Given the capitulation on the part of the Greeks, I would have thought Frau Fuhrer might have rolled out the latest from Chemin de Fer to make it official. The girl drives a hard bargain and for the life of me I can't really understand why unless it has all to do with domestic German politics for to be sure, anything that gets signed will be for all intents and purposes meaningless in six months if not less.
Poor old Tsipras got his brains beat in which is probably nothing as compared to what's going to happen when he stands up in front of parliament tomorrow. He won his referendum--that perhaps he thought he was going to lose--left town claiming that he had a far stronger negotiating position and folded like a cheap suit. Varoufakis's game theory proved to be just that...a game...and one with a stacked deck. The moment the Euros began openly talking about about a Grexit it was all over but the shouting and I am told there was a good deal of that as well. As an aside, a clearer picture of the Rock Star's departure showed he and his wife on a...you guessed it...A BMW motorcycle! Get in a fight with the Germans and drive off on a $50,000 motor made in Bavaria?! How dumb are you! Well, at least he'll never to be seen again except on speaking tour where it is reported that he is about to make a bundle. Oh well, a fool and his money...
All kidding aside, was the pounding the Greeks took really necessary? I understand that this is about the third or fourth time that have been bailed out; they lied about their finances to get in (thank you Goldman Sachs) and they have been absurdly dumb and useless throughout the entire process, but if you are the German government, why do you make it so easy for the press...who were always sympathetic to the plight of the long-suffering Greeks--to portray you as Germans? History may well not be kind. To stiffen the deal when the Greeks had no real alternative AND when the more harsh terms are not going to make a bit of difference to improving Greece's future AND when at some point the VOLK are going to take it in the neck anyway AND when you know perfectly well that this is all true, makes no sense to me. Give them the old deal and admonish them for wasting a week. As for Chrissy blabbering at the last minute about the need for debt forgiveness...just tell her to shut up and go away. You don't have to appear tough just because she gets paid first. Honest to goodness, it just seems to me that the IMF involvement just makes it harder for everyone else. In the old days when there were no stabilization funds around they were the only source of new money, but today...
Then there was the "enormous pressure" as the NY Times put in from Il Duce and Jacob/Jack on Frau Merkel last week. That had a hell of an effect, didn't it? There was a time when the suggestions of the United States carried enormous weight; no more. There are very legitimate global concerns regarding the future of the EU upon which the U.S. could well comment, and whilst I am no fan of this administration I think it is fair to say that a great nation cannot pick its spots as to where it chooses to lead out front or from behind. The result of such a policy is as seen.
A final comment. There are a number of things in this Package that the Greeks will certainly have to do if they are to have any chance of succeeding as a modern nation in the 21st. Century and it is upon those that one hopes will be the focus. But for the rest...as a Berliner might say, "Alles ist mir wurst."
For that, was all this necessary? Then again, Angie isn't a Berliner is she?
Showing posts with label Lew. Show all posts
Showing posts with label Lew. Show all posts
Monday, July 13, 2015
Thursday, October 16, 2014
AS I WAS SAYING...
If you think government regulation has nothing to to with the orderly and successful running of businesses, consider the sad tale of AbbVie who you might remember as Abbot Labs (I know, me neither). Earlier in the year AbeVie had announced a tender offer for the shares of the Irish pharmaceutical maker, Shire, at a price which was then a 53% premium to Shire's share price. The markets loved it; a sound deal for AbbVie and a knockout for Shire's shareholders and every hedge fund in the world who bought everything in sight.
There was no question that the deal was to be structured as an inversion but it made sense in any case…but perhaps not at the agreed premium. Well The Leader couldn't deal with missing an election year issue so he immediately instructed his Secretary of the Treasury, Jacob/Jack to fix the law which of course Jacob/Jack did in a few short weeks effectively ending the inversion dreams of the two parties. Now whether the Secretary's actions were constitutional or not--I mean in this country laws are supposed to be changed by other duly enacted laws--the effect was to give AbbVie second thoughts. Oh yeah, I know, you just don't do deals for tax reasons but tax effects can affect doing a deal or not. Well today, AbbVie announced that they were no longer interested in the transaction.
Joy in Washington and at the Treasury! We stopped the buggers from cheating the American people out of their duly-owed taxes and prevented these nere-do-wells from taking advantage of our tax laws! Except………
You see, the deal did make sense from a business standpoint. Both companies, according to people who know about this industry, was completely sound and accretive. But to justify the price the tax implications derived from the law in place when the transaction was agreed and in complete compliance with that law had to be maintained or else the financial benefits would not be achieved. Change the law, kill the deal. And that is exactly what appears to have happened.
