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    The market exploded Monday on the nationalization news of Dexia, no additional sovereign downgrades (but that hasn’t mattered recently anyway), and an announcement by Merkel & Sorkozy that they have, in essence, a “plan” to “create a plan” in the near future. When asked about the details, Sarkozy said “It’s too early for details…”

    And with the absence of anything concrete, but lots of Hopium to go around, the stock indices blasted higher with the Dow closing up over 300 points. To be clear: there is NO PLAN to do anything, but they plan on having a plan “real soon, we promise (this time).” Moreover, there are NO DETAILS OF WHAT THEY WILL EVEN DISCUSS! Explode indeed; after all, the banking mafia won’t have to clean up Dexia or anything touching Dexia as well as Greece, Ireland, Portugal, Spain, and Italy. Oh no! That’s for the saps that pay taxes.

    So on and on it goes…where it stops nobody knows. But wait a second here; could it actually stop with Slovakia? All of the countries in the Euro need to ratify the “bailout the banking mafia (EFSF) fund” and the only two that haven’t ratified it yet are Slovakia and Malta. Who wants to bet, despite it written into the treaties that ALL countries must ratify something this major that “this time” the details of the treaty just won’t matter. In the end, can the happiness and bonuses of the banking mafia be held up by Malta and Slovakia? “Meh, just ignore them and the rules” will be uttered by Sarkozy & Merkel.

    In der Spiegel we read about the possible cog in the wheel: Slovakia. The full article can be read here [url=http://www.spiegel.de/international/europe/0,1518,790577,00.html]http://www.spiegel.de/int...pe/0,1518,790577,00.html[/url]

    Richard Sulik, 43, is an economist specializing in tax policy, the speaker of the Slovak parliament and head of the Freedom and Solidarity (SaS) party, a minor party in the country's four-party coalition government. He lived and studied in Germany for over 10 years before returning to his homeland in 1991.

    Sulik has been a vociferous critic of aid packages to Greece and of the expansion of the euro backstop fund, the European Financial Stability Facility (EFSF). As an adviser to the Slovak minister of finance, Sulik played a decisive role in the introduction of a 19 percent "flat tax" on incomes, which led investors to flock to the country.

    [b]SPIEGEL ONLINE[/b]: Mr. Sulik, do you want to go down in European Union history as the man who destroyed the euro?

    [b]Richard Sulik[/b] : No. Where did you get that idea?

    [b]SPIEGEL ONLINE[/b]: Slovakia has yet to approve the expansion of the euro backstop fund, the European Financial Stability Facility (EFSF), because your Freedom and Solidarity (SaS) party is blocking the reform. If a majority of Slovak parliamentarians don't support the EFSF expansion, it could ultimately mean the end of the common currency.

    [b]Sulik[/b]: The opposite is actually the case. The greatest threat to the euro is the bailout fund itself.

    [b]SPIEGEL ONLINE[/b]: How so?

    [b]Sulik[/b]: It's an attempt to use fresh debt to solve the debt crisis. That will never work.

    [b]SPIEGEL ONLINE[/b]: Slovakia's parliament is scheduled to vote on the bailout fund expansion on Oct. 11. How do you predict the vote will turn out?

    [b]Sulik[/b]: It's still open. The ruling coalition is composed of four parties. My party will vote "no"; the other three coalition parties intend to say "yes." What the opposition says is decisive.

    [b]SPIEGEL ONLINE[/b]: What will you do should the EFSF reform pass despite your opposition?

    [b]Sulik[/b]: For Slovakia, it would be best not to join the bailout fund. Our membership in the euro zone, after all, was not conditional on us becoming members of strange associations like the EFSF, which damage the currency.

    [b]SPIEGEL ONLINE[/b]: If the euro only causes problems, why doesn't Slovakia's government just pull the country out of the euro zone?

    [b]Sulik[/b]: I don't see the euro as the problem. It's a good project. Everyone involved can benefit from it -- but only if they stick to the ground rules. And that's exactly what we're demanding.

    [b]SPIEGEL ONLINE[/b]: Which ground rules should we be following?

    [b]Sulik[/b]: We have to observe three points: First, we have to strictly adhere to the existing rules, such as not being liable for others' debts, just as it's spelled out in Article 125 of the Lisbon Treaty. Second, we have to let Greece go bankrupt and have the banks involved in the debt-restructuring. The creditors will have to relinquish 50 to perhaps 70 percent of their claims. So far, the agreements on that have been a joke. Third, we have to be adamant about cost-cutting and manage budgets in a responsible way.

    [b]SPIEGEL ONLINE[/b]: Many experts fear that a conflagration would break out across Europe should Greece go bankrupt and that the crisis will spill over into other countries, including Portugal, Spain and Italy.

    [b]Sulik[/b]: Politicians can't allow themselves to be pressured by the financial markets. Just because equity prices fall and the euro loses value against the dollar is no reason for giving in to panic.

    [b]SPIEGEL ONLINE[/b]: But do you really believe that politicians can calm the financial markets by stubbornly sticking to their principles?

    [b]Sulik[/b]: Let's just ignore the markets. It's ridiculous how politicians orient themselves based on whether stock prices rise or fall a few percentage points.

    Excuse me, but is Mr. Sulik suggesting that politicians do what’s right and not what’s politically expedient? Where the heck is the political equivalent in the USA to this man? One can dream.

    Surely the EFSF will pass. The banking mafia and political class will get its way in the end.

    Greek 1-YR bonds now yield 150%!? No problems there – Just move along.

    Trade well and follow the trend, not the so-called “experts.”

    [b]Larry Levin[/b]
    Founder & President- [b][url=http://www.tradingadvantage.com]Trading Advantage[/url][/b]

  • #2
    Don't know who you are Larry Levin, but a damn good post. Didn't know such wisdom existed in Slovakia. Governments trying to stop the collapse of over indebted banks, remind me of a man standing on the beach trying to stop the tide. R7

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