Mish's Global Economic Trend Analysis |
- IMF Chief Jackass Calls for Taxpayer-Funded Bank Recapitalisations to Avoid Painful Deleveraging; Mish Says Fire the Parasites and Disband the IMF
- Economic Madness; Bank of Japan Threatens More QE to Meet 1% Inflation Target
- Hopeless Situation in Spain: New Wave of Defaults as Home Prices Crash; Bad Loans Highest Since Oct '94
- Are Oil Embargoes Hurting Iran or the US? Obama Blames Oil Manipulators; Who are the Real Manipulators?
Posted: 18 Apr 2012 12:24 PM PDT Yesterday TrimTabs president & CEO, Charles Biderman, proposed Firing All Government Economists and Disbanding the BLS, BEA and Census Bureau I countered with ... "Biderman's proposal a mere down payment on what needs to happen. In addition to getting rid of the BLS, the BEA, and the census bureau, we also need to get rid of the Fed, the department of energy, student loans, crop subsidies, the small business association, Davis-Bacon, prevailing wage laws, collective bargaining, and all sorts of other programs that at best accomplish nothing at tremendous cost, and in most cases do further economic damage because of graft, inefficiencies, and bad reporting." Neither of us mentioned the ECB, central bankers in general, or the focus of this column, the IMF. IMF Chief Jackass Calls for Taxpayer-Funded Bank Recapitalisations Please consider the Financial Times article IMF sees banks deleveraging by $2.6tn A drastic contraction of European bank balance sheets during the next 18 months could jeopardise financial stability and economic growth in Europe and beyond, according to forecasts from the International Monetary Fund.Fire the Parasites and Disband the IMF Did taxpayers force banks to make stupid loans? If not, why should taxpayers bail out the banks and bondholders? Have the efforts to do that worked so far? Is Greece in better shape? Portugal? Did housing prices in the US recover after US taxpayers bailed out Fannie Mae and Freddie Mac bondholders such as PIMCO? Take a good look at Iceland. It is recovering because Iceland made banks and bondholders take a hit. Instead, the IMF wants to burden already over-burdened taxpayers so the likes of banks and bondholders (the wealthy class) can be made whole. Supposedly this will get banks to lend. How can it? Taxpayers have seen prices rise, wages fall, and taxes go up, all of which leaves them in a much worse position to borrow and spend. Who exactly do these jackasses represent? The answer is obvious. The IMF is not setup to help countries or taxpayers, it was created to rob countries, rob taxpayers, and generally wreak havoc in times of trouble just so the wealthy class can be bailed out again, and again, and again, whenever the banks and bondholders get in trouble by taking on excessive risk. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Economic Madness; Bank of Japan Threatens More QE to Meet 1% Inflation Target Posted: 18 Apr 2012 09:26 AM PDT The last thing Japan really needs is to kick off a bout of inflation. At a mere 2% interest rate or so, interest on its national debt would consume all revenues. Nonetheless, the Wall Street Journal reports BOJ Ready to Take Additional Steps The Bank of Japan stands ready to take additional steps as needed to achieve its price goal, a deputy governor of the central bank said Wednesday, amid strong expectations it will act at its policy-board meeting next week.Economic Madness Japan's aging society benefits from low prices and low taxes. However, politicians want to raise taxes which would tend to strengthen the Yen, while the Bank of Japan wants to print money to weaken the Yen. If this is not economic madness what is? Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Posted: 18 Apr 2012 08:32 AM PDT Bad news upon bad news keeps piling up in Spain as the government still insists it can meet deficit targets without needing a bailout. Anyone with any common sense knows there is no can left to kick. Reuters reports Spain banks' bad loans highest since Oct '94 Hopeless Situation Back on March 28, my friend Pater Tenebrarum on the Acting Man blog pinged me with the following comments. The situation is totally hopeless. If banks were to raise their puny loan loss provisions by just 1% of total loan exposure, it would eat 12% of their tangible net asset value.Yes indeed, it already has. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
Posted: 18 Apr 2012 01:51 AM PDT The US and European embargo of Iranian oil is one of the factors behind the stubbornly high price of crude, trumping the huge slump in petroleum demand in the US. Although Iranian oil exports are down 33%, Iran is on a course for its third largest oil-related earnings ever. Thus, the primary beneficiary of high oil prices is Iran. Rather than blame himself for the absurdity of the situation, president Obama blames oil speculators. High Oil Prices Shield Iran From Sanctions The Financial Times reports High Oil Prices Shield Iran From Sanctions. The Centre for Global Energy Studies (CGES), a London-based think-tank, estimates that Iran will earn $56bn selling its crude this year – its third-highest earnings ever – even after factoring in the loss of roughly a third of its export volume due to sanctions.Iran has had a hard time repatriating those earnings but Iran's president, says Tehran has enough savings to survive until 2015. "We have as much hard currency as we need, and the country will manage well, even if we don't sell a single barrel of oil for two or three years." It's difficult to know if that is a bluff or reality. However, artificially high oil prices are certainly not helping the global economy. Obama Blames Oil Manipulators Please consider Obama proposes steps to curb oil market manipulation Facing heat for high gasoline prices, President Obama tried to shift the focus to Congress, Republicans and energy traders, calling for legislation that he said would "put more cops on the beat" to crack down on potential manipulation of the oil market.Who is the Real Manipulator? Multiple ironies abound in Obama's lecture about "market" forces. Besides Obama's own influence on the price of oil, the Fed artificially holding interest rates low is "not the way the market should work" either. The very idea that 10 alleged wizards can sit in a room eight times a year and divine the proper interest rate to steer the economy is preposterous. Indeed that is precisely "not the way the market should work" and in fact cannot possibly work. Proof is easy to find. We have had bubble after bubble after bubble, each with increasing amplitude, each with bank bailouts, each causing greater and greater income disparity, and ultimately culminating in the biggest housing bust in history. History proves there have are no wizards on the FOMC, only economic and academic jackasses. Yet eight times a year, those jackasses sit in a room and set policy. Worse yet, they are arrogant enough to believe they, not the market, know what is best for the economy. Then to top it off, we have to listen to an Obama lecture on the market when it is his own policies coupled with inane Fed policies that are the real cause of high oil prices. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List |
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