Monday, August 08, 2011

Of the World's Mature Economies, The US is Still the Leper with the Most Fingers

José Manuel Barroso, the head of the European Commission, underlined the anxiety gripping the continent when he acknowleged: "The tensions in bond markets reflect a growing concern among investors about the systemic capacity of the euro area to respond to the evolving crisis."
Europe's economic minor league, the marginal fringe economies, having spent the past two years threatening civilization with cascading defaults, are exhibiting more weakness than ever. The press tries to cast this gross failure in terms of a "strain on leadership".

I suppose that's true, but it isn't the cause. It's just a sign that everything they do is seen solely through the prism of the political power of its' leaders. Frankly, they look like a bunch of bulldogs fighting in a gunny sack. Typical of that tone:
In a parliamentary speech delayed until after the market close, Silvio Berlusconi, Italy's prime minister, blamed the recent spike in its borrowing costs on factors beyond Rome's control.
Want to see how bubbles are made? When the financial world flocks to shelter in forex and singles out the Swiss Franc, one wonders how there could ever be enough volume there to support it. The notion of trading their goods and currency with other people's monopoly money has even lead those Knights Templar of finance to join everyone else in debasing their currency.
Switzerland's central bank made a surprise attempt to halt the rise in value of the franc on Wednesday, arguing the popular haven asset was "massively overvalued", but the initial impact of the move faded as the day wore on.
The Swiss National Bank cut target interest rates to "as close to zero as possible" and said it would inject SFr50bn in liquidity in coming days as it tried to halt the franc's relentless appreciation against both the dollar and euro.
Even the Swiss, the most notorious opportunists in the world of glow-ball finance are QEing, if you can believe it.