Europe Will Make Lehman Look Like a Joke

Friday, October 28, 2011
By Paul Martin

by Phoenix Capital Research

So now that one day has passed and we’ve seen a ridiculous 3% move in stocks based on a “bailout” that is nothing short of moronic (Greece is still insolvent and didn’t take a big enough default), the financial world is actually asking itself questions such as:

1) Does giving a bankrupt nation more money right after it defaults a good idea?

2) Does requiring an additional $100+ billion in capital for banks that need north of $1.77 trillion in new capital really accomplish anything?

3) Do bailouts involving more leverage and debt work when the entire banking system is insolvent?

Think about it… Greece is supposed to get its Debt to GDP ratio to 120% by 2020… Can you imagine being a political leader and expecting the markets to buy that?!? Greece had a Debt to GDP of 120% in 2009 when this whole mess started!!!

Already Germany is pouring cold water on it.

Eurozone bail-out: holes emerge in the ‘grand solution’ to solve EU debt crisis

Jens Weidmann, the president of the Bundesbank and a member of the European Central Bank, sounded the alarm over the plan to “leverage” the fund by a factor of four to five times without putting any new money into the pot.

The Rest…HERE

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