As austerity sets in on the periphery of Europe mainly (thanks in large part to the flawed currency system) there are increasing risks that a double dip could develop. Of course, many of these nations remain mired in deep recessions or depressions and the recent bailout packages all involve harsh austerity measures that will certainly keep them on their knees for years to come. As the problems in Portugal, Spain and Italy evolve there is the potential for even greater austerity and forced pain in the EMU. Meanwhile, the core nations have largely recovered, however, there are signs of weakness.
In a recent strategy note the always excellent Michael Darda, Chief Economist of MKM Partners detailed the reasons why he is becoming increasingly concerned about a Eurozone double dip:
Warren Mosler, Founder and Principal, III Offshore Advisors, elaborated on the Darda commentary:
“No question austerity will work – that is, it will force negative growth. Question is just when. Unless they make fiscal adjustments, but that seems unlikely.
I'm starting to feel a deflationary malaise coming on as the end of year/beginning of new year related activity subsides.
Headline CPI increases to me are mainly just relative value shifts that rob demand for other things, and are not anywhere near pushing through to core measures which would pass them on to indexed compensation.
But the talk of inflation is just one more thing keeping global authorities thinking they don't need another "?fiscal stimulus' as they continue to push spending cuts and "?fiscal responsibility'.
Housing going nowhere. Jobs going nowhere as GDP growth only marginally exceeds productivity growth.
Financial sector finding it hard to make a buck as loan demand remains weak and competition is driving down net interest margins and spreads in general. (I'm thinking of holding a walkathon to help them out. Anyone want to kick in a few cents a mile?)”
The world is at an interesting stage of economic growth currently. The United States has done just enough to muddle through and generate positive economic growth though not enough to substantially close the output gap and get the country anywhere close to full employment. China and much of Asia, on the other hand, initiated severely misguided fiscal packages during the 2008 downturn that now appear to be substantially contributing to their inflation woes and potential overheating. Europe, on the other hand, has been mixed with the core benefiting largely at the expense of the periphery. Austerity measures on the periphery are creating deep economic holes and the potential is for the problems to worsen as the likelihood for aid in Portugal, Spain and Italy increases in the coming months and years and only worsens the austerity virus. Europe remains a divided economy with the core recovering and the periphery still in recession. If the problems in the periphery worsen or even fail to improve there is an increasing likelihood that the growth on the core will weaken and Darda’s concerns will come to fruition.
Source: MKM Partners ——————————————————————————————————————————————————
The content on this site is provided as general information only and should not be taken as investment advice. All site content shall not be construed as a recommendation to buy or sell any security or financial product, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of firms affiliated with the author(s). The opinions of all guest authors or contributors can and will differ from those of Mr. Roche. These opinions do not necessarily represent the opinions or investment decisions of Mr. Roche. The author(s) may or may not have a position in any security referenced herein and may or may not seek to do business with one another or companies mentioned via this website. Any action that you take as a result of information or analysis on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.
A brief note on comments – The increase in users in recent months has resulted in an increase in unproductive comments. Any user who engages in the use of racial epithets or uses the comment section as a place to insult other users will be banned from the site. The comment section is welcome to all readers who are interested in asking pertinent questions and/or engaging in thoughtful, intelligent, and productive debate. In short, just be nice. Thanks.
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More on this topic (What's this?) Satyajit Das: European Death Spiral "“ End Games (naked capitalism, 1/12/11) Jim Rogers' 2011 Forecast for Europe's Sovereign Debt Woes and Inflation in the US (Blogging the Commodity Bull Market, 12/10/10) The 10 economic factors in the world outlook for 2011 "“ and the 3 dominos (Investment Postcards from Cape Town, 12/31/10) Cereplast (CERP) Signs Romanian Bioplastics Distribution Deal (Green Stocks Central, 1/19/11) Read more on European Union at Wikinvest icBrokerWidget('pragcap', 600, 55); Comments LVGChina’s overheating, Europe is slowing and America is bumbling along. Is that enough to just maintain the status quo and continue the growth in stocks that we continue to see? At what point does it just hit a wall?
Reply 01/20/2011 at 7:12 AM boatmandarda is very interesting to watch with his day old stubble and godfather tone.
i’m counting on big EUR problems.
