Wednesday, 12 May 2010

Sell in May and go away

This will be my last blog for a week. I am going on a fact finding mission to Corfu where I might just bump into Peter who has some time on his hands. Thank goodness his obnoxious little friend George will be otherwise engaged.

The Greeks intend to start drawing down their loans this week seeking 14.5 billion euros in three-year loans ahead of a May 19 repayment deadline for a 8.5 billion euro bond. I bet it comes from the IMF as the EU won't have got itself organised yet but where is the other 6bn € going? Well it as the conservative daily Die Welt said the fundamental problem was that the other euro zone countries did not share Germany's culture of financial stability or as their commentator Herr Eigendorf wrote, "The euro zone is dominated by countries for whom currency stability is not so important, and, "Nothing symbolises that more strongly than the loss of the central bank's independence."

Ben Bernanke, FED chairman, told US senators yesterday that the Greek debt crisis was a European problem but one that could have hurt U.S. banks if left unattended. Hence Obama's boot applied to the Sarky-Merkel bums.

Meanwhile one of our French EU partners, J-P Jouyet, chairman of the French FSA said only 'God would help" Britain after it snubbed its Eurozone neighbours by refusing to hand over lots more money to Brussels. Its a pity we had not said that in 1914 to the French. We would have been a richer and happier country.

It all arose because French, Swedish and Brussels officials have predicted it is only a matter of time before sterling suffers the same market turbulence that almost destroyed the Euro last weekend. What is French for schadenfreude? Anyway we have vast experience of Sterling crisis and we now have the boy David and his Buller friend wee George at the helm now so watch out you EU crats, boot boy Hague will soon be across to kick bums - I hope!

I opine that as the detail of the latest rescue package filters out Greek bond to Bund spreads will creep up, they are back over 6% this morning and the Euro slowly sink. The Greeks will continue to riot and the German press will flay Merkel especially as the whole deal is seen in the fatherland as a French triumph that turns the Eurozone into a transfer payments system using German money, a long held French aim.

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