I have read that during WWII a significant amount of America’s military intelligence of the German war effort was gathered by American intelligent officers reading local German newspapers. Reading local newspapers, it could be determined how the war was going for Germany, i.e., casualties, where certain Army groups were headed, were on leave, impact of local rationing, etc. Employing similar techniques and insight, I believe we can begin to see and recognize where the world economies may be headed, and when, and what we may very well experience.
IMO, this weekend has been a treasure trove of possible information concerning the world economy and where things are headed. Two stories/reports, neither of which appear to have received much attention this weekend are:
Treasury regulatory overhaul plan "timely": Fed and
German watchdog eyes $600 bln global bank losses: report.
I find it somewhat surprising these two news stories/reports, either of which would on an ordinary day be front page news in most large city newspapers, are released on a Saturday and apparently late in the daily news cycle.
Next, with respect to the Federal Reserve story, one must know the Federal Reserve or some body of individuals has been working on this report for some time, and to release the report in this manner does in my opinion give me significant pause that the Federal Reserve is telegraphing something, and the signal it may be sending is sos.
A possible indicator of what may be on the horizon is one of the stated reasons, goals, or problems to be averted, i.e., the need for a "market stability regulator", to wit:
An executive summary of the Treasury proposals says a "market stability regulator" is needed and the Fed best fits that role, suggesting the central bank could use its control over interest rates as well as its ability to provide market liquidity to fulfill its functions.
Just when we think or are told things are looking up, we receive telegraphed messages that America needs a "Market Stability Regulator". As an aside, I guess those old school rethugs have given up on allowing the free markets to straighten things out, i.e., work their magic.
The German report however, imo, creates more concern, as we now have another country stepping up to the table and not suggesting, but readily admitting, that America's economic meltdown is having spillover impact across the ocean.
FRANKFURT (Reuters) - The financial market crisis could cause losses of up to $600 billion at banks and other financial institutions worldwide, a German magazine reported on Saturday, citing an internal report by German financial watchdog BaFin.
The $600 billion figure represents a worst-case scenario for losses linked to the financial turmoil sparked by the meltdown in the U.S. subprime mortgage market, Der Spiegel magazine said in a story released in advance of publication on Monday.
One of the key points of the German report is the organization that is authoring the report, to wit: BaFin
I am not a student of German economics, but BaFin appears to be the German equivalent of our Federal Reserve, or possibly Germany's "Market Stability Regulator". So I ask, did I just mistakenly grab my my tin foil cap today when reaching into the closet, or is there more to these two stories/reports than meets the eye?
Taken together, these two reports/stories coming from opposite sides of the Atlantic, do in my mind, suggest the worst is yet to come and those seated at the tables of power and influence are preparing us for the oncoming storm.
Keep your eyes and ears open, assemble all the facts and stories, as often times in retrospect, even the most remote dots are eventually connected to provide us the larger and complete picture.