STOCK MARKET WATCH -- Friday, 10 February 2012

[Demeter]

6. It's Well Past Time for Plan Z

http://www.theautomaticearth.org/Finance/its-well-past-time-for-plan-z.html

Mario Draghi captured the utter ineptitude of him and every other Eurocrat out there when he said the following at today’s press conference in response to a question about a Greek exit: “To have a Plan B means defeat already. I am confident that all the pieces of this will fall in the proper places.”

Most 5-year old children in pre-school have already been told not to believe that they can always win and that “winning isn’t everything”, but Draghi & Co. still refuse to consider the possibility of failure even as it is staring them in the face. What’s really disturbing is that the stakes here are obviously much, much higher than they are on the playground. These people should have already been thinking about Plans X, Y and Z, but they’re telling us they can’t even make it to B.

I hate to break it Mr. Draghi, but everyone else, including the German government (read the Eurozone’s back-stopper of last resort), other sovereign governments of Europe and the rest of the world, do have a Plan B for when, not if, the current Euro experiment fails. Whether those plans will make a bit of difference is an altogether different question, but they do exist. They acknowledge the fact that all the pieces can’t simply “fall in the proper places”. Most of the pieces to this puzzle don’t even exist.

Like, for instance, the capital that is actually required to drag the entire Euro periphery along while the world falls into the unmitigated depths of economic depression. The ECB can issue another few trillion euros of under-collateralized loans to European banks, but, as mentioned before, this will merely make it exponentially harder for both European economies to grow and European banks to remain solvent (as opposed to flush with more short-term liquidity than they know what to do with)...