You can’t explode a bubble and have it too

Sir are we in the future going to have to read Nouriel Roubini’s “The mother of all carry trades faces an inevitable bust” November 2, as another example of how we were warned about the risks? I hope not. First because it does not contain a single word about the what-to-do and also because it ignores that all traders, though aware that yesterday’s results has little to do with tomorrows, just in order to make a living, need to keep the dancing halls open and the public dancing.

In comparison, Wolfgang Münchau’s “We must not be too late with starting the Big Exit”, and which calls for starting to increase the interest rates in the US, is a more valiant effort to face the sad truth that you can’t explode a bubble and have it too.

Jean-Claude Trichet sooths his own nerves.

Sir I feel a bit bad about Jean-Claude Trichet, the president of the European Central Bank, having to go out and affirm that he is a good and responsible parent, “Europe has mapped its monetary exit” September 4. Somehow one gets a feeling he is whistling in the dark so as to sooth his own nerves. Of course he should have an exit strategy for the current financial measures that looks to deliver price stability, and of course he should be willing to apply it, at least a priori, but both we and he know that this is just the beginning, since in any disciplinary approach a lot will depend on the children’s response.