Category Archives: Foreign
Italian Bond Buyers Marking To Corzine Themselves
Since the Cyprus intervention, the euro debt markets have exhibited remarkable calm, in spite of the precedent that was set. Italian and Spanish yields are both pushing back towards the lows, and it seems that stability has won out.
Let’s gloss over the inconvenient fact that Italy hasn’t had a government for, oh, seven weeks now. According to Italy’s debt, all is well in the land shaped like a boot.
Clearly, this is a contradiction. It’s a matter of if, not when, this thing blows up.
At some point, people are going to question exactly, what business do the remnants of Italy’s last government have in collecting taxes, or administering programs. Or issuing debt at all. How can a country with no government make its payments?
I know it’s all about the northeaster countries at this moment, dictating events and how they play out. But at some point, you have to question, what is “Italy”? Seven weeks without any government is kind of a big deal. And where does this get resolved?
Yet, here we find money flooding into the country-less bonds. Why? I’ve heard a few theories, but I’m not really interested in them. More importantly, at what point do the theories become a distraction from the problems?
And when the problems become front and center, what does that mean following everything that has happened up until now?
North Korea Seriously Underestimating Battle Lines
This is definitely amusing, watching the North Korean leadership try and play tit for tat, essentially against themselves. This is the kind of bravado that can only be fostered living in a hole in the ground. What do they think is going to happen?
The old lines of warfare have been killed out, largely thanks to the financial industry. Unprecedented levels of cooperation and mutual interests have been aligned over the last sixty years. Those aren’t going to just erase themselves.
The roots of NAFTA have sprouted a magnificent tree that is even now holding the countries together. Does North Korea think China has its back in a war against the South? South Korea and the US are far more important to China than North Korea is. I would venture that North Korea is actually a liability for China.
If markets seem unusually calm at North Korean warmongering, it’s probably because North Korea will get their clocks cleaned if they pick this fight. Any effective war against the US by the part of China would send that country screaming into a depression. They’ve come too far to see it all get ruined by old world communists.
But hey, let’s call North Korea’s bluff and find out.
Sadly Chavez Was Nothing Special
Chavez is now officially dead for real – as opposed to the fake news reports that have been making the airwaves once every few months – ironically it seems he died in Cuba’s “stellar” medical program, of a respiratory infection.
No, Cuba, you’re supposed to “clean” your instruments. “Clean”…
Well, hah! What do you expect for free?
I’d like to say this marks a turning point in Venezuelan history; a triumphant moment where a once-great culture can pull itself out of the gutter and rebuild after almost twenty years of garish incompetence.
I’d like to say that, but I’m just too smart for that sort of thing…
You see, there is nothing special about Hugo Chavez. Nothing. He was the dominant monkey to emerge from a primordial game of survival. His rise was circumstantial, charged by a sharp smile and a knack for knowing how to tell everyone, one on one, exactly what they wanted to hear. And now that he is dead, my only real satisfaction is knowing that he died young (one second early for every life he helped ruin I’d like to think).
His legacy is a power vacuum. You see, like most jackasses, Chavez believed himself irreplaceable. That is folly. Our betters come behind us, catapulted by our efforts today. Chavez belittled his people and convinced them they needed him, concentrating all power, publicity and wealth to himself – a megalomaniac of the highest order.
And now that ‘irreplaceable’ man is very dead.
The office that he left behind is unparalleled in power and has zero accountability attached to it. No culpability whatsoever – I mean, the man promised infrastructure spending back in the nineties and yet Venezuela has had rolling blackouts twice a day for a decade.
What kind of person is attracted to such a title?
And so, the next con artist is out there somewhere…preparing roaring and empty speeches…brushing up on what they think the near illiterate people want to hear…planning for all the wonderful things they’ll gift themselves from the public treasury, that grand reward for that good work they haven’t done…
Prepare yourselves. Soon to follow will be the dramatic calls from the indefensible sympathizers here in the US. Dull burdens of society like Sean Penn will soon be out and about, shining gold on Chavez great ‘legacy’ of “wanting to help people”. “Wanting to help people” is all they have – mostly because they’re too dumb to actually help people. They can’t let that go; what would be left for them?
But what should upset you is the murmur that will be coming from more sensible folks. The kind of folks who ought to know better…
They will ask the question, “is now the time to invest in Venezuela?” in much the same way they asked, “is now the time to invest in Russia?” in the early 90′s, even though it wasn’t clear that Russia was even a place (much less not-the-USSR). Chastise these men and women without delay – such baseless speculation can only bring suffering to themselves and those around them.
Even his death brings nothing for Venezuela. Because he left behind a mighty opportunity for the worst of mankind, and a population too weak, pitiful and sad to do anything about it. That is Chavez’ true legacy – that of a sycophant and a self-aggrandizer.
But there was nothing uniquely important about Chavez himself, and the banal can easily fill his shoes, if fortune and chance should allow it.
The monkey-knife-fight succession plan is about to commence…
So Dramatic
As the market is off a whopping fraction of a percent, commentators are literally soiling themselves on live television, trying to time the next selloff.
