When the big boxes of money arrived in Libya yesterday, I bet that there were several European states who were slavering and wishing that someone would send them a box too!
Especially Greece. Plus other states who don’t really want to admit it!
Greece has been back to the well for another 109 billion Euro bailout. That bailout could well be the last one because the well is now well and truly dry.
Even quiet and up-to-now compliant Finland is becoming a little bit fractious and will not contribute any more money to the bottomless pit that is Greece without a Charge on Greek assets. The Finns want collateral – and who can blame them?
The German electorate and many politicians are also beginning to voice their displeasure at having to hand over vast volumes of cash to the Greeks, no doubt followed by others.
Quite rightly, German Chancellor Angela Merkel insists she won’t be “blackmailed” into backing Eurobonds and the Germans have every reason to be worried! If they put their national balance sheet at risk just to support countries like Greece and Ireland, Germany’s borrowing costs would be driven up by an unsustainable additional 50 billion euros!
The simmering Eurocrisis could explode at virtually any moment because the politicians’ “Let’s wait and see” tactics have failed.
That is what sent European bank stocks lower today. They tanked!
The other day, Warren Buffett threw $5 billion at “near-death” Bank of America. In spite of Warren’s munificence, the bank has now been asked to sort out any potential problems. The bank’s fire sale continues with them now trying to offload their non-profitmaking Countrywide lending unit.
Does the Fed know something that we don’t?
America and Europe do NOT have a liquidity crisis! It is a MAJOR SOLVENCY problem.
Banks do not have enough capital to absorb losses on all the European sovereign debts that they are now loaded down with.
Pan-Western bank failures are now inevitable!!
The politicians? They will be doing what they do best.
Observing, having meetings and telling us not to worry.
p.s Sorry of this post does not make total sense. It was typed in a hot un-airconditioned dump on a Blackberry and then emailed for tarting up. But hopefully, you get the gist.