FLASH: Euro Zone Has Gone ENRON

Ok, the latest little scheme coming out of Euroland is that they’re going to use the European Stability Fund to capitalize a SPV, which will then buy up sovereign bonds, package and then (presumably) repo those to the ECB and then of course buy more bonds.

I will simply remind everyone that this is not materially different than what ENRON did, and we know exactly how that ended and why.

smiley smiley smiley

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