Anthony Hopkins Gets Life Plus 51

Not This One -- But Wouldn't It Be Weird If It Were?

My personal opinion is that often, fervent and public professions of religious faith are only an excuse for an abuse of power, personally, or on a broader scale. Ask the Office of the Holy Inquisition. Ask any of the local 'pastors' who participated in lynchings in the American South. Ask the Taliban, or their U.S. equivalents. And ask the families of people like Anthony Hopkins (no, not that one).

In Jackson, Alabama, a 37-year-old evangelical 'pastor' and "model church-goer and worship leader" named Anthony Hopkins was arrested for the murder of his wife. Herr Hopkins had kept his wife's corpse in a freezer, for four years -- thoughtfully preserving evidence for forensic and homicide investigators.


Anthony Hopkins of Jackson, Alabama, 2008

Hopkins' wife, Arletha, had not been seen since 2004; he had told friends that she had died in childbirth and was buried in Georgia. As it was later reconstructed by investigators, Hopkins' wife arrived home one day in 2004 to find him in flagrante with a young girl; after the girl fled, Hopkins killed his wife and stored her in a large freezer.

Plainly, not an individual who stops to ask himself, "What would Jesus do?"

Details emerged during his trial that Hopkins had terrorized his family for nearly a decade with alternating threats of heavenly punishment -- and sexual and physical abuse, which intensified after murdering his wife.

Hopkins was arrested in 2008 after one of his oldest children apparently approached police with a statement that their mother was stored with the Christmas ham and bags of Ore-Idas ("Timmeh, get me that bag of frozen peas" "Where, Daddy?" "Don't know -- lift your Ma's feet and look around under there, or god will strike you").


Portion Of 2004 Announcement From Hopkins' Church,
Reporting His Wife's Alleged Death In Childbirth

As I used to say in another job role, this guy's a real solid citizen.

Hopkins was convicted, primarily on the basis of physical evidence he had preserved and his own family's testimony. This week, he was sentenced to life imprisonment plus fifty-one years for the murder, and additional counts of rape, sodomy, child abuse, and poor sanitation in food storage.

As someone who committed acts of child molestation in addition to murder, he should have an interesting time in the Joint. Hope you enjoy being locked down 23 out of 24 hours a day, segregated in population, Tony! Otherwise -- hoo boy; you're dead, greymeat.

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Blame 'Em All; Blame 'Em All; The Long And The Short And The Tall...

Barry Ritholtz, via his financial blog The Big Picture, recently provided a chart of the National Debt as its accumulated during the administrations of various Presidents:



There was some discussion that, in showing how this monstrous public debt (that we know about) has been nurtured and grown, who controlled Congress is an important perspective as well -- and so Herr Ritholtz provided that as well:



Read 'em and weep. There's not much else to do these days.

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If This Is Tuesday, It Must Be Belgium

Twenty-Euro Note: The EU Has Some Beautiful Currency

David Marsh is an Op-Ed columnist for the New York Times, which published one of his pieces yesterday entitled "The Euro's Lost Promise".

It's a good example of how a large topic can be presented in relatively few words -- and is one of the best brief descriptions of the history of the Euro I've read in a while.

Americans don't really care about that history, or a common European currency -- unless you're a currency trader, or are vacationing there just now (and now would be a good time: 1.00 Euro is worth 1.24 US. A few weeks ago, the exchange rate was 1.48 US to the Euro, and San Francisco was full of German and French tourists).

Can't we all just get along?

Europe, a collection of nationalities and near-tribal subgroups, has a history of trade wars and religious wars and wars of national conquest and national unification going back over 1,300 years.

The dream of a Europe united under a single set of laws and currency wasn't really Napoleon's -- though he's often credited with it, that idea was just an extension of his personal ambitions; the same is true for German hegemony in Europe between June, 1940 and June of 1944. Unification has swirled around the edges of European history for generations, mostly gaining traction around the rise of Socialism before the Great War, and Communism after. But, the reasons it was so attractive as an idea (national chauvinism; right- and left-political radicalism; trade) were the same reasons it was politically dead: European governments couldn't get over themselves.

