Europe

Last week, when looking back at consensus economist forecasts for Japanese growth as of 1995, we compared what the pundits thought would happen, and what actually did happen: the result was what may have been the worst forecast of all time, leading to a 25% error rate in just five years later. It also unleashed the start of Japan's three lost decades.

But while laughably wrong economist forecasts are nothing new, a more troubling observation emerges when comparing the evolution of Japan's 10Y yields start in the 1990s...

Jordan’s King Abdullah has said that he believes Turkey is responsible for deliberately orchestrating the recent terrorist events in Europe, saying that Erdogan perpetuated Sunni extremism and sent ISIS militants to Europe.  The King also accused Israel of allowing al-Nusra to operate on its borders to counter Hezbollah.

Submitted by John Rubino via DollarCollapse.com,

Talk about diminished expectations. Friday morning’s estimate of 1.4% Q4 GDP growth is being hailed as a pleasant surprise. Which is odd, considering that for most of the past century a number this low would have been seen as weak enough to require emergency action.

The world will soon be facing a tsunami of defaults on bad debts. This will include municipal or local government defaults, governments “defaulting” on promises they’ve made to the people (Social Security, Medicaid), a default on the social contract between society and politicians such as the one in Cyprus (a default on the notions of private property and Democracy), stealth defaults on debts in the form of inflation and finally, of course, outright sovereign defaults.

The sovereign defaults will come last; all other options will be tried first.

When assessing candidates for elected office, foreign policy is perhaps the single most important consideration in an increasingly interconnected world.