Goldman Sachs has confirmed what I've been saying all along. The big targets in this war of the financial institutions against the states of Europe are not the small countries onthe euro zone periphery. They're the big countries. That's where they'll make a killing, where they will really get what they want: to make a fortune betting on the collapse of entire countries. It's what they've done until now, except it was with countries that could be more easily blamed for getting into the mess themselves.
Jim O'Niell of GS announced yesterday that he was going straight past the next possible front line of this war, Spain, and directly to the core of what he wants. Whilst everyone speculated that GS would raise the battle cry to attack Spain next, O'Niell made it clear that France is his target. He sees the country's finances as far worse than its southern neighbour's. At first glance he's right. But France also has a greater capacity to put its economy right than Spain does. And neither country has the problems of Greece and Portugal. Painting them with the same brush makes the justification easier, but the facts remain the same.
This doesn't mean that GS won't lead an attack on Madrid. It eventually will. But it wants to keep folks guessing about where the next invasion will land. After Portugal, of course. Silently, everyone has written that country off.
European leaders should consider one consequence of how the financial crisis was managed, and how it is hurting them now. Goldman Sachs is alive today because the U.S. Government kept it alive with TARP money. It paid the government back fairly quickly. But now Europe is going to pay the real price.
Jim O'Niell of GS announced yesterday that he was going straight past the next possible front line of this war, Spain, and directly to the core of what he wants. Whilst everyone speculated that GS would raise the battle cry to attack Spain next, O'Niell made it clear that France is his target. He sees the country's finances as far worse than its southern neighbour's. At first glance he's right. But France also has a greater capacity to put its economy right than Spain does. And neither country has the problems of Greece and Portugal. Painting them with the same brush makes the justification easier, but the facts remain the same.
This doesn't mean that GS won't lead an attack on Madrid. It eventually will. But it wants to keep folks guessing about where the next invasion will land. After Portugal, of course. Silently, everyone has written that country off.
European leaders should consider one consequence of how the financial crisis was managed, and how it is hurting them now. Goldman Sachs is alive today because the U.S. Government kept it alive with TARP money. It paid the government back fairly quickly. But now Europe is going to pay the real price.
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