Learn from the Ancient Greeks

Oedipus

Dear Congressional Niegodziwce*: Regarding your glee in smearing a true stalwart for US economic stability, Battleship Ben Bernanke, please re-read the famous tragedy, Oedipus. Some knowledge is not worth knowing. Your own posturing in seeking “transparency” seems rather vile, as you surely love the cloak of darkness for your earmarks. And many financial decisions are best made quietly as the unintended consequences of letting every single market participant know a decision is imminent can cause huge dislocations.

Like making sausage or how that steak got on your plate, or the past of Oedipus, some knowledge is better not known. Learn from the Greeks. [The hubris of Oedipus in incessantly seeking the knowledge of his origins led him to learn and show to the public that he had unwittingly killed his own father and married his mother. Consequently she killed herself and he blinded himself from the torment of that knowledge.]

*Yesterday’s Słowo Tygodnia aka Word of the Week in nominative plural form, meaning “knaves” or more humorously, “nogoodniks”.

Germany

It’s rather obvious that German policy makers’ are delusional, particularly Ms. Merkel and the finance minister. They seem to criticize US decisions by the Fed, Paulson, Timmy and Obama, yet don’t recognize their own nation needs the same efforts immediately. The evidence ?

FT: “Germany’s powerful export industry is warning of a credit squeeze in Europe’s largest economy even after the European Central Bank’s injection this week of one-year liquidity into the eurozone banking system. The German BGA exporters’ association on Thursday forecast a “dramatic deterioration” in credit conditions in coming months, which would result in “massive financing squeeze”.

"Anton Börner, BGA president, told the Financial Times that “for middle- and long-term credit we already have significant difficulties”. Even for short-term credit, he expected banks to “exert massive pressure on borrowers”.

"The alarmed tone is significant because German policymakers have argued that the export-dependent country is not facing problems in the supply of credit to business or households. Instead, the economy is seen as being hit by a global collapse in demand for its industrial products.” [my emphasis]. "

My dear Angela: it’s 2009, not 1923. [I suppose that should be in German. Eventually ...] Let’s hope she and the finance ministry cease their glee at US problems and focus efforts on their own. And they’ll be eating crow soon as they copy correct US policy moves. Their hubris is being punished.

Russia

Same situation. Past hubris is being punished – that is, the glee shown by Putin and Medvedev at US problems.

FT: “Russia is looking at a bail-out of its banks that would go further than the emergency action taken by the US, amid growing fears that bad loans could paralyse the country’s economy. “Igor Shuvalov, deputy prime minister, will consider taking stakes in troubled banks when a group of experts on the financial crisis meets on Friday to discuss ways to recapitalise Russia’s banking system, according to a draft proposal seen by the Financial Times. “

Dear Dmitry & Vlady: those “bad loans” were not made to US subprime borrowers, but to Russian magnates. Shut up and fix your own problems, please.

Central America

WSJ: “Honduran President Manuel Zelaya's push to rewrite the constitution, and pave the way for his potential re-election, has plunged one of Latin America's poorest countries into a potentially violent political crisis.”

A Chavez wannabe is causing trouble. Dear Obama: Don't let this get out of hand. Honduras IS in the US backyard.

Markets

Ms. Market put on a miniskirt yesterday and danced on the table. Rising stock prices seem to underline a defense of the markets 200 day moving average [“DMA”] and 50 DMA, after the usual break to run stops. Thank you beefers for your predictable antics that gave us a decent dip to make a few adds.

Word of the Day

"Flagitious" - adjective [$10]
Flagitious means criminal, utterly villainous
Sentence: Some Congressmen are mere knaves, but others are flagitious.

Le Mot de la Semaine

"Fripon" - noun, masculine

Fripon means knave, rascally fellow, rogue. Thus, niegodziwiec and fripon have the same meaning. The adjective, fripon, [F friponne] means mischievous.

La Phrase: L'homme du bunker pense que la plupart des politiques sont des fripons.

sentence: Bunkerman thinks most politicians are knaves.