Tuesday April 17, 2012
As we say, the news is right there in the paper our job is to piece together the random bits into some sort of meaningful pattern.
Meredith Whitney has caught lots of flak for her call that municipal governments would default. She has defended that call saying she is being confirmed every day. I agree, the definition of default just needs to be expanded, that was here mistake.
Governments will eat everything alive to stay afloat. On the front page of today's WSJ, Argentina's Kirchner's is expropriating YPF, Argentina's largest oil and gas producer. Frankly that confirms my claim in the last post that reserves in the ground are worth real money. Spain warns it may take control of regional governments. This parallels Michigan taking control of Detroit, not to mention the Federal Government bailing out both Michigan ad California via Build America bonds.
Meanwhile on page A 7 Southwest Royalty has gone to court to argue that oil and gas extraction is in fact manufacturing. Why the tortured explanation, well if it is, productino is exempt from Texas Sales Tax. The Comptroller's Office of course argues it is not, never mind the logic here, the State wants the money. Again, governments will seize everything they can find to stay afloat. Damn the private sector, it exists to support govennment not the other way round. And this is in Texas not Massachusetts!
I leaned this weekend that Brazil is now seizing $6 of every $100 that comes into the country in an effort to curb speculation, sounds like a money grab to me.
This reverse break down with larger bankrupt governments trying to rescue smaller bankrupts is a portent of the way the markets will collapse the next few years. You read it here.
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