Wednesday, August 10, 2011
The Eye Problem
FYI, I have been vaccinated against measles. Twice. The early vaccines that were given when I was youngster weren't very effective, and after my older brother got measles in college, I was dragged off for another shot. However it may not have worked because I was being treated with steroids at the time.
I did not realize it was measles until after I developed the rather distinctive rash. After a spate of googling, I discovered that I darned sure wasn't the first in this area. Apparently there's a European measles epidemic and they conveyed it here in the spring.
Anyway, I'm resting, because I was getting better before I decided to split wood in very hot weather and mow the lawn. Apparently this sort of activity is not a cure for measles, although I have found it works for some other viruses. It turns out, as was explained to me by a very disgusted doctor, that you should rest. That's the cure for measles. Who'd a thunk? It's a real pity that I don't apply some of the excellent advice I gave to Gordon to myself. I still claim that the GDP release would scarify anyone's eyeballs, though.
In other news, the European containment is spreading. France now has a touch of the Greek Grippe and the Italian Fever. The ground is very close indeed. ECB is supposed to be making unlimited money available to banks, which should help matters somewhat. Call it supportive therapy.
From here there are two possible outcomes. Either Germany coughs up and impairs its own credit, which would be really stupid ( although not as stupid as trying to treat measles with very vigorous sustained exercise in very hot weather ) or there's just a money dump to keep the banks afloat and some sort of deal to restructure sovereign debt in multiple European countries is developed.
I have no idea what the Europeans will do, but Mr. Market has caught up to them and the fundamentals just aren't there to BS their way through this. The problem is really that France can't afford to risk incurring more debt for bailing out any other countries. On its own it is quite plausible that it can tighten down and work its way through this. It cannot put money into rescuing other countries, however.
The ratings firms are trying, but it isn't going to work.
AGENCE FRANCE TRÉSOR
But again, if the theory is that EFSF is going to bail out Italy, they are not. The bottom line is that neither Germany nor France can assume all the debt that would be required.
That's why French credit swaps are picking up so much.
Also there is some debt not shown in that graph, but France truly is trying to control its spending and grow its economy more.
Also France is going to get a little relative pickup due to Germany's energy problems. The French economy did very well in the 70s due to cheap nuclear power and it is an asset now.
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