Sunday, May 09, 2010
Like Everybody Else
Arab markets are open already, and aren't doing well. We're waiting for Godot. A very anxious weekend.
PS: If the ECB won't buy bonds and if the debt of some of these countries isn't going to be restructured, what good is any of this going to do?
Yeah, the richer governments can establish a fund to do it, but if the money they throw into that fund in the form of loans is going to be used to buy bonds which the private market believes will bust, then they are spreading debt across nations, which logically means that say, the German Bund goes down. And there aren't that many truly solvent European nations in the large economies. Both Italy and France have pretty high debt/GDP ratios.
You have got to believe that these will be rough elections for Merkel. The Germans are distraught, for good reason.
Update: I think this is a link that will show the conference.
What the German public doesn't realize is that if they don't bail out the PIGS, they'll have to bail out the German banks instead.
Paul Krugman actually does a reasonable job of explaining this:
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