The ten year actually hit 2.30% today before falling back to 2.26%. It's been orderly but clearly there is some real blood-letting about and may well be more before this is all over. For a bunch who were damn near proclaiming the end of the world two weeks ago if Trump won, everyone seems to have jacked up their economic projections and with those their expectations on interest rates. The Obama legacy is considered ruined; the Clintons dead politically; the Democratic Party shattered; Conservatism rampant. All nonsense of course but for you non-American readers there is something quite important to keep in mind politically. In two years we will have another election and this one will involve over 30 Senators from Trump states with a lot of those seeking reelection being Democrats. Trump needs two decent years and if he gets them he may have an unassailable majority in the legislature over the remainder of his term. Look for him to hit the ground running in January with his new mantra being not "The Art of the Deal" but "The Art of the Doable." The guy will look for successes and consequently, I suspect, that the dreams of radical change held by some people on the right might not be fulfilled in the first two years of a Trump Presidency. After 2018...look out.
Where might the problems lie? Oddly, perhaps, I do not believe domestically. Europe to me is a serious question mark as there is no doubt that the forces which powered BREXIT and Trump are at work which could very well result in the dissolution of the Union or at least the beginning thereof. It is vital, I think, that European leaders recognize that an economic union is far more important than the dream (myth?) of a political union; at least one as is now envisioned. NATO for the time being is vital and I suspect that the cadre of advisers around Trump will convince him of that. As to claims that NATO can only survive in a strong political union...rubbish. NATO best times were when there was no Union at all. It is not the politics but the threat, and there is a threat exacerbated for the past eight years by--rightly or wrongly--Putin believing that Obama was an empty suit. There will be a period of assessment on both sides as the new year start. Trump, whether he realizes it or not has a strong hand, particularly if the pundits are correct and the economy takes off. Whether he plays it well remains to be seen.
I'm especially interested in the Cabinet appointments for Defense and Treasury--less so for State. Frankly, State doesn't count for much any more given its stewardship for the past eight years which has turned it into almost an after-thought. If he gets it right and with is what is clearly a mandate of sorts the guy just might pull this off. We'll know pretty soon. What is quite surprising is that it appears that his gang have actually been planning this for some time in stark contrast if one would remember, to the opening months of the Obama Presidency where the rule of the day was chaos. Who knew? Not the the New York Times...that's for sure. If you want to have some fun, read the Gray Lady for a few days. She has lost it...completely lost it. Delicious. And thus ends my political commentary. Back to Banking and finance...I promise.
Showing posts with label Obama. Show all posts
Showing posts with label Obama. Show all posts
Monday, November 14, 2016
Tuesday, March 22, 2016
AT A LOSS
The horrific acts in Brussels today are mystifying. That humans would act in this manner toward their own kind defies rational understanding. But rather than focus on what cannot be explained it is also remarkable to note the reactions from leaders of the world and leaders of business to these events. The Leader of the Free World goes to a baseball game with a murderous thug who with utter contempt rejects any thought of releasing his people from a totalitarian rule even in the face of a gentle nudge from his guest.
Had Il Duce cut off his visit and immediately returned to the U.S. it would have made no difference in the continuing events to be sure, but the absolute lack of understanding what his refusal to so do in an symbolic sense is quite mind-blowing. A member of NATO had just been attacked by a group of madmen who call themselves a nation. It would be altogether proper for Belgium to invoke Article 5 which it still might do, but the President is so unconcerned regarding the threat he goes to a ball game messaging the world that a fifth-rate nation run by thugs is more important than a NATO ally and significantly more important to his own self-absorption. The timing of the attack might have been influenced by the recent successes of the Belgian security forces but the loci of the assaults were not. These were attacks not just at Belgium but at the center of European governance and the NATO command. In the Middle of Holy Week. It is really quite brilliant. Europe, being torn asunder by the refugee crisis created in great part by the same terrorist organization has everything now multiplied by this act of carnage. Already are fears being raised that this is the final nail in the coffin of the EU. And Obama is at a ball game...in Cuba...with Raul Castro.
Perhaps I am too critical of Obama because people who should know better reacted in much the same way; the markets did nothing. The DOW was down a bit; NASDAQ was up a bit; commodities did little if anything and bonds were of little interest. There was one movement that was noted: the Pound was crushed. I would be willing to speculate that in the high street betting shops the odds for BREXIT just shortened considerably and will be shorter tomorrow. If the vote is "yes," David Cameron is gone, heavens knows what happens then and the EU is effectively finished. I am at a loss to explain any of this. By the way, does anyone know how the game ended?
Had Il Duce cut off his visit and immediately returned to the U.S. it would have made no difference in the continuing events to be sure, but the absolute lack of understanding what his refusal to so do in an symbolic sense is quite mind-blowing. A member of NATO had just been attacked by a group of madmen who call themselves a nation. It would be altogether proper for Belgium to invoke Article 5 which it still might do, but the President is so unconcerned regarding the threat he goes to a ball game messaging the world that a fifth-rate nation run by thugs is more important than a NATO ally and significantly more important to his own self-absorption. The timing of the attack might have been influenced by the recent successes of the Belgian security forces but the loci of the assaults were not. These were attacks not just at Belgium but at the center of European governance and the NATO command. In the Middle of Holy Week. It is really quite brilliant. Europe, being torn asunder by the refugee crisis created in great part by the same terrorist organization has everything now multiplied by this act of carnage. Already are fears being raised that this is the final nail in the coffin of the EU. And Obama is at a ball game...in Cuba...with Raul Castro.
Perhaps I am too critical of Obama because people who should know better reacted in much the same way; the markets did nothing. The DOW was down a bit; NASDAQ was up a bit; commodities did little if anything and bonds were of little interest. There was one movement that was noted: the Pound was crushed. I would be willing to speculate that in the high street betting shops the odds for BREXIT just shortened considerably and will be shorter tomorrow. If the vote is "yes," David Cameron is gone, heavens knows what happens then and the EU is effectively finished. I am at a loss to explain any of this. By the way, does anyone know how the game ended?
Wednesday, January 13, 2016
A STINKER
Il Duce's point in the State of the Nation last night was, "Hey, don't worry, be happy." It was a stinker salvaged only a bit by Knock-Out Nikki, the governor of South Carolina, who gave a ridiculous response blaming her own party and leaving mouths so agape that the silliness of Obama's babbling was all but forgotten.
As if on cue, everything in the world today was a stinker (save for the Iranians releasing the U.S. sailors, unmentioned in last night's speech as predicted), almost as if to say, "this is what we are worried about." The DOW closed down 365 and the 10-year closed at 2.07%. The worst part was that every sector was down as the equity markets went into a totally "risk-off" mode and the flight to quality was intense. Overdone? Probably, but people were looking to positive signs somewhere and found none.
Will this continue? Beats me but part of the problem is that people are beginning to realize that this time there is no institution that can turn the tide. The Fed is done; it is out of bullets and there is no one familiar to whom one can turn for relief. We re being rushed into a brave new world and therein lies the nexus of the fear. There is also the growing belief that we have not exactly been told the truth about the true state of things either by our leaders or by the all-compliant press. Trust is waning and that is the greatest fear of all.
Anyway, that's the story for today: tomorrow J.P. Morgan reports and maybe we can get back to the real purpose of this blog. I hate writing about politics but at this point in time it seems to be the the influencer (is that a word?) of all things. An all-around stinker of a day.
As if on cue, everything in the world today was a stinker (save for the Iranians releasing the U.S. sailors, unmentioned in last night's speech as predicted), almost as if to say, "this is what we are worried about." The DOW closed down 365 and the 10-year closed at 2.07%. The worst part was that every sector was down as the equity markets went into a totally "risk-off" mode and the flight to quality was intense. Overdone? Probably, but people were looking to positive signs somewhere and found none.
Will this continue? Beats me but part of the problem is that people are beginning to realize that this time there is no institution that can turn the tide. The Fed is done; it is out of bullets and there is no one familiar to whom one can turn for relief. We re being rushed into a brave new world and therein lies the nexus of the fear. There is also the growing belief that we have not exactly been told the truth about the true state of things either by our leaders or by the all-compliant press. Trust is waning and that is the greatest fear of all.
Anyway, that's the story for today: tomorrow J.P. Morgan reports and maybe we can get back to the real purpose of this blog. I hate writing about politics but at this point in time it seems to be the the influencer (is that a word?) of all things. An all-around stinker of a day.
