Ding Dong! The Witch is dead. Which old Witch? The Wicked Witch!
Ding Dong! The Wicked Witch is dead.
Wake up – sleepy head, rub your eyes, get out of bed.
Wake up, the Wicked Witch is dead. She’s gone where the goblins go,
Below – below – below. Yo-ho, let’s open up and sing and ring the bells out.
Ding Dong’ the merry-oh, sing it high, sing it low.
Let them know
The Wicked Witch is dead!
Wizard of Oz
Commentary & Analysis
Eurozone periphery: If this is success I’d hate to see failure!
Merriam Webster’s Dictionary uses the following to help define the word success:
b : favorable or desired outcome; also : the attainment of wealth, favor, or eminence
As I was perusing the very fine library of what Reuters calls its “eurozone crises graphs” I ran across this on yesterday and shared it with our Members. At no point in time while viewing anything on this graph did I think of “favorable or desired outcome” or “the attainment of wealth.” In fact, I think it portrays the exact opposite.
This could be the one chart that says it all, which in my sometimes narrow mind says the collective majesty of the European Union (EU), European Central Bank (ECB), and International Monetary Fund (IMF) have dished up a rescue plan that to date has been a dismal failure for Greece and it’s winding down the road to failure for Ireland. Oh, but not to worry, the same plan will surely work for Portugal.
Why am I so negative? Take a close look at the chart above and see if you notice some of the things I have, for instance:
- Since Greek showed up at the table to be saved, its 10-year bond yield has soared to over 15% from around 10%. That’s a 50% increase in borrowing cost for the country at a time when growth is plunging and unemployment is rising. Success? Hmmm…
- Since Ireland came to the table for aid, to be saved by our three superheroes, their borrowing costs have only increased about 20%…and yet many citizens who are tired of staring into the abyss of economic opportunity are leaving Ireland as fast as they can find a job elsewhere. Not exactly an ipso facto sign of success where I come from.
- Now Portugal is pulling a chair up to the marbled table to get their piece of the collective pie and already the trajectory of their borrowing costs is mirroring the rise of Greece and Ireland. I bet Spain just can’t wait to join this party now that their unemployment is near 21% (officially).
Climb euro climb!