ANYONE LISTENING?

Mario Draghi said today what many of have been saying for some time (including Mario):  this stimulation thing isn't going anywhere unless reform comes to the fiscal side and there is a complete and speeded up reform of...(most importantly) labor laws.  He is right of course but it appears that this is more of a reaction to Mario beginning to feel the heat and a somewhat gratuitous piece of advice than any real commitment on his part to make what is needed happen.

Coming a day after the ECB began buying corporate debt in an extention of  failed policy one can't help but have the impression that the advice is hollow.  Worst yet, it is certain that it will be ignored.  Over There as Over Here, politicians love for the public to believe that it is not their problem to solve but that the intervention of the central bank will at some point cure all ills.  If Mario were truly serious, no speech would be needed: a simple "FINITO" would suffice.  I have done all in my power and all I intend to do; it is now your turn and you must face the voters with the results of your actions...or non-actions.  Janet should do the same thing but of course this central bank is now totally politicized as I have said many times before and it is insane to think that anything useful will be done in this, an election year.

To be truthful, I do not know if Sr. Draghi can, should he so desire, assume a totally independent path.    I would think he could but clearly the backlash against the office would be immense.  It is therefore perverse in a way to believe that perhaps the only way at this time to preserve the unity that the EU seeks is to first destroy what has become a bureaucrats Nirvana and rebuild on a more sane and inclusive approach, recognizing that the national difference of, to be honest, very different peoples must be taken into account in an economic union rather than a political one with economics attached as has been attempted.  If there is still a concern about Germany and France going to war every 40 years or so, one might as well forget the entire thing and move on separately.  There are threats but a reconstituted NATO is the way to deal with those.  And in this there is a giant place for the United States and it's contributions in an economic, political and defensive sense.

But it appears that these thoughts will not see implementation for a while if ever.  And therefore the most ignore risk seems to be that of BREXIT as a reaction to the entirely unacceptable status quo.  If it comes about, what will the the consequences?  I'm going to try to spell out what I think might happen over the next few days.  In the mean time, the Bund traded below 0.03 today.  In addition to Sr. Draghi, people should start listening to the markets as well.  They don't think it's happening either.

LESSONS FORGOTTEN, LESSONS LEARNED

One of the things that is pounded into one's head in Law School is, "Never ask a question unless you are sure of the answer."  Not a great advertisement for intellectualism but keep in mind for the most part, Law School is a trade school.

Well, I forgot that yesterday and asked what am I missing.  Thought you might be interested in a few responses.  Besides, it writes this day's effort better than me.

" as we've been "QE ing",  the number of people on the dole has more or less doubled (from ~25m to ~50m)... "

"...more people have left the workforce than we've created jobs... "

70% of the jobsthat have been created have been part time or low-skilled, low-wage...

"...income continues to disappoint... investment remains weak... productivity is
declining...and debt continues to grow at a faster pace than the economy or
the population..."

"...the energy industry which has created about 2.5m jobs of
the 7.5m jobs that have been created(arguably among the highest paying
jobs), is in free fall...it has also been a major source of the capital
investment that has taken place over the past six years....again , scratch
that for the near term."

..."and why the Euros would want to emulate our experience ????....."
...
"...you were kind to the Euros...they are an absolute DISASTER...politically,
economically, socially, structurally..."

"... hyperactive central bankers everywhere...hyper dysfunctional politics
everywhere.... geopolitics increasingly fractious....hard to see how this
doesn't end in tears for all of us...."

The comment on the energy business is particularly telling.  Besides providing a massive tax cut to the middle class, it has produced the greatest amount of jobs in the economy.  Over There, France and Germany have banned fracking.  Talk about dysfunctional.  Those clowns have bowed to the Greenies even more that Il Duce in front of whom he is full grovel.  In addition, someone mentioned today that the price of diesel Over There  remains at $8 a gallon.  Aren't taxes to pay for the nanny state wonderful.

Anyway, on day two of Le Grande Illusion, the Euro went further into the crapper which was to be expected.  equities traded off, and everyone was waiting for the Greek elections on Sunday.  Oddly, not a sound from either the Fed or the Obama administration emerged.  I found that curious as it was they that invented this process.  I mean not even a "Yo, Mario way to go Paisan!"  Do you find it curious......wait, never mind,  I never asked that question.