Of course, one can argue that AbbVie vastly played down the tax advantages in as a public relations ploy and for that there can be just criticism of management. But what was gained here by the United States and its taxpayers due to the actions of The Leader and Jacob/Jack? Was the commission of a crime prevented? No the transaction was perfectly legal. Was there a loss of tax revenue? No. activities in the United States would continue to be taxed on the same basis except that with more turnover because of additional products the revenue might well be higher. Would future taxes be reduced by off-shore use of untaxed income as debt financing? Perhaps, but that is an almost infinitesimal amount in the grand scheme of things. Would shareholders be protected or their holdings enhanced? Indeed, precisely the opposite will occur. Will there be increased tax revenue. Nope. Will shareholders be hurt? Damn right they will…to the tune of a $1.6 billion break-up fee…not taking into account the afore-mentioned hedge funds who got hammered to the tune of 30% before they could blink an eye.
So why? The politics of this administration; class envy, anti-business, single issues and a complete lack of either understanding or concern as to the effect upon economic development or both. A perfectly sound merger which benefited all parties and was to have absolutely no effect on the finances of this country was killed because of political ideology. Rather than engage in a true dialog in order to fix the tax code which is in desperate need of fixing, this is what we get. We deserve better.
Say, did you here the one about the nurse who had treated an Ebola patient who died and who called the CDC to ask whether she could take a plane ride with a temperature of 99.7 and was told that was fine because the protocol called for concern only at 100.4 degrees? BOY, is that one a knee-slapper!!! I'm tellin' ya, this government must be a hell of a fun place to work!
There was no question that the deal was to be structured as an inversion but it made sense in any case…but perhaps not at the agreed premium. Well The Leader couldn't deal with missing an election year issue so he immediately instructed his Secretary of the Treasury, Jacob/Jack to fix the law which of course Jacob/Jack did in a few short weeks effectively ending the inversion dreams of the two parties. Now whether the Secretary's actions were constitutional or not--I mean in this country laws are supposed to be changed by other duly enacted laws--the effect was to give AbbVie second thoughts. Oh yeah, I know, you just don't do deals for tax reasons but tax effects can affect doing a deal or not. Well today, AbbVie announced that they were no longer interested in the transaction.
Joy in Washington and at the Treasury! We stopped the buggers from cheating the American people out of their duly-owed taxes and prevented these nere-do-wells from taking advantage of our tax laws! Except………
You see, the deal did make sense from a business standpoint. Both companies, according to people who know about this industry, was completely sound and accretive. But to justify the price the tax implications derived from the law in place when the transaction was agreed and in complete compliance with that law had to be maintained or else the financial benefits would not be achieved. Change the law, kill the deal. And that is exactly what appears to have happened.
Of course, one can argue that AbbVie vastly played down the tax advantages in as a public relations ploy and for that there can be just criticism of management. But what was gained here by the United States and its taxpayers due to the actions of The Leader and Jacob/Jack? Was the commission of a crime prevented? No the transaction was perfectly legal. Was there a loss of tax revenue? No. activities in the United States would continue to be taxed on the same basis except that with more turnover because of additional products the revenue might well be higher. Would future taxes be reduced by off-shore use of untaxed income as debt financing? Perhaps, but that is an almost infinitesimal amount in the grand scheme of things. Would shareholders be protected or their holdings enhanced? Indeed, precisely the opposite will occur. Will there be increased tax revenue. Nope. Will shareholders be hurt? Damn right they will…to the tune of a $1.6 billion break-up fee…not taking into account the afore-mentioned hedge funds who got hammered to the tune of 30% before they could blink an eye.
So why? The politics of this administration; class envy, anti-business, single issues and a complete lack of either understanding or concern as to the effect upon economic development or both. A perfectly sound merger which benefited all parties and was to have absolutely no effect on the finances of this country was killed because of political ideology. Rather than engage in a true dialog in order to fix the tax code which is in desperate need of fixing, this is what we get. We deserve better.
Say, did you here the one about the nurse who had treated an Ebola patient who died and who called the CDC to ask whether she could take a plane ride with a temperature of 99.7 and was told that was fine because the protocol called for concern only at 100.4 degrees? BOY, is that one a knee-slapper!!! I'm tellin' ya, this government must be a hell of a fun place to work!
