Monday, July 07, 2014

Financial Sarcasm Roundup for 07/07/14

I expect the amount of nonsense reaching my inbox to increase as the ancien regime of our global financial system approaches its crack-up point.  The crescendo should be deafening when it hits.

Japan is having second thoughts about jumping on board with the Asia Infrastructure Investment Bank.  China will make a lot of its neighbors reluctant to co-invest in anything it sponsors.  It would be funny if China asked Japan to put up ownership of the Senkakus as collateral for its participation.  The Asia Development already works just fine.  Leave it to China to copy something and pass it off as original work.

China's securities regulators think they can smooth the number of IPOs each month.  These people still have no clue how capitalism works.  Demand for new issues should drive the supply of new shares.  Some regulatory impulse to dress up capital markets is probably a reaction to lack of investor interest outside China.  American investors have been burned by fraudulent Chinese companies making questionable ADR debuts on US exchanges.  Chinese founders thus need a domestic outlet to cash out their stakes before fleeing the country.

The businesses community wants the Ex-Im Bank to stick around.  Forget the rhetoric disparaging it as a fountain of handouts for big corporations.  That is just for the low-information voters in some districts who get riled up about any government program.  If corporate money is behind some government agency, it will continue to operate.  The Ex-Im Bank's outstanding loan portfolio is a small amount of the nation's outstanding credit burden.  It is unlike the mortgage lending for house-flipping and the revolving credit card debt for mindless consumption.  This bank's loans drive export earnings.  It's a winner, for crying out loud.

The White House is backtracking on comments about more bank regulation.  It's so hilarious whenever a politician's handlers bend over backwards to ensure moneyed backers don't take rhetoric seriously.  Here's a lesson in politics for anyone who knows nothing.  Political comments to the general public are just noise to fill space.  Business lobbies should not be so easily fooled, yet the decline in competence I have witnessed among America's elite class in my lifetime indicates that some of them do fall for the common rhetoric.  A few trust fund babies running lousy hedge funds must have made some panicked phone calls to Washington.

The dumb things I've noted above happen all the time.  The dumb people doing these things will be even dumber in a big crisis.  That will be time for me to make some money at their expense by trading against stupidity.  Bring on the panic.