The lighter side of financial armageddon
As the financial system staggers towards its inevitable collapse Citi’s chief economist Willem Buiter may be looking to a future career as a stand-up comedian.
His keynote address at Citi’s credit conference in London on Wednesday provided some much-needed levity for an audience weighed down by the gloomy market outlook.
“Bunds would trade wider over Bunds if only they could!” he cracked, while assessing the state of the eurozone government bond markets. The eurozone finance ministers’ latest plans to leverage the EFSF (which were announced the day before) were summarily trashed with the observation that they “might just about be able to make €250 billion into €260 billion” and have enough left over to “fund Christmas presents for Albanian orphans”. The acronym for the EFSF’s SPIV replacement – the co-investment fund or CIF – was neatly explained: “CIF stands for...fiddle!”. As to potential solutions with more likelihood of success Buiter expects the ECB to step in after two or three more near-failed auctions with additional involvement from the institutions like the IMF and the EIB (“which has had its mandate distorted – it was set up to dig ditches in places like Scotland). But if all else fails and this time next year there is no longer a euro “at least we will all have souvenirs for the grandchildren!”