The U.S. has finally enacted permanent normal trade relations with Russia, more than two decades after the Cold War ended. Uncle Sam sure takes his sweet time recognizing reality. The Jackson-Vanik legal regime was a Cold War blunt instrument intended to hold the Soviet Union and its Warsaw Pact allies accountable for their human rights violations. Now Russia's internal freedom is on par with that of the West, which says more about the West than it does about Russia.
Uncle Sam will probably be just as slow in recognizing the weak demographic assumptions underpinning entitlement spending. The slowdown in legal immigration due to the prolonged recession is probably offset by the large numbers of illegals who remain here and have kids. The irony of illegal immigration is that our own government encourages illegals to apply for benefit payments while they are paid off-the-books income that can;t pay into Social Security or Medicare. Illegal immigration makes the unfunded entitlement problem worse and no one in our business or political elite even cares. My solution is simple. If you apply for benefits, please include your U.S. birth certificate or naturalization papers with your application.
Meanwhile, private equity firms have learned nothing since 2008. They are using more leverage than ever to buy companies whose earnings will be destroyed in the next round of the recession. Borrowing at record-low interest rates isn't such a great idea when the earnings needed to pay back those debts won't be there. I'll be watching the headlines for the first private equity firms that go bankrupt next year.
Sell-side analysts have learned nothing from last decade's master settlement. Some Morgan Stanley banker got his firm smacked for coaching Facebook on how to materially mislead analysts. That $5M fine is peanuts, so this is hardly going to hurt anyone other than that one banker. State regulators are paying attention while the SEC is asleep. My readers should be grateful that all of my articles reference facts already in the public domain. Anyone idiot can mislead analysts on a conference call. Only a genius like me can tell the truth.
I think I'm losing my touch. These boring news items aren't getting me fired up enough to be truly sarcastic.