September Preview: The Return of Macro Masturbation

“September is Europe’s Zero Hour.”
– some genius

I’m going to help you make it through the coming month, consider it my single good deed in a lifetime of practical jokes, sarcasm, snarkiness and feigned interest in lots of things I have no interest in.  Yes, I’ve done my share of upsetting stuff.  One time, for fun, a friend and I walked into a near-empty movie theater,  there was one guy sitting in there and then 200 empty seats.  And we sat on either side of him just watch him freak out.  I know, I know.  So here’s where I make up for that.

We’ve had a very pleasant low-volume, low-volatility August thanks to the fact that Draghi floated a few trial balloons from the ECB and then all the Europols went on their month-long speedo-vacations (side note: is it any wonder that a continent that takes 30-day holidays can’t get its fiscal shit together?).  But those vacations are now at an end, horrific tan lines and everything.  The Euro pols will be returning to their oak-paneled conference rooms in Brussels with fresh plans of disinformation and obstinacy dancing in their little Euro heads.

The big date everyone is concerned about is September 12th, a day during which we’ll be treated to a double-header of bullshit from our friends across the pond.

First, the Dutch general elections.  Holland is one of the few countries where you can look at their books with a straight face and as a result, they are on the hook for their Southern European neighbors should any major bailouts occur.  Like most Northern Europeans, the people are not thrilled about this and so the elections there will be mighty contentious and may even throw a metric system-calibrated wrench into the efforts to keep the currency alive, depending on how the vote goes.

Also on that day, Germany’s government will vote on the very constitutionality of the ESM.  As a briefer, the European Stability Mechanism is the descendant of the original EFSF, it is supposed to act like a bank with the power to borrow directly from the ECB and make (forgivable, we assume) loans to peripheral European banks.  This combined with the rumors of a bond-buying programme that would target low sovereign yields is meant to be the bazooka that puts this whole crisis in more stable footing.  But this entails loads of money printing (500 billion euros can’t simply be earned in an Etsy shop after all).  But Germany may not be on board the whole ESM thing, it may not even be legal.  And so this decision on 9/12 looms over us like an obese lover in the throes of passion, grinding and grunting away while the sweat trickling down its chin stings our eyes.

But here’s the part where I help you.  Because while I have no special expertise or experience in forecasting the vicissitudes of core European diplomacy and socioeconomic policy, I do know white people.  And I know wealthy white people, in particular.  And wealthy white people, American or otherwise, can always be counted on to compromise at the last moment so as to preserve the status quo.  And that compromise will typically involve whichever option is the least painful, even if it means that more work must be done in the future (the proverbial can-kick).  And we know that euro printing, even if it means a bit of inflation for the German middle class to wrassle with, is probably worth it if the task is preserving the hegemony of the  creditors, rentiers, landed gentry and aristocracy.

And so eventually, no matter how scary the headlines become or how volatile markets become in the short-term, you can expect a compromise that the wealthy and powerful elites (read: the markets) can live with.  You can set your Swiss watch by it.  Keep this in the back of your mind when the bullshit artists come on TV or puke their newsletters into your inbox.  They are very intellectually intelligent, but they are also misanthropic social outcasts who do not and have not ever understood the way people work.

Hope this was helpful, see you in September kids.