Friday, October 30, 2015

Its been a while....

Honestly, I find myself hard pressed to get exited about any of the recent political developments.  Everyone agrees that the Greece tragedy is over, well maybe not over, but swept under the carpet, shovelled forward -- use any analogy, but there the reality of Greece's tragedy is there for all to see, the country has more debt today than it did 6 months ago, the economy is still not recovering.  We shall see -- I am still confident that I will eventually win my bet (that Greece will be forced out).

On the American side things are unchanged, Canada had election and the conservative government was defeated by the left of center Liberals.  Mostly untested, but already some positive actions have occurred -- such as cancelling the F35 -- a ridiculous acquisition by the previous government of a poorly suited aircraft for Canada's usual border defence mission at a cost that is simply unacceptable, nearly $200 million per aircraft!

The American long long winded electoral process grinds on, with the republican primary being both entertaining (what a bunch of clowns) and depressing (what a bunch of clowns!).  

The world economy seems to be grinding to a halt, China the engine of growth is discovering a reality -- you can borrow for a long long time but eventually if have to repay the loan -- or at least pay the interest on the loans.  That has not happened for a long time on many post 2008 projects.  The simple reason is that these projects were not needed.

Europe is in a strange place; on the one side there is floor of refugees that are just knocking down the doors to come in, on the other you've got the Brits that are looking for an exit (to what is not entirely clear).

The biggest things are interest rates rates, and what the Feds will do.  They have been threatening to raise interest rates for some time now, and in fact Q4/2015 was suppose to be the big raise!  However, the world economy is giving all the wrong signals, US GDP growth that is interesting is probably the only one doing OK, and there again for most americans standards are living are still falling as median wages continue their relentless fall (in absolute and relative terms).  Even the richer segments are starting to feel the burn.  Banks are cutting down and bonus pools are evaporating.

So interest rate rises would seem to be off the table and the world's central bank have no idea how to prime the pump!  No exactly encouraging.