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Good news for people who like bad news

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Time to worry about Europe again.

By Ezra Klein  | September 29, 2010; 9:46 AM ET
 
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Comments

Is it strange that I like bad news?

Posted by: teddywilson | September 29, 2010 9:55 AM | Report abuse

"Good news for people who like bad news"

Now, that's a way to put a positive spin on the morning!

Has there ever really been a time when we didn't have to worry about Europe?

Now, who here still thinks a common European currency was a good idea?

Posted by: Kevin_Willis | September 29, 2010 10:02 AM | Report abuse

Is anyone surprised the $1 trillion bailout didn't fix the problem?

Note - this is why you do not want to get into a debt crisis. Imagine what it would be like for the US 10yr to be yielding north of 6% when inflation is running about 1%!

For the "our deficits are okay because yields haven't spiked yet LOL" crowd, note that the market wasn't worried about Portugal at the start of the year, but nine months later it's a big problem. Things can change that quickly.

Unlike the PIIGS, we can always print dollars to pay off our debt, but that solution is far from costless.

Posted by: justin84 | September 29, 2010 10:22 AM | Report abuse

Nice Modest Mouse reference, Ezra.

Posted by: matthat121 | September 29, 2010 10:29 AM | Report abuse

The EU (and its currency) is a rather delicate topic. The sovereign states of Europe (such as France) are now facing the same issues encountered by the sovereign states of America (such as Arizona and Virginia): the various sovereign states recognize the problems inflicted by distant and ineffective central-planning organizations and are forced to push back.

This morning, Reuters is reporting (see http://www.nytimes.com/reuters/2010/09/29/world/international-uk-france-roma.html) that "The European Union will begin infringement proceedings against France over the expulsion of Roma, EU Justice Commissioner Viviane Reding said Wednesday. 'France is not enforcing European law as it should on free movement, so we are launching an infringement process against France,' Reding told France 24 television."

A Constitution (or a Treaty) isn't a suicide pact. What will happen as ruling central-planners pursue increasingly bizarre social and economic policies and as general laws created by such central-planners become increasingly invasive and immutable?

In the United States, the question of mutability may be just around the corner: what happens if/when Obama "pulls a DeMint" and begins to veto acts of an elected Congress? The media must respond, but will reports brand Obama as an obstructionist -- or will a state-run media emerge and hail the obstructionism?

Posted by: rmgregory | September 29, 2010 10:36 AM | Report abuse

and as Justin referenced Spain is having issues too.

http://www.guardian.co.uk/business/2010/sep/29/spain-downgrade-expected-moodys


Its not that we want bad news its that we want a resolution to the deficit issues that are plaguing our world economy. December can't come fast enough to settle down these markets and resolutions relating around entitlement reform and increasing tax revenues need to be addressed and addressed soon.

Again this proves we need the intestinal fortitude to NOT extend the tax cuts for any lengthy period of time.

Posted by: visionbrkr | September 29, 2010 10:43 AM | Report abuse

I love his alpine climber analogy. Much better than the driving off the cliff analogy spinning around in my mind.

At what point do the top climbers cut the rope? And do they have the necessary tools to do so?

Posted by: bgmma50 | September 29, 2010 11:00 AM | Report abuse

BTW....has the lefty press decided to come out against extending the tax cuts?

Posted by: bgmma50 | September 29, 2010 11:02 AM | Report abuse

"Unlike the PIIGS, we can always print dollars to pay off our debt, but that solution is far from costless."

The PIGS are paying the price of a rigid exchange rate. All that is missing are runs on the local currency.

Not much impact on the US markets this time around.

Posted by: tuber | September 29, 2010 2:23 PM | Report abuse

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