It’s All Greek To Me

Stock markets are racing higher today on the news of a new solution for the “Greek problem.” The solution is to allow the Greeks to borrow more at even lower rates. Seems like that was what got them in trouble in the first place, but that’s for tomorrow, not for today so who cares.

Meantime U.S. economic data flow remains poor, but, again, nobody cares. Since our trading horizon is measured in milliseconds, economic data is hardly relevant, is it? The danger continues to rise, as politicians continue to fudge on the one side, attempting to keep asset prices up, while the broad economy is reeling under the pressure of household deleveraging. in the Great Depression, governments attempted to keep wages up. The main effect of this was to increase unemployment, as the price of labor was simply too high. This time around, the government has made little attempt to keep wages high, except in the public sector, while directing massive resources – $2.5 trillion from the Fed alone for securities, over $500 billion per year from the Treasury for housing – to pumping up asset markets. Of course, the beneficiaries of this policy are the asset holders, at the expense of the people who have to stretch their shrinking incomes to pay more for food, energy and other necessities of life. We are now seeing declines in real wages, something which has not happened since the Great Depression. The Party is spending money on Wall Street, the military and foreign aid. Everyone else can go hang because they’re not paying to play. Why Americans put up with this is beyond me. At least the Greeks took to the streets.

In other news, it wasn’t a good week for principled women. Obama showed his usual gutlessness and decided not to nominate Elizabeth Warren, choosing a pablum candidate who will offend no-one (and regulate no-one) in her stead. Also there was a systematic attack launched on Michelle Bachmann, on the grounds that she suffers from migraines and is therefore unfit for the Presidency. I guess Jefferson, Kennedy and Grant must have been unfit too, but somehow they managed. Pretty pathetic ad hominem attack, the kind that usually stems from knowing the victim is right.

Both comments and trackbacks are currently closed.
%d bloggers like this: