THIS commentary mocks central bank lending so I have to like it. In that spirit you have to wonder if the plan is to kick the can down the road over and over until we kick the bucket! You also have to wonder at the extent of this addiction. Just as Europe prints money, US headlines say stocks drop because Bernanke said no more QE (HERE).
Come back from class to find THIS story in Forbes saying “It all hinges on the definition of voluntary….” in reference to the ISDA decision to view the haircut taken by private Greek bond investors as a credit event. It is not that I am against their taking a haircut, just that those who purchased CDS insurance in the event of said haircut are being denied. The ISDA Committee that made this decision comprises several of our too big to fail (TBTF) banks as well as some big European banks. Surely ours sold sovereign CDS and are understandably reluctant to make a payout. Talk about conflict of interest! Still, El TRO saved the day for nearly 800 European banks anyway, so some of the banks holding Greek debt must have got some funding to alleviate the pain of the haircut.
Since I am into multi-lingual word play today, perhaps I should start referring to our TBTF banks as the KUCHKA (Russian for the Five). Europe has only the TROIKA, so America MUST HAVE MORE than three should it not?
BTW, a better fit may be to call them the MOGUCHAYA KUCHKA, The Mighty Five, who as Britannica just told me were five famous Russian composers, (Mussogorsky, Rimsky-Korsakov and Borodin are three you may have heard). And do they know how to play you!