Reply 01/20/2011 at 7:59 AM JHEurope's problems, much like the US, have less to do with it’s often blamed monetary system and much more to do with it’s eroding employment situation. I am old enough to remember when the streets of the US and the world were traveled by many MG’s Triumphs, Jaguars, Fiats, Morris, Renaults, and British motorcycles. You see none of that anymore. Likewise you see fewer and fewer made in America products. You cannot maintain a prosperous economy without producing products for export. Big business is getting uber wealthy exploiting third world labor at the costs of American and European jobs. The constant mantra of wealth thru credit is idiotic propaganda that has ruined the economies of both continents and threatens to enslave its inhabitants under the “company store” economic model.
Reply 01/20/2011 at 9:09 AM FDO15Those jobs are gone. They are not coming back. Americans like cheap crap and US companies give it to them by arbitraging the labor away. That’s that.
America and Europe’s problem is that they have become too dependent on the FIRE industries for growth. And now that those industries have tanked there is no real growth. And what do the politicians do? They try to revive those industries. So now we get to take another ride on the merry go round of hell.
Reply 01/20/2011 at 9:54 AM JHThe FIRE industries were manufactured to allow the exportation of the manufacturing jobs base. The FIRE industries were manufactured in order to allow the exportation of the manufacturing jobs base without public outcry. The FIRE industry cannot exist without the lax lending and interest rate environment created by the same interests who are benefiting from the low manufacturing cost high profit retail trade. This could all be turned around with trade and tax policies, in the same way Germany protects its manufacturing base. Although that would require pressure from and informed public. Unfortunately, the American public is incapable of joining together in its own interest. The truth is, they are as dumb as a box of rocks.
Reply 01/20/2011 at 10:36 AM boatmanu got it FDO
Reply 01/20/2011 at 12:29 PM tradeking13I’m still waiting for Darda’s V-shaped recovery in the US.
Reply 01/20/2011 at 10:06 AM Cullen RocheYou’ve gotta admit though – he called it better than most. I recall him being bearish in 2008 and quite bullish in 2009.
Reply 01/20/2011 at 2:22 PM Leave a Comment Name Mail (will not be published) Website Click here to cancel reply. Popular Stories RICHARD RUSSELL ON STAYING SOLVENT: I think this pretty much sums up the way a great deal of investors currently feel about the stock ma... BARRON'S ROUNDTABLE PREDICTS THE 2011 MARKET: The Barron's Roundtable for 2011 is out this weekend and it's a must read as always. I've attached ... APPLE MAKES A MOCKERY OF THE SYSTEM - AGAIN....: It's really not shocking that small investors believe Wall Street is a rigged game. There is, pe... RISK MANAGEMENT - AN UNDERVALUED COMMODITY ON WALL STREET: If you missed this Bloomberg piece on the unfortunate downfall of Peter Thiel's Clarium Capital it's... THREE THINGS I THINK I THINK: 1) Bigger is better? 2) Commodities and China can't both be right. 3) Bubbles in the USA? ... THE GAMBLER: "If you must play, decide upon three things at the start: the rules of the game, the stakes, and the... THE OUTLOOK FOR 2011 FROM PIMCO: Mohamed El-Erian, Pimco's CEO provides the outlook for 2011 from the bond market gurus:... ROSENBERG: FADE MEREDITH WHITNEY'S MUNI CALL: David Rosenberg isn't buying Meredith Whitney's dire analysis of the municipal bond market in the US... PUTTING THE MUNI BOND PANIC INTO PERSPECTIVE: Investors are increasingly fearful of a crisis in the municipal bond market. Meredith Whitney's ca... MADE IN CHINA, WORTHLESS IN THE USA: Bloomberg has been running a pretty interesting piece on Chinese companies that use what's called a ... REGISTER FOR PC LOG-IN TO PC var sc_project=5036143; var sc_invisible=1; var sc_partition=57; var sc_click_stat=1; var sc_security="5e6f901b"; icBeacon('pragcap');© 2009 pragcap.com · Register for PC
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More on this topic (What's this?) Satyajit Das: European Death Spiral "“ End Games (naked capitalism, 1/12/11) Jim Rogers' 2011 Forecast for Europe's Sovereign Debt Woes and Inflation in the US (Blogging the Commodity Bull Market, 12/10/10) The 10 economic factors in the world outlook for 2011 "“ and the 3 dominos (Investment Postcards from Cape Town, 12/31/10) Cereplast (CERP) Signs Romanian Bioplastics Distribution Deal (Green Stocks Central, 1/19/11) Read more on European Union at Wikinvest icBrokerWidget('pragcap', 600, 55); Comments LVGChina’s overheating, Europe is slowing and America is bumbling along. Is that enough to just maintain the status quo and continue the growth in stocks that we continue to see? At what point does it just hit a wall?
