Monday, February 18, 2013

Disneyland in Euroland...L&C

The fantasy park grew from the West Coast to the East Coast in Orlando to Europe in France, to Asia in Japan and to central banks everywhere. The big boys are meeting in Moscow while the little members grumble from the outside with no passes to the event. I, personally cannot understand the market that keeps rising in the face of declining aspects.
Change can be good or bad, but always cause transition problems. You cannot go from point A to C without passing B unless you are in a fantasy ride.
are taking place today(President's Day)in Cyprus with Italy next week and Germany later in the year. There are governments that could lose confidence like England, Greece, Italy again, which could cause another election this year. This creates doubt which is not good.
Economic Rules
are being changed in Sweden today to tighten lending standards because the government fears a housing bubble in the nation with one of the highest personal indebtedness among European nations.
The Swiss are tightening their banking requirements by 1% to avoid future problems with capital reserves.
Lars Christensen, co-chief of the Danish bank, Saxo fears a serious decline in the Euro currency because there is no real fiscal union behind it. He says this while the Euro has gained over 8% against the dollar in recent months, while at the same time other central banks like Japan and Venezuela are debasing their currencies. In fact, central banks around the globe are printing in excess with each looking to capture some export niche.
German banks are selling a new type of bond that is backed by weaker assets and American hedge funds like BlackRock fear that this could seriously damage the bond market. Amazing! They fear these assets while they don't fear the printing of excess fiat money? This can't be good.
Current Facts
are not very strong. Germany, the European leader, is shrinking. The ECB says that its GDP will fall to .4% for 2013. The euro zone itself has contracted for three straight quarters and now has seven countries in recession. By the way, the US economy was in contraction for its last quarterly report. This is not good.
the world's largest exporter is slowing too, however they offered this tidbit. They said that trade with European nations will rise to the point where China will trade more than European nations will among themselves. Not good.
So, I ask you, how can governments claim that things are getting better when there is so much doubt? I would not enter this market and I would place stops to protect whatever you bought. If you buy, who benefits?(cui bono?) Buyer Beware!
Liars and Crooks: The Army Corp of Engineers who last week allowed water from the Mississippi River to go to fracking oil companies while at the same time, denied shippers to traverse the river to deliver goods because water levels are low.

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