So the “right party” wins the election in Greece supporting the bail out. Good news? No, not really. The ECB and European (aka German) policies on Greece are doomed to fail. I tweeted this morning that all I don’t see any good news, but I can small straws burning. Those are the straws that are being clutched by desperate Euro-area politicians and policy makers.
I here more and more credible stories of major companies sweeping their cash from Greek banks every single night. Regulators are asking for stress tests against any number of catastrophic scenarios that are waiting to happen. If it’s not a dead certainty now, it’s pretty close.
Look at the response of Spanish bond yields to the “good news story”. Those with money know that the UK and the US aren’t going to default any time soon, aren’t going to suffer hyperinflation any time soon and that Spain and Greece are approaching the brink.
No gold-standard Austerian, Austrian mania explains any of this.