Trying something new: Facts. Macro

Fact: The Euro-zone and the EURO is dying a painful dead. The political establishment will do anything to safe something which never should have started....

Fact: If the proposed stricter criteria proposed was implemented ex-ante (Trichet favourite sentence!.....)in 1999 Greece, Portugal, Italy and all the small EEC countries would never had been allowed in. They did get in because despite what politicians tells us: Euro-zone is a political project not an economics one.

Fact: The are several countries which would be better of outside Euro-zone than inside presently: Greece, Ireland, Spain, Portugal, and Italy to mention a few. Why? Lack of competitiveness - they need to devalue their currency by 30% and make investors take 50% hair-cut.

Fact: All European banks are now de-facto quasi-public owned. The deal this week-end was ONLY about safe-guarding the banks capital. The banks are now extended government agencies - think KfW in Germany and the like. Purpose? To have positive-feed-loop where government issue debt, guarantee low financing costs and the let the quasi-public banks buy it. Price: Higher taxes on income and growth. This fact is the most important one and it will not last - it last sales date may be extended but ultimately it will get "killed".

Fact: Regulation is phase two in this "grand plan" of the lost politicians. Lower leverage also (which is good actually), but having a bunch of bureaucrats decide the future of Europe is a joke. EUR/USD is now below the close Friday- did anyone say: 1 Trillion EUR wasted?

Fact: Asia needs to control inflation. Meaning tighter monetary policy ==> lower growth ==> higher unemployment ==> lower valuations

Fact: US and Europe needs inflation. This week-end plan was phase one of monetizing debt - (hence the need to help the banks again)

Fact: ECB lost ALL of the credibility left after the disaster of a press conference Thursday with Trichet. (Please, please can someone give that guy an English course - he pigeon English is a joke -like mine))  Gros/Mayer on ECB lost credibility

Fact: Geithner/Obama willingly export their so called Harvard model to Europe, the Harvard model is one that makes us all bankrupt. (Do Google search on Harvard Alumni and their track records!)

Fact: This is the final phase of easy money - in the next phase will allocate capital to highest marginal utility - meaning we got window of 3-6 month before the world takes a permanent change.

Fact: By Q4 this year we will have started a descend into new low in equities, new highs in trade protectionism

Fact: Mean stream media is a the lowest point in terms of reporting - they are effectively running the equivalent of QTV when reporting on the market. Never asking the right questions, never making the politicians accountable.

Fact: If this "globalisation game" continues all the worlds savings will be in Asia, Europe will be a Disneyland (it already is intellectually!), and the US will be one big farm.

Fact: Time is running out - restructure Greek + friends debt - Break the EURO into pre-1999 segments. Make permanent stop to printing money, deleverage banks to 4-5x, accept we will go through 3-5 years of hardship and start investing in people, and productivity. The world is full of smart people, it is just a pity none of them are in governments, central banks or even banks (sorry friends - but having job taking money from the state day-in-day out is nothing less than poor judgement of your part.....if I was rich enough I would only trade with banks which have NOT taken subsidies - it is time to vote with our feet)

Fact: The world will survive, the jobs will come back, but now is the time to face reality: we need 5-7 years of sub-par growth, stock markets returns.

Be safe

Winston