Risk markets are roaring out of the bell this morning, on the next wave of nonsensical hype that today’s 20th EU summit has solved European insolvency. More debt and even more debt will not work. Most repugnant is the agreement once again to further subjugate European taxpayers as their political representatives agree that bond holders will continue to enjoy preferred-creditor status on crisis loans ahead of taxpayers. If there is any doubt as to who these politicians see as their true constituents, this agreement further reminds us–it’s the banks, not “we the people”.
This is another in a long line of efforts to save banks ahead of the real economy as taxpayers are thrown further and further under the bus. And that recession that is now underway around the world? More debt and more cuts to the real economy to support fake balance sheet values in banks will only extend and deepen our global downturn. Tomorrow we suffer more, but today apparently, we dance. In more relevant news, this morning we see that US consumer confidence sunk further in May, now at the lowest point since last December.