Wednesday, August 20, 2014


I like it when I know why things happen.  Take the Argies.  Their newest idea (although they actually rolled this one out about a year ago)  is to swap the restructured bonds under New York and English for the same-oh, same-oh bonds under Argentine law and have Banco de la Nacion pay the amounts due as trustee.  The Argies do this for a number of reasons:

1.  They are stupid.

2.  They think they are smarter than everyone else.

3.  They never listen to anyone…see #2 above.

4.  They've run out of other things to be stupid about.

Now, they might have in this grab-bag a couple of guys that are stupider than they are who will bite on the morsel, which will be the greatest thing that could happen to me as it will open up litigation that has yet to be imagined and no doubt lead to Banco de la Nacion being kicked out of the United States if they even try to comply; which will end that chapter entitled "Argentina's Leading International Bank" and may end the bank altogether.  If the Big Trader keeps me around, I have fifty years of material.  Look, if you want to know all the things wrong with this, read the WSJ.  They have it chapter and verse, but Christina is going to forge ahead because she may get a stage show out of it.  She sure as hell is going to get a lot of votes for the party--the country be damned--which is all she cares about.  In the meantime, unemployment is up, reserves are down, inflation is way above the official 12% and there isn't a bean for them in any market in the world.  But Mom, your little boy Charlie is in the tall grass.

The other thing that I get is the Pound Sterling going into the take yesterday.  When I was teaching, I used to ask the question, "why is one currency preferred over another?"  The answer I always gave was because of earnings power.  If six month Euros earned 5.00% and the U.S. Dollar earned 2.00%  all other things being equal there will be higher demand for the Euro.  For months, based on the relatively good performance of the U.K. economy, it was a one-way bet that the Bank of England would raise interest rates, and up went the pound.  It didn't, and down went the pound.  I thought, "now that's the way things are supposed to be," and felt wonderful.  It was down again today against the dollar and I feel even better.  If things keep on going like this I will feel GREAT!  It's just when I get confused that I feel bad.  Sad thing is I've been more confused about more things these days.  Which confuses me.

He who Knows All Things called to tell me Terry Checki was more than a little pissed.  And I said such nice things about him too.  Just shows.  No good deed goes unappreciated.

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