A case in point are Franco-German relations. Germany took the province of Alsace-Lorraine in 1871, a war that humiliated France, which plotted Revanche and a final reckoning with the hated Hun... which didn't occur until 1919, when France got Alsace back, but the Versailles Treaty paved the way for Hitler, with a little help from Wall Street and the Great Depression, ver. 1.0. A resurgent (and nazi) Germany kicked France to the curb in May of 1940, which endured years of occupation until being liberated in the high summer of 1944.

It took the rise of the nazis, the Holocaust, and the Second World War (also known as the Great War, Part II) and its political aftermath to make any European government believe unification was desirable, even possible.

We Don't Get Fooled Again

The specter of fighting another intra-European war was too terrible to contemplate. In addition, the Soviets had swallowed up the eastern third of the continent, and Western Europe was dependent on the United States for financial and military aid (and, particularly in Germany, for lots of bulldozers).

Ultimately, the EU and the Euro were attempts to force Europeans to interrelate with each other in the face of what was then still a Communist Russian threat, and to build a political and financial structure which could hold its own in the face of American domination and the eventual rise of China.

These are serious ideas for Europeans. It's an opportunity for them to create a model of separate, sovereign states acting in collaboration, not competition. There's an obvious tendency for Americans to perceive the EU in terms of 'states', like those in the U.S., but that's laughable, because, well... Europe is not America!!!

There are other questions involved here -- whether Europe's privately-owned banks were ready for a common currency; whether human beings can ever cooperate through long-term coalitions like the EU or the UN; or if 'human nature' is inherently selfish and evil. (A good number of Europeans like the cooperative model, and might ask If not now, when? If not us, then who?).

But, read Marsh's article. You'll learn something.

UPDATE (5/21/10): The German Bundestag has given a vote of support to the EU/IMF $750-Billion Euro (about $1 Trillion US) loan package to Greece and other EU countries through the European Central Bank, primarily due to the efforts of Die Eisenen Kanzellerin, Angela Merkel, and her CDU-dominated coalition.

We'll see what happens next.

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The Kids Are All Right

Big Guy Returns For BTB Weekend

The real Chairman Of The Board waded through the Golden Gate early this morning to make the annual Bay-To-Breakers -- if not a San Francisco Treat, it's certainly a tradition.

Anyway, that's what all the extra helicopters you see around are all about. We are, as always, happy to see him.

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$ 1,000,000,000,000,000

One Quadrillion Dollars

"Gold is for optimists. I'm diversifying into canned goods."
-- Commenter On British Financial Blog


Ten Of These

Paul B. Farrell has been a financial analyst and commentator for many years. Semi-retired in Arroyo Grande, California, near San Luis Obispo, Farrell writes a weekly syndicated column carried (among other venues) by Little Rupert's Wall Stret Journal MarketWatch section.

Farrell's message is center-right politically when any politics are called for; even so, a relatively sane voice in the American financial commentary. He was warning of the unsustainability of the Housing Market Bubble, and of the explosion in Derivatives trading, before Nouriel Roubini or even Joseph Stiglitz.

In his most recent column, Farrell warned that the world's financial situation (and America's in particular) is burdened with enough debt to make another Great Depression more than just possible. From some of the commentary, you'll see he makes his politics clear (e.g., Medicare, Social Security) -- again, even so; he outlined fourteen points of debt and their sources or causes, which I list here in full...

... So here are my best estimates, mostly from reported resources, of the huge debts Wall Street is dumping on America, the big bubble they're already blowing, driving the global economy headlong into another meltdown that will trigger the Great Depression II. And likely, with all this debt, soon you can bet taxpayers will stage a revolution making Main Street American streets far worse than Athens:

1. Federal government debt ... $14.3 trillion

Federal debt limit doubled since 2005 to $14.3 trillion limit. Bush/Cheney wars pushed U.S. deep into a debt hole. Military kills 54% of budget. Expect 4% deficits through 2020.

2. Treasury / Fed cheap-money policies ... $23.7 trillion

The Fed's shadowy printing presses have created an estimated but unaudited $23.7 trillion in credits, grants, loans and guarantees, backed by taxpayers. Pure profit.

3. Social Security's rising debt ... $40 trillion

Soon we must either cut benefits or raise taxes 40%. Delays worsen solutions. By 2035 Social Security and Medicare will eat up the entire federal budget, other than defense.

4. Medicare's unfunded debt ... $60 trillion

Going broke faster than Social Security. Prescription-drug benefit added an unfunded $8.1 trillion. In 5 years estimates rose from about $35 trillion to over $60 trillion now.