Wednesday, September 24, 2014
GENIUSES AT WORK
But before that,I did get ahold of Massimo who describes his situation as "being away." No details, but apparently should he be found in Italy there would be all sorts of awkward court proceeding involving his friendship with a lady whose husband has apparently decided to formally seek resolution of a--to understate the case--failed marriage. These things are messy in Italy and whilst Massimo claims that his relationship with the lady in question was merely "paternal" as he puts it, he adds the qualifier, "lately," which for Massimo could mean 3 months or thirty years. Then again, he's older than I am and the ravages of time… Oddly--or perhaps not--there is another lady involved; a friend of the ravaged husband who was until some time ago was a friend of Massimo's as well which tends to make me agree that "being away" is an excellent strategy. Massimo's wife is well by the way in case anyone is interested.
Massimo did say one interesting thing about Italy.
"Charlie," he said. "Qu'est Dragi?"
"What? He's the head of the ECB."
"No, primero est Italiano."
…and when you look at it that way….
Anyway, whilst Massimo was dealing with Italian affairs, The Leader was off in New York doing nothing more that creating the most God-awful traffic jams you have ever seen in midtown in addition to making two of the most ludicrous speeches of his career equating the slaughter in the Middle East to Ferguson, Mo. in one and calling Climate Change (whatever that means) as the greatest global risk of the century when everyone who was supposed to listen didn't bother to show up. Meanwhile, his boys, Jacob/Jack and Billy the Dud were finding ways to make fools out of themselves without any help.
Jacob/Jack announced new Treasury rules against the scourge of inversions, which may or may not be enforceable much less constitutional, but are certainly meaningless by any objective standard. While he was doing that, Billy the Dud was blabbering about how important it was to maintain zero interest rates lest the dollar rise and make the U.S. uncompetitive in world markets.
Now let's see if I can describe this: on the one hand we have a political tool who has no business or credentials to be the Secretary of the Treasury, dealing with the world's most uncompetitive tax code and attempting to make it even more uncompetitive in order to score political points and Billy doing what he rails against China and everybody else for doing, demanding that we manipulate the value of our currency in order to gain competitive advantage. One has to ask, are these guys born dumb or do they somehow become that way? And yet there is wonderment as to why business confidence is not higher. These stalwart guardians of out economy can't figure out among themselves as to whether they are pro business or agin' it. Inversion for tax reason? Why not just the hell out period and try it again someother place? Which, as I have said before, is exactly what you are going to see happen in the insurance business unless somebody shoots Dodd/Frank stone, cold dead. Which makes it real personal: number 2 son works for State Farm. I'll take the grand kids but I don't want him back. 21 years was enough.
Massimo did say one interesting thing about Italy.
"Charlie," he said. "Qu'est Dragi?"
"What? He's the head of the ECB."
"No, primero est Italiano."
…and when you look at it that way….
Anyway, whilst Massimo was dealing with Italian affairs, The Leader was off in New York doing nothing more that creating the most God-awful traffic jams you have ever seen in midtown in addition to making two of the most ludicrous speeches of his career equating the slaughter in the Middle East to Ferguson, Mo. in one and calling Climate Change (whatever that means) as the greatest global risk of the century when everyone who was supposed to listen didn't bother to show up. Meanwhile, his boys, Jacob/Jack and Billy the Dud were finding ways to make fools out of themselves without any help.
Jacob/Jack announced new Treasury rules against the scourge of inversions, which may or may not be enforceable much less constitutional, but are certainly meaningless by any objective standard. While he was doing that, Billy the Dud was blabbering about how important it was to maintain zero interest rates lest the dollar rise and make the U.S. uncompetitive in world markets.
Now let's see if I can describe this: on the one hand we have a political tool who has no business or credentials to be the Secretary of the Treasury, dealing with the world's most uncompetitive tax code and attempting to make it even more uncompetitive in order to score political points and Billy doing what he rails against China and everybody else for doing, demanding that we manipulate the value of our currency in order to gain competitive advantage. One has to ask, are these guys born dumb or do they somehow become that way? And yet there is wonderment as to why business confidence is not higher. These stalwart guardians of out economy can't figure out among themselves as to whether they are pro business or agin' it. Inversion for tax reason? Why not just the hell out period and try it again someother place? Which, as I have said before, is exactly what you are going to see happen in the insurance business unless somebody shoots Dodd/Frank stone, cold dead. Which makes it real personal: number 2 son works for State Farm. I'll take the grand kids but I don't want him back. 21 years was enough.
Tuesday, August 26, 2014
WRITE ABOUT WHAT?
For the past few days we have been off visiting with the triplets who are a hell of a lot more interesting than anything going on in the financial world and especially in the world of banking. While the tree are growing at a rapid pace, gaining knowledge every day and innovating as they more fully understand the environment in which they live, the economies of the world, save for a few exceptions, show no growth, no innovation and remain maddeningly stupid. Makes one wonder whether one should be a political commentator but there's probably more of those than the politicians about which they write which in the end is probably a good thing.
