CRASH 2: Can anyone in the media add value to this shambles any more?

Their word is their Bond. So don’t buy either.

Something of a rhetorical question, as most readers guessed already. These are the dimensions making further comment pointless on the views, plans, strategies, opinions, bollocks and lies permeating the bedlam now built where once stood an interesting place called Europe:

1. Nobody out there is listening

2. Everyone is beginning to panic and/or revert to national type

3. Nobody wants to suffer any pain

4. Almost nobody has any econo-fiscal motives in common with anyone else

5. The bureaucrats are frozen in the headlights

6. The Germans will take their ball home if it isn’t done their way

7. The banks will take their ball home if asked to have too close a haircut

8. The French are already on the way home with their ball

9. It has become an issue from which markets can make money, rather than one of which anyone can make sense

10. The process is unstoppable, because there is no dominant or collective will to stop it.

From here on, The Slog will stick to information significant in the sense of giving a scale and a timing ballpark to the entire mess. If I don’t mention that Spain has been downgraded, Italian borrowing is getting more expensive by the hour, or Herman Van Rompuy has forecast success, it’s not because I’ve nodded off, but because I’m bored with the thousand stickleback nibbles, and only now interested in important events like French default and how it might be handled. And if I don’t know anything that you can’t read somewhere else anyway, I won’t post anything….although if anything amusing occurs to me, I will.

So – for example – today, Trichet has wafted a goodbye swipe at Merkel about bank haircuts, the Greeks have reaffirmed their determination to succeed with debt repayment, Spain has started dropping hints about missing its austerity targets, and Ackermann is already trying to rubbish any attempt to make banks safer, nicer, or more useful. None of this is important, but rather – perm one from these as necessary – lies/fantasy/to be expected/spin/irrelevant/nonsense.

Cut to Mario Draghi caught in flagrante with Adam Werritty.

65 thoughts on “CRASH 2: Can anyone in the media add value to this shambles any more?

  1. “bored with the thousand stickleback nibbles”
    Yes, what essentially we are all waiting for is one good bite! A French default would be that one good bite!


  2. And the dance goes on; it’s becoming really tedious. Now we hear that Berlusconi wins his confidence vote, despite Italy’s downgrading and his impending trial. It’s enough to make you weep.


  3. Don’t know why, John, but a small vignette from long ago replayed itself in my head as I read your post.

    Many years ago I was fortunate enough to work at a zoo. One day I saw three unconnected events from afar: 1) The big male bear was dozing in the sun, his large head propped on his forepaws as he dreamt, no doubt of mountain streams and fresh salmon; 2) A large peacock was balancing on the guard rail in front of the bear enclosure, showing off to a group of peahens who were engaged in the timeless female activity of apparently ignoring him while secretly assessing his potential; 3) A small boy of no more than four summers was engaged in an impassioned monologue which he directed at a pair of exasperated parents who were trying – unsuccessfully – to attach him to a pair of reins. I looked at each of these three and a feeling of dread descended on me … I was too far away to influence matters which, almost immediately, began to unfold as I had foreseen just moments before. The small boy broke away from his parents and ran in staccato fashion along the main path, wailing against fate in general and parents in particular. The peacock, who had just pirouetted uncertainly upon his rail, took fright and launched himself into the air. The bear opened one eye and remained otherwise motionless. The bird flew unerringly and with much honking and flapping directly towards the bear and began to lose altitude. He was committed upon his course however, and the bear, realising this, assessing the possibility of a pre-brekkie snack and coming to a swift decision, reared up in one fluid move and clapped his fore-paws together in a feather-popping bone-splintering crash. Clearly delighted by this unpredictable turn of events viz. feeding times, he settled down and immediately began to break his fast.

    Now why on earth would this come to mind…?


  4. Its a bit like that film with the bloke who painted that Italian building and it took forever. The pope [Cant remember his name either} said, When will there be and end ? The artist said , When it is finished.

    That about sums it all up.


  5. Hi John, another contrary view for you…..Here’s someone from leftfield, who you may be aware of: Jean Gebser, his “major thesis was that the stress and chaos in Europe from 1914 to 1945 were the symptoms of a structure of consciousness that was at the end of its effectiveness, and which heralded the birth of a new form of consciousness.” (Wikipedia).

