From the Tom Toles collection at the Washington Post comes yet another way to look at the relationship between big banks on Wall Street and elected officials in Washington.
This was from early last week, that is, before the Volcker rule seemed to again be in favor at the White House but prior to the rumors and subsequent uproar in Congress about the consumer protection agency being consolidated at the Federal Reserve.
On March 8, 2010,
in Banks,
by Tim
On March 8, 2010,
in Currencies,
by Tim
Famed investor Jim Rogers talked to Damien Hoffman at Wall Street Cheat Sheet and shared his thoughts about the future of the common currency in this interview:
Well I’m long the Euro because I expect them to come through this one okay. Either Greece is going to be papered over and they’ll give a blast to the Euro, or they’re going to let Greece go bankrupt. In my view, this is what they should do because then people would say, “Wow. They’re serious about sound economies in Europe.” That would make the Euro very strong. Then people would know they are not just going to print money or paper over failure.
Either way, I think there’s probably a rally coming. There’s a huge short position in the Euro and whenever there’s been a huge short position in anything, it’s sometimes profitable to go to the other side. So, I am long the Euro because I think there are too many pessimists.
Maybe Greece will go bankrupt and the Euro will collapse before people realize, “That’s good … that’s not bad.” Sometimes it takes a lot for perception to become reality or reality become perception.
Amid all the talk about the troubles in Europe and the limitations of a common currency for more than a dozen disparate nations, this is the first time that I think I’ve heard this line of reasoning about why this could make the euro stronger – because the euro zone is actually doing something about deficits and forcing member nations toward sounder government finances, whereas, the U.S., U.K., Japan, and others just seem to be barreling toward a cliff.
The rest of the interview is also worth a look as Rogers talks about such topics as how you can’t really sustain the kind of economy that we’re trying to sustain here in the U.S.
On March 8, 2010,
in Economy,
by Tim
Former House Majority Leader Tom Delay shares a few thoughts on the high jobless rate, arguing that extended unemployment benefits encourage more of the same. Fortunately, he had the good sense to stop short of saying we are a nation of slackers.
While the term “funemployment” has been popping up on a somewhat regular basis over the last year, this is clearly a twenty-something phenomenon and those with families to support would no doubt overwhelmingly argue that there is nothing fun about it.
On March 8, 2010,
in Economy, Our Culture,
by Tim
It has long been a source of amazement to me that the California wine industry hasn’t already collapsed given that $15-$25 bottles of wine have got to be at or near the top of the list of things that once-home-equity-rich natives can cut back on now that housing ATMs have stopped dispensing thousand dollar bills.
This Bloomberg report tells of the latest developments for grapes in the Golden State.
Vineyard Defaults Surge, Lost Land Values Undermine Napa Wine
In California’s Napa Valley, producer of the most expensive U.S. wines, 2010 may be a vintage year for foreclosures as the industry is squeezed by falling land values and a consumer shift to cheaper brands.
As many as 10 wineries and vineyards in Napa will change hands in distressed sales or foreclosures this year and next, up from none in 2008, according to Silicon Valley Bank. In a bank survey of vintners, 7 percent called their finances “very weak” or “on life support.”
“We have 250 vintner clients saying this downturn is the worst in 20 years,” Bill Stevens, manager of the bank’s wine division in St. Helena, California, said in an interview. “Anybody who was late to the party won’t have staying power.”
It’s funny that, just a few years ago, it seemed everyone and their brother was trying to grow grapes and open up a winery throughout the state.
When we first visited Murphys, California about six or eight years ago they had two wine-tasting rooms on Main Street and, by the time we moved there in 2007, they had 17.
On March 8, 2010,
in Economy,
by Tim
After last Friday’s print of 9.7 percent for the unemployment rate, more than a few pundits are calling the 10.1 percent jobless rate seen back in October the high for the cycle. It seems to be way too early to make that call based on the millions of “discouraged” workers who, when they start looking for work again, will suddenly count as “unemployed” again.
Stephen Roach seems to agree, figuring that the real jobless rate today is 11.5 percent.
The odds of a double-dip recession are now 40 percent? That’s good to know. There’s been a lot of talk about another downturn for the U.S. economy, but it comes as news to me that they’ve already taken the time to poll economists and that they were this pessimistic.
On March 8, 2010,
in Uncategorized,
by Tim
TOP STORIES
EU Works on IMF-Style Lender, Speculation – Bloomberg
IMF: Greece will come through crisis without bailout – Guardian
Volcker Says Too Soon to Cut U.S. Monetary, Fiscal Stimulus – Bloomberg
A year on and quantitative easing is paused– but when will it return? – Telegraph
Link-phobic bloggers at the NYT and WSJ – Salmon, Reuters
California’s Big, Fat High-Yield Debt – Barron’s
Should You Join The Next Gold Rush? – WSJ
China ready to end dollar peg – Telegraph
MARKETS/INVESTING
Oil maintains momentum to rise to near $82 – AP
Gold slips despite firm euro; holds near 6-week high – Reuters
Exclusive: Jim Rogers is Long the Euro – Wall St. Cheat Sheet
U.S. companies amass record cash vs debt: report – Reuters
Gold is decade’s best performing investment – Telegraph
The Rubber Hits the Road – Hussman Funds
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