Monday, August 19, 2013

Financial Sarcasm Roundup for 08/19/13

This particular roundup goes out to the moron who accused me of slandering him online after I was generous to him at a conference.  I didn't slander the guy; I insulted him.  He's too dumb to know the difference.  My sarcasm is meant for stupid losers just like him.  

BofA is legally assimilating Merrill Lynch.  This is one more nail in the coffin for those Merrill loyalists who thought their former parent would eventually be spun out.  BofA got a pretty raw deal when it was talked into saving Mother Merrill during the 2008 crisis.  It just goes to show how easily investment bankers can outwit commercial bankers in deals.  

Greece's debt holders no longer need to fear haircuts.  Germany is backstopping the hedge funds that hold Greece's post-bailout sovereign debt.  Someone at Davos must have made an algorithm-laden threat at the CDS spreads of leading Germany companies.  Germany's public statements on Greece are no longer reliable.  Frau Merkel is bending with the trans-Atlantic consensus that quantitative easing is good enough.  

The tech sector is slumping.  I got the impression from keynoters at several enterprise IT conferences that the tech sector has been having an increasingly difficult time lately squeezing additional margin out of services.  That's one reason why they're pushing cloud so hard.  The tech slowdown also indicates that social media has reached saturation and cheaper smartphones will add less to bottom lines.  You tech people need to go back and read everything I've blogged about enterprise IT, "innovation premiums," and overpriced smartphones to see how your darling business models are turning out.  There's still lots of room for disruption within inefficient IT models and tech providers know it.  

Major energy producers are buying less land for shale exploration.  The hot air is slowly escaping from the shale balloon because shale drilling is a victim of its own success.  The booms in North America have flooded the markets with so much cheap natural gas that there's little point in drilling for more.  This tempts me to look into natural gas royalty trusts to see which ones are undervalued.  

Pension funds are cutting out their middlepeople.  Investing by committee is a great way to underperform the broad market but the investment committees at plans and endowments are determined to keep doing it.  The dumb money is not going to get smarter but at least they'll be saving money on fees.  This development is good news if it forces underperforming hedge funds and private equity firms out of business.