Tuesday, November 3, 2015
IS THAT ALL THERE IS?
With apologies to Miss Peggy Lee, writing about the Yuan's entry into the SDR world of the IMF is about as exciting as the jump in 10 year yield to 2.21% at the close today signaling a "repricing of the bond market" which reflects a resurgence of belief in the Fed going for 0-25b.p. to 25 b.p. in December based on the rise of the equities markets which is based on nothing at all. But that's all I got, Peggy, so we go with it.
Fortunately, My Really Smart Friend, Larry, came out with a great piece on the Yuan just the other day, which can be found only if you are a subscriber to his publication. (I never asked him if I could name it but I will). As you know he and I differ as to whether the Fund is going to let the Yuan in as a result of its year-end review and while I still have my doubts, he has added a very persuasive argument that I had mentioned but to which I had given little weight. Added to every other thing on the world stage that Il Duce and his mob continue to ignore is the Fund; this is not good for the thousands employed by the palace on 19th Street (tax free for many) known lovingly as, "Headquarters 1" by its adoring staff...especially when most people are beginning to realize that its functionality is somewhat in question. The Fund needs a friend and China needs acceptance; a match made in heaven the implications of which are yet to be fully understood. MRSF,L, does point out one thing that most of the watchers and commentators have not. A good part of the implications have a great deal to do with China alone--or at least for the time being. The move towards SDR status for the Yuan may have little practical effect for the world at large but will indubitably have a great deal of effect domestically, for in order for China to reach the point of acceptance of it currency, certain bridges had to be crossed which were navigated by what one might refer to as the reformist element in the economic leadership of the country. The political leadership moved grudgingly to comply but make no mistake, the "market driven considerations" have never been welcomed, and if the IMF grants Yuan SDR status we may well have seen the high water mark of the reformists for some time. Nothing more of value from the standpoint of President Xi can be gained and a consolidation of power on all fronts will resume. The implications stemming from that reality are yet to be considered.
We might also ponder another effect mentioned in this space not too long ago. Il Duce loves to speak about "smart power" in regard to foreign affairs...like sanctions. With the loss of influence within global organizations such as the IMF and the emergence of new "reserve currencies," bye bye "smart power." The dollar and its friends, the Euro, the Yen and Sterling held sway. We are about to enter a new era with new realities and, surprisingly...or not..less options. Leading from behind. It's kinda like the two dog on a dog team; the view never changes. Anyway, my two-bit bet is looking a bit more problematic.
As for bonds, I find more amusement in George Soros pulling half a billion that he put in just a year ago out of Janus, his buddy Bill Gross' new amusement since his departure from PIMCO. Gee, it's harder and harder to make an honest buck these days although as some would tell it, Georgie never cared what kind of buck it was as long as it was made. If things go on like this Billy is going to be left with managing just his own money, $700 million of which was supposedly the seed money for Janus. Oh, the humanity! Having said that, a decision if there is to be one will be more important for it having simply been made than for any economic effect it will have. Further, if the discount rate is increased it's is going to be interesting to see the rationalization presented vis-s-vis the opposite direction in which the Euros are heading. Thought there was this cooperation among central banks thingy. It will certainly provide copy which is desperately needed in these times. I will also be interested on the discussion of with China slowing, the Euros going nowhere and Asia more or less dead how the United States is making it happen all alone. We can call it the John Donne Rejection; you know, "No man is an island..." Or maybe you don't know.
Fortunately, My Really Smart Friend, Larry, came out with a great piece on the Yuan just the other day, which can be found only if you are a subscriber to his publication. (I never asked him if I could name it but I will). As you know he and I differ as to whether the Fund is going to let the Yuan in as a result of its year-end review and while I still have my doubts, he has added a very persuasive argument that I had mentioned but to which I had given little weight. Added to every other thing on the world stage that Il Duce and his mob continue to ignore is the Fund; this is not good for the thousands employed by the palace on 19th Street (tax free for many) known lovingly as, "Headquarters 1" by its adoring staff...especially when most people are beginning to realize that its functionality is somewhat in question. The Fund needs a friend and China needs acceptance; a match made in heaven the implications of which are yet to be fully understood. MRSF,L, does point out one thing that most of the watchers and commentators have not. A good part of the implications have a great deal to do with China alone--or at least for the time being. The move towards SDR status for the Yuan may have little practical effect for the world at large but will indubitably have a great deal of effect domestically, for in order for China to reach the point of acceptance of it currency, certain bridges had to be crossed which were navigated by what one might refer to as the reformist element in the economic leadership of the country. The political leadership moved grudgingly to comply but make no mistake, the "market driven considerations" have never been welcomed, and if the IMF grants Yuan SDR status we may well have seen the high water mark of the reformists for some time. Nothing more of value from the standpoint of President Xi can be gained and a consolidation of power on all fronts will resume. The implications stemming from that reality are yet to be considered.
We might also ponder another effect mentioned in this space not too long ago. Il Duce loves to speak about "smart power" in regard to foreign affairs...like sanctions. With the loss of influence within global organizations such as the IMF and the emergence of new "reserve currencies," bye bye "smart power." The dollar and its friends, the Euro, the Yen and Sterling held sway. We are about to enter a new era with new realities and, surprisingly...or not..less options. Leading from behind. It's kinda like the two dog on a dog team; the view never changes. Anyway, my two-bit bet is looking a bit more problematic.
As for bonds, I find more amusement in George Soros pulling half a billion that he put in just a year ago out of Janus, his buddy Bill Gross' new amusement since his departure from PIMCO. Gee, it's harder and harder to make an honest buck these days although as some would tell it, Georgie never cared what kind of buck it was as long as it was made. If things go on like this Billy is going to be left with managing just his own money, $700 million of which was supposedly the seed money for Janus. Oh, the humanity! Having said that, a decision if there is to be one will be more important for it having simply been made than for any economic effect it will have. Further, if the discount rate is increased it's is going to be interesting to see the rationalization presented vis-s-vis the opposite direction in which the Euros are heading. Thought there was this cooperation among central banks thingy. It will certainly provide copy which is desperately needed in these times. I will also be interested on the discussion of with China slowing, the Euros going nowhere and Asia more or less dead how the United States is making it happen all alone. We can call it the John Donne Rejection; you know, "No man is an island..." Or maybe you don't know.
Thursday, September 10, 2015
YOU CAN'T MAKE THIS STUFF UP
In a blatant political move, the administration leaked to the New York Times (more on it later) the text of a speech to be given by the Attorney General, Loretta Lynch, on a change in the Justice Department's strategy for dealing with "white collar crime" which in effect, is to place more emphasis on going after the individuals in a corporation for their wrongdoing through the forcing of the corporation to "give up" their employees rather than just settling for fines against the corporations and in very rare case pleas of wrongdoing.
Having been constantly berated by people on the far left of the party for not jailing the "criminals" in the great financial crisis, this is the solution propose, in a coming election year, to silence the criticism. It is crap and a disgraceful misleading of the American public.
Huge damage was done beginning about 10 years ago. Huge mistakes were made. Huge losses were suffered but whilst there was corporate wrongdoing and stupidity, was there illegality? That is a very different question.
To be convicted of a criminal offense, under the laws of the United States, in most case two requirements must be present. The first if knowledge that one is breaking the law and the other the intent to break the law. Sounds easy, but it is not. It is very, very difficult to prove intent, and that hurdle remains despite whatever new thoughts the justice department might have regarding "going after the bad guys." For all of the noise and nonsense created, this justice department has never successfully prosecuted any individual involved with the financial--not because they it didn't want to but because it couldn't. In fact the best shot they could have had was Franklin Raines, the former head of Fanny Mae who knowingly and deliberately misrepresented the financial records of the company and was allowed to "retire" with a package somewhere in the rang of $100 million. Of course, good ol' Frankie was the political insider of all political insiders in the Democratic party and a long term advisor to Il Duce that continues up to the present day. Not on, old boy, not on, despite Fanny and Freddie being at the very heart of the collapse.
But, the Times puts this on the front page and boy, don't these guys look tough whereas nothing has really changed. A political grandstand, nothing more except that one can be sure that the white collar lawyers at the nation's big law firms might get a bit busier in the next few months explaining to their clients what all this means...for a fee of course. Oh, one of the leading firms in this game is the Washington shop, Covington & Burling. The head of it's white collar practice? Eric Holder, recently of the Attorney General's office. You can't make this stuff up.
