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UK Misery Index Hits 20 Year High

Tyler Durden's picture


Earlier we briefly noted the surge in UK February inflation which coupled with the ongoing decline in GDP, and increased deficits indicates that the UK economy is in dire need of reliquification, which alas won't come (or so the rumor goes) precisely courtesy of ongoing money printing. Just confirming this deterioration visually is the UK Misery index (combination of inflation and unemployment), which has just hit a 20 year high.

Courtesy of Reuters


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Tue, 03/22/2011 - 09:18 | 1085489 Harlequin001
Harlequin001's picture

I thought the worst investment was Madoff, or lending to a European government...

Tue, 03/22/2011 - 09:42 | 1085500 EscapeKey
EscapeKey's picture

Contango on USO is horrible. Makes for great investments when oil goes down, however. Unfortunately, I don't have the balls to go short oil with peak looming.

I suppose you could short, with call options as a hedge. One hell of an expensive hedge, though.

Tue, 03/22/2011 - 09:39 | 1085572 TomJoad
TomJoad's picture

Where is the ETF to short happiness, 'cause I want to go all-in on that MF'er.

Tue, 03/22/2011 - 11:49 | 1086115 The Fonz
The Fonz's picture

I too would like to invest in a ETF 100x leveraged short happiness and long oppression fund. Then all the misery around me will seem like a good thing! Suffer more bizachts.

I am going to beat helpless bunnies with a splintery bat to speed along my investment. ttl.

Tue, 03/22/2011 - 09:43 | 1085585 jus_lite_reading
jus_lite_reading's picture

Wait! The Unemployed Kingdom is suffering? Recovery underway! Hairy Wanker sells one roll of self stick curtains.

Tue, 03/22/2011 - 09:11 | 1085461 Thorlyx
Thorlyx's picture

only bullish news today !

Tue, 03/22/2011 - 09:27 | 1085524 kris
kris's picture

from a contrarian point of view you are absolutely right!

Tue, 03/22/2011 - 09:11 | 1085464 Sudden Debt
Sudden Debt's picture

Looks like drinking their misery away didn't really help...

Maybe they should ask Ireland for a hand?


Tue, 03/22/2011 - 09:56 | 1085630 Oh regional Indian
Oh regional Indian's picture

Perhaps if they chilled their beer they would warm up a little?


Tue, 03/22/2011 - 09:57 | 1085635 Oh regional Indian
Oh regional Indian's picture

Perhaps if they chilled their beer they would warm up a little?


Tue, 03/22/2011 - 11:14 | 1085947 Bananamerican
Bananamerican's picture

or have another...

Tue, 03/22/2011 - 09:13 | 1085465 TruthInSunshine
TruthInSunshine's picture

Let them eat Fukushima Yellowcake.


I'll be damned if we aren't going to see global Q3 economic contraction with the likelihood of more of the same in Q4.

Tue, 03/22/2011 - 09:45 | 1085595 A Man without Q...
A Man without Qualities's picture

When you say "see", to you mean officially stated or just a sense that the global economy is contracting despite the positive numbers?  My gut tells me we've been contracting since Q4 of last year, but they are "protecting" us from the harsh realities...

Tue, 03/22/2011 - 09:48 | 1085605 TruthInSunshine
TruthInSunshine's picture

I would concur, but I think that even they won't be able to hide the ugliness of it all for too much longer and may even use it as sacrificial lamb on the altar of QE.

Tue, 03/22/2011 - 10:30 | 1085764 dick cheneys ghost
dick cheneys ghost's picture

Its coming here..........things wiill get worse. Large Protests in Nevada's Capitol City

Tue, 03/22/2011 - 09:12 | 1085466 Sudden Debt
Sudden Debt's picture

ps: UK inflation in 2 months = 4.4%


Tue, 03/22/2011 - 09:17 | 1085482 Harlequin001
Harlequin001's picture

Onward and upward, as they say...

Tue, 03/22/2011 - 09:24 | 1085508 EscapeKey
EscapeKey's picture

That's the official figure. However, dig into the ONS CPI weight report, and you'll find a lot of controversial figures, such as the transport weight has remained static for 10 years, which is absolute bullshit.

New annual report out in a months time. Should be good to see their estimate of food weighting.

Tue, 03/22/2011 - 09:38 | 1085567 Sudden Debt
Sudden Debt's picture

What amazes me it that nobody has every added the inflation number to the % drop in house values.

