Catching up on the Euro

The Euro crisis continues, with no positive end in sight.  As we posted before, this more and more looks like nothing more than moving the pea around in a high-stakes game of Hot Potato.  Richard Fernandez makes this observation:

The problem as Nigel Farage and Daniel Hannan point out in the videos below is that everybody is bust. Nobody is in a real position to help anybody else out. The bailouts aren’t real because the problem is simply being recirculated through an organism settling into toxic shock.

Farage is that kind of clear-thinking, straight-talking leader that appeals so much to the OC.  He doesn't give you the sugar coated version; he hits you upside the head with undeniable truths. Too bad that he's not running against Obama this year.

Here are the videos:

The Pain in Spain

Stole that title from Richard Fernandez, along with links for this post.  So read his full analysis.

Anyhow, it seems that huge bailout for Spain wasn't the answer after all.

MADRID (AP) — Euphoria over a lifeline of up to €100 billion ($125 billion) to rescue Spain's hurting banks morphed into a financial markets rout in a matter of hours Monday, as investors digested the still-undefined plan and became concerned the country may be unable to repay the new loans.

"Plenty of risk still remains in place, with question marks over the ability of Spain to repay the debt, especially, if the country fails to get back on the growth path, the outcome of the upcoming Greek elections and the perception of situation in Italy," Anita Paluch of Gekko Global Markets wrote in a note to clients.

So, let's see.  The bailout is because the banks have loans outstanding that won't be repaid.  So, having made that error, they are now getting bailed out from their folly.  But it now appears that the markets are figuring out that, if the original loans can't be repaid, and there are no structural changes happening, how will this new $125 billion be repaid?  Can anyone say "throwing good money after bad"?  Why is this so elementary to the man on the street (aka OC) yet international finance wizzes think it's something different?  I guess it's the number of zeros.  I mean in the loan amount, not the people involved.

 Fernandez continues:

In the video below Nigel Farage finds that even Red Ken Livingstone now agrees with him. Godzilla’s footsteps are now audible outside London. Livingstone says what everyone knew all along. The Euro was nothing but a set of handcuffs designed to bind countries to a “United States of Europe” project which Livingstone claims was meant ‘end war’ — and probably to end racism, stop climate change, foster gender equality, promote gay rights and all that good stuff as well. But handcuffs they were and they are pulling the countries towards disaster.

The bitter truth is that the European collapse is simply the consequence of Leftist fantasy politics.  It is what happens when people realize that the ‘paradise’ they’ve been building is nothing but a deconstructed, demographically collapsing, hollowed-out and bankrupt shell of lies.

At some point, the German populace will rise up and say "Enough is Enough".   How much damage will it take to their economy to drive home the point that they are being used?

The old shell game

Richard Fernandez has a great line about the financial situation over in Europe:

Perhaps the deep dark secret of the financial crisis is this. Nobody is bailing anybody out. They are simply moving the debt around like a pea under a shell, keeping just one step ahead of the crunch. Maybe this explains why, despite the trillions of dollars in disbursements, rescues, restructuring packages and bailouts, the water in the European hold is just as high as it was before. Just as high and rising.

Or is it just a high stakes game of hot potato.  At some point, the music stops and someone will be left holding the bag.  Of course, the bag will be filled with worthless IOUs, but hell....let's just keep bribing the orchestra to keep playing.

There's money in the air

If there's one thing that the OC wants everyone to take from this blog, it's "Follow the Money".  Because, when you strip away all the lofty words and emotional rhetoric, it all comes down to.....tada....money.

For as much as Congress and the DC establishment are pros at this, few hold a candle to the statist bureaucrats of the European Union.  Not content just to exert control over Europe, they want the tentacles to extend over America.  From Breitbart:

The European Union has established an Emissions Trading Scheme, which taxes all airlines including American carriers on carbon emissions, even while they are flying over the United States.

Yes, you read that correctly.  If a plane takes off in San Diego, California and lands in Madrid, Spain, an American airline would be taxed by the Europeans on its carbon emissions for the entire flight, even though the bulk of the flight occurred over the United States and the Atlantic Ocean.  Their rational?  It landed in Europe.

Read the whole story.

And in news from Brussels

When is wine not wine? When totalitarian EU bureauweenies demand that you call it a “fruit-derived alcoholic beverage made from produce imported from outside the European Union”:




Still more evidence that there is no situation that a government bureaucrat can't stick their nose into and make worse.  Hat tip to Moonbattery.

A Message?