The big talk on the street today was the apparent confusion and indecision at the Fed as to whether to raise or not next week. Whether they do or not wasn't the talk, the indecision was. No surprise, because even I was prepared to concede that they would move until the other day when the word came down from on high via a New York Times editorial that raising interest rates would not be a good idea. The politicos on the Board are now wringing their hands...Il Duce will be displeased. Hell of a way to run monetary policy. I'm tellin' ya, you can't make it up.
Having been constantly berated by people on the far left of the party for not jailing the "criminals" in the great financial crisis, this is the solution propose, in a coming election year, to silence the criticism. It is crap and a disgraceful misleading of the American public.
Huge damage was done beginning about 10 years ago. Huge mistakes were made. Huge losses were suffered but whilst there was corporate wrongdoing and stupidity, was there illegality? That is a very different question.
To be convicted of a criminal offense, under the laws of the United States, in most case two requirements must be present. The first if knowledge that one is breaking the law and the other the intent to break the law. Sounds easy, but it is not. It is very, very difficult to prove intent, and that hurdle remains despite whatever new thoughts the justice department might have regarding "going after the bad guys." For all of the noise and nonsense created, this justice department has never successfully prosecuted any individual involved with the financial--not because they it didn't want to but because it couldn't. In fact the best shot they could have had was Franklin Raines, the former head of Fanny Mae who knowingly and deliberately misrepresented the financial records of the company and was allowed to "retire" with a package somewhere in the rang of $100 million. Of course, good ol' Frankie was the political insider of all political insiders in the Democratic party and a long term advisor to Il Duce that continues up to the present day. Not on, old boy, not on, despite Fanny and Freddie being at the very heart of the collapse.
But, the Times puts this on the front page and boy, don't these guys look tough whereas nothing has really changed. A political grandstand, nothing more except that one can be sure that the white collar lawyers at the nation's big law firms might get a bit busier in the next few months explaining to their clients what all this means...for a fee of course. Oh, one of the leading firms in this game is the Washington shop, Covington & Burling. The head of it's white collar practice? Eric Holder, recently of the Attorney General's office. You can't make this stuff up.
The big talk on the street today was the apparent confusion and indecision at the Fed as to whether to raise or not next week. Whether they do or not wasn't the talk, the indecision was. No surprise, because even I was prepared to concede that they would move until the other day when the word came down from on high via a New York Times editorial that raising interest rates would not be a good idea. The politicos on the Board are now wringing their hands...Il Duce will be displeased. Hell of a way to run monetary policy. I'm tellin' ya, you can't make it up.
Monday, July 13, 2015
WHAT, NO RAILWAY CAR?
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?
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?
Tuesday, April 14, 2015
QUICK TUESDAY
It was so dead today that I washed windows. Yeah, I know, I'm damn near perfect but what can I say. More to talk about tomorrow but late this afternoon came along this mind-mender. Quick, if you were a Greek, what's the next worst thing you could do besides meeting with Val Putin? How about having your Rock Star Finance Minister meet with IL Duce? Yep. On the occasion of the EBRD/IMF meetings this week Varoufakis plans to wander over to the White House for a one-on-one with Obama. Memo to the Finance Minister: You don't owe any money to the United States, although you might have missed that given you owe everybody else. Memo to Duce: you don't meet with the Finance Minister of an almost-country who is hock up to its eyeballs with your allies Over There. At the end of the day it probably will not amount to much but if I were Angie the first thought I would have is what in the hell does this jerk think he's going to get out of this meeting? If he is allowed to speak with anyone it should be me.
I guess I'm old fashioned but there is...or should be..a protocol about these things. Just because you are gauche enough not to wear a tie doesn't mean you set the rules unless of course you have a willing dope on the other end whose ego makes him entirely insensitive to the damage such an encounter might cause and believing that there is a role for him to play. Then again, there might be a simple answer to all of this. The finance minister job in Greece isn't exactly a walk in the park. Maybe the guy is interviewing to become the next Secretary of the Treasury. Judging by current standards, there's a do-nothing job if there ever was one. Gotta wear a tie, though. Well, you can't have everything.
I guess I'm old fashioned but there is...or should be..a protocol about these things. Just because you are gauche enough not to wear a tie doesn't mean you set the rules unless of course you have a willing dope on the other end whose ego makes him entirely insensitive to the damage such an encounter might cause and believing that there is a role for him to play. Then again, there might be a simple answer to all of this. The finance minister job in Greece isn't exactly a walk in the park. Maybe the guy is interviewing to become the next Secretary of the Treasury. Judging by current standards, there's a do-nothing job if there ever was one. Gotta wear a tie, though. Well, you can't have everything.
Tuesday, December 23, 2014
EVER WONDER?
I though last week it was going to be all down hill. It wasn't. Eye was a mess for a few days...overworked is the diagnosis. So we begin again.
It's kind of like playing "What if" with one's self. With most of the world shut down today and Il Duce off to Hawaii after a grueling year of foreign policy disasters, electioneering, massive legislative losses and bad golf, things are going to be quite for a while which gives one some time to think. So I was thinking...and it struck me that one of the greatest policy realignments coming in 2015 is the complete dovish nature of the new Federal Open Market Committee and what is expected to be a far more tight fiscal approach in the now, new, Republican Congress.
This is no little thing. If the Republicans are serious about bringing their brand of fiscal responsibility ...which may be another way of saying squeezing the administration's initiatives at every turn--at some point there is going to be a hell of a policy conflict as every day it becomes more apparent that the economic advances of the past few months have nothing whatsoever to do with administration policies and everything to do with cheap and unlimited money and the massive tax break that is the decline in the price of oil. All of this came to a head today as the DOW reached 18,000 for the first time in history aided no doubt by the remarkable GDP number of 5% that nobody expected. Good for us to be sure but the debate has now changed a bit as the bond boys immediately sold the 10 and the 2 year figuring this signaled a no-brainer interest rate rise early next year while the equity guys paid it no attention at all and focused on free money tomorrow and the next day. The classic debate between the investor and the trader.
As to who is correct? My money is on the trader. It seems that today's world is governed by the next headline and for the past ten years the Fed has slowly backed into a cage from which it reacts to event as opposed to getting out in front. Blue skys are not going to be an everyday event and the Fed is going to be very reluctant to initiate a program that in any way can be seen to have precipitated a negative turn in either the economy or markets--they are not the same you know--particularly with the distinctive liberal bent of the members and the decidedly liberal bent of the FMOC. Unless the economic outlook remains in the Goldilocks boudoir for the next six months, I suspect monetary policy will not move and there is a lot out there to change the current rosy outlook particularly on the international front. More on that in detail at a later date.
Then again is the new Congress going to sit tight vis-a-vis it's relationship with the Fed? Already we have heard rumblings regarding the "dual mandate" and whether it should be continued. The question of auditing the Fed is very real among these folks up on the Hill and not a partisan issue at all. It is a very big and powerful hammer in the relationship which could be used with great effect in any form of negotiation. Fed oversight and regulation is a prime issue but within a different context. I sincerely doubt if the extreme left wing of the Fed in the person of Daniel Tarullo, no matter what sort of support he has from Crazy Lizzy will have anywhere the same influence it has today. Lizzy desperately wants to be the nominee but to have any chance in either the primary or in the election she needs Chuck's fund raising machine on Wall Street, Bye, Bye Danny, it's been fun to know ya. Fed watching might be back in style which may not be a bad thing if it gets Billy the Dud back to Goldman.
Anyway, those are some of the things I'll be watching (if I continue to see) in the coming months. This is long enough for tonight. Warming up my Fan Song I bought at a Russian Army/Navy store. Wasn't worth much but it was really good at spotting Reindeer.
It's kind of like playing "What if" with one's self. With most of the world shut down today and Il Duce off to Hawaii after a grueling year of foreign policy disasters, electioneering, massive legislative losses and bad golf, things are going to be quite for a while which gives one some time to think. So I was thinking...and it struck me that one of the greatest policy realignments coming in 2015 is the complete dovish nature of the new Federal Open Market Committee and what is expected to be a far more tight fiscal approach in the now, new, Republican Congress.
This is no little thing. If the Republicans are serious about bringing their brand of fiscal responsibility ...which may be another way of saying squeezing the administration's initiatives at every turn--at some point there is going to be a hell of a policy conflict as every day it becomes more apparent that the economic advances of the past few months have nothing whatsoever to do with administration policies and everything to do with cheap and unlimited money and the massive tax break that is the decline in the price of oil. All of this came to a head today as the DOW reached 18,000 for the first time in history aided no doubt by the remarkable GDP number of 5% that nobody expected. Good for us to be sure but the debate has now changed a bit as the bond boys immediately sold the 10 and the 2 year figuring this signaled a no-brainer interest rate rise early next year while the equity guys paid it no attention at all and focused on free money tomorrow and the next day. The classic debate between the investor and the trader.
As to who is correct? My money is on the trader. It seems that today's world is governed by the next headline and for the past ten years the Fed has slowly backed into a cage from which it reacts to event as opposed to getting out in front. Blue skys are not going to be an everyday event and the Fed is going to be very reluctant to initiate a program that in any way can be seen to have precipitated a negative turn in either the economy or markets--they are not the same you know--particularly with the distinctive liberal bent of the members and the decidedly liberal bent of the FMOC. Unless the economic outlook remains in the Goldilocks boudoir for the next six months, I suspect monetary policy will not move and there is a lot out there to change the current rosy outlook particularly on the international front. More on that in detail at a later date.
Then again is the new Congress going to sit tight vis-a-vis it's relationship with the Fed? Already we have heard rumblings regarding the "dual mandate" and whether it should be continued. The question of auditing the Fed is very real among these folks up on the Hill and not a partisan issue at all. It is a very big and powerful hammer in the relationship which could be used with great effect in any form of negotiation. Fed oversight and regulation is a prime issue but within a different context. I sincerely doubt if the extreme left wing of the Fed in the person of Daniel Tarullo, no matter what sort of support he has from Crazy Lizzy will have anywhere the same influence it has today. Lizzy desperately wants to be the nominee but to have any chance in either the primary or in the election she needs Chuck's fund raising machine on Wall Street, Bye, Bye Danny, it's been fun to know ya. Fed watching might be back in style which may not be a bad thing if it gets Billy the Dud back to Goldman.
Anyway, those are some of the things I'll be watching (if I continue to see) in the coming months. This is long enough for tonight. Warming up my Fan Song I bought at a Russian Army/Navy store. Wasn't worth much but it was really good at spotting Reindeer.
Wednesday, December 17, 2014
WE'RE BACK!
"Tom, I'm still seeing double." Tom is my surgeon and neighbor.
"Charlie, the operative word is seeing."
We're back, a good way from perfect but lookin' really good...and feeling even better.
Big doings while sidelined on just about everything so the trick is going to be how to weave the past with the present beginning with the election which, as he challenged it would be, was all about Il Duce's policies of the past six years. Yeah, Il Duce. No point of being clever about it anymore, let's just call it as it is and hope he doesn't end up on a lamppost. He, his policies and his party got killed which is going to shape the next two years but of course that hasn't stopped him in his imperial quest the latest being the "normalization" of relations with Cuba about which other than the Castro boys, the Venezulus, the Nics and other assorted vermin and despots in Latin Land, who benefits? Certainly not the Cuban people and the U.S. But, forward he goes, trailed by an increasingly smaller group of sycophants and hangers-on, wandering from one alternative universe to another. The problem is he has chosen a high stakes game in which he holds less than half of the aces. If he loses one of his challenges--just one--be it a real risk in with the Supremes involving Obama Care and Executive authority, or a disaster in foreign affairs, the economy could be brutalized. It is therefore critical that the Republicans, having been wildly successful, prepare for what they have fought and the fall-out from the same. Not to have in place contingency plans to deal with success would be critical. It all begins in two weeks.
On the bright side, the complete collapse in energy prices has been the second most important event in the past month and a half, providing what amounts to a huge tax break to the American consumer and massive upheavals in the geopolitical landscape especially in regard to Russia. Tsar Vlady's imperial ambitions may have been seriously derailed by a world awash in oil and the prospect of burgeoning new supplies of energy arriving in western Europe in a much shorter time frame. The Saudis bless them, have chosen sides in this one and from our standpoint, all the bad guys are getting squeezed. If Il Duce's mob aided in that, good on em'. But times are not good for the Rodina, Belarus--couldn't happen to a nicer bunch--and Venezuela just to name a few. The Zulus could be real close to asset sales and thoughts of default just past the first of the year assuming Duce doesn't do something even stupider and bail them out. Emerging market funds are the other side of this picture, however, with people like Allianze and...ready for it...PIMCO, up to their eyeballs in dodgy paper with the former holding a big number in Russian private sector. Nobody's going in the tank over this but there might well be a cut back or two in bonuses this year. Cry for them.
A third important and truly encouraging piece of news was the roll-back of a small part of Dodd-Frank which sent crazy Lizzy into an apoplectic state which was certainly fun to watch. Poor Lizzy, the minute her back was turned, WHAMMO, right in the neck from my old bud Chuck Schumer whose motto has always been, "Gather ye campaign contributions while ye may..." and the easiest gathering spot is Wall Street. But this is not going to go away and blood is going to be spilt. More on this in coming episodes and on the Federal Reserve which today said it ain't doing nuttin'. The market, which had been awful for ever it seemed immediately went up 300 points. And a Merry Early Christmas to all! Who says it's not about interest rates?
Finally, it became more and more apparent...as we have been suggesting...that the next year is going to be all about Europe, the Union and the Euro. Baring external political events, this is the game to be played and the one to watch which we shall be doing carefully and with great regularity. So, I am really looking forward to the coming months and trying to tie all this together. I hope you're still with me and thanks for all the good wishes I received. Believe me, they were very heart warming.
"Charlie, the operative word is seeing."
We're back, a good way from perfect but lookin' really good...and feeling even better.
Big doings while sidelined on just about everything so the trick is going to be how to weave the past with the present beginning with the election which, as he challenged it would be, was all about Il Duce's policies of the past six years. Yeah, Il Duce. No point of being clever about it anymore, let's just call it as it is and hope he doesn't end up on a lamppost. He, his policies and his party got killed which is going to shape the next two years but of course that hasn't stopped him in his imperial quest the latest being the "normalization" of relations with Cuba about which other than the Castro boys, the Venezulus, the Nics and other assorted vermin and despots in Latin Land, who benefits? Certainly not the Cuban people and the U.S. But, forward he goes, trailed by an increasingly smaller group of sycophants and hangers-on, wandering from one alternative universe to another. The problem is he has chosen a high stakes game in which he holds less than half of the aces. If he loses one of his challenges--just one--be it a real risk in with the Supremes involving Obama Care and Executive authority, or a disaster in foreign affairs, the economy could be brutalized. It is therefore critical that the Republicans, having been wildly successful, prepare for what they have fought and the fall-out from the same. Not to have in place contingency plans to deal with success would be critical. It all begins in two weeks.
On the bright side, the complete collapse in energy prices has been the second most important event in the past month and a half, providing what amounts to a huge tax break to the American consumer and massive upheavals in the geopolitical landscape especially in regard to Russia. Tsar Vlady's imperial ambitions may have been seriously derailed by a world awash in oil and the prospect of burgeoning new supplies of energy arriving in western Europe in a much shorter time frame. The Saudis bless them, have chosen sides in this one and from our standpoint, all the bad guys are getting squeezed. If Il Duce's mob aided in that, good on em'. But times are not good for the Rodina, Belarus--couldn't happen to a nicer bunch--and Venezuela just to name a few. The Zulus could be real close to asset sales and thoughts of default just past the first of the year assuming Duce doesn't do something even stupider and bail them out. Emerging market funds are the other side of this picture, however, with people like Allianze and...ready for it...PIMCO, up to their eyeballs in dodgy paper with the former holding a big number in Russian private sector. Nobody's going in the tank over this but there might well be a cut back or two in bonuses this year. Cry for them.
A third important and truly encouraging piece of news was the roll-back of a small part of Dodd-Frank which sent crazy Lizzy into an apoplectic state which was certainly fun to watch. Poor Lizzy, the minute her back was turned, WHAMMO, right in the neck from my old bud Chuck Schumer whose motto has always been, "Gather ye campaign contributions while ye may..." and the easiest gathering spot is Wall Street. But this is not going to go away and blood is going to be spilt. More on this in coming episodes and on the Federal Reserve which today said it ain't doing nuttin'. The market, which had been awful for ever it seemed immediately went up 300 points. And a Merry Early Christmas to all! Who says it's not about interest rates?
