Monday, April 22, 2013

Financial Sarcasm Roundup for 04/22/13

Whether good news or bad news, the news stream in business never ends.  That is why my sarcasm will never end.

The grand poobahs of world finance have anointed the global economy as just fine, except for weak growth and not enough jobs.  That kind of logic is so tortured it might as well reside in Torquemada's dungeon.  If GDP growth is weak and job growth is scarce, then there is no real global recovery.  The top dogs don't keep their jobs by generating spooky headlines but it's high time someone called them out.  I have no idea what these fools are smoking but I'm glad I've never smoked anything (except a couple of perfectly legal cigars on special occasions).  Oh, they're also giving moral cover to Japan's debt-fueled stimulus and currency devaluation because they can't think of anything better to do.  Lots of policymakers are backing away from austerity now that economists are questioning the Reinhart-Rogoff 90% debt/GDP formulation.  Austerity is on the ropes and Krugmanite stimulus is ascendant, with no brakes.  The die is cast for hyperinflation and currency collapse in most of the developed world.

Fitch is flushing the UK's credit rating down the tubes.  This is going to happen more frequently as the G-20 consensus referenced above endorses more mad Krugmanite spending and inflating.  The UK's finance minister still pushes austerity but the IMF gave him a polite reminder that the global consensus is shifting to super-stimulus.  Do they have any real sterling left to back the pound?  Or will they pledge the Crown Jewels and the Queen's silver flatware as collateral to stem a run on the pound?  When the dust settles they'll have to find a hard asset pool to back the value of Pound 2.0, or neo-pound, or whatever.  I'd suggest pledging North Sea oil reserves but production may have peaked.

Budget pressure on the air traffic controller workforce is forcing flight cancellations.  This is why I don't invest in airline stocks.  Too much union influence and too much debt hurt profitability.  Now a ceiling on human infrastructure is limiting the daily revenue passenger miles of the industry.  I suspect the USDOT directed the furlough to a sector that would immediately cause the public an inconvenience, in the hope that travelers would whine loudly to elected officials about restoring full budgets.  That's a cute trick.  It will last until dollar devaluation forces a bond market exodus that denies deficit spending.  The hyperinflation that follows will drive fuel costs through the roof and make airline travel unaffordable for anyone except Donald Trump.

I've got other material to write about so I'll finish with some sarcasm about my worthless alma mater, Notre Dame.  Their star football player from these last few seasons is now getting mentioned as an active prospect for the NFL.  The pro teams don't seem to care that this player had an imaginary girlfriend and that the school lied to cover up his friend's deception.  It just goes to show that you don't have to be smart or honest to succeed at Notre Dame.