From Iain Murray comes this analysis of a news item:

Hollande’s Plane Struck by Lightning on Way to Germany

Yes, seriously.

There will be some who view this as a divine warning. Others will joke that it has something to do with Zeus and the Greek crisis.

As for me, I think it is the first strike by The Avengers on European socialism. The Mighty Thor led the way. Up next, The Hulk, who will smash France’s economy.

 If only that could be true.

Where is Europe heading?

Victor Davis Hanson has these thoughts:

Over the last four years, almost all of the news about the shaky European Union has been financial, with some attention paid to southern Mediterranean tabloid attacks on Germany and the German media counter-stereotyping of irresponsible siesta-loving sunny Mediterraneans.
But as Greece falls apart, and as panic spreads to other debtors, we are starting to see a stage II political crisis, with socialists and extremists, both left and right, revolting over “austerity” — or rather over the mere taste of austerity that has never been really swallowed in whole. But all the defiant nationalist showboating and whipping up of domestic constituents will not bring salvation, just more polarization outside their borders. (Witness Greek “nationalists” damning Germans as Nazis as they use war-guilt and conspiracy theory to beg Germany for more money without ever acknowledging why it is that they are in need of it.)

So what’s next? Unless there is some sort of miraculous political fix, the bankruptcy and internal volatility will start to transcend domestic politics and manifest itself, as it always has in Europe, in blame-gaming against “them” (pick your foreign bogeyman). Then the question will be not just a common currency but the very viability of the European Union itself, and perhaps of the NATO alliance, such as it is in its present eroding state.

Not since 1940 has Europe found itself so weak and incoherent in comparison to a unified and solvent Germany. And the present disconnect of nations that did most things wrong publicly demonizing Germans for doing most things right — while privately begging them for more bailout cash and guarantees — simply is politically untenable. If this continues, I would not be surprised to see a Mediterranean Franco, Salazar, Mussolini, or Metaxas emerge soon, albeit in pinstripes and with a tasteful villa on the Mediterranean.

The lead-from-behind U.S. is of little or no help. While private consensus grows in Europe that the entitlement state got them into this mess, we in America are racing to embrace the old failed EU paradigm of exploding unfunded entitlements, vast deficits, high taxes, bigger government, and class warfare. And as our first “Pacific president” turns toward Asia, and cuts back on defense, the message is that the U.S. has neither the will nor the resources to offer any financial, military, or political guidance to Europe. We simply are no longer a credible alternative model or a reliable partner for Europe, either materially or financially. In Thursday’s column I will suggest that the long-term political worry may not be the present cheap demonization of Germany — but just how long Germany is going to put up with it.

Hanson is, by training and experience, a historian.  One who can look at the past and see into the future.  And a wise one at that.

Reprinted in full from NRO's The Corner.

Don't cry for me

The EU decides to flex its muscle.

European Union trade chief Karel De Gucht said Monday the bloc will shortly take action against Argentina's government, after its decision to seize control of oil giant Repsol's YPF subsidiary.

"We will soon be moving forward with a response to Argentina's action in the Repsol case, in particular," De Gucht said in a speech during which he complained of a "growing tendency towards protectionism across Latin America."

Argentine President Cristina Kirchner on Friday signed a bill expropriating 51 percent of YPF's stock from Repsol, its majority shareholder, sealing a measure that has roiled the country's trade ties with Europe.

"Argentina has also continued other trade restrictive policies, like its import-licensing regime," De Gucht added.

"And just last week we saw Bolivia take another step towards nationalising utility companies at the expense of a Spanish firm.

"These types of moves are of course a problem for Argentina and Bolivia -- which will find it harder to secure the international investment they need," he underlined.

EU officials have already complained about the "overly broad use" of red tape, notably in the "pre-registration and pre-approval of all imports into Argentina."

Individual states may also suspend WTO-compliant preferential trade status accorded to Buenos Aires.
Spain's Prime Minister Mariano Rajoy said Monday that the seizure will trigger a "tremendous" loss in investor confidence in the country, while other international organisations have also criticised the measure.

Argentina is a delightful country; the OC has visited there several times and loves to feast on Argentine steaks and Malbec wine.  But the people and politicians are some of the most self-destructive in the world.  The nationalist populism of Juan Peron has never left the Argentine psyche, much to its detriment.

It starts with class envy populism, moves on to increasing governmental control and international antagonism.  It then spirals into a cycle of government actions, market responses and further governmental interventions. When it fails, and given its nature it always will, the fault will be blamed on others.  Yankees.  The Spanish.  Whomever.

Eva got out while the going was still good.