Actually, I am being probably a bit harsh in throwing the USA in with all the rest for despite every obstacle set up by the administration to growth, we are surviving. Oh, it's still tough out there and every day there is more and more suspicion as to the believability of most of the economic numbers, but the mood in the Fly-Over Zone is generally OK, buoyed no doubt by the start of the new football season next weekend. Sport has an enormous influence on the Psyche of this nation, and what is of course unique it is affected not by one sport but by a multiplicity of sports all of which are internal. Indeed, cricket between India and Pakistan means much more than the result, and The Ashes, Down Under, is the yearly affirmation of the independence of a people. We have nothing of that sort but if anyone denies that at this time of year there isn't a different bounce in the step of many Americans just isn't very observant.
Anyway, there's not much of a bounce in Europe at all, so little in fact the Mario is considering his own prime the pump, buy, buy, buy bonds, flood the continent with money operation that was soooo successful Over Here to get those economies moving again and boost inflation to scary levels. Of course, there is some question as to whether he has any authority to do any of that but no matter, like Over Here it will be perceived of as "doing something" Over There and that will buy time for everyone unless the Ukraine thing really spins out of control which is a real possibility Putin being Putin. Although I think at this stage he has realized that he has bitten off more than he can chew. The more you see of this guy the more you realize that whilst cunning and vicious, he may not be the sharpest knife in the drawer, but he's sharp enough to cause a real hurt. He's also probably sharp enough to realize that one bullet changes the entire picture and it would be best not to put to much of a hurt on his pals should the picture go from bright and shiny to lights out.
And speaking of hurt, The Leader took one in the privates today as his chief tax advisor, Warren Buffett, announced that he was about to help finance the merger of Burger King with Tim Horton's, a Canadian firm that will be structured as an inversion. Who was it that wrote of the Liberal millionaire who fought all his life to have the government take more and more of his wealth and at the time of his death, he had failed miserably. That's Buffett. But not to be deterred, The Leader and his Sec Tres. Jacob/Jack babbled all day about the act of inversion on the part of the hamburger guys as being "simply Anti-American." Inasmuch as Burger King is owned by a Brazilian private equity firm you gotta ask yourself are these guys really that stupid or do they think we are? Then you have to ask yourself I wonder which is worse?
Monday, May 13, 2013
HOME IS THE SAILOR
The boys were right. We found the Blue Marlin, a little beauty of about 100 pounds. One jump and it starts swimming right at the boat. Didn't get a good look at it but I said to myself, "Self, the way this fish is acting tells me it is a very nice Sailfish. Go easy with it." So I do and it gets about 50 yards off the stern and it goes crazy; four jumps in one direction, turns on a dime for five jumps the other way and I pull the hook. Idiot rookie mistake. They don't call it catching.
Anyway, other than The Leader's administration being caught in two monstrous lies to the nation as a whole, last week was pretty quiet except that my confusion was somewhat righted by the dollar doing what I thought it should do and that is strengthen against the Euro. But was that the normal course of events or half the street believing that Bernanke was signaling in a speech on Friday that QE III (or is it IV) was coming to an end? This guy is getting that Greenspan in confusing the hell out of everybody but appearing far more jovial in so doing. What ever happened to that transparency thing? No, take that back, I being too hard on the guy, and while this guessing game was going on the Yen fell solidly to 100 against the dollar. That's 18% sports fans in five months, a huge move and one that appears to be having the desired effect, certainly on the export sector of the Japanese economy. But Jacob/Jack was on top of things. He promised to "keep an eye" on whether the Japanese were devaluing for competitive purposes or to improve domestic economic growth. Honest to God he really said that. I hope he hires a blind man to do it for him; it's a wonderful thing to hire the handicapped.
We had another big yuk this morning when the former joke writer for Saturday Night Live, now turned U.S. Senator, Al Franken, announced that he had fixed the problem of the rating agencies. You see, Al seems to think that they might be conflicted as they are paid to rate by the guy who is issuing debt. Really? Well, his solution is to create another governmental agency as a subsidiary of the SEC whose job it would be to assign the rating function among the agencies who would then get paid on the basis of some kind of performance related structure. As we all know the Federal Government is completely non-partial and is never subject to outside pressures. It is also immensely hard working and used to dealing in the time frames of the global market place. Al will fight on this front if it takes all winter.
