SAR #12155

We are repeating lessons from an unlearned history.

Fourth Reich?: Chancellor Merkel has absolutely rejected joint debt sharing in the euro region, saying “under no circumstances” would she agree to German-backed euro bonds. Germany wants the creation of a European finance ministry with power over national budgets, and major new powers for the European Commission, European Parliament and European Court of Justice. That, and peace in our time.

The American Way: Personal income increased 0.2 % in April, Personal consumption expenditures increased 0.3 %.

Spring, Sprang:The Arab Spring is not over, its barely just begun. Yes, Mulbarak is gone. But the transitional government was simply more of the same and thus far the election does not promise much hope that the causes of the Spring Revolt will be addressed. Back to Tahrir.

You Are There: Remember all the talk about how we wouldn’t repeat the mistakes of 1937? Turns out it was just talk.

Big Ben:  Wall Street hopes that last week's poor jobs report will force Bernanke into another round of 'giveaway', which they can use to drive up the markets (and their bonuses). But the GOP has spent the last year telling the Fed to fight the inflation boogeyman and not to do anything that might help Obama get re-elected. So, which set of masters will Ben disappoint?

Three Part Disharmony: There are three separate issues are tangled up in the Eurozone crisis. They should be dealt with separately, not mashed together. First, Northern European bankers/investors loaned Greek politicians money knowing they had no way to pay it back. The banker/investors didn't care, they thought (correctly so far) they would be bailed out when Greece defaulted. The bailout of Northern banker/investors should be a Northern problem, not Greek one. Second, going forward, euro or non-euro, no sane person will lend Greece a drachma. That's a Greek problem and they should live with it. Thirdly, Greece & friends need to abandon the euro and let their wages and prices fall until they become competitive with their trading partners. How they can do this an not suffer a decade of depression is a Good Question.

Cheaper By The Dozen: Over the weekend, US drones killed 10 Pakistani militants who were attending the funeral of one of two militants killed by drone strikes the previous day.

Egress: The American jobs crisis is the result of high corporate profits that the companies are afraid to use to expand their business and thus let tens of billions sit on their bottom lines. Corporate profits now account for significantly more than 10% of GDP: that’s never happened before. The way out of this bind is for the government to borrow a few hundred billion at 1.47% and use it to fix our broken infrastructure, to re-hire all those laid-off teachers and firefighters, and to provide some kind of safety net for the millions of Americans who have been out of work for more than a year. The nominal long-term return would be well over 1.47%, making the investment worthwhile.

Frills: Prisons in Greece are running out of money and have no way to feed their prisoners. I'm not sure this is what Angela had in mind, but that's the reality. They should free them if they can't feed them.

The Play's The Thing: About 2.4 million US homeowners^HA! owe more than twice their house's value to the bank - or to whomever may pretend to own their mortgage today. that's 5% of mortgage holders. And over 10% of mortgage holders owe 40% more on their mortgage than their house is worth. In all, nearly 16 million households are "underwater". That's one out of three mortgages; and more than 10% of them are three or more months behind on their payments. Part of the shadow inventory.

Baubles, Bangles & Beads: Romney's senior campaign adviser, Eric Fehrnstrom, says that the women's social issues like abortion rights and access to contraception are but “shiny objects” which distract voters from the important things. Like cutting Mitt's taxes a bit more.

Porn O'Graph: History lesson.

The Parting Shot:

After the rain.