Obama says U.S. has tried not to scold Europe - headline on Marketwatch.comI'm not really sure why Obama thinks he has a right to "scold" Europe. Scold Europe over what? Over trying to politically manage the kind of systemic problems that are multiples worse/bigger in the United States?
How about Obama warning Greece to not leave the Euro zone? LINK
Where does Obama feel like he has right exhibit hubris like this? Is this the sense of entitlement one subsumes as being an extensive life-long beneficiary of affirmative action?
What Obama fails to understand is that many of the financial problems in the EU banking system have their roots in the American banking system. It's funny because I have not noticed any EU leaders congratulate themselves over refraining from "scolding" the U.S. over MF Global, Lehman, Madoff, AIG, Enron, ad nauseum. "Hubris" can be defined, with reference to Greek tragedy, as an excess of ambition or pride which ultimately leads to the ruin of the person exuding hubris. I would say, in this context, Obama has likely put on a tragic display of hubris.
Furthermore, he exuded serious ignorance. I suggested in an earlier blog that the Fed/Obama administration will use Europe as one of its excuses for more QE/Government-borrowed stimulus. Obama used his speech on the economy today to set that up. Ironically, per this report posted on FT/Alphaville LINK , U.S. exports to the Euro zone account for a mere 3% of U.S. GDP. Even if Europe's import demand from the U.S. disappeared completely, it would have a negligible effect on our economic output. So how can economic weakness in Europe be the cause of economic issues here? Europe has been nothing more than a device for the U.S. elitists to divert attention from the much more serious systemic problems in this country.
Expect a lot more Euro-bashing from the Obama people over the next few weeks leading up to some serious money printing and Government borrowing/spending. As an aside, I was driving down I-25 through Denver last night and I saw a sign, which preceded a bunch of annoying road work, which proclaimed that the construction being done was part of Obama's spending to put America to work. Ironically, it was just a couple years ago that a massive $13 billion overhaul of I-25 was completed. I don't understand why the Federal Govt has to spend more on I-25 so soon. Irritatingly, as I drove by the area where the work was supposedly being done, I saw several workers in orange vests hanging out and sitting on the road barrier. I guess these workers were just taking after the guy responsible for their paychecks (Obama) and were expecting to get paid while someone else does the heavy lifting.
And last, the real reason the U.S. elitists fear an EU financial implosion is that it would take down our banks with it, as our banks have trillions in derivatives exposure to the EU financial system. Please note: the derivatives have absolutely no contribution to economic growth/health. They are, instead, a way for Too Big To Fail banks - like JP Morgan and it's $100 billion whale bet - to use Taxpayer guaranteed money for making speculative bets.
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2 things Dave:
ReplyDelete1) The Euro weakness will come back to haunt our banks as a result of investments our banks made there ala MFG (thanks partially to Fed for the set up of having to reach for yield). Not that out banks cannot get into trouble by themselves with US holdings (MBS for example).
2) I94 was just rebuilt 3 years ago from the ground up -at least north of O Hare. On a recent trip on the north end (where tolls were recently doubled) I found them with a 4 mile long project closing 2 of 5 lanes and only one orange vest worker to be seen. However, here in the Land of Lincoln, err, Obama, Chicago was well known for featherbedding on City trucks of all sorts. Even today Chicago still have the garbage trucks with 3 union employees.
Back to I 94 (and the I 294)bypass of chicago: The Ohare area is still under construction as is the south end of I 294.
Not that this would happen in Illinois of all places but this road project apparently has become an annuity for the construction company and its union workers.
Spending money like it was water. At least we got something for the money--new roads which have to be repaired 3 years later.
Funny how the European "weakness" is impacting our economy while half the European countries are going like gangbusters. Hell, Germany has real unemployment in the 6% range. But European weakness is our problem, doubtful. Our problem is that we gave ourselves close to 75% inflation (I go by the "Twinkie-Indicator" which is equal to the increase in the price of a 2 pack of twinkies, adjusted for the reduction in a the amount of spooge filling and removal of supporting backboard from the packaging; but enough about the Twinkies) to fill the coffers of banks that did not cut their ridiculous overhead (Now almost every stadium that can be named is named after a bank)or salaries and bonuses. The coffers are drying up again because the banking business is no where close to where it use to be and they need more. Screw them.
ReplyDeleteQuick story. I have a small business in the Rotten Apple. I fill a certain Niche in the are and do relatively well. A few months ago I took one of the Blood Suckers up on an offer for a Business Line of Credit. Small amount, 50k, about 20% of my revolving receivables. The wanted close to 2Mill in collateral by the time I tallied up their requests, including personal guarantees; which kinda goes against the whole point of incorporating. When I gave them a pledge of exactly 50K in equipment and materials, they said that it wouldn't even be close to covering their costs if I defaulted on the loan and it wasn't worth their time. Banker math makes no sense to me, I'll just keep working in the real world and use them to facilitate sending and receiving payments. Like I said before Screw Them and their "products".
As far as Obama goes, I'm not sure if he's been able to buy the votes of 51% of the country but based on the money sprinkled around the last few years and the number of Benzo's I see driving around the ghetto and parked in front of all the "Community Action Health Centers" that have popped up since the passing of that Abomination of a Health Bill, I have to say he's pretty close.
Sofa.Out.
The twinkie indicator! I stopped eating those things years ago when they switched to synthetic ingredients. I have no idea what the hell they are made of now, tastes like plastic to me. Correlate your twinkie inflation with crude for shits and giggles for me Sofa!
ReplyDeleteNo can do...that would not be realistic. The 250% increase in the average barrel of Crude over the last 5 years is "transitory". Actually, now that I think of it, you can't use Twinkies either because there is a Bodega knock-off that costs $0.50 so if you downsize your quality of life and venture into Gangland territory to pick up some of those poisonous treats; poof...no inflation.
DeleteOr so they want you to believe; Boy-oh-boy does that red pill sting.
I am Sofa King tired.
Thanks for the awareness. Quality subject to dwell upon.
ReplyDeleteSRSrocco has reported in conversation with Harvey Organ on Barrick's Pascua Lama mine. Basically they are mining and bulldozing an ancient glacier to open pit mine the gold and silver. Not suprisingly this is running into all sorts of legal issues. This represents 25% of Barrick's reserves and if they fail to open up the mine then SLW will want it's silver from other Barrick sources if they have this sort of amount so goes the analysis. I don't know what the contract says but normally in a silver leasing mine deal you would expect the contracting party (Barrick) to give a performance guarantee on the subsidiaries mine operations but in the event of a force majeur (no permissions) then both SLW and Barrick would be at risk. SLW's security such as it is would be the charge on Pascua Lama and a performance guarantee void by way of force majeur. I don't own any SLW but if I did I would imagine it would be worth ploughing through their contracts to check out the legals.
ReplyDelete