Farmer Diaries

Over the weekend, Draghi spoke at the Jackson Hole economic symposium. He addressed the  absolute disaster  that unemployment in the Eurozone has been, but also made the case that the ECB has been somewhat limited in its ability to address the economic situation in the bloc because of austerity measures taken by European governments.  Ok so first off, Draghi has no control over fiscal policy (he can have a word, but nothing else) .  Moreover, when European government put the breaks to spending (largely at the urging if the ECB -- with an objective to cut deficits) the impact was, surprise, surprise, economic contraction. Amazingly, the ECB is now saying "it's not us, we didn't tell Portugal, Spain, and their friends to cut spending". Guess what then, European countries put pressure on their economy to stem the flow of capital out -- so that the pain would be mitigated, the ECB was surprise of this outcome --  "Sovereign pressures also interrupted the homogen

Twice last week I got that question, don't know why!  I keep on telling all my friends that I must be the world's worst stock picker -- if I choose it, it will go down.  Anyway, the markets have decided that the news is suddenly bad, don't know what is different suddenly (not wars, not economics).  It used to be that in thin summer trading "trolls" could play their games but with the advent of high frequency trading this is no longer realistic -- for those who don't know HFT accounts for 40-50% of all trading activities on most North American markets. So since computers don't take holidays summer doldrums cannot be it, maybe the markets have over-reached over the past few months.  I always commented that the markets were rich over the past few months -- corporate profitability has never been higher (NEVER) as a percentage of GDP, earnings multiple while not insane are "rich" insofar as there's not much increase in multiple (again the logic