At least it feels that way. The pound fell to it's lowest level in thirty years today ostensibly on the announcement by Ms. may that talks will be begin in March on Brexit and the top of the agenda will be immigration. Supposedly, this put the fear of God into all markets that the UK will be out in the cold, alone, like a poor waif straight out of Bleak House. Of course this view overlooks the fact that the price of the pound has caused a small boomlet in the British economy through a big jump in exports and the British public seems not to give a toss about it in the first place. Then again, we are still working off the old EU compact but if the Brits take this attitude and get thrown out.......and with that will end the export of 900,000 German motor cars to the U.K. Dancing in the streets of Sheffield and Dagenham East to the latest Korean and Japanese pop tunes. 900,000 is a big internal market for the likes of KIA. As my sons say to me, "Keep in real, dad." Life is not so easy, and by the by
1. There is no joy in the EU as to immigration...certainly not to the extent of losing the Brits over the issue, and
2. Ms. May and her mob are a long way from being dumb. Their timing, as suggested here and other places, may be perfect.
Then there's the small issue of whether the Pound is tanking on it's own or is it because of pressure from the Dollar whose country of origin is desperately trying to convince itself that higher rates are coming, as if a 1/4 of a point even in December would really make a fundamental difference. Rubbish, but there may be a silver lining in this cloud of uncertainty that being that perhaps--just perhaps--the realization is beginning to set in that we all got this collectively wrong guys and we had better to start trying to figure out ways to get out of it before a bounty is put on the head of any Central Banker found anywhere.
Curiously, if that scenario were to be the case,the this is the week in which to set the gears in motion. The World Bank, IMF annual meeting is underway in Washington and whilst nothing of note ever happens in the few days that it runs aside from the list of CAN YOU TOP THIS cocktail parties and Nirvana for The World's Oldest Profession from six bordering states (alas, Madame Claude is no longer with us hence the class formally brought to the proceedings will be absent), the rumor mill will be in full throated roar and I suspect we shall soon see if Yellen & Cie. are prepared to test the waters.
Anyway, intrigue such as this might be welcome as a replacement (for however brief) to the nonsense we have endured for so long. Besides, a really good trader's market might come out of this thing for a while. Good for ol' Charlie as well. Good, hard copy we call it. The stuff of dreams.
Showing posts with label World Bank. Show all posts
Showing posts with label World Bank. Show all posts
Tuesday, October 4, 2016
Monday, October 15, 2012
BAD TIMES
We had a house full last week, terrible weather, Trouble and Strife sick as can be (grandchild pathogens) and a football game to attend. We won. That was about the only thing that went well.
In the meantime, I've been trying to figure out what in the hell is going on out there whilst the tightening polls in the Presidential race dominate everything over here. I am told, however, that in regard to the matter of the fiscal cliff, there are actually substantive discussions underway with members of both parties that could lead to a solution but not until the full results are known. Which is why Chuck Schumer, fresh from the taking of a new stupid pill, demanded a tax rise for "millionaires and billionaires," (those defined as making more than $200,000 a year--I know, neither can I) as a way to shoot in front of the duck. But given the back and forth over the past six months I consider this to be a positive step...if true.
Meanwhile, in the midst of financial crisis and austerity, the IMF and World Bank held their annual meeting in probably the most expensive venue in the world, Tokyo, and agreed on nothing except that things weren't good out there. The headline news (not big type) involved Europe and centered about the IMF now believing that austerity is not the way to go and Sweden believing that Greece should step out of the Euro and the Eurozone altogether. A polite, "Thank You" was given to the Swedes (who are correct) and discussion centered around how to prevent the same from happening and the German view (at least on the part of the finance guys) that the IMF was full of it.
The IMF is correct of course but they have no real alternative as the prolonging of the status quo or the improvement upon the same will take money, a lot of money, and that comes from only one source; Germany. Not on at this stage. And yet, Greece will probably get a bye for a few months or so and Spain, if politically they can come to Brussels to ask for help, will get all the money the ECB can print; not that this is going to solve anything permanently but because it will prolong the appearance of a union for a bit longer until...well, that's the real question, isn't it?
So I asked a fellow I know who was in Tokyo as an observer that very thing.
"The election."
"What? Our election? What does that have to do with it?"
"No you jerk," ...we have a warm friendship..."the German election."
I thought about it and it made sense. No one is really working for a solution; everything is in a holding pattern. Can it work given the election is almost a year out? I don't know but the theory is a good one. These are not dumb people. I think everyone realizes that with austerity there will be no or slow growth and growth is what is desperately needed. But pilling new debt onto already overtaxed economies is no solution either as surely at a point it will lead to inflation and an exacerbation of the problem through increased carrying costs. The real solution is through a massive effort at debt reduction but that will of necessity involve the public sector institutions and THAT at this time is unacceptable and politically a death wish. It is a high wire act worthy of the Flying Wallendas.
