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Archive for October 26th, 2011

Valance Weekly Report 10.26.2011

Posted by WARREN MOSLER on 26th October 2011

Valance Weekly Report

(To download PDF, right click link and select save link as)

Highlights
US – Consumer Confidence erosion mirroring Europe’s
EU – Business and Consumer Confidence at cycle lows
JN – Exports improve although domestic conditions remain weak
UK – Manufacturers’ optimism dropped sharply
CA – BoC cut its 2011/12 growth forecast
AU – Inflation moderated in Q3
NZ – RBNZ may delay hikes

Posted in Economic Releases, Valance | No Comments »

Crude Oil Update

Posted by WARREN MOSLER on 26th October 2011

Still seems to me that the idea that WTI appreciates to Brent as the Strategic Petroleum Reserve release winds down over the next few weeks is playing out as previously discussed. The WTI discount depends on a serious glut condition persisting, and the wind down of the approx 3.8 million barrels a week being delivered from the strategic petroleum reserve will work to reduce the glut by that amount.

If so, WTI is marching towards $110/barrel which seems to me could trigger substantial market reactions.

And about the same time the super committee deficit reduction talks will be in full swing, euro financing stresses elevated, exacerbated by confirmation of the 0 gdp growth forecasts hit the headlines, and further slowdown news from China complicating things as well.

The ‘answer’ remains as simple as it is further away from political reality than ever, even though the right policy responses couldn’t be more attractive to both sides:

The US budget deficit is too small.

Posted in China, Deficit, Oil, USA | 3 Comments »

MERKEL: ECB INVOLVEMENT IN EFSF LEVERAGE RULED OUT

Posted by WARREN MOSLER on 26th October 2011

Looks like Merkel is speaking purely for political effect, which may be all she’s capable of, unfortunately.

Fact is, from the beginning, without the ECB ultimately writing the check, it’s all been in ponzi.

And like all ponzi’s, it seems to work on the way up, and disintegrates on the way down.

With the ECB writing the check, deficits can be determined by further political/public purpose, without concern of ‘market forces’ undermining finance.

Without the ECB writing the check, it all probably keeps disintegrating, as none of the member nations can be inherently solvent without some form of ECB support.

MERKEL SAYS GOAL OF TONIGHTS DISCUSSIONS MUST BE TO HAVE A SOLUT ION WHICH PUTS GREECE AT A DEBT TO GDP RATIO OF 120 PCT BY 2020
MERKEL: ECB INVOLVEMENT IN EFSF LEVERAGE RULED OUT
MERKEL: GERMAN EFSF CONTRIBUTION WON’T EXCEED E211 BLN
MERKEL: BANK RECAP NECESSARY TO PREVENT CONTAGION
MERKEL: NEED PERMANENT SUPERVISION OF GREECE
MERKEL: TROIKA SUPERVISION DOESN’T SUFFICE
MERKEL: GREEK BOND HAIRCUT ALONE WON’T SOLVE PROBLEMS
MERKEL:PSI MUST BE MUCH HIGHER THAN AGREED ON JULY 21
MERKEL: NEED SIGNIFICANT PSI IN GREEK RESCUE

Posted in Deficit, ECB, Germany, Greece | 12 Comments »