Archive for November, 2010

Pasta With Fools

Tuesday, November 30th, 2010

The news from Euroland keeps getting grimmer…

Today, it’s Italy and Spain, but the larger issue remains: extend and pretend isn’t working on either side of the Atlantic and the day of reckoning is fast approaching.

For Euroland, the problem is straightforward: the PIIGS are going to default, the only questions are how big the haircuts will be and whether the euro currency regime survives.

For the US, bank loan losses have still not been fully marked to market, and they are substantial: several trillion dollars.

There will be at least another 5-10 years of high unemployment and deflation until and unless politicians get serious about creating jobs (vastly more stimulus is needed, on the order of $2 trillion/year for the next 3-5 years) and enforcing moral hazard (politicians cannot continue being wholly owned subsidiaries of a bankrupt Wall Street, and house prices need to fall another 20-30%).

With the Know Nothings guaranteeing another 2 years of stagnation and gridlock in Washington, it’s difficult to be anything other than pessimistic about the rest of this decade.

Gorilla says: “When we have no leaders, we’re all bottom feeders!”

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Let Them Expire!

Monday, November 29th, 2010

Tax Cuts: Best outcome for the country in the long run, tax cuts are the worst form of stimulus going. Want the same services? Raise taxes and pay for ’em.

Extra Medicare payments for doctors: Only a very few doctors can afford to give up Medicare patients. Let those who do enjoy lower incomes, good for reducing health care costs right away!

Estate tax exemptions: A return to a $2/$4 million threshold and a marginal rate above that of 80% rewards success and punishes income inequality and plutocracy.

Gorilla says: “Time to end the soft bigotry of regressive tax code expectations!”

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One And Done

Monday, November 29th, 2010

President Obama’s decided that pursuing symbolic and stupid economic policies will guarantee him ???

Yet another depressing example of negotiating with yourself, something this Administration does constantly for no good reason at all.

Republicans now will insist that federal employees be laid off, and that will be the starting point for all the phony deficit discussions to come.

Cutting employee pay at a time of national economic disaster is bullshit of the highest order.

Where is the jobs program?

Hiring 10-25 million Americans right now will do more for deficit reduction and economic growth than all the worthless commissions any cowardly President will ever appoint.

Gorilla says: “Bye, bye Barry! You’ve jumped the Jimmy Carter shark on the road to one term!”

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One Bomb At A Time

Monday, November 29th, 2010

How to stop Iran from getting a nuclear bomb?

Kill off Iranian scientists!

Since it’s clear that no one in the West wants a war with Iran (other than genuinely certifiable Know Nothings like John McCain), and no one outside the West thinks sanctions will make any difference, the easiest way to halt Iranian progress is through plausible deniability.

Gorilla says: “Talk is cheap, assassination is cheaper!”

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Bunds In The Oven

Monday, November 29th, 2010

How much longer will extend and pretend be the only approach Frankfurt will entertain?

Not much longer!

The reality is that the markets have decided that default risk is high in the following countries: Ireland, Portugal, Greece, and Spain.

Soon, markets may decide that France and Italy no longer enjoy the blessing of the confidence fairies.

And then the Germans will have three very bad choices:

1) Continue writing ever larger checks to keep extend and pretend going another 3 years.

2) Decide to punish creditors with drastic haircuts on the existing debt, with German banks getting a very large dose of Wildroot.

3) Unwind the euro experiment once and for all.

As Krugman observes, the incompetence of the EU and ECB is breathtaking.

Gorilla says: “Gasping for Deutschmarks is the new oxygen of austerity!”

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Longing For…

Sunday, November 28th, 2010

1) A rational discussion about actual US national security and foreign policy, rather than another breathless, useless trove of information that demonstrates how much money we waste on the pursuit and classification of stupidity.

2) A national leader who will say: “Here is my jobs program, which envisions hiring 25 million Americans in the next 12 months to fix our woefully under repaired, under educated, and under compassionate country, and is the first one in living memory that is not based on giving rich people more money”.

3) A national leader who will say: “Here is my financial services program, the first one in living memory that is not based on impoverishing millions so that corrupt, predatory and failed bankers are made whole”.

4) A national leader who will say: “I don’t give a shit about what the deficit might be in 20 years, I think hiring more people and significantly downsizing the healthcare and financial services industries right now will pretty much take care of everything in the future. If I’m wrong, feel free to call me out in 20 years”.

