Financial Sarcasm Roundup for 02/20/16

It's always a great day at Alfidi Capital. It's even greater when I'm throwing sarcasm at the financial world.




China replaced its stock market regulator with a bank economist. Trading one type of loser for another will not repair foreign investors' lost confidence. The symbolism of a former central bank official watching stock movements is that capital markets must do the state's bidding. They could try putting a panda bear in charge. It would be more fun to watch than a human regulator and just as effective given the system's pervasive corruption.




US law enforcement and Apple are testing each other's legal patience. It looks like so much theater to me. Apple has cooperated with data subpoenas before. It's fairly easy to unlock iPhone data anyway. It's so easy, a caveman could do it. The latest case should not be such a big deal but Apple has to at least go through a few hysterical motions to please Silicon Valley's hard-core libertarians and data geeks. The data privacy crowd simply does not grok the "layer cake" messaging methods that federal regulators often employ with the finance sector, and now with the tech sector. I do not expect the data crowd of Star Wars fans and Bitcoin nut jobs to uncover such subtle public performances.




The heart of Yahoo's operation is going to the highest bidder. The board should fire the CEO for dragging this decision out so long. I would have kept the core business and sold off everything else, but the Yahoo board never asked me to become CEO. It's their loss. I will LOL if Microsoft emerges as the ultimate buyer, getting a bargain for what they should have acquired in 2008. Silicon Valley's smartest people sometimes do some really dumb things. It took a series of geniuses over a decade to destroy Yahoo when it could have been saved under Microsoft.


I still use Yahoo Finance because I like the details. It enhances my net worth. Dumb people in the Valley continue to dump capital into doomed tech startups. Laughing at them all will enhance my well-being.

Financial Sarcasm Roundup for 02/15/16

Happy Presidents Day, America. George Washington and Abraham Lincoln never imagined that the Internet would carry their noble messages to the far reaches of the globe. It also carries my sarcasm to those places.

Oil traders are getting more bullish. The bulls may have read my recent writings, or they may be figuring out that bankrupt oil producers can't pump forever before turning off wells. Oklahoma is drowning in liquid black gold and drillers are drowning in red ink. Consolidation this year means fewer slick operators selling flimflam and dry holes next year.

US consumers are spending again. People who went broke during the holidays are now counting pennies saved on lower gasoline prices. They spend those pennies with abandon. Watch your neighbors who aren't saving; they won't survive the onrushing recession. Their homes will be for sale upon foreclosure and I might be waiting with a check in hand.

Franklin Resources' Mark Mobius likes Chinese stock bargains. He misreads garbage as a bargain. Western investors who aren't from Asian bloodlines will never understand the false fronts that Asian financial markets present. Dopey fund managers are born to get clobbered after they buy Chinese state-sponsored Ponzi schemes.

Oil ministers will talk through their mutual pain. Expect lots of crying, wailing, and whining about an oil market that is out of control. Emerging markets got more than they expected when Saudi pumping wrecked their capital accounts. The major oil producers could have used their dollar reserves to diversify away from oil production in the face of UN COP21's coming wealth redistribution scheme. Instead they chose to maintain kleptocratic rentier states and defend their currencies. No one in the developed West should cry for the oil countries that proved too weak to stand up to the Saudis and make their own production cuts.

Presidents Day sales don't apply to political campaign contributions. A dollar for your favorite candidate does not go farther over a holiday weekend.

Financial Sarcasm Roundup for 02/13/16

Most people go out for fun on Saturday nights. Staying home to publish sarcasm is my idea of fun.

Apple is about to throw new versions of its hottest products at consumers. I believe Apple's most fervent customers are the same kinds of too-rich, too-dumb people I meet at San Francisco VIP events. Only a moron pays a premium every 18 months for an updated product with only incremental capability upgrades. Young urban trendies have to show off shiny gadgets because they live for today. They will have no retirement portfolio for tomorrow.

More banks will face Libor manipulation action. The ones that were too dumb or too greedy to settle early with regulators are going to bite the bullet. Only dummies and crooks try to rig markets anyway. The lack of Libor transparency cries out for an international regulatory solution. The World Bank and IMF are welcome to call me anytime if they want my help.

