The Digger’s financial problems are beginning to show in the standard of columnists he can afford to hire. Either that, or hacks from different specialisms are having to learn new ones as their job responsibilities double up. Perhaps Anatole Kaletsky normally does gardening, but this week had to stand in on the economic outlook. Anyway, his column today is utter piffle from start to finish: not backed up by a shred of evidence, and with that type of optimism which only very clever people can embrace. I’m not going to link you to it because Murdoch’s approach to the news business is to stifle free speech: ie, Roop thinks we should all pay for the privilege of having an opinion – so he’s not getting any help from The Slog. What I will do however is reproduce one of the comments on the piece, which reflects both my views and the general tenor of the threads:

‘Britain does have a disproportionate financial services industry, and the concentrated rubbish in this article disappoints me. Mervyn King has slightly more kudos and wisdom than Mr Katelsky; but it seems that anyone who challenges the city is seen as a heretic.’

Meanwhile, back on Earth the UK does have an 85% export dependence on services, and no, the eurozone crisis is not over, Anotole. But don’t take my word for it: this was a senior US dealer’s view last night on Geli Merkel’s decision to ban speculation on bond debt:

“The market sees an inadequate policy such as this as an act of desperation and a refusal to address the fundamental problems at hand.” This was the view of Brian Yelvington at Knight Libertas in Connecticut.It was also the view of most other folks with whom I’ve conversed and coresponded over the last few days. Bloomberg nonchalantly reports today:

‘The unexpected ban, done independently of the European Union, came after the rescue package failed to stop the 16-nation common currency from weakening to a four-year low and as banks became increasingly reluctant to lend to one another’.

The trouble with Frau Merkel is a microcosm of the madness underlying the idea of one currency for 27 entirely different economies: sooner or later the squabbles become a blazing row, and the younger offspring either leave home or are kicked out. Since she gave in to Franco-Iberian pressure last week, the German Chancellor has been commuting from the inside to the outside of the tent and back on a daily basis. This is not playing well with the German public, and nor is it instilling confidence among dealers and lenders.

As one has come to expect, the FT’s Martin Wolf posted easily the best piece on Eurozone problems last night. It is a model of clarity, and spears the hypocrisy on all sides with clinical accuracy.

Whereas Martin was an unbeliever in Eurozone collapse only three months ago, he is now in the ‘I’m not sure’ camp. This is significant. I don’t think any of us know what the likely outcome of the current unpleasantness will be; but it isn’t hard to spot the flaws in European deficit thinking.

The worst outcome by far was triggered via the ECB’s decision last week to buy all the junk on offer. This guaranteed that the taxpayer will have to pick up the bill. And that in turn has ensured that private sector consumption-driven recovery in the EU as a whole will be infinitely harder than it would’ve been.

Panic bans on naked shorts create unwanted effects. Taxes on already overburdened consumers don’t aid recoveries. Inflation created by QE generates excessive wage demands and industrial unrest. And deficits that mean we have to pay for what used to be free exacerbate the situation. Anatole Kaletsky would be better off returning to the planet Szplat. And the EU is all over the place at the moment.

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