For example:


If inflation is 4%

and housing values drop 4%

Total = 8% drop in real estate value


just saying... :)

Tue, 03/22/2011 - 09:44 | 1085600 EscapeKey
EscapeKey's picture

A mixture of real and nominal figures - don't give government statisticians any ideas, please.

Tue, 03/22/2011 - 09:58 | 1085646 Absinthe Minded
Absinthe Minded's picture

They only use statistics that make the market look better, not worse. I know where I work we're having great sales but like everyone else profit margins are squeezed paper thin. We use asphalt in our manufacturing process, and lots of it, how's our outlook? PM's baby, and I don't mean prostate medicine.

Tue, 03/22/2011 - 10:02 | 1085649 Absinthe Minded
Absinthe Minded's picture


Tue, 03/22/2011 - 10:02 | 1085655 Absinthe Minded
Absinthe Minded's picture

Trip, frickin'slow server today. or is the hammer finally coming down.

Tue, 03/22/2011 - 10:00 | 1085629 TruthInSunshine
TruthInSunshine's picture


Tue, 03/22/2011 - 10:02 | 1085640 TruthInSunshine
TruthInSunshine's picture

Tue, 03/22/2011 - 10:03 | 1085666 Pants McPants
Pants McPants's picture

Damn.  Joke ruined!

Tue, 03/22/2011 - 10:01 | 1085658 TruthInSunshine
TruthInSunshine's picture

Pink Floyd reports that both pudding and meat are skyrocketing.

Tue, 03/22/2011 - 10:31 | 1085773 aheady
aheady's picture

We're so happy we can hardly count.

Tue, 03/22/2011 - 12:58 | 1086342 Greater Fool
Greater Fool's picture

Look at the sky,

Look at the river:

Isn't it good?

Tue, 03/22/2011 - 09:11 | 1085470 malikai
malikai's picture

That's cool, I'm long misery.

Tue, 03/22/2011 - 09:14 | 1085473 Fredd00
Fredd00's picture

Misery train bitchezz

Tue, 03/22/2011 - 09:14 | 1085477 John Law Lives
John Law Lives's picture

Well, at least TPTB in the UK admit they have inflation.  The Ben Bernank refuses to accept any claim that inflation exists in the USA.

Tue, 03/22/2011 - 09:26 | 1085515 reload
reload's picture

Admit it, and at the same time admit their inability to do anything about it. It feels so long since there was some optimism on main st uk. In fact it was only 4 or 5 years ago, and the optimism was of course credit fueled and misguided. No sign of what will lift us out of the current slump - and it is a slump, unless you work in a government protected monopoly. For most of us in business it is a struggle which gets less rewarding month by month. We have had some much needed government austerity, where is the stimulus to get the private sector investing and producing?

Tue, 03/22/2011 - 09:32 | 1085541 EscapeKey
EscapeKey's picture

They are discussing corporate tax breaks.

However, this has lead to the obvious socialist outrage. Gordon Brown voters (aka "fucking morons") don't think public sector spending to the level of 53% of UK GDP is anywhere near enough. According to them the deficit is a myth, private debt loads can expand forever, and there is plenty of money to hire even more public servants, who should all have generous pensions, of course.

Tue, 03/22/2011 - 10:05 | 1085674 Absinthe Minded
Absinthe Minded's picture

Where have I heard that before? Seems like head in ass disease is on both sides of the pond.

Tue, 03/22/2011 - 09:44 | 1085593 dbTX
dbTX's picture

the only stimulus that will work over a period of time is major, permanent tax cuts, it's that simple.

Tue, 03/22/2011 - 09:48 | 1085603 overmedicatedun...
overmedicatedundersexed's picture

"the only stimulus that will work over a period of time is major, permanent tax cuts, it's that simple."


wish it were so..but until elite banksters and pols go to jail and their ill-gotten gains are returned  there will be no recovery

no justice no recovery.

Tue, 03/22/2011 - 10:17 | 1085713 MachoMan
MachoMan's picture

Right.  You only get to implement the laissez faire system when the playing field is EQUAL.  To start the race at this point, given their head starts, would be less than honest.

Tue, 03/22/2011 - 10:04 | 1085672 Thorlyx
Thorlyx's picture

and if there was, he could stop it in 15 minutes.

