05.20.12 AEP: Rising US recession risk poses the real threat to Europe

by John Galt
May 20, 2012 23:59 ET

 

But, butt, butt, butttttt, butttttttt, I was told on the teevee that Mr. Obama had saved the day according to the Vice-President, Mrs. Biden.

 

Oopsies, again!

 

Tonight’s editorial/commentary from Ambrose Evans-Pritchard sums up the ultimate definition of “critical mass” if and when the American economy collapses in this article:

 

 

Again; do what? I thought Obamanomics cured cancer, AIDS, divorce, unwanted pregnancy, herpes, and common toe nail fungus. Apparently, according to the concerns of Mr. Pritchard in tonight’s U.K. Telegraph article, that does not seem to be the case:

 

Rising US recession risk poses the real threat to Europe

 

It is this fresh menace – combined with China’s failure to calibrate its heralded soft-landing – that poses the real danger to southern Europe’s arc of depression over the next year. Greece is just a poignant detail.

 

America’s official data has not picked up any inflection point yet. We may be repeating the summer of 2008 when Washington mistakenly reported brisk growth and Fed rhetoric turned hawkish, setting off the Fannie/Freddie, Lehman, AIG disasters. We now know that the figures were wildly wrong. The economy was already in slump.
 

Fed chair Ben Bernanke is vigilant this time. Last week’s Fed minutes hinted at fresh stimulus if “the economic recovery lost momentum”. The Fed noted “sizeable risks” as $1 trillion (£633bn) of fiscal cuts kick in automatically at the end of the year.

 

Uh, no, he’s just as ignorant now as he was in 2008. I warned in the spring of 2008 that if Chairman Bernanke did not react by June it was going to be a bloodbath in the fall.

 

And it was so that Chairman Bernank is just as ignorant now as he was then.

 

Click on the link above to read Ambrose Evans-Pritchard’s take on the coming implosion as he is far more optimistic than I am.

 

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