Monday, May 17, 2010
Technically Precious with Merv, May 14, 2010
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Pimco's El-Erian Warns Inflation to Hit US, Europe
Although price pressures are currently muted, the United States will get an uptick of inflation over the medium term, the world's biggest bond fund management company said on Thursday.
Extensive money printing by central banks to buy securities in emergency measures, such as those the European Central Bank recently announced to stabilize euro zone government bond markets, will ultimately stoke inflation, wrote Mohamed El-Erian, CEO and co-CIO of Pacific Investment Management Co., or Pimco, in a three- to five-year "Secular Outlook" summary.
"This potential evolution from disinflation to inflation will likely proceed at different speeds in different parts of the globe. It is already well in train in emerging economies and will remain so," El-Erian wrote. (more)
Extensive money printing by central banks to buy securities in emergency measures, such as those the European Central Bank recently announced to stabilize euro zone government bond markets, will ultimately stoke inflation, wrote Mohamed El-Erian, CEO and co-CIO of Pacific Investment Management Co., or Pimco, in a three- to five-year "Secular Outlook" summary.
"This potential evolution from disinflation to inflation will likely proceed at different speeds in different parts of the globe. It is already well in train in emerging economies and will remain so," El-Erian wrote. (more)
The Bailout of Big American Banks Has Cost Trillions More Than We've Been Told
Granted, the $700 billion dollar TARP bailout was a massive bait-and-switch. The government said it was doing it to soak up toxic assets, and then switched to saying it was needed to free up lending. It didn't do that either. Indeed, the Fed doesn't want the banks to lend.
True, as I wrote in March 2009:
The bailout money is just going to line the pockets of the wealthy, instead of helping to stabilize the economy or even the companies receiving the bailouts:
Bailout money is being used to subsidize companies run by horrible business men, allowing the bankers to receive fat bonuses, toredecorate their offices, and to buy gold toilets and prostitutes
A lot of the bailout money is going to the failing companies'shareholders (more)
Greek leader considers action against US banks
Greek Prime Minister George Papandreou declared he is not ruling out taking legal action against U.S. investment banks for their role in creating the spiraling Greek debt crisis. Both the Greek government and its citizens have blamed international banks for fanning the flames of the debt crisis with comments about Greece's likely default, actions that are causing the country's borrowing costs to soar.
"I wouldn't rule out that (legal action) might be a recourse. But we need to let due process (take its course) and then make our judgments once we get the results from the investigations," Papandreou said in a CNN interview broadcast Sunday. (more)
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