Finally, it became more and more apparent...as we have been suggesting...that the next year is going to be all about Europe, the Union and the Euro. Baring external political events, this is the game to be played and the one to watch which we shall be doing carefully and with great regularity. So, I am really looking forward to the coming months and trying to tie all this together. I hope you're still with me and thanks for all the good wishes I received. Believe me, they were very heart warming.
Friday, October 17, 2014
WHAT SCOPE!
I had no idea I was being read in the White House and more importantly by the editorial board of the Wall Street Journal! Copy cats! Their leading article today was on Jacob/Jack, killer of businesses. Oh well, better late than never. Next time I'll give them a heads up so we can be on the same page.
The White House was busy as well. Responding to my claim that we were witnessing very little leadership in regard to the economy and the Ebola outbreak, The Leader today announced the appointment of Ron Klain as the Ebola Tsar. Now Ron Klain goes back a ways. He was the chief of staff to Al Gore and the guy in charge of the recount (he lost primarily because he limited the counties recounted). Before that he was Joe Biden's head guy when Uncle Joe was in the Senate. Klain ran Biden's attack of now-Justice Thomas (he lost). He ran Uncle Joe's Presidential campaign (he lost) and then became Chief of Staff to Vice President Biden where, among other things, he was the point guy for America's investment in Soylandra (he lost about a billion of the taxpayer's money). In D.C. circles he is know as being very consist ant and a son-of-a-bitch of a political hack. With the nation half terrified (probably without much reason) over this Ebola thing, he seems like the perfect choice for the position of Tsar. He can take some of the pressure off the head of the CDC and allow him to get back to the business of banning the sale of 32 oz. bottles of soft drinks but preserving Americans' rights by allowing them to purchase two 16ozers at the same time as he did in New York. As I have said, you can't make this stuff up.
Markets rebounded today for absolutely no reason but it was good to see. This thing is more and more about Europe, gang, and the Euros, bless them, aren't making things any easier. Relations between Germany on one hand and the entire southern cone led by France and Italy are at the lowest point in years. The issue? Fiscal stimulus vs. fiscal conservatism. Economic restructuring vs. same old, same old. Don't need me to tell you about it. However, behind all of this but looming very large is the stress test results which I though were scheduled for next week but apparently I was in error. They will be soon, however, and Brussels and the EBC are making a big thing of the fact that for the first time there will be a real transparency in the conditions of the financial sector. Now as I have said the previous stress tests were jokes but I also have to wonder if "real transparency" is a completely good thing given what I feel is the true state of European banking. I await the result.
Finally, I have been asked why I haven't commented on the AIG trial. Simple, Don't know what happened, don't understand what is being alleged and don't care. There are more important things: the World Series starts next week, the Premiership is back in business and there is one BIG game tomorrow in college football. Let's keep our priorities straight.
The White House was busy as well. Responding to my claim that we were witnessing very little leadership in regard to the economy and the Ebola outbreak, The Leader today announced the appointment of Ron Klain as the Ebola Tsar. Now Ron Klain goes back a ways. He was the chief of staff to Al Gore and the guy in charge of the recount (he lost primarily because he limited the counties recounted). Before that he was Joe Biden's head guy when Uncle Joe was in the Senate. Klain ran Biden's attack of now-Justice Thomas (he lost). He ran Uncle Joe's Presidential campaign (he lost) and then became Chief of Staff to Vice President Biden where, among other things, he was the point guy for America's investment in Soylandra (he lost about a billion of the taxpayer's money). In D.C. circles he is know as being very consist ant and a son-of-a-bitch of a political hack. With the nation half terrified (probably without much reason) over this Ebola thing, he seems like the perfect choice for the position of Tsar. He can take some of the pressure off the head of the CDC and allow him to get back to the business of banning the sale of 32 oz. bottles of soft drinks but preserving Americans' rights by allowing them to purchase two 16ozers at the same time as he did in New York. As I have said, you can't make this stuff up.
Markets rebounded today for absolutely no reason but it was good to see. This thing is more and more about Europe, gang, and the Euros, bless them, aren't making things any easier. Relations between Germany on one hand and the entire southern cone led by France and Italy are at the lowest point in years. The issue? Fiscal stimulus vs. fiscal conservatism. Economic restructuring vs. same old, same old. Don't need me to tell you about it. However, behind all of this but looming very large is the stress test results which I though were scheduled for next week but apparently I was in error. They will be soon, however, and Brussels and the EBC are making a big thing of the fact that for the first time there will be a real transparency in the conditions of the financial sector. Now as I have said the previous stress tests were jokes but I also have to wonder if "real transparency" is a completely good thing given what I feel is the true state of European banking. I await the result.
Finally, I have been asked why I haven't commented on the AIG trial. Simple, Don't know what happened, don't understand what is being alleged and don't care. There are more important things: the World Series starts next week, the Premiership is back in business and there is one BIG game tomorrow in college football. Let's keep our priorities straight.
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.
Wednesday, September 10, 2014
THE KI…ER…LEADER'S SPEECH
Which is the only thing of any great importance today as we await to see what a lovely war we will have. It will be described as such for after all it is The Leader's war and we know that all of those are the "right" war…take Afghanistan…PLEASE!
We will have no boots on the ground…except for the thousand or so we have right now and whatever it takes to make sure that those lovely smart bombs we drop aren't going to land on the heads of the good guys…whoever they may be. I shall reserve further judgement except to say that George Bush has been gone for six years, much like Jacob Marley, but I will bet his ghost will reappear again tonight conjured up onto the teleprompters right on cue. Only The Leader is bold enough to try that o n e m o r e t i m e.
Meanwhile, Over There, every British politician from Labor, Conservative and Liberal parties than could be shaken out of bed was up in Scotland yesterday. The days dwindle down and whilst I remain a believer that the "NOs" will carry the day, all reports call it a very close thing. Perhaps I'm crazy, but I don't think it's going down to the last vote. This is really a remarkable thing the world is watching and taking note: this is not the only region in Europe that bears this struggle. If the Scots make it work, the pressure on Spain and Catalonia will be enormous, and on and on.
Finally, tomorrow is 9/11. A prayer, perhaps would be in order for 2900 souls no longer with us s and for a great city that showed what courage and resilience is all about.
We will have no boots on the ground…except for the thousand or so we have right now and whatever it takes to make sure that those lovely smart bombs we drop aren't going to land on the heads of the good guys…whoever they may be. I shall reserve further judgement except to say that George Bush has been gone for six years, much like Jacob Marley, but I will bet his ghost will reappear again tonight conjured up onto the teleprompters right on cue. Only The Leader is bold enough to try that o n e m o r e t i m e.
Meanwhile, Over There, every British politician from Labor, Conservative and Liberal parties than could be shaken out of bed was up in Scotland yesterday. The days dwindle down and whilst I remain a believer that the "NOs" will carry the day, all reports call it a very close thing. Perhaps I'm crazy, but I don't think it's going down to the last vote. This is really a remarkable thing the world is watching and taking note: this is not the only region in Europe that bears this struggle. If the Scots make it work, the pressure on Spain and Catalonia will be enormous, and on and on.
Finally, tomorrow is 9/11. A prayer, perhaps would be in order for 2900 souls no longer with us s and for a great city that showed what courage and resilience is all about.
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?
Tuesday, August 5, 2014
THIS IS GETTING TO BE HARD
You try to be witty, informative and current, but after you've been forced to say, "Everything stinks all over the place" where do you go from there? Well, everything does stink all over the place with the Ukraine situation regaining top billing after a report out of Poland claimed the Russians were about to invade. Stocks crashed as did bond yields. There's a joke going around D.C these days. Someone runs into the Russian Ambassador and asks him when will Russia invade? "When Obama is on vacation or fund raising," he replies. I didn't think it was funny but then that's just me... Of course, the shooting has stopped for a bit in Gaza, but ISIS seems to being well on its way to expanding its power in the Tigris and Euphrates hood.
