Reparation Day

Spain and Italy done and dusted for this round and however much you feel it’s a fix or manipulation, the results are OK. Also the idea of an expanded EFSF with a greater mandate is picking up steam as a potential panacea for the current European funding problems and headlines such as “*S&P’S SIX SAYS INCREASING EURO FUND IS LIMITED RISK FOR CORE” appear to be on the increase. Peripheral spreads have collapsed and we have seen the start of a healthy Euro FX rebound, but judging by the market chat we are picking up, everyone still appears to be fighting it and waving their bearish factors fervently. More of a short squeeze is certainly on the cards and our trusty old mibometer is backing that view.

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Now, whilst we are all focused on auctions, the ECB announcements and EFSF headlines it is actually these headlines pricked our interest:

*GREECE TO BE REPRESENTED ON GERMAN WAR REPARATIONS CASE
*GREEK GOVERNMENT DECIDES REPRESENTATION AT ICJ CASE IN HAGUE
*GREEK PRIME MINISTER PAPANDREOU COMMENTED IN EMAILED STATEMENT
*PAPANDREOU SAYS ICJ CASE RELATES TO DISTOMO WWII MASSACRE

TMM have begun to wonder where this is leading? Is this an alternative to the EFSF rescue package? How convenient it would be if Germany just happened to settle €80 billion in “war reparations” (ahem) to Greece. As such TMM look forward to the following headlines:

For Spain

• Germany agrees to pay Spain €300bio in reparations for their involvement in the Spanish Civil War and for persistently commandeering all the sun-loungers
• France to pay Spain €194 bio in reparations for the damage Napoleon did during the Peninsular War
• China to pay €6bio in “reparations” to Spain for all the Chinese restaurants in Malaga taking UK tourist income from local Spanish establishments
  Not quite reparations but equally backdoor:
• France agrees to buy Spanish air traffic control for €100bio to create Europe’s largest no-fly zone

For Italy

• Germany agrees to pay Italy €500bio in reparations for the Varian Disaster in the Teutoburg Forest in 9AD
• France agrees to pay Italy €300bio in reparations for Charles VIII of France’s invasion of Italy in 1494 AD
• Holland agrees to pay Italy €200bio in reparations for soundly beating them 3-0 in the opening match of Euro 2008

For Portugal

• Germany agrees to pay Portugal €50bio reparations for not taking them seriously in WWII
• France agrees to pay Portugal €20bio in reparations for assisting Spain in stealing oranges in 1801
• Finland to pay Portugal E10bio reparations for thinking it was part of Spain

For Ireland

• Germany to pay backdated rent of €50bio for hire of submarine parking facilities
• France to pay €10bio for constantly going on that Breton culture is actually Celtic
• ECB continues to pay €30bio for their involvement in getting them all into this mess in the first place and allowing them anywhere near the Euro

For Belgium

• The rest of Europe agrees to pay €100bio for using their country as a rugby pitch in every World War

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