5. Annual health-care costs ... $2.5 trillion

Costs rising faster than inflation. Burden increasingly shifted to employees. Recent Obamacare plan would have cost $90 billion annually, paid to Big Pharma and insurers.

6. Secretive global derivatives trading ... $604 trillion

Wall Street resists all regulation of their gambling casino that leverages the combined $50 trillion GDP of all nations by a 12:1 ratio. Warning: Less than 2% of Wall Street's derivative bets triggered the last meltdown. Buffett "guarantees" it will happen again.

7. Population growth 50% vs. Peak Oil demand ... $30 trillion

United Nations says global population is increasing from 6 billion to 9 billion by 2050. China and India need 500 new cities each. Billions more humans want autos, using up limited resources, shifting more costs to America, as commodity price increases and new resource wars.

8. U.S. dollar losing as reserve currency ... $20 trillion

As China's economy rockets past America's, the dollar will be replaced as the chief foreign reserves. The shift will devalue the relative worth of all America's assets.

9. Global real estate losses ... $15 trillion

Commercial real estate is bloating 25% of U.S. bank balance sheets. Dubai Tower, world's tallest, is empty. China collapse will upstage, further depress America's market.

10. Foreign trade and ownership ... $5 trillion

Foreigners own more than $2.5 trillion of America. China holds over $1 trillion Treasury debt. $40 billion new deficits added monthly. Total climbing at $400 billion annually.

11. State / local budget / pension shortfalls ... $3.5 trillion

Shortfalls of $110 billion in 2010, $178 billion in 2011. On top of more than $450 billion in annual shortfalls in local government employee pension funds. L.A.'s near bankruptcy.

12. Corporate pensions plus 401(k) plans ... $3.2 trillion

Only 30% of Americans have enough to retire. There's $2.7 trillion in 401(k) plans. And 92% of corporate pension plans are underfunded, with defaults guaranteed by taxpayers.

13. Consumer card debt ... $2.5 trillion

Americans are still living beyond their means. Even with a downturn, consumer debt rose from about $2.3 trillion to $2.5 trillion. Fat Cat Bankers love it, yes, love making matters worse by gouging cardholders and mortgagees, blocking help in foreclosures and bankruptcies.

14. Lobbyists' annual costs ... $1.4 trillion

Wall Street bankers, Corporate CEOs and Forbes 400 Richest spend billions to influence elected officials, regulators and bureaucrats with lobbyists and campaign donations to exercise power over government. Voters are easily manipulated, but it takes lots of cash.

The total of all 14 categories of debt is a mind-blowing $825 trillion that includes "apples and oranges," jet fighters, derivatives and insurance fees, credit cards, autos and mortgages. There are more, and of course these are just estimates. Given the lack of transparency on Wall Street and in Washington, our debt is likely over $1,000 trillion.

That's One Quadrillion Dollars.

Farrell's column makes clear that Wall Street is 'betting short' -- placing trades that will make money when aspects of the system lose; this is Goldman-Sachs' methodology. And in order for these Masters Of The Universe to cash in... the system has to fail.

I wish I had a wisecrack to make at this point, but I don't.

---

Not Even 'Clash Of The Titians' Sucks Like This Badness

Если ты настолько глуп, чтобы тратить 880 R. рублей на DVD этого фильма собака, все молдавский народ жалко вас.

By I. Rabschinski


Milla Jovovich Concentrates On Her American Accent

Hokay. I am liking the Film. Is being a really good invention of the technology for over hundred years now. But sometimes there comes a movie so bad, like sick from the bad food, that I want to vomit in bucket. I will maybe vomit without bucket -- and I think in particular for this piece of diseased pig foot, I will make cream corn on your personal shoes, Okay?

This is The Fourth Kind, starring a woman who fifteen years ago was fashion model who never ate much food, and could only speak the Ukraine, and that not so good. But, they put her in this movie Fifth Kind Of Element with the Bruce Willis, and boom boom, she is big star and slinking around lots of modeling and advertisement. So nice for her.


You Buy Makeup From This Woman? She Looks Like Idiot.

Now, she is thirty-five and gets enough to eat, so no more can she make with the slinky photo shoots and little dresses. Now, she had better be film star for real -- and to do this, she has to speak the Amerikanyets like she comes from the Ohio and not like Kiev.

