3 articles in the FT comment section this morning each in its own way harbinger of bad news.
1- Obama's lonely quest for consensus
On the one hand the dems are throwing every pet project they had floating around in that bag. On the other the republicans are trying to block based on ideology and size (too big they say! more tax cuts! after years of Bush that one made me chuckle). So they appear as ideological radicals and not ready to compromise. All in all a shameful and a wasteful spectacle for the rest of us. Politicians are failing to raise up to the occasion for lack of pragmatism across the spectrum.
2/ Narrow-minded leadership hurts Europe
In here munchau lambasts the europeans for defaulting to what they can do: regional stimulus packages that beggar thy neighbor. Sarkozy is talking bullshit across the board and appeasing the french voters. The Austrian banking system in imploding the Germans are refusing to bail them out "not our problem" etc etc. Protectionism is a natural consequence of "bail at home, don't bail the neighbor" and a retrenchment to voting constituencies (e.g nations of Europe) makes sense although it maybe what accelerates this crisis. Negative spirals are tough!
3/ Co-ordinated inflation could bail us all out
Although the title of this one is positive, look! an end to this crisis! I find it naive. It assumes that government control inflation with the fine grained degree that is shown here. When I talk of inflation I include all asset prices, not the inflation ex-inflation index governments like to look at. The housing bubble of late was inflation, monetary inflation. Governments do not control monetary levels of private debt anymore. Deregulation made sure they don't anymore and the invisible hand took those levels to dizzying heights, the invisible hand is now deleveraging and monetary levels will reset (minus the money injected) but current consensus is "too little". So yes, the article is right, 4% inflation would be dandy! unfortunately that is not a point of control by the central banks anymore. The invisible hand will do what the invisible hand does, let's hope it doesn't strangle the patient too long. Evolution says the invisible hand should stop strangling before we die, or we would be dead by now. But this evolutionary thinking is akin to someone falling to the floor and thinking "so far I am alive".