Last week the world’s leading finance wizards ’hauled-arse off to Wyoming’.
Last week the world’s leading finance wizards ‘hauled-arse off to Wyoming’, to quote the dreadful brat in Henry Fonda’s last movie ‘On Golden Pond’, for their annual sojourn in Jackson Hole to put the world economy aright.
This year, however, it’s the world economy that’s down the hole, unless they do something like fix it, otherwise all that they can do is pray the recession will go away. Unfortunately, the data in August on both sides of the less-than-golden pond show that the double-dip is gathering momentum.
That song by Johnny Cash and June Carter has the lyrics that hit the prevailing over-indebted, zero-growth economic atmosphere this year:
I’m going to Jackson,
I’m gonna mess around,
Ain’t ever coming back…
Goodbye, that’s all she wrote.
But where is June’s ‘Big-talking man’? Obama? He doesn’t do economics. Bernanke? He’s too busy greasing his printing presses to think of anything else, and so when he stood up to speak he said nothing. Larry Sumners? He doesn’t know if he’s meant to be doing austerity in election year, or how to do it.
The Committee of Twelve Wise Men have been appointed to play the ball into the long grass, while another $2.4 trillion is added to the federal deficit while they deliberate about cuts of 'mandated' expenditures, taking the deficit to $16.7 trillion by 2013, well over 115% of a stagnant GDP, with just 0.2% growth in Q2. S&P’s downgrade was justified; Fitch’s continuing AAA rating isn’t.
Any direction coming from Europe? Stupid question! The pygmy politicians of the EU simply have no answer to the eurozone crisis of their own making, locked as they are in the straitjacket of an unworkable monetary union. The Brussels accord in early August wilted in the heat of the market the next working day, and all that came out of the meeting between Sarkozy and Merkel in August wasn’t worth the value of the paper the communiqué wasn’t even written on.
They were just playing domestic politics in election year too: Sarko got a headline and one over on the left by not doing a DSK with Angela, but the Swabian housewife was only interested in reinforcing her stance for home electoral consumption and making sure there are no more German bailouts for the PIGS, conveniently announced in the land of the generosity of spirit of Fraternité, Liberté, Egalité, but unfortunately, or conveniently for her, a country with no spare cash either.
Then Christine Lagarde, DSK’s replacement at the IMF, told the delegates at Jackson Hole that the Euro banks needed recapitalising immediately, but Jean-Claude Trichet of the ECB said his fellow Frenchwoman had got it all wrong.
The Germans, not to be upstaged by the French fighting each other at the Jackson watering-Hole, started throwing fists and threats: the President of Germany said the ECB had no authority to buy PIGS’ bonds, and the Bundesbank said that bail-outs were illegal, which is indeed the case.
Meanwhile, Plan A for the imminent banking crisis in the eurozone doesn’t exist, so there’s not much point in Plan B either. The EU has run out of ammo, vision and utility. Like Obama, it is fast approaching its sell-by date too, unless…
Now, how did that song go on …
We got married in a fever,
Hotter than a pepper-sprout.
Marry in haste and all that; and then Johnny maxed out on his credit card and blew his cash, and ended up singing for his supper in Folsom Prison. Sounds like a familiar farce, coming soon to a screen near you?