Friday, June 29, 2012

Merkel is the bully

merkel © getty

News comments:
The markets believe Merkel was bullied by two arrogant men to get free cash.

Up they go. The reality is somewhat different. Merkel is no patsy and has effectively given the EU control of Spain and Italy's banks and indirectly their governments. Yes the technocrats wanted share debt and pain with bailout cash but she said not over her dead body. So the compromise is for Spain and Italy to have banks given cash for the purpose of keeping them alive.

Banks as we have seen already can never have enough cash. Now they have some more, they will be forced to buy debt from their sovereign countries since over time noone else will and the debt/gdp ratios will just keep on rising. Banks don't want to lend and they wont. Upshot is capital full banks (and bigger bonuses) and negative GDP.

Eurobonds aint happening this month. But they may well happen in July (fintag).

But this is dull.

Now this is the best idea I have heard of all week. A rich Greek setting up a distressed debt fund that buys greek debt and cancels it (sort of) in an attempt to push the price up and the yields down. (despielgel)

Today's shorts:
RBS get ready for huge Libor fine (telegraph)

Today's longs:
Bobby Gezzer just doesn't get it (guardian)

Gossip:
Mervyn King to become chairman of Barclays and make an even bigger mess of it.



Wednesday, June 27, 2012

Bobby Geezer needs better PR

the geezer © fintag

News comments:
What can you say? Investment Bankers cheating again.

It has been clear for years that Libor was a bit of a dart throw, but Barclays abuse is quite staggering. But then when bankers are able to con governments in getting them to fund their bonuses under the guise of capital requirements and too big to fail rhetoric, then what is a little bit of libor flexing?

Barclays are in big shit. Everything they have done in the past 10 years has turned to dust.

Barclays are rumoured to have pumped 2 billion into film partnerships, tax schemes being investigated and closed down by the UK's tax authorities. Barclays have also set aside huge sums for PPI mis-selling and it turns out will be setting aside even more for the mis-selling of interest rate swaps. They appear to have only paid 1% in UK tax and were caught with their trousers down when they off loaded a chunk of their balance sheet to some ex staff who ran it as a hedge fund.

Now in most instances the CEO would have sworded himself by now. But not this one. Despite all these things happening on his watch, he has decided to forgo his stock options (which would be worthless anyway) in return for granting himself much better ones next year when hopefully we have all forgotten how arrogant and shocking Barclays have been.

Oh yes and didn't Barclays rape Lehman after it collapsed too?

The worse thing of all is at one time I was interviewed by Bobby Geezer for a job at Barclays Capital ...and I accepted ...and left soon after with a fat guarantee ...time to wash my mouth out with soap meez thinks.

Today's Barclay shorts:
USD450 Fine (reuters)

PPI (moneysavingexpert)

IRS (telegraph)

Film Partnerships (independent)

Privacy (fintag)

1% tax on UK profits (mirror)

Today's longs:
GoogTab (bloomberg)

Gossip:
Bank of America, UBS, Nomura ...(rollingstone)



Monday, June 25, 2012

Long Olympic Tickets

for sale © fintag

News comments:
@natwest. All very fishy.

You know when RIM went down and we were blackberryless because some terrorists were going to strike in the USA [Ed: That is classified], the excuses coming out were quite frankly bizarre.

An upgrade error.

And remember Twitter and Google going down?

More upgrade errors.

So we now have RBS / Natwest, a bank owned by the UK taxpayer, not being able to pay people. That is what they are supposed to do. Pay people. Move money around. Isn't it worrying they cannot seem able to do this?

An upgrade error.

Actually no. A bit like the way the traffic lights are always red in London (testing for the Olympics), NatWest is being tested for when the Euro collapses.

Tis true.

Talking of Olympics, I managed to get hold of 4 closing ceremony tickets for my new fund, the "Anything but listed global manx 4 fund llc" and I am looking for a valuation price.

EBay seems a good place but apparently I cannot sell them there.

So please tell me how much you would pay for these tickets and I will pass on your prices to the funds auditors.

The best price gets a couple of tickets (at that price of course ....)

