What's the Gaelic for 'DOOM!'?

Many people insist that no nation will favor bondholders over taxpaying citizens if fiscal push comes to welfare-state shove. Well, Ireland is a good test case, and guess who got screwed? (Hint: it wasn't the bondholders.) I think people underestimate the amount of pressure governments are under to maintain their credit ratings, especially in this age of fiat money and global financial networks. (Via Mish Shedlock.)

People who think that the US states and Federal government will simply default if it comes down to servicing the debt or paying entitlements aren't paying attention. If it comes down to making bondholders whole or shorting Granny and Grampy on their Social Security checks, I guarantee you that Granny and Grampy are the ones who are going to get the shaft.

Also from Mish Shedlock is a good antidote to the "ZOMG China is going to surpass us!" hysteria.

Liam Halligan calls the US recovery a "sugar rush". I don't know that this is quite the correct metaphor -- we're like kids who see no huge changes in our day to day lives, so we assume all is well. Mom and Dad still feed us; we still have a roof over our head; the schoolbus keeps coming to pick us up. As far as we can tell, life is going on as normal. But what we don't see -- Mom and Dad's huge credit card debt, the car-repair bill that is now on the verge of going to collection, Mom's hospital bill, the ARM on the house that is about to adjust upward -- is the stuff that is about to shift our lives into an entirely new orbit. When everything finally collapses, it descends on us like a disaster out of blue, but that's only because we weren't paying attention. We preferred to let Mom and Dad deal with that stuff. It never occurs to us that maybe Mom and Dad are incompetent at managing their finances.

It's good to be the King. It's almost as good to be a friend of the King. His Majesty has many favors in his gift.

Who killed the Euro? Germany, in the study, with a candlestick.

Americans bemoaning their own economy’s sluggish recovery should look on the bright side: it’s worse in Europe. The International Monetary Fund projects growth of 3 percent for the United States this year but just half that for the euro zone. Even more striking is the extent of economic divergence within the euro area. While the German economy is currently growing at an annualized rate of around 6 percent, Greek growth in the fourth quarter of last year was minus 6 percent. So much for the convergence monetary union was meant to bring.

John Tamny asserts that it was a lack of economic diversification, not liberal governance, that is killing Detroit. I do agree up to a point, though when Tamny uses San Francisco as an example of a city where far-left government has done little harm, I have to laugh -- SF is, like the rest of California, boned. Detroit's collapse probably was caused by an over-reliance on the auto industry and the malign impact of unions; bad governance since the mid-1960's has prevented Detroit from recovering.

The delicate balance of supply and demand.

Via Andy in the sidebar: GOP proposes a (cumulative) $4 Trillion in cuts, Democrats howl in agony and insist that the world will enter a new dark age if such a horrendous thing should happen, it's nothing but a mean plot hostaed by a bunch of stingy mean meanies, and by the way why does the GOP hate women, minorities, gays, and old people?

Speaking of hate: why does Obama hate the young? Savor the flavor:

Unemployment was 25.7 in February for teenagers and 15.7 percent for those 20 to 24 years old, according to the Bureau of Labor Statistics. Recent college grads are despairing of landing anything above the fast-food counter, where they face stiff competition from millions of recent immigrants.

It's a land of dreams, son. Go to North Dakota -- there's less DOOM! there.

Ai! The DOOM! It burns!

posted by Monty at 11:31 AM

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