Archive - Apr 2010 - Blog entry

Unemployment (real unemployment that is) is still rampant. The federal government is effectively funding and financing deficit state unemployment rolls (see below for more detail). With record bankruptcies, deleveraging consumers, and rampant unemployment combined with drastic drops in consumer expenditures, guess what retail stocks are doing??? Yep, you guessed it. Now, what happens when reality reasserts itself???

The Japanese currency is falling in a choppy, volatile fashion that has become a day trader’s paradise. One of the largest short positions in the futures in history has appeared practically overnight. Has the central bank yen unwind only just begun?

Bondholders to be re-paid with unicorn rainbows; EU objects, claiming withdrawal requires ratification by two-thirds of European Parliament or 10% of European populace.

Multiple choice time.

Forget the economists ... call in the criminologists.

As the herpe of sovereign default continues to flare across Europe, Jürgen Stark of the ECB paints a refreshingly honest portrait of the horizon: "we may already have entered into the next phase of the crisis: a sovereign debt crisis." The sum of 'Taking stock: where do we stand in the crisis?' in four lines: while continental Europe is a deformed cripple; the US, UK and Japan are each morbidly obese, wart-ridden trolls; it's last call and everyone's drunk; so who do you want to lay with?

Interest rate derivatives certainly help many individual businesses control and hedge their costs.

But when a bunch of individuals all attempt to reduce their risks at the same time in the same way, it can increase the risk to the overall system.

As I warned, Greece is ever closer to default (a default that is damn near guaranteed) while Ireland is probably in worse shape!!! Financial contagion begets economic contagion which breeds more financial contagion...

Christina Romer, chair of the president’s Council of Economic Advisers, is channeling J.M. Keynes. She stubbornly sticks to the Keynes Manifesto. In fact you could say that Keynes is Obama's chief economic advisor. These are the people who got us into this mess and we ask them to lead us out?

This decision will rank only second after his selection of the new Supreme Court justice in importance for the country, the economy, and your portfolio. The betting is that he will pick three monetary doves who will keep interest rates lower for longer, continuing the steroid injections of free money for the economy. The ghost of libertarian Ayn Rand will no longer be welcome on this board. Setting up a layup for the 2012 election.

Jim Bianco warns that "punishingly high" rates are coming in the second wave of the financial crisis. If he's right, it will be a bloodbath.

Olivier Blanchard, chief economist at the International Monetary Fund (IMF), talks with Bloomberg this morning about the prospects for an asset bubble in China. Blanchard, speaking from Washington, also discusses the impact of sovereign debt on global economic growth.

More divergence in opinions between our team and the reporting of the MSM! Failing to provision for loan losses is not the same as making money, is it???

Never be satisfied with the gruel we are handed, take anything offered and everything demanded. Rather than complain that the gruel doesn’t fill, think like Oliver Twist and declare you want more swill. Be the voracious mindless consumer that the Ponzi claims they don’t forbid. Become a blood sucking vampire and plunge into the blood funnel of your favorite giant squid.

The government wants to regulate your intake of salt because your lousy eating habits will drive up the cost of Obamacare. Salt consumption is anti-social behavior and deserves to be punished.