Friday, September 28, 2012

Haven't we been here before?

© fintag

News comments:
Often I stare at Bloomberg and it all looks so familiar.

Being a financial journalist / commentator / agitator / windbag (please delete) is sometimes very easy when the events of the day are like the events of yesterday. News repeating itself. Here are some examples for the weekend:

Nothing ever changes at the ONS...

October 2011: UK statistics - finger in the air (fintag)

1 year later: Time for MPs to summon statisticians over endless revisions (cityam)

Spain coats itself with Teflon...

Santander is the next Northern Rock (fintag)

Spain bank test joke (businessweek)

Apple loses its way...

Lost in space (reuters)

The Emperors new clothes (fintag)

RIM is dead (almost)...

RIM RIP (fintag Jun12)

RIM is BB10ody alive and kickin' (reuters)

Bank of America is not fit for purpose...

Investors get some of their cash back (bloomberg)

Cobol is the new Apple 6 OS (fintag Jul12)

France eats itself...

France puts up taxes to cover Greek exposure (fintag Nov11)

France puts up taxes to cover Greek exposure (wallstreetjournal)

Euro to collapse next week / Euro to be saved with lots of important meetings and press announcements (please delete).

Wednesday, September 26, 2012

Why I want Anarchy in the EU

FX © fintag

News comments:
I always look forward to this time of year.

It's always the period when news makes market makers very twitchy. Given the over valued (or maybe truly undervalued?) equities and commodities markets, the real casino markets showing what the future lies are the EUR FX rates. Not that they are being driven by fundamentals - it seems to be more correlated with the percentage of people out after dark. And more.

Greeks setting fire to trees, demands for devolution in Spain and CRAs punching hard to keep the bankrupt USD a float before the lemmings jump off the fiscal cliff, are all contributing to the ebb and flow of the EUR FX markets.

My interest is purely selfish though as I am buying a place in the South of France. A distressed seller of course, but the French red tape means I cannot get my hands on the place for another 2 months when I have to hand over some EUR. Forward rates are looking favourable and evening spotting now I feel I can get a bargain despite GBP being as overvalued as Apple.

The other bargain hunters in France are the Australians. Everywhere. Snapping up real estate with their over priced currency. No wonder being Australian is so in fashion. (telegraph) (fintag)

As I am not Australian I need to resort to other means to get a peanut rate EUR. Given the EU FX markets appear to be driven purely by politics I am screaming out for Anarchy in the EU. So come on you unemployed youth, burn, trash and cause as much chaos as you can over the next 8 weeks.

My sun tan is in your hands.

Today's shorts:
Burning assets (spiegel)

Today's longs:
Russians find way to manufacture gold (marketwatch)

Canadians are the smartest people (marketwatch)

Israel and Iran found to be arming unemployed students.

Monday, September 17, 2012

Pirate Equity: Watch out, you are next

pirates © fintag

News comments:
The unexpected consequences of Mitt Romney's standing for president is the opening of the of one of the most corrupt, immoral and unpleasant worlds known to financiers: Private Equity.

As you know I have long held the view that it was the Pirates who contributed most to the current credit crunch but the regulators and media commentators have gone after the easy targets like the banks, real estate pushers, tax havens and hedge funds. Now its the turn of the Pirates who have hidden for a long time behind a cloak of opaqueness because guess what its "Private" business model and the Pirates are smarter than your average Goldman Sachs executive.

Of course the Pirates like to believe they help turnaround companies with their expertise in management and strategy and hiring the right people. The reality is these spreadsheet jockeys are just good at working out how to leverage assets and dupe investors into thinking they are onto a winner like Facebook. Some people have become very wealthy (Mitt Romney and Bono for example) but many others have been party to some unscrupulous behavior such as "bid rigging" which are soon to be reaching the courts.

