Tell me: is there a decent hero on the planet?
Market control in a supposedly neoliberal world, fortunate glitches in a nervous Stock market, and bullying hypocrisy from the squandered marbles army. There is little or nothing worth saving in any of it.
The Shanghai index’s collapse was ‘stemmed’ during Asian trading earlier today. Much relief all round, but there are two reasons not to be joyful about it: first, the market is still around 55% higher than it was a year ago, when the property market collapse pulled novices into stocks…so logic would suggest it has further to fall; and second, it is not market sentiment that has stopped the rot, but more draconian Beijing regulation. 50% of all China stocks are now suspended, and yesterday the government ordered a blanket ban on anyone with more than 5% of a company’s stocks from selling for the next six months.
So this is not a rally, it’s a dam. In the US yesterday, a glitch came to the rescue of NYSE traders already nervous and gloomy. Nobody I spoke to believed the hiccup was either accidental or satisfactorily explained.
“There’s definitely an issue if we see a further correction in the Chinese stock market,” said Russ Koesterich, BlackRock’s chief investment strategist, but then he added a tell-tale bit right at the end about the EU (my italics): “Greece is going to be a negative in the short term. If you don’t see a deal on Sunday, you’re going to see a negative knee-jerk reaction on Monday. I don’t think a ‘Grexit’ is priced in,” he said. However, he did not see Greece as a major problem for the market longer term, “since Europe is backstopped by the European Central Bank.”
In recent days, more and more people with their brain functions intact are starting to gen up on the real Greek debt canvas that’s been gradually painted over since 2009 by ham-fisted cover-up artists called Draghi, Schäuble, Dijesslbleom, Schulz, Samaras et al. I’d refer those who missed it to the Daniel Hannan demolition job The Slog performed on June 17th this year in relation to his woeful ‘analysis’ of Greek debt and surplus, because Point 4 therein is an important reality that the daubing history-changers would prefer you didn’t perceive. This is that the ECB could this afternoon write off two-thirds of the entire Greek debt without any harm or cost to anyone anywhere at any future time.
A central bank configured like the ECB can put a zillion quadrillion Swiss francs of debt into its ‘negative assets’ column and forget about it, because the ECB cannot go bust. The surreal accounting system behind the euro ensures that the Central Bank can be blown up by a direct nuclear hit, but its viability as a financial institution will remain intact. The markets and the first Troika were perfectly well aware of this, as are the hypocrites working forTroika2.
The Greek debt is not being forgiven for a number of reasons – lending market dislike of written-off debt, fears about default contagion, a German determination to contain all resistance contagion, and a continuing belief that the euro’s cadaver is not dead, it is simply resting. That’s it: there is no fiscal or economic logic to any of it. Club Med is being destroyed by austerity to show the markets that European debt will be repaid come what may – even if the entire region has to starve and degenerate into Civil War in order to achieve that goal….a goal that is mathematically unachievable anyway. The situation really is that surreal, and its practitioners that profoundly deranged.
Degrading and depriving millions of EU citizens for the sake of a fiat currency with no Sovereignty to guarantee it, and no way to opt out of it – because it was designed by hubris-fuelled idiots keen to offset any and all responsibility for unsound fiscal governance.
That’s what we are looking at here: a policy that is blatantly unconstitutional under the Rome and Lisbon treaties, and one that demands the bill be paid by the waiters, not the troughing borrowers. In exactly the same wicked and lawless manner, the Berlin FinMin is now lobbying for any failed Greek banks to be the subject of bailins whereby entirely innocent citizens will lose such savings as they have left…precisely as Cypriot citizens and foreign retirees lost theirs. For Mr Dijesslbleom has his template, and that template must be used.
Meanwhile, the odiously irresponsible Troika1 lenders got away with their margins largely intact from the early stages of this ripoff – because they either sold on their investments to vultures, or the vultures themselves paid 10cents on the Dollar and received only a 40% haircut. Goldman Sachs (which conspired with the original right wing Greek government to deceive Brussels about the scale of the debt they were busy selling to the fat cats) in turn has never been brought to book for that heinous crime.
So to sum up, the German position as of last night was a flat refusal to accept any devaluation of a debt that can never be repaid, but which could be largely vapourised by one push of an electronic button. Some call this intransigence; I call it insanity…the insanity of fanatics who refuse to accept defeat. The same mentality, if you will, as those SS officers who – with the Russians two streets away from the Reichschancellery in 1945 – walked around calmly shooting any citizen unwilling to resist the Soviet advance.
Francois Hollande – the Socialist President of France – and his FinMin Muscovici have now fallen in with the eurogroupe Schützstaffel tendency… fully aware of the fact that France played a central lobbying role in designing and then exploiting the irresponsible nature of the euro’s format: since EMU came into being, the French have failed to hit a single deficit target they were set by the Commission. No bat-pummelling for the French, though: bullies, after all, never take on anyone approaching their own size.
There remain for me this morning three other targets for ire. First, Tsipras – for offering to continue with a 3-year bailout. That’s not so much a red line as a red rag to all those tired and tortured bulls who voted for Syriza in January. Second, the European Parliament, whose behaviour towards Tsipras was horribly reminiscent of Mussolini’s fascists shouting down Haile Selassie’s speech to the League in 1936. And finally, a disgraceful British Labour Party too ideologically constipated and europhile to align itself with the People.
‘Forward with the People’ a famous Labour paper used to say. What a truly reticent, flappy-bottomed shower of pampered fluffies they are.