Now we've tilled this ground many times before but it might be worth while to ask once again for what do we need these rating agencies? Well to help investors properly evaluate credit risk, you say. But isn't it the job of the investor to protect himself? If you can't evaluate the risk, don't take it! This kind of dumb-ass thinking is what got us into trouble in 2008 and if you think about it, what got the Cypriot banks into trouble in 2011. Needing income, they purchased Greek Bonds big time. And why not? As the head of one bank put it, "There was no risk according to the EU. Capital requirement on sovereign risk was 0. That's what we were told." That's the modern day version of Walter Wristen's famous, "Countries don't go broke." Walter was as smart a banker who ever lived: the countries survive, they just might not pay you back.
We would be in a hell of a lot better place if we stopped making official the ratings of the agencies and require and expect the buy side to do the job for which they are being paid: to evaluate the risk to themselves of the instruments in which they invest. If the wish to hire an agency, fine. But, if the buck stops with the investor, it is guaranteed that the issuance will become far more secure overnight because if not, nobody will buy it and Mr. Sellside, you're wearing it. And that folks is what we call The Market.
Anyway, other than The Leader's administration being caught in two monstrous lies to the nation as a whole, last week was pretty quiet except that my confusion was somewhat righted by the dollar doing what I thought it should do and that is strengthen against the Euro. But was that the normal course of events or half the street believing that Bernanke was signaling in a speech on Friday that QE III (or is it IV) was coming to an end? This guy is getting that Greenspan in confusing the hell out of everybody but appearing far more jovial in so doing. What ever happened to that transparency thing? No, take that back, I being too hard on the guy, and while this guessing game was going on the Yen fell solidly to 100 against the dollar. That's 18% sports fans in five months, a huge move and one that appears to be having the desired effect, certainly on the export sector of the Japanese economy. But Jacob/Jack was on top of things. He promised to "keep an eye" on whether the Japanese were devaluing for competitive purposes or to improve domestic economic growth. Honest to God he really said that. I hope he hires a blind man to do it for him; it's a wonderful thing to hire the handicapped.
We had another big yuk this morning when the former joke writer for Saturday Night Live, now turned U.S. Senator, Al Franken, announced that he had fixed the problem of the rating agencies. You see, Al seems to think that they might be conflicted as they are paid to rate by the guy who is issuing debt. Really? Well, his solution is to create another governmental agency as a subsidiary of the SEC whose job it would be to assign the rating function among the agencies who would then get paid on the basis of some kind of performance related structure. As we all know the Federal Government is completely non-partial and is never subject to outside pressures. It is also immensely hard working and used to dealing in the time frames of the global market place. Al will fight on this front if it takes all winter.
Now we've tilled this ground many times before but it might be worth while to ask once again for what do we need these rating agencies? Well to help investors properly evaluate credit risk, you say. But isn't it the job of the investor to protect himself? If you can't evaluate the risk, don't take it! This kind of dumb-ass thinking is what got us into trouble in 2008 and if you think about it, what got the Cypriot banks into trouble in 2011. Needing income, they purchased Greek Bonds big time. And why not? As the head of one bank put it, "There was no risk according to the EU. Capital requirement on sovereign risk was 0. That's what we were told." That's the modern day version of Walter Wristen's famous, "Countries don't go broke." Walter was as smart a banker who ever lived: the countries survive, they just might not pay you back.
We would be in a hell of a lot better place if we stopped making official the ratings of the agencies and require and expect the buy side to do the job for which they are being paid: to evaluate the risk to themselves of the instruments in which they invest. If the wish to hire an agency, fine. But, if the buck stops with the investor, it is guaranteed that the issuance will become far more secure overnight because if not, nobody will buy it and Mr. Sellside, you're wearing it. And that folks is what we call The Market.
Tuesday, April 9, 2013
REFLECTIONS
It was 1978 I think and I was standing on the Sloane Street eastbound platform having watched, by actual count, eleven District Line trains headed to Daganham East pass. At long last the Circle Line arrived and having been forced to wedge my way inside we sat motionless for about 12 minutes; seems it was, by union rules, time for the train driver to have his "cuppa," so we all waited for his return. A conversation relating to the evens ensued.
"American are you?"
"Yes I am."
"Tell me, do these sort of things happen in America?"
"No they don't."
"Really? Why is that you think?"
"Because we would shoot the SOB, take the keys and drive the train ourselves."
Of course anyone within hearing distance had confirmed their belief as to the state of civilization in the colonies but it did afford me a bit more of standing room for the trip to the City. Not long after, things changed.
