Are central bankers and politicians really as stupid as they sound or are they pathological liars who simply cannot help it?
Check out these preposterous lies by Bank of France Governor Christian Noyer as quoted by Bloomberg in Noyer Sees ‘Absolutely No Reason’ to Use Bank Backstop
“I’m extremely confident” in French banks because “we know them very well. We know their balance sheets, their risk assessments. We know they have no toxic assets.”
There is “absolutely no reason” to activate a support system for the nation’s banks that was set up during the financial crisis in 2008.
Markets “are over-reacting,” he said. “They need to come back to a sense of reality.”
All of those are blatantly preposterous. However, lie number 1 has to be one of the top lies of the year. "French banks have no toxic assets"?!
For starters, what about Greek bonds about to take a 50% haircut or more in default? That lie is so ridiculous no one on the planet can possibly believe it.
Greece vows to stay in the euro, never go bankrupt
In case you need more laughs this Sunday, please consider Greece vows to stay in the euro, never go bankrupt
Greek Finance Minister Evangelos Venizelos sought to reassure nervous markets and EU partners on Saturday by pledging his debt-ridden country would do whatever it takes to avoid default and stay in the euro zone.
During an IMF meeting in Washington that was dominated by fears that Greek debt woes could trigger a wider European crisis, threatening banks and hurting the world economy, Venizelos dismissed any talk of bankruptcy.
"Greece will always be in the euro and Greece will never go bankrupt because this would be destructive for the euro zone and for many other countries beyond the euro zone," he said in a statement after meeting his German, French and Italian and Belgian counterparts.
The European Union and IMF handed Greece a 110 billion euro bailout to save it from bankruptcy last year in exchange for austerity measures and reforms, but markets remain unconvinced a debt mountain of over 160 percent of GDP is sustainable.
"Greece is determined to honor all its obligations. No Greek paper will ever go uncovered," Venizelos told reporters.
No Greek Paper Will Go Uncovered!?
Excuse me for pointing out two simple facts.
Bondholders have already agreed to a 21% haircut on Greek bonds.
More haircuts are coming.
Europe Weighs the Weightless, Comes Up with Wrong Answer
Bear in mind the German supreme court has ruled out permanent bailout mechanisms. Moreover, the odds that Finland, Austria, Slovakia and the Netherlands would approve them is close to zero.
Nonetheless, Europe Weighs Speedier Enactment of Permanent Rescue Fund to Stem Crisis
European governments are exploring speeding the start of a permanent rescue fund for their cash- strapped economies amid fresh signs they may bolster efforts to halt the worsening sovereign debt crisis.
Senior finance officials will examine next week the cost advantages of setting up the fund, known as the European Stability Mechanism, a year earlier than its currently planned July 2013 start, according to a document prepared for the meetings and obtained by Bloomberg News.
“Patience is running out in the international community,” U.K. Chancellor of the Exchequer George Osborne told reporters yesterday.
That pressure increased after concerns that a Greek default may be inevitable helped push global stocks into their first bear market in two years. Economists at Citigroup Inc. said yesterday they now expect Greece to begin restructuring its debt as soon as December, while those at JPMorgan Chase & Co. said the euro area will start shrinking in the fourth quarter.
Citigroup and JP Morgan Dismiss the Lies
Lies from Europe are now so preposterous that even Citigroup can spot them.
IMF Out of Cash
Things are so dire the IMF is out of cash. Don't take that from me, take it from Christine Lagarde, head of the IMF.
The Telegraph reports IMF may need billions in extra funding, says Lagarde
Christine Lagarde said the money available to the organisation “pales in comparison to the potential financing needs of vulnerable countries”.
My Dear Darling
In the wake of the global credit crisis, the funding of the IMF tripled and Britain’s exposure to it rose to £20 billion. This figure is poised to rise again if financial troubles engulf bigger economies such as Italy and Spain.
Yesterday, Alistair Darling, the former Labour chancellor who was in office during the previous crisis in 2008, warned that the problems facing the global economy were worse than three years ago.
“There are lessons to be learnt, and they are not being learnt by those responsible at the moment,” he said. “Lehmans [the investment bank that collapsed in September 2008] taught us one thing which is if you know there is a problem, take action, sort it out [in a way] that is more decisive than people expect if you are going to stop it.
My dear Darling, you are a complete fool (but no, I don't love you anyway). Here are the "Lessons of Lehman"
Lessons of Lehman
Darling continues ....
Lehman was overleveraged
Lehman went under
Lehman should have gone under
The world did not end
“The problem with the Greek crisis is that it has been allowed to run on and on and on.”
I happen to agree with that Darling sentence, unfortunately I completely disagree with the context.
The smart thing to do would have been to let Greece default. It is now clear Greece is going to default anyway.
History will show the world will not end. It will also show that bailouts to date have done nothing but harm.
Mike "Mish" Shedlock
John Ransom | Create Your Badge
See more top stories from Townhall Finance. New Homepage, more content. Be the best informed fiscal conservative.