Archive - Jul 27, 2010

In the new deflation, the value of our income falls, while the prices of things we need to buy are going through the roof. Burning our candles at both ends. Rampant wage deflation means that recent graduates have a grim choice between taking a poorly paid job, or no job at all.

In light of recent bombastic statements by priests of Keynesian fundamentalism that European banking is one big, non-dysfunctional, even healthy family, it would have been the logical thing that the Basel Committee on Banking Supervision would if not tighten terms on proposed Basel III implementation, then at least keep them as is. Why is why news that the recently proposed adjustments to Basel III which not only delayed implementation of the "regulatory" framework by many years, allowing banks sufficient time to blow themselves up under thecurrent regime, but also to soften liquidity requirements of all global banks, is merely an indication that global regulators realize that the last free for all, in which every bank is allowed to steal as much as it possibly can before all hell breaks loose, in many times with as little as a penny in the mythical risk reserve concept known as Tier 1 Capital, levered a few hundred billion times, is finally here. And yes, aside from the fact that even the existing massively lax regulatory rules of Basel II need to be toned down is irrelevant: all European banks are healthydammit, and just like in the US, bank failures will continue until credibility returns.

RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 27/07/10

A few days ago I posted a video of Larry Summers talking about FinReg on CNBC with Maria Bartiromo. At the time, I was content to simply post the video with some snide remarks about what a devilish doofus and utter cad the man was, leaving it up to the reader to watch the video and see how obviously arbitrary and self-serving his opinionating on the subject was. Alas, it seems that with the clarity of retrospect I see now that I misjudged the psychic value I would derive from leaving the video up without specific comment. It turns out I misjudged my future value system (insert statist/interventionist guffaw here, along with requisite claim that this situation highlights the need for a monopolist regulator who could smooth out market inefficiencies, failures and information asymmetries) and I have no choice (!!, double guffaw) but to present to you now a series of nearly verbatim (I might have blown a preposition or tense here or there) transcripts of The Sleepy One's comments to the Money Hunny, along with my very own color commentary. Let us begin