- Greece's external debt is 147% of GDP (think Domino effect) and 66% of that is public sector debt
Given most of the issues facing Greece involve public sector generosity, solutions must come from the public sector in the form of more revenue, less expenditures, or both
Banks have become increasingly reliant on ECB for short term liquidity
New Normal in Australia? From absolutereturn-alpha.com: Is Australias luck about to run out?
- Australian housing prices have doubled in the past decade, and export prices have done even better
- Loans to Deposits are at 120%, bank risk is growing, and the government continues to offer home purchasing incentives to prop up prices
- Australia is potentially a triple risk threat: double dip in US destroying the risk trade, Chinese construction collapsing driving export prices down, or the Australian housing bubble bursting with leverage
Subscribers, see China Macro Discussion 2-4-10. Non-subscribers, reference:
- Can China Control the "Side-Effects" of its Stimulus-Led Growth? Let's Look at the Facts
- What Are the Odds That China Will Follow 1920's US and 1980's Japan?
- Signs of a China Credit and Real Asset Bubble Are Now Unmistakable!
Borat Bests Cailfornia.....Again from the Financial Times
- California's inability to cut debt, tighten/reform pension liabilities, and large rate of dependency have driven CDS spreads wider (don't worry, they tried to blame it on the squid too)
- Kazakh demographics are favorable in comparison to CA, and has access to a $25 billion rainy day fund
- The Californian response of trying to kill the messenger is dangerously similar to Europe and the PIIGS, muni risk continues to climb under the nose of the marketplace
For more on my take on Muni-risk, dating back to the spring of 2008 when I told everyone several states were bound to have their finances collapse, see "Here's Another "I Told 'ya So" for the Muni Buyers "
Employment Recovery? Or just the Census? From Businessweek:
- US payrolls grew by 162,000 workers, according to BLS estimates of the U-3 rate
- The data includes nearly 50,000 temporary government employees, mostly Census hires
- Earnings per hour fell (stagflation hint? Oil & other input prices are currently going up!) and the amount of people working part time that could not find full time jobs continues to rise
For more on this, see "Are the Effects of Unemployment About To Shoot Through the Roof?" where we get into the nitty gritty of the unemployment numbers, the empirical way.
Timmy Two Faced Geithner and the Chinese Revaluation, From Bloomberg.com
- After a few weeks of bitching about the undervalued Chinese Yuan, nothing notable is done, and Secretary Geithner is headed to China for damage control
- With a potential trade deficit for China for the month of March, 25% YoY M2 growth, and explosive credit growth, the Yuan appreciating from a float is not a sure bet
- The Yuan debate may be the first big step toward a large US/Asian trade war, as the only reason the US cares about the CNY exchange rate is generate manufacturing jobs domestically, no matter the cost
- Subscribers, see "The Potential Effects of Remnibi Appreciation on China's Economy "
Is this Really News? Italian Swap Losses Increase From Bloomberg:
- Swaps have continued to sour to the tune of .07% of GDP in Italy
- No word on the underwriter of the swaps
- Italian has nearly 3x in the sovereign CDS market as Greece
All readers should reference "Once You Catch a Few EU Countries "Stretching the Truth", Why Should You Trust the Rest?" as wells as Smoking Swap Guns Are Beginning to Litter EuroLand, Sovereign Debt Buyer Beware! and Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse! . Subscribers should also see Italy public finances projection and Italian Banking Macro-Fundamental Discussion Note.
