PALOOKAVILLEFINANCIAL ...capitulation day postponed...
...here in...
...palookaville...
...all bets are hedged...
...as we await the resumption of normal service...
...a V shaped recovery has been achieved in the financial markets...
...and the puppet masters have made loads-a-money...
IT TAKES ONE TO TANGO
...the states within the Eurodisunion...
...are locked in a dance of death...
...those that sell and those that buy...
...those who sell will not buy and those who buy must borrow to do so...
...those who lend fear they will not be repaid...
...the price of borrowing must rise for those who buy...
...those who sell...will not lend...
...round and round we go...
...until the music stops...
...when all must find a seat at the table...
...or fall to the floor...
...and must then sit out the game...
...in the corner...with the dunce's hat...
WE TWO KINGS
...Chi Na and Berlin...
...are kings of the castle...
...all the rest are dirty rascals...
STANDS WITH A BOWL
...our great leader...
...is asking for more...
...more time to rule...
...more money to spend...
...he can't get enough from all us palookas...
...so he stands with a bowl...
...begging for more money...
...so that he can pay the interest...
...on the money he has borrowed...
...mr bumble the beedle...
...wants to give him to the undertaker...
...who will bury him for good...
FATAL ATTRACTION
...but he just keeps emerging from the dead...
...consumate zombie that he is...
...the people of palookaville...
...will vote for death...
...so long as somebody else will pay for it...
BAGPIPE MUSIC
It's no go the merry-go-round, it's no go the rickshaw, All we want is a limousine and a ticket for the peepshow. Their knickers are made of crepe-de-chine, their shoes are made of python, Their halls are lined with tiger rugs and their walls with head of bison.
John MacDonald found a corpse, put it under the sofa, Waited till it came to life and hit it with a poker, Sold its eyes for souvenirs, sold its blood for whiskey, Kept its bones for dumbbells to use when he was fifty.
It's no go the Yogi-man, it's no go Blavatsky, All we want is a bank balance and a bit of skirt in a taxi.
Annie MacDougall went to milk, caught her foot in the heather, Woke to hear a dance record playing of Old Vienna. It's no go your maidenheads, it's no go your culture, All we want is a Dunlop tire and the devil mend the puncture.
The Laird o' Phelps spent Hogmanay declaring he was sober, Counted his feet to prove the fact and found he had one foot over. Mrs. Carmichael had her fifth, looked at the job with repulsion, Said to the midwife "Take it away; I'm through with overproduction."
It's no go the gossip column, it's no go the Ceilidh, All we want is a mother's help and a sugar-stick for the baby.
Willie Murray cut his thumb, couldn't count the damage, Took the hide of an Ayrshire cow and used it for a bandage. His brother caught three hundred cran when the seas were lavish, Threw the bleeders back in the sea and went upon the parish.
It's no go the Herring Board, it's no go the Bible, All we want is a packet of fags when our hands are idle.
It's no go the picture palace, it's no go the stadium, It's no go the country cot with a pot of pink geraniums, It's no go the Government grants, it's no go the elections, Sit on your arse for fifty years and hang your hat on a pension.
It's no go my honey love, it's no go my poppet; Work your hands from day to day, the winds will blow the profit. The glass is falling hour by hour, the glass will fall forever, But if you break the bloody glass you won't hold up the weather. Louis Macneice
Humorous as it may be with regards to Class and social mores, flirtations with theosophy etc., one is brought up with a start... the realization that this was written in 1937 and, the more specific social unrest in Spain and Germany... the fall of the glass is unstoppable!
...and the politix danced around the fires of the burning banks...
...all the talk is of the new bull market...
...the great recovery...
...how it was all just a panic...
...well maybe they are right
and we can sleep easy in our beds
and all the young unemployed can play football
travel, crochet, see a movie...
NEGATIVE FOR NEGATIVE'S SAKE
...baltic dry is down again...
...but only 40%...
...ships lie idle all over the world...
...but only 12%...
...house prices have stabilised...
...honest!..
...not...
...cars sales have risen...
...from the ashes...
...on free money incentives...
...in japan...
...they are spending like there's no tomorrow...
...in china inventories are up...
...flats are empty...
...but inventory is up...
SHORT FOR SHORT'S SAKE
...come on sh*t for brains...
...pile in now...
...this is the biggest free ride the politix will ever provide...
...capitulation day?...
...moral hazard...
...what a twat!..
halfcat : don y'all mind petey non...he jus a shadder o his ol sell...
petey : oh yeah...an this...
