Ten Days to a EuroZone Collapse?

November 28th, 2011

So says a piece in the Financial Times, here excerpted from behind the paywall.

Things are moving very fast indeed on the Euro front:

  • U.S. banks stop lending to European governments. While this is good news, the possibility that the Fed may rescue Europe is very, very bad news. Our own life raft is barely treading water, and now liberals want us to invite a dying elephant to climb aboard.
  • And not the Fed, then the IMF, which America also funds to a large extent.
  • This article from Der Spiegel is a good roundup on consensus wisdom, which boils down to the rest of Europe wondering why Angela Merkel won’t just give in and pay their bills.
  • There’s word she might even do it, but only if she can get France, Finland, the Netherlands, Luxembourg and Austria to join Germany in issuing “elite” Eurobonds. I mean, what’s another trillion in taxpayer equity flushed down the toilet in comparison to the beautiful dream of European integration?
  • Even Poland wants Germany to take a more active role, something that has not traditionally brought Poland tidings of comfort and joy.
  • Daniel Hannan at NRO provides a nice summary of the state of play:

    From the beginning, the Brussels elites made it clear that, to adapt Abraham Lincoln, their paramount object was to save the Union. Never mind if that meant imposing epochal poverty and emigration on the southern members, and unprecedented tax rises on the northern. Never mind if it meant toppling the elected prime ministers of Italy and Greece and replacing them with Eurocrats (respectively a former European Commissioner and a former vice president of the European Central Bank — two perfect specimens of the people who caused the crisis in the first place). They were prepared to pay any price to keep the euro together — or, more precisely, to expect their peoples to pay, since EU employees are generally exempt from national taxation.

  • How expensive will a Euro bank bailout be? Keep in mind that at one point during the 2008 meltdown, Morgan Stanley owed Uncle Sam $107 billion. With a B. For one bank.
  • In the mid-1990s, Bulgaria got a good look at a currency meltdown first-hand. They only recovered by adopting a currency board for the Lev (which is exactly what Steve H. Hanke and Kurt Schuler had suggested in 1991.)
  • The British Foreign office is already planning for a Euro collapse.
  • A general strike shuts down Portugal.
  • Finally, one Irish commentator puts things in purely mercenary terms:

    The only beneficiaries of the State’s assumption of [Anglo Irish Bank]’s liabilities are taxpayers in the countries whose banks were the reckless lenders to Anglo. Anglo, for all the guff at the time of the bank guarantee, had no systemic importance to the Irish economy. Irish taxpayers had no moral or other liability for its debts.

    The sole reason for saving it was the ECB’s insistence that no euro zone bank should fail. Had Anglo failed, the costs would have been borne primarily by European banks and consequently by European taxpayers.

    So the undertaking by the Irish State to stump up €47 billion to pay those private debts is an act of extreme (if extremely demented) euro-altruism. We are Europe’s ragged-trousered philanthropists, bailing out the euro with money we don’t have and that our European partners are kindly lending us at penal interest rates.

    And this single act of insane generosity wipes out every red cent we’ve got from Europe since 1973.

    [snip]

    And for what? For less than nothing. For a moment of panic, a daft notion, a stupid indulgence in bluster and bravado. Some bleary-eyed fools decided, in the middle of the night, that they could bluff the markets by throwing all the chips we might ever have on to the table. It didn’t take long for the markets to realise that their hand contained nothing better than a pair of deuces.

    But the gamble failed for Europe too. There might be some kind of (very expensive) pride in being able to say that little Ireland took the hit to save the euro zone, like the starry-eyed gal who takes a bullet for the outlaw in a corny western. But we saved nothing. All we managed to do was to buy the euro zone leaders more time in which to delude themselves that there was no real crisis.

  • France Recognizes Syrian Rebels

    November 24th, 2011

    “In a direct echo of previous events in Libya, France has formally recoginsed the opposition Syrian National Council and proposed that international troops should protect civilians.”

    Meanwhile, those rebels are calling for international air strikes against the Assad regime.

    It’s quite possible that the Assad regime could unravel much faster than Moammar Gadhafi’s regime in Libya did, since whole army units have already defected, and Assad is much more isolated from his country’s Sunni majority that Gadhafi was (at least ethnically) from his.

    France Pushing Intervention in Syria?

    November 23rd, 2011

    So it seems:

    Alain Juppe, France’s foreign minister, has raised the possibility that western powers could intervene directly intervene [sic – LP] to protect civilians in Syria from the Assad regime.

