Archive - May 17, 2010 - Blog entry

2 crises, same response ...

The problem with Greece is George Papandreou and his socialist party. For years they have been looting the country by transferring capital from the producers to government employees, national health care, and the unions. They've been borrowing to pay for it ever since capitalists found ways to hide capital from confiscation. Now he blames "speculators" for Greece's problems. He has no shame and he will take Greece and the eurozone down.

As final salary pensions reach the end of the road in the UK, politicians in Illinois ponder on which pension poison to swallow. Kicking the can down the road is no longer an option...

The US economy is in the midst of an epochal transition from a long term GDP growth rate from the 3.9% rate we saw during the last decade, to maybe 2%-2.5% this decade. The “V” is rapidly turning into a “square root.” The screaming great weakness in the global capital markets has long been that it is totally dependent on voluntary private capital. Market makers are now on a hair trigger to whip their capital right out of the market. Not answering the phones at Morgan Stanley. Sharing a single bed in a cheap motel with a gaggle of snoring regulators.

The Asset Securitization Crisis begat the Sovereign Debt Crisis at a time when many believed (and still do) that we are pulling out of a global recession with a roaring bull market. In reality, we are at the tail end of the synthetic high borne from unprecedented global fiscal and monetary stimulus, and it is time to pay the piper - world wide! Enter the final phase of the Great Global Macro Experiment, laid out for you in a analytical spreadsheet!