Professor Tim Congdon from International Monetary Research said US bank loans have fallen at an annual pace of almost 14pc in the three months to August (from $7,147bn to $6,886bn).
"There has been nothing like this in the USA since the 1930s," he said. "The rapid destruction of money balances is madness."
petey : ...disclaimer...an obviously...this aint no advice...etc. etc.
..."But Mr King’s differences with the Treasury and Financial Services Authority over the future of the UK’s tripartite system of financial regulation are of greater importance. In testimony this week, Mr King revealed the extent to which regulators in one of the world’s great financial centres have yet to agree on the lessons to be learnt from the banking crisis. Mr King’s claim that he has not even been consulted on the government’s forthcoming white paper on reform of financial regulation, which is likely to give the FSA a share in responsibility for financial stability, certainly does little to boost confidence that the Bank will swing into line in support of the UK’s proposed new regulatory framework...."
...“All we can do at present, before a bank is deemed by the FSA to have failed, is to write our Finanicial Stability Report and give speeches. These are important things. But in the end I don’t believe that people change their behaviour simply because we publish reports. Now, that’s fine by me. I’m very happy with that position if you want us just to publish reports. I’m very content with that. But I do want it to be absolutely crystal clear that you in parliament understand the Bank of England can do no more than publish reports and make speeches.
“If you’re content with that, that’s fine by me. What you can’t do is turn around afterwards and say ‘You have the statutory responsibility, why didn’t you do something?’ when there is nothing we can actually do. “So all I’m saying is just align carefully powers and responsibilities. But believe me I’ve got more than enough work on my plate at present. I’m not looking for a whole lot more.” king
"The feud between the Bank of England and the Treasury intensified on Wednesday as Mervyn King said he had not been consulted on the contents of the Government's imminent White Paper on financial services."
LEST WE FORGET
...it was Brown wot took away powers from the BOE...
They are trying to pump a new bubble to solve existing problems.
Before inflation appears, this strategy works.
As inflation expectation rises, its effectiveness is threatened.
When inflation appears in 2010, another crash will come.
If you are a speculator and confident you can get out before it crashes, this is your market. If you think this market is for real, you are making a mistake and should get out as soon as possible. If you lost money during your last three market entries, stay away from this one – as far as you can."
petey : sounds about right to me....
always read the full article an we don't give advice. we just suckers like you...
..."Paul Krugman: The "Nipponisation" of the world economy with a bunch of "Argentinafications" playing a role in the acute crisis. But even after those are over, we have the Nipponisation of the world economy. And that's really something.
Will Hutton: What was the heart of the Japanese problem? What was at the heart of their 17 years of going nowhere?
PK: Well, my guess is that it was that the balance-sheet problems took a very long time to resolve. And it is difficult to get enough demand in an economy where you have really very adverse demography ...
WH: So, which countries look closest to being Nipponised - combining balance-sheet problems and ageing populations?
PK: Well, the US doesn't have the same combination. But in Europe, Germany and Italy look comparable. France is better and Europe as a whole is considerably better.
WH: Germany matches Japan to an uncanny degree. You talk about the Nipponisation of the world economy: I'm not so sure. But I would talk about the Nipponisation of Europe via a German economy at its centre in the grip of the same problem - and that starts to be a global problem.
PK: Germany has huge inadequacy of domestic demand. Their economic recovery in the first seven years of this decade rested on the emergence of gigantic current account surplus.
How is it possible that Germany, which did not have a house price bubble, is having a steeper GDP fall than anyone else in the major economies?
The answer is that they depended upon exporting to the bubble regions of Europe, so they actually got side-swiped by the loss of those exports worse than the bubble regions themselves got hit.
It's Germany on a global scale that is the concern. We worry about the drag on world demand from the global savings coming out of east Asia and the Middle East, but within Europe there's a European savings glut which is coming out of Germany. And it's much bigger relative to the size of the economy.
WH: And on top there is an unique and unaddressed huge potential banking crisis. The Germans pride themselves on their three-legged banking system, but it is incredibly interlinked. The IMF warns that Germany could have to take at least $500bn of writedowns, which its banks have not begun to recognise. German banks hold a trillion dollars - maybe more - of maturing collateralised debt obligations that can only be refinanced by crystallising the losses. We've had RBS and you've had Citigroup. Germany's GDP will fall 6% this year - before the banking crisis has hit it....
...PK: That the cause is primarily financial. Certainly, Lehman and all of that alerted us all. And it did trigger an immediate drop in demand. But the housing bust was going to happen regardless.
The fall in business investment is at least to a large degree a response to excess capacity, which is the result of falling consumer demand and the housing bust. So we don't know.
