haviicoco

One, watch the electoral rather than the earnings calendar.

What happens to corporate profits doesn’t matter nearly so much as it might do in more cheap designer handbags. The electoral cycle is more significant than the business cycle. How will that play out in practice? Well, you probably won’t see any movement on the U.S. deficit until after the 2012 presidential election. Until then, there will just be uncertainty and confusion. Likewise, you won’t get any movement on the French deficit — which, in truth, could make it the next victim of the sovereign-debt crisis —until we know whether President Nicolas Sarkozy stands a chance of being re-elected.

Two, figure out where the votes are.

In politics, nobody does anything that costs them re-election. Leaders live in fear of some group of floating voters in Hamburg or New Hampshire who might suddenly cast them out of office and leave them with nothing better to do than write their memoirs. So it doesn’t really matter how many bankers or economists write learned articles saying that Greece needs massive fiscal transfers if the euro is to survive. It isn’t going to designer handbags wholesale , because if it did, German Chancellor Angela Merkel could say “auf wiedersehen” to her job.

Three, expect muddle and delay.