Following our last poll which saw the vast majority of Zero Hedge readers agreeing that the next iteration of monetization (not if but when) would focus on municipals, today Art Cashin agrees that in a world in which things are right out of Alice in Wonderland, with Bernanke in the role of the Mad Bearder, this is precisely what could happen.
From Art Cashin's market commentary:
Does Jerry Brown Have Bernanke’s Phone Number? – A reader of these Comments picked up on our re-examination of Mr. Bernanke’s 2002 speech on how to fight deflation. We noted that Mr. B had suggested that the Fed had the power to buy foreign bonds if it chose to do so.
The gentleman pointed out that Bernanke also suggested that the Fed could even buy the bonds of municipalities or public corporations.
Given that the recent bond offering by California appears to have been given the cold shoulder by the public, might they turn to the Fed?
As Alice might say – things just get curiouser and curiouser.
Other things that tickled Art's fancy include Ireland...
The Gamble To Save Ireland – The battle to stave off contagion in the European sovereign contagion is a very high stakes game, indeed. Here’s a view from Ambrose Evans-Pritchard in the U.K.’s Telegraph:
The entire European Project is now at risk of disintegration, with strategic and economic consequences that are very hard to predict.
In a speech this morning, EU President Herman Van Rompuy (poet, and writer of Japanese and Latin verse) warned that if Europe’s leaders mishandle the current crisis and allow the eurozone to break up, they will destroy the European Union itself.
“We’re in a survival crisis. We all have to work together in order to survive with the euro zone, because if we don’t survive with the euro zone we will not survive with the European Union,” he said.
Well, well. This theme is all too familiar to readers of The Daily Telegraph, but it comes as something of a shock to hear such a confession after all these years from Europe’s president.
He is admitting that the gamble of launching a premature and dysfunctional currency without a central treasury, or debt union, or economic government, to back it up – and before the economies, legal systems, wage bargaining practices, productivity growth, and interest rate sensitivity, of North and South Europe had come anywhere near sustainable convergence – may now backfire horribly.
The article goes on to detail some of the strains already introduced into the system by the crisis.
Despite this morning’s hopeful news out of Ireland, we may just be kicking the can down the road a bit.
...And on Joe Hill and sundry rabble-rousing.
On this day in 1915, a Swedish immigrant's share of the American Dream came to a violent end. He had been born Joseph Hagglund, or maybe Hillstrom (the State Department records are not available). He had come to America in 1902 but found neither joy nor profit working the mines. He tried a variety of other menial jobs but to no avail.
Believing labor was getting a raw deal, he joined the radical "Industrial Workers of the World" (dubbed the Wobblies by those who thought they were Anarchists). But, even anarchists were too structured for this free spirit. So he hung out on the fringes of the effort-part hobo and part cheerleader. And he wrote songs. Many were anti-management, some celebrated the road (Hallelujah, I'm a bum) and a few ridiculed the clergy (he warned of promises of Pie in the Sky when you die).
His songs became instantly famous and made him instantly infamous. And, when anyone dared to speak against the establishment, they were branded with his Americanized name (What are you - - another Joe Hill?).
But, when a stockbroker and his son were shot dead in Utah, authorities arrested Joe Hill on the evidence that he was in the same county and also had a bullet wound. Hill claimed his wound was the result of a semi-romantic episode. Nevertheless, he was convicted of murder and at his request sentenced to a firing squad rather than hanging. Hundreds, including President Wilson, begged for clemency. But, on this day, he was brought to the prison yard. His last words ran something like - - you got guns boys - - shoot'em. Over 35,000 people showed up at his funeral. And at labor demonstrations over the next 30 years more people spoke of seeing Joe Hill than have recently seen Elvis.
To mark the day, take in a film about a recent mover and shaker. But remember Marshall McLuhan's caveat to separate the medium from the message. It keeps the historical from the hysterical and will let you appreciate the subject properly.
Traders tried to go out for popcorn yesterday, but the movie droned on without human intervention. Frozen in anticipation of the unknown the boys hung out by the newstickers awaiting the drop of an entrail or two on the geo-political front.