    He suggested that “humanitarian corridors or humanitarian zones” could be established to protect those under attack.

    As the Assad regime presses ahead with its attacks on Syrian rebels, Mr Juppé has become the first senior western figure to raise the possibility of such an intervention. He said the issue would be discussed by European Union foreign ministers at a meeting next month.

    Of course he goes on to say that “full scale military intervention by the west in Syria was not being considered.” But I remember hearing much the same thing about the intervention in Libya, and we all know how that turned out.

    France’s sudden belligerence may seem out-of-character, but they’ve been pissed at Assad ever since he had Lebanese Prime Minister Rafik Hariri assassinated in 2005. France has a long history of ties with Lebanon, and the Hariri assassination was just the most overt act in Syria’s semi-successful attempt to turn Lebanon into a puppet state. I have no doubt that France would be happy to knock off Assad if they were sure they had NATO (or at least American and UK) backing and could be sure the job was done right.

    In other news, UNSECO’s executive board unanimously elected Syria to a committee dealing with human rights—even though the U.S. has a representative on the committee. Must be more of that Obama Administration “smart diplomacy” we keep hearing about…

    Now Even German Bonds are Toxic

    November 23rd, 2011

    Now investors are even shying away from German sovereign debt:

    A “disastrous” sale of German benchmark bonds on Wednesday sparked fears the debt crisis was beginning to threaten even Europe’s biggest economy, with the Bundesbank forced to hold on to record amounts to ensure the auction did not fail.

    In one of the least successful debt sales by Europe’s powerhouse economy since the launch of the single currency, the low returns offered — just 2 percent annually over 10 years — deterred investors made uneasy by the escalating cost of the crisis to Germany.

    That meant the central bank had to pick up 39 percent of the 6 billion euros of debt Germany had hoped to sell after commercial banks bought just 3.644 billion euros of the issue.

    This isn’t Greece or Italy or Portugal. This is Germany, the strongest economy in the Eurozone, and the fourth largest economy in the world. There shouldn’t be any question about Germany’s ability to pay it’s debt, and there wouldn’t be if it weren’t for the fact that debt is denominated in Euros. If they were in Deutschmarks, Germany wouldn’t have any problem selling them.

    This just confirms what Euroskeptics have been noting for a while now: Once the defaults start, there’s no way to firewall the stronger Eurozone economies from the weaker ones while maintaining the same currency.

    Germany may soon be faced with the question of wrecking the Euro, or wrecking their own economy.

    Could All Of Europe Declare Bankruptcy?

    November 22nd, 2011

    That’s the option being openly talked about:

    Europe may need to pull a Chapter 11 – a US-style bankruptcy, which would permit a market shutdown and Euro Zone reorganization before reopening for business.

    The EU desperately needs a break from market pressures in order to allow the political apparatus to really gather its forces and finally move Europe and its debt crisis ahead of the curve. Here we are just a couple of weeks after the feeble attempt to apply an EFSF plaster on the problem and we’re already back to Square One: the EU debt crisis has reached the point at which none of the readily available tools or institutions are sufficient to match the magnitude of the crisis. This dictates the need for an out-of-the-box solution.

    EU policy makers played the extend and pretend game for as long as they could – but now the writing is on the wall: popular outrage is on the rise and putting increasing pressure on the political process – as we are seeing increased demonstrations and grass-root activity taking over both the political agenda and the media. And markets are now balking as empty promises and now a real lack of funds are seeing bond yields beginning to spike out of control. The self-reinforcing cycle of downgrades and austerity and recession are taking us to the very brink of a full scale Crisis 2.0.

    Or, alternately, the EU could just jetison all that inconvenient democracy to keep the Ponzi scheme going just a little bit longer, trying to hide the fact that Europe has run out of money.

    Says Walter Russell Mead: “Right now the world’s largest economic bloc is running around like a chicken with its head cut off.”

    So how could Europe possibly display the terminal bankruptcy of the high tax, high spending, highly unionized, cradle-to-grave welfare state, European/Blue State social model? How about if EU staffers went on strike?

    Dear Greek Citizens: I hope you weren’t so foolish as to believe that the Swiss bank accounts containing the money you earned actually belong to you, do you? You’re going to have to return them to Greek banks so we can steal them. Love, the EU.

    The Euro may have been great for Greek elites, but not necessarily great for average Greeks.

