He did it, he really did it. Today, Little Paulie came out in full support of the Trillion Dollar Platinum Coin or "other such innovative ideas" in a deliberately misleading, factually incorrect, packed with misunderstanding of markets (and one outright untruth) piece in the Times today. But there we are; we now know that if pushed, the administration will challenge any concept, law or provision of the Constitution to shape their view of governance. They won so I guess they think they can. One thing I don't get, however, is why these guys insist on Platinum when freeze dried feces would work as well. Same trillion dollar value and far lower production costs. Why, they could use their own; they seem to have a lot of it.
On the banking front, Wells Fargo came out with great fourth quarter numbers and prom ply fell like a stone bring the rest of the banking system down with it. Now I don't know much about the stock market except for the fact that it is the place to which I head when I want to lose money but the reason given for the decline in bank stocks is demonstrative, I think, of what these guys don't know. You see, the problem according to the street is that Wells has too many deposits and can't put them to use because rates are too low. Boys and girls, you can NEVER, especially in times like these, have too many deposits...especially the retail based deposits akin to Wells. If anyone tells you different, you are dealing with a fool. Deposits are the real capital of a bank; one uses them to make loans, build relationships, sell additional services to he who is a customer rather than through cold calling. They provide stability and most of all they provide liquidity. Retail deposits hang around through thick and thin which is what the monstrously dumb Ms. Bair didn't understand when she intervened in the merger of Wachtovia and Citibank who, at the time, desperately needed a domestic deposit base. Poor Wells. They are now paying for the stupidity of Poo Bair in being unable to put to work all those deposits. Yeah, right.
Over there, The Italians had a hell of a 3 year auction with yields falling below 3%. Good by any standard. Massimo is still on holiday so the "insider's" view is still unknown to me but he should be back by next week when things begin to pick up unless you consider L'Affair Cyprus to be of interest which it actually is as what has been floated that in return for the bail-out the Russian bond holders and depositors take a hit. Look for a disruption of natural gas shipments to Europe if this discussion doesn't end which caused one of my more savvy friends down in the coffee shop in Galveston to ring me up with, "Damn boy, iffin we can git the OK to liquefy all the extra stuff we got and ship it to Europe, how much money you think we can make?" Hadn't thought about that aspect but he may be on to something. I'lltellyouwhat'sthetruth: things are gettin' complicated in this ol' world. Fortunes from financial crises in natural gas. Whew! Oh, the Euro is at 1.33 today. Guess the Euros really like that Krugman Rand idea.
See you next week
Showing posts with label Platinum Coin. Show all posts
Showing posts with label Platinum Coin. Show all posts
Friday, January 11, 2013
Thursday, January 10, 2013
A YEAR OF LIVING DANGEROUSLY
Welcome back. Sorry I am a bit delayed in getting started again, but by this time I'm sure you realize that I'm not the most on-time guy you ever met--especially when the grand kids are in the middle. They win every time which we didn't on January 7. In fact it was worse than being a Republican in Washington which we will get to in a minute, but first, over there.
It's still Christmas but slowly, things are coming back to life with the realization that the three big events which will shape the EU this year will be the elections in Italy and Germany and the referendum in the UK as to its future membership. As I had mentioned, I had overlooked the the UK for much of last year but it is now impossible to do so. We are heading over in a month's time (a shaky date contingent on a number of things at which point I will have a better perspective) but right now, with a certain dependency on the manner in which the question is put, one should expect the UK to leave the EU despite the now somewhat screeching implorings of The Leader and his administration. The effect would be a sea-change and important to the readers of this ongoing plot because of the effect this would have on finance and banking world-wide. Sadly, I am forced to admit at this time that I am clueless, but given that London is, and will probably remain, the center for international finance no longer in coalition with the Euros, any end-game one could dream up might well wind up as the state of play. Near term, I suspect things will remain quite for a bit: now, quiet doesn't mean better--it just means...well...quiet as witnessed by Spain's 10 year auction today which went well by any standard although one should keep in mind that it was revealed about a week ago that Spain has picked the pockets of it's government pension funds to purchase it own debt. My word, the place is looking more and more like Illinois every day. Segue to over here.
The Leader is heady with power and prepared to pick a fight on just about anything following his victory in the first battle of the Great Tax War. Now one battle does not a campaign make and the foreboding specter of the debt ceiling looms before us, but it is clear that the man is in no mood to compromise and therefore it remains to be seen just how much fight is left in the Republicans in the House before a total victory can be declared. In the mean time, the new generals are being put forward, most notably Jacob Lew as the replacement for The Suit, a notorious gutter fighter as opposed to more amiable candidates such as Billy the Dud from the NY Fed and The Bair With Very Little Brain who was dying for the job.
While all of this was going on, insanity began to creep out into the open regarding what the administration might do to avoid a fight altogether.
