Archive - Nov 13, 2011 - Blog entry

Germany makes contingency plans to deal with the fallout from the debt crisis.

The political and social disruption resulting from eurozone nations being processed like sausages will wear on investors’ nerves, in the same way that living near a slaughterhouse and listening to the screams of livestock being rendered, weighs on the mood.

CHECK YOUR COFFEE AT THE DOOR

A Sunday ramble...

US data is turning up while European political hurdles are being cleared and Chinese inflation is cooling. But will the resilience of the US consumer be sustained with the current drop in income and savings? Will Europe experience any sustainable solution without the ECB engaging in explicit sovereign bond yield targeting/unsterilized QE? And will China be able to rebalance its economy away from exports and fixed asset investment toward consumption without a sharp drop in its GDP growth rate?

The combination of Mr. Obama’s continued denigration of America’s historic role, the Washington domestic economic policy tangle, the increasingly aggressive Chinese menace, all challenge the Obama Administration’s modeling a new American Pacific presence.

The European Union next week unveils its third broadside against credit rating agencies since the financial crisis began, and this time the Big Three face a direct hit where it hurts.

Thursday's mistaken downgrade by Standard & Poor's of France's sovereign debt won't help a sector seen by policymakers as an "oligopoly" that fomented and exacerbated market turmoil globally and more recently in the euro zone.