Today's shorts:
Spain asks for cash (reuters)

RBS systems are mostly excel (fintag)

Today's longs:
Lawyers line up to hammer RBS (bbc)

Gossip:
Hester to be given Fred Goodwins penion for services to banking.



Thursday, June 21, 2012

Germany says Yes! Germany denies Yes!

Spains new currency © fintag

News comments:
The Euro soap opera is taking its toll and making short term and long term trading near impossible. No wonder illiquid assets are back in vogue (treasure, art, wine, trees, distressed credit)

Media: Spain puts pressure on the EU to give it free cash as it has run out. EUR600bn to be handed out with no strings. Markets rise on news.

Merkel (or other stooge): We believe in the Euro but cannot support countires who have flouted the EU treaties. Markets fall.

Media: Obama tells Merkel she is causing the death of millions in Euro and has forced her to make a u-turn. Markets rise.

Merkel: There is no truth in Germany bailing out those who photoshop swastikas on my arms and with the other hand beg for cash. Markets fall.

Media: Spain and Italy gang up on Merkel and bully her to pump cash into the Euro-Tarp to save their ailing economies and she says yes. Markets rise.

Merkel: I deny there is any truth in debt sharing. These are theoretical ideas and will not turn into reality. Markets fall.

Media: Germany to tire out the Greeks, pounce and thrash (yahoo). Market volatility becomes a joke.

Today's shorts:
Man decides to pay more tax to keep his job (dailymail)

Today's longs:
Dixon man leaves for Apple and Dixon does good (sharecast)

Gossip:
Germany to leave euro (again)



Wednesday, June 20, 2012

What does Fair actually mean? All tax is morally wrong

vodafone tax © deloitte

News comments:
Civilised societies should not need to tax anyone.

Tax is a lazy way for non wealth creating people (eurocrats mostly) to spend the wealth created by others. Apparently wealth creators are by nature useless at spending money properly and it needs to be taken away so clever civil servants can load up their pensions and cause unfettered chaos in the Eurozone through intervention.

A few celebrities in the UK are being hammered for not paying their "fair share" of the UK debt burden through tax. What is fair? I mean if you have to pay 50% tax and you found a way to pay only 45% because of an allowance you were not aware of, would you pay 50%? Would it be fair not to pay the 5% difference?

If you found a way to set up your business affairs legally and reduce it to 1% then would you pay 50%? Only an idiot would, surely?

Tax liability is determined by laws. If laws are badly drafted then why should someone be penalised for the incompetence of some politicos?

All these schemes being exposed by the media have been around for years. Investment Banks are legalised tax minimisation schemes and so are most large conglomerates. An old structuring mate of mine always told me you need 3 entities in 3 countries all with agreements between each other in jurisdictions that never talk to each other. Why? So the tax authorities can never get to the wealth because they don't know who it belongs too. This structure is as old as the hills of course and is the basis of most tax mitigation and reduction schemes. But not always.

Hedge Funds to Hotels are all at it. Paying less tax. It is quite easy to do. The internet is full of ideas and you don't need to be smart to work them out. There are many LLPs and LPs paying out drawings as loans to equity partners that will never be repaid and never taxed. There are companies using Intellectual Property and Patents to keep tax down (Google to Vodafone). There are others putting in huge loss provisions or selling unrealised losses and buying them back to ....

If the law is an ass, change it.

And on another note why don't Financial Accounts have a simple note to the account that says:

Profit before tax
Tax (broken down between the countries that received the tax - amount and when paid)
Profit after tax

...then UK Uncut could get their facts right.

Today's shorts:
Jimmy Carr is a moron (telegraph)

...Prime Minister David Cameron said the tax arrangement of comedian Jimmy Carr was "morally wrong" using a scheme which allows him to pay as little as one per cent tax on their income...

Today's longs:
Greece solves all its problems (reuters)

Gossip:
Euro people to pay 100% and be given pocket money (USSR style).



Sunday, June 17, 2012

Grexit becomes Grestayin

unhappy Greeks © Eurokinissi

News comments:
Greece has decided to fight and to continue with the Euro.

