Archive for October, 2011

On The Road To Keyesville

Monday, October 31st, 2011

Herman Cain: tax evader, sexual harasser, oh, and did the Know Nothing poobahs also leak that he is black?

It’s clear that senior Know Nothings want a nominee who isn’t a clown, but alas they all are!!!

So Cain is now being groomed to be the new Alan Keyes

Meanwhile, Romney appears to be what he’s always been: an amoral, reprehensible disaster whose mission in life is to run perpetually for offices no one wants to see him win!

Gorilla says: “More gifts from the gods for President Obama!”


No Spivs, Please!

Monday, October 31st, 2011

It’s taken a little more than 72 hours for the rest of the world to see that Euroland’s latest sovereign debt deal is a joke!

The Chinese and the Japanese certainly don’t seem very interested in buying more unsecured debt

What’s actually needed is still the same thing that’s been needed the last 3 years: the ECB must be the lender of last resort and set a floor for sovereign debt prices.

Failure to do so means the markets will decide swiftly and negatively that the Eurozone is leaderless and pointless.

At that time, serious decisions about who stays and who goes must be made.

Gorilla says: “Farewell, Euroland, we hardly knew ye!”


A Pointless, Complete and Total Failure

Saturday, October 29th, 2011

Afghanistan, of course, where the Pentagon is not winning and has not succeeded in training Afghan forces to take over the country’s security.

Why we need to spend another 3 years on this debacle is beyond understanding.

There will certainly be a civil war once we depart.

We can try for a negotiated settlement in advance, but it appears that everyone in the country and in the region is waiting for us to leave before getting serious (about either war or peace).

There needs to be a complete overhaul of the Pentagon, reducing the budget substantially and addressing genuine national security threats (of which there are very few).

DOD is wasting trillions of dollars on an outdated strategy (whose air forces and navies are we going to fight? whose army hasn’t a clue about counterinsurgency? whose nukes must we spend billions defending against?), while being unable to defeat a lightly armed, fifth-rate group of fanatics who pose no threat whatever to the United States.

Gorilla says: “Never leave anything to the generals, they’ll just screw it up!”


Following The Money

Friday, October 28th, 2011

Portugal and Spain: money supply falling dramatically, austerity increasing debts and destroying the economy, and no confidence fairy arrival!

And this is another reason why yesterday’s Eurozone package is doomed to failure. Until the ECB is made lender of last resort, establishes a price floor for government debt, and cuts interest rates to zero, contagion will be the only thing ongoing in Euroland.

Gorilla says: “Contraction, contractionary, reaction, unactionary!”


Quote Of The Day

Friday, October 28th, 2011

French Finance Minister Francois Baroin: “The reality is that China is the third largest shareholder in the International Monetary Fund, and if China via the IMF wants to participate – not by saving Greece or the euro – but by participating in investment, that is a gesture of confidence”.

Gorilla translates: “Who knew the ECB would be relocating from Frankfurt to Beijing?”


Thudding Along

Thursday, October 27th, 2011

So long as unemployment claims remain above 400K/week, and economic growth remains not very much above population growth, the US is looking at a decade or more of stagnation.

Gorilla says: “Add in the political paralysis, and you get depressed when considering the lesser depression!”


Contagion Will Continue

Thursday, October 27th, 2011

The new Euroland debt deal is yet another attempt by failing leaders to kick the can down the road. Like the leaders, it is doomed to fail.

What’s missing from the agreement and absolutely essential to prevent the spread of contagion to the Eurozone core?

1) A clear statement that the ECB will be the lender of last resort and will maintain an explicit market floor for current and future sovereign debt.

2) A recognition that growth cannot be achieved through further cutbacks in spending at a time when demand is inadequate.

3) An admission that current ECB policies are wrong and must be corrected: a cut in interest rates to zero and a higher inflation target of 4-5%.

What’s in the agreement but not anywhere near sufficient?

1) The EFSF needs at least $2 trillion dollars and an ECB backstop to be credible. The debt exposure of the Eurozone banks is on the order of $11 trillion.

2) Bank recapitalizations will likely be on the order of $500 billion or more. Tier I capital at 9% is less than the ratio at Lehman Brothers on the day it collapsed.

3) Haircuts need to be much larger and more extensive. The Greeks have no capacity to pay back the debt at the new level, in 2020 or 2030; 80% is the minimum haircut needed, and 100% is frankly the only way Greece ever recovers. The Irish, Portuguese, and Spanish need writedowns of 20-40%. The French and Italians need an explicit ECB guarantee and market floor behind their debt.

So, this deal puts off the day of reckoning by at most another month or two. Next year may see new leaders in France and Germany, who certainly can’t be any worse than the ineffectual liars they have now. Without further stimulus and the end of crippling austerity, a double dip is likely.

Gorilla says: “And so the Euro continues its fall to earth, and a crash landing is still the most likely outcome!”


Allah Likes Cash, Too

Wednesday, October 26th, 2011

While American Know Nothings recoil in horror at the prospect of Islamist parties coming to power in Muslim countries or sharia law being adopted in non-Islamic states like Oklahoma, the Islamists who won in Tunisia intend to be firmly pro-business and tolerant of all faiths.

Amazingly, these same right-wing American clowns had no problems with Islamists who wrote the constitutions of Iraq and Afghanistan, or doing deals with Gaddafi and Iran, possibly because the opportunities for America’s corrupt corporations were so much greater…

Gorilla says: “Glass houses, etc.!”


Firmly Squishy

Wednesday, October 26th, 2011

The new head of the ECB says one good thing, but fails to say what’s needed!

Yes, the bond buying will continue, much to the chagrin of the Germans!

But what needs to be said is that the ECB will be the lender of last resort for the Eurozone, will cut interest rates to zero, and pursue a higher inflation target of at least 4-5%.

If those things were said, we wouldn’t need to waste more time watching ineffectual and mendacious leaders announce absolutely nothing.

Gorilla says: “Draghi should not be a drag on growth!”


UK: Also Run By Idiots

Tuesday, October 25th, 2011

A Bank Of England man says there’s a risk of double dip in the UK!!!

But doesn’t mention why: the pursuit of idiotic austerity programs by the current government.

Contraction is contractionary, surprise, surprise!

The same man also thought it would be a good idea to raise interest rates, thus demonstrating just how difficult it is to achieve growth in an economy run by morons.

Gorilla says: “Never have so many idiots occupied positions of importance!”