Reply 01/20/2011 at 7:12 AM boatmandarda is very interesting to watch with his day old stubble and godfather tone.
i’m counting on big EUR problems.
Reply 01/20/2011 at 7:59 AM JHEurope's problems, much like the US, have less to do with it’s often blamed monetary system and much more to do with it’s eroding employment situation. I am old enough to remember when the streets of the US and the world were traveled by many MG’s Triumphs, Jaguars, Fiats, Morris, Renaults, and British motorcycles. You see none of that anymore. Likewise you see fewer and fewer made in America products. You cannot maintain a prosperous economy without producing products for export. Big business is getting uber wealthy exploiting third world labor at the costs of American and European jobs. The constant mantra of wealth thru credit is idiotic propaganda that has ruined the economies of both continents and threatens to enslave its inhabitants under the “company store” economic model.
Reply 01/20/2011 at 9:09 AM FDO15Those jobs are gone. They are not coming back. Americans like cheap crap and US companies give it to them by arbitraging the labor away. That’s that.
America and Europe’s problem is that they have become too dependent on the FIRE industries for growth. And now that those industries have tanked there is no real growth. And what do the politicians do? They try to revive those industries. So now we get to take another ride on the merry go round of hell.
Reply 01/20/2011 at 9:54 AM JHThe FIRE industries were manufactured to allow the exportation of the manufacturing jobs base. The FIRE industries were manufactured in order to allow the exportation of the manufacturing jobs base without public outcry. The FIRE industry cannot exist without the lax lending and interest rate environment created by the same interests who are benefiting from the low manufacturing cost high profit retail trade. This could all be turned around with trade and tax policies, in the same way Germany protects its manufacturing base. Although that would require pressure from and informed public. Unfortunately, the American public is incapable of joining together in its own interest. The truth is, they are as dumb as a box of rocks.
Reply 01/20/2011 at 10:36 AM boatmanu got it FDO
Reply 01/20/2011 at 12:29 PM tradeking13I’m still waiting for Darda’s V-shaped recovery in the US.
Reply 01/20/2011 at 10:06 AM Cullen RocheYou’ve gotta admit though – he called it better than most. I recall him being bearish in 2008 and quite bullish in 2009.
Reply 01/20/2011 at 2:22 PM Leave a Comment Name Mail (will not be published) Website Click here to cancel reply. Popular Stories RICHARD RUSSELL ON STAYING SOLVENT: I think this pretty much sums up the way a great deal of investors currently feel about the stock ma... BARRON'S ROUNDTABLE PREDICTS THE 2011 MARKET: The Barron's Roundtable for 2011 is out this weekend and it's a must read as always. I've attached ... APPLE MAKES A MOCKERY OF THE SYSTEM - AGAIN....: It's really not shocking that small investors believe Wall Street is a rigged game. There is, pe... RISK MANAGEMENT - AN UNDERVALUED COMMODITY ON WALL STREET: If you missed this Bloomberg piece on the unfortunate downfall of Peter Thiel's Clarium Capital it's... THREE THINGS I THINK I THINK: 1) Bigger is better? 2) Commodities and China can't both be right. 3) Bubbles in the USA? ... THE GAMBLER: "If you must play, decide upon three things at the start: the rules of the game, the stakes, and the... THE OUTLOOK FOR 2011 FROM PIMCO: Mohamed El-Erian, Pimco's CEO provides the outlook for 2011 from the bond market gurus:... ROSENBERG: FADE MEREDITH WHITNEY'S MUNI CALL: David Rosenberg isn't buying Meredith Whitney's dire analysis of the municipal bond market in the US... PUTTING THE MUNI BOND PANIC INTO PERSPECTIVE: Investors are increasingly fearful of a crisis in the municipal bond market. Meredith Whitney's ca... MADE IN CHINA, WORTHLESS IN THE USA: Bloomberg has been running a pretty interesting piece on Chinese companies that use what's called a ... REGISTER FOR PC LOG-IN TO PC var sc_project=5036143; var sc_invisible=1; var sc_partition=57; var sc_click_stat=1; var sc_security="5e6f901b"; icBeacon('pragcap');© 2009 pragcap.com · Register for PC
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China’s overheating, Europe is slowing and America is bumbling along. Is that enough to just maintain the status quo and continue the growth in stocks that we continue to see? At what point does it just hit a wall?
