Stating the Obvious

Yesterday, IMF director Christine Lagarde called for additional protections or using the newly popularized word, “firewalls” in Europe to stop the spread or “contagion” in the eurozone. (On a side note, let us see how many of this new financial jargon I can use in this article). To most of the world the EU, the ECB, the IMF, the European Financial Stability Facility(EFSF) and the under development European Stability Mechanism (ESM) are all what we call rescue funds. To the average Joe, who cares what you call the money, or how it is being funneled to governments and banks, we just know that it going from taxpayers pockets out the door to cover huge debts.

Just back a few years ago, when the US bailed out GM and AIG and many others, where the money was coming from was really unimportant, it came via the government and that meant it came from the tax payer.

When you pay your taxes does the government care which bank account you took the money from or if you sold your car to come up with the money or if you borrowed it. They just care that you paid the money and eventually it all comes from the same place your pockets.

Last week it was suggested the IMF raise their funding to 1 trillion euros, now this week IMF director Lagarde is suggesting that they pool all the money that the EU has stashed or can leverage into one pool. It sounds nice but in actually outside of economists and ministers and banking officials who really cares, if the EU has the money to “ring fence” the eurozone that is all that matters.

The bigger question is what will be the outcome, how many other creditors will be forced to take “haircuts” (a nice way to say losses of billions) and why can’t we just get on with it. The agony of the daily news and comments and the never ending problems and meetings. Why can’t these Ministers just sit down come up with a plan more than just a “fiscal pact” and “austerity” measures to figure a way to resolve or deal with these problems, develop a formula or a road map or a committee charged with dealing and settling these matters quickly as they continue to drag the rest of the world down.

Greece had a deadline of last Friday to reach agreements with their creditors but nothing was resolved and talks continue as the IMF and the EU help put up smoke screens. Why isn’t anyone actively dealing with Spain and Italy, who the IMF director says could deal with their own debts?

Not likely, these are two economies buried by debt and government expenses that need assistance. Just because they are not in dire straits with their backs against the walls, why do we push them off to the future, why not deal with them now.

The US economy is slowly chugging along, it is not great, and it is very fragile, but it is showing signs of recovery, but the EU continues to drag them back down.

Boys and Girls, let’s get on with it. How many slang and jargon terms did I use.