    This guy left Germany, did Italy, Spain, France then Inddia, Far East, Americas etc….And he is the forerunner of the ideas of people like Ken Wilber. Anyway……

    … one passage of his I have always liked is this (from Verfall und Teilhabe):

    “There is no way in which the much needed changes to the world and to humanity will be achieved by trying to improve either. Those who try to do so are merely using their struggle to improve the world as a way of avoiding improving themselves. They are playing the usual deplorable, if thoroughly human, game of demanding of others what one is too lazy to carry out oneself. Yet such illusory success as they achieve does not absolve them of having betrayed not only the world, but themselves too.”.

    Or, to say it more simply: “look within”.
    (Yes, the sun came up this morning and everything is just perfect :-)


  6. Technology has now developed a better brand of paint for the Forth bridge so that now only needs doing every 25 years I think it was


  7. “The French are already on the way home with their ball”
    The French don’t have a ball of their own, they keep trying to pilfer Germany’s.

    “The Germans will take their ball home if it isn’t done their way”
    The German’s are going to have to pay for it all, so they are going to leave and take their ball whatever happens.

    What will the final trigger be…

    Italian/Spanish Bond yields hitting 6-7% (Berlusconi survived the no confidence vote he is not going anywhere).
    Greece Default (going to happen unless Germany leaves Euro).
    A core default like France, Spain or Italy (no hope of a bailout).
    Eurozone banking collapse (does not matter which bank starts it).
    A country decides enough is enough and walks away voluntarily (not Germany).

    If Germany was to leave it could actually save the Euro, but would cause France to have a diplomatic meltdown.

    Wish it would hurry up and happen…


  8. “Yes, the sun came up this morning and everything is just perfect.”

    Ah Cronshd, you’re doing that bringing a smile to my face thing again. Ta as always, much appreciated.


  9. I wonder what would have transpired in 1914 if events and the actors had been exposed to 24×7 news coverage (and analysis?) and internet blogging?


  10. hhhmmmm yummy yummy.
    Several of those possible triggers look V-E-R-Y attractive :-)

    I’m here, ready, able and willing to help them along!


  11. Probably doing what I am, struggling to stay awake during the gravest economic crisis the world has known. This could just be ‘their’ plan you know. Nah, it couldn’t be, could it?


  12. IIUC your comments, you are saying:

    – trying to change the world is pointless.
    – JW is wrong or lazy by doing so and should focus on changing himself.
    – none of it matters anyway.

    Would that be about right?


  13. This is a beautiful vignette. Thank you.

    Who is the bear?

    And does the little boy get off scot free? — Just rhetorical questions. I realize it’s not an anology.



  14. @OAH: A snippet from Churchill:

    “A socialist state could not afford to suffer opposition – no socialist
    system can be established without a political police.”


  15. Well,I recommend a fortnight in India,terrible roads,power cuts etc,but hotels to die for(the Imperial,Delhi;Oberoi Amarvilas,Agra;Umaid Bhawan Palace,Jodhpur;Leela Palace,Udaipur;and the little Fort Rawla,Narlai.And hurry before MarK’S POLICY OF DEVALUATION AND INFLATION really comes to fruition.The only sensible member of the MPC, an ex, one Dr. Andrew Sentance, says ‘Past experience suggests that continual injection of demand stimulus to counter weak growth leads to persistent inflation and financial instability’. Pace,the UK and Euroland, respectively.Where does this all end?The politicos lose,the markets triumph,more pain for the PIGS,but I bought a dirt cheap little gem (just a few shares, mind) this morning in high tech Gloucestershire.Ken, you should look at it!


  16. …not exactly. I am showing that there are other perspectives out there in the world.

    John and I have exchanged a few emails so I think he knows where I’m coming from. I concur with a good deal of his philosophy (if you want to call it that) and admire and enjoy his analyses (sic).

    I hold the view that my world (and the universe as a whole) is better for the Slog.

    Still, there is a time to look within and see what it is within your ‘shadow’ (Jungian shadow) that you are trying to come to terms with.


  17. Kohl passes the ball to Mitterand, who lets Kohl have the other half of Germany, now Merkel wants the ball back !!! Sarkozy, can’t find it; aaaah! Berlusconi’s kicked it into the crowd, they were already bored, they’ve picked it up and scarpar’d down the pub.

