The global markets were on the verge of a failed rally when a news story broke about the resignation of Bini Smaghi. In my mind this is a very significant event as it portends the beginning of a major deal on EFSF funding in the works. WHY? Two weeks ago it appeared that Mr. Berlusconi had castrated President Sarkozy by reneging on an agreement for Mr. Bini Smaghi to resign his ECB position once Mario Draghi assumed the Presidency of the ECB. If SMAGHI retained his seat it meant Italy would occupy two key positions in the ECB and France would have none. Sarkozy supported Draghi only on that basis that the Bini Smaghi seat would go to a Frenchman.
Posts Tagged ‘Meredith Whitney’
Notes From Underground: Bini Smaghi Resigns From ECB Executive Board … What’s It All About?
November 10, 2011Notes From Underground: While Europe Slept…
December 19, 2010This weekend the European Union, again, failed to do anything to alleviate the PIIGS’ problems. Eurocrats continue to put Band-Aids on the problems of potential insolvency of the weakest sovereigns. Even though the official communique left more questions than it answered for investors and European citizens, there were two solid pieces about the why and how of some type of real bailout program. Nouriel Roubini had an insightful piece on Slate, but while economically sound it fails to deal with the political machinations that are in play in Europe. Adding to Merkel’s problems is the fact that her coalition lost a vote in Parliament on an education issue. While it’s not a serious affront to the chancellor’s coalition, it does reflect the serious political winds that are blowing and gathering force in Germany.