Budget, budget down the hall, are there any suckers left?

To mix up some metaphors, the milk has already spilled from the golden bailing buckets. Last November, Harper's minority government infuriated even its own support by issuing a fairy-tale bubble update that predicted the country would stay in surplus over the next five years as long as it did not embark on measures to stimulate the economy and that resulted in the "coalition of everyone else."

Today, the NDP and the Bloc have handed the ball to Michael Ignatieff who believes he is rebuilding the Liberal Party by implying he might support for the budget if Harper uses prettier smoke this time. Or not.

In today's Star, Chantal Hébert notes that "Harper has no control over the major pieces in the global financial puzzle," like who's going to believe his jive this time. She goes on: "If they don't fall into place [i.e., the pieces of the puzzle], his budget will have little or no durable positive impact and it will turn into an albatross around the neck of the Conservative party." Dig the mix.

She believes that "Too much of its success lies elsewhere [i.e., both the puzzle and the albatross], in particular in Washington and the presidency that was inaugurated yesterday." But that is only partly true.

Much of the budget's success or lack thereof depends on unknown synergies, lurking beyond the margins. Moving right along to some figure-skating lingo, if the UK economy is indeed in a death spiral from a nationalizing of its banks and the US is sopping up the credit pool for its massive golden buckets, not even the banks will want to go into debt, and consumers have already figured out that much. Good risk has become an oxymoron.

Really good risk has nothing to do with banks and even less with politicians. A period of cash-and-carry and real-time, real-world asset value (including barter) is just around the corner. Future me no mortgage-backed liquidity drought. Shell-game me no triple-A rated paper sorcery.

There is no magic bullet. Some dreamers are still trying to determine where the bottom is, but the smart money has started to swim. Any direction will do. There is no shore in sight.Recommend this Post

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