All Posts Tagged With: "sovereign debt"

Even before debt became such a big problem, real growth had already begun to disappear from the developed world. There has been none in Japan for the last 20 years…and almost no real growth in the US private sector for the last 10 years. In Europe, grosso modo, the story is similar.

The break over Christmas is a pretty convenient time for politicians to spring something unexpected on you. Well, unexpected for those who don’t read the Daily Reckoning, that is.

So here is a list of things the governments of the world might unleash on you and your portfolio over the holidays:

As the economy is taken over by zombies, more and more people are needed to do the zombies work shifting more and more of the economy’s output to the insiders.

The insiders rig the system for their own benefit. The rigs each one of them a form of price-fixing or central planning weaken the system. In today’s battle, the insiders fight to protect it.

The combination of political deadlock in Greece and the fact that the European Financial Stability Facility (EFSF) will be funded by debt and not money printing has caught investors off guard recently. They failed to discount the ability of politicians to find other options in their attempts to exhaust all other options before turning to the inevitable one. Hence the falling markets of late.

The European monetary family is in crisis. It meets on March 25th and 26th to discuss whether to kick Greece off the island (survivor style) or to intervene and save the prodigal son. The problem, from a German perspective, is that Europe is full of prodigal children. To save Greece means to save the rest of the economies troubled by rising public debt-to-GDP ratios.

The bigger story is that Greece hasn’t been abandoned by the rest of Europe…yet. Europe could probably leave Greece behind and preserve the integrity (such as it is) of the euro as a sound currency. But 50 years of harping on about social justice and economic harmony and humane capitalism is going to make it hard for policymakers to leave Greece to its own devices.

NAB came by the bonds because it accepted them as collateral for what it described as an “interbank reverse repurchase agreement.” Got that? From what we can gather, NAB may be obligated to take on certain loan obligations of its bank partner “under certain circumstances.”