Tue, 03/22/2011 - 13:04 | 1086370 Greater Fool
Greater Fool's picture

...and crush the economy in the process. But you have to admit that Fed's pile of Treasuries give it the Tsar Bomba of interest-rate-raising tools. No need to fool around with Fed Funds--just go sell some 10-years and watch the fireworks!

Tue, 03/22/2011 - 09:33 | 1085542 Miss anthrope
Miss anthrope's picture

Gully, the misery index is perhaps tied to the debasement of the society as much as the CPI, huh?

Tue, 03/22/2011 - 09:15 | 1085481 reader2010
reader2010's picture

WWIII will be started, and unemployment rate falls back to 0%. 

Tue, 03/22/2011 - 09:42 | 1085587 SheepDog-One
SheepDog-One's picture

Of course!

Tue, 03/22/2011 - 09:15 | 1085483 docj
docj's picture

This is bullish.  Right?

Tue, 03/22/2011 - 09:36 | 1085555 X. Kurt OSis
X. Kurt OSis's picture


Tue, 03/22/2011 - 09:19 | 1085495 Johnny Lawrence
Johnny Lawrence's picture

Anyone read how Obama encouraged Brazil to produce more oil so the United States can be one of its "best customers?"

Tue, 03/22/2011 - 10:04 | 1085673 Broomer
Broomer's picture

Brazilian here.

No, but after you mentioned it I used some Google magic.

Oh fuck...

Nothing good comes from America saying "That's some nice oil you have there"

Last time America sponsored a dictatorship here [ ], it lasted for twenty years.


Tue, 03/22/2011 - 10:07 | 1085681 Tail Dogging The Wag
Tail Dogging The Wag's picture

Expect Ipanema's beaches to be covered in oil sometime in the near future. Oil Slick Coming to a Beach Near You.

Tue, 03/22/2011 - 10:22 | 1085729 Absinthe Minded
Absinthe Minded's picture

What happened to the new oil slick in the gulf? MSM is strangely silent on this topic. Probably hoping that New Madrid quake will swallow up the oil.

Tue, 03/22/2011 - 09:19 | 1085499 Doubleguns
Doubleguns's picture

I thought when green lines went up that was a good thing.

Tue, 03/22/2011 - 09:22 | 1085507 Spartan
Spartan's picture

British people love to be the Daily Mail if you have any doubts

Tue, 03/22/2011 - 09:27 | 1085519 John Law Lives
John Law Lives's picture

Fisher is the most reasonable member of the bunch (imo).  He doesn't drink the Kool-Aid.

Tue, 03/22/2011 - 09:39 | 1085563 overmedicatedun...
overmedicatedundersexed's picture

fisher and pianalto, seems like the guys on the titanic fighting over what songs the band should play to calm the passengers.

Tue, 03/22/2011 - 10:20 | 1085720 LawsofPhysics
LawsofPhysics's picture

Rates should have been slowly rising a long time ago, at least making it not so profitable for the primary dealers to simply lend money back to the government.  At this point, the game is over, just a matter of time.  If you haven't hedged accordingly, it may be too late.

Tue, 03/22/2011 - 09:23 | 1085514 virgilcaine
virgilcaine's picture

This is worse than the last depression.

Tue, 03/22/2011 - 09:26 | 1085523 JackES
JackES's picture

did Jap nuke meltdown happen? no

now what?

Tue, 03/22/2011 - 09:31 | 1085533 TruthInSunshine
TruthInSunshine's picture

Yeah, dumbass, it's all good over there.

Eat your spinach now.

Tue, 03/22/2011 - 09:31 | 1085538 strenue
strenue's picture

Give it time. Hubris is a malaise not so easily healed.

Tue, 03/22/2011 - 09:33 | 1085539 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Money for no one.

Tue, 03/22/2011 - 09:33 | 1085546 Red Shield
Red Shield's picture

Someone should take a poll of the misery index of ZH readers. I come here for a daily dose of bad news. I don't even consider this site reality news anymore, but an equally opposite view of the fake news, somewhere on the opposite spectrum. 

Tue, 03/22/2011 - 09:36 | 1085557 John Law Lives
John Law Lives's picture

Someone should take a poll of the stupidity index of CNBC viewers.  I don't go there daily because CNBC is worthless.

Tue, 03/22/2011 - 09:43 | 1085596 Sudden Debt
Sudden Debt's picture



Tue, 03/22/2011 - 12:48 | 1086307 Red Shield
Red Shield's picture

Yes, and cheerleaders are worthless in terms of playing the game, but people do seem to enjoy them. There are more current and financial news sources than CNBC. Try for a descent summary of all of them.

