Economist Nouriel Roubini says the risk of a global recession is greater than 50 percent, and the next two to three months will reveal the economy’s direction. In an interview with WSJ’s Simon Constable, Roubini also says he’s putting his money in cash. “This is not the time to be in risky assets,” he says.
There is more than one way to skin a cat apparently (what a horrible saying, where does that come from?) Anyway, since banks have resisted all calls to mark the bad bonds on their books to market value over the past three years, traders have found an alternate way to penetrate the dark cloak of extend and pretend: they are shorting bank stocks as a way of shorting the over-valued bonds held on their balance sheets. Brilliant. This is likely to keep up pressure on the banksters to finally come through with some fair disclosure and transparency. Watch the CNBC clip here.
Eurobanks are the big story this morning as the Chinese are pulling back credit line commitments to French banks on worry about the junk bonds on their balance sheets. See Bank in Asia cuts credit to french lenders: “One bank in Asia has cut credit lines to major French lenders while five other banks in Asia are reviewing trades and counterparty risk as worries about the exposure of French banks to peripheral euro zone debt mounts, banking sources told Reuters on Thursday.”
The next wave of the financial crisis is now underway.
This article from the weekend is worth reading and digesting in full (thanks Richard P for the tip). See What happened to Obama?
What I have found the most frustrating about Obama personally is that unlike most of the other leaders, bankers, regulators, advisors who were hopelessly clueless at every turn over the past 20 years, Obama actually seemed to grasp the mistakes. He articulated the issues clearly in his many wonderful campaign speeches. And then… he did nothing but continue in the same horrendous policies, promoting and rewarding the perpetrators with even greater positions of power and influence in his government.
The question now is can Obama find any guts to change course in his final year? I would like to believe it is possible, but I cannot at present see any strength in him.
And if not Obama in 2012, what kind of leader will replace him??