    Thank you Mr Fox. Cameron, get IDS to do a thorough search of your ConLib government to identify the other ticking Weapons of Mass Distraction you have lurking there. Then it’s your job to defuse the WMD’s – if that means surprise resignations for “personal/health/family” reasons, then so be it.

    Pundits predicting Sarkozy gone in 2012 and Merkel in 2013 – by the Right, Left Wheel – Left, Left, Left – out in the cold.

    Another round of Global Warming in Paris – yawn. OWS crowd having a day of rage in Brussels – heard in interview Q “what do you want”, A “to mobilise the people” , Q “to what end”, A “er, well, er, so that their er, mobilised” – Right, we’ll let that one go through to the keeper.


  18. ”Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.” ~ Winston Churchill


  19. … Is it not true that professional politicians are boils on the neck of society that prevent it from turning its head and moving its arms? … After all, politics is not even a science but is an empirical area not susceptible to description by any mathematical apparatus: furthermore, it is an area subject to human egotism and blind passion. – Solzhenitsyn.


  20. Fine. I’m sure many of us have a Jungian Shadow …a repressed or hidden self that was necessary during a working career to avoid scaring the horses (employers/colleagues/customers etc). I’d guess that JW is no different to that and, now he’s a free agent, feels able to give vent to that aspect of his character to expose the cesspit that global society has become under our political elites.


  21. Good egg, Solzhenitsyn. Some of his stuff should be required reading along with Kafka, Orwell, Huxley et al. For example:
    The First Circle
    We Never Make Mistakes


  22. Hi John, Caratacus & Audrey;
    The bear is China – if he can be bothered.
    He may wish to call in his USA debts first

    This might be a time to revisit the French poet Alfred de Musset:
    “Ne pouvons nous, sur cet ocean des vagues
    Jeter l’ancre, un seul jour?”
    Stop the world – I may want to get off!


  23. One of the best little treatises on this subject is “Owning Your Own Shadow: Understanding The Dark Side Of The Psyche” by Robert A. Johnson. I read it years ago and I think of it still.


  24. Got this from FT via DT Crisis Blog…

    Charles Dallara, managing director of the Institute of International Finance, criticised European leaders on Friday for failing to allow the July deal to proceed. He said any greater losses imposed on Greek bondholders could prompt investors to sell the sovereign debt of other eurozone countries, destabilising the single currency.

    “We do not see that a compelling case has been made to reopen the deal,” Mr Dallara told the FT. “A deal is a deal.”

    If investors were to do dump sovereign debt on masse the shit would really hit the fan. Why should investors who believed they were putting their money in a safe place take a bigger hit anyway…

    I must admit asking anyone to take a voluntary hit of 50-60% on an investment has got to be mad (or French).


  25. I have access to the FT and here is a nother snippet from the same artile which should make you laugh (2020 indeed).

    “The IIF’s views has some sympathetic ears within European policy circles, particularly at the ECB, which earlier this week warned that any further haircuts could “put at risk the financial stability of the single currency as a whole”.

    Mr Dallara said the IIF calculates the July deal still has the potential to decrease Greece’s debt load significantly, from about 155 per cent of gross domestic product today to 97 per cent in *2020*.

    He said that if the plan was given time to work it, along with Greek commitments to get to a primary budget surplus next year and to sell off €50bn in state assets, could restore market confidence in the eurozone’s ability to tackle the crisis.”

    Greece will still be at 97% Debt to GDP ratio by 2020 what a joke…


  26. I hadn’t considered the risk of a rout in e-zone sovereign bonds before, but even a 21% haircut might make a lot of investors very dubious in the future and demand higher coupons. That would undermine borrowing by the e-zone for a long time.


  27. The July deal was for a 21 percent haircut for the private sector lenders, nothing for any state lenders.

    Charles Dallara is a bright operator but as Managing Director of the IIF he works for the banks. His Chairman is Josef Ackermann, head of Deutsche Bank. What you are hearing is the institutional voice of the German and French banks from a supposedly independent source. usual smoke and mirrors.