    How are things in the rest of Europe? In Spain, unemployment is 22.6%.

    The EU may crack before the Euro.

    China is not coming to the rescue, as China is suffering from the same demographic maladies afflicting Europe: “A population that is no longer growing very fast and is quickly aging. The proportion of the population that depends on the state for pensions and medical care is overwhelming the proportion that works and pays taxes to the state.”

    Plus, Chinese rating agencies just downgraded Greek debt.

    The IMF has quitely changed its rules to make it easier to bail out Europe. With your tax dollars.

    (Hat tips: Ace, Insta, and the usual suspects.)

    Gulbuddin Hekmatyar Takes Credit for Occupy Wall Street

    November 20th, 2011

    Sometimes different stories you’re following twine together in weird and unexpected ways. Today it’s news from MEMRI that former mujahideen commander, Islamic radical, and all-around-asshole Gulbuddin Hekmatyar is taking credit for inspiring Occupy Wall Street.

    If you don’t remember Gulbuddin Hekmatyar, he first rose to prominence as commander of the Hezb-i islami faction of the mujahideen fighting the Soviet invasion of Afghanistan in the 1980s. Fighting the Soviets was pretty much the last decent thing Hekmatyar ever did, and he wasn’t very good at it, especially compared to his chief rival, Ahmed Shah Massoud, commander of Jamiat-i Islami, who was one of the greatest guerrilla warfare commanders of the 20th century. If “Hezb-i islami” sounds an awful lot like “Hezbollah,” that’s because they’re both different branches of the same transnational affiliation of radical Shia Islamic fundamentalism. Hekmatyar the sort of guy who thought the Ayatollah Khomeini was too much of liberal softie. Hekmatyar spent almost as much time fighting Massoud as he did fighting the Soviets, and after the Soviets left he changed sides so many times in the various Afghan civil wars that followed (in the government, out of the government, with the Taliban, against the Taliban, etc.) that it’s hard to keep track. He was also one of Osama Bin Laden’s drinking buddies in the 1990s. Pretty much anytime he showed up was bad news for Afghanistan, and now he’s one of the head jerks fighting the Afghan government.

    Now he’s taking credit for “inspiring” Occupy Wall Street. Yeah, right. I think you would be hard-pressed to find anyone at Occupy Wall Street that had even heard of Gulbuddin Hekmatyar (or even any foreign political figure before Bush43 that isn’t featured on a t-shirt).

    Syrian Revolt Gathering Steam

    November 20th, 2011

    The rebels in Syria seem newly emboldened, as they just attacked the ruling Baath Party building in Damascus.

    One estimate of the death toll since mid-March of 4,500 Syrains killed, which strikes me as much too low.

    Barry Rubin says that Syria is no longer a revolution, it’s a civil war. He also says that the newly formed Syrian National Council is dominated by Islamists. Lovely. Guess who the U.S. is backing?

    It is hard to overestimate how disastrous Obama Administration policy has been. Not only has it promoted an Islamist-dominated leadership (which might be pushed into power by monopolizing Western aid) but this mistake has fractured the opposition, ensuring there would be several anti-SNC groups. This strategy has also angered the Kurds and Turkmen minorities who view the SNC as antagonistic to their hopes for some autonomy. As a result, these two groups have reduced their revolutionary activities.

    Rubin also recommends Syrian Revolution Digest as a source to keep up with the latest developments. And here’s a news scroll for events in Syria, courtesy of Lebanon’s NOW.

    How bad has it gotten for Assad? A pro-Syrian demonstration in Beruit only drew dozens of supporters, where previously Assad count count on his (and Iran’s) puppets in Hezbollah to throng the streets with tens of thousands. Of course, Hezbollah and Amal are still in Assad’s corner. I do wonder if Assad could start importing Hezbollah fighters wholesale, since his own army seems unable to contain the rebellion. I also wouldn’t put it past Iran to send combat troops on to prop him up, though that seems less likely.

    In the Weekly Standard, Lee Smith goes so far as to state: “Bashar al-Assad is finished.”

    Some Occupiers Are More Equal Than Others

    November 20th, 2011

    I haven’t been covering Occupy [Place Name Here] because other people have been doing such a bang-up job of it, and because, objectively, it simply isn’t important. But the latest development is too tasty not to mention.