Tue, 03/22/2011 - 09:44 | 1085601 pendragon
pendragon's picture

welcome to the real world

Tue, 03/22/2011 - 12:53 | 1086319 Red Shield
Red Shield's picture

[Insert catch phrase here].

Are you implying that the majority of the real world is miserable? Are they miserable becuase prices are high and they can't afford to shop anymore? Same as a drug addict is miserable while their body readjusts to the lack of artificial stimulus.

Back in the day, most people used to be happy simply becuase they had a family, and that they were alive.

Tue, 03/22/2011 - 09:50 | 1085608 RockyRacoon
RockyRacoon's picture

If that really is the case then you will see just what you want to see no matter where you go for news.

Tue, 03/22/2011 - 09:52 | 1085615 TruthInSunshine
TruthInSunshine's picture

Someone should take a poll of the misery index of ZH readers. I come here for a daily dose of bad news. I don't even consider this site reality news anymore, but an equally opposite view of the fake news, somewhere on the opposite spectrum.

I would say Zero Hedgers are not only actually quite realistic, but many are prophetic (not in the theological sense), actually.

If I wanted skittles and unicorns, I'd watch CNBC, land of the Pisani, Kiernan & Sugar Tits.

Tue, 03/22/2011 - 10:28 | 1085749 RunningMan
RunningMan's picture

Great idea. I come here to make sure I'm not losing it (or at least to confirm that if I already have lost it, I'm not alone).

I'm not miserable, because I scrap it out at work and was raised with practical, Depression era mentality parents (my read of them). I'm not confident though, and my view of the future is extreme skepticism.

Rising prices must be killing some people who haven't prepared appropriately.

Tue, 03/22/2011 - 12:54 | 1086326 Red Shield
Red Shield's picture

If you foresee a future of misery, then so it will be. Why not do something about it?

Tue, 03/22/2011 - 09:53 | 1085617 EscapeKey
EscapeKey's picture

How appropriate considering your name.

Perhaps if you translated it into German, it would be even more appropriate?

Tue, 03/22/2011 - 12:46 | 1086294 Red Shield
Red Shield's picture

Yep, that was the point. Rot schild. Irony is fun, except when it is tragic.

Maybe everyone here has such a skeptical outlook becuase deep down they know that they are not going anything about it, except trying desperately to save their own skin.

If there ever is an end game that this blogs readers seem to hope for, everyone better be in fantastic physical shape, or your gold and silver won't mean a thing.

You can't eat gold, which means you have to trade it. In order to trade it, you need someone to trade with, someone who won't just look at you and then decide to take it.

More appropriate for this blog might be to discuss some sustainable farming practices, like permaculture and bio-dynamics.


Tue, 03/22/2011 - 09:35 | 1085550 overmedicatedun...
overmedicatedundersexed's picture

the price of misery is dropping every day, everyone will be able to afford it..

Tue, 03/22/2011 - 09:37 | 1085551 Yield2Greatness
Yield2Greatness's picture

I just hope that Prince William and Kate Middleton find true happiness. ;)

Tue, 03/22/2011 - 09:44 | 1085592 Sudden Debt
Sudden Debt's picture

that couple looks like the centerpiece of the misery index.

She looks like a dried raisin and he looks like a retired retiree.


Tue, 03/22/2011 - 09:39 | 1085566 pendragon
pendragon's picture

nobody said austerity was going to be good for the mood....just good for the soul.

Tue, 03/22/2011 - 10:04 | 1085668 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Cameron and Osborne thank you.  Now please clear their plates, they are ready for desert.

Tue, 03/22/2011 - 09:40 | 1085574 pendragon
pendragon's picture

we may be extremely miserable but at least we don't have krugman

Tue, 03/22/2011 - 09:50 | 1085614 RockyRacoon
RockyRacoon's picture

You forgot the caveat:

"We'll just say that obviously we have no idea whether this is true or not."

Read more:
Tue, 03/22/2011 - 09:59 | 1085620 TruthInSunshine
TruthInSunshine's picture

Come on, go with your inner cynic on humanity.

Has being cynical on humans ever led you wrong?

Tue, 03/22/2011 - 09:54 | 1085619 Sudden Debt
Sudden Debt's picture

They get free biscuits and orange juice for it.