Eurocrats et al will be greatly joyed by the Greek people having no choice but to stay in the Euro and live a life of ever falling living standards.

Some people are gluttons for punishment. The Greeks certainly are. So no more moaning Greeks, pictures of burning buildings or stories of pensioners hanging themselves from trees.

Greece is back in. Hurrah! The Euro is saved, long live the technocrats.

Greece has decided not to leave the Euro but will the other countries have the will to keep bailing them out along with the PIS? It looks like they have.

Either way I have been proved wrong, a fool and an idiot. I deserve to lose every penny on my shorts (except I am sitting on USD and rock n roll memorablia...) and should stop commenting on the Euro debacle. And I will.

Today's shorts:
Goldman Sachs (reuters)

Today's longs:
Euro is new currency of quality (bloomberg)

Gossip:
Greece to grow stronger and become the next Germany.



Friday, June 15, 2012

King's latest ponzi scheme

cash for crap 2008 © fintag

News comments:
Snail like King has copied Bernankes cash for crap scheme of a few years ago in an attempt to kick start growth in the UK.

Well that is the stated intention. The reality is somewhat different.

As we saw in the USA it did nothing but provide the banks with cash for bonuses. And it will do the same for the UK banks.

Here is fintagleaks conference call hack:

King: HSBarclays, it is Mervyn King here.

HSBarclays: Good to talk again. Onto business, then. Will you please take this portfolio of non performing debt which we have in our books at a 2006 valuation?

King: Yes, I will look after that and will swap back in 18 months when the valuation is back at 2006 levels. Here are some crisp new notes in exchange.

HSBarclays: We have hungry bankers who need bonuses and others who have worthless options and so giving us this cash will enhance our stock price and make us all happy. We promise to spend it well and of course give it to small businesses via our Private Equity mates who are in dire need of finance.

King: Given I am unemployed very soon, I trust my Chairmanship seat is nice and warm; including those Wimbledon debentures of course.

HSBarclays: Indeed. A win-win then. We trust this hasn't been minuted and is not in breach of the UK Bribery and Corruption act as its an off the record Cameron-Brooks banter.

King: It is also a win for my boy George who needs to get votes for the next election.

Bankers. At it again while the world gets distracted by the Germany / PIG spat. Scum.

Today's shorts:
Snail alert (cityam)

ECB ready to spend other peoples money (bbc)

Red wine merchants follow subprime sandwich model (dailymail)

Paul Sinclair nice guy calls it quits (bloomberg)

Today's longs:
Answers on a postcard please ...
Or tweet me @fintag ...

Gossip:
Bank of England to borrow the money from the ECB.



Thursday, June 14, 2012

69% of Germans say

hamilton © wiki

News comments:
We all want a Europe resolution because sitting on cash is extremely tedious.

The will of the Eurocrats and politicos and the media is for Germany to sponsor a huge mopping up fund in the style of Hamilton's US hidden sinking fund in the 18th century.

But it isn't that easy because you have to change treaties and laws. And you have to listen to the little people too:

"According to a survey published by polling institute YouGov on Wednesday, 69 percent of Germans think Greece should leave the euro, and only 17 percent want it to stay in."

(speigel)

June 17th is ground zero (unless its another hung parliament) and with these stats...

"Greece's economy shrank further in the first three months of 2012, shrivelling at a yearly rate of 6.5 percent against a backdrop of painful wage cuts, tax hikes and record unemployment."

(athens news)

...we are seeing a rich and powerful nation slowly crush and destroy a nation that should be let free. It is like a failed marriage - divorce is painful but in the long run the best option.

"...where has it ever been heard that the annihilation of a peoples and dissolution of a country is a condition for participation in the euro?" Alexis Tsipras.

Today's shorts:
Greeks lash out at Merkel (athen news)

Today's longs:
Germany 1 Greece -1 (reuters)

Gossip:
France to tax all Brits who refuse to speak in French in France.



Sunday, June 10, 2012

Spain bails itself out

spain © about.com

News comments:
The arrogance of Spain and the EU is truly shocking.

