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2011: The Year of the European GIPSI?

Nov. 15, 2010 3:36 PM ETEWG, EWP, EWO, EWI, ESR, EWQ, FEZ, EWU, EPV1 Comment
C X Alexandre profile picture
C X Alexandre

PIIGS is truly not a flattering acronym, and can be deemed offensive and downright cruel. But the ugly acronyms don't stop there and STUPID (zerohedge.com) is yet another one that refers to another group: Spain, Turkey, U.K., Portugal, Italy, and Dubai. As a matter of fact, just about any country in Europe can be bundled into a new group, because the economic landscape across the pond is quiet dire.

It's my turn, and I now create a new, and logical, acronym — GIPSI — that actually reflects the credit risk by order of magnitude (from high to low) of the five members in the table below and is ironically appropriate, especially since French President Nicolas Sarkozy on July 28, 2010, ordered authorities to force out Gypsy illegal immigrants and dismantle their camps amid accusations that his government is racist in its treatment of the group known as Roma. Could it be that Nicolas is acting out his fantasy in a smaller scale — and wildly misdirected — since Mr. Sarkozy dreams of expelling the GIPSI from the European Union?

Country 5 Year Spread
Greece 826.18
Ireland 489.37
Portugal 387.29
Spain 222.56
Italy 176.30
Source: CMA (cmavision.com) 11/1/2010

But does it really matter which country is the weakest link? Or the order in which the debt crunch and the fallout from austerity measures will be felt? Let's remember that Europe is now a Union of sorts, aspiring to become the most powerful Federation of States on Earth, and the Euro's ambition, although misplaced and ill-designed, requires economic cohesiveness. Athos, Porthos, and Aramis, the characters created by Frenchman Alexandre Dumas, come to mind. In "The Three Musketeers" they were inseparable friends and their motto was "tous pour un, un pour tous" — "all for one, one for all." Its' not

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C X Alexandre profile picture
1. - Unassuming, unbiased, and unemotional analyst of people, politics, and markets. 2.- Psychology, Patterns, and Probability are the trading tools. 3. - Packaging builds Perceptions that must be validated by Performance.

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