Trouble In The Trough

The PIIGS continue to lead the worldwide news stories.  Portugal Italy Ireland Greece Spain.  Greece, and now Italy, appear to be on the forefront.  It's amazing that the sheeple believe that removing the prime ministers solves the debt problem.  Going to be interesting to watch!

"The PIIGS continue to lead the pack to destruction."
Random Roving, January 1, 2011

Contracting Multiculturalism

"Nicolas Sarkozy declares multiculturalism had failed. French president Nicolas Sarkozy on Thursday declared that multiculturalism had failed, joining a growing number of world leaders or ex-leaders who have condemned it.  'We have been too concerned about the identity of the person who was arriving and not enough about the identity of the country that was receiving him,' he said in a television interview in which he declared the concept a 'failure'. Prime Minister David Cameron last month pronounced his country's long-standing policy of multiculturalism a failure, calling for better integration of young Muslims to combat home-grown extremism. German Chancellor Angela Merkel, Australia's former prime minister John Howard and former Spanish prime minister Jose Maria Aznar have also in recent months said multicultural policies have not successfully integrated immigrants."
Source: The Telegraph

 "Xenophobia is a powerful force in the down cycle."
Random Roving, October 9, 2007

Xenophobia continues to rise at an alarming rate.
Random Roving, November 6, 2009

"Although the language of race has rarely been explicitly invoked, terms like 'Marxist,' 'Nazi,'extremist', and 'foreigner' have been used to smuggle racism and xenophobia into the public conversation without political consequence."
Marc Lamont Hill, Columbia University professor and FOX News contributor

Anger & Hope

"It all began in one small Tunisia town with one despondent man, frustrated by lack of employment who set himself on fire and in turn set the whole Arab world ablaze with anger and hope. As the dominos fall throughout the Arab and northern African world, many of us wonder what is waiting on the other side. Will the people in these countries get the freedom and hope they desire?"
Source: Africana Online

An updated N. African protest map.  The "nodes on the network" continue to connect.  It might be a good time for a re-read of Gladwell's "Tipping Point"!

Protest Map - N. Africa / Middle East

I've used my analogy of The Onion probably too much, but my "Argentina-Onion" post still ranks as my highest visited ever.  The N. African onion layers are peeling back quickly.  What's interesting, is that right across the "Mediterranean pond" there are countries such as Spain, Italy, and Portugal that are in much more financial trouble, but the power of the EU keeps them afloat.  When the outer layers of the EU onion peel back further, it will be interesting to watch.  Tunisia, Algeria, and Jordan haven't really attracted major news coverage, but Egypt sure has.  Why, because Egypt is a more important peace in the "chess game".  A U.S. ally, but a country with a long history of major conflict in the region, especially with our good friends in Israel.  Stay tuned.

And The Winner Is??

A current look at worldwide unemployment ranking.


Worldwide Unemployment



Source: Bespoke Investments

Hot Potatoes & Risk Transfers

"Bailouts for Ireland and Greece and speculation that Portugal and Spain may need aid are prompting investors to shun some of Europe’s highest-rated bonds. The cost of insuring German debt against default rose yesterday to the highest since May. The yield on 10-year French securities climbed to as much as 3.247 percent, the most in more than in six months, and the extra yield, or spread, investors demand to hold 10-year Belgian bonds instead of similar-maturity German bunds climbed to the most since at least 1993. More rescuing means a bigger bill for everyone and this partly explains the pressure on yields in some countries, including Germany,' said Elwin de Groot, a senior market economist at Rabobank Groep in Utrecht, Netherlands. 'Now we have the deal with Ireland, there’s speculation about whether we should rescue Portugal or even Spain after that. That’s creating an environment in which there’s going to be risk transfers.'"
Source: Bloomberg

"We are moving apart. Organizations like the European Union are in the process of "fragmenting". During an upward trending mass social mood, we make peace and sign peace treaties. We form cooperative organizations during these times and merge currencies. Now, the tide has shifted. Keep an eye on the EU. As Greece, Spain, and others continue to feel "the pain", their partners in the EU will continue to ask 'why are we being dragged down by them?'."

Random Roving, March 30, 2010

Spaniards Strike

"Spain's first general strike for eight years, a protest against the Socialist government's public spending cuts and easier hire-and-fire laws, had a limited impact beyond disrupting transport and some factories.  Spanish unions said 10 million people, or more than half the workforce, were on strike. The government gave no numbers."
Source: Reuters

Now that's what I call a strike. More than half the workforce. Wow!

"In a downward trending mass social mood, it's very likely that labor strikes will become very popular again. We might even see a professional sports strike in the next few years. An angry mob loves a strike and a picket line. The cycle will likely bring unions back to strength as fear and anger 'drives the herd closer together'."

Random Roving, November 24, 2009

The Great Pig Roast

This is one category that we would prefer to not be in the Top 5 of.  When is the next pig roast?

P: Portugal
I: Ireland
G: Greece
S: Spain

A Pictoral of CDS's

These fancy, complex financial instruments called credit default swaps (CDS's) appear to be rearing their ugly head again.  Check out the graphs below of 5 year prices.

"Sovereign debt default risk as measured by 5-year CDS prices has spiked for Hungary and the countries surrounding it today, but default risk for this region still remains well below levels seen in late 2008 and early 2009."   Source: Bespoke


Entire article: http://www.bespokeinvest.com/thinkbig/2010/6/4/crisis-moves-to-hungary.html

Buenos Días Amigo

It appears that Spain is the next crisis.  Are we ready amigos?

"Now, the tide has shifted. Keep an eye on the EU. As Greece, Spain, and others continue to feel 'the pain', their partners in the EU will continue to ask 'why are we being dragged down by them?'"
Random Roving, March 30, 2010

"Spain's Socialist government is seeing its political power erode as it struggles to chart a path out of deep financial trouble, failing so far to satisfy conflicting demands to cut its budget and stimulate job creation.  The coming months could bring far more problems as Prime Minister Jose Luis Rodriguez Zapatero reforms the country's labor market, risking national strikes and the loss of support from trade unions, a core source of his center-left party's strength.  Zapatero's minority government is already running into serious trouble, although there appears to be no immediate threat of it falling.  A package of austerity measures passed by only one vote in parliament's lower chamber Thursday and the Fitch Ratings agency downgraded Spanish debt on Friday. Opposition parties have called for new elections."
Source: Associated Press

"The focus of Europe’s problem is rapidly shifting from Greece to Spain, one of the world’s largest economies.”
Source: The New York Times

"Concern about Spain's medium-term growth prospects was the main factor behind a decision to downgrade the rating of the country's sovereign debt, Brian Coulton, Fitch Rating's head of Europe, Middle East and Africa ratings said on Tuesday."
Source: iMarket News

Keep an eye on the P.I.I.G.S. (Portugal, Ireland, Italy, Greece, Spain)