On the home front, there is louder talk about when the Fed is going to move on interest rates--before year-end--and finally…finally…we seem to be reaching consensus that if rates do move, for example 100 b.p. on the 10 years this thing--whatever thing is--is over. Having been saying that for years I fully agree but what a lot of people are overlooking is not the effect that a rate rise will have on the economy but what effect it will have on the national debt and the obligations of the states. Of course the problem is that when the cost of financing rises because of Fed actions there is a concurrent uptick in the cost of borrowing over and above what would normally be simply a reaction to monetary policy. Rate rises beget rate rises which sports fans is not a good thing especially when The Leader keeps believing that it's not his policies that depress American growth but the greed of CEOs. It's been a hell of a ride on this highway but I have the feeling that around the next curve there stands a toll booth. Nothing is for free.
I was trying to write something yesterday of Espirito Sancto but what is there to say? If there were something different about this situation from that which we have seen year after year it might be interesting but alas, la meme chose. And getting French into it, the Credit Agricole who just wrote off about a billion dollars as a result of dealings stemming from a 17% interest in the bank (they wrote that off as well), declared today that they were "defrauded" by the management. Now how the hell you can have two representatives on the Board of Directors with the full knowledge that the books were being audited by something called Eurofin which also structured investments for the bank and claim to have been defrauded is beyond me, but there you go. I mean, who cares anyway as the government of Portugal announced over the weekend that they are going to pump about 5 billion Euros of tax payer money into this pig and all will work out. In case anyone is interested, Eurofin hangs its shingle in Lausanne with an office in St. Jim's in London and has as its head guys two fellow who apparently received a degree in hotel management from some joint in France. Bloody good lunches I bet. Never hold that against anyone I say. But FIVE BILLION!? Haven't these guys ever heard of Dodd/Frank? More if there is more.
On the home front, there is louder talk about when the Fed is going to move on interest rates--before year-end--and finally…finally…we seem to be reaching consensus that if rates do move, for example 100 b.p. on the 10 years this thing--whatever thing is--is over. Having been saying that for years I fully agree but what a lot of people are overlooking is not the effect that a rate rise will have on the economy but what effect it will have on the national debt and the obligations of the states. Of course the problem is that when the cost of financing rises because of Fed actions there is a concurrent uptick in the cost of borrowing over and above what would normally be simply a reaction to monetary policy. Rate rises beget rate rises which sports fans is not a good thing especially when The Leader keeps believing that it's not his policies that depress American growth but the greed of CEOs. It's been a hell of a ride on this highway but I have the feeling that around the next curve there stands a toll booth. Nothing is for free.
I was trying to write something yesterday of Espirito Sancto but what is there to say? If there were something different about this situation from that which we have seen year after year it might be interesting but alas, la meme chose. And getting French into it, the Credit Agricole who just wrote off about a billion dollars as a result of dealings stemming from a 17% interest in the bank (they wrote that off as well), declared today that they were "defrauded" by the management. Now how the hell you can have two representatives on the Board of Directors with the full knowledge that the books were being audited by something called Eurofin which also structured investments for the bank and claim to have been defrauded is beyond me, but there you go. I mean, who cares anyway as the government of Portugal announced over the weekend that they are going to pump about 5 billion Euros of tax payer money into this pig and all will work out. In case anyone is interested, Eurofin hangs its shingle in Lausanne with an office in St. Jim's in London and has as its head guys two fellow who apparently received a degree in hotel management from some joint in France. Bloody good lunches I bet. Never hold that against anyone I say. But FIVE BILLION!? Haven't these guys ever heard of Dodd/Frank? More if there is more.
Monday, July 21, 2014
THE ROAD TO…WHERE?
The Leader spoke on the Ukraine crisis early this afternoon, some say in response to the criticism of what he said…or did not say…over the weekend. It received even harsher criticism as a result. He said nothing which was interpreted only by the American far-left wags as being a brilliant ploy of holding his cards close to his chest. To be honest, he has few cards to play without the Euros who can't stand the guy and worst yet, don't trust him. Nevertheless, there seems to be a growing thought that doing nothing can't be done and therefore one has to ask where this thing is going and what will be the repercussions to the increasingly integrated financial world in which we live.
From the standpoint of what this means Over Here, the announced plans of the Administration to essentially fund its domestic policy program through tax increases and cuts in the military is, I think, dead. Congress simply will not agree to the former or support the latter in an increasingly (or so it seems) more dangerous global environment. The U.S. response to Russia or the lack of the same will probably become a larger election issue which is now but four months away and could help to shape the congress for the next two years. Should the Republicans achieve their goal of recapturing the Senate their will undoubtedly be legislative stalemate on all levels which some view as a good thing on issues such as financial regulation and of course health care--which I shall never mention again--leading to a possible roll-back on some of the legislative mistakes that have been made in the rush to punish that group of pariahs in the society formally know as bankers. Then again, perhaps not. I'm fairly confident of one thing, however. The relationship between the U.S. and the Euros had better come out of this thing intact and hopefully improved or there is going to be some really tough sledding ahead in the near term.
Over there, individual domestic difficulties seem to be preventing a convergence vis-a-vis Russia--an understandable situation given what is going on. The French, par example, announced today that the state of the economy was "un catasthophe" to the extent that Frankie's beloved 75% top tax rate was to be scrapped along with the 35 hour work week (bet that doesn't happen) in order to get the country moving again. Perhaps scrapping Frankie might work even better but that's none of my business.
Over the weekend more information was released concerning the Banco Espirito Sancto. Luxembourg holding companies, multiple and interlocking loans, commercial paper putchases…and proposed payments thereof…and whether anybody in hell can explain what was going on. It's not Portugal you see, but the issue being if here, where else in the continent that is one big Disney Land is this going on? Of course the masters of obfuscation are the Italians…they have been the best at it for 700 years…so it shouldn't be long before questions start getting asked--again--about who owes what to whom and oh my goodness does this mean that the entire system is probably insolvent? Well, yes, but hopefully the Italians will do what they have always done, keep their mouths shut and act like nothing has happened. And you thought Omerta was just a Sicilian thing? My son, you haven't seen a thing until you visit some of the little shops in Milano, Turino and oh, let us not forget Vienna. It's a good thing August is close at hand, otherwise we would have a lot to worry about. But not until September. In 10 days all of Europe will be on the road…to somewhere.
From the standpoint of what this means Over Here, the announced plans of the Administration to essentially fund its domestic policy program through tax increases and cuts in the military is, I think, dead. Congress simply will not agree to the former or support the latter in an increasingly (or so it seems) more dangerous global environment. The U.S. response to Russia or the lack of the same will probably become a larger election issue which is now but four months away and could help to shape the congress for the next two years. Should the Republicans achieve their goal of recapturing the Senate their will undoubtedly be legislative stalemate on all levels which some view as a good thing on issues such as financial regulation and of course health care--which I shall never mention again--leading to a possible roll-back on some of the legislative mistakes that have been made in the rush to punish that group of pariahs in the society formally know as bankers. Then again, perhaps not. I'm fairly confident of one thing, however. The relationship between the U.S. and the Euros had better come out of this thing intact and hopefully improved or there is going to be some really tough sledding ahead in the near term.
Over there, individual domestic difficulties seem to be preventing a convergence vis-a-vis Russia--an understandable situation given what is going on. The French, par example, announced today that the state of the economy was "un catasthophe" to the extent that Frankie's beloved 75% top tax rate was to be scrapped along with the 35 hour work week (bet that doesn't happen) in order to get the country moving again. Perhaps scrapping Frankie might work even better but that's none of my business.
Over the weekend more information was released concerning the Banco Espirito Sancto. Luxembourg holding companies, multiple and interlocking loans, commercial paper putchases…and proposed payments thereof…and whether anybody in hell can explain what was going on. It's not Portugal you see, but the issue being if here, where else in the continent that is one big Disney Land is this going on? Of course the masters of obfuscation are the Italians…they have been the best at it for 700 years…so it shouldn't be long before questions start getting asked--again--about who owes what to whom and oh my goodness does this mean that the entire system is probably insolvent? Well, yes, but hopefully the Italians will do what they have always done, keep their mouths shut and act like nothing has happened. And you thought Omerta was just a Sicilian thing? My son, you haven't seen a thing until you visit some of the little shops in Milano, Turino and oh, let us not forget Vienna. It's a good thing August is close at hand, otherwise we would have a lot to worry about. But not until September. In 10 days all of Europe will be on the road…to somewhere.
Wednesday, June 18, 2014
THEY ARE NUTS
No, not the Argies. The Federal Reserve Board. What a show that was today. The headline is that the Fed will continuing with the tapering, knocking another $10 billion off monthly purchases and keeping the accommodative monetary policy in place for the foreseeable future. Then Janet got up to explain all this...or not, as the case may be.
