Research for Online Investors
The market is down this morning as
the European Leaders begin their meetings in Brussels. France’s Hollande
is attending his first summit. He told reporters “I have come here to
get very rapid solutions to support countries in the greatest difficulty on the markets even though they have made
considerable efforts to restore their public finances.”
Italy and Spain are under pressure
in bond markets and want the European Central Bank (ECB) to intervene in markets to push interest rates
lower. The EFSF and ESM are the big pots of money that have weak
countries salivating. There is $625 billion dollars available between
the two funds. That is enough honey to bring out animal
Unidentified European Union sources
told Reuters that an agreement could be signed on Friday if details were worked out
today. That makes it sound like a done deal. It is not. Germany is not worried
about higher interest rates for Italy and Spain. A government
official said “We would warn against exaggerated panic-making.”
Germany insists that fiscal reforms
to sovereign budgets and fundamental reforms that allow European authorities to override national economic policies
and budgets must come before there is shared liability for individual country’s debt.
France, Spain and Italy want the
money first then talk about the reforms.
Dutch Premier Rutte told his
parliament “It’s crucial for us to avoid taking measures that would ease pressure on Southern Europe to
reform. That is why I seriously question a rapid transition to a banking
union, or Eurobonds.”
All of the press seems to focus on
Germany’s stubborn refusal to loosen their purse strings. Unsettled
markets are not caused by Germany; the controversy is being instigated by France’s Hollande. The credit problems in Ireland, Portugal and Greece were handled before he came to
office. Governments had to commit to austerity measures to bring their
deficit down in order to receive a bailout.
Hollande does not want this
discipline because he fears France will be in the cross-hairs of bond vigilantes before long. He is a socialist and wants to spend more money. He has already granted early pensions and increased minimum
wages. He needs money to institute a “growth” program. France is broke and needs to get their hands in someone else’s
To fulfill his campaign promises he
needs Germany to loosen the purse strings. This would allow “soft”
support for France in credit markets. Eurobonds and support for banks
would isolate France from the marketplace.
We don’t expect good news out of
Brussels tomorrow. They won’t be singing Kumbayah. We expect next week to be a tough week in the markets.
This morning the Supreme Court paved
the winding path to more socialism the United States has been on for the last 100 years. To many limousine liberals it feels good to know we are going to do all we can to
help the weakest, slowest and least likely to contribute.
My religious teaching and beliefs
have instilled these values in me. I just never knew I was going to be
forced to worship at the Washington alter! Sadly rather than teaching a
man to fish, so he could provide for himself for a lifetime, we have taught him to stand in line for free
This morning, the 32,000 member
British Medical Association (BMA) voted to go on strike because of a nasty pension dispute. According to the Guardian, the doctors took “industrial action” last week that denied operations and
appointments to ‘tens of thousands of patients.’
As government agents, the British
doctors will maintain emergency services as they slow work to get the politician’s attention. The British government has angered the doctors with plans to force them to work to
68 years old, increase their pension contributions and lower their pension pay.
If you are buying hospital stocks
this morning because you think it will be good for them to have the government more involved in medicine…remember
how well the government runs everything else. When costs escalate beyond
the bureaucrat’s spread sheet projections, where will they turn to cut costs?
Will you transmit my blood
pressure directly to the IRS?
Many have recounted the ineptness of
government. I won’t pile on here, it is unfair. Contemplating the government’s deeper involvement in my family’s healthcare makes
me angry. Our family doctor is a friend of over 30
years. My daughter is applying for Medical School because she
wants to help people. He is going to quit and my daughter is
upset. I feel sorry for both…and all of
Democracy is an excellent form of government where if you can cobble together 51% of the people, by promising them
other people’s stuff, or scaring them that you’ll take away their stuff, you can rule as a dictator. It is
decidedly not the form of government originally chosen by the United States of America, which is a constitutional
republic with limited government. Thankfully we’ve mostly done away with that
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