And, she has done this! Hoo Boy; is miracle! No, I am not kidding you. She sounds exactly like American -- only every little while, she has this slight little thing that happens.

I have pain in my butt to tell you -- but Milla cannot make like the modulation of her voice. No like going up; then like going down. She speaks in weird kind of low monotone: What-do-you-think-this-means-I'm not-sure-don't-put-your coffee-on-table-without-coaster-make-sure-the-Alien-has-some-too-thank-you.

Otherwise, she could like be from L.A. Not that sounding like American is great achievement, you understand what I am saying? (Oh yes you do too.) I am not certain why Slavic peoples seem to do this. Only Romanians and a couple guys I know from TransNestor speak English in some other way. And also myself, of course.


Milla: Just Another The Regular Kind Of Amerikanyets Girl

So: This sucking bad movie is fake inside another fake also. It is rubber chicken head inside of the bread made from cardboard. Ptuh!

Premise for this movie is that a real Doktor, psychological doktor kind of girl, experienced all kind of things with Aliens from the outer space in this Nome Alaska place, which used to be Russian. The movie is supposed to be about real people in the Alaska, and they make movie, supposed to showing Truth about all this -- with girl from Kiev who does such good fake American playing the Doktor.

And she is talking all these people in the Nome, who cannot sleep, because they see this Owl looking at them. Only, is not an owl -- and we know all this before the movie starts, even.


Supporting Cast Wears Funny Caps, Like Guys Wanting Work
In The Downtown Budapest -- Which Is Funny, Because Movie
Scenes In The Alaska Was Shot In Yugoslavia, Okay?

The film Guy is splitting the screen, or cutting away, to show interviews with this "real Doktor lady", Abigail Tyler (What fake name! I guarantee nobody named Abigail in all of America since there was the Tsar). Then, we see Milla saying exactly the same thing. So we think one is real, the other a movie. But the whole thing is being fake. In fact, supposed-to-be-real Amerikan Doktor girl is British actress named Charlotte Milchard.

Не мочиться на мою голову резиновой курицей и скажите мне, я могу арендовать большой автомобиль от вас, Okay?


This Is Whole Thing! This Is Much Of Bad Alien You Will See --
And Is Not Even Alien! Is Only An Owl!

Then her patients are not only not sleeping, they are running crazy with the gunz and shooting wife and kids and dog (well, not dog, because they have no dog), because of this Owl. And they do this with front lawn full of police cars with lots of flashing lights (such bullshit).

And this Owl is all over the place. Tricky Owl, who will always keep weird face to the camera as it moves around him. So effect is creepy -- and that is only special effect this movie has! You never get to see Aliens, and that is rip-off, big time.


Look! Even The Zoidberg, Actual Alien, Thinks Film Is Crap!

The rest of the movie is Milla, and fake interview with awful-looking fake-real Doktor lady Abigail every two minutes. Also people speaking the Sumerian (and with really bad aksent, I have to be telling you), which means something but nobody says what.

I go to University Of Bulgar to learn that film is "suspension of the not believing" -- but this piece of crap the film makes my Uncle Yehudi, who is famous for being funny in his head, look like Most Sane Guy In World.

Also there is the actor Guy, Will Wheaton Guy (Remembering Shock To The System? Armageddon? Or maybe The Postman? Will is the Good, but stuck in big Dog Of Film). And also some children put there to make you feel sorry for them to be in such bad film. There is also no dog, which bothers me.

At least kids got paid. If you are seeing this movie, you will see big Owl face with creepy eyes -- but all you will want to do is stab your own with fork or pencil.

Do not see!

I, Rabschinski, say this -- to Moldavish Guy; you also.

---

How Big Is It?

The Gulf oil slick is this big, as of today.

The notion to superimpose the outline of the oil slick to scale with Google (Hey, we're not evil; we just play that way!) Earth maps is the brainchild of one Paul Rademacher, and was presented in Atlantic Monthly.

