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June 30, 2011


DC O'Connell

I personally think this has more to do with the US and EU financial sectors weaknesses, then manufacturing in Japan. 40% of our economy is in finance, so when BoA proposes a $15B settlement (a token settlement since NY is not signing on) for MBS fraud and the other State AGs are looking at a minimum $40B settlement for other banks, it will be a rough 2011 for finance. CDS with PIIGS debt is also a worry. Don't fret though, we will just "pretend and extend" the banking sector for a few more years. Maybe by 2017 the banks will be solvent!


Absolutely no disagreement over the sordid state of our banking system, or anyone else's for that matter. I never bought into the V fantasy and even wrote about that (Fasten Your Seat belts it is going to be slow). I am not sanguine about any real growth in the US Economy given our banking system and monstrous amount of debt; deleverings take many years according to empirical studies on the matter. But I am my optimistic about other parts of the world growing unevenly though China frightens me.

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