A few things bouncing around my head:
-The website Stratfor has put out some good material recently about the Syria situation. From the U.S. perspective, Obama is playing with a weak hand. He doesn’t have public support, nor does he have any sort of international coalition. Yet he is forced to do something because of the “Red Line” comment. The Russians are trying to look like global leaders here, but we already see them pushing back on a fairly straightforward idea that any agreement has to keep the threat of attack in play, to make sure that everyone plays by the rules. So, let’s not put them on any sort of pedestal yet. But, forget all of that for a moment – the notion of having Syria turn over all its chemical weapons is not such a slam dunk easy outcome as it is. The country is engaged in an active civil war. The weapons are thought to be spread around the country in 50 different locations, some in spots that are very hot right now – and it’s not exactly like the war is going to end just because Assad decides to give up his sarin gas. All of which means someone is going to have send troops into a war zone in order to deal with the collection. And for Obama, since U.S. troops will probably get the assignment, that’s a better outcome that lobbing a few missiles? I’m still where I started with this – there were 100,000 deaths that came before the chemical attack. You either got involved 99,999 deaths ago or never. I vote never.
-I have been revisiting, at least in my mind, why I am critical of Keynesian economics. And what I thought about in my most recent version of this exercise is that it is an ideology that requires the majority to be asleep at the wheel (on second thought, maybe I’m not giving them enough credit). Back in the early 2000s, when there was a recession that followed the tech bubble, there were some acolytes of Keynes calling for the Federal Reserve to engender a housing bubble. What that really meant was lowering rates and getting people to take on more debt. Great recipe. And now these same folks have the audacity to argue that lower rates don’t cause bubbles. Sigh. No one ever wants to clean up the mess.
-I keep reading articles about public pension shortfalls. It started with Detroit, but it will not end there. It looks like the bond vigilantes have started to gang up on Puerto Rico. Where there is smoke, there is often fire.
-As for the taper, I do believe there will some token gesture made by Bernanke and team next week. Something to the tune of $10 or $15 billion per month. All so Bernanke can look like he left the job trying to keep the animal spirits in check. But, we already know that the economy is not in great shape. Each monthly jobs report, the housing data, and the rest of the menagerie of economic data points tells us that. So, at some point after the taper, and probably not too long either, the un-taper will be here.
-The possible trades that I am keeping my eyes on: gold, Yen, Aussie Dollar, and 10-year treasury.