5) A national leader who will say: “Henceforth I will not waste any more time and treasure on Iraq, Afghanistan, Middle East peace, North Korea, terrorism, counterinsurgency, the war on drugs, and Iran. These are minor issues and/or fifth-rate nations not worthy of anyone’s attention.”

Gorilla says needs must: “A fresh start on the road back from nowhere!”

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Fake Leaders: The Real Story

Tuesday, November 23rd, 2010

When we’re not negotiating with and bribing fake Taliban leaders, our own fake leaders have decided not to negotiate at all!!!

2.5% GDP growth is wholly inadequate and should be completely unacceptable.

25 million Americans need jobs. Where’s the jobs program?

Nowhere, since one political party believes, having destroyed the American economy, that destroying the American economy further is the ticket to power.

Gorilla asks: “Who replaced our leaders with these clowns? Oh, that’s right, the idiots known as the American people!”

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C’mon, Speed Up National Suicide!

Tuesday, November 23rd, 2010

Today’s message from the ECB to Ireland and Greece (coming soon: Portugal, Spain, and Italy)…

And so begins yet another round of extend and pretend.

Surely, the EU thinks, given another 3 years and another huge rise in unemployment, a group of magical confidence fairies will rescue German, French, and Dutch banks from their own very special stupidity…

The problem, same as it is in the US: economic growth is not sufficient to cover the demands of austerity, let alone provide millions of Europeans and Americans with the jobs that are essential to any economic recovery.

Gorilla says: “Another 5 years down the drain!”

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Issues Of No Current Importance

Monday, November 22nd, 2010

A random list, as Gorilla sorts through the vapidity of current events:

1) Inflation: Forecasts from the Fed and private economists have consistently missed the inflation target on the downside. In fact, deflation is far more of a threat to global economic recovery, while the bond markets are not punishing supposedly inflationary policies like QE2. Absent the destruction of the Saudi oil fields, there’s no threat from inflation for years to come.

2) Deficits: Everyone seems far more worried about reigning in deficits, particularly those that won’t materialize for at least 20 years. 25 million unemployed in the US is not being seriously addressed at all. The bond market continues to finance the deficit at bargain basement rates, so we should in fact being borrowing and spending much more, particularly on a jobs program. The deficit is essentially due to one thing: the unsustainable rise in health care costs. If the US paid what every other developed country pays for heath care, we’d have surpluses as far as the eye can see.

3) Iran/North Korea: Can anyone explain why two very fifth-rate nations, neither with the capability to do much more than irritate regionally, have suddenly become existential threats to our way of life? No, Gorilla never got it either.

4) Terrorism: A very minor problem that has become the main excuse for a massive waste of money. Why do we spend 10 times more on defense than anyone else, yet remain unable to defeat very lightly armed, very underfinanced groups of no hopers in basket case countries like Afghanistan, Iraq, Yemen, Somalia, and Pakistan?

5) Various regional peacemaking and warmaking efforts: When it comes to the Middle East, climate change, nuclear proliferation, Darfur, Burma, the Congo, and the wars on drugs and poverty, there’s nothing to worry about because no one directly concerned by these problems is in any way serious about devising and implementing long-term solutions.

Gorilla says: “There’s only one major issue of importance at the moment: the US economy. And nobody in power wants anything to do with it!”

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Lesser Evil Is Still Evil

Sunday, November 21st, 2010

Gorilla is one of those people who can’t understand why anyone thinks anything the Pope says is worth wasting time over.

This amoral, stonewalling clown, who continues to preside over policies (homophobia, second-class citizenship for all women, and the promotion of poverty through overpopulation and sexual ignorance) that vastly damage humankind, is now unjustly lauded for being just slightly less than completely backward when it comes to condom use: it’s now all fine so long as the users are homosexual men who will die of AIDS anyway.

Sexuality, on the other hand, remains equated with drug abuse (it not’s about expressing love,”but only a sort of drug that people administer to themselves”) and the sexuality of women has still not gained anything resembling acceptance in this intellectual pygmy’s worldview.

Gorilla says: “When there’s an apology for all the suffering he’s brought in the name of Jesus, then the German Shepherd will earn a place somewhere outside the kennel”.

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