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Posts Tagged ‘Occupy Wall Street’

2011/11/15: Quick Post: Cycles Accelerating: Hippies to OWS to Europe to US

November 15, 2011 2 comments

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The first media seer, Marshall McLuhan (who essentially invented the science of media’s influence on culture), famously noted back in the 1960’s that electronic media would destroy established social structures. And all he had to guide his perceptions was incipient developments in cable TV. Wonder what he would have said if the development and ubiquity personal computers was anything more than futuristic bit of imagination. [Although in the Dick Tracy comic strip they actually had wrist radios and TVs; forerunners of the PDA?]

But now we have an entire galaxy of information whizzing across everyone’s screens at the speed of light. And while the social structures of the 1960’s were reduced to rubble, society will always be reborn because it is a necessary cycle. However, there is little doubt the only real constant remains ‘change’, and it does seem to be accelerating.

Consider the turn of the cycle from the height of the Hippies to the end of that attempted utopian solution. After the 1967 San Francisco ‘Summer of Love’ it took two years to degenerate into the Manson murders and the Weather Underground. For the uninitiated that last group is a faction in the previously aggressive yet peaceful SDS (Students for a Democratic Society) which shifted to the pursuit of violent revolution. They had given up on peaceful pursuit of change and reverted to violence, because it seemed obvious to them that nothing was going to change. (Hence the group’s name, from the Bob Dylan lyric, “You don’t need a weatherman to know which way the wind blows.”)

Fast forward to Occupy Wall Street and what do you get?

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2011/11/04: Quick Post: Draghi Not Soggy. But Does G20 End Up Just a Cannes-Game?

November 4, 2011 2 comments

There was quite a bit of concern about whether Signore Draghi taking the reins at the European Central Bank (ECB) would lead to a much looser regime that would ignore inflation. In the first instance he is an Italian central banker, who historically have been known to have no qualms about allowing significant amounts of inflation. While he has been personally committed to far more fiscal rectitude than any of his Italian predecessors, that still left a question in the air.

Especially so at a time when Italy is going to need seemingly massive help with its sovereign debt problem. There was some passing concern (nothing really too serious) that he might be overly accommodative in supporting the Italian government bond market through ECB purchases. And all of that was seemingly compounded by the first interest rate decision under his regime yesterday, as the ECB put through a surprise 25 basis point rate cut to 1.25%.

Horror of horrors? Well, not really. Along with the rest of the world, European inflation does remain very high at present. As such, an easing ECB seemed to be joining Fed Liquidity Lubrication Club. However, in the context of the recalcitrant rate rises into an obviously weakening European economy by hawkish predecessor Jean-Claude Trichet, the reversal of one of those hikes hardly makes Signore Draghi an inflation Dove.

In fact, the economic data all seems to have vindicated his decision to make a bold move at his first interest-rate meeting as ECB President. As events have evolved today at the G20 meeting in Cannes, he has also rejected the idea that the ECB should continue purchasing the sovereign bonds of Europe’s weakest fiscal sisters. In that regard his indication that the Euro-zone needs to get its European Financial Stability Facility (EFSF) act together (funding, mandate, leveraging mechanism) is wholly consistent with that of his predecessor. On the whole, a very solid showing.

However, whether the ECB has turned just a bit more dovish is the least of the equity market’s concerns. The now bizarre machinations in Greece, and more importantly the continued lack of agreement on the critical funding and operational aspects for EFSF are plaguing the markets today. The biggest problem seems to be recurring failure of lofty pronouncements followed by no credible details on all of these various rescue at fiscal reform plans. And once again at the G20 in France, it is all starting to feel like not much more than a Cannes-game!!

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