Tuesday, September 27, 2011

The archetype of the trader

A video interview of a trader with the BBC has gone viral today. In that interview, Alessio Rastani not only predicts the end of the euro, but reveals that he, and presumably all traders like him, up to and including Goldman Sachs, have been waiting for the opportunity to make money from a crash. If you haven't yet seen it, take a look. You'll see the world as it really is.

This is what Europe is up against, and why, at the end of the day, there are only two choices for Europe if the creditor countries attempt to get 100% of the money back that Greece owes them: A European (Economic) Government, or European Collapse. The interdependencies of the banking system are too extensive to avoid contagion from Southern Europe to the core financial centres of the North. The pattern until now to throw good money after bad in the case of Greece has exacerbated, not reduced the threat.

We see here, in this video, the archetype of the financial market trader--a living representation of all that we associate with the movers and shakers of the financial world--displayed in all its glory. And yet there is no real-life archetype of a European President, of a European Government, that could take authoritative decisions in economic policy Barosso? Van Rompuy?

Exactly. European leaders are selected for their weakness, their capacity to work with the heads of government of the member states, who fear for their prerogatives and only vote for those who are smaller, in a figurative sense.

Barring a turn-around that establishes a European government, we had all better hope that Europe comes down to a negotiated partial default (rather than a complete default), or that Greece leaves the euro or both. Because the alternative is as Mr. Rastani says: governments don't rule the world. Goldman Sachs does.

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