Tuesday, December 15, 2009

Welcome to RECOVERupY NEWS

RECOVERupY news today-

John Williams runs the counter-government data manipulation website which is very popular in the US: http://www.shadowstats.com/

What? Government economic statistics are that unreliable? Well, not so much unreliable as unbelievable and untrustworthy.

So John, how IS the US economy really doing then?

The U.S. economic and systemic solvency crises of the last two years are just precursors to a Great Collapse: a hyperinflationary great depression. Such will reflect a complete collapse in the purchasing power of the U.S. dollar, a collapse in the normal stream of U.S. commercial and economic activity, a collapse in the U.S. financial system as we know it, and a likely realignment of the U.S. political environment. The current U.S. financial markets, financial system and economy remain highly unstable and vulnerable to unexpected shocks. The Federal Reserve is dedicated to preventing deflation, to debasing the U.S. dollar. The results of those efforts are being seen in tentative selling pressures against the U.S. currency and in the rallying price of gold.

Nooooooooo, all the government talk about working towards a recovery. We've been promised John and it's government, if we don't believe in the government who should we believe in? Santa?

Never happen in Europe. Governments have taken the proper steps to solve the crisis. It makes me feel all safe when you see them all together at summits. They're so reassuring!

Dow Jones today:

Irish banks will need significantly more capital and 50% state ownership of the country's two leading banks is "quite possible," Patrick Honohan, governor of Ireland's central bank, said Tuesday.
The governor said significant additional capital will likely be needed in the two main banks taking part in the forthcoming National Asset Management Agency -- Allied Irish Banks PLC (AIB) and Bank of Ireland PLC (IRE).
Speaking to a parliamentary committee, he said: "To the extent that needed capital cannot be sourced by the banks themselves, the government has indicated that it will be prepared to make the necessary investments.

Yes but the European Union or the € is not in any serious danger. I mean things ain't that bad, are they?

In the Telegraph today:

The danger point for Greece will come when the Pfennig drops in Berlin that EMU divergence between North and South has widened to such a point that the system will break up unless: either Germany tolerates inflation of 4pc or 5pc to prevent Club Med tipping into debt deflation; or it pays welfare transfers to the South (not loans) equal to East German subsidies after reunification.
Before we blame Greece for making a hash of the euro, let us not forget how we got here. EMU lured Club Med into a trap. Interest rates were too low for Greece, Portugal, Spain, and Ireland, causing them all to be engulfed in a destructive property and wage boom.
The ECB was complicit. It breached its inflation and M3 money target repeatedly in order to nurse Germany through slump. ECB rates were 2pc until December 2005. This was poison for overheating Southern states.
The deeper truth that few in Euroland are willing to discuss is that EMU is inherently dysfunctional – for Greece, for Germany, for everybody.

Arggghh, you'd think none of the governments and banks have a grip on anything wouldn't you? You'll be telling me next they were all lying anyway. Brown and Darling wouldn't lie though - this is Blighty after all?

Janet Tavakoli (Tavakoli Structured Finance) writes in the Wall Street Journal:

Alistair Darling, Chancellor of the Exchequer, spoke on the opening evening. I asked him why massive financial fraud remained unaddressed. Darling appeared momentarily confused and seemed to suggest this was exclusively a U.S. problem to be handled by the courts. I pushed back on this notion. By the time one needs a lawyer, it is too late. I noted that we, the middle aged financiers in the room, are responsible for taking action. If we don't face this issue head on, we will never restore trust in the financial system.

And that was RECOVERupY News, Goodnight!

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