SAR #12021

Should we surrender to the bankers now, or wait until we have nothing left?

On The Up and Up: Sales of previously owned houses were up 3.6% in December, y/y, the third consecutive month showing gains. For the year, 2011's previously owned house sales were up 1.7% over 2010. Taking a bit of the luster from the sales numbers were the sales prices, which were down. Again. Some more.

Candide, Indeed: Two months ago the European banking system was in such bad shape that a coordinated intervention by the European Central Banks was rushed into existence, and billions were shoveled into the banks, which turned around and parked them at the Central Banks. What did that solve? The banks still have a 26 to 1 leveraging, where a strong wind of a 4% decline in their already worthless assets would doom them. The LTRO charade was the best the ECB could come up with to hide their monetizing EU bonds - except that it was neither successfully hidden nor did the banks buy the sovereign bonds they were supposed to. So how is it everything is getting better over in the best of all possible worlds?

Fine Print: A couple of wives years ago, Newt insisted that “the people have every right to ask the tough questions.” Yesterday he said that asking about past dishonesty and moral lapses was “despicable”. Not the dishonesty and the moral lapse, mind you. Just the asking.

Finer Print: Gingrich also refused to release documents relating to $300,000 fine levied after the House investigated what they could find of his ethics.

Cow/Cabbage: The bloom is slipping from the rose of global growth projections. The IMF now sees two years of recession in Italy, while “the global recovery is threatened by the growing tensions in the euro area." Overall, world GDP growth is projected to be 3.3% in 2012 and 4% next year – both downgrades from earlier guesses.

True or False? “We now live in an era of unmitigated propaganda that is accepted much as propaganda in wartime.”

Civilized Discourse: Maine's governor, Tea Partiest Paul LePage, asserts that if the state's Health and Human Services budget isn't decimated, he will permanently close the state's public school system. The 61% of Maine voters who did not vote for LePage are less than thrilled, especially those the governor wants to toss off of Medicaid in order to fund his tax cut for the rich last year.

Chocolates: Debt-to-GDP has declined in only 3 countries since the current crisis began - the US, South Korea and Australia. US households are, it is thought, about one-third of the way through their required deleveraging, and attempts to re-inflate the economy through bubblicious credit is not helping. Deleveraging has been mostly absent in Europe - the UK and Spain get singled out as the worst miscreants.

Surprise! Analysts say that Romney's tax plan would only increase the national deficit by $600 billion in 2015. That makes Mitt the better of the tax and spend wannabes; Gingrich, Perry and Santorum's plans would all increase the annual deficit by over a trillion. All of them achieve this by cutting taxes for the rich and slashing social spending for the rest of us.