The Trichet Crash
I nominate Thursday’s stock-market crash to be titled “The Trichet Crash” after European Central Bank president Jean-Claude Trichet. Yesterday morning, he announced that the ECB would fiddle while Europe burned. I predicted that this would happen a month ago when I wrote:
Is Greece Lehman All Over Again? This Greece situation is starting to remind me of the Lehman collapse. Remember that one weekend in 2008 when all the powers-that-be met in New York to fix the problem? Remember all those rich guys in limos coming to save the day? And instead they blew up the whole world? Who knew that the powers-that-be were in reality a Confederacy of Dunces, right? Well, these euro dunces aint got nothin’ on our dunces. I am entirely confident that I should have no confidence whatsoever in them, and I wouldn’t be the least bit surprised to see Greece default and blow up the EUD (European Union of Dunces).
And kudos to Ambrose Evans-Pritchard for getting the European situation exactly right. He is now must-reading and you can find a list of his columns on this page. Here is a quote from his latest column:
“Governor Trichet came very close to saying that the current mess is not the ECB’s problem,” said Lars Rasmussen from Danske Banke.
What Trichet did was appalling. When the US Congress voted down the TARP and crashed the market, it was merely due to petty infighting. But these Euros! They are insane! Look at German Chancellor Angela Merkal literally declaring war on the financial industry (also from AEP’s latest):
“First the banks failed, forcing states to carry out rescue operations. They plunged the global economy over the precipice and we had to launch recovery packages, which increased our debts, and now they are speculating against these debts. That is very treacherous,” she said. “Governments must regain supremacy. It is a fight against the markets and I am determined to win this fight”.
Can you imagine? Even if all of that were true, is now really a good time to issue the declaration of war?
All capital should immediately flee the EU and pour into the USA. We are so much less incompetent than the zeros that words can’t even describe it.
On a lighter note: Last week on his CNBC TV show, Larry Kudlow said many times: “Greece isn’t my problem” meaning that it was not material to the USA’s markets. That’s a small glimpse into the competency of the elite that rules this nation.