Digital Journal Op-ed

Europe Desperate in Midst of Unprecedented Financial Contagion

The economy follows an ocean of derivatives down the drain.

Digital Journal,

17 October, 2011

Berlin - The term "contagion" being bandied about in the world press is short for "Bad Debts Created from Worthless Financial Derivatives" that have infected all aspects of the world economy. Germany took a cautious position today promising no quick fixes.

The mountains of bad paper originated by the derivative contagion unleashed on the world by Wall Street between 2006 and 2009 has begun to seriously infect world economies to the point of Credit Default and Bankruptcy. Greece is sinking fast.

Picture a healthy hospital ward that takes in patients who are infected with an incurable contagion. By necessity, they’ve been placed in the general ward (The European Union) 

where financial analysts have diagnosed the problem as malignant, highly infectious, and inoperable “financialitist carcinoma.” The patient’s only hope for survival is a financial money infusion/transfusion from the arm of the healthiest body in the room, a strapping German whose also showing signs of sickness but is as healthy as can be expected in the milieu of the infectious, stinking financial plague.

Waking from the nightmare we discover that Europe is in the midst of the worst financial crisis since the conclusion of World War I. With the consolidation of the European Union, Europe has in essence booked its ticket on the Titanic. The ship hit an iceberg of massive bad derivatives about two years ago, and the Greek portion of the bow has been taking on water ever since. The ship is inexorably bound to go down, but the stronger midsections manned by Germany and France are still above water and reluctant to release the limited life boats and preservers to their drowning contemporaries who’ve begun to jump ship in mass protest.

The desperate ship engineers came up with an emergency plan called the European Financial Stability Facility which is currently the equivalent of a couple of blow-up water wings. Bloomberg Reports that Nouriel Roubini chairman and co-founder of Roubini Global Economics LLC.Roubini said the EFSF needs to be more than four times its current size to be effective. Someone, somewhere isn’t on the same boat.

If the boat is sinking you had better release the lifeboats. German Chancellor Angela Merkel who of late has made several commitments to shore up the aching financial wounds yesterday reiterated that any meaningful commitments may not occur until the new year. Make no mistake about it, Europe is scared, scared shitless. Things are going down the tube and those countries who are currently healthier balance sheets, not yet showing the ugly scabs of the bad debt, derivative contagion, are getting to the point where they're ready to cut-off the infected parties and toss them to the wolves. Remember the dark ages and black plague? This time the transmitter wasn’t an ugly rodent that ran through sewers, but instead a good looking man at a desk on Wall Street who dressed in Armani Suits, Zegna Shirts, and Bruno Magli Oxfords. His contagion was a derivative financial weapon of mass destruction packaged as safe investment with a 40-1 liability to asset ratio and insured by a giant, too-big-to-fail conglomerate of world finance called AIG (rhymes with HIV.)

The Investment Banker hit the sell button, Greece, said “all in” and the rest is, or will be…history.