    A few weeks ago, when it turns out there was $500,000 just sitting in a bank to support OWS, the “leaderless movement” suddenly found out that they had leaders, who appeared without all that pesky “democracy” and “consensus” they kept talking about:

    On Sunday, October 23, a meeting was held at 60 Wall Street. Six leaders discussed what to do with the half-million dollars that had been donated to their organization, since, in their estimation, the organization was incapable of making sound financial decisions. The proposed solution was not to spend the money educating their co-workers or stimulating more active participation by improving the organization’s structures and tactics. Instead, those present discussed how they could commandeer the $500,000 for their new, more exclusive organization. No, this was not the meeting of any traditional influence on Wall Street. These were six of the leaders of Occupy Wall Street (OWS).

    Occupy Wall Street’s Structure Working Group (WG) has created a new organization called the Spokes Council. “Teach-ins” were held to workshop and promote the Spokes Council…

    According to Marisa Holmes, one of the most outspoken and influential leaders of OWS, the NYC-GA started receiving donations from around the world when OWS began on September 17. Because the NYC-GA was not an official organization, and therefore could not legally receive thousands of dollars in donations, the nonprofit Alliance for Global Justice helped OWS create Friends of Liberty Plaza, which receives tax-free donations for OWS. Since then, Friends of Liberty Plaza has received over $500,000. Until October 28, anybody who wanted to receive more than $100 from Friends of Liberty Plaza had to go through the often arduous modified consensus process (90% majority) of the NYC-GA—which, despite its well-documented inefficiencies, granted $25,740 to the Media WG for live-stream equipment on October 12, and $1,400 to the Food and Medical WGs for herbal tonics on October 18.

    At the teach-in, Ms. Holmes maintained that while the NYC-GA is the “de facto” mechanism for distributing funds, it has no right to do so, even though she acknowledged that most donors were likely under the impression that the NYC-GA was the only organization with access to these funds. Two other leaders of the teach-in, Daniel and Adash, concurred with Holmes.

    Ms. Holmes also stated at the teach-in that five people in the Finance WG have access to the $500,000 raised by Friends of Liberty Plaza. When Suresh Fernando, the man taking notes, asked who these people are, the leaders of the Structure WG nervously laughed and said that it was hard to keep track of the “constantly fluctuating” heads of the Finance WG. Mr. Fernando made at least four increasingly explicit requests for the names. Each request was turned down by the giggling, equivocating leaders.

    The leaders of the Structure WG eventually regained control of the teach-in. They said that they too were unhappy with the Finance WG’s monopoly over OWS’s funds, which is why they wanted to create the Spokes Council. What upset them more, however, was the inefficient and fickle General Assembly. A major point of the discussion was whether the Spokes Council and the NYC-GA should have access to the funds, or just the Spokes Council….

    When my turn came to speak, I brought up the plans of “the leaders of the allegedly leaderless movement” to commandeer the half-million dollars sent to the General Assembly for their new, exclusive, undemocratic, representational organization. Before I could finish, the facilitators and other members of the OWS inner circle started shouting over me. Amidst the confusion, the human mic stopped projecting what I, or anybody was saying. Because silence was what they were after, the leaders won.

    Eventually one of the facilitators regained control of the crowd and explained that I was speaking “opinions, not facts,” which is why I would not be allowed to continue. He also asserted untruthfully that I had gone over my allotted minute. Notably, the facilitators and members of the OWS inner circle regularly ignore time restrictions.

    This reaction shouldn’t surprise anyone. It is reasonable to expect any undemocratic organization to be co-opted eventually by a vocal minority or charismatic individual. On Friday, October 29, the proposal to create the Spokes Council was put to the NYC-GA for a fifth time, and finally received a 90% majority. The facilitators assisted the process by denying two vocal critics of the Spokes Council their allotted time to speak against it.

    So who is party of the shadowy “Finance Working Group”? Well, one of them is “Pete Dutro, 34, a tattoo artist and former software project manager who dropped out of an NYU finance degree program to join the occupation.”

    It must be a real hardship for Dutro to give up his education to handle all that money while sleeping in a park. Or it would be, if he weren’t using that money to stay in a $700 a night hotel.

    Fritz Tucker, the Occupy participant quoted so extensively above, said of the funding takeover that “I felt like I was watching a local production of Animal Farm.” Having already deployed that metaphor, one wonder what he would have left to say about Mr. Dutro’s swanky hotel. If you put that in a novel, your editor would make you take it out because the symbolism was too heavy-handed.

