"Crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbusch
Hidden Message: Bank stocks dropped as soon as it was learned that Obama would appoint a director for the Consumer Financial Protection Bureau. Why should will having someone looking out for the consumer threaten bank profits?
The Snidely Solution: Bernanke wants Congress to help make the US a nation of renters by “devising policies that could help facilitate the conversion of foreclosed properties to rental properties.” Is there a Federal Apartment Rental Management Team in our future?
Caution: Not every disastrous prediction for the New Year – Iran, Italy, oil, the euro, China, Ron Paul - will prove accurate; but just one or two would be more than sufficient.
Introductory Comments: Budget cutting governments are as likely to get re-elected as big-spending governments. Austerity may save the economy, it is less likely to save the regime. The 20th Century is replete with instances where austerity resulted in unpleasant social outcomes. History also suggests that internal stresses tend to give rise to external stresses. There, I thought I phrased that quite delicately.
Is It Getting Warm In Here? European banks turn ever more to the ECB to safely hide their free money - €453 billion at latest count. That's €453 billion that the banks were given on the foolish hope they might buy sovereigns. Banks are greedy, not dumb.
Ms Manners: An appellate court has upheld an $18 billion fine against Chevron for environmental damages in Ecuador. The original sum was only $8.6 billion, but the amount was more than doubled because Chevron refused to apologize. How much could a simple "sorry" and some flowers have cost?
Apples To Apples: Why do Republicans cite our children and grandchildren's lives as reasons for doing something drastic now to reduce the federal deficit, while climate change - a far more serious threat – is not?
Day In The Park: A judge ruled that in order to prevail in its suit against Countrywide, MBIA needs only show that Countrywide misrepresented the nature and quality of the loans backing the bonds MBIA was insuring.
Complication: When guestimating how much oil will be available in 10 years, remember that Saudi Arabia's internal consumption will double in that time. What they burn at home, they will not be selling on the open market. And in 20 years, they won't have any left over to export at all. And that's before we figure in their depletion rate...
Pending Question: When is the stock market going to encounter the real world?
And Your Point Would Be? Stock trading, in and of itself, does not create wealth. Trading stocks very rapidly with computers does not create anything useful to the real economy. Taxing trades - say at 0.25% or a penny a share or somesuch - would put a sudden stop to a lot of the churning in the market.
Yes, But: The US has imposed sanctions on institutions that deal with Iran's central bank, which has led Turkey to seek a wavier for oil, while South Korea simply increased its oil agreement with Iran, without even saying "May I?"
Porn O'Graph: It's good to be rich.