  28. John, totally Off Topic. Whilst your pondering what new twist and turn is gonna happen in the EU, this article by Charles Moore in yesterday’s DT is about our unelected and unaccountable Civil Service on the Fox resignation. It confirms much of what you’ve been saying for a long time:

    A coupla snippets from it:
    “…it is the bureaucrats, not the public interest, who will do well out of this fiasco. By our constitution, ministers are supposed to be in charge of them. Nowadays, empowered to investigate their own ministers, the civil servants are in charge of their masters’ conduct. They will make sure that Dr Fox’s successor has even less political freedom to operate than he did.”

    “Now that Dr Fox has gone, watch as the emboldened established powers [Civil Servants] turn their fire on Mr Gove – or on whichever secretary of state is trying most actively to take power from the bureaucracy which has misruled us for so long.”


  29. Thanks OAH. I understand now why Dallara is keen on 21%. Even though it will only achieve the amazing goal of reducing Debt to GDP ratio to 97% by 2020, it will reduce losses taken by the banks.


  30. My ‘prescient view’ that the IMF would be the prime mover in the solution appears to be dead in the water as the US and UK have already stated they are against such a solution (that lasted a few hours).

    So much for my forecasting career!

    But I do grow ever more worried with the UK’s attitude as their is an ever greater whiff of hubris about it.

    However, the UK is getting ever more isolated and yet is on life support from ‘foreign hot money’.

    Just look at the national debt, annual deficit and structural trade deficit we need johnny foreigner and friends, and the US maybe a friend but has no money to spare (not even a dime for a buddy).


  31. Alter Goman
    Britain’s problems are being obscured by what you describe a hot money. It is a very interesting contrast to the problems in the EU – many of which to me seem manufactured by forces out to make money from other people’s unhappiness.

    Britain could do a lot better in exporting – her lack of understanding for her nearest neighbours is breathtaking. It is also unwise: there are rich export markets for products that have real quality. Remember that there is still enough money to keep high-class bespoke tailors in business in cities smaller than Bristol (but with the wealth of Manchester).

    Nobody is ever able to make 100% forecasts. Not even our precious elites.


  32. The IMF may not turn out to be the prime mover but according to the news reports they are certainly intended to play a major role.
    See my post above about BRIC countries preparing to pour money into it to increase its available funding by $350 billion as part of the overall solution.


  33. John,
    I think the truth is that you are getting out of your depth and your pseudo contacts cannot help you any more. Hence the hiatus; until it gets so crazy again that anyone can comment behind the cover of “contacts”.


  34. BT
    thankyou. I am really worried that more money is going to be poured onto this mess. It is like pouring water onto my soil. None of it stays there because the soil is so poor, and it will take years to make it better.


  35. More bad news – the FTSE only up by 1.17% yesterday.
    Coming on top of the mediocre c10% increase over the last two weeks, should we be concerned?


  36. The politicians got out of their depth about 12 months ago. Why else do you think they’re running around like headless chickens, coming up with ever more incomprehensibe solutions to a problem of their own making?


  37. BT
    You are confusing issues here.

    On the one hand you have democratically elected politicians. On the other hand you have private institutions such as the ratings agencies and banks. Then to cap it all you have the EU commission and the ECB. (Okay, you need a foot for that as well, but I was never one to be satisfied with keeping things simple).

    You say that the politicians got out of their depth – who took them to this point, as it was pretty certainly not of their doing. It is the likes of the EU that are at the root: why? Because it has an agenda and it will not allow details like a country’s needs to interfere with this.

    Is it any wonder that the politicians cannot agree? The EU needs what no two countries can give together – or apart. Its very manner of dealing with problems is divisive, because it employs analytical methods not synthetical methods of thinking. The EU will never find solutions as long as it keeps unravelling the problems instead of looking at the whole picture.


  38. Gemma

    I follow JWs blog for 3 months now and can tell that together with BT you are creating some sparks.
    Having said that it is these sparks that add flavour and spice to JWs blogs. Integrity and fairplay are evident to these bloggs too. Which is fantastic in these days..
    Although I am a hard working (75hrs pw / true slave) person this blog should be elicited to a forum.
    Looks that politicos and bankers are on a sliding slope. They don’t have the heart to do it for their people (too cosy and dependent). They are putting a great fight against those that are volunteering theirselves to do it for them (check yesterday’s events)
    Question is where from here?
    JWs blogs have managed to engage great many responsible and intelligent citizens. Amongst this pull of intellect they must be people that are fed up with Analysis Paralisis and begin to realise that it’s time for us to do something. That something should not give any excuse to the current system to perceive it reckless. At the moment any genuine worrying person that questions the system is perceived as a threat. Words fail me to articulate comprehension of the depth and breadth of the problem.
    Would love to know how honest responsible citizens can get to ensure some human standards of leaving and a good environment (social & physical) for the next generation to build on.
    Carry on expressing yourself with vigour and conviction maybe someone of us will get to see and feedback a hidden side which can happen to be the path to a happier state.