Margaret Thatcher died today at 87. She was a remarkable woman and easily the p It was 1978 I think and I was standing on the Sloane Street eastbound platform having watched, by actual count, eleven District Line trains headed to Daganham East pass. At long last the Circle Line arrived and having been forced to wedge my way inside we sat motionless for about 12 minutes; seems it was, by union rules, time for the train driver to have his "cuppa," so we all waited for his return. A conversation relating to the evens ensued.
"American are you?"
"Yes I am."
"Tell me, do these sort of things happen in America?"
"No they don't."
"Really? Why is that you think?"
"Because we would shoot the SOB, take the keys and drive the train ourselves."
Of course anyone within hearing distance had confirmed their belief as to the state of civilization in the colonies but it did afford me a bit more of standing room for the trip to the City. Not long after, things changed.
My friend, Gordon, one of the great users of the English language wrote this today:
Farewell then, to Maggie. A woman, it occurs to me, of your time in London. It took a while, but it is a fact that more than 70 per cent of my countrymen now clearly see what a poisonous affair the EU truly is. We will leave it, in the end. Along, therefore, with her comprehensive destruction of the Trades Unions, her legacy was the the fight she put up to protect us from it, when virtually every British politician either lied to us about it, or were simply to stupid to see the malign intent that underlies it.
I print this without comment, agreement, or anything else but merely to highlight what I think will now become the beginning of the end as the memory of Mrs. Thatcher will spur the movement now afoot and, aided by the absolute on-going stupidity of the Northern Masters as witnessed by in their dealing with Greece, Cyprus and now Portugal, the movement will soon to reach the goal. Will the UK be the first? Perhaps not, as for once I tend to agree with Little Paulie Krugman who advised the Portuguese to get out NOW! Maggie will win that battle as well although I suspect she always knew she would.
Our Treasury Secretary is in Euroland as we speak. Is name is Jacob Lew and it appears he's there to tell the Euros that we--the U.S. of A--are getting tired of this austerity policy in Euroland and that they should shift to a growth policy and read more Paulie Krugman. His predecessor, The Suit, said the same thing more or less but Jacob--or Jack as he likes to be called--couldn't do it at a private dinner but did it in a public speech thereby convincing everyone that he is far more stupid than the past, unlamented Secretary ever could have conceived of being although he tried like hell. Oddly, his meeting with the French Secretary of the Treasury got cancelled. I wouldn't worry if I were him because it was a straight-up meeting with no lunch involved and trust me, you don't want to deal with any French Treasury Secretary without food and wine being involved. He's promised a chin-wag in a week or two in Washington which I'm sure will happen if he keeps his mouth shut but to what end I have no clue.
So, it was a hell of a day. Maggie passed, it was proven to be impossible to merge two Greek Banks, Cyprus needs more money than thought (Surprise!!), Portugal is really in the crapper having been told by it's supreme court that it's austerity measures are unconstitutional, Jacob/Jack make a fool out of himself and Massimo remains no where to be found--yet again! But Herself's Peonies are showing; she's happy which means that I have a shot at getting through the rest of the week. One small step at a time which is what I always say.
"American are you?"
"Yes I am."
"Tell me, do these sort of things happen in America?"
"No they don't."
"Really? Why is that you think?"
"Because we would shoot the SOB, take the keys and drive the train ourselves."
Of course anyone within hearing distance had confirmed their belief as to the state of civilization in the colonies but it did afford me a bit more of standing room for the trip to the City. Not long after, things changed.
Margaret Thatcher died today at 87. She was a remarkable woman and easily the p It was 1978 I think and I was standing on the Sloane Street eastbound platform having watched, by actual count, eleven District Line trains headed to Daganham East pass. At long last the Circle Line arrived and having been forced to wedge my way inside we sat motionless for about 12 minutes; seems it was, by union rules, time for the train driver to have his "cuppa," so we all waited for his return. A conversation relating to the evens ensued.
"American are you?"
"Yes I am."
"Tell me, do these sort of things happen in America?"
"No they don't."
"Really? Why is that you think?"
"Because we would shoot the SOB, take the keys and drive the train ourselves."
Of course anyone within hearing distance had confirmed their belief as to the state of civilization in the colonies but it did afford me a bit more of standing room for the trip to the City. Not long after, things changed.
My friend, Gordon, one of the great users of the English language wrote this today:
Farewell then, to Maggie. A woman, it occurs to me, of your time in London. It took a while, but it is a fact that more than 70 per cent of my countrymen now clearly see what a poisonous affair the EU truly is. We will leave it, in the end. Along, therefore, with her comprehensive destruction of the Trades Unions, her legacy was the the fight she put up to protect us from it, when virtually every British politician either lied to us about it, or were simply to stupid to see the malign intent that underlies it.
