The Eurozone crisis, Is there a way out?

[liveco]

I was just reading now on LA times (McManus: Europe's continental drift), and a phrase really captured my attention; The author, while describing how bad the situation is in Europe (especially the southern countries) goes as far as saying:

"
Southern Europe is experiencing its worst drop in living standards since World War IITo anyone who has been

Comments

[peristaltor]

Okay, this is the first time I've gotten a serious link to comedy network.

I thought I'd mix it up a bit. ;-) I heard about his book through that interview.

Previously, he's brought up that the Treasury is counting money that the FED actually made, which I'm not thinking is a big deal. The FED and Treasury were both working on TARP, so I'm not too concerned about who gets the money.

The details are in the book, yes, and I remember but a portion of them. Essentially, Treasury time and time again was shown to be supporting the banks in ways that SIGTARP Barofsky felt inappropriate. Treasury-especially Geitner-went so far as to interpret the Homeowner Loan Modification program in ways that allowed the banks, not the homeowners, to avoid losses. I did take notes on that section. Holy crap, it's bad.

The section concerning the "paying back" of the first TARP infusions, the one that got a lot of press, was actually Treasury allowing the banks to record a subsequent TARP infusion as a payback. Barofsky was furious, but his job was clearly defined to avoid the SIGTARP office from criticizing policy. Since he couldn't speak out, and no one else corrected the record, the public now has the impression that the banks paid back gov. They didn't, and the details are in the book.

Be it Greece or Fannie or Freddie, there's a mistaken impression out there, one you seemed to voice, that things will "improve." If by that you mean return to the old normal, put me down as extremely skeptical. Remember that the old normal was a bubble created by rampant credit extension done without due regard for consequences. If today's bad returns to the old normal, it will by definition be called a bubble, one that will-again, by definition-eventually burst.

We need no return to the old days, but rather a path to a new normal that can be sustained. As long as people cling to the halcyon past, that ain't gonna happen, not here, not in Greece, no where.