    From the very first Occupy Wall Street has struck me as a movement ginned-up by Obama’s left-wing allies, using a mixture of the usual circus who attend any left-wing rally plus some paid stooges and naive joiners, designed to distract attention from Obama scandals like Fast and Furious and Solyandra, and created out of a sense of “Tea Party Envy” on the left. But while Tea Party and Occupy Wall Street tentatively agree on one big economic problem (namely, crony capitalism), their approaches to solving it are radically different. The Tea Party wants to get rid of the cronyism, but the Occupy Wall Street crowd wants to keep the cronyism, but get rid of the capitalism.

    In some ways you have to admire the efficiency of the operation. After all it took more than 200 years of the Republic before people like Nancy Pelosi and John Kerry were able to pervert democratic institutions the system enough to reap the full benefits of crony capitalism, but Pete Dutro has managed to go from misplaced idealism to outright looting in under two months!

    Despite the risible “99%” posturing, Occupy Wall Street is being run by, and for, the Democratic Party and their left-wing fellow travelers: ACORN, unions, the MSM. (Has any Occupy [Place Name Here] protester ever called for smaller government and less spending?) Which is why its ironic that the only people it’s actually inconveniencing are those who live and work in the hearts of very large metropolitan areas, i.e. largely the same Obama-voting urban liberal elite who already seemed to believe in the risible class war tripe peddled by the Occupy Wall Street crowd. All it’s doing now is eating up municipal budgets and alienating independent potential Obama voters.

    A few more random Occupy Wall Street tidbits:

  • Here’s a handy chart for which crimes have been committed at which occupy sites.
  • Dark Knight creator Frank Miller weighs in in a nice juicy that has the panties of various leftist comics fans in a knot. “’Occupy’ is nothing but a pack of louts, thieves, and rapists, an unruly mob, fed by Woodstock-era nostalgia and putrid false righteousness. These clowns can do nothing but harm America.” However, I wonder if it’s he jabs at Occupy that has really steamed them as much as his jab at that most sacred of victim groups, radical Islam. Given Wiscon’s disinviting of Elizabeth Moon over the very mildest of criticisms of Islam, I’m guessing the latter.
  • Being creatures of the left, the Occupy [Place Name Here] crowd have never complained about Obama’s extensive ties with Goldman Sachs.
  • Here’s a hedge fund manager offering up talking points for Occupy Wall Street. However, since he’s discussing the various government distortions of the market that lead to the current situation (he even mentions Solyndra!), I feel confident in predicting that none of the current Occupy crowd will take him up on it.
  • Mark Steyn’s essay on Occupy.
  • Ground Zero Mosque May Not Get Built Because Owner is a Deadbeat Slumlord

    November 19th, 2011

    Well, this is some interesting news:

    Con Edison wants a judge to green-light the eviction of the would-be developer of the controversial mosque near Ground Zero — because, the utility claims, he doesn’t have a prayer of paying the $1.7 million that he owes in back rent.

    At a hearing in Manhattan Supreme Court, Con Ed lawyer Scott Mollen yesterday portrayed Sharif el-Gamal as a deadbeat slumlord and far too cash-strapped to pay back what he owes.

    “They’re $1.7 million in arrears, and they have not come close to demonstrating they have the ability” to pay up on the rent at 51 Park Place, Mollen told Justice Richard Braun.

    It would be deeply ironic that after all the sturm-und-drang if the ground zero mosque were killed by the one thing almost all New Yorkers hold in contempt: landlords.

    Maybe Sharif el-Gamal should wander down to wherever Occupy Wall Street is hanging out and pass the hat…

    Ricardo Sanchez’s House Burns Down

    November 18th, 2011

    Democratic Senate frontrunner Ricardo Sanchez had pretty horrible Veteran’s Day, as a fire destroyed his San Antonio home.

    The article linked above states that arson investigators (pace the video) have ruled out foul play.

    I would like to formally extend my condolences to Sanchez and his family for the tragic loss, and relief that everyone got out of the house safely.

    I actually had an inkling of this early in the week, since I had some Google search hits on “Ricardo Sanchez fire,” but was unable to find anything in the news when I searched then, just a tweet linking to a dead Facebook page. In fact, there doesn’t seem to have been anything findable by Google News until yesterday. Either major San Antonio news sources were unbelievably slow in covering an important story about a major public figure, or Google isn’t picking them up for some reason.