darda is very interesting to watch with his day old stubble and godfather tone.
i’m counting on big EUR problems.
Europe's problems, much like the US, have less to do with it’s often blamed monetary system and much more to do with it’s eroding employment situation. I am old enough to remember when the streets of the US and the world were traveled by many MG’s Triumphs, Jaguars, Fiats, Morris, Renaults, and British motorcycles. You see none of that anymore. Likewise you see fewer and fewer made in America products. You cannot maintain a prosperous economy without producing products for export. Big business is getting uber wealthy exploiting third world labor at the costs of American and European jobs. The constant mantra of wealth thru credit is idiotic propaganda that has ruined the economies of both continents and threatens to enslave its inhabitants under the “company store” economic model.
Those jobs are gone. They are not coming back. Americans like cheap crap and US companies give it to them by arbitraging the labor away. That’s that.
America and Europe’s problem is that they have become too dependent on the FIRE industries for growth. And now that those industries have tanked there is no real growth. And what do the politicians do? They try to revive those industries. So now we get to take another ride on the merry go round of hell.
The FIRE industries were manufactured to allow the exportation of the manufacturing jobs base. The FIRE industries were manufactured in order to allow the exportation of the manufacturing jobs base without public outcry. The FIRE industry cannot exist without the lax lending and interest rate environment created by the same interests who are benefiting from the low manufacturing cost high profit retail trade. This could all be turned around with trade and tax policies, in the same way Germany protects its manufacturing base. Although that would require pressure from and informed public. Unfortunately, the American public is incapable of joining together in its own interest. The truth is, they are as dumb as a box of rocks.
u got it FDO
I’m still waiting for Darda’s V-shaped recovery in the US.
You’ve gotta admit though – he called it better than most. I recall him being bearish in 2008 and quite bullish in 2009.
© 2009 pragcap.com · Register for PC
As austerity sets in on the periphery of Europe mainly (thanks in large part to the flawed currency system) there are increasing risks that a double dip could develop. Of course, many of these nations remain mired in deep recessions or depressions and the recent bailout packages all involve harsh austerity measures that will certainly keep them on their knees for years to come. As the problems in Portugal, Spain and Italy evolve there is the potential for even greater austerity and forced pain in the EMU. Meanwhile, the core nations have largely recovered, however, there are signs of weakness.
In a recent strategy note the always excellent Michael Darda, Chief Economist of MKM Partners detailed the reasons why he is becoming increasingly concerned about a Eurozone double dip:
Warren Mosler, Founder and Principal, III Offshore Advisors, elaborated on the Darda commentary:
“No question austerity will work – that is, it will force negative growth. Question is just when. Unless they make fiscal adjustments, but that seems unlikely.
I'm starting to feel a deflationary malaise coming on as the end of year/beginning of new year related activity subsides.
Headline CPI increases to me are mainly just relative value shifts that rob demand for other things, and are not anywhere near pushing through to core measures which would pass them on to indexed compensation.
But the talk of inflation is just one more thing keeping global authorities thinking they don't need another "?fiscal stimulus' as they continue to push spending cuts and "?fiscal responsibility'.
Housing going nowhere. Jobs going nowhere as GDP growth only marginally exceeds productivity growth.
Financial sector finding it hard to make a buck as loan demand remains weak and competition is driving down net interest margins and spreads in general. (I'm thinking of holding a walkathon to help them out. Anyone want to kick in a few cents a mile?)”
