Saturday, November 12, 2011

SAr #11314

Without losers, there are no winners.

Clarification: The eruozone crisis wasn't caused by unrestrained governmental borrowing so much as it was by unrestrained 'over-lending' by banks. The problem has been magnified by reactionary and damaging economic ideas and the original birth defects in the euro, all compounded by treating they symptoms and making the symptoms worse. What at first were lectures by the Markozy element telling the lazy and apparently unsophisticated Mediterranean states to cut wages, sell of national assets, reduce pensions, abandon healthcare and raise taxes have now become instructions from the IMF and ECB. This will not set well with the people being enslaved  – and unlike their American counterparts, they have not forgotten how to fight back. “Most likely rational solutions will emerge from the battlefields.”

Not News: Assad continues to slaughter his citizens, US continues to maintain Syria has no oil.

Oddsmakers: While yields on 10-year Italian bonds have fallen to the 6% level, simple math shows that even that rate is far too high for Italy to be able to actually redeem its € 1.9 trillion debt (GDP growth of less than 1%, Inflation – controlled by the ECB – at 2% leaves at least 3% more in taxes the government would have to suck out of the stagnant economy). This means that Italy will need to spend nearly 10% of its annual GDP on interest payments alone. European bankers agree and are busy dumping €300bn in Italian debt.

Water Is Wet: The natural gas industry has pumped over $750 million into lobbying at the federal level aimed at avoiding regulation of their 'fracking'. We are supposed to be shocked.

Trigger Happy: On planet Washington, where reducing the federal budget deficit continues to be more important than creating jobs, everyone is talking about “triggers” that automatically go into effect if certain other things don’t happen. Yet no one is talking about the most obvious trigger of all — no budget cuts until the official level of unemployment falls to 5 percent, its level before the Great Recession

Damn! Research shows that 85% of the #Occupy protesters have jobs. Only 56% of Tea Party members have jobs.

Technocrats, pah: The trouble with technocrats – even if there were such a thing and even if their solutions were appropriate – is that they are not leaders, not inspiring, not charismatic. And if massive suffering austerity programs are going to be imposed, it will take a leader to get the population to go along. Think 'blood, sweat, and tears' vs 'take this it's good for you.'

You Made Me Do It! Obama's decision to put off approving the Keystone XL pipeline in order to con his environmentalist supporters one more time may force Canada into China's waiting arms. Or so the Canadian Finance Minister would have you believe.

Reminder: “Every $1 per barrel rise in the price of oil decreases US GDP by $100 billion a year. Every 1 cent increase in gasoline price at the pump cuts US consumers' disposable income by about $600 million a year.”

The Future Is Now: According to the IEA (and oil industry production records) peak oil has come and gone – back in 2006. The reason that there has been but limited impact is called 'recession' – which it may well have been instrumental in triggering. Do not be misled by the “all liquids” data – actual crude oil, the stuff that gasoline, diesel and jet fuel is made from peaked 5 years ago. Yes, liquids have added about 1% to the supply – but with the global population growing by the tens of millions each year, that's little comfort. It's not how much there is, but how much there is for me that counts.

Being Human: Most Americans are pro-choice and pro-life and manage not to think too deeply about the dichotomy.

1 comment:

fajensen said...

He his best known in Greece, however, for his work as one of the country's most senior economists.

So he is either the one of the people who helped cook the books for Greece's entry into the EUR or he failed to spot it. Essential skills to "restore confidence" in spite of the Greek not paying any damn taxes soon, especially not to Germans and French people.