GREECE AND OTHER NO BRAINERS

We've all heard the meme too big to fail.

So when does too miserable or pathetic not to be saved come into play. Well, for now it appears like the recent Greece deal is a case in point.

As one writer put it: "The country's (Greece) departure would undermine the idea that the single currency is irrevocable, possibly setting a precedent for other nations that might run into financial trouble.That is something that euro-zone policy makers are keen to avoid, seemingly at any cost."

The key term here--and by the way the one most dangerous--is at any cost. If it sounds like the old economic moral hazard, you're getting there. It's the moral equivalent of economic unconditional love. "It's all right, Little One, anything you do, we'll be there to bail you out."

To date, this is a victory for the scaremongers, the same ones who scared the Scots into keeping their attachment to the UK at the hip, "...with the eurozone economic recovery still fragile--growth this year is estimated at just 1.3%--a Greek exit could be particularly disabling."

Yes, it could. But just as easily it could surprise to the upside, like riding oneself of a non-compliant, recalcitrant, long-time non-productive employee. Then there's the huge size of the Greece's economic contribution to the overall EU.

Next the writer states, "While the full impact (as if it is ever known in anything beforehand) of a....Greek exit for the eurozone is unclear, it would likely clobber the currency." Is that clobber a
short-term or long-term one?

There's been two bailouts--2010 and 2012--and like another scribe put it: "...the continent, then as now, was itself suffering from slow economic growth." 

That's spells a lot of euros heading south. "Many Europeans are frustrated at seeing their euros flow south to a country whose economy never seems to improve."

And there you have the crux of too-pitiful-to-be rescued.

Meanwhile, the euro is down nearly 6% versus the greenback so far this year adding to the U.S's  buyer-of-last-resort stature. For all those who deny a currency war is alive, afoot and well we say enjoy your economic delusions.

Azerbaijan might not conjure pictures of a big economy but central bankers there just depreciated their currency nearly 34% against the U.S. dollar.
  
According to the bank, the move was aimed at creating additional incentives to diversify the economy, boost the nation's international competitiveness and export potential, ensure strategic stability of the balance of payments and international solvency of the country, one news source reported.

Sounds like a competitive devaluation to us.

On another front, we've said before from the beginning that those billions in consumer savings from lower gas prices won't get spent and it appears they aren't.

Meanwhile, in some areas gas prices are once again up 50 cents off their recent lows. While there's been a run-up in some retail and restaurant equities owing to consumer spending, a meaningful uptick in consumer spending--the Great American past time--is meaningfully AWOL.

January retail sales numbers were unchanged from December. So if consumers keep their wallets closed, another so-called economic no brainer bites the dirt.