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Economist first, attorney second. I enjoy critiquing the current groupthink spewing from the academics, central bankers, journalists and banksters regarding the world’s fiscal, financial and economic condition. The groupthinkers seem to think that we are muddling through a post-Great Financial... More
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  • Around The Globe 04.15.2013 0 comments
    Apr 15, 2013 12:45 PM

    Stagnant Europe the class laggard as G20 takes stock | Reuters.

    Japan GDP Change

    This article says that Japan is back. My question is back where? GDP growth has yet to materialize, so let's not count our money before it is printed. A rising stock market indicates asset price inflation, not an economic recovery.

    The article also tells us that China surely grew 8% in the last quarter because a group of economists said so, and economists are always right. Well, except for this one time. The official growth rate was 7.8%.

    Europe to Face Washington Disbelief With Economic Progress Claim - Bloomberg.

    Markit Eurozone Components PMI Flash March 2013

    The Eurozone is in a recession that is going on two years old with 12% unemployment, yet eurocrats claim that economic growth is just around the corner "settling in toward mid-2013 and strengthening in the second half of 2013 and in 2014."

    Common sense tells us that mid-2013 would be the months in the middle of 2013, May through August. That period starts in two weeks. Do any of the economic indicators show that a bottoming out, let alone a full recovery, is ready to commence? The chart above has your answer.

    Recall that Draghi and his ilk have been calling for a recovery commencing in the next quarter since September. When we arrive at the current quarter with no recovery in sight, recovery is pushed back to the next quarter. Maybe it's a trick. After all, there is always a next quarter.

    Gold Selloff on Tax Day Perhaps No Coincidence - MarketBeat - WSJ.

    From the WSJ

    The sell off in gold is being linked with tax day. The theory is that people are selling gold to raise money to pay for tax liabilities on their gainers for 2012. I am do not buy this explanation. There are plenty of other assets to sell, and I do not see a reason why everyone decided that gold and silver sales would be the way to raise money to pay Uncle Sam this year.

    Fed, BOE Officials Don't See Signs of Emerging Equity Bubbles - Bloomberg.

    Greenspans Irrational Exuberance Speech

    Central banks never claim to see bubbles. If the Fed issued a statement pointing to a bubble in any market, traders would front run its next move precipitating a market swoon. Remember in the 90's, Greenspan said something about "irrational exuberance" causing a broad sell-off in the stock market? He learned to keep his mouth shut after that.

    Our view: Exiting the euro is a debate we must have - Cyprus Mail.

    This is an interesting editorial from Cypriot English-language newspaper, the Cyprus Mail. Leaving the euro is rarely an option put on the table for citizens of the crisis countries, but it may be their best option.

    Stockman KO's Krugman in Big Fed Brawl - Bloomberg.

    Slowly but surely, people are beginning to see the Fed's policies for what they are: giveaways to the TBTF banks.

    Bank regulators gain ground against too-big-to-fail bailouts | Reuters.

    I am sure the FDIC really means that there will be no bank bailouts if there is another financial crisis. However, once people's 401(k) plans plummet, political resistance will melt away and a panicking Congress will give the Fed and Treasury whatever it wants. The TBTF banks pay a lot of money in campaign contributions and lobbying fees for their government line of credit, and they will get what they believe that they have paid for.

    Themes: macroeconomics
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