Tuesday Financial Briefing

I've been talking you up to all my friends, bragging on how beautiful you are, and now you do me this way? Why are you so cruel? You're making me look like an idiot! ...but I just can't quit you. The heart wants what it wants.

The main dish on the menu at the recent G-20 summit was a heaping helping of bullshit. What's notable in the well-publicized "split" between the Americans and the Europeans (Obama wants more stimulus, while the ECB and Merkel want less) is that neither is actually being realistic. America cannot, politically or even structurally, continue to deficit-spend as it has been over the past two years. And for Europe -- Germans, French, Spanish, Italians, Greeks, even the English -- "austerity" will be honored more in the breach than in the practice. Europe's coddled and pampered populations, used to cradle-to-grave welfare states, will not tolerate an austerity policy; nor will the entrenched labor unions. Any cutback serious enough to solve the problem would provoke street-riots and nationwide strikes. Both America and the EU, consequently, find themselves both prisoners of politics as much as economics: the right economic thing to do is political suicide, and vice-versa. We'll get the first inkling of what's going to happen après le déluge when -- not if, but when -- Greece defaults. It's just a waiting game now.

A Ponzi-scheme suspect in Europe has taken the coward's way out. (If I seem callous: I hate a thief worse than anything.)

Like I have said before: sometimes just sucking less than anyone else is enough. (Though we can't count on our competitors to remain clueless and incompetent forever.)

Riordan the Gray faced the Orc horde, sitting straight and unbowed atop his war-horse. He was alone, and knew his charge was futile. The Orc horde was vast, rolling like a stinking sea for leagues in all directions. There was no hope, no possibility of victory. Yet Riordan resolved to charge the horde nonetheless. Just contending against the horde was proof enough of virtue; perhaps his example would give heart to others who came after him. Raising his sword and uttering a mighty bellow, Riordan spurred his steed forward.

I've become a fan of The Telegraph's Ambrose Evans-Pritchard over the past couple of months. He's a doomcrier after my own heart. He's an "easy money" advocate, but not quite a Keynesian:

It is obvious what that policy should be for Europe, America, and Japan. If budgets are to shrink in an orderly fashion over several years – as they must, to avoid sovereign debt spirals – then central banks will have to cushion the blow keeping monetary policy ultra-loose for as long it takes.

The Baltic Dry Index (BDI) is 27 days into a losing streak. That's the longest slump in five years. Naysayers to the contrary, that can't be good for the international trade situation.

Unions: working for America! Haw, just kidding. It's basically just blackmail. Like any good confidence game, it all depends on how gullible the marks are.

Los Cajas: no es bueno!

It's a hell of a world when you're a European looking forward to a measly 1% growth in GDP, and then here comes Dr. Doom throws cold water all over you. Is 1% too God Damn much to ask for? Is that like Oliver Twist asking for some more porridge or something?

Larry, Moe, and Curly aren't getting the same love from the public that they used to. They begin to question the wisdom of being a Stooge. Perhaps the Stooge philosophy has become trite and passé?, they wonder. Shemp looks on and shakes his head mournfully. He has learned the hard way that the public's love for a Stooge is a fickle thing.

How in the hell can we have a shortage of the second most-common gas in the entire universe? It's the Sun, I'll bet -- that bogarting bastard has been gobbling up all the available helium for billions of years. Perhaps the UN can issue a strongly-worded letter of protest or something.

Remember that story I posted awhile back about how a University education was a huge waste of money and time for many of the people who chose that path? Well, word is getting out: many companies are now recruiting right out of high school. It's simply a reversion to the age-old practice of apprenticeship, and I think it would be a splendid thing if it caught on.

Also via Mish: In a rather surprising development, a California court has sided with Der Governator and upheld his move to reduce some California pubic-sector workers to minimum wage. Comptroller John Chiang (a Democrat, quelle surprise!) refuses to honor the order saying that it's "infeasible". Strictly speaking, he's probably right -- if California's payroll systems are as fucked up as every other part of their State, County, and municipal apparatus, it would probably be nearly impossible to implement Ah-nuld's order without causing a meltdown. Thus, this is political theater -- entertaining, but not really useful in any practical sense. Boned? Oh, yes.

Today's briefing brought to you by Pink Floyd.

posted by Monty at 07:15 AM

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