Juggling Dynamite

The US banking system will lose 30 percent more than consensus estimates as shrinking loan portfolios squeeze profits, analyst Meredith Whitney told CNBC.
While increased governmental regulations will restrict the industry somewhat, Whitney said that the decline of up to 20 percent in lending portfolios will enact far more damage on bank balance sheets.
“Your good borrowers don't want to borrow, and your bad borrowers you're trying to kick out of the system,” she said. “So on average lending portfolios are down 4 to 20 percent and we think they're going to be down another 10 to 15 percent for all the big banks this year.”

Gary Shilling was on Bloomberg yesterday explaining the possibility of parity for the Euro-Dollar exchange rate. That would be a further 25% increase of the U$ versus the Euro at this point and is likely to have broadly negative implications for other risk assets over the next few months. A strengthening dollar also presents extra hurdles for the Obama administration's mandate to create new jobs asap. Every 1 percent increase in the dollar, averaged against other major currencies, knocks U.S. exports down by about $20 billion annually and destroys some 150,000 jobs, according to the Peterson Institute for International Economics, a Washington-based nonpartisan research group.
As I have said for some time now, it is not that the US is doing much right these days, but more that the world is now realizing the Euro zone is deeply mired in its own debt problems and even less along the road to solutions than the US. Since the credit crisis hit first in America the focus has been mostly on US ills for the past couple of years as the world punished the dollar. Now the realization is building that the EU problems are massive and even harder to manage than the US in many ways with all of the EU's separate governments, policies and philosophies.
Watch the Bloomberg clip here.

If I were a semi-retired billionaire I would hope that I would not just sit around my house shopping on-line and drinking martinis, I would hope to invest my energy in solving a world problem or two. In 2050 I will be 84 and my kids will be 51 and 52 hopefully with kids of their own. And hopefully by that point, we will have engineered for the world much more sustainable methods of harnessing and burning energy on our planet. Gates speaks about a new type of nuclear reactor he is investing in to achieve the attainable “miracle” of zero carbon emissions globally by 2050. I know it is possible to achieve innovation “miracles” (we have certainly done it many times before) and especially when people stop resisting change, and stop spending their time arguing about whether cleaner, sustainable, domestic energy is a good idea or not. Can we just get on with it already please? Time is a wasting.

Hat tip Barry Ritholtz