  39. @Gemma: regarding my previous post, responding to erika…

    The short answer: If the pols have not lost control of this debt mess, how is it that after 18-24 months they still haven’t sorted it out?
    It is very serious. No?
    Further, they must have lost control for it to have happened in the first place, unless one believes excess borrowing was a deliberate plan.

    The longer answer: There are numerous players in this game of pass the parcel (the parcel contains huge sovereign debts across the e-zone).
    And if you take Greece for example, it was their politicians who borrowed too much, to satisfy their own political/power agendas. The banks and other investors were conduits for this borowing but reasonably assumed that the matter was under EU/ECB control. After all, the EU has rules about sovereign borrowing, and they wouldn’t break their own rules. Would they?

    Now it’s all gone south, Greece and Portugal et al are living on EU Welfare and EU politicians (= EU taxpayers) collectively are expected to pay for it. But they have been struggling to do so for 18-24 months.
    Why is that? It’s because when anybody takes a look at the huge sums involved, they all run for the trees and resort to their national interests. Most of those with debts want a solution which essentially socialises the debts, backstopped by EU taxpayers.


  40. Daniel Hannan’s blog on Saturday clarified the banking/sovereign debt mess quite a bit.

    In his own words:
    “…what has taken place since 2008 is anything but capitalism. In a capitalist system, incompetent banks would have been allowed to fail, their profitable operations sold on to their competitors. Shareholders, bondholders and some depositors would have lost money, but taxpayers would not have contributed a penny.”

    The cost to taxpayers of allowing the banks to fail and govt then activating its Deposit Protection Scheme would almost certainly have been £billions less than bailing them out and would have taught them a serious lesson.

    But as we know, in the run up to a general election, Gordon Brown couldn’t bear to see TV footage of lines of people outside banks withdrawing their money, so he stepped in with hundreds of £billions of taxpayers’s money to bail them out. That not only left Britain with massive sovereign debts but also created a future expectation in the banks that the taxpayer will always be the bailer-out of last resort.

    We now see hoards of socialists and other assorted anti-capitalists and malcontents occupying The City and elsewhere to vent their anger against capitalism. But as Hannan rightly points out, the problem is not with capitalism, but socialism. But we can’t expect the uniformed demonstrators to blame their beloved socialist Brown for the Welfare cuts we now see.


  41. BT
    You make a very interesting point, but would the Americans even allow one to utter the word “socialism” without it having a seriously negative overtone. It was after all a right-wing president that undertook the bail outs.

    Other than that, your argument is watertight. It would also have settled a lot of problems that the politicians are now trying to face (or outface?)

    I will remind you that it was an American President that relaxed the regulations on lending in the first place. Without that the banks would have been less merry with their lending.

    In some ways it is a circular argument: the government allows stupid lending (ECB and EU included here) the banks make foolish loans and when these fail ask the government for help. Said government steps in and gives them a great deal of money.

    But I will re-iterate: Greece was a basket case in 1998. How is it that the markets and agencies have only woken up to the fact now. Are they too playing to a tune off-stage?


  42. To be honest I’m not sure what Bush was. I always saw him as an enigma.
    I know many people refer to him as right-wing but his foreign policy was largely dictated by the Neocons who were mostly Jewish ex-Democrats and one or two were followers of Leo Strauss. The relaxation of banking oversight was carried out by the banking regulatory body (name escapes me) and they were under the control of Greenspan afaik. Poulson was in charge of TARP…he’s an ex-Goldman Sachs banker. It’s difficult to pinpoint any policies that Bush formulated himself, except to be POTUS.

    On Greece, I guess it’s blown up recently because it looked like they were running out of money to pay debts. Someone blew the whistle.

    Dan Hannan is possibly a future leader of the Brit Conservative Party when it realises that an Establishment stooge like Cameron has failed.


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