Stock markets around the world soared Thursday after the ECB said it would implement a quasi QE program where the eurozone nations central banks will provide liquidity for banks to buy 1.1T euros of government debt. Unbelievably, markets are ignoring an all out gorilla war in eastern Ukraine where Russian supplied militia are fighting covertly supplied from the West gorillas. In Greece, political party Syriza is set to win elections to win a parliamentary majority and force a 50% write-off in the nations debt, which is now mostly owed to the ECB and the IMF. While relatively small, a debt repudiation of even this size would damage both institutions financial condition in a major way. Always suspicious Chinese economic data show a slow down in growth, but raw data suggest that even these data are fudged (hard to grow at 7.3% when electricity usage is falling). Canada and Mexico are both suffering from the collapse in oil price and to a lesser extent other raw goods. The loonie has gone from around 1.1 $US to nearly .8. The US has more oil in reserve than it ever has had since records started being kept. The Chinese, now the swing buyer of nearly every industrial commodity, is using empty tankers to store oil as its on ground facilities are full. The Middle East is on simmer as ISIS continues to destabilize the region militarily, while the death of the Saudi king creates political instability. The US Congress is set for two years of inaction, whether by veto or divides deep within the GOP caucus between conservatives and fascists driven by racist hatred of a black president. But hey, ignore all that. Stocks are up... just like in 1929.
Posted on: Fri, 23 Jan 2015 09:10:08 +0000