18:50 to 25:45 of this clip (below) perfectly describes the sistema. The rest is quite good as well. I like to think my approach is to sell or fade magical thinking, no easy task. I do sense a big wake up call is out there however.
I have a piece at Seeking Alpha that considers official sector losses in a Greek Re-Default.
"A simple look at the participation percentages of various existing bailout funding schemes is in order. Taking one of the insolvents, Greece, Mark Grant calculates true debt to GDP at 422%, taking into account its contingent liabilities. Greece runs out of money (again) in September and faces a key August 20 debt rollover event. Given that 5-year Greek Treasuries yield 60%, one can conservatively assume the next Greek default haircut will be 60% or more.
"The private sector has already received a severe haircut in the last inadequate restructure and has a little more blood to drain. The hit for this next one will fall squarely on the official sector. At that point, the loses will flow directly to the contributors of the rescue funds, and that would include Spain and Italy. The first chart below shows the exposure of the official sector in the Greek "rescue" programs."
Classic magical thinking stock is Tractor Supply (TSCO). If you read through their analyst call of July 25, there is sparse mention of the drought, instead spinning it as an opportunity to sell turf building supplies after the drought ends. No consideration that a ten state area is entering a depression as a result of this event.
A very good post on the magical thinking prevailing around this drought.
There are now 1,452 counties in America that have been designated as disaster areas due to drought – a list that encompasses more than half the counties in America, a list that grew by 218 counties just last week.
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