Juggling Dynamite

Excessive leverage 2005-2015 brought forward years of what would have been future demand and booked it as sales in the present, now the future has arrived and the world economy is slumping into the demand pothole this behavior left for us. While many so called experts are surprised, no one should be.  We have earned an equal and opposite mean reversion period.

Gary Shilling, president at A. Gary Shilling, and Alberto Gallo, portfolio manager and head of micro strategies at Algebris Investments, discuss areas of rising inflation, the prospect of a Federal Reserve rate cut and the lack of ammunition for the Fed to combat a slowing economy. Here is a direct video link.

Alberto Gallo, portfolio manager and head of micro strategies at Algebris Investments, and Gary Shilling, president at A. Gary Shilling, join Bloomberg’s Michael McKee to examine liquidity warning signs in global markets and the economic impact of globalization. Here is a direct video link.

As we have written earlier, Deutsche Bank is a canary in the ongoing global financial crisis. Its culture and management have blown up a $2 trillion balance sheet with reckless risk taking, illegal activities and suicidal-leverage. Now they are blaming a $14 billion fine being demanded to settle their role in mortgage fraud as unreasonable and want Germany to bail them out. So far Merkel’s government has said ‘nein’ as they face low popular support and a desire to distance themselves from bankers heading into next year’s election. But then there is the inter-connectivity between Deutsche and the other too-big-too-exist global banks as captured in this chart.

Will personal prosecution, compensation clawbacks and job losses follow for the directing executives this time?  It certainly needs to, might as well start now.

Danielle was a guest with Jim Goddard on Talk Digital Network talking about recent developments in the world economy and markets. You can listen to an audio clip of the segment here.