As it turns out, Mr. Papandreou's seemingly democratic gesture was more likely a political tactic to lure the opposition conservatives into sharing the political burden of passing the bailout deal. Although many of these conservatives had likely supported the bailout package, they kept their distance due to its extreme unpopularity on the street.
Thank goodness he didn't have ambitions for higher office. The last time we had such ham-handedness in financial matters, Grant was treating Grant & Ward like he treated the rebels at Antietam.
If European governments and the U.S. Congress ceased the practice of giving people what they have not earned, budgets would be more than balanced.
Watching the long slow death of this market has been agonizing. Back in 2009, a friend of mine who heads up research at a very big firm asked me what I thought. I told him the market was crap, but it would go up as long as the government bought it. We looked at some charts from the 1930's. While not a perfect mirror, this market reminds me of that time. We rallied in 2009, 2010, and this year the government stopped buying it.
All the theatrics of meeting after meeting, general pronouncements, and dramatic conference calls can do no more to stop the inevitable than a lifeguard raising their hand trying to stop a tsunami.
Ben Bernanke, Hank Paulson, Tim Geithner, Larry Summers, and a parade of bankers and ex-Goldman employees all said this had to be done to spur lending. It was a lie.
Now that Finland wants collateral for Greek loans, it will do the same if Spain or Portugal needs more loans. Moreover, I keep wondering when the citizens of Spain, Portugal, and Ireland have had enough, given the success of Iceland in telling the ECB, EU and IMF to go to hell.
The question at hand is how much more will governments force down the throats of taxpayers (hoping to bail out the banks and the bondholders) before this mess cracks in pieces. The more politicians force down taxpayer throats, the bigger the eventual repercussions.
The biggest problem for the plunging stock market is coming out of Europe. Fears over the safety and solvency of European government debt and banks are haunting the stock market. I still don’t believe it’s 2008. But yes, like everyone else, I’m worried.
As Greek 2-year debt yields hit 39.15% the bond market finally forced the ECB's hand, and the Trichet group comes out looking foolish, not only on his "we say no to default" stance, even temporary defaults, but also on his ridiculous bluff repeated for the nth time just 2 days ago regarding the acceptance of Greek bonds as collateral.
ECB president Jean-Claude Trichet has been battling Germany, the bond markets, and EU officials over his "No Greek default, not even a soft one" stance. That battle is about ready to come to an inglorious end for Trichet.
Everyone wants something, and they want to take it from someone else to get it. In the US, the SEIU is right at the top of the list in wanting to pick the pockets of everyone else for their own self-serving benefit
So if China won't and the U.K. and Canada can't, who is going to loan us a trillion dollars in the next 12 months? Nobody knows.