Spain Reminds Us What The Main Problem With Blank Checks Is: Says Q2 GDP Will Be Worse Than Q1
Some Readers Remarks: “When this thing finally blows, the columns of smoke will be visible for miles”…” For all intents and purposes when this thing goes it will be a global event. This means everyone has the best seat in the house”…..” How long will the market levitate on the hopes and aspirations of a political class desperate to keep the status quo alive?”…..
debt never fixed more debt………
This is precisely what Monti and Rajoy showed at last week's Eurosummit: every time things get worse, someone who has done the right thing, has to fold to keep the party going for all the crack addicts.
The problem with this approach, and it applies to the US entitlement state underfunded by about $100 trillion just as much as it does to Europe, is that at the end of the day only math matters. One can push for artificially lower yields to keep the game of musical chairs going longer, but not even naive children believe that there could be a happy ending to a farce in which one time bailouts continue to enable self-destructive behavior, which in turn becomes a Mutually Assured Destruction gambit to the worst offenders.
In the mean time Spain's already deep recession is about to become even worse, to be followed by Italy, France, and soon, Germany too, now that it has decided to spread the wealth.