Good Ebola News for Animal Lovers

Bentley, Dallas nurse Nina Pham’s dog, has tested negative for Ebola.  He will be tested again before his quarantine is up on November 1.  Um, Spain, this is how you do it.  I’m guessing Teresa Romero’s dog, Excalibur, would have been Ebola negative too, but we’ll never know for sure, will we Spain, because you irrationally rushed to kill him.

Pham herself has been upgraded from fair to good at NIH in Bethesda, MD.  I’m looking forward to seeing her reunited with Bentley.

 

Barry’s Other New BFF

Aside from Bill, Barry has another BFF, Mario.

The head of the European Central Bank, Mario Draghi, announced today that the bank will buy lots and lots of bonds from struggling euro zone countries to help reduce their borrowing costs, especially Italy and Spain.   Draghi in effect drew a line in the sand, saying “The euro is irreversible.”

One country voted against the bond-buying plan.  That’s right — Germany.

Do I think this will save the euro?  No.  But it means there won’t be a big panic between now and our election.

It also seems as if Israel won’t attack Iran between now and November 6, although Bibi is not exactly another BFF.

Looks as if Barry has everything under control.  He just has to get through the debates without checking his watch or sighing and rolling his eyes.

So Where Are the High Interest Rates?

From “Money For Nothing,” Paul Krugman, NYT:

“For years, allegedly serious people have been issuing dire warnings about the consequences of large budget deficits — deficits that are overwhelmingly the result of our ongoing economic crisis.

“But a funny thing happened on the way to the predicted fiscal crisis:  instead of soaring, U. S. borrowing costs have fallen to their lowest level in the nation’s history.  And it’s not just America.  At this point, every advanced country that borrows in its own currency is able to borrow very cheaply.

“The failure of deficits to produce the predicted rise in  interest rates is telling us something important about the nature of our economic troubles (and the wisdom, or lack thereof, of the self-appointed guardians of our fiscal virtue).
“Oh, and pay no attention to the warnings any day now we’ll turn into Greece, Greece I tell you.  Countries like Greece, and for that matter Spain, are suffering from their ill-advised decision to give up their own currencies for the euro, which has left them vulnerable in a way that America just isn’t.

“So what is going on?  The main answer is that this is what happens when you have a ‘deleveraging shock,’ in which everyone is trying to pay down debt at the same time.

“But it’s simply crazy to be laying off schoolteachers and canceling infrastructure projects at a time when investors are offering zero- or negative-interest financing.

“You don’t even have to make a Keynesian argument about jobs to see that.  All you have to do is note that when money is cheap, that’s a good time to invest.

“That said, you should be a Keynesian, too.  The experience of the past few years — above all, the spectacular failure of austerity policies in Europe — has been dramatic demonstration of Keynes’s basic point:  slashing spending in a depressed economy depresses that economy further.”

Dead Heat in Florida

And I’m not talking about the weather.

The Mason Dixon poll out today show President Obama leading Mitt Romney by 46 to 45.

If Mittens puts Marco! Rubio! on the ticket, he leads Obama by 46 to 45.

Libertarian Gary Johnson is getting the protest vote at 2% from those who don’t get the concept of lesser of two evils.  They’d rather go with the third evil who doesn’t have a chance.

Obama can win without Florida, but Mitt really can’t.

With Florida so close, I need to warn  all you hanging-chad folks that if you mess up another presidential election, we’re giving you back to Spain.  Except for those who get sent to Cuba, and I don’t care if your feet are wet or dry.  One Bush v. Gore is enough of a blight on our history.

Nurse Merkel Offers More Bandaids

At the European Summit, Italy, France, and Spain did their best to gang up on Germany, but didn’t get much in return.  Merkel is still vehemently opposed to euro bonds, and I don’t see that changing, no matter what.

Italy and Spain will find it easier to get aid from the European bailout fund (the European Stability Mechanism or ESM), but the ESM didn’t get any more money.  Its maximum is still about $633 billion, when Italy and Spain owe about five times that amount.

The ESM will put money directly into Spanish banks rather than using the Spanish government as a pass-through.  And private bondholders of Spanish banks won’t be subordinate to government bond holders.

Such tiny steps have failed to satisfy the markets in the past.

By refusing to “go big,” Europe’s leaders are setting up the euro zone to go bust.

 

Merkel — Euro Bonds Over My Dead Body

With France, Spain, and Italy supporting euro bonds (shared European debt), Germany’s Angela Merkel told them to fugeddaboudit:  “I don’t see total debt liability as long as I live.”

There’s another EU Summit this Thursday and Friday, but I think they’re running out of road to kick the can down.

This isn’t going to be pretty, either in Europe or here.

If you’re Mitt, it’s all good.   For the President and the rest of us, not so much.

 

Unfortunately, I Think He’s Right

From “One Wall Street Seer Says The Greek Tragedy Is Near,” Andrew Ross Sorkin, NYT:

“If you want to be scared, truly terrified, listen to Mark J. Grant.  He might be right.

“For the last two years, Mr. Grant, a managing director at a regional investment bank in Florida, has been predicting the bankruptcy of Greece and a cascade of chaos across the global economy.
“‘Greece will default because there is no other choice regardless of anyone’s politics.’

“Mr. Grant in a Jan. 13, 2010 report forecast that Greece would default on its government debts, one of the first to publish such a prognostication.

“The January 2010 report, written two years before Greece did indeed default, has made him the go-to forecaster for some of the world’s largest investors.

“Sadly, Mr. Grant is not predicting the default of just Greece, he’s already on to Spain (he reached that conclusion before many others, too).

“He has convinced himself that Germany, the only country in a position to help, will not come to the rescue.  ‘You can bank on one thing if nothing else; the Germans will not allow their cost of funding to rise or their standard of living to decline to help the nation that have gotten themselves in trouble.  You can count on this!’

[W]e are headed for a bad recession with lots ‘of shocks to the system.’  He says this will likely happen in the next four months or ‘it could come sooner.’”  Emphasis added.

 

In Chicago, they’re hoping to keep the sick men of Europe alive till the second week of November; in Boston, they want to remove life support ASAP.

 

 

Spain Is the Big Story

I know everyone’s focused on Greece, but today’s big story really is Spain.  For the first time, the interest rate on its ten-year bonds went over the magic number, 7%.  That’s the point at which Greece, Ireland, and Portugal had to get bailouts.  Spain’s economy is bigger than those three combined, so bailing out Spain would be a huge deal.

Italy’s interest rate went over 6% today.  Bailing out Italy, whose economy is bigger than Spain’s, would probably be impossible.  Italy is the third largest economy in Europe, after Germany and France.