I print this without comment, agreement, or anything else but merely to highlight what I think will now become the beginning of the end as the memory of Mrs. Thatcher will spur the movement now afoot and, aided by the absolute on-going stupidity of the Northern Masters as witnessed by in their dealing with Greece, Cyprus and now Portugal, the movement will soon to reach the goal. Will the UK be the first? Perhaps not, as for once I tend to agree with Little Paulie Krugman who advised the Portuguese to get out NOW! Maggie will win that battle as well although I suspect she always knew she would.
Our Treasury Secretary is in Euroland as we speak. Is name is Jacob Lew and it appears he's there to tell the Euros that we--the U.S. of A--are getting tired of this austerity policy in Euroland and that they should shift to a growth policy and read more Paulie Krugman. His predecessor, The Suit, said the same thing more or less but Jacob--or Jack as he likes to be called--couldn't do it at a private dinner but did it in a public speech thereby convincing everyone that he is far more stupid than the past, unlamented Secretary ever could have conceived of being although he tried like hell. Oddly, his meeting with the French Secretary of the Treasury got cancelled. I wouldn't worry if I were him because it was a straight-up meeting with no lunch involved and trust me, you don't want to deal with any French Treasury Secretary without food and wine being involved. He's promised a chin-wag in a week or two in Washington which I'm sure will happen if he keeps his mouth shut but to what end I have no clue.
So, it was a hell of a day. Maggie passed, it was proven to be impossible to merge two Greek Banks, Cyprus needs more money than thought (Surprise!!), Portugal is really in the crapper having been told by it's supreme court that it's austerity measures are unconstitutional, Jacob/Jack make a fool out of himself and Massimo remains no where to be found--yet again! But Herself's Peonies are showing; she's happy which means that I have a shot at getting through the rest of the week. One small step at a time which is what I always say.
Thursday, January 10, 2013
A YEAR OF LIVING DANGEROUSLY
Welcome back. Sorry I am a bit delayed in getting started again, but by this time I'm sure you realize that I'm not the most on-time guy you ever met--especially when the grand kids are in the middle. They win every time which we didn't on January 7. In fact it was worse than being a Republican in Washington which we will get to in a minute, but first, over there.
It's still Christmas but slowly, things are coming back to life with the realization that the three big events which will shape the EU this year will be the elections in Italy and Germany and the referendum in the UK as to its future membership. As I had mentioned, I had overlooked the the UK for much of last year but it is now impossible to do so. We are heading over in a month's time (a shaky date contingent on a number of things at which point I will have a better perspective) but right now, with a certain dependency on the manner in which the question is put, one should expect the UK to leave the EU despite the now somewhat screeching implorings of The Leader and his administration. The effect would be a sea-change and important to the readers of this ongoing plot because of the effect this would have on finance and banking world-wide. Sadly, I am forced to admit at this time that I am clueless, but given that London is, and will probably remain, the center for international finance no longer in coalition with the Euros, any end-game one could dream up might well wind up as the state of play. Near term, I suspect things will remain quite for a bit: now, quiet doesn't mean better--it just means...well...quiet as witnessed by Spain's 10 year auction today which went well by any standard although one should keep in mind that it was revealed about a week ago that Spain has picked the pockets of it's government pension funds to purchase it own debt. My word, the place is looking more and more like Illinois every day. Segue to over here.
The Leader is heady with power and prepared to pick a fight on just about anything following his victory in the first battle of the Great Tax War. Now one battle does not a campaign make and the foreboding specter of the debt ceiling looms before us, but it is clear that the man is in no mood to compromise and therefore it remains to be seen just how much fight is left in the Republicans in the House before a total victory can be declared. In the mean time, the new generals are being put forward, most notably Jacob Lew as the replacement for The Suit, a notorious gutter fighter as opposed to more amiable candidates such as Billy the Dud from the NY Fed and The Bair With Very Little Brain who was dying for the job.
While all of this was going on, insanity began to creep out into the open regarding what the administration might do to avoid a fight altogether.
There are two beauties out there. One is the striking of the One Trillion Dollar Platinum Coin to be deposited with the Fed By Treasury thereby by-passing Congress and providing all the funding The Leader needs...provided we don't run out of Platinum. The other is the tried and true issuance of script in lieu of currency with which we paid our maturing debts just like California did a few years ago. "Hey, no problem! As soon as we get over this little hurdle we'll redeem all that's out there but in the mean time, you can use the stuff or sell it to our banks who we will instruct to purchase the same. After all, the buggers have been hoarding TRILLIONS!"
