Tuesday, June 5, 2012

How to fix Europe 2

no fun © quaker

News comments:
It is easy to complain but harder to come up with viable solutions.

In the interests of my up and coming nobel prize for economics, here is a summary of how we can get Europe back on course.

Some of the solutions may seem unpalatable. This is a consequence of not letting things die and be reborn. Zombies should be in films not holding the deposits of you and I.

The key problem Europe (and the West) has is China. Its labour costs are too low for Europe to compete with. Along with a healthy disregard for human rights and health and safety, China is responsible for Europe's unemployed lost generation. While politicians add layers of red tape and protect their bloated pensions, cheating China ends up sucking out the value from Europe. China needs Europe but Europe should not need China.

Solution: Ban all goods and services made in China from being sold in Europe. This would force Europe into manufacturing, push up inflation and reduce debt values.

Europe is an old people's home. With the advances in medication and lifestyle management, people are spending more time retired than creating economic value.

Smoking bans are exaserbating the longetivy of people. I used to smoke and loved it. Now I am a miserable git who will live to 110 and once the UK government has removed me of all my wealth to fund unemployed young people, I will ensure I get as much of the taxes I have paid back by living as long as possible.

Solution: EU should remove risk management legislation and encourage Europeans to engage in dangerous sports, smoking competitions and vice.

Banks only take deposits these days so are not really banks. The reason is many banks that should not exist have been propped up by cheap ECB money on the back of capital requirements that discourage lending. Banks have outsourced their business model to wonga and crowdcube.

Solution: Slash tier 1 capital requirements, abandon credit rating services and take away banking licenses from deposit takers.

Overpaid IBs who think they are soooo important (I spent many years watching my genitals grow too) soon realise they provide no value to society when they leave and enter the real world. By then it is too late as rehabilitating an IB into the real world is difficult.

Solution: All IB's to rotate out of their jobs every 5 years and work in McDonalds.

The debt numbers that the markets love are fraught with issues. Many are wrong and have to be readjusted later (Greece for example). I never believe the numbers but given we all have the same ones, we all pretend they are right which is not right.

Solution: All countries should be audited once a year by the big 4 accounting firms.

One of the upshots of deflation and volatile equity markets is the big move into dull coupon producing debt. Equities are dead and this isn't good for anyone especially your average long short equity hedge fund.

Solution: Get some inflation going. Print money like there is no tomorrow. Trade Unions to put in huge wage claims. Ban outsourcing to cheap countries. Stop banks having sovereign debt as tier 1 capital.

Living in a Game of Thrones unreality is what Karl Marx would have called the Opium of the Masses. Such distractions are keeping the unemployed and the unproductive topped up and passive.

Solution: Either free internet and Xboxes to everyone or pleasure is only handed out to those who pay taxes. Quakerism to be the new Bailoutism. I think.

Today's shorts:
Spain ready to riot (reuters)

Today's longs:
Regulators find another ponzi scheme (hedgeweek)

Santander to redeem all Spanish deposit holders and to rename itself the Bank of Everywhere Except Spain.


Anonymous said...

You're back on the coke again Fintag - there is a new spring in your step again - but just me commenting it seems.