Skip to comments.Asia stocks fall as Europe fears revive
Posted on 09/18/2011 9:29:12 PM PDT by Free Vulcan
SYDNEY (MarketWatch) Asian stocks fell on Monday, as concerns about a Greek default came back to the fore amid indications that Europe is losing patience with the countrys efforts to cut its debt pile...
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It's both big enough to do serious damage as well as destabilize very quickly. Looking at the market we've moved up off the lows well, but it's a consolidation market with and volume on the up moves decent right now but fading.
If they can't resolve this situation, and I don't think they will...look out below. I could see the recent upward movement cut short very quickly. That doesn't factor everything else out there mentioned above. The structure of the market is ripe for another smackdown.
Looks like the Band-aids aren’t working.
The Eurobank injected alot of liquidity into member banks I think last Thursday. They said at best that little trick might last till Christmas. The gut says not nearly that long.
The S&P futures smacked down hard right at the open on good volume with the bid-ask just collapsing right before. That is not a good sign for the week but we’ll see. The market looks like it’s at a tipping point.
Fears are only “reviving” in the statist-ivy-league-run media.
It’s painfully obvious that fears have simply persisted because the brainiac decision to implement a common currency between different sovereign nations with vastly different productivity levels is nearing it’s inevitable end.
Geez. I thought little Timmy Tax Cheat was going to get this all worked out last week. Good thing he got involved with our money to stabilize things or the Eurosone would get worse. No...Wait?
For the socialists it comes down to this every time. All the big talk and demagoguery can’t mask the failure of their policies which boils down to creating junkies that can’t give up the fix in exchange for votes and power.
They can cut the Gordian knot by fixing Greece and the rest for real, but they won’t do it because they don’t want to go thru the withdrawal. And so the whole damn thing collapses and it’s 10X worse than it has to be. Game over and everyone loses.
They never learn.
In order to avoid what could be a catastrophic domino effect crash, don't be surprised that Germany--who has by far the most powerful economy in Europe--will suggest (and everyone has to accept) the following conditions:
1. The "safety net" social spending will have to be seriously cut back, and more emphasis placed on private long-term savings accounts for retirement and medical bill payments.
2. Taxation across Europe will have to be simplified drastically to encourage more savings and investment in Europe, not encourage liquid assets sitting in tax havens around the world. This means major overhauls of income tax laws with far lower tax rates combined with removing most (if not all) income tax loopholes and a lower-rate value-added tax (VAT).
We have postponed the major world-wide crash since 2008 by increasing debt and weakening the dollar. Europe has done the same thing.
It needs to crash. Any more stimulus or bailouts will only make the inevitable much worse. The markets will not improve or stabilize because everyone (except the Obama administration and Michael Moore) understands the fundamental problems are still there.
We never learn.
I would agree with that in the past, but once Ireland and Greece started to get into serious sovereign debt difficulties a few years ago, I think that attitude is starting to change. Even the Socialists in Europe are starting to wonder what to do next, and from now on retirement must be more based on personal retirement plans and taxation MUST be revised to encourage more local businesses--the mantra of the Tea Party movement.
Worldwide debt to GDP ratio is 69 percent.
Since global GDP is 74 trillion a year, that means the world is 50 trillion dollars in debt, or about 10k per person.
That gives a debt buffer of about 24 trillion. Global debt has doubled in 10 years.
The growth in the world economy was about 30 trillion dollars from 2000 to 2010, so the economic growth is still slightly outpacing debt and borrowing.
Yes, we’ll see. I’m not hopeful either, at some point things have to get much worse before they get better.