Oil reversed yesterday – to a flurry of publications informing us that the move higher is over with.
Bond analysts are flipping out about Europe.
Romney made some comment most everyone I hang out with agrees with – half of all American’s are lazy tits with zero self-worth – and now a few ancient and withered CNN “journalists” are creaming their pants insisting Obama now somehow has this election in the bag.
And China is thinking of crushing Japan because of some island that might have oil rights.
Folks, this is obviously a drama day. I’m checking my brain out.
Do you understand insignificant this selloff is?
Do you get how high all commodities ramped over the last three weeks as the QE announcement was obviously leaked?
Do you see that European bond yields are still lower than they’ve been all year?
Do you understand that CNN journalists all dorm together in a crawl space and haven’t made a correct prediction in the last 15 years? That the polls coming out have fluctuated consistently by 3% or more, leaving Obama and Romney (the guy supposedly nobody likes) in a virtual tie?
Do you get that Japan has nukes too?
Seriously, this is ridiculous. I’m closing the 9th floor for business early today. My things are packed. I’m closing the door behind me – the lights are flipped off as my hand slides quickly out before the latch locks tight.
Today is just too stupid to get involved with. I’ll see you tomorrow.
How’s The China Rate Cut News Good?
Banks hold reserves to pay out withdrawals or take losses on bad loans, not because law dictates they must. If you’re a bank and you don’t have sufficient money to pay out, in a classical banking sense, well then you’re pretty fucked.
In this day of money printing, I get that banks love having lower limits, because then they can play tight and fast with the houses money. But from their economy’s standpoint, what does lowering loan reserve requirements for their banks mean for China?
Is it a good thing, really?
Or does it indicate that Chinese banks are having some serious issues juggling their obligations without government intervention?
Not all central bank printing needs to lead to higher prices. Come on people. I mean, if an economy has 20X the currency in credit running around and the central bank doubles the currency, then sure the same credit level would result in higher prices. But if the central bank is printing because that 20X number is getting crushed down to 10X as bad loans and poor investments dampen the system, well then that printing really just gets you to about break even.
Especially looking at China’s inflation and housing problems, why on Earth do you think the China reserve cut is a good thing? If anything, it’s an action they shouldn’t have wanted to take.
Back In America
I left late Friday evening to enjoy some downhill skiing in the frosty northern lands of Canada. The scenery was beautiful, the people rather friendly, and the architecture, motivating. I always enjoy seeing cosmetically adorned brick buildings; our homes should be ornate and representative of a people who care. Nothing puts me off more than functionally driven housing. If the post-industrial world has claimed one underserving victim, it is the myriad of grand style that has been supplanted with faceless and formless buildings dotting the landscape.
What does that say? I’m so poor I just can’t take the time to cast some concrete into a more pleasant shape. I’m so destitute that constructing living spaces in anything other than cubes is a hindrance to my well-being. The old neighborhoods we drove through were splendid to look at, and full of cathedrals and churches made with the tall pride of a people replaced with a generation whose catchall is “no one can build them that way anymore.”
Oh really? “Can’t,” or “Are too lazy to try?”
That being said, I’m glad to be back in the U.S. If I have one criticism to place against Canada, it is this: your costs of living are stupid expensive.
Between dropping $1.20 per liter for gas (well over $5 a gallon for those who don’t care about the metric system) paying 20-25% more for all goods we purchased (all beer including domestics starts over $10-12 a pack. I was “overjoyed” to pay $50 a meal for Mrs. Thaler and myself, when eating out and that was for “decent” food, not great), I simply cannot fathom how you Canadians get ahead in life. Those prices would easily devour the entire budget of most ordinary citizens. You really see how high the costs are, now that the two dollars are near par with one another; the old excuse of a weak Canadian dollar is no longer valid.
Oh, I’m actually playing devil’s advocate. I know exactly how you get ahead. Don’t pretend like I don’t know that Canada has a brazen and rampant black market for labor. I’ve heard the stories from before healthcare reform, when men and women could work some paltry handful of months a year to qualify for coverage, and then quit their jobs and work under-the-table on all sorts of odds and ends for the rest of the time. And I know that remnants of that dark pool still exist. There’s nothing like tax free income to escape the burden of high costs.
It’s a shame; I’d probably visit the country more if I could at least engage in the simple enjoyment of living without constantly needing to contribute money to someone else’s welfare or benefits. It’s fairly ridiculous how much money those price disparities eat up with just the simple necessities like food and drink. This concerns me, because it looks like the Democrats put us on a similar path not long ago.
Two men should be able to exchange as freely as possible between themselves, without having to constantly feign worry for others; it’s a pretty straightforward transaction until you start chaining the planet to the participants. I’m a firm believer that a homeowner should be able to fix the roof on his house as easily as possible, without resorting to hiding in the shadows to avoid the open hands. It disgusts me to think that we could be dealing with these price levels at home in just a few short years, if a prolonged liberal majority were to ever hold office.
