Too Little, Too Late & Too DesperateAll in all, this oil intervention of the Obama Administration came too little, too late. To put it in perspective, the IEA estimate global oil demand for 2011 is 89.3 million b/d, so the 60 million is not significant enough to sway the oil market supply and demand equation.Furthermore, due to the poor timing, the damage to the global economy has already done impacting consumer and corporation spending pattern, whereas the cost inflation has already built into the goods and services supply chain, and manifesting in the latest U.S. consumer inflation numbers.And frankly, if the U.S. and other IEA member countries have to resort to SPR as an economic stimulus, it is just a testament to the colossal failure of (1) global monetary and fiscal policies, (2) the global synchronized quantitative easing, and the dire desperation of politicians for re-election.U.S. Fed Chairman Ben Bernanke has basically admitted the failure of QE2 to revive the economy. This SPR release acting as QE 2.5 is another waste of resource adding to theunmitigated disaster of the U.S. quantitative easing programs
Monday, June 27, 2011
from Quantitative Easing to Quantitative Greasing : SPR Oil Release Could Cost U.S. Taxpayers $1.5 Billion
More on the Oil situation — from Quantitative Easing to
Greasing, anything goes in the quest to get some traction from the economy...
Poorly-Timed SPR Oil Release Could Cost U.S. Taxpayers $1.5 Billion
Thursday, June 16, 2011
With everyone focused exclusively on the Greek balance sheet, where apparently the market has now realized that you don't cure unmanageable debt with yet more debt (something the Troica will figure out just as soon as the eurozone breaks apart), a far more important statement is the country's P&L, or income statement. After all, if a country can not grow into its balance sheet with excess cash at the end of the day, all bailouts are completely irrelevant....
Egan-Jones', a rating agency that has proven infinitely better at predicting the future than Moody's or S&P, summary of what to expect:
End of the line - although Greece is likely to receive additional funds, those funds might be senior to existing debt and both creditors and Greece's patience is waning. The rise in interest rates is likely to place an unbearable burden on the issuer and the austerity measures will further pressure GDP. The Hellenic Statistical Authority cited an accelerated contraction in domestic demand and a fall in consumer expenditures with the decline.
We expect that Greece will be forced to restructure its debt within the next 2 to 18 months; it cannot sustain significant additional budget cuts, the tepid economy, restricted capital raising, and 20+% interest rates. Greece's stated debt is EUR329B, GDP is EUR230B, and the federal budget deficit is EUR3.8B before interest expense and EUR16.4B after interest expense. The country has failed to meet its initial deficit target of 8.1% of GDP for 2010 as agreed to under the joint IMF-EU bailout terms in May 2010.Meanwhile, Greek debt (currently the highest in the EU at 127%) is projected to reach 160% of GDP in 2011. Austria withheld funds due to Greece after claiming the country has failed to meet its spoken commitments for the EU bailout package
Read the whole post on zerohedge.com :The Collapsing Greek Income Statement, Or Why Greece Is Doomed
Check it out on The MasterCharts
Wednesday, June 15, 2011
How China could yet fail like Japan
Until 1990, Japan was the most successful large economy in the world. Almost nobody predicted what would happen to it in the succeeding decades. Today, people are yet more in awe of the achievements of China. Is it conceivable that this colossus could learn that spectacular success is a precursor of surprising failure? The answer is: yes.