For the first time that I can remember, the Chairperson of the Fed essentially admitted she had no idea what the hell is going on, our guess is as good as hers and therefore, why change anything? She also said the economy was getting better, the job picture was getting better and there was no sign of any inflation to cause worries. Absolute horse crap on all accounts.
Inflation is rapidly rising on all things that human beings need to stay alive. Food, fuel, clothing, air fare and just about anything else one can think of. What isn't going up are all the things in the Fed's little basket which nobody can name because nobody needs them. It is a joke.
The job number is precisely the same as it was at the end of 2007. Only problem is the country has 16 million more people. The job participation rate, however, is down from approximately 67% to 62% which means a bunch of people have simply given up. Wages are stagnant, wage growth is slow. Oh by the way, Janet, the reason for this is that the economy stinks and why does it stink? Well, not because of you Bubbala, but you can't fix it either despite how much money you leave floating about in Fed Nation. It stinks because The Leader is out there talking about oceans with this DiCaprio guy who apparently earned his expertise on the subject by drowning on the Titanic. It stinks because all you geniuses passed Dodd/Frank which means the banks wont take a risk. It stinks because the morons in the Patent Office decided today that they are the guardians of morality as to what one names his franchise, never for a moment believing that if a name is offensive the product will not be bought. The country is rudderless as the latest opinion polls indicate and the Fed can't fix it.
What you can do, however, and are doing (along with Super Mario) is creating the most God-awful bubble in equities and crap fixed income, much of which is sovereign and none of which is sustainable. Of course when everyone decides at the same time to unload, where is the bid going to be to maintain an orderly market? Not at the banks as in the past because you see, they can't do that any more and wont that be a lovely war! You are also putting a severe hurt on those of us living on a fixed income who sit and watch your non-inflation beat the crap out of our savings and income. And in the big picture none of this has helped and it never will. And yet you press forward with the same nonsense policies, clearly indicating that you are clueless. Oh while, we are at it, you might call to mind the definition of insanity about doing the same thing and believing the result is going to be different. Insanity: that's a step or two above nuts.
Oh yeah, in case you're interested Spain went out of the Cup losing 2-nil to Chile. More people care about that than what you had to say today.
For the first time that I can remember, the Chairperson of the Fed essentially admitted she had no idea what the hell is going on, our guess is as good as hers and therefore, why change anything? She also said the economy was getting better, the job picture was getting better and there was no sign of any inflation to cause worries. Absolute horse crap on all accounts.
Inflation is rapidly rising on all things that human beings need to stay alive. Food, fuel, clothing, air fare and just about anything else one can think of. What isn't going up are all the things in the Fed's little basket which nobody can name because nobody needs them. It is a joke.
The job number is precisely the same as it was at the end of 2007. Only problem is the country has 16 million more people. The job participation rate, however, is down from approximately 67% to 62% which means a bunch of people have simply given up. Wages are stagnant, wage growth is slow. Oh by the way, Janet, the reason for this is that the economy stinks and why does it stink? Well, not because of you Bubbala, but you can't fix it either despite how much money you leave floating about in Fed Nation. It stinks because The Leader is out there talking about oceans with this DiCaprio guy who apparently earned his expertise on the subject by drowning on the Titanic. It stinks because all you geniuses passed Dodd/Frank which means the banks wont take a risk. It stinks because the morons in the Patent Office decided today that they are the guardians of morality as to what one names his franchise, never for a moment believing that if a name is offensive the product will not be bought. The country is rudderless as the latest opinion polls indicate and the Fed can't fix it.
What you can do, however, and are doing (along with Super Mario) is creating the most God-awful bubble in equities and crap fixed income, much of which is sovereign and none of which is sustainable. Of course when everyone decides at the same time to unload, where is the bid going to be to maintain an orderly market? Not at the banks as in the past because you see, they can't do that any more and wont that be a lovely war! You are also putting a severe hurt on those of us living on a fixed income who sit and watch your non-inflation beat the crap out of our savings and income. And in the big picture none of this has helped and it never will. And yet you press forward with the same nonsense policies, clearly indicating that you are clueless. Oh while, we are at it, you might call to mind the definition of insanity about doing the same thing and believing the result is going to be different. Insanity: that's a step or two above nuts.
Oh yeah, in case you're interested Spain went out of the Cup losing 2-nil to Chile. More people care about that than what you had to say today.
Thursday, June 5, 2014
MON DIEU!
Frankie is so hacked off that he's going to bring the BNP-Paribas mess up tonight over dinner for God's sakes with Barry and that's because of the size of the fine that Eric Holder, the Head of the Department of Extortion is banding about. Frankie hasn't even heard about New York State's play but the $10 billion about to be charged against BNP-Paribas Visa card might well, it is rumored, put the bank into deep do-do from a capital standpoint. I mean it's the theater of the absurd. The Leader, desperate to get some help from somebody Over There having abandoned all pretense of having a foreign policy gets himself in the middle of a fight over whether a French bank broke U.S. rules regarding dealing with OUR enemy (the French have a different view about these things) half a dozen years ago and how much his idiot acolytes are planning on fining them for the crime…like money is the issue. In the end, the money comes from the Tresoire; the issue is how does a President of the Republic who has a lower approval rating than The Leader explain to his taxpayers that their cash is going to Les Americains? Like there's nothing more important than this, dude? And then he gets up on his hind legs to tell the world it is simply out of the question that he would ever interfere with the prosecution of a case! The guy continually believes that he finds a new kind of stupid in every spot in the world he visits. I give up. It's hopeless.
So, over to our friend Mario Draghi, who today did exactly what everyone thought he would do which was pretty much nothing. Super Mario pulled a Swissy and laid a negative deposit rate on all the banks in Europe in order to get them to keep their money out of the ECB and put it to work out in the economy. Problem is, there are no deposits in the ECB, the banks having pulled those out weeks ago in anticipation of such a move. Where's the money? I haven't a clue but it is not back in the economy. Gee, do you think the collapse in yields on southern European debt might be a result of some of that deposit money flowing into bonds...AND do you think that the zero capital weighting because of the sovereign risk might have something to do with it...AND do you think if someone was to take a look at cross-border flows between home offices and subsidiaries in Spain and Italy someone might find a lot of activity...AND if someone was told that investments by local branches in sovereign debt was tax free, do you think you might find the answer to the missing Euros? You do? Clever child. Oh, Mario just cut the Lombard rate to 0.10 from 0.25. There's stimulus for you.
To be fair he held back his "bazooka" which is of course Quantitative Easing…which by the by is still unsettled as to whether he can do that or not, but there was talk of asset purchases to the tune of 400 million Euros which is not small change to a punter out at Longchamp, but a drop in the bucket in a 20 trillion dollar market. Of course, markets loved it and up went the DOW by 100 points. My God, it doesn't get better than this…except, perhaps, to be the back-up translator at Frankie and Barry's little Soiree tonight. Lord, the tickets I could sell!
So, over to our friend Mario Draghi, who today did exactly what everyone thought he would do which was pretty much nothing. Super Mario pulled a Swissy and laid a negative deposit rate on all the banks in Europe in order to get them to keep their money out of the ECB and put it to work out in the economy. Problem is, there are no deposits in the ECB, the banks having pulled those out weeks ago in anticipation of such a move. Where's the money? I haven't a clue but it is not back in the economy. Gee, do you think the collapse in yields on southern European debt might be a result of some of that deposit money flowing into bonds...AND do you think that the zero capital weighting because of the sovereign risk might have something to do with it...AND do you think if someone was to take a look at cross-border flows between home offices and subsidiaries in Spain and Italy someone might find a lot of activity...AND if someone was told that investments by local branches in sovereign debt was tax free, do you think you might find the answer to the missing Euros? You do? Clever child. Oh, Mario just cut the Lombard rate to 0.10 from 0.25. There's stimulus for you.
To be fair he held back his "bazooka" which is of course Quantitative Easing…which by the by is still unsettled as to whether he can do that or not, but there was talk of asset purchases to the tune of 400 million Euros which is not small change to a punter out at Longchamp, but a drop in the bucket in a 20 trillion dollar market. Of course, markets loved it and up went the DOW by 100 points. My God, it doesn't get better than this…except, perhaps, to be the back-up translator at Frankie and Barry's little Soiree tonight. Lord, the tickets I could sell!