The gang gets together yet again at the end of the week in Brussels so we wait to see what comes out of that. While all of this is going on there is Cyprus, which, in case you missed it is a member of the EU, a member of the Euro Zone and broke. Cyprus is a little Greece: a busted economy, busted banks and not entirely corrupt but close enough to dammit. They want a bail-out and they want it now or they walk--or so they threaten. Sounds like The Mouse that Roared, Part II. Then again, it is the squeakie wheel that gets oiled...every pun intended
In the meantime, I've been trying to figure out what in the hell is going on out there whilst the tightening polls in the Presidential race dominate everything over here. I am told, however, that in regard to the matter of the fiscal cliff, there are actually substantive discussions underway with members of both parties that could lead to a solution but not until the full results are known. Which is why Chuck Schumer, fresh from the taking of a new stupid pill, demanded a tax rise for "millionaires and billionaires," (those defined as making more than $200,000 a year--I know, neither can I) as a way to shoot in front of the duck. But given the back and forth over the past six months I consider this to be a positive step...if true.
Meanwhile, in the midst of financial crisis and austerity, the IMF and World Bank held their annual meeting in probably the most expensive venue in the world, Tokyo, and agreed on nothing except that things weren't good out there. The headline news (not big type) involved Europe and centered about the IMF now believing that austerity is not the way to go and Sweden believing that Greece should step out of the Euro and the Eurozone altogether. A polite, "Thank You" was given to the Swedes (who are correct) and discussion centered around how to prevent the same from happening and the German view (at least on the part of the finance guys) that the IMF was full of it.
The IMF is correct of course but they have no real alternative as the prolonging of the status quo or the improvement upon the same will take money, a lot of money, and that comes from only one source; Germany. Not on at this stage. And yet, Greece will probably get a bye for a few months or so and Spain, if politically they can come to Brussels to ask for help, will get all the money the ECB can print; not that this is going to solve anything permanently but because it will prolong the appearance of a union for a bit longer until...well, that's the real question, isn't it?
So I asked a fellow I know who was in Tokyo as an observer that very thing.
"The election."
"What? Our election? What does that have to do with it?"
"No you jerk," ...we have a warm friendship..."the German election."
I thought about it and it made sense. No one is really working for a solution; everything is in a holding pattern. Can it work given the election is almost a year out? I don't know but the theory is a good one. These are not dumb people. I think everyone realizes that with austerity there will be no or slow growth and growth is what is desperately needed. But pilling new debt onto already overtaxed economies is no solution either as surely at a point it will lead to inflation and an exacerbation of the problem through increased carrying costs. The real solution is through a massive effort at debt reduction but that will of necessity involve the public sector institutions and THAT at this time is unacceptable and politically a death wish. It is a high wire act worthy of the Flying Wallendas.
The gang gets together yet again at the end of the week in Brussels so we wait to see what comes out of that. While all of this is going on there is Cyprus, which, in case you missed it is a member of the EU, a member of the Euro Zone and broke. Cyprus is a little Greece: a busted economy, busted banks and not entirely corrupt but close enough to dammit. They want a bail-out and they want it now or they walk--or so they threaten. Sounds like The Mouse that Roared, Part II. Then again, it is the squeakie wheel that gets oiled...every pun intended
Tuesday, April 10, 2012
BUGS
Easter with the triplets and I have returned with pathogens within my system as of yet undiscovered by modern medicine. I sware, they are trying to kill me and may well succeed this time around. So goodbye cruel world...unless I am back tomorrow. again thwarting my efforts. And oh, apologies. Every time I try to use my IPad to write this thing it gets buggered but not to worry, I've only had it for 5 months; I'm learning.
The equity markets traded down for the fifth day in a row and the blame has been placed squarely on Europe by the same people who not two weeks ago proclaimed that the debt crisis had been solved for the time being. I guess I'm living in the past during which Semana Santa meant something and Easter was a time of reflection. Not in today's modern financial world. It didn't take the boys long to settle on Spain as the next target and trading all last week drove yields on Spanish debt up to near When-Greece-Was-In-Trouble levels and as if on cue, took Italian yields right along with them. Of course the dumbo Italians did nothing to help themselves by forcing Mario Monti to water down his reform proposals believing, somehow, that no one cared any more after Greece had been "fixed." As Masters champion Bubba Watson might have put it, "These boys et up with dumb." But Spain is the easier shot (as predicted I might add), so here we go again. I didn't expect it to happen so quickly and as a result I have to get up to speed with Spanishmaturities which I promise to do.