Victory

Victory In Europe (V-E) Day; May 8th


May 8th, 1945; Kaiser-Wilhelms Church
Kurfurstendamm, Berlin


San Francisco, May 8, 1945


May 8th, 1945; Times Square, New York City


Canadian Troops, German Refugees Outside Hamburg, May 8, 1945


May 8th, 1945; Ebensee Concentration Camp, Bavaria


May 8th, 1945; Russian Soliders At The Reichstag, Berlin


May, 1945; Russian Soldiers Near Führerbunker Show Location
In Chancellery Garden Where Hitler's Corpse Was Burned


May 8th, 1945; Berlin


May 7, 1945; Survivors Of Mauthausen Concentration Camp


May 8th, 1945; Winston Churchill At Whitehall, London


May, 1945; Bomb Damage Still Being Cleared, Central London


May, 1945; Berlin


May 8th, 1945; Paris


May 8th, 1945; German Refugees, Juchen (N.Rhein-Westphalia)


Memorial, Mamayev Kurgan, Volgograd


Memorial, The Cenotaph, London


Memorial, Near The Mall, Washington, D.C.


Memorial, The Neue Wache With Kollwitz Pieta, Berlin


Memorial, Deportees And Prisoners; Lyon, France


Memorial, Yad Veshem, Jerusalem


Kaiser-Wilhelms Church; Kurfurstendamm, Berlin


European Union Headquarters Building; Brussels, Belgium

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Ruh-Roh

(Photo: Dimitri Dilkoff - Getty Images; NYT Online)

From today's New York Times Online:

“Greece may just be an early warning signal,” said Byron Wien, a prominent Wall Street strategist who is vice chairman of Blackstone Advisory Partners. “The U.S. is a long way from being where Greece is, but the developed world has been living beyond its means and is now being called to account.”

In the struggle to pass legislation in Congress to strengthen regulation of our barely-controlled financial sector, one amendment has been offered that would call for an audit of the Federal Reserve Bank. This has been resisted, strongly, by both Treasury Secretary Geithner (Timmeh!), and (Surprise!) the White House.

The current Greek/European debt crisis has a direct bearing on why Timmeh and the White House are fighting tooth and nail to prevent such an audit, and why we should be more worried, and pay more attention to what's happening with Europe's financials, than we are.

As an ex-DOJ and Financial Analyst Dog, resisting any move for more transparency generally means there's something to hide -- and while that's only my opinion and not fact, I think it may be a common one: There's a great deal that's rotten in our financial system, and it's all being hidden from view so that we don't run screaming off a cliff.

John Talbot noted in an article in Salon that the American financial crisis was hidden, but not cured, by our government's response to the crisis. If you haven't read it, you should.

Talbot noted that Troubled Asset Protection Plan (or, TARP) funds made available by the Bush administration to shore up banks and investment houses weren't used that way. Then-Treasury Secretary (and former Goldman-Sachs' CEO) Hank Paulson convinced Congress over a weekend that he needed $700 billion of TARP funds to purchase toxic assets held by America's commercial banks.

Within weeks of being given the funds by Congress, Paulson decided not to do this -- instead, he gave hundreds of billions of dollars directly to the commercial and investment banks to do what they wanted with it, and to fund a series of bailouts: Money to Chrysler and General Motors, and the Insurer AIG -- much of which immediately found its way back to the commercial and investment banks who were already getting huge amounts of government money.

To cut to the chase as Talbot reports it (increasing the number of paragraphs for emphasis is mine),

At the time [2008], nobody explained what happened to the toxic assets on the banks' books whose purchase was the original stated purpose of TARP.

We now know that the financial crisis was not caused solely by a liquidity crunch or an irrational loss of confidence, but rather by the fact that the marketplace realized that the commercial banks held more than a trillion dollars of very poor-quality ... mortgage securities such as collateralized debt obligations, or CDO’s, and that these bad assets were sizable enough to bankrupt even our biggest banks.

How bad? Even the AAA [valued] CDO is facing a mortgage default rate of approximately 93 percent today.

Talbot goes on to say that the reason Paulson didn’t pursue the original plan for the government to purchase these toxic assets is because such a purchase would have created a market price for them.

Suddenly, the banks would have had to "mark-to-market" -- to acknowledge that the CDO's they had invested in, sold to them by other fellow-players like Lehman and Goldman-Sachs, were worth a fraction of what was paid for them. Nearly all of our major commercial and investment banks would have had to declare bankruptcy.

You can see why this couldn't be allowed to happen.

What I believe the Fed did next [Talbot continues] was fraudulent and deceitful, its full impact still hidden from the American public, who want bank reform.

The Fed, I am convinced, went to these commercial banks and offered to take many of their toxic mortgage assets off their books, often accepting them as collateral for loans to the banks...