Greece's weak pension plan jeopardizes its chance for more bailouts. The story never ends. Greece ran out of game theory options last year and is now prostrate. Angry farmers who don't like contributing more to their pension funds will be even angrier when their future pensions won't even buy a gyro. I don't mind making jokes about gyros because the rest of the world makes fun of American hot dogs and hamburgers.

Sunday may shape up to be even more sarcastic than Saturday.

Financial Sarcasm Roundup for 02/12/16

I had a busy day today. Important things demanded my attention. I read a whole bunch of very interesting material. I barely have time for sarcasm right now, but I make time.

The Federal Reserve's chair does not wish to be blamed for stock market turmoil. What a bunch of hooey. The Fed's ZIRP has done more to misprice securities valuation than anything else it has done in its history. Normalizing rates sooner would have depressurized the stock market without all of this pain from unsustainable gains. Other central banks took off with variations of the Fed's approach and now we see China's collapse hurting other markets. Way to go, banker gnomes.

Europe's sovereign debt market is seriously stressed. I wouldn't be surprised if some random announcement from one of the PIIGS' finance ministers makes the whole tamale implode. Suckers bought European government bonds and will soon eat their losses. The ECB's dollar swap line agreements with the Federal Reserve were an open secret among Transatlantic bankers in the last crisis. The rest of us won't find out for years just how much credit the Fed has given the ECB to support its bond purchases now.

I just did a Google search of "leveraged ETF" to see that these stupid products are more popular than ever. Investors chasing these things and advisers pushing them obviously can't do the math on daily leverage calculations. The best hope for sanity is a market crash that wipes out the 2x-3x bullish ETFs combined with a credit crisis that destroys the liquidity of bearish ETF sponsors. Brokerages programming their robo-advisers use passive ETFs without leverage for darn good reasons.

I should be busy tomorrow. I continue to ignore losers who demand my attention because I only have room on my calendar for winners.

Financial Sarcasm Roundup for 02/10/16

Today is Ash Wednesday in the Roman Catholic Church. I am no longer a member of any religion so I don't need to attend church services. My sarcasm never went over well during prayers anyway.

Europe wants the G20 to target growth. Got it. One continent's finance people want the world's leading finance people to decouple global growth from China as quickly as possible. Panic is not yet in the air. The real panic comes when the world's bifurcated economies - one for financial flows, one for real goods - trend down together. The rest of the world (ROW, in money manager parlance) can't get China off its balance sheet fast enough.

Coal power plant cleanliness gets a breather, so to speak. The charred, hard carbon miners have taken a beating for years thanks to the world's zeal for lower emissions. I don't see how the world can substitute for metallurgical coal and coke in making steel. China's crashing demand has put the lid on steel demand anyway, so even coal's industrial use faces dark days. It would take a lot more backyard barbecues for charcoal demand to make up for declining coal power.

Gold prices respond positively to the Federal Reserve's interest rate hints. Gold traders and retail investors view the Fed's experiment as a mistake, proving they are a reactive audience. The Fed's "layer cake" message tastes bitter to gold bugs stuck in old views of monetary tightening. The new era of a ginormous Fed balance sheet that constricts traditional stimulus means gold traders missed the news about what normal interest rates now mean. A normal situation is where the FOMC makes any change, in any direction other to zero.

Tesla Motors lost money again but its shares kept rising. The more cars they sell, the more money they lose. Investors are really stupid to think that a money-losing car company will be worth more. There is something very wrong with Tesla's inability to control both its fixed costs and variable costs. Software entrepreneurs need a whole new set of skills before jumping over to hardware.

I would like to start a religion that celebrates Cash Wednesday. It would be an opportunity for me to stand up and wave cash around to the applause of my congregation.

Financial Sarcasm Roundup for 02/09/16

New Hampshire voters have made up their minds tonight, mostly in favor of outsiders. I have made up my mind in favor of myself, because I can fix all of America's problems with sarcasm.

