“The Euro Zone’s Terrible Mistake”

If you want to know what the ‘Merkozy’ deal has up its sleeve to ‘resolve’ the euro crisis read Felix Salmon’ recent blog for Reuters news agency:

American International Group

Learning or not from 2007 mistakes -Image via Wikipedia

“In order for markets to work, lenders need to suffer when they make bad lending decisions. If the Europeans didn’t learn from Ireland, couldn’t they at least learn from the Fed’s much-criticized decision to pay off all AIG creditors at 100 cents on the dollar? Blanket guarantees at par are pretty much always a really bad idea — and this one, if it comes to pass, will be the biggest one yet. It won’t end well.”

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