So the Federal Reserve, with no approval by the president, the Congress, the people or their elected representatives, ended up purchasing $1.5 trillion of new assets of unknown quality... What concerns many knowledgeable investors is that the Fed doesn't have the money needed to purchase these assets and instead prints new money.

As of March 2010, there was approximately $1 trillion of currency outstanding in the country, not including the more than $1 trillion of bank reserves at the Fed. So if the Fed doesn't shrink its balance sheet, we can expect inflation to come roaring back as banks increase lending in the future.

This $1.5-Trillion-dollar debt is being kept "off the books" -- an allowable but in these circumstances near-criminal accounting activity, and hidden only by the amount of physical cash the Fed directs the U.S. Mint to print and put in circulation.

As if I had to say anything, Paulson's decisions (supported by Fed Chairman Bernanke and America's major banks) only forestalled the potential reckoning of $1.5T in bad debt. It also hides the fact of that debt from the American population.


(Chart: Calculated Risk)

The direct exposure of American banks to Greece is small [notes the New York Times article],but below the surface, there are signs of other fissures. Even the strongest banks in Germany and France have heavy exposure to more troubled economies on the periphery of the Continent, and these big banks in turn are closely intertwined with their American counterparts.

Over all, United States banks have $3.6 trillion in exposure to European banks, according to the Bank for International Settlements. That includes more than a trillion dollars in loans to France and Germany, and nearly $200 billion to Spain.

What’s more, American money-market investors are already feeling nervous about hundreds of billions of dollars in short-term loans to big European banks and other financial institutions... With so much uncertainty about Europe and its common currency, the euro, managers of these ultra-safe investment vehicles are demanding that European borrowers pay higher rates.

These funds provide the lifeblood of the international banking system. If worries about the safety of European banks intensify, it could push up their borrowing costs and push down the value of more than $500 billion in short-term debt held by American money-market funds...

Now, as Europe teeters, the dangers to the American economy — and the broader financial system — are becoming increasingly evident.

Gosh. A trillion here; a trillion there; pretty soon, it adds up to real money. I live paycheck to paycheck, and a thousand dollars is a serious amount to me. But, then, I'm just one of the Peasants our Masters Of The Universe are so proud to live above.

This weekend is critical -- one attempt to create a loan package for the Greeks last week did nothing to calm fears of a larger collapse; the plummeting of world financial markets (pushed further in the case of the Dow by automatic trading software) on Thursday was the result. Whatever fix can be created will have to both offer a hopeful solution and be accepted by the Greeks, and neither is certain.

No matter how smart I may be, I don't pretend to understand every nuance of a system that's been made intentionally opaque, in order to allow the kind of behavior that created this crisis. But it doesn't take a PhD in Economics to perceive that a serious ripple in the world financial system -- one that starts in Greece, say, or Portugal and Spain's economies -- might set in motion an interlocked series of banking / investment / stock market collapses that could make the Great Depression look like a one-day-drop in the Dow.

Ruh-Roh.

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Bellwether

The Wheels Coming Off The Wagon: Athens, May 2010

[A quote from The Great Curmudgeon, unexpurgated:]

The Madness Of Central Bankers
While they never put it in this way, it of course makes sense for elites to be concerned about tiny upticks in the inflation rate rather then the human suffering of millions of people out of work. A bit of unexpected inflation might erode their fortunes a bit, and if the rest of us have to live in vans down by the river so be it.

The basis for this post was (via the link) discussion by Matthew Yglesias that "the European Central Bank could take decisive action to avert disaster in Europe but almost certainly won’t for no real reason".

Analysts had hoped the ECB might use its almost limitless ability to create money to stanch the crisis (something our own central bank, The Fed, has done here), though doing so could hurt the long-term credibility of the European Central Bank as an inflation fighter that does not yield to politics.

"But I’ve witnessed" (Yglesias goes on), "a prominent European central banker state, live and in person albeit off the record, that the purpose of central bank independence is to allow him to 'fight inflation, regardless of the human cost.' "

"You or I [Matt says]... or someone who’s not a sociopath might say the point of central bank independence is to allow to him pursue technocratically sound monetary policy that advances the long-term interests of the people of Europe. But that’s not necessarily how they see things in Frankfurt. The madness of the European Central Bank is, in my view, the most underexplored and underappreciated aspect of the crisis thus far. The Eurozone, not the United States, is the world’s largest economy and the Eurozone, not China, is America’s largest trade partner."