Silicon Valley startups aren't happy anymore. Unicorn employees are taking off their party hats, realizing that the unicorn they were riding to riches was a donkey in its own party hat all along. Employees who were counting on their stock options to pay for a McMansion are watching those dreams evaporate. Liquidation preferences are the well-connected VCs' way of walking away laughing at everyone who worked hard from the start. BTW, I have never seen the point of the Crunchies awards. A corporation's performance is not like a movie or pop song. The only performance that matters is the bottom line. Net income is the only award that pays bills.

Germany is lining up praise for Deutsche Bank. I recall hearing the same things from Bear Stearns and Lehman Brothers before they fell apart. It's too bad the ECB's bank stress tests weren't really stressful. Examiners could have looked under the hood at Deutsche Bank and figured out what needs fixing. Now investors need to take a look at the entire European banking sector's exposure and figure out who's sitting on powder kegs. Greek sovereign debt is the obvious first place to look, then Chinese sovereign debt, then other emerging market debt, then any rotten bananas stored in these banks' break room refrigerators.

San Francisco property owners are sitting on big bubble values. No one saw this coming, of course, after the dot-com bubble and housing bubble of the last decade. I love the mention of all-cash buyers looking for investment properties. The clueless private equity funds and assorted rich people who bought homes in The City sealed their own fates. I will buy what they abandon at bargain prices.

Voting is awesome. Medieval peasants would rebel against their lords when they didn't like working conditions. Today we have the bloodless option called elections to voice displeasure with Establishment elites. I would seriously consider voting for a candidate who formally adopts sarcasm as a campaign platform.

Financial Sarcasm Roundup for 02/06/16

We are well into 2016 and it doesn't feel much different from 2015. This situation cries out for remedy.

The tech stock crumble continues to drive the NASDAQ down. The whole enchilada is headed to its intrinsic value, which is somewhere north of zero. We can soon party like it's 1999 all over again, except valuations will be more like 2001. Pink slip parties will soon replace Silicon Valley's ubiquitous tech mixers. Come to think of it, those two kinds of parties are indistinguishable.

China wants to throw it down with the EU at the WTO. It's a bluff, like a male gorilla charging in the jungle. China has no intention of addressing any traded disputes in the WTO. It sees the TPP coming and wants no part of multilateral dispute resolution. Making noise at the WTO distracts is lip service to international norms that suckers in Western financial institutions will buy.

Twitter teases its users with a possible new algorithm. It won't matter whether Twitter make sits tweets more relevant, or longer, or more colorful. The horse named Medium has already left the barn. Ordinary schmucks who self-publish have multiple options now besides Twitter. I could go into a ton of reasons about why Twitter makes little sense but the biggest one is its inability to make a profit. It will make a good blog article later on, so stay tuned.

The 50th Super Bowl is tomorrow. Makers of snack chips, hot dogs, and chicken wings have probably had great sales for the past week. Americans should enjoy this while it lasts. Living beyond one's means makes overindulgence possible. I will probably stay home and get work done unless someone offers me free food and booze.

It would feel more like 2016 if we had a real market crash and recessions. That would really differentiate this year from 2015. I have waited so long for this to happen.

Financial Sarcasm Roundup for 02/05/16

I avoid watching politicians debate each other on TV because I have more important business tasks to accomplish. I realize I'm giving up a huge source of inspiration for sarcasm. Oh well, we can't have it all in life.

Here comes a new oil barrel tax to fund green technologies. The UN COP21 architects would be proud. I have no problem with this fee. It will destroy part of the US shale industry, but that's to be expected after years of overinvestment in wells that are only economically viable at higher oil prices. Kermit the Frog once said that it's not easy being green, but he didn't mean green energy.

The IMF lectures China on getting into better financial shape. Good luck with that one. China is flailing around for a workable economic policy. Beijing cannot admit that its Ponzi scheme is unraveling because it can't afford to frighten away the Western investors who were dumb enough to start trading the yuan onshore. The IMF can't afford to look bad after adding the yuan to its reserve basket. It all looks like two poker players in a televised tournament who know they can't bluff each other anymore but are still bluffing the audience.

The mortgage bond market just isn't much fun anymore. Taking the punch bowl away is good news for responsible homeowners because there will be fewer secondary bids for mortgage products that should not exist. Issuing paper backed by other paper is usually pretty dumb. Of course, if the Federal Reserve ever had to sell a big chunk of its MBS holdings, the banks would have to hire back MBS traders in a hurry. Catching a falling knife is usually pretty dumb.

