3 Events That Should Set Us Up For Market's Next Big Move [View article]
I can tell you pretty much the EU must do something to get bond rates down unless they are planning to compete with Africa for poorest continent. As for the US the Super committee was never expected to do anything but posture for the election.
So things should be dour but not that dour and the recovery will be stalled yet again. There really can't be a recovery until businesses and the public are liberated from massive taxes and government spending in excess of what the real economy can afford.
Any bank that's too big to fail should be broken up or barred from getting any bigger. The 2.5% will do little to stem the public being dragged into paying in spades for their bankruptcy.
Europe's Large Banks - Are The Titans Crumbling? [View article]
Europe was so eager to criticize the US for their over-leveraged positions and deficit spending. It is rather ironic that they were so hypocritical and duplicated the US behavior even as they lambasted it. They are now reaping what they sowed.
We will see how they resolve their over leverage since they believe that the US was delinquent in letting a major financial institution collapse. If you want to prop up institutions with bad behavior (banks or governments) the money must come from someone and no one in Europe wants to really be the one paying.
France's Banks Lose Their Street Cred [View article]
France with their own woes may be the next to balk at continued PIIGS funding. Their over investment in them is already taking a severe toll and France doesn't have the resources to start insuring against the inevitable sovereign defaults like the Germans.
European Sovereign Debt Contagion Continues to Spread [View article]
This is just another good example for forcing banks to mark to market. So they must realize their losses as they come and not engage in digging themselves deeper just to prevent realizing their losses immediately. Sure credit for bad borrowers will be constrained be it a individual, corporation, or country. Shouldn't it be? The issue here is that for some reason government's think that running unsustainable debts is some right and that the world is better off expanding credit by allowing these entities to take inordinate amounts of debt and risk. They are dead wrong and may eventually pay with their own dead economies laying along side the delinquent entities they staunchly supported.
In the end run all fiat systems run the same risk. The proclivity for governments to spend excessively without consideration of future costs will most always sink a country's financing into ruin. The fiat system only makes doing this so much easier. First comes devaluation then ruin. The US is on a very clear devaluation curve. So much so even a stopgap action to prevent it from sinking further probably can't save it in the long run.
As for the Euro, it can survive by shedding countries that go astray and letting them sink into a 3rd world economy. This may be inevitable. That or create another level of leverage by letting the EU issue debt on top of individual countries much like the Federal Reserve is doing buying up debt and issuing money on its own with QE. In such cases then the people must admit they and their governments have abdicated all power and right to their economic future to someone outside their government.
The US is on a rocky path to monetary destruction and the EU is not far behind. Why the EU is drawn into the picture sooner than the US is that they are required by law to see and try to fix their problems rather than play like they don't exist and just keep making things worse. Even so, the EU is scrambling trying to figure out how to skirt their mandate to assure that individual members can viably handle their debt load which Greece certainly can't.
Next Global Credit Crisis: U.S. Banks and Greek Debt Will Be the Toxic Trigger [View article]
Greece is a prime example of how a government eats an economy. 1 in 3 people are government workers. Taxes on the other 2/3rds can't possible afford such ridiculous bureaucracy. Government has made all services they took over inefficient and uncompetitive. What is Greece going to export when they can't compete because their government produced goods and services are obsolete compared to the rest of the world?
If the USSR hasn't been enough to prove socialism wrong then Greece is just another example. The fact is at 20% GDP the US isn't all that far from going to the 33% doomsday scenario Greece is in. Government solving everything sales pitches should have a giant "Buyer Beware: This may be hazardous to your life." sticker put on them. Greece isn't the only one who must look at restructuring their economy. And yes, they need to pair down their government workers to at least 1 out of 10. Pain and suffering my foot.
The general public (what's left of it) are the ones suffering now and its not because of austerity. I would not call Greece's measures anywhere austerity yet. It is the locust storm of government overspending that is making Greece's people suffer with or without austerity. Until they start cutting their bureaucracy and laying off public employees they are taking 0% meaningful measures to solve anything.
3 Events That Should Set Us Up For Market's Next Big Move [View article]
So things should be dour but not that dour and the recovery will be stalled yet again. There really can't be a recovery until businesses and the public are liberated from massive taxes and government spending in excess of what the real economy can afford.
29 Global Too Big To Fail Banks [View article]
Europe's Large Banks - Are The Titans Crumbling? [View article]
We will see how they resolve their over leverage since they believe that the US was delinquent in letting a major financial institution collapse. If you want to prop up institutions with bad behavior (banks or governments) the money must come from someone and no one in Europe wants to really be the one paying.
France's Banks Lose Their Street Cred [View article]
European Sovereign Debt Contagion Continues to Spread [View article]
Euro: Safer Than the U.S. Dollar? [View article]
As for the Euro, it can survive by shedding countries that go astray and letting them sink into a 3rd world economy. This may be inevitable. That or create another level of leverage by letting the EU issue debt on top of individual countries much like the Federal Reserve is doing buying up debt and issuing money on its own with QE. In such cases then the people must admit they and their governments have abdicated all power and right to their economic future to someone outside their government.
The US is on a rocky path to monetary destruction and the EU is not far behind. Why the EU is drawn into the picture sooner than the US is that they are required by law to see and try to fix their problems rather than play like they don't exist and just keep making things worse. Even so, the EU is scrambling trying to figure out how to skirt their mandate to assure that individual members can viably handle their debt load which Greece certainly can't.
Next Global Credit Crisis: U.S. Banks and Greek Debt Will Be the Toxic Trigger [View article]
If the USSR hasn't been enough to prove socialism wrong then Greece is just another example. The fact is at 20% GDP the US isn't all that far from going to the 33% doomsday scenario Greece is in. Government solving everything sales pitches should have a giant "Buyer Beware: This may be hazardous to your life." sticker put on them. Greece isn't the only one who must look at restructuring their economy. And yes, they need to pair down their government workers to at least 1 out of 10. Pain and suffering my foot.
The general public (what's left of it) are the ones suffering now and its not because of austerity. I would not call Greece's measures anywhere austerity yet. It is the locust storm of government overspending that is making Greece's people suffer with or without austerity. Until they start cutting their bureaucracy and laying off public employees they are taking 0% meaningful measures to solve anything.