another depression catch-up:
the UK’s awful stimulus package creates some weird effects. Gordo’s 2 pence in the pound cut in VAT, spooned out with a large dollop of promised tax rises, made everone feel they were going to be worse off. So they were put off spending, right? Wrong, maybe Gordo has the leap on the British consumer who, defying all rationality, believes that they will become poorer and, therefore, should spend what they can now, preferably in one day with 20% off whatever-it-is. Yes, christmas grosses are up. hard to credit it.
meanwhile the germans take a swipe at any kind of fiscal stimulus, bashing Gordo several times in the last few days in what looks like a concerted campaign. nobel laureate Paul Krugman (the man who said Gordo saved the world) hits back at the germans.
meanwhile egg on faces of (european - go figure) banks for investing in the world’s largest (discovered so far - just wait a while) ponzi scheme. interestingly, Madoff is supposed to have lost $50Bn of client funds, yet in January he filed that he had just $17Bn under management. we should remember that this is the first fraudulent scheme to be discovered. I will eat my (worthless) share options if it’s the last we’ll see this side of a recovery. Indeed, the question that any sane person has been asking for the last few years, namely just what do all the hedge funds actually do?, is going to get answered real soon.
