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Notes from the Field…Simon Black……via E-mail

In Uncategorized on September 23, 2010 at 8:44 am

Sovereign Man

Notes from the Field

Date: September 22, 2010
Reporting From: Frankfurt, Germany

From the moment he walked out on stage, the crowd was in a frenzy. Roger Waters may be 67 years old, but as one of the chief creative forces behind the band Pink Floyd, his seminal work “The Wall” resonates even more today than it did 30+ years ago.

I was there at Chicago’s United Center on Monday night with floor seats to his concert. Actually, it was more of an opera than a concert, full of visual and musical metaphor. To paraphrase Waters’ own words, any bloody fool can play the music– an artist conveys a message.

And the message was loud and clear.

During the first half of his performance, the stage crew meticulously and inconspicuously built a faux-wall behind Waters, brick-by-brick, while he sang. Simultaneously, anti-war and anti-establishment images were projected onto the wall as it grew higher and higher throughout the show.

The hoops and whoops from the audience certainly suggested a strong agreement with Waters’ message, particularly as he projected images of fallen soldiers and civilian casualties juxtaposed with images of frivolous consumerism and political greed.

The greatest reaction of the night, though, came during the acoustical ballad “Mother.” At the point when he sang the lyrics, “Mother should I run for President / Mother should I trust the government?”, Waters’ laser lights etched the words “No fucking way ” in deep crimson on the Wall behind him.

The crowd went insane. The noise was so deafening, it was as if a jumbo jet were landing in the arena. Apparently, no one at the United Center that evening was a friend to the government… and this was no Tea Party gathering either.

In fact, I’d say it was one of the most diverse groups I’ve seen in quite some time, including homeless anti-war demonstrators, cross-dressing drummers, local drug dealers, retirees, and even a few professional athletes and Fortune 500 execs.

Personally, I took great comfort in this optimistic sign. It seems that the party of ‘throw the bums out’ is finally taking hold, and significant mistrust of all establishment politicians, regardless of party affiliation, is growing.

Far beyond the Pink Floyd microcosm at the United Center this week, though, there are growing indications in other parts of the world. Here in Europe, from where I pen this missive, there are also signs of a changing political current.

With decades of bosomy entitlement programs and overblown taxes under their belts, European nations have a heritage strongly rooted in the left. But now even socialist bastions like Sweden are bucking tradition and starting to elect inexperienced candidates from obscure, right-wing parties.

Meanwhile, mistrust of the political establishment is growing in the financial sector. Greece’s finance minister has been on the road lately trying to convince investors that Greek debt is just fine and that they’re not going to default thanks to a 12-figure EU bailout package.

No one is buying it… and Greek bonds are now trading at a higher risk premium than they were during the height of the euro debt crisis a few months ago. Meanwhile, Irish and Portuguese bond spreads are the highest they’ve been in the history of the euro.

In other words, the collective European mentality also seems to be ‘throw the bums out’, though in this case referring not only to the political establishment but to the PIIG nations as well.

I’m convinced that continued pressure from voters and financial markets will call the EU leaders’ bluff, eliminating any resolve to hold the eurozone together.

Will a German factory worker who already pays 50%+ in taxes suffer through austerity or tax hikes just so that a Greek hairdresser can retire at age 50? No chance. Will any politician be dumb enough to force this through given the sea change in voter sentiment? Doubtful.

Remember, this is a continent that has been at war with itself for most of its long history. It’s nonsense to think that, all of a sudden, the whole of Europe will be willing to go down with a sinking ship… and for this reason, a breakup of the eurozone is a foregone conclusion.

In the meantime, this provides some rather interesting opportunities to buy high quality (non-PIIG) assets at a PIIG discount. Most importantly, though, this shift in attitude is also a great sign that people may be starting to wake up… and tear down the Wall.

Until tomorrow,

Simon Black
Senior Editor, SovereignMan.com

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