Bruce Krasting's Blog

The Congressional Budget Office is out with a very well timed report on what the hell should be done with debt, deficits, taxes and the economy.

Democrats want to go back to the good old days when Fannie and Freddie were tools of both the Congress and the Administration. The Dems want the D.C. mortgage agencies to write off all underwater loans. The goal is to socialize the losses that borrowers are faced with.

Total global debt is around $200Tn. World GDP is less than $70Tn (300% global debt to global GDP). Advanced economies have a higher percent of total Debt/GDP then developing countries. So the crux of the problem lies with Japan, most of the EU and the USA.

Beppe Grillo is a well know TV personality/comedian in Italy. At age 64 he ran for political office in Parma, and won. He has been doing a lot of talking since, and his philosophies have become very popular.

Absent some earth shaking event between now and November, Obama is going to win, the House will remain in the hands of the Republicans and the Senate will continue to be equally divided. The war between Reds and Blues will be just as bad as it was a year ago. The day after the election, the fight over the fiscal cliff will commence. I expect it will be ugly.

The Congressional Budget Office (CBO) did a good job of shredding the electric car industry and the government’s role in its evolution with a recent report.

Mario was able to maintain “Radio-Silence” on the key elements of the plan he unfolded. As a result, he achieved tactical advantage when he unveiled his bold proposals. The global capital markets were both shocked and awed, and responded with unbridled enthusiasm.

The Congressional Budget Office came out with its Update to the Budget and Economic Outlook 2012 – 2022 yesterday (Link). The press jumped on the report’s conclusion that the consequences of not dealing with the fiscal cliff will cause a recession in 2013. The CBO thought it might result in 0.5% YoY drop in GDP.

The only winners in this story are the rail-roads. Everyone else will pay a bit more. In some cases there might be shortages (rock salt/chemicals up north). Global grain, corn and bean supplies may get disrupted. Add another few percent to the already skyrocketing price of raw food stocks.

Bernanke will speak at the all-important Jackson Hole meeting on August 31. This means that Ben is writing his speech this week. He will be speaking on the phone with his cohorts about what to he will say. In the process, he will get a consensus from the Fed’s voting members for policy actions that will be taken (if any) on September 13.