Looks like a fair deal.


All I wonder when I read that is:

1. We have homeless people to

2. We have Nuclear reactors to



Tue, 03/22/2011 - 09:45 | 1085599 SheepDog-One
SheepDog-One's picture

Same as our unemployment, 14% or so and just as bad inflation, only difference is we've got more brazen liars.

Tue, 03/22/2011 - 09:48 | 1085602 falak pema
falak pema's picture

There is/was(?) an Indian man I met who got an immediate erection at his old age every time he heard 'Britain hits the shit' on the news. Or the shit hits Britain. When asked why he was so obdurate in his ongoing hatred of the British, who taught his people cricket, five o'clock tea, stiff upper lip, democracy, the railroads and the public school system, he replied "I spent four years in their prisons during the WWII and read about my country's history. There I learn't they signed and then broke over three hundred local treaties to eat piece meal the nawab kingdoms of our land. I don't think any one can bowl that many "googlies" in one innings.

They are born deceivers and they'll end up deceiving their own people, like the flock of 'half naked fakirs' they will become when made destitute..."

Pretty strong medicine man that...but I still like English scones in-spite of all that.

Tue, 03/22/2011 - 09:47 | 1085606 monkeyfaction
monkeyfaction's picture

Most people here in the UK are on variable rate mortgages which are linked to the BOE base rate. During the financial crisis, when the BOE dropped rates from over 4% to near zero, a lot of peole suddenly had hundreds of pounds spare income. (Not me, I stupidly fixed for 10 years).

A lot of this income has since been eaten by very high inflation and static wages. Several of my friends have actually had their pay cut but they can manage because their mortgages are so low.

Once interest rates start to rise there are suddenly going to be a lot of families whose budgets no longer balance. There will be a massive drop in consumer spending and a large rise in mortgage defaults. This all at the same time that the government spending cuts actually start to bite.

I do not predict good things for the UK economy.

Tue, 03/22/2011 - 09:52 | 1085616 falak pema
falak pema's picture

For the elderly : a lot of pension funds are also dependent on risk asset (stock) performance or are at fixed interest rate annuities. Very inflation/interest rate dependent.

Tue, 03/22/2011 - 09:55 | 1085636 pendragon
pendragon's picture

rates are not going up. if so it is a one a done...i prefer none and done. the inflation target is 2y forward. tightening rates now in the UK will not stop oil prices rising. sentance the perma wrong rate hike nutter is retiring from the mpc which pretty much only leaves doves apart from weale who is as sharp as a beachball. the economy cannot withstand higher rates with austerity and vat increases

Tue, 03/22/2011 - 10:01 | 1085665 monkeyfaction
monkeyfaction's picture

They wont have any choice about raising rates. The bond and currency markets will force their hand. Who is going to buy UK government 10Y bonds (currently paying <4%) when inflation hits 10%?

Tue, 03/22/2011 - 10:09 | 1085690 pendragon
pendragon's picture

i will. gilts are a buy. the inflation trade is close to the end...for a while at least.

Tue, 03/22/2011 - 10:17 | 1085715 EscapeKey
EscapeKey's picture

LOL, yeah we haven't heard that one before. "The inflation is due to temporary factors, and should return to target in the medium timeframe".

Hell, Mervyn King said so today. But then his message has been on repeat play for, what, 28 months now?

Tue, 03/22/2011 - 10:23 | 1085737 pendragon
pendragon's picture

well not from me anway. Strip out VAT increase and the data look a lot better. is that a legitimate temporary factor or do you think the MPC need to hike rates because VAT has gone up?

Tue, 03/22/2011 - 10:41 | 1085792 EscapeKey
EscapeKey's picture

Why don't we remove food, transportation, clothes, and everything else while we're at it? VAT increase is fact, deal with it.

Besides, VAT is not attached to food, housing, or other parts of the CPI, so it's hardly as if it's a 2.5% linear addition.

Not forgetting due to Keynesians favourite "elasticity" argument, items with an increase in prices would logically see lower demand, and hence the VAT increase would be reflected less in overall stats.

Tue, 03/22/2011 - 10:42 | 1085805 pendragon
pendragon's picture

that's not the point being made. if you look at you food shopping bill half the items on it are vattable anyway. if you expect the MPC to have anticipated a VAT increase 2y ago and adjusted monetary policy accordingly pass the crack pipe when youre done. this is a legitimate temporary factor like it or not and it's contractionary like it or not.

