into those locations. A boot on the neck would be good.
No clean, no dirty. Just Win or lose, have or have-not.
There is no try. There is only do or not do.
Merkel is about to learn that the hard way.
The EU’s Key Phantom Gap.
EUrope’s socialist Sterilization Fund Obituary.
“Complex: A handwritten diagram, held by an unnamed European government adviser, shows the hugely complicated nature of the euro bailout negotiations. The role of the IMF, banks, and the stabilisation fund are all included, although a key gap in the diagram appears to be where exactly the £40bn will come from.”
http://i.dailymail.co.uk/i/pix/2011/10/28/article-2054405-0E8F0A2500000578-570_306x489.jpg
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“Help us out, Europe begs China: Desperate Euro chiefs look East to fund huge bailout gamble”
“Further embarrassment as one trillion euro bailout fund announced yesterday does not really exist”
http://www.dailymail.co.uk/news/article-2054405/EU-summit-del-Desperate-Euro-chiefs-look-East-fund-huge-bailout-gamble.html
I think Frau Merkel is right and proper despite what some have said. Violence in Europe doest necessarily have to involve states. People are fully capable of some horrific work.
The Greeks are leading the way. Europe has lost the basis for its culture. They have abandoned God in favor of the State. They have abandoned their work ethic because the state shows they dont need it. They have no past because its just not fashionable. Nothing left to do except exist. But if the States fail, existing will become very difficult. Note that the islamic invasion has been supported by the state apparat and the indigenous population has been held in check by political correctness. I think Europe is a powder keg. And I think Merkel is simply acknowledging the fact.
#83 stoicheion
I wondered why Wall street jumped. It seemed illogical to me. Why would anybody expect doing what hasn’t worked before to work this time?
Another factor in the fools’ rally was the release of obviously bogus US GDP figures. Supposedly a sudden surge in consumer spending gave us the best quarterly GDP figure in years [it rose from horrendous to just below mediocre], which supposedly means the worst is over.
1) How come consumer spending surged when consumer confidence has been plummeting at record rates and is the lowest in recent memory. They are saying that people believe things are bad, getting worse, and decided to splurge?
2) If there is all this consumer spending, how come inventories are up?
3) They claimed that unlike the last few decades, government spending did not inflate the GDP this quarter? How so? Leaving aside the detail that one can argue that government spending lowers the GDP because it takes money from other productive uses; where is the sudden burst of Federal government austerity that the claim implies?
Government figures on GDP, unemployment, and most other things are cooked and bear no resemblance to reality. They are used as political weapons. Always look at the component figures for anomalies. Throw in the PPT, and an incumbent whose polling is collapsing as badly as the economy, and yesterday’s DJIA makes even more sense.
Subotai Bahadur
Subotai: How come consumer spending surged when consumer confidence has been plummeting at record rates and is the lowest in recent memory.?
Consumer spending grew because personal saving fell sharply to just 3.6% – the lowest in a while. It’s a very bad sign. Denninger surmises that people were forced to dip into their savings to spend: http://market-ticker.org/akcs-www?post=196699
The entire Euro bailout is bogus. It cannot possibly work.
Merkel’s threats are empty bluster. What the heck is she, Kaiser Bill in drag?
The sooner these bailouts come to an end, the sooner we will see that the house of cards is already down, and the sooner we will be able to start anew.
Bailouts not only postpone, but also exponentially worsen, the inevitable.
When you kick the can down the road, you will find out that it is not a can at all, but a snowball turning into an avalanche.
I had it all scoped out back in 2008.
Also see…Sovereign Debt 101
Unsk…
The savings figure is a derived figure — it’s a residuum.
One should never use such a manipulated figure in any market calculus.
It’s is prone to staggering rear-view rejiggering.
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Folks, the modern market is dominated by concentrated money — and concentrated algos.
They use correlations — back-tested — that are presumed to be forever operative.