More political debates are ahead. They won't mention any of the issues I blogged about here. That's too bad.

Financial Sarcasm Roundup for 02/04/16

The US Congress does not feel like rushing through a review of the Trans-Pacific Partnership. It is unusual to see lawmakers take their time with important legislation. They typically pass major lobby-backed items in record time, like the Affordable Care Act. "We have to pass the bill so we can see what's in it," or something like that. There's no time to lose when there's money on the table gathering dust.

Vanguard can now buy a bigger block of Chinese A-shares than ever before. Suckers! If you don't know who the mark is in a group of people, it means you are the mark. Western investors keep falling for any China story, whether it was the bull market everyone thought they could ride to planetary dominance or distressed-value bargain investing. Investors raised in Anglo-West cultures, where anti-corruption auditing and property rights are norms, simply cannot fathom that those traits do not characterize the Chinese economy.

The corporate bond market's signals have analysts scratching their heads. Dumb analysts don't realize that the US economy has been truly stagnant since the 2008 financial crisis, with overstated GDP growth and understated unemployment and inflation. National policies to avoid mortgage defaults and backstop corporate credit have only postponed the inevitable crack-up. No one on Wall Street wants to admit that the bond market is toast because that would have investors running for the exits. A whole bunch of careers and firms are bound to implode.

Financial Sarcasm Roundup for 02/03/16

Groundhog Day came and went without any animals feeling Jungian existential angst. Climate change has more impact than a rodent's shadow on winter's length.

The ECB lowers expectations for more monetary stimulus. It could mean anything, or nothing. The ECB now mimics the Fed as it discovers it has the ability to move stock markets and resolve bad banks' balance sheets. Central banks don't make policy errors anymore. They send "layer cake" messages in a bifurcated economy. Retail investors will hear something about selling bonds that may have peaked in value. European bond fund managers will hear something about not expecting support for their asset valuations. Crying then begins in earnest in bond fund boardrooms.

The UK must wonder if the BOE plans for negative interest rates. "I say, Jeeves, is that a minus sign in your savings account? Why yes, it is indeed, old bean. Good God, man, such poppycock used to be confined to less dignified countries like our former colonies. Oh, fiddlesticks. This calls for a shot of brandy." BTW folks, anyone who wants to pull another George Soros move and attack the British pound should watch how far the BOE tries to push this NIRP speculation.

China will keep cutting banks' reserve ratios. It's just like getting a haircut every month until you're forced to go bald, and then the barber scalps you. Forget about responsible bank stewardship. That just flew out the window in a desperate search for capital to prop up China's failing stock and property markets. I guess Beijing couldn't entice enough Western banks to launch onshore yuan trading branches. There are plenty of suckers in both the West and China who will try to catch falling knives behind a bamboo curtain.

Your average groundhog does not follow the financial markets as closely as I do. That's another bragging point for Alfidi Capital.

Financial Sarcasm Roundup for 02/02/16

There are always voters in an election year who think a politician can make the stock market go up. There's always a politician ready to pander to those voters. They are all stupid.

Bond yields are tanking in Japan. The two-year yield dropping to -0.11, even less than the BOJ's -0.10 rate for excess reserves, is totally crazy. How can they be profitable on any product with a duration of less than two years? This totally scrambles overnight lending to businesses. I want every hedge fund manager who jumped on the Japan bandwagon to be blown out of the water. Forcing the dumbest fund managers out of business will be a shock to the really dumb investors who trusted in non-existent genius.

Now the Federal Reserve is thinking about negative rates. The rest of the world sometimes laughs at America for the dumb things we often do here. Now we have the chance to be as dumb as the rest of the world in monetary policy. The shock of initiating NIRP may lift the US stock market as investors leave cash and enter riskier equities. The rush should last for about six months, the typical duration of monetary policy's lagged effects. After that, the deflationary death spiral across multiple asset classes will be impossible to prevent. Lethargic Americans will wonder what happened.

