Monday, October 27, 2014


The stress test that it.  The Italians are weak, the Spanish aren't in great shape, Caxia...after a zillion Euros of support still look to the Belgian Burgers for support, the Germans are fine with the exception of a few little Landesbanken and the French are brilliant.  Do I believe it?  Not for a minute but there seems to be general agreement that this go-around was conducted with a more cogent view of reality than any of its predecessors.  Whilst all the Brits passed, the Old Lady will do her own thing next months which promises to be a bit more demanding than what came out of the ECB.  Nevertheless, the system should make it through that one as well.

So, what does all this mean?  Not much, really.  Those two nasty words--structural adjustment--keep popping up and reduced fears about the banking system, whilst no doubt a good thing--will not have any real effect on the European growth outlook.  Today, like yesterday, it is still stinko with nothing on the horizon to change it.  It would appear, therefore, we get through this year with a whimper and look to 2015 to change the course of events.  Of course, that change could be in either direction as there is a heck of a lot of political activity scheduled.  Remaining is the  Big Destabilizer...Russia...with a currency in free fall, an economy in tatters and a nut running the place.
A worse scenario one could not imagine but there's not really much anyone can do.

Of more immediate interest and perhaps concern is that Dilma won...and Brazil lost.  Oh, make no bones about it, the lady is a communist, they don't change, and as a result her economic policies and dismal governing record will persist and doom her country to no better than the gloom that has accompanied the past four years as well as to the continued destruction of the jewel in the crown, Petrobras, as a result of corruption, mismanagement and unconscionable incompetence.  Remember the Masters of the Universe of a few years past?  The BRICS?  Brazil, Russia, India and China?  Gee what happened, what went wrong?  The rule of law gang.  If it isn't there, nothing else is.  Might be something to keep in mind as we approach our elections next week

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