Punch the clown

While reading an Illusion of Prosperity post on Oil and Wages, I was going to comment on how it was unsportsmanlike to beat up on Anthony Mirhaydari at MSN Money and his questionable ideas. I mean, how hard is it to punch a clown?

After reading the article, I decided instead to join in the clown punching fun. Here is what he wrote about the crisis in Europe on October 5, 2011:

As for Europe, leaders continue to make progress toward a definitive solution.

Maybe he is in on the latest weekly emergency meeting, but I have yet to see any progress toward a solution. I see lots of emergency meetings, lots of plans to make plans, lots of ideas tossed out by ministers who don't have the authority to do anything, but no solution. Wasn't this problem solved in the summer of 2010? No. Wasn't it solved by a second Greece bailout in July? No. Does Mr. Mirhaydari know that Dexia, a 500 billion dollar bank is being dismantled by the French and Belgium governments this weekend? No. How about that Italy and Spain were both downgraded two days after his article, or that Belgium is now under downgrade watch due to the Dexia bailout. Banks all across the EU were downgraded in the last few days because there is no solution forthcoming.

The Greek Cabinet approved a new budget with tough austerity measures -- including mass layoffs of public sector workers -- designed to return the country to a primary budget surplus (before interest payments), a necessary first step toward restoring fiscal sustainability.

Greece has been approving austerity measures for a year and a half resulting in a lower GDP and bigger budget deficits. They haven't hit a single target since they entered their death spiral. And as mentioned, they can't meet their budget even if they stopped making all interest payments on their bonds tomorrow. They are beyond bankrupt. How have things changed?

As for Greece's saviors, only Slovakia and the Netherlands need to approve the so-called "July 21" changes to the eurozone bailout fund -- which will give the fund more strength and flexibility. Moreover, ratification of the July 21 agreement is needed before European leaders can push ahead with plans to leverage up the bailout fund with private capital with the help of the European Central Bank, a plan that should be the final nail in the coffin of the crisis.

The latest from Slovakia is that the ruling party is against approving the EFSF, but negotiations are ongoing. It could pass, but lets not count the chickens before they hatch. Even if it is approved, they seems to be no taste in Germany for leveraging it up. It really makes no sense for bankrupt countries to borrow from each other, with leverage, to pay off the bonds they can't afford to pay. The whole thing is a circular cesspool.

Whew, clown punching can be exhausting.