Monday, June 04, 2012

Financial Sarcasm Roundup for 06/04/12

Another Monday brings another bucket load of sarcasm about business news items.  This is my first roundup using an iGoogle gadget feed to generate the news headlines instead of my previous method of culling news from emailed alerts.  Let's see what's in the bag.

MF Global's bankruptcy trustee has determined that the firm's former CEO may be liable for breach of fiduciary duty.  Well, that sure took long enough to officially figure out.  Plenty of other analysts, including yours truly, knew that from the start of the debacle.  The trustee's lawyers needed to justify their fees and provide rationale for keeping the gravy train chugging along with more lawsuits.

Chrysler doesn't want to reduce its pension obligations with buyouts.  They may regret that decision in 2013 when the full force of the trans-Atlantic Great Recession 2.0 hits their net income.  The time to prepare for trouble is before trouble hits.  Chrysler's private equity fans are in for disappointment, at some point.

S+P says Greece has about a 33.33% chance of leaving the euro.  I think the odds are a lot higher.  I won't describe the chain of posterior probabilities S&P used to estimate the chance of an anti-austerity election victory, a rejection of austerity, and a German-led expulsion of Greece.  Suffice it to say that a lot of posteriors are on the line now.

AIG appears to be on the mend.  That's good news for Goldman Sachs; they can use AIG as their cut-out once more to offload any European sovereign credit risk still stuck to their investments.  I knew people back in 2008-2009 who day traded AIG and thought they were geniuses.  I'd hate to see them try that trick again.

Some former Deutsche Bank guy says Germany will pull out all the stops to save the eurozone.  You've got to be kidding me.  Post-WWII Germans have been taught all about how the Weimar hyperinflation laid the path to hyper-nationalism, militarism, and ultimate disaster.  No way are the volks going to tolerate a German push for ECB hyperinflation just to save Greece and other deadbeats.  That's why the Fed is going to do the inflationary heavy lifting for Europe.  Angela Merkel's comments in favor of fiscal union are just rhetoric to calm the capital markets.  The train for a fiscal union left the station last year and no one boarded.

Full disclosure:  No positions in any companies mentioned.