Thursday, November 7, 2013


As though the entire thing was programmed, the ECB lowered it's short term borrowing rate to a 1/4% in a move that seemed to catch most economic forecasters off-guard in the face of continued concerns of European growth (or lack of the same), disparities in trade balances between members, and expected free money continuation as policy by the Federal Reserve.  Will it help?  Probably not as long as Germany continues its Euroland for Deutschland approach for the foreseeable future.  It does reaffirm, however, Sr. Monti's commitment to do whatever it takes to hold the whole thing together which I don't think anyone doubted in the first place...well, at least I didn't.  The only question was, and it still remains, is will all he can do be enough in the face of the political and structural reforms necessary beyond buying Spanish and Greek debt to keep the creditors afloat.

Over Here, the third quarter GDP figures released today showed a surprising growth of 2.8%, well- above all expectations, but when I called around to a couple of my economist buds (yes, I actually speak to economists) their view was don't get excited, most of it was due to excessive inventory restocking which was probably 0.8% of the number.  You know it's really funny: every time these guys get one of their SWAGs wrong they always have an immediate answer.  "We called for 2.0% GDP growth but it came in at 2.8% but that was because the inventory growth was 0.8% above what it should have been, so there."  Honest to gosh I don't know how they do it.  Anyway, the consensus for the fourth quarter is now 1.8% down from 2.2% because inventory growth will be cut back from the too-strong third quarter, and...I can barely wait.

But in the midst of all of this there from time to time comes something that puts a smile on one's face.  On Tuesday, the good people of the City of New York elected a guy by the name of Bill DeBlasio as their mayor.  The town which is fond of referring to itself as the center of the Financial Universe now has a mayor whose economic and political groundings came from his experiences in Nicaragua under the Sandinistas and Cuba under Castro.  He is also married to a lady who wrote an autobiography about being a lesbian (who says you can't change!) and changed his name to his mother's maiden name because he felt closer to her than his father who was of German parentage-- making life a touch confusing for all who meet him as he looks like an officer in the Das Reich Division.  Oh yeah, this is gonna work.  I feel like a kid at Christmas.  Can you imagine the stories that are going to come out of this juxtaposition of philosophies and beliefs?  I can.

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