re-pression is programme

Stock markets are running out of arguments where "all the money pumped into the economies" would pump the global party to new heights. While bank crunch has now turned into a credit crunch and soon will be a supply and demand crunch the global players gamble on all kinds of commodities, an artificial world they dream to live in and bound to bounce.

The wake up call will be ugly; it will be a fight for labour and energy enforced by neo-protecionism which will leave the neo-liberals homeless.

Not that charts tell you much other than memorising the past; obviously 1929/30 and last five years' FTSE look very similar - the challenging difference is that then we had lots of white spots on this planet and WWII was next while today we have many unsolved hot spots in a globalised over-populated world pressurised by the ongoing fights for labour, energy and any other resource.

And why does the GBP look so similar?


Carpe diem!

one Axle: two mill stones

telegraph.co.uk: China has now become the biggest risk to the world economy

cartoon source

At some point, American workers will rebel. US unemployment is already 17.5pc under the broad "U6" gauge followed by Barack Obama. Realty Track said that 332,000 properties were foreclosed in October alone. More Americans have lost their homes this year than during the entire decade of the Great Depression. A backlog of 7m homes is awaiting likely seizure by lenders. If you are not paying attention to this political time-bomb, perhaps you should.

It is fashionable to talk of America as the supplicant. That misreads the strategic balance. Washington can bring China to its knees at any time by shutting markets. There is no symmetry here. Any move by Beijing to liquidate its holdings of US Treasuries could be neutralized – in extremis – by capital controls. Well-armed sovereign states can do whatever they want.

If provoked, the US has the economic depth to retreat into near autarky (with NAFTA) and retool its industries behind tariff walls – as Britain did in the 1930s under Imperial Preference. In such circumstances, China would collapse. Mao statues would be toppled by street riots.

The rest of the world watching that development will be forced between those two mill stones and for sure loose its texture.

Carpe diem!

and the EURO takes it all!

Telegraph Article: "EURO at $1.50 is 'disaster' for Europe"

Obviously the EURO is currently loosing the fight of the economies in trouble (which one is not?) of trying to import inflation (i.e. reducing debt) and export goods (i.e. economic growth); the easiest way to achieve both is weakening the own currency; by coincidence (?!) all major and not-so-majorcurrencies are on the same trip, some more successful like $ and RMB thanothers.

Not that it would make a big difference but setting the EURO rules did definitely not include a strategy out of a global economic disaster other than an automated destruction.

The result is going to beat 1929.

Carpe diem!

Do you believe in Miracles?

Telegraph story and BBC's Robert peston on the same subject

$3.44bn in 90 days!

What a remarkable resurrection? $3.44bn in just three months, only some months after they had to be bailed out by the tax payer. But then they had not only received cash but grandiose monetary instruments that allowed them to re-valuate rubbish and garbage.


Not only are they making serious profits; they have also repaid the $10bn of tax payers' money already: good boys!


Incidentally the same good boys, Goldman managers, sold $691m of their own shares between 09/2008 and 04/2009 - into a falling market. Compare this to $435 being sold by the same mangers between 09/2007 and 04/2008, when shares were almost three times higher... which makes it a +300% increase in volume; so does that mean they do not believe in the generous offer of balance sheet cosmetics, ultra low interest rates and cash floods being sustainable and sufficient to make holding on to Goldman shares worthwhile?

I believe they are right!

Carpe diem!

1929 : 2009

A Tale of Two Depressions

As much as I like to be an optimist this makes it hard(er).

The comparison of 1929 and 2009 does not end at finding a "9" at the end of each year's figure; also brushing any comparison aside by declaring the world of '29 was "unprepared" and "not fully developed" in reality is a very counter productive argument: one could say that even though '29 had enormous economic potential lying ahead, it soon rang 1939.

While starting a war is always an option, 2009 sees the world having run out of the majority of comparably peaceful economic chances. Fully developed, few blank spots on the map, matured, over crowded, an inflation of crunches, black holes, bad and no banks, etc. - what and where are the options?

Could it be us for whom the bell tolls?

Carpe diem!