John Dizard: Mega-Bailout to Come?

John Dizard's Financial Times column has this insightful observation:

One gets the sense that what the world’s political and speculative communities want is an excuse for one last, titanic, round of “stimulus” amphetamine. The collectors and dealers I saw last week at the contemporary art sales in London were astonished by the money in the room suddenly looking for something to do. I think they may be seeing the premonition of the mega bail-out to come.

That's the column's last paragraph. It pops out to me because it aligns with my belief that -- while we my not see an outright QE3 -- we will at least see easy money policies for a very long time.

The bulk of Dizard's piece deals with Europeans not applying the lessons learned from previous emerging market restructurings, or applying them too late.

He recommends a new book, Banker to the World: Leadership Lessons From the Front Lines of Global Finance by William Rhodes, a former Citibank president. Dizard reports first meeting Rhodes while writing about Nicaragua's debt restructuring in 1980. And says Rhodes' career is best described at "the international banks' chief sovereign workout person."

Among Rhodes' key insights is this: a government needs to present its debt restructuring program as being "national" in origin -- and avoid looking like it was imposed, rather than supported, by outside forces (like the IMF, other countries or outside financial institutions).

That's not the case with Greece.

And with eventual default taken for granted, Dizard says the failure will taint the big European and multlateral institutions as well as Greece.