If you want a better world, elect better leaders.
Peak Money: "The world is running out of money. If money is credit, and credit relies on confidence, there is not enough confidence in the financial system to supply the world with the money it needs. ... credit and money have been withdrawn from the system in such staggering amounts that international trade can no longer grow. The world’s central banks are playing a rear guard action by acting as lender of last resort to banks that no longer trust each other and have stopped lending in the interbank market. As liquidity flows out from the system, the rottenness that has corrupted the foundations of global finance is now exposed for all to see." And so on.
Rin-Tin-Tenner: Tax evasion and the movement of ill-gotten gains out of the country has become such a severe problem that the Italian financial police are deploying dogs trained to sniff out euro notes.
Triage: Investors (?) holding Greek sovereign debt are seeing their "voluntary haircut" go from a 50% crew-cut to an 80% Mohawk. Some at the ECB want to abandon the effort to “involve the private sector” and make the Greeks pay far more, while “restoring trust” in the rest of the euro zone thus reducing their financing costs. Except, of course for Ireland, Portugal, Spain and Italy.
Data Dump: Unemployment initial claims were reported at 372,000, down 15,000, and the 4-week average stands at 373,250 – the lowest it has been since June 2008. Light vehicle sales, at 13.56 million SAAR, were up 8.9% y/y and were the strongest since June 2008. Gift horses, do not look too closely.
Sampler: Where once Americans dreamed of owning a home, now they dream of affording an apartment.
Sticks and Stones: Despite our expectations and the forecasts of experts, there are not going to be any dramatic changes, just continued, unrelenting decay all around. Oil prices are never going to come down, house prices are not going to go up, and US wages will continue to erode, year after year. True, the system is broken, but it has tremendous inertia.
Motivation: In the legislation to convert REO/foreclosed houses to rental units, expect investors to get access to federal money at below-market rates, banks (and the GSEs) to receive above-market prices for houses they cannot sell, and the taxpayers of 2045 to foot the bill.
Clarification: The non-partisan Tax Policy Center says that Romney's tax plan would increase taxes on low-income families by 60% while cutting taxes for the middle-class 2% and reducing taxes on the rich by 15%. Any questions?
As Easy As 1 – 2 – 3: First the financial/economic crisis discredited America's free-market brand of capitalism. Then the European version collapsed. Now the Chinese approach (socialized state capitalism) is wobbling badly. How then shall we next try to organize the economy? Is there any absolutely sure way of generating wealth and prosperity? No.
Beautification Project: The US defines its foreign policy and foreign military adventures as being “pro-democracy”, while even the most casual observation reveals that “democracy” to the US power elite denotes a country whose leadership will serve America's interests, while dictatorships are countries that do not take orders from Washington. Democracy in terms of the various countries internal politics is of no concern to America, Inc.
Ipso Facto: Three New Hampshire GOPers want the state to adopt a requirement that all legislation must trace its origin directly from the Magna Carta. Beats insisting on implementing the Ten Commandments.
Reminder: “Remember when teachers, public employees, Planned Parenthood, NPR and PBS crashed the stock market, wiped out half of our 401Ks, took trillions in taxpayer funded bailouts, spilled oil in the Gulf of Mexico, gave themselves billions in bonuses, and paid no taxes? Yeah, me neither...”