He's got that right.

UPDATE: I haven't said anything about why the Greek financial crisis is important. And, in brief (very hard, for a dog), here it is (Click on image to enlarge -- Nett und Spass für dich !)

Comparison Of Greek And Eurozone Financial Key Data

>> Greece is part of the Eurozone, the common financial and trading system supporting the European Union. The Euro is its common currency, and the current Greek debt crisis threatens its stability;

>> There is a European Central Bank (ECB), acting much as the Fed does here in the U.S. by arranging loans or financing for member states. This is what's been happening over the past few weeks as the ECB arranged a loan package which includes funds from the International Monetary Fund (another super-bank), and member EU states, like Germany;

>> The IMF-ECB loan package will cover payments the Greek government must make on loans it already holds -- but the loan comes with conditions: Accepting the loan will force Greece to balance its budget and reduce its National Debt, which is equal to 125% of Greece's GDP;

>> There will have to be job cuts and service cutbacks in a country where over 30% of the workforce are in civil service and many public services are taken for granted. The Greek standard of living, expectations for income, vacations, buying foreign goods, will have to be lowered;


Greece's Largest Union Marches In Athens Earlier This Week

>> The Greek on the street is not happy with any of this -- not with their government, not with the EU. There have been strikes and riots over the past few weeks; just a few days ago, crowds set fire to several banks around the country, killing two bank employees in the process. The Greek Communist Party has agitated heavily for support in the past few months;

>> If the Greeks cannot balance their national budget, and default on any outstanding loans (or later default on payments for this IMF-ECB loan package), they may have to drop out of the Eurozone;

>> This means they will no longer use the Euro as their principal currency, and return to the Drachma -- which will not be valued very highly. This can destabilize the entire Eurozone... and much like the interconnected Wall Street investment bank community which were all doing deals with each other, the problems of one Eurozone country can affect all of Europe;

I agree that Europe and the EU is America's largest trading partner. If they suffer, if their economies falter and stock exchanges have selloffs that force EU businesses to fire workers and reduce production, the U.S. will get hit with that as well -- just as we were trying to crawl out of our own terrible Great Recession.

Another fact about Greece's circumstances we should be paying attention to, here in the United States, is what happens when a nation's public debt becomes larger than the value of its domestic goods and services (Gross Domestic Product, or GDP). It generally ends in catastrophic financial collapse, hyperinflation, and a devaluation of its currency -- along with potential political upheavals (revolution, or a coup d'etat).

Paul Krugman, Nobel laureate and general good guy, had this observation to make in the New York Times this morning. He doesn't paint a rosy picture:

So how does this end? Logically, I see three ways Greece could stay on the euro.

First, Greek workers could redeem themselves through suffering, accepting large wage cuts that make Greece competitive enough to add jobs again. Second, the European Central Bank could engage in much more expansionary policy, among other things buying lots of government debt, and accepting — indeed welcoming — the resulting inflation... third, ...fiscally stronger European governments could offer their weaker neighbors enough aid to make the crisis bearable.

The trouble, of course, is that none of these alternatives seem politically plausible. What remains seems unthinkable: Greece leaving the euro. But when you’ve ruled out everything else, that’s what’s left.

If it happens, it will play something like Argentina in 2001, which had a supposedly permanent, unbreakable peg to the dollar. Ending that peg was considered unthinkable for the same reasons leaving the euro seems impossible: even suggesting the possibility would risk crippling bank runs. But the bank runs happened anyway, and the Argentine government imposed emergency restrictions on withdrawals. This left the door open for devaluation, and Argentina eventually walked through that door.

If something like that happens in Greece, it will send shock waves through Europe, possibly triggering crises in other countries. But unless European leaders are able and willing to act far more boldly than anything we’ve seen so far, that’s where this is heading.

As the Curmudegon and Matt Yglesias pointed out, the European Central Bankers don't want to risk any inflation. And that decision, while it protects a small group of Owners and Masters Of The Universe, may put the structure supporting the Euro at risk -- and, ultimately, the EU itself. And because Europe is our largest trading partner, all that will wash up on our own shores, as surely as millions of gallons of BP crude in the Gulf.

But I'm only a Dog, and no one listens to me.

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