The "carry interest" tax free income capital flip joke that nobody really understands and the pass the parcel of PE valued crap so to ensure this carried interest can still be paid to those risk taking Pirates (using other people's money of course) was the domain of those living in an unreal and unregulated world lived in by the likes of Mitt Romney (USD250k is a bit more than the average middle income American earns (dailybeast 2008). He has been part of a system that has made some Pirates extremely wealthy, not because they were very good stock pickers but because they colluded with bankers to grab cheap debt and bolster company balance sheets for easy picking IPOs (from Facebook, Ocado, Groupon, Prada, HCA, GM, Visa, UPS, Kraft, CIT and of course Goldman Sachs) and the public to private fee generation trades that move off piste and off balance but with fees on fees and market distortions to make your eyes bleed.

Lawyers have had a tough time as corporate work (mostly generated by Private Equity) has dried up - now they can enjoy the fruits of litigation as the next huge fee opportunity will be all those lovely IPOs of the past 10 years.

Today's shorts:
KKR et al (cnbc)

Today's longs:
Hedge funds are the new Pirates (bloomberg)

Facebook to go private.

Tuesday, September 11, 2012

Will they or won't they?

© guardian

News comments:
On and on and on.

Over the years history tells us a boom follows a bust. Those owning distressed real estate all know in the long run they will make a profit. If they can hold on long enough (e.g Santander).Well that is how it's supposed to go. So imagine if the EU crats weren't distorting the markets and equity markets reflected the true reality and value of the world today with proper volumes and less vol? The markets would surely be 20, maybe 40, maybe even lower than they should be. Or maybe not. With low interest rates we could well be booming right now.

But we are not. So again we wait for another event. Will the Germans allow the ECB to buy some sticky plaster? That is the question. And if so how much plaster will they allow to be bought?

Life really is too short to be going long on anything except corn. And potatoes. Have you seen how much it is a tonne c.f last year? Ooof. Your Big Mac and fries will be getting smaller later this year.

The Germans have dished out some plasters buy only EUR190bn or so. Well that ain't gonna be enough is it?! (bloomberg)


Today's shorts:
Egypt (cnn)

The right to have ones foreskin (spiegel)

Today's longs:
Asia (irishtimes)

Germany will say yes! Sort of.

A time to remember

wtc © fintag

News comments:
Just a thought for those who were in the wrong place at the wrong time.

New cancer links (mbnc)

Museum costs costly (guardian)

Almost forgotten (huffpost)

Sunday, September 9, 2012

Bad but no bank

more coins © fintag

News comments:
Sterilisation? Super Mario should be sterilised.

The ECB's sterilised swap for bank deposits and the purchase of sovereign debt is more market distorting nonsense. Given Mario doesn't really run a bank, there is little it can do except move the goalposts while the Germans opine.

Now I quite like his conditionality idea of buying sovereign debt with conditions and being subordinated but I cannot imagine any government wanting to take Mario's money under some nasty fiscal sovereignty handover to an unelected bad bank. If the ECB is only buying the debt on the secondary market, how is it going to enforce its conditions anyway? A bit like me saying I will only buy the new iApple if they stop using child labour. Or you refusing to open a Santander account unless they get rid of that continually smiling and chirpy Lewis Hamilton [Ed: Have you seen his girlfriend?].

Under normal circumstances a lender would want some collateral as a hedge against default or lack of servicing but it seems the ECB are following Bernanke's famous "Cash for Crap" malarkey and will take anything. Spanish real estate? A charge on Greek pensions? The Colosseum?

The biggest fear is the ECB will turn into a student loan fund or worse a Freddie Mac and Fannie Mae. Hoovering up junk bonds using clean bank deposits.

These bank deposits would normally be lent to the real world but lending is risky so it will find its new home in the risk free ECB honey pot. Out of action. More credit crunch. Market distortion.

The ECB will soon have lots of bad debt and these banks will eventually realise the Euro cause is lost and pull their deposits when the CRAs rate the ECB as junk. So who will bail out the ECB?

A short term fudge and a long term nightmare.

Today's shorts:
Fintag's crap picture (spiegel)

4th Richest man hedges his tax bets (wsj)

Hedge funds start to manage risk (hedgeweek)

Today's longs:
iPhone 5 to distract us all (marketwatch)


Wednesday, September 5, 2012

Why the over 50's should be culled

young chap © google/

News comments:
Baby Boomer scum. [Apologies. I have discovered some grey pubes and had to drown my sorrows. Rant should be taken with a pinch of salt]

This is a true story. Names and locations have been changed.

