Here is the latest piece of Fantasyland thinking as reported by the following Bloomberg headline.
*EU MAY DROP 500 BILLION-EURO CEILING ON BAILOUT FUNDS
2011-10-20 17:45:07.290 GMT
STORY TO FOLLOW.
No Story, Just Imagination
Regardless of what follows from Hertling, the “story” is pure imagination.
Steen Jakobsen, chief economist at Saxo Bank in Denmark, sent that news headline along with his comments as follows:
It’s very important for me to stress all these headlines are pure imagination.
The facts remains:
- German Constitutional ruling plus EFSF vote in German Parliament makes it impossible for Germany to go ahead with any solutions which means bigger, permanent or increased liabilities.
- Furthermore the last 24 hrs has proved that ALL German agreement is subject to later approval by German Parliamentary finance committee
- Two summits are needed now, an EU summit then an internal German one, making it harder and less likely to succeed.
The latest rumors and leaks are all part of extend-and-pretend. All solutions will be back loaded with actions taken in 2012 and 2014 rather than here and now.
Time is up, but the next 48 hrs will give us plenty of leaks and management of expectations via PR.
The conclusion however, remains the same: The EU was given a rope – it decided to use it for hanging itself and not to tie down the rudderless ship.
Mike “Mish” Shedlock
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