Leading financiers want better public company shareholder relations. Anything with Warren Buffett's approval will probably work. JP Morgan's involvement indicates confidence that its balance sheet will survive long-term turmoil. Better corporate governance is an imaginary prophylactic against corporate raiders. Private equity firms will target well-run firms anyway if they're undervalued. The best corporate governance policy would be an electric shock device attached to a board member's chair, activated if they fall asleep during a quarterly meeting.

Vote for panderers and they will do absolutely nothing for you. I promise. You can't vote for me because I work for myself.

Financial Sarcasm Roundup for 02/01/16

It's time for caucuses in Iowa. If sarcasm were a Presidential qualifier, I'm certain that my name would be at the top of the ballot.

JP Morgan is jumping on the blockchain bandwagon. All aboard! You all know I've trashed Bitcoin many times but the blockchain tech that succeeds it may be worth a look. The SIFI banks doing this will have to completely own their particular blockchain tech and disallow developers from forking it. They will also have to reserve a significant amount of data center space in case the hashes get out of hand. I suspect the world's central banks will have to standardize some part of a blockchain's code for money transfers. The whole movement risks turning into spaghetti code if central banks don't get involved.

China wants more foreign banks to trade its currency. It's a fun way to celebrate the yuan's new IMF reserve currency status. More importantly, it's a clever way to entice foreign banks to pump fresh currency into China so the PBOC can postpone the economy's day of reckoning. A stronger yuan means less PBOC money printing and less immediate stress on China's currency reserves. Have fun while it lasts, Beijing. The game will be up pretty soon. Foreign banks won't be happy to find out that empty real estate developments and shadow wealth management products are their currency trading counterparties' collateral.

The OMB is ready to review the US DOL's fiduciary rule for retirement advisers. Well, that sure took long enough. I blogged about this proposed rule in 2015 and I am all in favor of tighter controls. The industry's claimed concerns about stronger rules forcing them to drop smaller, less profitable clients are baloney. Automation is reducing the cost of servicing small clients to zero. Robo-advisers can implement fiduciary rules automatically. I want OMB and the rest of the administration to turn the screws on the retirement plan sector and make greedy brokerages howl with the pain of fiduciary compliance. That will force them to fire more humans and accelerate the automation shift.

May the most sarcastic candidate win. That would be me, of course, in any election year. Always vote your conscience, America.

Financial Sarcasm Roundup for 01/31/16

Sarcasm on Sunday is way better than attending church. You could listen to some preacher lie about the nature of the universe, or you can listen to me tell the truth about finance.

Alphabet and Apple battle it out for the valuation world heavyweight championship. Both companies are symptoms of the Silicon Valley tech bubble. Investors have chased these stocks because ZIRP made savings accounts look stupid. Apple's (AAPL) P/E is deceptively low at 10 and Alphabet's (GOOG) is really high at 31. Both companies depend very much on smartphone users replacing costly phones more often than necessary in the developed world's saturated markets. Financial advisers who toggle their portfolio optimization searches with "high risk" aren't doing their risk-averse clients any favors by selecting overpriced tech stocks.

The IMF and its lending cartel will review Greece's bailout progress. It's really sick how the world's most important financiers play "extend and pretend" with a country that has no interest in paying its debts. Forcing losses on creditors would clear up credit quality questions a lot faster than extending maturities. I would have hung the foreclosure sign on the Acropolis by now but the IMF never called me to ask for advice. Athens should hire me to fix their problems if they can pay me in something other than gyros (which I really like to eat BTW).

Big SIFIs are cutting the biggest deals with the SEC to settle dark pool allegations. I have always wondered why investors deliberately walk into something they know is dark. The banks telling investors they will get the best execution in dark pools are also the same source of prime brokerage credit for HFT hedge funds trading in those pools. Willfully blind investors, duplicitous banks, and greedy HFTs all jumped into those dark pools to rip each other off. The traditional investors are always the dumbest money in the room, so of course they got taken to the cleaners.

I told you this was better than a church sermon. I'm more entertaining and honest than any religious leader. I should start my own religion so people can properly worship me.

Financial Sarcasm Roundup for 01/30/16

Saturday is supposed to be a slow news day, but it's never too slow for sarcasm.