The world is at an interesting stage of economic growth currently. The United States has done just enough to muddle through and generate positive economic growth though not enough to substantially close the output gap and get the country anywhere close to full employment. China and much of Asia, on the other hand, initiated severely misguided fiscal packages during the 2008 downturn that now appear to be substantially contributing to their inflation woes and potential overheating. Europe, on the other hand, has been mixed with the core benefiting largely at the expense of the periphery. Austerity measures on the periphery are creating deep economic holes and the potential is for the problems to worsen as the likelihood for aid in Portugal, Spain and Italy increases in the coming months and years and only worsens the austerity virus. Europe remains a divided economy with the core recovering and the periphery still in recession. If the problems in the periphery worsen or even fail to improve there is an increasing likelihood that the growth on the core will weaken and Darda’s concerns will come to fruition.
Source: MKM Partners ——————————————————————————————————————————————————
The content on this site is provided as general information only and should not be taken as investment advice. All site content shall not be construed as a recommendation to buy or sell any security or financial product, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of firms affiliated with the author(s). The opinions of all guest authors or contributors can and will differ from those of Mr. Roche. These opinions do not necessarily represent the opinions or investment decisions of Mr. Roche. The author(s) may or may not have a position in any security referenced herein and may or may not seek to do business with one another or companies mentioned via this website. Any action that you take as a result of information or analysis on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.
A brief note on comments – The increase in users in recent months has resulted in an increase in unproductive comments. Any user who engages in the use of racial epithets or uses the comment section as a place to insult other users will be banned from the site. The comment section is welcome to all readers who are interested in asking pertinent questions and/or engaging in thoughtful, intelligent, and productive debate. In short, just be nice. Thanks.
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Post Footer automatically generated by Add Post Footer Plugin for wordpress.
More on this topic (What's this?) Satyajit Das: European Death Spiral "“ End Games (naked capitalism, 1/12/11) Jim Rogers' 2011 Forecast for Europe's Sovereign Debt Woes and Inflation in the US (Blogging the Commodity Bull Market, 12/10/10) The 10 economic factors in the world outlook for 2011 "“ and the 3 dominos (Investment Postcards from Cape Town, 12/31/10) Cereplast (CERP) Signs Romanian Bioplastics Distribution Deal (Green Stocks Central, 1/19/11) Read more on European Union at Wikinvest icBrokerWidget('pragcap', 600, 55); Comments LVGChina’s overheating, Europe is slowing and America is bumbling along. Is that enough to just maintain the status quo and continue the growth in stocks that we continue to see? At what point does it just hit a wall?
Reply 01/20/2011 at 7:12 AM boatmandarda is very interesting to watch with his day old stubble and godfather tone.
i’m counting on big EUR problems.
Reply 01/20/2011 at 7:59 AM JHEurope's problems, much like the US, have less to do with it’s often blamed monetary system and much more to do with it’s eroding employment situation. I am old enough to remember when the streets of the US and the world were traveled by many MG’s Triumphs, Jaguars, Fiats, Morris, Renaults, and British motorcycles. You see none of that anymore. Likewise you see fewer and fewer made in America products. You cannot maintain a prosperous economy without producing products for export. Big business is getting uber wealthy exploiting third world labor at the costs of American and European jobs. The constant mantra of wealth thru credit is idiotic propaganda that has ruined the economies of both continents and threatens to enslave its inhabitants under the “company store” economic model.
Reply 01/20/2011 at 9:09 AM FDO15Those jobs are gone. They are not coming back. Americans like cheap crap and US companies give it to them by arbitraging the labor away. That’s that.
America and Europe’s problem is that they have become too dependent on the FIRE industries for growth. And now that those industries have tanked there is no real growth. And what do the politicians do? They try to revive those industries. So now we get to take another ride on the merry go round of hell.
Reply 01/20/2011 at 9:54 AM JHThe FIRE industries were manufactured to allow the exportation of the manufacturing jobs base. The FIRE industries were manufactured in order to allow the exportation of the manufacturing jobs base without public outcry. The FIRE industry cannot exist without the lax lending and interest rate environment created by the same interests who are benefiting from the low manufacturing cost high profit retail trade. This could all be turned around with trade and tax policies, in the same way Germany protects its manufacturing base. Although that would require pressure from and informed public. Unfortunately, the American public is incapable of joining together in its own interest. The truth is, they are as dumb as a box of rocks.
Reply 01/20/2011 at 10:36 AM boatmanu got it FDO
Reply 01/20/2011 at 12:29 PM tradeking13I’m still waiting for Darda’s V-shaped recovery in the US.
