“[T]he government has to take resources from someone before it can dole them out to others. This act of taking destroys an economy. The more you take from the productive members of society, the less productive they become. That’s the primary lesson of the history of socialism.”
One of the big advantages of being a Latin American or Asian country used to be - somewhat counter-intuitively - the lack of credit available to most citizens. The banking system in, say, Brazil or Thailand simply wasn’t “advanced” enough to offer credit card, auto, or mortgage loans on a scale sufficient to turn the locals into US-style debt slaves. But that, alas, is changing as those countries adopt their rich cousins’ worst habits.
At the turn of the century few argued when the 20th century was dubbed the "American Century." Over the past 16 years, America's fortunes have changed with dizzying speed. The safer bet is that the 21st century will not be America’s. The TTIP’s rejection by European leaders and grass roots’ protests against the agreement testify to the fact.
While the summer doldrums continue, with little market-moving newsflow overnight and zombified volumes, US futures crept higher and European shares rose after EU PMIs printed modestly better than expected, while a return to dollar weakness pushed emerging markets higher, even if it failed to boost oil which as we noted last night was downgraded by Goldman on various fundamental reasons.
Until now, the emissions scandal revealed one year ago involving first Volkswagen and then countless other companies using "defeat devices" to evade emissions requirements, was contained to the car space. That changed moments ago when the U.S. government alleged in a lawsuit that Harley-Davidson “Screamin’ Eagle” after-market engine tuners are emissions-control defeat devices, and accused the motorcycle maker of violating federal air pollution laws.