The US economy probably slowed down in Q4 2015. Business surveys from the private sector are probably more reliable than government figures. Federal agencies have been monkeying around with their methodologies for too long under political pressure to report rosy results. Voters get fed up with ruling elites when official results don't square with daily life. The next administration can do a lot to restore Americans' confidence in government just by reporting honest numbers.

The Zika virus is boosting a few life science stocks. Curing disease is a good reason to invest in drug makers. Day trading a stock with the expectation that disasters will pump a quick profit is immoral, not to mention just plain stupid. There is no assurance that the UN WHO or any other powerful body will hand these companies a contract. Greed and wishful thinking drive dumb investor reactions to headline dangers. There is no drug to cure stupidity.

Hedge funds misjudged the yen. The BOJ invalidated a whole bunch of investment philosophies overnight. I've said before that currency positions are useful mainly as hedges for cash reserves, not pure-play bets. Hedge funds are running out of ideas if they think betting big on a currency is innovative. George Soros made a big currency bet once against the British pound and it worked once. There is no law that says it must keep working. People running hedge funds can work as janitors after the yen bankrupts them.

Xerox is splitting itself. Carl Icahn wins again. I've always admired the guy because he forces companies to do right by their shareholders. He would probably make an excellent US Treasury secretary if Donald Trump wins the presidential election. I would like to see some corporate raiders and deal-makers break up some of the US government's less efficient agencies. Privatizing Social Security and Medicare could work like an insurance company spin-off. I wouldn't buy those split stocks because I've read the Bowles-Simpson reports on those entities' eventual insolvency, but some mutual fund manager is dumb enough to go for it.

Most writers would sign off by saying they hope everyone else's Saturday is going well. I'm not like most writers. I don't care about how your Saturday is going. My Saturdays are the definition of awesome.

Financial Sarcasm Roundup for 01/29/16

People take self-identification to new extremes in the digital age. I self-identify as sarcastic, which ought to be a distinct personality type.

Japan's central bank goes for negative interest rates. That should pry the last yen out from under savers' mattresses and push Japanese investors into riskier territory. The positive feedback loop from such a nonsensical policy will never solve Japan's structural problems. Switzerland did this for a while but they had a strong currency. Japan's results will be worse.

Puerto Rico expects to issue new debt. The old debt isn't working out too well, so the new stuff will have to pay junk-bond type interest. Paying out 5% just isn't going to cut it with investors who got burned. No one likes taking a valuation haircut. I am so glad I never owned Puerto Rico bonds. They will make very nice wallpaper after several re-issues.

Theranos keeps having one problem after another. Specious tech claims and poor lab conditions should not justify a multi-billion dollar private market valuation. A whole bunch of top-shelf VC firms have staked their reputations on a business they never understood. I can imagine the panicked phone calls up and down Sand Hill Road about what desperate measures anyone can take to keep this unicorn from tipping over. Save the energy for the post-mortem court cases, people.

I may try self-identifying as a housecat just to see how people react. Nah, just kidding.

Financial Sarcasm Roundup for 01/28/16

Hatred and love are powerful emotions. Sarcasm is not an emotion but it may be even more powerful.

The Federal Reserve made markets nervous yesterday. I say tough luck for wimpy stock market experts. Big players have had it too easy with ZIRP subsidizing their gambling. Moving toward a more historically normal interest rate environment means crybaby institutional investors will lose money. Just look at the confused commentary coming from Wall Street's idiots. They don't remember what normal feels like and their bond trading desks are full of Millennial whipper-snappers who think credit is always free.

The US Treasury alerts us to derivatives clearinghouse risks. That sure throws some cold water on the theory that transparency and mark-to-market pricing would make derivatives less threatening to the economy. The Fed and SEC have planned for trading halts and fund backstops. Now they need to think about liquidity backstops for clearinghouses. I suspect that will be a bridge too far in a crisis, so AIG-style instant firm resolutions will be the preferred risk mitigation tactic instead.