Reply 01/20/2011 at 10:06 AM Cullen RocheYou’ve gotta admit though – he called it better than most. I recall him being bearish in 2008 and quite bullish in 2009.
Reply 01/20/2011 at 2:22 PM Leave a Comment Name Mail (will not be published) Website Click here to cancel reply. Popular Stories RICHARD RUSSELL ON STAYING SOLVENT: I think this pretty much sums up the way a great deal of investors currently feel about the stock ma... BARRON'S ROUNDTABLE PREDICTS THE 2011 MARKET: The Barron's Roundtable for 2011 is out this weekend and it's a must read as always. I've attached ... APPLE MAKES A MOCKERY OF THE SYSTEM - AGAIN....: It's really not shocking that small investors believe Wall Street is a rigged game. There is, pe... RISK MANAGEMENT - AN UNDERVALUED COMMODITY ON WALL STREET: If you missed this Bloomberg piece on the unfortunate downfall of Peter Thiel's Clarium Capital it's... THREE THINGS I THINK I THINK: 1) Bigger is better? 2) Commodities and China can't both be right. 3) Bubbles in the USA? ... THE GAMBLER: "If you must play, decide upon three things at the start: the rules of the game, the stakes, and the... THE OUTLOOK FOR 2011 FROM PIMCO: Mohamed El-Erian, Pimco's CEO provides the outlook for 2011 from the bond market gurus:... ROSENBERG: FADE MEREDITH WHITNEY'S MUNI CALL: David Rosenberg isn't buying Meredith Whitney's dire analysis of the municipal bond market in the US... PUTTING THE MUNI BOND PANIC INTO PERSPECTIVE: Investors are increasingly fearful of a crisis in the municipal bond market. Meredith Whitney's ca... MADE IN CHINA, WORTHLESS IN THE USA: Bloomberg has been running a pretty interesting piece on Chinese companies that use what's called a ... REGISTER FOR PC LOG-IN TO PC var sc_project=5036143; var sc_invisible=1; var sc_partition=57; var sc_click_stat=1; var sc_security="5e6f901b"; icBeacon('pragcap');© 2009 pragcap.com · Register for PC
Home · Advertise · Contact us · Disclaimer ·
Post Footer automatically generated by Add Post Footer Plugin for wordpress.
More on this topic (What's this?) Satyajit Das: European Death Spiral "“ End Games (naked capitalism, 1/12/11) Jim Rogers' 2011 Forecast for Europe's Sovereign Debt Woes and Inflation in the US (Blogging the Commodity Bull Market, 12/10/10) The 10 economic factors in the world outlook for 2011 "“ and the 3 dominos (Investment Postcards from Cape Town, 12/31/10) Cereplast (CERP) Signs Romanian Bioplastics Distribution Deal (Green Stocks Central, 1/19/11) Read more on European Union at Wikinvest icBrokerWidget('pragcap', 600, 55); Comments LVGChina’s overheating, Europe is slowing and America is bumbling along. Is that enough to just maintain the status quo and continue the growth in stocks that we continue to see? At what point does it just hit a wall?
Reply 01/20/2011 at 7:12 AM boatmandarda is very interesting to watch with his day old stubble and godfather tone.
i’m counting on big EUR problems.
Reply 01/20/2011 at 7:59 AM JHEurope's problems, much like the US, have less to do with it’s often blamed monetary system and much more to do with it’s eroding employment situation. I am old enough to remember when the streets of the US and the world were traveled by many MG’s Triumphs, Jaguars, Fiats, Morris, Renaults, and British motorcycles. You see none of that anymore. Likewise you see fewer and fewer made in America products. You cannot maintain a prosperous economy without producing products for export. Big business is getting uber wealthy exploiting third world labor at the costs of American and European jobs. The constant mantra of wealth thru credit is idiotic propaganda that has ruined the economies of both continents and threatens to enslave its inhabitants under the “company store” economic model.
Reply 01/20/2011 at 9:09 AM FDO15Those jobs are gone. They are not coming back. Americans like cheap crap and US companies give it to them by arbitraging the labor away. That’s that.
America and Europe’s problem is that they have become too dependent on the FIRE industries for growth. And now that those industries have tanked there is no real growth. And what do the politicians do? They try to revive those industries. So now we get to take another ride on the merry go round of hell.
