For Wine-Drinking Euro Economists, the End is Nearer than They Think

By Bill Tatro

Saturday, April 27, 2013

 

Hurray, hurray!  A foremost international financial analyst at Federated Investors has declared that the worst may be over for Europe.

 

She made this proclamation after having met with “European economists, decision makers, and decision shapers.”  I imagine that after a long flight from Pittsburgh, she was greeted by a limousine and quickly whisked away to her five-star hotel.

 

After a day of in-depth discussion, interrupted only by a catered lunch, she more than likely spent the entire evening immersed in comprehensive conversations regarding Europe’s current economic situation — all followed by fine wine and a solid meal.

 

Perhaps the conversation dealt with the ECB and Mario Draghi’s steadfast determination to do “anything and everything” in order to keep the European Union afloat.  Indeed, I’m sure that Keynesian congratulations were shared all around, as sovereign spreads have narrowed and stock markets have continued to rise.

 

In addition, I’m quite certain the Italian political dilemma — if not solved entirely by this aforementioned brain trust following their day of deliberations — was at the very least merely put on hold for a while.  I can also envision that their spontaneous straw poll confirmed that the German people favor the euro, and we all know how important that is since Germany pays all the bills.

 

All in all, multiple reasons to order another round of champagne.

 

“Veni, vidi, vici,” I came, I saw, I conquered — high fives all around.

 

Yes, I’m definitely convinced this little bit of theater was repeated several times in numerous European Union countries, until it came time for the financial analyst to get back into her fancy limo, catch her first-class flight, and return home to write the “all’s well that ends well” report for MarketWatch.

 

It’s quite obvious the analyst never witnessed firsthand the 25% unemployment rate in Spain, or the lifetime Greek businesses closed and shuttered, never to open again.

 

And it’s safe to say that she never left the Keynesian circuit in order to meet face-to-face with the average person in Cyprus, Portugal, or even Italy, who are all wondering where their next meal will come from, let alone what tomorrow will bring.

 

Truth be told, the growth rate of most European countries is hanging by a thread, and when really scrutinized from a day-to-day perspective, European gross domestic product is mired in economic depression.

 

Unfortunately, most financial analysts spend all of their time talking to the “decision makers and shapers” that have only one group of people they’re concerned about — themselves.

 

The next time around, my suggestion to the Federated analyst is to take a taxicab, stay in a B&B, roll up your sleeves, and get your hands dirty by eating and drinking with the European equivalent of Joe Six-pack.

 

At that point, maybe all financial analysts will finally start to realize the worst for Europe is not behind, but lying directly ahead.