Monthly Archive:: September 2011

Deficit Reduction Super Committee Fighting the Battle of New Orleans

I realize it’s not a perfect analogy, but, due to poor communications, the battle of New Orleans was fought well after the War of 1812 had ended. Likewise, the Congressional super committee is fighting the battle for deficit reduction long after the vaporization of the primary reason driving that move towards deficit. ...Read More

Valance Weekly Report 9.28.2011

Valance Weekly Report (To download PDF, right click link and select save link as) Highlights US – Political battles on both sides of the Atlantic overshadowing data EU – Markets slightly more optimistic resolution will be reached JN – Light week of data UK – The IMF lowered its 2011 growth projections ...Read More

Mosler Bonds for the ECB, and reasons why Greece will not be allowed to default

First, The ECB should turn the bonds it buys into Mosler bonds, by requiring the govt of issue to legally state that in the case of non payment, the bearer on demand can use those bonds for payment of taxes to the govt of issue. The ECB holding Mosler bonds will shift ...Read More

Japan- Government, DPJ Agree On Third Extra Budget

This spending does add net financial yen denominated assets to the private sector: Japan DPJ Policy Chief Maehara: Government, DPJ Agree On Third Extra Budget By Kosaku Narioka September 27 (Dow Jones) — The Japanese government and the ruling Democratic Party of Japan agreed on the third extra budget, totaling about Y12 ...Read More


Karim writes: Hard to believe we are still getting August data, but durables came in better than expected: Headline -0.1%, but core +1.1% and prior month revised from -1.5% to -0.2% Core shipments up 2.8% Shipments number likely reflects some impact from global supply chain resumption early in Q3 Q3 still looks ...Read More

Greek Parliament Approves Unpopular Property Tax

No compliance issues here- if the tax isn’t paid the property gets sold. Don’t even have to know the owner. Greek Parliament Approves Unpopular Property Tax September 27 (Reuters) — Greek lawmakers approved an unpopular property tax law on Tuesday that is crucial to a new austerity campaign the government has proposed ...Read More

China’s Squeeze on Property Market Nearing ‘Tipping Point’

If China gets by this we should be ok. If not, could be a serious setback for a few days, but ultimately the lower commodity prices are a plus for the US. And even more of a plus if we knew how to sustain aggregate demand at full employment levels. China’s Squeeze ...Read More

Update from prior email

As previously suggested, the Fed doing anything would cause markets to believe it’s all going bad out there. However, the US economic news still looks like modest improvement, so I still suspect the reaction to the Fed will be temporary, and start wearing off around noon Eastern time today. ***SORRY, MISSED THE ...Read More

Half of Germans oppose Greek bankruptcy

makes sense. The ECB funds Greece which facilitates the purchase of German goods and services, including military, at ‘no cost to the German taxpayer.’ Germany gets to control/impose austerity on Greece, which keeps the euro strong, interest rates low, and punishes Greece for past sins. Half of Germans oppose Greek bankruptcy (AP) ...Read More

The euro zone is operationally sustainable as is

While the way the euro zone is currently function would not be my first choice for public policy, it is operationally sustainable. The ECB is writing the check, and can continue to do so indefinitely. For example, as long as the ECB buys sufficient quantities of Greek bonds in the secondary markets, ...Read More