So it has come to this. America's trading reassured by a few tens of thousands of payrolls and the presence of Super-Silvio at an urgently convened press conference in Rome. And at the time of writing it seems to have worked, with American traders sending New York stock markets higher courtesy of the "Berlusconi Bounce".

A correspondent suggested to me yesterday that the rise of the robot traders had led to the lay-offs of financial experts who have the capacity to trade political risk. The Berlusconi  Bounce is surely evidence of that.

Here's what the Italian PM said:

Since the beginning of the Industrial Revolution, we have seen an impressive and sustained growth in the scale of energy consumption by human civilization. Plotting data from the Energy Information Agency on U.S. energy use since 1650 (1635-1945, 1949-2009, including wood, biomass, fossil fuels, hydro, nuclear, etc.) shows a remarkably steady growth trajectory, characterized by an annual growth rate of 2.9% (see figure). It is important to understand the future trajectory of energy growth because governments and organizations everywhere make assumptions based on the expectation that the growth trend will continue as it has for centuries--and a look at the figure suggests that this is a perfectly reasonable assumption.  (See this update for nuances.)

he journalist within the last hour (it is currently 10.21 on Saturday 6th August 2011),  providing the analysis on the credit ratings for the BBC News 24, is wrong in my personal opinion, I'm afraid.

 

 

 

The inference from what he was saying that Britain's credit-rating might be downgraded if the deficit reduction is not fast enough. It is misleading to have presented this as fact. The issue is in fact as Chuka Umunna clearly described it. If growth is too slow, and the UK does have a poor strategy for economic growth, it is widely believed as an expert opinion, the deficit could get worse, this poses problems for our credit rating.

LONDON -- It was said of one nineteenth century British politician that he never missed a chance to let slip an opportunity.

European leaders were quick to define last month's Euro summit of 2011 as the day European leaders seized the moment and faced the crisis down.

Instead it will be seen as a huge missed opportunity, the turning point at which history failed to turn. And, in my judgment, the Euro leaders will soon be back in crisis sessions.

Last month I warned that, although Chancellor Merkel and President Sarkozy had brokered a deal which kept Greece liquid, their four political 'no go areas' -- no bailout, no default, no devaluation and no more money -- represented the capitulation of economic necessity to political expediency. I argued that the wrong conclusions arose from a wrong analysis.

Over too long a period it has suited European leaders to believe that theirs is a fiscal crisis in the weaker states, and so they have analyzed their problem in just one dimension: profligacy in the periphery demanding tougher and tougher austerity.

Its refusal to act in the face of an existential threat to monetary union has set off violent tremors across the global financial system, raising the risk that the crisis will spiral out of control.

Bank shares crashed in Madrid and Milan, with Intesa Sanpaolo down 10pc and Italy's MIB index reduced to its knees with a one-day fall of 5.2pc. Share trading was suspended at a string of bourses across Europe.

....

Professor Willem Buiter, Citigroup's chief economist, said the apparent ECB action was pointless. "The warped logic of intervening in two countries that don't need it is as strange as it gets."

Mr Buiter said Europe risks a disastrous chain of events and the worst financial collapse since the onset of the Great Depression unless Europe's central bank steps in with sufficient muscle to back-stop the system.

"The ECB has yet so show it understands that it is the only institution that can save Italy and Spain from fundamentally unwarranted defaults. Everybody is afraid and real money investors are dumping their holdings. The ECB must step in to cap the yields at 6pc or 6.5pc and put a floor under the market," he said.

....

"As long as the ECB stays on the sidelines, a speculative, fear-driven withdrawal of market funding can feed a self-fulfilling insolvency. Any number of banks and insurance companies would take huge hits. The ECB will have to come in, or accept the biggest banking crisis since 1931," Mr Buiter said.

http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929

The Roaring Twenties, the decade that led up to the Crash,[4] was a time of wealth and excess.

The crash signaled the beginning of the 12-year Great Depression that affected all Western industrialized countries[2] and that did not end in the United States until the onset of American mobilization for World War II at the end of 1941.

Stock prices plummeted on that day, and continued to fall at an unprecedented rate for a full month.[6]

...The October 1929 crash came during a period of declining real estate values in the United States (which peaked in 1925)

...Anyone who bought stocks in mid-1929 and held onto them saw most of his or her adult life pass by before getting back to even.     "

--Richard M. Salsman[
 

   "And remember, where you have a concentration of power in a few hands, all too frequently men with the mentality of gangsters get control. History has proven that."

    Lord Acton

It appears that my suspicions about a hidden agenda and undercurrent in today's trade were correct. There were prints of something significant but undisclosed all over the tape, yesterday and today.

....

It appears that this information known earlier on by at least some market participants, as the "government prepared for the downgrade" as reported to ABC news. S&P delayed the release this afternoon as the Treasury found 'a 2 trillion mathematical error' in S&P's figures.

Are you kidding me?

The US rating remains unchanged at Fitch and Moody's. This may ameliorate the effects of the downgrade.

There are no coincidences in politics, and international financial ratings. Watch and see how they never 'waste a crisis.'

ASX200 down 2.7%.  Nikkei down 2.18%

Israel is down 7% ... and Who Cares.

Can't find any info on the Helsinki OMX 25 who should be trading right about now.

Dow looks to drop about 200 points at the opening.

As I said, a yawner.


Ever since I learnt about confirmation bias I've started seeing it everywhere