China's statistics chief is in trouble. Beijing couldn't keep their numbers frauds hidden forever and now they need a public scapegoat in true Manchurian style. The news may fool a few Western investment firms (the ones that don't understand China) into thinking things will get better when the head stats guy is replaced. A couple of high-profile career terminations won't stop the Chinese stock market's slide.

I try really hard not to hate people, even if they deserve it. Hateful people deserve sarcasm instead.

Financial Sarcasm Roundup for 01/27/16

It's not enough to have weekly sarcasm. I need to exhibit daily sarcasm. Alfidi Capital must be the unchallenged premium source of financial sarcasm every time the sun rises.

Iran's president says getting filthy rich cures radical nutjobs. He didn't quite say it like that but I like to think that's what he meant in translation. Reuters is too kind to quote heads of state that way. Iran is about to unlock $150B in frozen assets and return to exporting oil as sanctions are lifted. It pays to play nice with one's neighbors. Iran should spend that windfall on something other than harassing student protesters. Meeting the Pope may be the key to convincing Rome's street vendors to import Iranian lavashak (a.k.a. Persian fruit leather, or pressed fruit rolls). I smell a sweet deal.

Credit rating agencies are still messed up. It's about time regulators squeezed these people until they squeal. Selling ratings for MBS and other garbage helped cause the 2008 financial crisis. Dumb money does not perform due diligence even one level deep, let alone for the two or three levels needed to understand securitized products. Continued problems will bring another chance to short every falsely rated financial product in sight.

The corporate debt mountain is ready to topple. Bring on the implosion. Publicly held companies that can't service their debt will get wiped from indexes and bring shorting opportunities to patient investors like me. Defaulted corporate bonds and bankrupt ETF prospectuses will make nice art projects.

I can really get used to a daily sarcasm habit. I will enjoy force-feeding this diet to my regular readers. Eat it, people.

Financial Sarcasm Roundup for 01/26/16

The Beatles once sang about having "A Hard Day's Night." That's unintentionally sarcastic. If your hard day continues into the night, you may have a lifestyle problem.

JP Morgan Chase wants to turn your smartphone into an ATM. People need to think hard about this very risky approach. Tapping a smartphone to an ATM means anyone who holds the phone can get your cash. It will be a boon for pickpockets and armed robbers. JP Morgan's IT people need to code some hard-core biometric identification tools into their ATM app before it goes live. I think a saliva sample would work nicely. Just lick your smartphone's screen before you tap for that cash.

Apple's iPhone sales are slipping. Here's the latest evidence that a long-term bet on endless China growth is the corporate strategy of five years ago, not today. The inevitable US sales peak will come when Apple's too-stupid early adopter segment finally realizes that they can do without spending $800 every eighteen months for an incremental improvement in camera resolution. Oh yeah, the Apple Watch looks like the company's first dud since the Newton scratchpad. I knew the Watch was useless as soon as I saw it. Watches cannot be scaled down versions of smartphones due to their display size but nobody at Apple was thinking about biometrics. Tech marketers fall for their own hype at the tops of market bubbles.

Oil producers that cut costs can survive earnings season. The ones who drilled $60/boe wells expecting to make $100/boe forever are toast. I was really getting sick of hearing from unproven junior E+P companies tout their shale wells. They can have their remaining employees take turns sucking the oil out through big straws if they can't afford fracking fluids anymore.

I usually have a great day's night, unlike the Beatles. I studiously avoid the Notre Dame Club of San Francisco because those people used to ruin both my days and nights when I met them. No one can ever ruin me now.

A Post-Modern Interpretation Of Trustworthiness

I made my usual rounds through San Francisco's intellectual circles of influence today. One aspiring philosopher claimed that trustworthiness is the fulfillment of a promise, especially one that is in accord with publicly professed values. The naivete in that expression was striking. Life would be so much kinder if only the modern world worked that way. The real world has a different definition of trustworthiness than the one held in the effete imagination of progressives.

The classical age's virtues gave the Judeo-Christian West a baseline for understanding trustworthiness. The baseline disappeared in the modern era as a semblance of material prosperity became accessible to the uneducated, unenlightened lower classes. The most postmodern definition of trustworthiness has a different formulation from the classical understanding. In antiquity, moral actors earned trust by fulfilling duties, especially civic ones. Today, amoral actors earn trust by providing economic advantages, regardless of how said benefits are attained. Demonstrating integrity by keeping promises is not part of that equation.

