Madrid Is This Week’s Eurobailout Winner

Another eurobailout, this time for Spain. Here’s how two politically useful idiots who cover business news for the Associated Press – Paul Wiseman and Peter Svensson — saw it, abetted by just the right quote from a third: ”This move will come as a relief to the Obama administration as it suggests that European leaders are finally beginning to take significant actions to ease the intensifying pressure on the euro zone’s peripheral economies” such as Spain and Portugal,” said Eswar Prasad, professor of trade policy at Cornell University. Finally? All three of these guys must have missed the news a few months ago that a trillion euros’ worth of no-strings credit – about ten times the amount extended to Spain over the weekend – was put at the disposal of Europe’s commercial banks. But to do what? Hey, let’s not be impertinent! Don’t ask, don’t tell has become the omerta of the global banking system and its news-media lackeys. And anyway, it’s not the purposes to which such “money” will be put that we are supposed to think about – only that the “money” itself is there – in this case materialized, somehow, by 17 European countries most of which are themselves bankrupt. We’re not referring to just the PIIGS, either. Has anyone taken a close look at France’s books lately?

The Seattle Times headlined the story thus: “Bailout for Spain’s Banks Buys Time for Europe”. That’s a gutsy way to slant the story on a Saturday night, considering that the world’s stock markets would be voting their confidence, or lack thereof, in less than 24 hours. Suppose stocks open flat-to-down in Asia, and then Europe follows with a thud? There goes a hundred-and-twenty-five bil, as fleetingly impressive as a shower of white sparks on the Fourth of July. Our gut feeling is that the “news” concerning Spain should have been staged on Sunday to give Europe’s spinmeisters more bang for their digital buck. The story was half-baked already, since markets rallied last week on speculation that Spain’s increasingly dire financial situation would coax forth yet another boatload of shut-up money. We’d say ten boatloads would have been better, since the public has been conditioned to think in 13–digit sums when it is bailouts that are being spun. One could argue that The Powers That Be are not talking about bailing out all of Europe, only Spain. But do they think us so stupid as to believe that each new crisis involves just one country alone, or that a paltry $125 billion will buy more than a few nanos’ worth of relief?