This is how Long Term Capital Management blew up. The geniuses never imagined in their model that a sovereign state would default, ( Russia )
The exact same approach has given us Bear Stearns and Lehman Bros.
As for the Yurps…
They made the same linear assumptions WRT sovereign Euro debt.
At bottom the Euro system is a clone of the Gold Standard — but using fiat currencies and digital discipline.
Under the classic 19th Century gold standard, imposed by the British Empire because of London’s favorable gold mining position and complete domination of the Bills Market, all currencies crossed via weight of GOLD. It was entirely rigid — the game stopped if you ran out of gold on deposit in London. The Bills Market demanded that settlement be in gold AND in London — the City.
Greece is a sovereign that has run out of ‘synthetic gold’ and has zero prospect of finding any.
The London Bills Market has been replaced by the ECB for internal Eurozone trade. It’s no longer the case that trade settles in the City. Instead, crossing trades end up back at the master central bank – after all offsets — of which there are plenty.
2011 saw the implosion of the tourist industries of Greece and Egypt. They will stay dead until peace returns. With islamist control in prospect for Egypt one should expect Malthus to win this round. I expect that Egypt will face a hard famine within months. Libya will surely out bid Egypt.
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It was and is the nature of rigid exchange regimes that they shatter like glass. The longer the delay the greater the shards.
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Steveaz…
The government HAD to bail out AIG. Else it would lock up the entire planet. That’s no joke.
AIG FP’s position was so dark — even to AIG, the parent — that it was permitted to underwrite impossible positions.
The problem for the counterparties was that they absolutely depended on AIG FP’s backstops. Otherwise they’d go under.
This folks is what happens when the number of players is small and they’re all using the same economic/ trading models.
It is essential that they ALL be broken up to stop ‘schooling’ behavior/ group think/ herd action.
It is NOT true that HFT adds liquidity to the market. It’s a hair-clip, front-running gambit. The end result is chronic flash-crashes – -which are becoming more common.
Bernanke has flown the Fed into the ‘coffin-corner.’ Any ‘backing-up of interest rates’ will destroy bank balance sheets — globally.
That includes the Fed, itself.
In the meantime — the S&P 500 are reporting bloated profits based upon US Dollar destruction and Financial Repression. When normalized – the market isn’t cheap at all.
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Simon Black is reporting dire reverses in the Red Chinese real estate bubble.
Next up: the termination of the Canadian and Australian real estate bubbles — some of the most extreme ever to be.
Those of us who have any savings at all have been forced to dip into them.
This should have been our retirement money. What a cruel joke.
Unless there is MASSIVE deregulation, the repeal of Obamacare, and the enactment of a flat tax, we will have no choice but to emigrate.
There is always a land of opportunity somewhere. We will find it and we will succeed, even though we will be starting over at the age of sixty with very little in our pockets. There is always a land of opportunity. Too bad it is no longer the USA.
RE: AIG & FP & the need for bailout (the stakes were almost beyond human conception – there’s a joke in there somewhere – the Immaculate Misconception?)
Joseph J. “Joe” Cassano (born 12 March, 1955) is an American insurance executive who was an officer at AIG Financial Products from the division’s founding in 1987 until his resignation in February 2008.[1] Cassano is considered a key figure in the Global financial crisis of 2008–2009.[2][3] Political writer Matt Taibbi nicknamed him “Patient Zero of the global economic meltdown.” [4]
["Patient Zero" was used to refer to the index case in the spread of HIV in North America.]
Matt Taibbi describes The Big Takeover. (Warning: It IS Rolling Stone, which guarantees a certain informality of prose, but Taibbi’s reporting on the financial crisis has been credible and is worth a look. Nobody from Washington or Wall St can claim the “American public” doesn’t have the sophistication to understand “what happened” when Taibbi puts it out there with just the right amount of accessible detail – with or without the f-word.)
And the High Frequency Trading needs to go – something to watch for (a key “tell”) when Washington claims to have reformed The System. We’ll know that somebody got serious when HFT is gone and the markets (start to) return to “price discovery.”)