European leaders in open revolt against ECB President Jean-Claude Trichet
Financial street gangs (oh, sorry, I of course meant the ECB and leaders of nations) are attacking each other in Europe on whether to continue bailouts to the debtor nations and who should take a haircut on the bonds. Maybe if we’re lucky, they’ll destroy each other.
The ECB wants everyone else to take haircuts, presumably because if the ECB also did, it would be obvious they are insolvent. They took enormous amounts of garbage bonds as collateral for the onerous loans they forced upon countries like Greece. They are pretending the bonds are worth face value, which of course they aren’t. But taking a haircut on them would mean they would have to write down their portfolio.
None of this has anything to do with the financial health of nations. Rather it’s the usual irresponsible (if not criminal) banks now realizing their pretend and extend game is about over and desperately looking for someone else to take the pain.
The bankster class of the debtor nations are of course just as culpable.
Greek Prime Minister George Papandreou is another one who insists there will be no haircuts on Greek Bonds. The reason is Greek pension plans are stuffed to the gills with them.
Tough luck says Finland, the German finance minister, and now the German Parliament. How will that fly with Greek unions and Papandreou.
2 year Greek bonds were yielding 25% earlier this week, which means the market deems them to be junk, extremely risky, with a high possibility of default or a haircut.
The Eurozone debt crisis is growing, obvious, and can no longer be ignored. What were seeing now is just the opening act.
The so called “financial crisis” (gamblers and spivs gone bust) is still with us and will unfold over the next year or so with choas and civil disobedience and a massive scale. Greece, at the moment, has almost daily mass demonstrations in most of its cities, with a general strike planned. Spain has Squares in its large cities uccupied and every other country in Europe has demonstrations and more planned on a unified front. The real pain has still to hit. Will the public allow themselves to be pushed back to the Victorian era of poverty, or will they kick back. Let’s hope they kick back hard.