If I were Irish I would be livid. Spain's banks are phut and they have been bailed out by the rest of Europe without any austerity package or punishment. As usual, the bankers who are some sort of workers collective have saved their bonuses and pensions once more by acting like a trade union and bullying their paymasters (you and I) to give them more cash. The EU is more communist than North Korea.

However, all is not what it seems as it is worse than that.

The bailout funds (European Financial Stabilisation Facility) are funded by other European countries. The fund / facility lends money to indebted entities like Spanish banks. Isn't it funny that Spain has already guaranteed a commitment of EUR95.5bn to the EFSF and is effectively asking for it back so its banks can be recapitalised.

So instead of Spain putting its own money in it has gotten the rest of Europe to do so and avoided even more pain than it is currently enduring.

The Spanish elite are happy and the Eurocrats are happy.

However, other Spanish creditors are unhappy as they will be subordinated. With Spain's borrowing costs going up, austerity will just go on longer until Oliver Wyman find the bank's need more capital, Greece turns right and the markets hammer Italy before finally France is hammered and the Euro ends. Unless Germany leaves before then. Which it will.

Let's hope it all happens in September after I come back from my summer vacation in the South of France.

Today's shorts:
Spain plays with different rules (bloomberg)

Today's longs:
Portugal to invade Spain (reuters)

Gossip:
Markets to tank on Monday.



Friday, June 8, 2012

It's getting grimmer

top bank © fintag

News comments:
Hope you are sleeping well. You shouldn't be. I had a dream last night, and these were the headlines on my new iPad3D:

Spain confirms 275bn bailout is required after IFRS accounting is abandoned and bank assets marked to market.

Germany abandons Euro after refusing to pay to save Spain.

UK sues the EU for allowing Finland to nationalise France.

Spanish squatters turn Brussels into world's largest.

Spain nationalises Santander and the UK branch assets are frozen and repatriated to the Spanish government.

Greece reports 12.3% GDP growth exactly 1 year after leaving the Euro; plans surplus within 3 years.

Goldman Sachs found guilty of causing the Nasdaq FB IPO meltdown.

FB is suspended from trading after Russian hackers publish all 900million passwords.

Blackberry is sold for $1 to Apple who put its patents up for sale on eBay.

Iceland, Ireland and Italy form new 3i Euro area and decline the admittance of Germany for not having rigourous fiscal control.

Mitt Romney arrested for being too dull.

Today's shorts:
China refuses to bailout Europe as its "not worth it" (telegraph)

Despite Obama revealing his new found German roots, he fails to seduce Merkel (bloomberg)

Today's longs:
Money to be abandoned for large size cola bottles (marketwatch)

Gossip:
Obama to stop dying his hair grey.



Spain to blame IFRS

© fintag

News comments:
You know when you cannot find your car keys.

You scour work surfaces and drawers, peek through the car window and stare at the drain below your feet. It is when you put you hand in your pocket to scratch that grional itch (I must go to the Doctor) and there they are.

Spain is like my lost car keys. [Ed: uh?] The country has no industry, 50% unemployment for those under 25, 15 years worth of empty real estate, 2 new unused airports and banks whose only collateral is Spanish real estate which has fallen 30% since the start of 2008. So why hasn't anyone ripped apart its credit rating? I mean Fitch waited until yesterday and the 10 yields still look reasonable. Why is Santander UK still safe (it maybe ringfenced but then so was Lehman's LBIE and that was raped by the US Lehmans the day before it crashed)?

Spain is not alone. The other basket cases are well known and the Euro project is a disaster.

Good to see some more sensible reporting on how the Euro will disintegrate (bloomberg).

Here are the three possible Euro outcomes:

Disintegration.

Disintegration.

Disintegration.

I still believe Germany will leave first though (fintag). Having had supper with the ex CEO of a German Bank at my current Italian favourite (its next to Zuma) last night, I was informed that this is what will happen. Straight from the horses mouth. Someone in the know. And they are not alone.

So tell me, why is anyone buying long dated Euro debt? The currency may not exist in 12 months time.

