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-- Posted Wednesday, 10 February 2010 | Digg This Article | | Source: GoldSeek.com
Rick’s Picks Wednesday, February 10, 2009 “Phenomenally accurate forecasts”
The terms of Germany’s proposed bailout of Greece were sketchy at press time, but you can bet that the sums involved will not be covered with hard cash. Rather, it is “financial guarantees” that will be used to shore up Greece’s finances, much the way the more nebulous “guarantees” of the U.S. Government have come to buttress practically every piece of worthless paper held by an American bank. Not surprisingly, the EU bureaucrats are spinning this fraud exactly the way Tim Geithner would have: "As long as it is very clear that any support only comes with very, very stringent conditions attached, it would not affect the moral-hazard question," said Fabian Zuleeg, chief economist at the European Policy Centre, a Brussels think-tank. Before Mr. Zuleeg came along, we might have thought it was only Mr. Obama’s economic spinmeisters who took their audience for imbeciles. Stock markets around the world rallied ebulliently on Tuesday, even as a credulous press rolled out a story with only vague concerns about how the bailout of Greece would be perceived by such other potential wards of the EU as Spain and Portugal, as well as by Eastern bloc nations that were forced to get in line at the IMF when their backs were up against the wall last year. But if such questions worried global investors, they didn’t show it. In fact, they greeted the news the same way they do whenever some new, trillion-dollar claim is piled on the dollar – i.e., they bought euros hand-over-fist, treating the currency as though it was as good as gold.
Germany’s Burden
The rescue package is being sold as an EU effort, but in reality it is almost entirely Germany’s burden, since Germany is the only member of the EU that is perceived as being able to write a very large check that won’t bounce. But if Germany’s own banks should falter anew, requiring the kind of bailout shenanigans that have kept America’s make-believe financial system afloat, the fallout will redound to the serious detriment of the euro if not its demise. In the meantime, equity shares around the world have been spared a confrontation with reality by short-covering bears. As is the case with nearly all rallies these days, it was mostly over before the NYSE opened Tuesday morning. Index futures had rallied all night into paper-thin volume, presenting bears with a harsh choice at dawn: bite the bullet now, or risk annihilation trying to oppose the madness. In the end, they went along with the absurd fiction that Greece, and therefore Europe, had somehow been “saved.” *** Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. There is a substantial risk of loss in futures and option trading, and even experts can, and sometimes do, lose their proverbial shirts. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2010, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Wednesday, 10 February 2010 | Digg This Article | Source: GoldSeek.com
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