Reply 01/20/2011 at 9:54 AM JHThe FIRE industries were manufactured to allow the exportation of the manufacturing jobs base. The FIRE industries were manufactured in order to allow the exportation of the manufacturing jobs base without public outcry. The FIRE industry cannot exist without the lax lending and interest rate environment created by the same interests who are benefiting from the low manufacturing cost high profit retail trade. This could all be turned around with trade and tax policies, in the same way Germany protects its manufacturing base. Although that would require pressure from and informed public. Unfortunately, the American public is incapable of joining together in its own interest. The truth is, they are as dumb as a box of rocks.
Reply 01/20/2011 at 10:36 AM boatmanu got it FDO
Reply 01/20/2011 at 12:29 PM tradeking13I’m still waiting for Darda’s V-shaped recovery in the US.
Reply 01/20/2011 at 10:06 AM Cullen RocheYou’ve gotta admit though – he called it better than most. I recall him being bearish in 2008 and quite bullish in 2009.
Reply 01/20/2011 at 2:22 PM Leave a Comment Name Mail (will not be published) Website Click here to cancel reply. Popular Stories RICHARD RUSSELL ON STAYING SOLVENT: I think this pretty much sums up the way a great deal of investors currently feel about the stock ma... BARRON'S ROUNDTABLE PREDICTS THE 2011 MARKET: The Barron's Roundtable for 2011 is out this weekend and it's a must read as always. I've attached ... APPLE MAKES A MOCKERY OF THE SYSTEM - AGAIN....: It's really not shocking that small investors believe Wall Street is a rigged game. There is, pe... RISK MANAGEMENT - AN UNDERVALUED COMMODITY ON WALL STREET: If you missed this Bloomberg piece on the unfortunate downfall of Peter Thiel's Clarium Capital it's... THREE THINGS I THINK I THINK: 1) Bigger is better? 2) Commodities and China can't both be right. 3) Bubbles in the USA? ... THE GAMBLER: "If you must play, decide upon three things at the start: the rules of the game, the stakes, and the... THE OUTLOOK FOR 2011 FROM PIMCO: Mohamed El-Erian, Pimco's CEO provides the outlook for 2011 from the bond market gurus:... ROSENBERG: FADE MEREDITH WHITNEY'S MUNI CALL: David Rosenberg isn't buying Meredith Whitney's dire analysis of the municipal bond market in the US... PUTTING THE MUNI BOND PANIC INTO PERSPECTIVE: Investors are increasingly fearful of a crisis in the municipal bond market. Meredith Whitney's ca... MADE IN CHINA, WORTHLESS IN THE USA: Bloomberg has been running a pretty interesting piece on Chinese companies that use what's called a ... REGISTER FOR PC LOG-IN TO PC var sc_project=5036143; var sc_invisible=1; var sc_partition=57; var sc_click_stat=1; var sc_security="5e6f901b"; icBeacon('pragcap');© 2009 pragcap.com · Register for PC
Home · Advertise · Contact us · Disclaimer ·
China’s overheating, Europe is slowing and America is bumbling along. Is that enough to just maintain the status quo and continue the growth in stocks that we continue to see? At what point does it just hit a wall?
darda is very interesting to watch with his day old stubble and godfather tone.
i’m counting on big EUR problems.
Europe's problems, much like the US, have less to do with it’s often blamed monetary system and much more to do with it’s eroding employment situation. I am old enough to remember when the streets of the US and the world were traveled by many MG’s Triumphs, Jaguars, Fiats, Morris, Renaults, and British motorcycles. You see none of that anymore. Likewise you see fewer and fewer made in America products. You cannot maintain a prosperous economy without producing products for export. Big business is getting uber wealthy exploiting third world labor at the costs of American and European jobs. The constant mantra of wealth thru credit is idiotic propaganda that has ruined the economies of both continents and threatens to enslave its inhabitants under the “company store” economic model.
Those jobs are gone. They are not coming back. Americans like cheap crap and US companies give it to them by arbitraging the labor away. That’s that.
America and Europe’s problem is that they have become too dependent on the FIRE industries for growth. And now that those industries have tanked there is no real growth. And what do the politicians do? They try to revive those industries. So now we get to take another ride on the merry go round of hell.
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