Monday, July 28, 2014

Financial Sarcasm Roundup for 07/28/14

Death and taxes are certainties in life, according to folk wisdom.  Sarcasm should be an additional certainty.

Argentina moves closer to default by refusing to compromise with its holdout bondholders.  I saw this one coming.  Go read my previous Financial Sarcasm Roundups if you can't handle the truth or are too dumb to remember what I've been saying for weeks.  I note with interest the possibility that Argentinian soybean farmers may hoard their crops.  Hard assets like agricultural produce make sense in a high-inflation economy that world markets have isolated.

The IMF is letting us all know that there is no cause for alarm.  That's nice to know.  It's also nice to know that Chair Yellen acknowledged several equity market bubbles and is helping other regulators put exit gates on bond funds.  People should know these things but they prefer to remain ignorant.  Trusting some untrustworthy financial officials is going to get a lot of people hurt.

Bank of America hypothesizes that China is buying Treasuries through a European clearing firm in Belgium.  That would explain the mystery surge in Belgium's Treasury holdings that market observers noted earlier this year.  It's obvious that large holders of Treasuries will have a huge problem on their hands regardless of where they clear their trades.  They won't be able to find buyers to take large volumes in a hurry.  The Fed's bond fund gates for US investors are a message to foreign central banks.  Message received, loud and clear.

I'm pressed for time today because some Silicon Valley techies invited me to a reception down in Menlo Park.  I need to be on the road in a few minutes.  I will seek out sarcasm there but I don't expect to find much I can use, as these things tend towards proprietary discussions of business models.  I hope Models In Tech are on the scene; now those are some models I'd really like to discuss.