[Ed: So what about IFRS?]

Today's shorts:
Germany to win 2012 (maradona)

England to lose on penalties to Germany in the Semi Finals (guardian)

Today's longs:
Rich (shale gas reserves) versus Poor (a few antiquities) tonight (euro2012)

Gossip:
Spain to compulsory purchase all the Brit ex-pats living there.



RIM RIP

uncool © fintag

News comments:
No, not a sexual perversion but the end of Blackberry's maker.

Since the 1990s there have been some iconic brands. From the Palm to the Prius and the iPhone to the Blackberry. Beloved of everyone, this once cool device is the equivalent of Facebook and LinkedIn by the end of the year.

As much as tap screen smartphones are fun for those who have small brains, they still cannot compete with the Blackberry's keyboard and secure email infrastructure.

So what do I do? My contract ends this year and I need to bail out before RIM bails out on me.

I like the iPad (apart from making me go blind) but prefer the airbook.

I like the Samsung but still prefer a device with a keyboard because I like to write proper emails that make sense and cannot be misinterpreted. You always know when someone has sent you an email from a touch screen phone because they are always very short. We all like shorts (Hot Pants, Euro and Obama) but not from smart people.

So please, will someone make a smartphone that is like the Blackberry but isn't the Blackberry. Otherwise I will continue to use the thing and look uncool.

Today's shorts:
No more Playbook (reuters)

28 June spells the end of RIM (yahoo)

Today's longs:
Blackberry 10 is a game changer (cnet)

Just as we said (therecord) (fintag 2011) (fintag 2010)

Gossip:
RIM to be renamed Nockia.



Wednesday, June 6, 2012

Greece is like Y2K

y2k © jesus christ

News comments:
The end of the world musings coming from the EU fed financial media is staggering.

Every article on Grexit says the following:

The world will enter a great depression of depression

France and Cyprus will starve to death

Right wing fascism will rise once more

Asia will put up a firewall and ban the use of English

Spain will nuke Argentina

All Greeks will emigrate to the UK for its weather and jobs

Pants.

Remember Y2K when the lawyers and IT consultancy's drummed up a moral panic of planes falling out of skies, nuclear plants exploding and Windows 95 turning into a blue screen nightmare?

Well nothing happened except lots of project managers were made redundant and many stressed out 2000 millenium party goers who thought it would be their last ever got to see 9/11.

Greece is being heralded as a Y2K disaster but this is totally wrong. There was a time when Prime Brokerage agreements only assumed a hedge fund would blow up. If a bank did we would be in armegedddon. And yet Lehman, Bear Stearns, AIG, Merrills et al blew up and we are all still here. The markets rallied soon afterwards.

Greece is leaving a currency. Big deal. Many countries have done it before. Yes, a few exposed banks and haircut bond holders will lose some money. The last people with the CDO parcel will be coughing up. They have been aware of the Greek problem for nearly 2 years. If they are still exposed the wrong way they should be reported to the regulators for incompetence.

Greece is tiny. The size of Maryland in the US (thanks for Bloomberg for telling us this factoid). It is over leveraged but deleveraging has been taking place whilst the EU and the french driven IMF in all their wisdom have given more blood transfusions than Simon Cowell has had waxing the hair off the back of his hands.

What Greece needs is a fresh start. Tourism.

Greece will create a new currency, peg it for a short time to the Euro and slowly devalue. Or as I would suggest it starts over with a big bang currency launch.

But that is dull. Here is some gossip:

Swiss banks are telling their customers they will be imposing a charge on deposits held. Yep, negative interest on your savings.

The Spanish King is flogging all his assets.

Twitter pre IPO stock is being hawked around by people who are not Goldman Sachs.

Today's shorts:
OHF liars get found out (SEC)

FB liars get found out (dealbreaker)

Today's longs:
Talk costs lives (reuters)

Gossip:
See above.



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.

CHINA
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.

SMOKING
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.

BANKING
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.

INVESTMENT BANKERS
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.

COUNTRY AUDITS
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.

BOND HOLDINGS
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.

COMPUTER GAMES
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)

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