Is there a coincidence that as I opened my Financial Times today and read this Latvia Flop Sparks Bond Fears I got an invitation, via YahooMail, to welcome an attractive twenty year old Latvian fashion model into the country to be my mistress? I've been finding lately that these fantastic marriage and mistress proposals coming from Eastern Europe, via Yahoo Mail, have been overwhelming my invitations to help deposed African princes and princesses recover and split millions of dollars with them for the simple "fee" of giving them my bank account information!
This could be another key economic indicator! The "Eastern European Wife Invitation to African Prince Money Recovery Invitation Index"! When the index is greater than one, the world economy is going further into the crapper. Right now that index, according to my e-mail "Spam Folder" is roughly 1.75. Just a few months ago it had to be around .25. I'm not going to call for any meaningful global recovery until this new indicator of mine gets back to 1. Richie is building his charts now to capture his moving averages. As you have seen, Richard's charts are very powerful.
On a serious note, I had no idea that Latvia was in such bad shape. The only thing that makes me feel a little good is I, as a former "mortgage backed security professional", and my brethren had nothing to do with blowing the country up. At least as far as I can tell! Latvia expects its economy to contract EIGHTEEN PERCENT this year! They also expect their budget deficit to be nine percent of GDP. Latvia keeps that ratio going and they are going to end up being........us! At least we are a reserve currency.
Lastly, I see here that the ECB is done lowering rates. From Bloomberg News;
The European Central Bankkept its benchmark interest rate at a record low of 1 percent today after first signs of an economic recovery emerged. The Frankfurt-based ECB will also reveal details of its asset-purchase plan, and economists say it is unlikely to signal it will buy more than the 60 billion euros ($85 billion) of covered bonds already announced. President Jean-Claude Trichet, who is trying to heal a rift among policy makers, holds a press conference at 2:30 p.m.
“The reality is that the ECB are done cutting rates and will not be announcing any further policy initiatives,” said James Nixon, an economist at Societe Generale SA in London. Still, “I’m very concerned that much more has to be done to stimulate the economy from here.”
I don't know about you, but it seems the ECB and Jean-Claude Trichet have made an art form of being WRONG. Last I checked, Latvia and the rest of Eastern Europe is kind of close to Western Europe! And we're not even talking about what a mess the Euro-zone banks are in, or the fact that the policies of the major countries are not exactly uniform with one another. I've done pretty well over the last year watching the Euro rise against the USD because "things were better in Europe and the rate differential will keep the Euro strong" and then selling USD/EUR (Selling Euro buying USD) as the Euro comes crashing down...AGAIN. It's at 1.411 now. I see it going back to the low 1.30's soon.
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