Bailout Blues

Busted Bailout

The Bailout Bias

The IMF learned this in 1997, when an inadequate bailout of South Korea forced a second round of negotiations. In Greece, the problem is even worse, as the 86 billion ( 94 billion) plan now under discussion follows a 110 billion bailout in 2010 and a 130 billion rescue in 2012.

Why the Greek Bailout Failed

Even if a bailout plan were implemented quickly which appears increasingly unlikely there would be some credit contraction. The US economy has been sustained by a consumption boom fueled by excessive borrowing, and that will be curtailed.

Although Greece was bailed out a year ago, Plan A has now clearly failed. Greece will require another official bailout or a bail in of private creditors, an option that is fueling heated disagreement among European policymakers.

Russia s government just rolled out a 130 billion bailout plan for the country s banking system as a percentage of GDP this would be equivalent to about 1.3 trillion in the US almost double the Paulson plan. Yet, even this package has not significantly eaten into Russia s sovereign wealth funds and its world s third largest currency reserves.

MUNICH In blatant violation of the Maastricht Treaty, the European Commission has come forward with one bailout plan after another for Europe s distressed economies. Now it wants to socialize not only government debt by introducing Eurobonds, but also banking debt by proclaiming a banking union.

After a bank s shareholders are wiped out and its creditors take an 8 haircut, the European Fund transforms itself into a bailout fund, justifying some of Germany s fears. And there is no explicit prohibition of some form of national government bailout.

Spain like Greece is spiraling into depression, and may need a full scale bailout by the troika (the ECB, the European Commission, and the International Monetary Fund). Meanwhile, austerity fatigue in the eurozone periphery is increasingly clashing with bailout fatigue in the core.

Will the bailout work? We have national debt, Detroit, currency valuations, healthcare, all these issues facing us.

The fact is that only the US and the massively over represented countries of the European Union supported the Greek bailout. Indeed, the major emerging economies all strongly opposed it, with the Brazilian representative calling it a bailout of Greece s private debt holders, mainly European financial institutions.

With minds concentrated by fears of another 1930 s style Great Depression, America s political leaders developed, virtually overnight, a 700 billion bailout plan to resuscitate the country s rapidly deflating financial sector. But, just as stunningly, rank and file members of the US House of Representatives have rejected it at least for now.

NEW YORK It doesn t take a genius to figure out that the United States financial system indeed, global finance is in a mess. And now, with the US House of Representatives having rejected the Bush administration s proposed 700 billion bailout plan, it is also obvious that there is no consensus on how to fix it.

The problem is that the Geithner Plan appears to me to be too small between one eight and one half of what it needs to be. Even though the US government is doing other things as well fiscal stimulus, quantitative easing, and other uses of bailout funds it is not doing everything it should.

There is a growing consensus among economists that any 750 billion bailout based on Paulson s plan won t by itself do the trick of resuscitating our economy. If so, the huge increase in the national debt and the realization that even 700 billion is not enough to rescue the US economy will erode confidence further and aggravate its weakness.

Delaying bank restructuring is costly, in terms of both the eventual bailout costs and the damage to the overall economy in the interim.

So plan B, always a plan B.

Moreover, Greece could exit the eurozone in 2013, before Spain and Italy are successfully ring fenced Spain like Greece is spiraling into depression, and may need a full scale bailout by the troika (the ECB, the European Commission, and the International Monetary Fund). Meanwhile, austerity fatigue in the eurozone periphery is increasingly clashing with bailout fatigue in the core.

So I think that the oil blowout, the bank bailout, the mortgage crisis and all these things are absolutely symptoms of the same cause.

The Chinese have a little bit better plan or they have a plan we have no plan.

So if you have a plan, then plan against Me.

So if you have a plan, then plan against Me.

So if you have a plan, plan against Me (now).

So if you have a plan, plan against Me (now).

Plan

We do that corporate whether it's a bailout, an oil spill, a recall we pretend like what we're doing doesn't have a huge impact on other people.

Moreover, fiscal and sovereign debt strains are becoming worse as interest rate spreads for Spain and Italy have returned to their unsustainable peak levels. Indeed, the eurozone may require not just an international bailout of banks (as recently in Spain), but also a full sovereign bailout at a time when eurozone and international firewalls are insufficient to the task of backstopping both Spain and Italy.

As a result, taxpayers may need to pay twice, once for the bailout and again for the low quality debt they have incurred during the bailout, as the austerity programs unveiled in Europe attest. Paradoxically, the growing sense that a catastrophe has been averted has given rise to a growing demand for governments to cut public and social spending, and to refrain from proposing investment programs.

Don't plan for the war unless you plan to win the peace.

Good plan.

Business Plan

Action plan

So Russia now has a choice Ukrainian plan A or Ukrainian plan B.

It was kind of interesting because in the morning, from 9 to 11, they were discussing the bailout package how many billions to invest in saving the Danish economy.

ATHENS Germany s arguments against introducing Eurobonds, expanding the eurozone s bailout fund, and instituting a comprehensive system of economic governance are transparent and easy to understand. But are they right?

And they have indeed planned their plan, but their plan is with Allah, though their plan was such that the mountains should pass away thereby.

And they have indeed planned their plan, but their plan is with Allah, though their plan was such that the mountains should pass away thereby.

Well, I said we also have a plan. And our plan is quite simple.

They planned a plan, and We planned a plan, but they did not notice.

They planned a plan, and We planned a plan, but they did not notice.

And they planned a plan, and We planned a plan, while they perceived not.

And they planned a plan, and We planned a plan, while they perceived not.

And they planned a plan, and We planned a plan while they perceived not.