Tue, 03/22/2011 - 10:29 | 1085762 MachoMan
MachoMan's picture

How can you raise rates when you cannot stand any marginal increase in costs/expenses?   (can't increase revenues because there are none).  Further, it seems to me that western sovereigns are going to have to reduce the duration of their debt as well, given the need to entice bidders (not that the U.S. can even do that).  Who the hell is going to tie up for 30 years on a sinking ship?  Who really suspects that the entitled citizenry of western nations can sustain decades and decades of austerity (depression)?  Maybe I'm strange, but I don't plan on picking up nickels in front of the steam roller.

Tue, 03/22/2011 - 10:36 | 1085784 pendragon
pendragon's picture

fine but there is a perma bid for long dated assets for liability matching with our aging populations. anyway the 30y looks a better trade than equities at these lvls!

Tue, 03/22/2011 - 11:50 | 1086123 MachoMan
MachoMan's picture

Who exactly is making this permanent bid?  Also, pimco disagrees with your treasury thesis...

Tue, 03/22/2011 - 10:32 | 1085774 SheepDog-One
SheepDog-One's picture

'Rates are not going up'...EVER?? People live in a dream world!

Tue, 03/22/2011 - 10:19 | 1085722 Phlash
Phlash's picture

I can confirm that I live in the UK and I'm pretty frikking miserable about it.

Tue, 03/22/2011 - 10:04 | 1085671 Oh regional Indian
Oh regional Indian's picture

I really feel bad for britons. They have been used by the battenbergs as a base for a particularly ugly form of global domination. The average brit has no clue. As long as football and 24/7 pubs (what a brilliant idea that was) are available to rid themselves of their angst and drown their sorrows...

The sun never did set on the empire, it just went underground. And payback is in-evitable and uncomfortable.

Tue, 03/22/2011 - 10:16 | 1085714 LawsofPhysics
LawsofPhysics's picture

I don't know if I agree.  I am feeling pretty good about the pounds I am holding right now.

Tue, 03/22/2011 - 10:21 | 1085727 ivana
ivana's picture

like the misery index composition.

looks like "cup & handle"

Tue, 03/22/2011 - 10:55 | 1085843 surfsup
surfsup's picture

300 year old tractors will do that... 

Tue, 03/22/2011 - 11:32 | 1086045 cheapy
cheapy's picture

They just need to "revise" how they calculate the input numbers to fix it.


That's how we did it, and it worked just "fine".  Our government pretends there is no inflation or unemployment, and we pretend to survive.

Tue, 03/22/2011 - 11:59 | 1086145 TruthInSunshine
TruthInSunshine's picture

Guy Fawkes mask for $4.70 USD for our friends in the UK.

Buy in mass quantity, and march on.

Guy Fawkes Mask

Tue, 03/22/2011 - 11:59 | 1086148 Lord Peter Pipsqueak
Lord Peter Pipsqueak's picture

Misery and inflation are only temporary according to Mervyn King.As soon as every one gets that into their heads and goes out and starts buying houses and buy to let properties,everything will be just nice and cosy, the British people can again start discussing how much their house has gone up in value and revel in how shrewd they have been to purchase such a valuable asset.House makeover and property search programmes can reclaim their proper place as top rated TV shows.What is wrong with everyone?

Tue, 03/22/2011 - 14:17 | 1086691 GFORCE
GFORCE's picture

Can I buy misery call options??

Tue, 03/22/2011 - 14:38 | 1086812 DR
DR's picture

Watch what happens in the UK. This is the future of the US-UK style of austerity is coming to the US after 2012 elections. Both countries have governments beholden to the interests of global finance. Invest accordingly.

Tue, 03/22/2011 - 14:44 | 1086838 DR
DR's picture

To quote Pettris:


Throughout modern history, and in nearly every economic system, whether we are talking about China, the US, France, Brazil or any other country, there has really only been one meaningful way to resolve banking crises. Whenever non-performing loans or contingent liabilities surge to the point where the solvency of the banking system is threatened, the regulators ensure that wealth is transferred in sufficient amounts from the household sector to borrowers or banks to replenish bank capital and bring them back to solvency. The household sector, in other words, always pays to clean up the banks.

Tue, 03/22/2011 - 21:37 | 1088209 suckerfishzilla
suckerfishzilla's picture

The misery index should be measured on the Richter scale.

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