And of course it's the banks who will come under even greater pressure when everyone realizes that the deal cut with the ECB for three year cheap money was for them to purchase their own sovereign bonds under the theory that the interest rate arb game could go on long enough for the banks to get well again. Problem is that now becomes the only game in town as the bond guys have now come to the realization that the banks have just loaded up on more crap and good bye new financing. Can the Euros make it through? Nope. Euroland, including Germany will probably experience a recessionary period beginning this quarter. Why not? There is a general slow-down across all markets and little good news on the horizon. With the news of the afternoon being the removal of Rick Santorium from the Republican primary race, the 2012 Presidential campaign really begins. Nothing of interest will occur in Washington before November.
And now for a moment of real drama. Over the weekend, The Leader nominated the President of Dartmouth College, Jim Kim...or is it Kim Jim...to be the Head of the World Bank. The Bank, which remains today as the final resting place of hundreds of otherwise unemployable Ph.D economists, is shaking on its very foundation with the thought that an ACADEMIC who promises to govern based on the concept of "Observable results" is about to run the place. Indeed, Jim Kim/Kim Jim is about to be the head herder at the Cat Ranch on H Street. He will not have a clue and the institution, wildly mismanaged for years, will become the biggest cookie jan in Washington and that's saying something. I mean we're talking United Nations mismanaged. The effort to place a non-American in the position just ended. For those who work there--tax free I might add--this is a gift from the heavens. It is also the stupidist appointment in the past three years but, hey, who knows? Miracles happen...they do don't they?
The equity markets traded down for the fifth day in a row and the blame has been placed squarely on Europe by the same people who not two weeks ago proclaimed that the debt crisis had been solved for the time being. I guess I'm living in the past during which Semana Santa meant something and Easter was a time of reflection. Not in today's modern financial world. It didn't take the boys long to settle on Spain as the next target and trading all last week drove yields on Spanish debt up to near When-Greece-Was-In-Trouble levels and as if on cue, took Italian yields right along with them. Of course the dumbo Italians did nothing to help themselves by forcing Mario Monti to water down his reform proposals believing, somehow, that no one cared any more after Greece had been "fixed." As Masters champion Bubba Watson might have put it, "These boys et up with dumb." But Spain is the easier shot (as predicted I might add), so here we go again. I didn't expect it to happen so quickly and as a result I have to get up to speed with Spanishmaturities which I promise to do.
And of course it's the banks who will come under even greater pressure when everyone realizes that the deal cut with the ECB for three year cheap money was for them to purchase their own sovereign bonds under the theory that the interest rate arb game could go on long enough for the banks to get well again. Problem is that now becomes the only game in town as the bond guys have now come to the realization that the banks have just loaded up on more crap and good bye new financing. Can the Euros make it through? Nope. Euroland, including Germany will probably experience a recessionary period beginning this quarter. Why not? There is a general slow-down across all markets and little good news on the horizon. With the news of the afternoon being the removal of Rick Santorium from the Republican primary race, the 2012 Presidential campaign really begins. Nothing of interest will occur in Washington before November.
And now for a moment of real drama. Over the weekend, The Leader nominated the President of Dartmouth College, Jim Kim...or is it Kim Jim...to be the Head of the World Bank. The Bank, which remains today as the final resting place of hundreds of otherwise unemployable Ph.D economists, is shaking on its very foundation with the thought that an ACADEMIC who promises to govern based on the concept of "Observable results" is about to run the place. Indeed, Jim Kim/Kim Jim is about to be the head herder at the Cat Ranch on H Street. He will not have a clue and the institution, wildly mismanaged for years, will become the biggest cookie jan in Washington and that's saying something. I mean we're talking United Nations mismanaged. The effort to place a non-American in the position just ended. For those who work there--tax free I might add--this is a gift from the heavens. It is also the stupidist appointment in the past three years but, hey, who knows? Miracles happen...they do don't they?
Friday, April 3, 2009
WHAT HAPPENED?
Nothing, actually. One interesting moment that transpired was when The Leader told the President of Brazil, Lula, that he was the best looking guy in the place. Memo to historians: another first. President Obama is the first visually impaired President in history. Then again, if he was right even I have a shot.
Gordon Brown. One wonders what the British people must think of this. If Blair was Dubya's poodle what the hell is poor Gordon? My God, that was embarrassing.
