Doug Kass points out this “comprehensive checklist of the eurozone challenges” from Omega Advisors (and former Goldman Sachs strategist) Steve Einhorn. As Doug notes, “it is a template upon which we can all monitor and measure ‘the progress of eurozone governments/ECB/IMF in addressing the challenge…. It will help us understand whether the problems in the EU are being adequately addressed and whether these problems bring manageable corrections in risk markets or outcomes that are more severe.’ ”
Eurozone Checklist:
-Merkel backs away from pure austerity to a balance of austerity and pro-growth policies.
-Germany accepts higher wage/consumer inflation so as to increase the relative competitiveness of weak peripherals.
-Euro bonds are approved by a means of joint Euro zone financing, including joint liability of Euro zone countries.
-The EFSF/ESM provide funds directly for bank recapitalizations.
-ESM is granted a bank charter and gets unlimited access to ECB liquidity.
-A U.S.-like FDIC program is introduced for Euro zone bank deposits.
-The ECB cuts its target rate by 25 to 50 basis points in June or July and reintroduces the Security Markets Program.
-Greek elections on June 17 bring a pro Troika coalition.
-Labor reform begins.
-There is increased fiscal integration including heightened monitoring of eurozone deficits, spending, and movement toward tax harmonization.Steve Einhorn, vice chairman of Omega Advisors
Doug adds “Each one of these can and should be monitored by us to assess eurozone progress.”
Interesting approach to the turmoil in the EU . . .
Category: Markets
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
What does he mean by labour reform?
Who controls the (value of) money?
What purpose controlling the (value of) money?
-The EFSF/ESM provide funds directly for bank recapitalizations.
-A U.S.-like FDIC program is introduced for Euro zone bank deposits.
He means put the ECB on the hook rather than the peripheral governments for the insanity of the money flows, and bubbles. A bit late I think they should have figured thos out from the start, unless they had other motives.
-ESM is granted a bank charter and gets unlimited access to ECB liquidity.
In the US the legislature has abdicated controlling the (value of) money to the federal reserve (banksters), in EU who answers for the value of money?
How would a US of Europe look?
Wow, that’s an ambitious list! Does anyone think they can accomplish more than 2 or 3 of these items by the end of summer?
EPIC FAIL Doug. TPTB will try but hopefully the EUR is collapsed. Why on earth would Germans agree to Euro bonds?! Lunacy.
Eurozone Checklist:
-Merkel backs away from pure austerity to a balance of austerity and pro-growth policies.
-Germany accepts higher wage/consumer inflation so as to increase the relative competitiveness of weak peripherals.
-Euro bonds are approved by a means of joint Euro zone financing, including joint liability of Euro zone countries.
…
-There is increased fiscal integration including heightened monitoring of eurozone deficits, spending, and movement toward tax harmonization.
-> ECB adopts FED unlimited “printing press” —- Priceless ….
I disagree with this list, but it would take a discourse of blog-entry proportions to explain why. I agree that they probably need to go full fiscal union or go home, but that is not going to happen. I also find it shocking that suggesting an American-type response to the banking/liquidity crisis passes for sound policy.
I think that this fails to absorb the lessons of recent events for mainstream economics, for one thing, and misses the boat on Greece. Reelecting toadies to the Troika is not progress, not after what they’ve been through. I’m as horrified by Golden Dawn as the next person, but if they are a democracy, they have a right to reassess where they are and who got them here.
The problem is as layered as a muffaletta, and what you think needs to be done depends on the layer you look at most closely — I’ll grant that. But I consider this list myopic and overly focused on the primacy of banks and capital.
WOOHOO
big 100% bank bailouts from a buyside stooge
INSTEAD
take all the trillions that will cost and spread it around
with tax cuts and good programs–for europe better make that mostly tax cuts.
if you go with complete bank bailout how much consumption do you thind a big bank bondholder thats gets hammered will cut back?? not much
if old banks are wiped out good
ill be delighted to start a bank in europe on those terms
just like i would in US– nobodies allowed right now
solve the currency over val prob for greece and others with temporary export subsidies n tarriffs
an agreed decent rescheduling package
debtor austerity with maximum output? minimum consumption and the remainder for DEBT SERVICE
including for greece an immediate 20% govt salary cut
Creditors eat the rest as they logically should
theres 25% unemployment and skyrocketing in Greece and spain–depression looming
do the right thing for a change
and get off the stage loser STOOGE bailout experts
GET OFF THE STAGE!!!
and clean up accounting and otherwise get securitization restarted.. thats the key source of the collapse AND the stall right now
i wont say greece has been a good debtor or offered any austerity. but what they have been offered is a complete pile of shit. Greece is a pimple anyway. Its brokebank mountain over there.
This garbage leave no bondholder rescue proposal
is exactly what jamie Dimon had positioned himself for???
too bad he couldnt wait it out?
RE: A U.S.-like FDIC program is introduced for Euro zone bank deposits.
I think European directive 2002/87/EC requires, already, some equivalent.
As to whether an FDIC/FSLIC agency/program could cope with a country-wide (no pun intended) failure is anybody’s guess.
What exactly is ” a balance of austerity and pro-growth policies.”? Let me guess, destroy the social safety net and give more taxpayer money to the banksters.
Equally meaning less is the phrase :”pro Troika coalition” – they will just pay lip service to austerity while continuing to funnel money to their cronies, just as they have for decades.
Meanwhile, China is slowly circling the drain as will become obvious soon enough. Is Japan far behind.
On the bright side: With a Romney presidency deficit spending will be renamed “pro-growth policies” as the deficit hawks return to their caves. Morning in America!
[...] members to get on with it. Apparently they are arguing too much. Who knew? Personally I prefer Einhorn’s Endgame analysis (h/t to A Dash of [...]