Saturday, 2 June 2012

Say it ain't so . . . God save the queen

I just got back from a fantastic pre-breakfast ride into France. 2 hours of pleasure in the alps, I know I'll miss this easy access to the countryside when I move back to Sydney. The Pinarello was humming, though my Easton wheels just don't have the zip of my Campagnolo Bora's. I'm looking forward to the Mavic Carbone SLR aero clinchers that I'm getting with the Cannondale. They're a bit heavier than my other wheels, but I'm told they're the business ... we'll see.

In finance the good news is it's the weekend, the bad news is the US non-farm payrolls . . . say it ain't so . . .

El-Erian tells it like it is. Notice how the money honey immediately goes for the QE button. She knows that moves markets, but what she doesn't get is that it won't move credit. No one trusts their neighbors and if you don't do that you won't see banks lending and you won't see businesses investing.

"This is a time to be concerned with the return of your capital, not with the returns on your capital."

I wonder hat the RBA will do with their rate decision on Tuesday? Are they bold enough to go 50bps? I think 25 minimum, they can't afford to get behind on this as the government is locked in to a budget surplus.

Meanwhile the Irish proved themselves too cowardly to leave Europe and have instead voted to pay off their debts. The Irish Prime Minister:

“The Irish people have sent a powerful signal round the world that this is a country that is serious about overcoming its economic challenges.” 

What he didn't say was that the poorest in society, those that have been hit the hardest voted no. Class warfare will be back on the agenda. Ireland has Euro 31bn in bank debts and a population of 4.5 million. What are they thinking? Iceland had the right idea, walk away and start again. The Greeks will walk and then .... Spain?

So that's it for the moment. For my monarchist friends I wish you all a happy Jubilant long weekend.

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