Of course, the GRAY LADY is sort of treating this thing like a 20-strong Neville Chamberlain event; Peace and Unity in our times and all that rubbish. Good. Hopefully that view will keep their mind off things for a while.
Anyway, politicians did what politicians do best; enter into an agreement to spend 1,000,000,000,000 dollars of somebody's else's money on an ill-defined mission to produce ill-defined results in an ill-defined time frame. The best part is the enlistment of the International Monetary Fund and The International Bank for Reconstruction and Development--quick, what's that?--that's right the World Bank--to get it done in part at least. For the better part of the last ten years these have been two players in search of a mission so this direction comes non-too-soon. No one really minds the World Bank but for a national leader to ask for assistance and the accompanying conditionality from the IMF, is in some parts of the world, an invitation to have your government overthrown. Therefore, there can be the expectation that not a lot of damage is going to be done soon, but there comes the realization that it is simply easier that the leaders of the G20 find it far simpler and preferable to turn over their constituents wealth to one of the greatest bureaucracies of the modern world and to get seriously involved themselves in the very real problems of the developing world. Sad. And the staff is all tax free in Washington...as Our Hero can attest. Remember that little interlude?
Unbridled joy at the announcement that THE ENTIRE WORLD has agreed to new, progressive, all-encompassing, robust and comprehensive regulation of the financial community WORLD WIDE! Ah, hold on.
Any idea what it's going to look like?
Well, no, actually, but it's going to be comprehensive and we will never experience another period such as the one we have just experienced.
Well, whose going to write it, then?
Don't know that yet, but the French are very keen.
The French? Aren't they a bit airy-fairy so they can interpret stuff any way they want?
Well yes, but we can work with them.
Really? Ever try to work with the French on regulations?
No.
This EU mob been trying to do that for 20 years haven't they?
Yes
Any luck?
Well, not much, actually.
Perhaps I was wrong. Maybe a great deal happened
A final note: read Krugman in the Times today. I think he read the blog. Poor bugger got it wrong again. Mr. Krugman seem not to understand the differences between Bills, Notes and Bonds and that they are specific instruments that should be referenced specifically. Nor does he understand the Chinese and their art of negotiation. Makes one wonder if he uses chop sticks at Sunday night dinner.
Have a good weekend.
Gordon Brown. One wonders what the British people must think of this. If Blair was Dubya's poodle what the hell is poor Gordon? My God, that was embarrassing.
Of course, the GRAY LADY is sort of treating this thing like a 20-strong Neville Chamberlain event; Peace and Unity in our times and all that rubbish. Good. Hopefully that view will keep their mind off things for a while.
Anyway, politicians did what politicians do best; enter into an agreement to spend 1,000,000,000,000 dollars of somebody's else's money on an ill-defined mission to produce ill-defined results in an ill-defined time frame. The best part is the enlistment of the International Monetary Fund and The International Bank for Reconstruction and Development--quick, what's that?--that's right the World Bank--to get it done in part at least. For the better part of the last ten years these have been two players in search of a mission so this direction comes non-too-soon. No one really minds the World Bank but for a national leader to ask for assistance and the accompanying conditionality from the IMF, is in some parts of the world, an invitation to have your government overthrown. Therefore, there can be the expectation that not a lot of damage is going to be done soon, but there comes the realization that it is simply easier that the leaders of the G20 find it far simpler and preferable to turn over their constituents wealth to one of the greatest bureaucracies of the modern world and to get seriously involved themselves in the very real problems of the developing world. Sad. And the staff is all tax free in Washington...as Our Hero can attest. Remember that little interlude?
Unbridled joy at the announcement that THE ENTIRE WORLD has agreed to new, progressive, all-encompassing, robust and comprehensive regulation of the financial community WORLD WIDE! Ah, hold on.
Any idea what it's going to look like?
Well, no, actually, but it's going to be comprehensive and we will never experience another period such as the one we have just experienced.
Well, whose going to write it, then?
Don't know that yet, but the French are very keen.
The French? Aren't they a bit airy-fairy so they can interpret stuff any way they want?
Well yes, but we can work with them.
Really? Ever try to work with the French on regulations?
No.
This EU mob been trying to do that for 20 years haven't they?
Yes
Any luck?
Well, not much, actually.
Perhaps I was wrong. Maybe a great deal happened
A final note: read Krugman in the Times today. I think he read the blog. Poor bugger got it wrong again. Mr. Krugman seem not to understand the differences between Bills, Notes and Bonds and that they are specific instruments that should be referenced specifically. Nor does he understand the Chinese and their art of negotiation. Makes one wonder if he uses chop sticks at Sunday night dinner.
Have a good weekend.
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