The G7, inexplicably, announced that member finance ministers would convene for a conference call this afternoon. No other details emerged, but this seemed a bit unusual on the heels of the most recent G20 meeting a couple weeks ago. The Wall Street Journal reports that: “News of the conference call comes amid speculation that Spain might tap the EUR750 billion euro rescue fund set up to help euro-zone countries.” And then Reuters published this report: “Spain sees credit squeeze but denies EU rescue bid” – here’s the link: “You as well, Spain?”
The key feature of that news report is adamant denial by Spain’s Treasury Secretary, Carlos Ocana. I believe that is at least the second or third time that Spain has officially denied the need to be financially bailed out. As per the old political adage: a rumor is just that until it’s been officially denied three times – then it becomes fact. This is probably why gold was slammed from its overnight high of $1235.50 (August future) as soon as London trading commenced (usually they don’t hit gold until the a.m. fixing, two hours into trading). It’s also why gold was hit another $6 as soon as Comex trading commenced. The key event in this whole sequence is that gold rallied $7 from Friday’s Comex settlement last night in Asian trading, indicating that Asia/India have resumed their physical buying.
In another Weimar-esque development, Obama asked Congress for $50 billion to give to the States in order to help keep public employees employed. This development of course occurred on Sunday, when very few people actually pay attention to the news. Please note that this $50 billion would be tossed on top of the more than $37 billion already given to States in order to fund jobless claims.
Can someone please explain to me why Obama is willing to spend $50 billion of printed taxpayer money to keep Government employees well-fed, while the private sector workers continue to face massive job losses? It grows more absurd by the day. At this point, I’m not sure what the bigger disaster is: the BP castastrophe or Obama’s Presidency? Speaking of BP and Obama disasters…
It sounds like BP/Obama are negotiating to put some kind “fence” around BP’s total liability for cleaning up the Gulf. I have yet to see any estimates of the cost, so I’m not sure why Obama would be willing to cap BP’s exposure. Rest assurred, the Taxpayer will be paying for the rest, and thus probably the bulk of the clean-up cost. This is one time that I’m really cheering for the class-action lawyers to bury a big corporation in damage litigation.