Via Mark J. Grant, author of Out of the Box,
I went to sleep with some degree of hope and I awoke to find it dashed upon the reefs of the Florida coast. Yet in that comment, in my observation, the people have spoken and, right or wrong, it is the decision of the majority that holds. This morning no one is marching in the streets, no coup is underway and the election process functioned. For that much at least; I give thanks. We will have twenty-fours hours of afterglow and self-congratulation and then we will return to a Democratic President with a Democratic Senate that will confront a Republican Congress and America’s fiscal cliff. The popular vote provides no mandate and the United States remains a deeply divided country where the traditional values of the country are wrestling with a succession of new values where much is demanded from the government and where it is expected that those with money should pick up the bill. Much of Europe is far to the left of America and perhaps it is no surprise that we have swung in that direction but the important questions are still in front of us as we have been reckless in our spending and social commitments. The age of spend and borrow has to cease if the country is going to right itself and I can only hope that some compromise is found between the curtailment of social programs and the taxation to pay for that which is left and that those answers lie in some acceptable range of fairness to those that have and for those that are without. I remind everyone that we can only spend what we can afford and that compromise must be found as Lincoln’s famous comment rings in my ear, “A house divided against itself cannot stand.”
The month of November will be defined by the following three subjects:
- Fiscal Cliff
- Greece
- Spain
Just as our election on November 6 provided an end to a very long road so will the empty till of Athens and the severely declining revenues of Spain. Decisions will now have to be made. The IMF and the European Union are in gridlock over Greece and the country is out of money with payments to be made on November 16 that cannot be avoided. Mr. Rajoy can dance until the underpinnings of the floor give out and then Hell may have no fury like a Germany scorned and the tribal warring’s of ages long past may flare up again as Madrid pleads for sustenance. If there is a wildcard it is the politics of Greece where what is demanded is not given and where Athens decides that the pain inflicted will not be borne any longer. In both Greece and Spain it is a high stakes game of Risk where the “streets are alive” and not with “the sound of music.”
The IMF may, in fact, just say, “No” to additional funding for Greece as their constituents are far broader than the nations of Europe. The EU is scathing under the whip of “Official Sector Involvement” and neither the ECB or the European Union have yet to accept the notion of any losses for Greece as it violates what they have told the taxpayers in all of the nations on the Continent and so the squeeze is on. November 16 looms, the recession broadens and deepens and what is wished for by Spain will not be granted by the ECB as the condition of the European nations’ acceptance first is now firmly planted in the cement by Mr. Draghi.
Three subjects, three chances of “Force Majeure” and one strike may be all that is necessary to be out.