WH: I think we know more than that. The links between bank capital, loan losses, credit availability and economic activity and asset prices have never been clearer. That was why there was a threat of Depression.
PK: Clearly, re-establishing stability in the financial markets is a necessary condition for recovery. But we're not sure it's sufficient.
WH: That's very scary.
PK: Well, that is part of the reason why I am so depressed.
WH: In one of your lecture charts you seemed to be suggesting that we're 12 months into what you think could be a 36-month period of downturn, albeit at a slower rate.
PK: Easily.
WH: It's quite shocking that you think it will be that severe.
petey : Im shocked that you're shocked...Will
PK: If we measure the 2001 US recession by when the labour market finally started to turn around, it was a 30-month recession. It was really 30 months in before you started to see the unemployment rate come down."
..."The March signs of revival turned out to be little more than a technical inventory correction, with no change in the underlying trend. The world economy is still contracting, though perhaps not quite as fast as at the start of the year.
As an analysis by economists Barry Eichengreen and Kevin O’Rourke* shows, global industrial output is still on the same trajectory as it was during 1930.
The only question is whether we can avoid 1931 and 1932.
The answer is yes, but on conditions that seem increasingly implausible if we extrapolate current policies. We can avoid calamity if monetary and fiscal policies remain supportive throughout the duration of this crisis, if we fix the banking system and if we impose regulations to constrain a resurgent financial sector. We also have to be lucky to avoid another round of market turbulence in the near future.
In other words ... the answer may well be no. Central banks and governments therefore risk moving too swiftly out of a recession-mode strategy. When Axel Weber, president of the Bundesbank, publicly talks at this time about how to communicate a rise in interest rates, it tells me that the danger of a premature exit, at least in Europe, is clear and present....
...So at this point, I see the chances as roughly even between a global slump and a return to quasi-stagnation. What is so galling about this scenario is that it is avoidable. The central banks took the right decisions. But the political reaction has been near-catastrophic almost everywhere.
Instead of solving the problems to generate a recovery, the political strategies have consisted of waiting for a recovery to solve the problem. The Europeans are relying on the Americans to generate growth. The Americans are relying on the Chinese, who in turn are waiting for the rest of the world.
Even if the US were to generate some growth, as is likely after this summer, it would not benefit global exporters; China may be one of the fastest growing economies in the world, but it is only about half as large as the eurozone in dollar terms. And as Brad Setser** has pointed out in his blog, there is absolutely no evidence that China contributes to a global recovery. While Chinese investments are up by more than 30 per cent from last year alone, imports are down 25 per cent. All this hype about decoupling and China pulling the world out of recession is baloney. The data tell us that China’s exports and imports are both falling, and that imports are falling faster.
As everybody expects the others to move first, nobody ends up moving. In the meantime, the problems grow worse. US house prices, which are down by a little over 30 per cent from their peak, still have some way to fall. Until the US housing market hits rock bottom, perhaps sometime in 2010, there is no chance of a recovery in the securitisation market, without which there may not be sufficient credit growth....
...The only potentially good news in the past three months has been the receding threat of a currency crisis in central and eastern Europe. But I am not even sure that this is for real. The persistent refusal by eurozone policymakers to concede fast-track euro accession for central and eastern member states could yet prove destabilising.
Last week, the ECB had to provide €3bn in euro liquidity to Sweden’s Riksbank, in the absence of which Sweden may have experienced its second banking meltdown in less than two decades. The inevitable collapse of Latvia will have ripple effects on the Baltic region and may cause panic among investors in other central and east European countries.
This is why last week’s news about the withering green shoots is so important.
It tells us that the non-strategy of waiting until things get better is not working.
The March signs of life reinforced complacency.
Optimism will get us out of this crisis only if it is founded in reality.
..."Neil Mackinnon, chief economist at ECU Group, said Washington believes European states are "free riding" on American stimulus, expecting the US to pull them out of crisis yet again.
Europe's industrial output continued to slide in April and was down 22pc from a year earlier, suggesting that talk of a "V-shaped" rebound is premature. At best, the pace of decline has slowed. Production fell 23pc in Germany and 24pc in Italy.
The ECB expects the eurozone economy to contract by 4.6pc this year and a further 0.3pc next year, with no recovery until mid-2010.
Structural rigidities of the region raise risks that it will remain trapped in slump well after the rest of the world has turned the corner, as it did after the dotcom bust.
This time Europe faces the extra head-winds of a strong euro, over-valued against the 45-odd countries such as China that are linked to the dollar. This currency effect is slowly "hollowing out" Europe's industrial core...."