Consider how modern politicians typically earn trust. Election winners promise to give their constituents free things. Greedy, selfish, stupid voters flock to the polls and hand them victories purely from self-interest. The question of trustworthiness becomes "What will you do for me?" The answer is some variation of "I will make you prosperous." How the prosperity comes is irrelevant. Voters tend not to link their personal prosperity to abstractions like the rule of law, property rights, enforceable contracts, and incorruptible regulatory bodies. The modern electorate prefers cold, hard cash. It cuts out the middleperson that way. Benefits and bailouts are the order of the day. Politicians who try to do honorable things like balance budgets, end wasteful programs, curtail entitlements, and enforce accountability are the kinds of politicians that voters simply will not trust.

I have always tried to earn trust the old-fashioned way by telling the truth, showing loyalty, and sharing my work. I always fail because my personal values are out of step with the times. Feel free to scold me for my own naivete. My colleagues in financial services lacked personal integrity but outperformed me anyway, and their clients rewarded them for their exertions. Bernard Madoff lied and cheated all the way to prison, while the SEC and his well-heeled clients could not have cared less. In a perverse sense, vile people earn a kind of trust by violating values a philosopher from antiquity would have held dear. The Alfidi Capital solution is to be a lone voice in the wilderness raging against the onrushing dark age.

Trustworthiness is no longer earned in post-modern America. It is a commodity to be traded rather than a virtue to be demonstrated. It is highly ironic that a nation founded by serious intellectual students of the English Enlightenment and ancient Rome has devolved to this state. A reset to pre-modern definitions of trustworthiness and virtue is a pressing national need. Resetting national values is always an election year issue, whether we realize it or not.

I am Anthony James Alfidi, and I approve this message.

Financial Sarcasm Roundup for 12/30/15

Social media users often tempt me to follow them down endless rabbit holes of replies. That is not how I prefer to spend my time. I would rather use my hours wisely in the pursuit of sarcasm.

The SEC's report on last August's volatility spike is out. It should have taken the SEC weeks, not months, to produce this report and it doesn't even draw any conclusions. A bunch of people at the SEC must be very concerned about how any hard evidence of malfunctioning markets would make them look bad or endanger their prospects with future employment on Wall Street. Fund managers are becoming very concerned about how liquidity interruptions in the bond market can trigger illiquidity in equity markets. They worry about being forced to sell stocks just to pay for bond fund redemptions. The SEC doesn't even get that the trading halts triggered in August can cause such illiquidity. We're sleepwalking into another market crisis and the SEC has no idea how to untangle its vine jungle of trading rules.

The wealthiest Americans have created their own private tax system. Affluenza has replaced civic obligation as the defining characteristic of this country's ruling elite. Rich people who claim they are willing to pay more in taxes aren't serious. Their claims are a stalking horse for increasing the burden on "tax donkeys" in the upper middle class of professionals who could displace them. I'll bet Bermuda is really nice this time of year. I wouldn't go there for vacation because these "income defense" people would just shoo me away. They don't even realize that they are the intended targets of their super-rich masters' desire to push the income tax burden downwards.

Bridgestone will allow Carl Icahn to walk away with Pep Boys. I think this deal is a play on the sharing economy for cars. Think about how car-sharing services will eventually hurt sales of new cars to Millennials who can't afford to drive anyway. Car-sharing services will still have cars on the road, driving constantly. Those cars will have to last longer and will need constant maintenance. Auto parts and services will always be in demand, even if corporations own most of the cars. Lots of aspiring Uber drivers can switch to jobs stocking parts at Pep Boys once Uber starts buying self-driving cars.

Let me get back to Bermuda as a tax haven. I don't see why Congress doesn't grant the same preferred status to Puerto Rico. Just think of all the professional income defenders who could then set up shop on that poverty-stricken island and help alleviate its insolvency. I guess the ultra-rich prefer to confine their tax donkeys to the same island where they take vacations, just to push them around in person. No one pushes me around. I'm a CEO, in case anyone forgets.