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Last Thursday, in my subscribers’ newsletter I touched on a theme of the silver-euro correlation. Clearly, the euro is heading to zero (not necessarily immediately and not necessarily all at once) and clearly silver is not. This means that the correlation will end, and silver will decouple from the euro to the upside, perhaps violently. [...] Greece was able to float enough new debt to pay its old debt and avoid default. What a charade. They got the money from the bailout fund and used it to pay back the bailout fund: The auction, which attracted more than €4.2 billion in bids, was more show than substance, mainly reflecting Greek banks’ [...] Once is happenstance. Twice is coincidence. Three times, it’s enemy action. —Auric Goldfinger, quote from Goldfinger (1959) Leaving aside Vallejo’s bankruptcy of a while ago, municipal bond investors have been hit with a rat a tat tat of three California municipal bankruptcies in short order. Stockton, Mammoth Lakes, then San Bernardino. [...] This headline out of Greece today, “Greece Agrees on Tax Cuts, Other Stimulus“. If I’m not mistaken, I think I’ve heard this before. In fact I’ve heard it from Italy, Spain, Portugal, France, and from our own government. It promises to make spending cuts too. But, if Greece didn’t live up to its original agreements, [...] It just keeps getting worse in Greece. With the leaders of the eurozone all exhaling after the election of “centrist” Antonis Samaras, thinking that maybe the Greeks will toe the line set by the Germans, they learn who the new Greek finance minister is: Antonis Samaras, the Greek centre-right leader, has made a surprise appointment [...] Many readers are familiar with the adage, “Little children, little problems; big children, big problems.”. As with children, so with insolvent countries. It’s been my feeling that too much financial media attention has been focused on today’s Greek elections. I believe that Germany has already indicated that whatever government may be formed, Greece will have a 100-day [...] This video is emblematic of why Greece will fail as a member of the eurozone. Now that the benefits have been taken away from the public, the response has been riots and discord. While one could dismiss this smack down as an anomaly, I think it has some significance and answers the question of why [...] The Daily Capitalist has kept the Greece financial situation in perspective. Greece has borrowed not wisely but too well, so to speak, but at the end of the day, it has about as many people as the state of Illinois and the economic output of the modestly-populated state of Wisconsin. The same is true of [...] In the news today are two enterprises whose fortunes have diverged so dramatically over the past decade that I wish to comment. I think that the Austrian economists Schumpeter and von Mises would also have been impressed. On the one side is an ancient people whose government borrowed hundreds of billions of euros over about [...] According to S&P’s Moritz Kraemer, as reported by Bloomberg (off of the DJ Newswire): As for Greece, Kraemer said the ratings agency expects the country to default on its debt “very shortly,” adding that he cannot predict if negotiations will succeed. S&P just downgraded the EFSF to AA+, which knocks out its required AAA rating [...] Perhaps in keeping with its good government traditions, the brokest state in the Union the governors of which do not routinely go to jail issues monthly statements recording its fiscal ineptitude. This week’s summary release from Controller Chiang’s office, covering December, is a doozy. First it presents a macro view that raises questions about the [...] |
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