There are two beauties out there. One is the striking of the One Trillion Dollar Platinum Coin to be deposited with the Fed By Treasury thereby by-passing Congress and providing all the funding The Leader needs...provided we don't run out of Platinum. The other is the tried and true issuance of script in lieu of currency with which we paid our maturing debts just like California did a few years ago. "Hey, no problem! As soon as we get over this little hurdle we'll redeem all that's out there but in the mean time, you can use the stuff or sell it to our banks who we will instruct to purchase the same. After all, the buggers have been hoarding TRILLIONS!"
What seems to have been overlooked by the geniuses behind this idea is the fact that we don't have to merely refinance a trillion or eight this year but it appears that we are in need of almost $1.5 TRILLION OF NEW MONEY! Let's have a contest: how many of you think the amount available, outside of direct purchases by the Fed, will exceed $.50? Love to hear from you.
Finally, after a couple of years, the first set of regs were released by the Consumer Protection Agency, you know, that piece of insanity created by Lizzy Warren, now junior Senator from Mass. Joy at the wisdom of the thing. It seems that if the banks play by the rules which include a repayment formula of no more than a requirement of 46% income to debt, the banks will granted "safe harbor" status whilst having been placed into a position where they can no longer make "sub-prime" mortgage loans unless they are Fanny and Freddie qualified. Absolute genius screamed the Times and those of it's ilk. Funny, I have always been of the view that the only really new idea that has come around in a while was the Sermon on the Mount. Everything else is simply a variation on a theme. This reg is no different, only in my time it was called "Red Lining;" I guess what side of the fence you are on makes a difference. Wonder what Rev. Jackson thinks?
It's still Christmas but slowly, things are coming back to life with the realization that the three big events which will shape the EU this year will be the elections in Italy and Germany and the referendum in the UK as to its future membership. As I had mentioned, I had overlooked the the UK for much of last year but it is now impossible to do so. We are heading over in a month's time (a shaky date contingent on a number of things at which point I will have a better perspective) but right now, with a certain dependency on the manner in which the question is put, one should expect the UK to leave the EU despite the now somewhat screeching implorings of The Leader and his administration. The effect would be a sea-change and important to the readers of this ongoing plot because of the effect this would have on finance and banking world-wide. Sadly, I am forced to admit at this time that I am clueless, but given that London is, and will probably remain, the center for international finance no longer in coalition with the Euros, any end-game one could dream up might well wind up as the state of play. Near term, I suspect things will remain quite for a bit: now, quiet doesn't mean better--it just means...well...quiet as witnessed by Spain's 10 year auction today which went well by any standard although one should keep in mind that it was revealed about a week ago that Spain has picked the pockets of it's government pension funds to purchase it own debt. My word, the place is looking more and more like Illinois every day. Segue to over here.
The Leader is heady with power and prepared to pick a fight on just about anything following his victory in the first battle of the Great Tax War. Now one battle does not a campaign make and the foreboding specter of the debt ceiling looms before us, but it is clear that the man is in no mood to compromise and therefore it remains to be seen just how much fight is left in the Republicans in the House before a total victory can be declared. In the mean time, the new generals are being put forward, most notably Jacob Lew as the replacement for The Suit, a notorious gutter fighter as opposed to more amiable candidates such as Billy the Dud from the NY Fed and The Bair With Very Little Brain who was dying for the job.
While all of this was going on, insanity began to creep out into the open regarding what the administration might do to avoid a fight altogether.
There are two beauties out there. One is the striking of the One Trillion Dollar Platinum Coin to be deposited with the Fed By Treasury thereby by-passing Congress and providing all the funding The Leader needs...provided we don't run out of Platinum. The other is the tried and true issuance of script in lieu of currency with which we paid our maturing debts just like California did a few years ago. "Hey, no problem! As soon as we get over this little hurdle we'll redeem all that's out there but in the mean time, you can use the stuff or sell it to our banks who we will instruct to purchase the same. After all, the buggers have been hoarding TRILLIONS!"
What seems to have been overlooked by the geniuses behind this idea is the fact that we don't have to merely refinance a trillion or eight this year but it appears that we are in need of almost $1.5 TRILLION OF NEW MONEY! Let's have a contest: how many of you think the amount available, outside of direct purchases by the Fed, will exceed $.50? Love to hear from you.
Finally, after a couple of years, the first set of regs were released by the Consumer Protection Agency, you know, that piece of insanity created by Lizzy Warren, now junior Senator from Mass. Joy at the wisdom of the thing. It seems that if the banks play by the rules which include a repayment formula of no more than a requirement of 46% income to debt, the banks will granted "safe harbor" status whilst having been placed into a position where they can no longer make "sub-prime" mortgage loans unless they are Fanny and Freddie qualified. Absolute genius screamed the Times and those of it's ilk. Funny, I have always been of the view that the only really new idea that has come around in a while was the Sermon on the Mount. Everything else is simply a variation on a theme. This reg is no different, only in my time it was called "Red Lining;" I guess what side of the fence you are on makes a difference. Wonder what Rev. Jackson thinks?
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