What seems to have been overlooked by the geniuses behind this idea is the fact that we don't have to merely refinance a trillion or eight this year but it appears that we are in need of almost $1.5 TRILLION OF NEW MONEY! Let's have a contest: how many of you think the amount available, outside of direct purchases by the Fed, will exceed $.50? Love to hear from you.
Finally, after a couple of years, the first set of regs were released by the Consumer Protection Agency, you know, that piece of insanity created by Lizzy Warren, now junior Senator from Mass. Joy at the wisdom of the thing. It seems that if the banks play by the rules which include a repayment formula of no more than a requirement of 46% income to debt, the banks will granted "safe harbor" status whilst having been placed into a position where they can no longer make "sub-prime" mortgage loans unless they are Fanny and Freddie qualified. Absolute genius screamed the Times and those of it's ilk. Funny, I have always been of the view that the only really new idea that has come around in a while was the Sermon on the Mount. Everything else is simply a variation on a theme. This reg is no different, only in my time it was called "Red Lining;" I guess what side of the fence you are on makes a difference. Wonder what Rev. Jackson thinks?
It's still Christmas but slowly, things are coming back to life with the realization that the three big events which will shape the EU this year will be the elections in Italy and Germany and the referendum in the UK as to its future membership. As I had mentioned, I had overlooked the the UK for much of last year but it is now impossible to do so. We are heading over in a month's time (a shaky date contingent on a number of things at which point I will have a better perspective) but right now, with a certain dependency on the manner in which the question is put, one should expect the UK to leave the EU despite the now somewhat screeching implorings of The Leader and his administration. The effect would be a sea-change and important to the readers of this ongoing plot because of the effect this would have on finance and banking world-wide. Sadly, I am forced to admit at this time that I am clueless, but given that London is, and will probably remain, the center for international finance no longer in coalition with the Euros, any end-game one could dream up might well wind up as the state of play. Near term, I suspect things will remain quite for a bit: now, quiet doesn't mean better--it just means...well...quiet as witnessed by Spain's 10 year auction today which went well by any standard although one should keep in mind that it was revealed about a week ago that Spain has picked the pockets of it's government pension funds to purchase it own debt. My word, the place is looking more and more like Illinois every day. Segue to over here.
The Leader is heady with power and prepared to pick a fight on just about anything following his victory in the first battle of the Great Tax War. Now one battle does not a campaign make and the foreboding specter of the debt ceiling looms before us, but it is clear that the man is in no mood to compromise and therefore it remains to be seen just how much fight is left in the Republicans in the House before a total victory can be declared. In the mean time, the new generals are being put forward, most notably Jacob Lew as the replacement for The Suit, a notorious gutter fighter as opposed to more amiable candidates such as Billy the Dud from the NY Fed and The Bair With Very Little Brain who was dying for the job.
While all of this was going on, insanity began to creep out into the open regarding what the administration might do to avoid a fight altogether.
There are two beauties out there. One is the striking of the One Trillion Dollar Platinum Coin to be deposited with the Fed By Treasury thereby by-passing Congress and providing all the funding The Leader needs...provided we don't run out of Platinum. The other is the tried and true issuance of script in lieu of currency with which we paid our maturing debts just like California did a few years ago. "Hey, no problem! As soon as we get over this little hurdle we'll redeem all that's out there but in the mean time, you can use the stuff or sell it to our banks who we will instruct to purchase the same. After all, the buggers have been hoarding TRILLIONS!"
What seems to have been overlooked by the geniuses behind this idea is the fact that we don't have to merely refinance a trillion or eight this year but it appears that we are in need of almost $1.5 TRILLION OF NEW MONEY! Let's have a contest: how many of you think the amount available, outside of direct purchases by the Fed, will exceed $.50? Love to hear from you.
Finally, after a couple of years, the first set of regs were released by the Consumer Protection Agency, you know, that piece of insanity created by Lizzy Warren, now junior Senator from Mass. Joy at the wisdom of the thing. It seems that if the banks play by the rules which include a repayment formula of no more than a requirement of 46% income to debt, the banks will granted "safe harbor" status whilst having been placed into a position where they can no longer make "sub-prime" mortgage loans unless they are Fanny and Freddie qualified. Absolute genius screamed the Times and those of it's ilk. Funny, I have always been of the view that the only really new idea that has come around in a while was the Sermon on the Mount. Everything else is simply a variation on a theme. This reg is no different, only in my time it was called "Red Lining;" I guess what side of the fence you are on makes a difference. Wonder what Rev. Jackson thinks?
Subscribe to:
Posts (Atom)