Wednesday, March 31, 2010

Phony War

There is the sense of waiting for the other shoe to drop during the course of Twenty-Ten. We have seen what some observers believe to be round one unfold in the unravelling of world economic fortunes and now we are supposed to be getting ready for round two to sneak up on us. The wait is unnerving.

We are told that many threads of economic derangement are about to be pulled at the same time. We have commercial real estate loans coming due en masse with no credit to support refinancing and no customers to justify keeping myriad stores open across the fruited plain. We have Bank of America attempting to stop the hemorrhaging of home foreclosures by promising to buy up in essence, three billion dollars in principal of homes that are currently underwater. The pain of this maneuver may be sweetened by the fact the bank plans to pay not one dime in Federal Income Taxes for 2009. On the other hand some merchants of gloom suggest residential housing prices may drop by half yet again...Which, thanks to the intervention of Fanny Mae and Freddie Mac would leave the US Government on the hook to the tune of trillions more dollars.

In Europe the struggle to figure out the European Union's future continues. Bureaucrats in Brussels are moving ahead with plans to create a foreign service representing the Union, at the same time Germany is saying there will be no bailout for Greece unless sit is the IMF doing the bailing. Bringing in the International Monetary Fund is viewed as an admission that the Union can't manage it's own monetary policy. "The Euro is a currency in search of a country" was one wry comment attributed to an economist this past week. Portugal's bond ratings are slipping and AA status will mean higher costs of borrowing. Britain may be next they say.

Japan is on the ropes and interest rates may be rising. Exports are flourishing and unemployment has dropped slightly to below 5%, yet the country can't climb out of it's deflationary spiral and the government is borrowing 300% of GDP from it's citizens to fund out of control spending. China has over purchased raw materials they tell us and has nowhere to go but down, as exports are being impacted and they have no internal market to speak of.

It all just keeps rattling along supposedly preparing us for the time the other shoe will drop. Meanwhile we polish our muskets and practice austerity with more or less success as we wait. Wait for what? Who knows because if we knew we wouldn't be waiting. Me? I'm waiting for the ocean to warm up enough to make swimming tolerable. I hope summer is long enough and calm enough to allow plenty of swimming to help take my mind off these looming and intractable worries.

7 comments:

Danette said...

And of course you don't want any nasty hurricanes to muss things up (me either! I will be very unhappy if my vacation is complicated with an evacuation)

But really--- don't you watch television??? It's all good! We're just fine!!! Maybe a new new iPad would make you feel better. That's what everyone else is obsessing over! :)

Danette said...

One of the sites I linked to from your site, I think (can't remember which one) had predicted that natural disasters would cost more than the GDP will produce. Lots of stuff just waiting to happen-- and do you worry about the chaotic weather patterns that climatologists predict? Hurricanes and all that? I just wonder-- as much as I would move to Key West in a second... would I even consider owning a property??? what between the very real possibility of hurricane and water levels rising, etc.

Dead, is dead. said...

It's possible to be hit by a micrometeorite at any moment whilst living above ground as well - life is too short to live in fear of "oh my! Lions! Tigers! Bears!" - go forth, greet all humans with a smile, all dogs with a pet, and enjoy being on the green side of the lawn every day!

Danette said...

Have I offended someone? If so, it was not my intention.

Conchscooter said...

Probably not.

Danette said...

I wasn't talking about death though-- just property. "We are all standing at the station. The train is always leaving and the soul checks it's watch and wonders if its his time to go." And that's true in Denver as well as KW.

Conchscooter said...

Except that in Denver one is far above the high tide line and well away from hurricanes.