All Things in Moderation

Kicking the can down the road

11 Responses

1. 

   jnc4p, on June 17, 2012 at 6:01 pm said:

   Speaking of Japan, I read somewhere that Japan was reaching the end of the road in terms of low interest rates for it’s government debt, despite Paul Krugman’s assurances to the contrary. What’s the opinion of the more informed financial commentators here?

   http://www.bloomberg.com/news/2012-06-04/japan-s-debt-sustains-a-deflationary-depression.html

   “The Organization for Economic Cooperation and Development says Japan’s public debt will reach 223 percent of the country’s gross domestic product next year, the highest such ratio in the world. ”

   http://online.wsj.com/article/SB10001424052702303410404577468032978439866.html?mod=googlenews_wsj

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   • 

     ScottC, on June 17, 2012 at 6:34 pm said:

     jnc:

     I don’t have a strong view, although I am surprised that Japan has sustained such debt for as long as it has already.

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2. 

   Mike, on June 17, 2012 at 6:09 pm said:

   Scott:

   So is that good news or bad news? I take it from your title that it might be fine for the short term, but long term is not so good, particularly if Greece doesn’t make some serious reforms.

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     ScottC, on June 17, 2012 at 6:29 pm said:

     Mike:

     If the early returns are correct, it will be widely seen as good news. But my own view is that it will only be temporary. As I’ve mentioned before, I don’t think the single currency is ultimately viable in the absence of political union, so I see anything that retains the status quo and avoids steps either towards unification (unlikely) or devolution of the Euro as simply kicking the can down the road.

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3. 

   jnc4p, on June 17, 2012 at 7:19 pm said:

   “ScottC, on June 17, 2012 at 6:34 pm said:

   jnc:

   I don’t have a strong view, although I am surprised that Japan has sustained such debt for as long as it has already.”

   My understanding was that this was due to the high level of savings in Japan making the majority of it held domestically. The speculation on reaching a tipping point was due to exceeding the domestic savings capability and having to rely more on the international market, but that could simply be a convenient piece of pundit hypothesis.

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4. 

   Troll McWingnut or George, whichever, on June 17, 2012 at 9:49 pm said:

   PASOK’s refusing to form a coalition without Syriza (the commie’s) being a part of it. I’m guessing that the Syriza wants none of that and want to be untainted for when this government collapses in 3 or 4 months.

   It’s not over yet.

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   • 

     ScottC, on June 18, 2012 at 5:06 am said:

     McWing:

     It’s not over yet.

     You sure were right. Contrary to what I expected, markets are not relieved. After being up in Tokyo morning, stocks are now trading down. Dow futures, down 42, S&P futures down 3.7. And the 10yr note has rallied to 1.557%. No relief despite the seemingly positive electoral outcome in Greece.

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5. 

   lmsinca, on June 18, 2012 at 5:27 am said:

   I just read almost the same thing McWing over at Naked Capitalism. Apparently kicking the can down the road isn’t working as well as it used to.

   Also, I just finished reading this regarding foreclosures and where the numbers really stand. We still have a lot to work through if these numbers are correct.

   And my daughter sent me this which I thought depicts my attitude pretty well lately. I think I need to retire soon.

   

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6. 

   jnc4p, on June 18, 2012 at 8:08 am said:

   “Troll McWingnut or George, whichever, on June 17, 2012 at 9:49 pm said:
   …
   It’s not over yet.”

   First thing that popped into my head when I read that line from McWing:

   “Greece: It’s not over yet.

   Wall Street: It is for *me*, sister. Look, I ain’t in this for your revolution, and I’m not in it for you, Princess. I expect to be well paid. *I’m* in it for the money. ”

   http://www.imdb.com/character/ch0000002/quotes

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7. 

   Mike, on June 18, 2012 at 8:36 am said:

   Troll:

   Sorry to be the bearer of bad news. No overtime pay for PSRs.

   Christopher v. SKB

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8. 

   Troll McWingnut or George, whichever, on June 18, 2012 at 11:58 am said:

   [Managing Greece’s Euro exit] aint like dusting crops, boy. We could fly right through a star or bounce to close to a supernova. That’d end your trip real quick wouldn’t it?

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