Home > Finance and Economics > Ineptitude abounds in Europe

Ineptitude abounds in Europe

Markets are down big all over the world and Wall Street opened sharply lower.

Worries about Europe’s sovereign debt crisis are the backdrop for all of this, precipitated earlier this week by Germany’s decision to place a ban on all naked short selling, in an attempt to stop the bleeding.  The fools.

The market overlords are scratching their heads, wondering why their magic pixie dust isn’t working.  If you want to attempt to understand why markets are crumbling, look at idiocy like this:

Asian stocks tumbled, with the Nikkei at a three-month low, amid worries there about the European debt crisis, market regulation and growth in China. Plus, riots in Thailand that saw 30 buildings torched including the stock exchange, a massive shopping mall and a TV station, added a layer of unease to the region.

“I’m convinced the markets are really out of control,” said German Finance Minister Wolfgang Schaeuble. ” That is why we need really effective regulation, in the sense of creating a properly functioning market mechanism.”

And this:

[...]The German government faces a stormy debate in parliament this week over its participation in the €750bn stabilisation plan for the eurozone and the move on a transaction tax could persuade the opposition Social Democrats to support it.

Berlin has promised to give credit guarantees up to €150bn as part of the stabilisation package, if weaker eurozone economies come under renewed pressure in the capital markets. The finance minister rejected domestic criticism of the rescue, saying it was essential to preserve the stability of the euro.

[...]

He expressed disappointment at the market reaction. “We would rather see the markets react a bit more positively,” he said. “But when the euro was launched, its exchange rate to the US dollar was lower. So we’re not getting too worked up about it.”

Got that?  It’s the MARKETS that are the cause of the problem.  Those silly markets, refusing to abide by the temporary bandaids bailouts and other lame measures that Europe’s central bankers have put in place to try and stop the sell-off.

Of course, they want to use the volatility to take more control, implement more regulation on the markets.

Such hubris and arrogance.  The “markets” are not acting “out of control”.  The markets are RE-acting to the ineptitude and ignorance of central bankers and European leaders!   The out-of-control spending, the deficits, all of it unsustainable.  The markets (investors) realize this and are acting accordingly.  There’s a big difference.

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