American States on the brink of financial catastrophe

In the third year of the worst recession since the 1930's many States totter on the brink of catastrophe, after generations of imprudent management.  Ahead lie even greater challenges, as employees cash in on their insanely generous pensions.  A few charts tell the tale -- showing America's most profligate states -- from "The State of California … Continue reading American States on the brink of financial catastrophe

A great speech by the PM of Greece. How soon until an American President says similar words?

A great speech, more powerful and truthful by far than anything said so far by President Obama.  Truly the sight of the gallows focuses the mind.  How soon until an American President says such things?  Not long (and only if we're lucky), unless we get smart and work together.  Note this was a speech not … Continue reading A great speech by the PM of Greece. How soon until an American President says similar words?

News from the front lines of the economic wars

A brilliant and provocative but pessimistic analysis by Albert Edwards of Société Générale:  "To cut or not to cut? Actually it doesn't really matter. We're stuffed anyway!", 12 February 2010.  With links to even better analysis by Richard Koo.  Must-reading for anyone seeking to understand this crisis.  Excerpt: About Europe My own view of developments, for what it is worth, … Continue reading News from the front lines of the economic wars

A look at our government’s debt – rising because we like to spend

One of the great similarities of our economic downcycle and Japan's two decade long journey to oblivion:  both are periods of economic stress caused by private sector deleveraging -- in which the government mitigates the resulting pain by borrowing and spending.  Japan's government has run up terminally large debts, on a gross basis equivalent aprox to 2x its GDP.  We're on the … Continue reading A look at our government’s debt – rising because we like to spend

Government economic stimulus is financial heroin

Summary:  A powerful metaphor, widely used, about this recession -- the worst since the 1930's -- providing important insights. Excerpt from "Financial Heroin", Don Coxe, Coxe Advisors, 16 December 2009: ... my father was a doctor in the Canadian Army in WWII, and served in the Italian campaign. He became greatly respected for his anaesthesia … Continue reading Government economic stimulus is financial heroin