Friday, May 2, 2014
IF IT WAS SO GOOD, THEN WHY...
The jobs report of this morning. Up 288,000, way above estimates and unemployment down to 6.3%. Wow, I thought, we're going through the roof on this one.
Nope, wrong again. The markets sloshed around all day with the DOW finally closing down 45. The ten year did nothing except to slide down in yield, the exact opposite of what one would have thought and volumes slipped. Perhaps it was the dismal GDP number of 0.1% but that was expected. Or was it the market reflecting upon the fact that the decline in unemployment was solely as a result of another large "drop out" number from the work force bringing the total number of unemployed in the country to almost 100,000,000. That is a dreadful statistic by any measure and by anyone's politics.
I don't mean to be political but the question that is being increasingly asked is who's running the show and the answer increasingly appears to be, no one. At this stage if one looks to the Fed it's same-oh, same-oh but we have to start asking with 100 million not even looking for work, how are we going to deal with this and the only answer I see is by keep printing money. Now if that is the case logic would indicate that we must see a rise in interest rates which everybody with whom I have spoken is looking for and which is believed to be needed but not a peep from Janet & Co. If anything, all indications are that she is determined to keep things right where they are in almost a perverse battle with the bond boys who are about as short as the world has ever seen according to Mad Max who checked in today asking the same questions. Of course, if Janet really does want a fight, she isn't doing herself much good because with interest rates as at these levels Max and his lot can stay short forever…it's a free roll. I don't get it.
Anyway, on the international front, The Leader and Angie met today to agree on new sanctions to be agreed upon at a later date if Russia crosses another red line in regard to the Ukraine. I'm told Putin is shivering down to his jack boots. It may be as cold in Moscow as it is in the fly-over zone…46F. as we speak on May 2. I just don't know why I'm so confused about everything again.
Have a great weekend.
Nope, wrong again. The markets sloshed around all day with the DOW finally closing down 45. The ten year did nothing except to slide down in yield, the exact opposite of what one would have thought and volumes slipped. Perhaps it was the dismal GDP number of 0.1% but that was expected. Or was it the market reflecting upon the fact that the decline in unemployment was solely as a result of another large "drop out" number from the work force bringing the total number of unemployed in the country to almost 100,000,000. That is a dreadful statistic by any measure and by anyone's politics.
I don't mean to be political but the question that is being increasingly asked is who's running the show and the answer increasingly appears to be, no one. At this stage if one looks to the Fed it's same-oh, same-oh but we have to start asking with 100 million not even looking for work, how are we going to deal with this and the only answer I see is by keep printing money. Now if that is the case logic would indicate that we must see a rise in interest rates which everybody with whom I have spoken is looking for and which is believed to be needed but not a peep from Janet & Co. If anything, all indications are that she is determined to keep things right where they are in almost a perverse battle with the bond boys who are about as short as the world has ever seen according to Mad Max who checked in today asking the same questions. Of course, if Janet really does want a fight, she isn't doing herself much good because with interest rates as at these levels Max and his lot can stay short forever…it's a free roll. I don't get it.
Anyway, on the international front, The Leader and Angie met today to agree on new sanctions to be agreed upon at a later date if Russia crosses another red line in regard to the Ukraine. I'm told Putin is shivering down to his jack boots. It may be as cold in Moscow as it is in the fly-over zone…46F. as we speak on May 2. I just don't know why I'm so confused about everything again.
Have a great weekend.
Tuesday, March 11, 2014
THE LESSER PRAIRIE CHICKEN
Sometime you just have to get of your comfort zone. Today is one of those days because I read a piece so bazaar that one just has to comment.
The subject of energy independence, always popular, has become even more so in the past couple of weeks what with the situation in the Ukraine and the strangle-hold that Russia has on western Europe's energy supplies. Bully for us cry the pundits for with the advances in energy extraction the U.S. will soon be energy independent…or so we thought.
The U.S. government has some agency called the Bureau of Land Management, whose duties are not fully understood by anyone but I think it comes under the Dept. of the Interior which, among other things, is the oversight and enforcer for the Endangered Species Act, the greatest act of Congress ever passed according to the enviormental left. Now despite what you might hear from The Leader and his mob, the growth of energy production in the U.S. has nothing whatsoever to do with the genius of the Obama administration. Not 1% of the growth comes from Federal land. All of the drilling and fracking is on private land which can only be regulated as to safety by Washington. Enter the Lesser Prairie Chicken and its cousin, the Sage Grouse.
These noble birds, each of similar size which is slightly smaller than a Rhode Island Red, inhabits broad areas in the western and north western United States…like about 100,000,000 acres. It's a big country, gang. It appears, that under intense pressure from enviormental groups--an absolute core Obama constituency--the Interior Department is wrestling with the idea of designating these two clucks as "endangered species," which means that before anyone does anything, anywhere these birds breed, on public or private land, the permission must first come from the Interior Dept. by way of a request fulfillment, after exhaustive enviormental studies and law suits guaranteed to take a minimum of 10 years. Like, never man. Among those sacrosanct breeding areas? The Permian Basin in west Texas and the Bakken in North Dakota, among a few others.
Now there is stupidity and then there is stupidity. You pick what this is. To be honest, I haven't a clue whether all the gas and oil we talk about is really there, but a lot of smart people say it is (although my classmate, Mike says it's a Ponzi scheme and his family has been in the oil "bidness" in Texas for so long that except for the brief time he served his country I don't think he ever filed a W-2 in his life…uh-huh).
If the Ukraine is any guide, maybe it's not a bad idea to find all the energy we can and if there is enough, we might even be able to help out our buds Over There. I mean, we're talkin' survival here. And, in that vein another thing I'm try to figure out is way the enviormental left is always accusing those who are not absolutely in lock step with them of not believing in science. Like Man, you tellin' me that that Dude Darwin was whacked with that Survival of the Fittest gig? You tellin' me that it's me against the Lesser Prairie Chicken and let's see who wins and it's gonna be the bird? Radical, dude, radical.
The subject of energy independence, always popular, has become even more so in the past couple of weeks what with the situation in the Ukraine and the strangle-hold that Russia has on western Europe's energy supplies. Bully for us cry the pundits for with the advances in energy extraction the U.S. will soon be energy independent…or so we thought.
The U.S. government has some agency called the Bureau of Land Management, whose duties are not fully understood by anyone but I think it comes under the Dept. of the Interior which, among other things, is the oversight and enforcer for the Endangered Species Act, the greatest act of Congress ever passed according to the enviormental left. Now despite what you might hear from The Leader and his mob, the growth of energy production in the U.S. has nothing whatsoever to do with the genius of the Obama administration. Not 1% of the growth comes from Federal land. All of the drilling and fracking is on private land which can only be regulated as to safety by Washington. Enter the Lesser Prairie Chicken and its cousin, the Sage Grouse.
These noble birds, each of similar size which is slightly smaller than a Rhode Island Red, inhabits broad areas in the western and north western United States…like about 100,000,000 acres. It's a big country, gang. It appears, that under intense pressure from enviormental groups--an absolute core Obama constituency--the Interior Department is wrestling with the idea of designating these two clucks as "endangered species," which means that before anyone does anything, anywhere these birds breed, on public or private land, the permission must first come from the Interior Dept. by way of a request fulfillment, after exhaustive enviormental studies and law suits guaranteed to take a minimum of 10 years. Like, never man. Among those sacrosanct breeding areas? The Permian Basin in west Texas and the Bakken in North Dakota, among a few others.
Now there is stupidity and then there is stupidity. You pick what this is. To be honest, I haven't a clue whether all the gas and oil we talk about is really there, but a lot of smart people say it is (although my classmate, Mike says it's a Ponzi scheme and his family has been in the oil "bidness" in Texas for so long that except for the brief time he served his country I don't think he ever filed a W-2 in his life…uh-huh).
If the Ukraine is any guide, maybe it's not a bad idea to find all the energy we can and if there is enough, we might even be able to help out our buds Over There. I mean, we're talkin' survival here. And, in that vein another thing I'm try to figure out is way the enviormental left is always accusing those who are not absolutely in lock step with them of not believing in science. Like Man, you tellin' me that that Dude Darwin was whacked with that Survival of the Fittest gig? You tellin' me that it's me against the Lesser Prairie Chicken and let's see who wins and it's gonna be the bird? Radical, dude, radical.
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