@Aurelija's

The Economist is always good at summarizing the state of affairs:


The European democracy is just not getting us closer to solution fast enough. All the harm that has been done to the markets so far due to procrastination is, in my view, a big chunk of what we would have paid if, say, Greece was allowed to default already last year.

While the costs are inreasing, the means to pay them are not. A global slowdown is in full swing, with now even China's industry contracting. Fed's Bullard this weak said that the decrease in inflation expectations is worrisome (read: deflation might be just around the corner). I met a few large corporate treasuries this week, and all they have in mind is pure worry - how to keep the sales growing, how to maintain funding, how to get as much USDs as possible...

Politicians are in the meantime thinking about how to finance their budget holes. The EU is planning on a Tobin tax on financial transactions:

The proposals would levy at a rate of 0.1% on the exchange of shares and bonds and 0.01% on derivatives. The commission said the tax could raise €57 billion a year and would begin from 2014.

Some countries experiment even further than that. Like, for example, Denmark has launched a... "fat tax" as of today!

Butter, oils, and high-fat dairy products will see the biggest price increases; products with more than 2.3% saturated fat will be taxed 16 kroner per kilogram ($2.90 USD) of saturated fat. Shoppers should be ready to pay up to 30% more for a pack of butter, 8% more for a bag of chips, and a liter of olive oil will cost 7.1% more than usual.

Fighting obesity? Premature deaths? Honestly, keep aside that cheap marketing, dear politicians. We all know it's just about getting some extra money to shore up the public finances.

Unfortunately, I have a hunch this is just the beginning. In the "new normal" of zero or even negative growth we will see more of the "new taxes" down the road...

Lights off.