Friday, January 11, 2013

THE KRUGMAN RAND

He did it, he really did it.  Today, Little Paulie came out in full support of the Trillion Dollar Platinum Coin or "other such innovative ideas" in a deliberately misleading, factually incorrect, packed with misunderstanding of markets (and one outright untruth) piece in the Times today.  But there we are; we now know that if pushed, the administration will challenge any concept, law or provision of the Constitution to shape their view of governance.  They won so I guess they think they can.  One thing I don't get, however, is why these guys insist on Platinum when freeze dried feces would work as well.  Same trillion dollar value and far lower production costs.  Why, they could use their own; they seem to have a lot of it.

On the banking front, Wells Fargo came out with great fourth quarter numbers and prom ply fell like a stone bring the rest of the banking system down with it.  Now I don't know much about the stock market except for the fact that it is the place to which I head when I want to lose money but the reason given for the decline in bank stocks is demonstrative, I think, of what these guys don't know.  You see, the problem according to the street is that Wells has too many deposits and can't put them to use because rates are too low.  Boys and girls, you can NEVER, especially in times like these, have too many deposits...especially the retail based deposits akin to Wells.  If anyone tells you different, you are dealing with a fool.  Deposits are the real capital of a bank; one uses them to make loans, build relationships, sell additional services to he who is a customer rather than through cold calling.  They provide stability and most of all they provide liquidity.  Retail deposits hang around through thick and thin which is what the monstrously dumb Ms. Bair didn't understand when she intervened in the merger of Wachtovia and Citibank who, at the time, desperately needed a domestic deposit base.  Poor Wells. They are now paying for the stupidity of Poo Bair in being unable to put to work all those deposits.  Yeah, right.

Over there, The Italians had a hell of a 3 year auction with yields falling below 3%.  Good by any standard.  Massimo is still on holiday so the "insider's" view is still unknown to me but he should be back by next week  when things begin to pick up unless you consider L'Affair Cyprus to be of interest which it actually is as what has been floated that in return for the bail-out the Russian bond holders and depositors take a hit.  Look for a disruption of natural gas shipments to Europe if this discussion doesn't end which caused one of my more savvy friends down in the coffee shop in Galveston to ring me up with, "Damn boy, iffin we can git the OK to liquefy all the extra stuff we got and ship it to Europe, how much money you think we can make?"  Hadn't thought about that aspect but he may be on to something.  I'lltellyouwhat'sthetruth: things are gettin' complicated in this ol' world.  Fortunes from financial crises in natural gas.  Whew!  Oh, the Euro is at 1.33 today.  Guess the Euros really like that Krugman Rand idea.

See you next week

1 comment:

  1. Krugman does have one reasonable point: Congress has put the Executive branch in an untenable position. Congress has passed the budget; the President disobeys the will of Congress by either not spending as instructed, or breaching the debt cap. Can't believe a fiscal conservative like you wouldn't be in favor of paying ones debts - a good "midwestern" virtue.

    #QuadrillionLiraCoin

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