Wonder Twin powers activate!
Wonder Twin powers activate! Form of a money printing press, shape of a distributor of all that money. http://www.timbeaux.com/wp-content/uploads/wonder_twins1.jpg. The DJ is reporting “A proposal that the IMF could call on the ECB to lend it money so it can finance bailouts for euro zone governments threatened with insolvency is gaining traction and if all parties agree, a deal could be announced at the Dec 9th European Union summit, two people with direct knowledge of the matter said.” The story went on to say the Germans and the ECB are “still opposed to the idea but with no other viable alternatives talks could start soon.” The S&P futures went straight up and European bond yields came off their highs on the story and we’ll see where this goes. Spain’s 10 yr however did come within 12 bps of 7% earlier and is still above 6.75% ahead of elections on Sunday. At the end of the day, while the ECB may decide to get more aggressive and the IMF may step up with greater resources, its still a story of just buying time and Italy, Spain and others must still liberalize their economies and spend less.
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November 18th, 2011 at 9:07 am
That’s kind of what I just said in the prior post. If the IMF wants to act as agent, OK by me providing they perform strict due diligence and not issue a dime in support until the debt addicted countries fix themselves and come up with a believable repayment plan for the IMF. It would be stupid beyond stupid just to start writing checks out … much like loaning money to a well dressed and perfectly presented crack addict for the purpose of buying more crack.
November 18th, 2011 at 11:23 am
dead hobo – Isn’t that what they’ve been doing for years now?
November 18th, 2011 at 12:32 pm
Uh. I have no idea what PV is saying. And, what can the meaning of the first sentence possibly be? And, the link is broken.
I think I’ll move on now..
November 19th, 2011 at 8:00 am
HarleyHoward Says:
November 18th, 2011 at 11:23 am
dead hobo – Isn’t that what they’ve been doing for years now?
reply:
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Borrowing and spending responsibly … no (europe and US)
borrowing and spending like a crack addict who wants to buy more crack … You nailed it.
A long term plan managed by the IMF and financed by the ECB makes sense IF and only IF the PIGS legislate competent fiscal management and follow through. Repayment in full of ECB funds must be a part of it, even if it takes 50 years and the payments must be regular and substantial. It’s a tall order since the players here are so irresponsible, but it is very workable.