A friend from university is the source; a child of "Baby Boomer" parents who did very little but had an incredibly lucky life at the expense of the rest of us. Right time, right place.

Two people. An Artist. A Journalist. Met in a squat in grotty Notting Hill circa 1950. Landlord wouldn't visit area as too dangerous so gave them the title deeds. Later, the house was turned into an artist community and many who lived there have works in Tate Modern and MoMA. True bohemian life of sex and drugs and fun. Then came family and responsibility and squat turned into nice family home. A very big home with many floors and bedrooms that has featured in Hollywood films (Depp, Weddings et al) and which they recently sold for GBP45m. Tax free. Not a bad return for a struggling artist and a lowly paid hack.

Inbetween they and their children were educated for free; health care looked after by the state and when they didn't work the state paid them while they were idle. When they retired the state gave them a pension too.

Life is about luck. After WW2, those living in the West have had it pretty good. It started out tough of course (rationing and all that) but just got better and better. Vacations. Fridge. Cars. Property. Paid help. Education. Health. Sports. Culture. Cheap chinese made goods. Communications. Apple.

Chances of this being replicated are pretty slim. Children born post 1985 may have been born into a luxurious heaven of everything now and everything works, but will be finding life a bit trickier these days. Unlike their parents where heaven got better, they are living in a world on no jobs, crap jobs, tinnitus and no religion.

So what can be done about it? The Baby Boomers have had all the cake and you lot are having to do the washing up.

What the world needs most [Ed: is love sweet love?] is a plague or war to wipe out those over 50. Men's sperm over 40 is defective useless and dementia is the new black.

Too many unproductive people at both ends (under 25 and over 50) so its time for a clear out. I am banking on Israel versus Iran. Gas versus Oil. Watch this space.

Today's shorts:
Too old to work, too old to be healthy (ikklesia)

Japan's 25% idle old people (ft)

Today's longs:
Cancer in old people (guardian)

Sushi keeps the old working in Japan (bloomberg)

Apple to make iThings with large screens because older people cannot see them (cnn)

One Direction has a future EU president amongst its ranks.

Monday, September 3, 2012

Three big events

green bollox © aet

News comments:
In the world today there are three big events.

Will useless Obama get a second term because his opponent is even more useless (and I lose my $100 bet?)?

Will the EU talk us into boredom such that by the time the Euro collapses we will be in the middle of Credit Boom 3.0?

Will the really useless George Osborne actually do something?

Brits like to be different. We like to innovate and set the scene. Alas Georgie Osborne is no Brit. A bit like Samsung he likes to copy and follow.

So now we have a new Big Society idea. Create a local bank that will lend to SMEs. (yahoo) Uh? The UK government already owns RBS and Lloyds TSB so why doesn't it force them to lend to small SMEs? And surely this will have to be approved by the EU because it is a state funded bank? I give up. Why won@t he just slash VAT and other business prevention taxes, tax empty houses in Belgravia and allow people like me to hire anyone I want to at any wage I want to and fire anyone I want to whenever I want?

Remember the Green Bank? (guardian) It was supposed to help out businesses in the "green" space? But now we find the FSA banning investments in Timber, Wind Farms and other sustainable assets and green is a bit left for the likes of the Tories (although Zac Goldsmith (bbc) wants to ensure his people like K-Patz, Brad Pitt and Tim Rice don't get noise polluted by more Airbus planes)

Still, at least I am not French (and a socialist). In the short space of a few months the great saviour of France is looking more and more like George Osborne everyday (if you take his glasses off that is). (telegraph)

But that is dull. So what are we all investing in?

London Prime, London student accommodation, Corn, Nokia, Golf [Ed: I think you mean Gold] and for those of you who are sophisticated professionals, Supertuscan and Burgundy wines.

Today's shorts:
Goldman says short some junk (ciol)

Today's longs:
Reds United (bbc)

New gold standard is here (marketwatch)

George Osborne is having an affair with Nick Clegg (sponge or stone?)