Markets are up and financial pundits NEED a reason. Somehow, these hyper-informed bunch, have yet to read the obituary of the Efficient Market Hypothesis. Thus, we are currently being bombarded with stories about China and her fellow BRICS "rescuing Italy."
As president Clinton showed us the day he declared he "didn't have sex with that woman" later explained by his narrow definition of "sex", the devil is in the semantic details.
Therefore,
"we are currently studying how to support..." means we may do nothing at all
"we are considering buying Italian bonds..." means we may buy an insignificant amount in order to say we did
"we are committed to do everything we can..." means anything we don't do is automatically redefined as "we couldn't do more."
Of course the real point of these statements is to see if they "inspire confidence in the markets" which is political/wall street parlance for fooling the private sector into buying Greek and Italian bonds again at the same rate they would buy Germany's. Barring this ideal case, at least provide legal cover for pension funds, banks, and others custodians of other people's money who can point out to their (by then former) customers in bankruptcy court that nobody could have seen it coming, after all, the president/chancellor him/herself said they wouldn't let them fail.
This is bluff poker, any resemblance to capitalism is just a mirage.
Dismissing the abundance of conditionalities in an eventual support (by the BRIC's) of a possible eurozone rescue (is it vague enough???)...it never ceases to amaze how dirty power politics is...
ReplyDeletehttp://www.ft.com/intl/cms/s/0/39a02f6e-deef-11e0-9af3-00144feabdc0.html#axzz1XxSdU2nx
And markets respond like a teenager addicted to porn...predictable enough