Courtesy of Karl Denninger of The Market Ticker
Germany’s high court capitulated, and this drove the markets over in Europe – and here – markedly higher.
The Federal Constitutional Court rejected lawsuits arguing that Germany’s participation had violated parliament’s right to control spending of taxpayer money. But President Judge Andreas Vosskuhle said parliament had to play an active role and could not simply serve as a rubber-stamp for the chancellor.
“The government is obligated in the cases of large expenditures to get the approval of the parliamentary budgetary committee,” Vosskuhle said.
This makes it all fixed, right? Well, not quite – look at what Merkel had to say in "defense" of this stupidity:
In an impassioned defense of the 17-nation euro, she told lawmakers that the euro meant more to Europe than just a common monetary zone,saying that no countries with a shared currency had ever gone to war with one another.
“The euro is the guarantor of a unified Europe,” she said. “If the euro collapses, Europe collapses.”
I hope you’re prepared for war; that’s not only a new twist on the old tanks in the streets extortion game it comes with an explicit prediction, because nothing has changed in the intermediate and longer term.
Specifically, Greece. Nothing other than a deconstruction of the welfare state there and a dramatic and immediate contraction in the size and scope of government, with all that implies, will "save" Greece. The same is true in Italy and most of the rest of Europe. The only other alternative is for Germany (and to a lesser extent France) to carry the rest of the European union on its back, which it will not be able to do on a forward basis.
There are those who believe, if you observe the markets, that today means "all is good" and that one should buy back into the market.
Let me remind everyone what our budget situation looks like as of last night:
My third-grade math says we have $45 billion left. Oh sure, Turbo can play his games again, but the fact of the matter is that this "great deal" we reached a month ago lasted….. less than a month. That welfare-state problem exists here too. We too made promises we can’t keep, we too are levered up too far, we too have refused to face reality.
But arithmetic doesn’t care about your politics, your party or your national affiliation. It just is.
If you got trapped long stocks in the monster selloff you got yourself a nice second chance. Don’t be a sucker and believe this is all fixed; while the "ahhhhhhh!" of the drugs going in might feel good right now, I can assure you that the withdrawal is coming and it’s not going to get better or easier the longer we put it off.
Incidentally, about four years ago I said "We’re f*ed. They’re f*d worse." It looks like I was right.
