Political leaders will claim that this is a major milestone en route to European political union. But it is really an empty gesture that will have no effect on future deficits and debts. Fortunately, the bond vigilantes understand this and are on the job.
–Martin Feldstein, Europe Needs the Bond Vigilantes, The EU’s ‘fiscal compact’ is an empty gesture. Wall Street Journal, 9 April 2012
They have punched the 24-hour clock and are on the job.
Except, European leaders are on holiday.
In the blur of the day, zerohedge.com launched a blogette on the leader-of-the-moment in Germany trés upset at sie Vigilantes. Others, too.
I await full and apportioned blame on Herr Gross and Herr El-Erian.
Let me cut to the chase: when Senator Shelby (R-TooBigToFail) danced on the west-wing driveway in the heart of the American crisis, he understood that markets & vigilantes price the perceived present and the distant future.
That lesson is lost in translation (Charlotte: You’re probably having a mid-life crisis. Did you buy a Porsche yet?) in our collective Old World.
Read Jerry Z. Muller and understand in a Kantian non-Knightian way…it is not the vigilantes’ fault. Discuss.