2012 January 04 | timiacono.com

Merkozy “Dinner for One”

I don’t know about you, but when I watch this video with the heads of French President Nicolas Sarkozy and German Chancellor Angela Merkel superimposed on characters from a 1963 sketch that, for some reason, is wildly popular when broadcast on German TV on New Years Eve, I can’t help but think of those Saturday Night Live caricatures of German TV personalities somehow working behind the scenes.

This story at Spiegel Online has all the particulars about the video that has gone a bit viral, also known as “The 90th Rescue Summit” or “Euros for No One”.

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‘Ol Greenie in the News Again

Former Fed Chairman Alan Greenspan was in the news again this morning writing in the Financial Times about how a more austere future awaits America. This item at CNBC appears to have a good summary of the key points (the old trick of Googling the article’s title to access the FT subscriber section doesn’t seem to be working anymore).

In an opinion piece for the Financial Times, Greenspan argued that the political landscape in the United States was more divided than ever, resulting in political paralysis as the Tea Party’s influence had created “an effective veto of new legislation before the current heavily Republican House of Representatives”.

The failure last year of the Super Committee — a congressional committee tasked with finding spending cuts to reduce the United States’ ballooning budget deficit — to reach a deal underscores this shift in U.S. politics, Greenspan said.

“A political tsunami has emerged out of our past in the form of the Tea Party, with its ethos reminiscent of rugged individualism and self-reliance,” Greenspan wrote.

The Tea Party “has so altered the distribution of votes within Republican Party’s House caucus that the party’s center has moved closer to the Tea Party,” he added.

And with an ideological battle raging over the future of the welfare state, “Congress, having enacted increases in entitlements without visible means of funding them, is on the brink of stalemate,” Greenspan wrote.

The only viable long-term solution appears to be “a shift in federal entitlements programs to defined contribution status” — programs that require employees to make a set contribution to their pensions, Greenspan said.

Defined contribution retirement programs have worked so well for the rest of America (that is, until stocks stopped rising a decade ago), it’s only fitting recipients of government benefits have the pleasure of fretting over their future too.

By the way, I’ll try to get in as much Greenspan related material as possible over the next month or so since a new combined blog/investment website will be launching sometime in February sans the TMTGM moniker. (Yes, it’s time…)

Another View of Stocks in 2011

In their latest Daily Chart, The Economist has another one of those “Stocks in 2011″ summary graphics that, despite all the buzz about large-cap stocks in the U.S., reinforces the point that it was a rather dismal year for equities around the world.

Don’t get too excited about equity markets in Venezuela – inflation there is running at 29 percent, a level that, according to The Economist’s weekly Output, Prices, and Jobs makes them an extreme outlier in a world of generally low reported inflation. Only two other countries have double-digit inflation – VietNam at 18 percent and Pakistan at 10 percent.

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Wednesday Morning Links

Romney edges Santorum in Iowa caucuses – MarketWatch
MF Global sold assets to Goldman before collapse – Reuters
Market rally a harbinger of things to come – Globe & Mail
Fed Shows Rate Forecasts, Boosts Transparency – Bloomberg
China mulls plans to boost domestic consumption – Reuters
China finds huge violations in audit on local debt – Channel News Asia
Greece Urgently Requests Clarity on Bailout Deal – Spiegel
JPMorgan sued for $95 million over mortgage securities – Reuters
Wall Street’s Big Swingers Get the Biggest Breaks – Bloomberg
Gross’s bond fund bleeds $1.4B in December – Reuters
Towards the Paranormal – Gross, Pimco
The Right Kind of Hope – Hussman Funds

Oil retracing on no new Middle East news – IBT
Gold eases as euro falls but consumers step in – Reuters
January Effect Could Help Keep Bid in Stocks – CNBC
Against Euro and Yen, Dollar Defied Reality – WSJ
Obama Official: “We’re Going to Kill the Dollar” – BER
Oil prices spike 4% on Iran supply threats – CNN/Money
Negativity In Gold Reaches Epic Levels – JS MineSet
Indian gold purchases collapse in Nov, Dec – Mineweb
Gartman as Gold Tops $1,600: ‘I Missed the Lows’ – CNBC
Gold Bulls Driven By Emotions – WSJ

Personal finance: A layaway to save – Economist
Crowding Out and Hyper-Inflation Watch – EconBrowser
NBC’s Super Bowl ads sell out at record prices – CNN/Money
Tracking the Unreported (15.6%) Unemployed – Real Clear Markets
Euro zone inflation eases, boosts rate cut expectations – Reuters
Greece’s Least Bad Option Looks to Be Internal Devaluation – Bloomberg
China Home Prices Slide Amid Reserve-Ratio Speculation – Bloomberg
First-time buyers depend on parents to secure a home – NJ Biz
Housing’s Huge Supply and Demand Imbalance – CNBC
North Dakota oil boom fuels real estate sales in Arizona – USA Today
Futile: Thank you for contacting the New York Fed – Lars Schall
Economists React: Fed Moves to ‘Alleviate Uncertainty’ – WSJ

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