Slaves to Rome

Quote of the Day - December 14, 2011

It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.

Thomas Sowell

Antidote du Jour - December 12, 2011

(Via Dan Soto)

Antidote du Jour - December 11, 2011

(Via torkan khodaverdi)

Quote of the Day

I’m gonna carve this quote on a stone dildo and shove it up the a** of Merkozy…

Monetary union “is not only inefficient but undemocratic. A danger not only to our wealth but also our freedoms, and ultimately, our peace. The villains of the story… are bureaucrats and self-aggrandizing politicians.” Monetary union “is a mechanism for subordinating the economic welfare, democratic rights, and national freedom of the European countries to the political and bureaucratic elites whose power-lust, cynicism, and delusions underlie the actions of the vast majority of those who now strive to create a European superstate.”

Bernard Connolly, in The Rotten Heart of Europe: The Dirty War for Europe’s Money (1995)

(Via The Big Picture)

Quote of the Day - December 9, 2011

More than any other time in history mankind faces a crossroads.  One path leads to despair and utter hopelessness, the other, to total extinction.  Let us pray we have the wisdom to choose correctly.

Woody Allen

Juncker Tells Britain Not to Spoil Euro Summit Deal; Shut the F*ck Up You Junk

In a marvelous display of arrogance, ‘Junk’ Juncker Tells Britain Not to Spoil Euro Summit Deal as per CNBC. Please consider:

Eurogroup chief Jean-Claude Juncker said on Thursday he hoped Britain would not stand in the way of a solid response to the euro zone debt crisis when leaders meet to consider treaty changes and other measures on Thursday night and Friday.

Speaking on French state radio, Juncker, who chairs meetings of finance ministers from the euro zone, said the euro was not under threat but EU governments had to come up with a response that stemmed the debt crisis.

Juncker said Britain, considered a reluctant partner in the drive to tighten up financial sector regulation, should not be allowed stand in the way of treaty changes and other measures needed to address the crisis that has engulfed the euro area.

“There has to be a deal,” he told France Info radio, adding regarding the currency shared by 17 countries, “The euro itself … is in no way at risk.”

“We need a solid agreement. I would like a treaty deal that commits the 27 (EU member countries) but if it turned out that there were countries among the 27 unwilling to go along with us … we will do it with 17 (euro zone countries),” he said.

“I don’t want the United Kingdom setting aside entire pages to say the United Kingdom will not do what all the others have to do. I will not accept that,” he said, citing specifically the need to tighten financial sector regulation.

Leaving aside the pure stupidity of saying in one single sentence that the euro is not at risk but that a grand plan is needed, I’d like to ask Mr. Juncker who the f*ck does he think he is to be telling a sovereign nation what it can or cannot do.

I mean, when you read what he says in the next to last paragraph, the best summary would be a F*CK YOU to anybody who doesn’t want to go along with this latest proposal. Speak about democracy…

Not only should Britain and her citizens have a say, but also should all the citizens of the other 26 countries. And as for Mr. Juncker, just shut the f*ck up would you?

Antidote du Jour - December 5, 2011

(Via Not Safe For Work.)

Morgan Stanley’s Graham Secker’s 2012 Outlook Main Takeaways

Via FT Alphaville, Morgan Stanley’s Graham Secker’s 2012 outlook report. His most salient observation is that the investment framework of the last 25 years is increasingly irrelevant because we have reached the end of the debt super cycle in developed markets and that Japan offers the best guide to what might happen in the equity market over the next decade.

Some more detailed observations from Secker:

1. Economic growth will be slower and more volatile. In the 20 years prior to the bursting of the Japanese bubble at the beginning of the 1990s, Japanese per capita GDP grew by an average of 3.4 per cent, with just one recession in 1974/75. However, in the subsequent 20 years there have been six recessions, and per capita GDP growth has averaged just 0.8 per cent.
2. Fiscal policy is increasingly important when interest rates are very low. When the private sector of an economy is in deleveraging mode, interest rates are likely to stay low for a long period; however, a lack of appetite for debt means that their ability to generate growth in an economy remains poor. If rates stay low for a long period, the lack of change also means that rates no longer exert much influence on economic growth on the upside or the downside. Instead, economic activity is predominantly affected by changes in domestic fiscal policy and the external growth outlook (i.e. exports).
3. Equity performance will be weak and volatile. Between 1970 and 1990, Japanese equities produced an 8 per cent CAGR price return in absolute terms and outperformed global markets by 16% per annum. Since 1990 the figures are -8 per cent and -6 per cent respectively. If we exclude the extreme upside and downside of the late 1980s/early 1990s, we note that the median rolling return over any 12m period between 1993 and 2007 was 2%. This compares to 12% for MSCI World.

And the consequences for investors, which are quite grim:

1. more social protests and economic dislocations, such as strike action;
2. increased political turnover as the electorate churns its politicians on a regular basis in the hope of protecting its living standards;
3. an increase in ‘populist’ policies from governments as they aim to align themselves with the wider electorate;
4. Higher taxes – Exhibit 19 shows how corporate tax rates have been falling for the past 30 years, while Exhibit 20 shows how the marginal top rate of US income tax rose from 30 per cent to 90 per cent in the decades post the Great Depression of the 1930s.