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.

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.

The Haiku of Finance for 12/22/12

Notre Dame football
Covers up players' actions
Corrupt like Wall Street

College Grads' Earnings Head Down, Illegals Head To College

My headline should have grabbed your attention, especially if you recently went heavily into debt to obtain a bachelor's degree.  The WSJ reports that college grads' inflation-adjusted earnings have declined by about a tenth in a decade.  How does that sheepskin look on the wall now?  Hopefully it's loaded with a bunch of pretty calligraphy that has some aesthetic value, because it's not worth anything else. 

In a related development, state governments are cutting what they spend on K-12 education.  This probably does not result from any realization that a well-rounded formal education now has rapidly eroding earning power and is thus a poor investment.  It has more to do with the bloat that's accumulated in state-run schools for years thanks to unneeded technology toys (iPads for all!), useless administrators (i.e., multicultural curriculum specialists), and overinvestment in suburban schools that will be socioeconomically untenable as the viability of suburbs erodes. 

Whatever austerity measures are unfortunately visited on K-12 education should be more appropriately directed towards state-run collegiate systems.  Malinvestment in higher education shows no sign of slackening despite the disappointing WSJ report on earnings.  California's madness continues with the enactment of the California Dream Act, a law that would provide more financial assistance to the children of foreigners who break the law than to out-of-state U.S. citizens who want to study in the Golden State.  I am disgusted with this development and the blatant pandering to an interest group that it represents. 

Middle class earnings continue to disintegrate for educated professionals.  Legitimate government functions continue to hollow out with cuts to basic education.  California's response is to provide more subsidies for an alien presence within our borders that undermines the rule of law.  We should start asking college-educated U.S. citizens how they feel about subsidizing the educations of people who should not be here. 

Nota bene:  My own bachelor's degree from the University of Notre Dame is completely and utterly worthless. 

Here Come The Irish, For A Bailout

Students at my worthless alma mater, the University of Notre Dame, had a lot of favorite chants that livened up football games and distracted the home crowd from the poor performance of the Fighting Irish on the field.  One such chant was "Here come the Irish!"  The thinking behind this one was to scare the visiting team into running away in fear at the sight of the Blue and Gold.  It never worked.

This chant may actually be an appropriate way to announce the queuing up of the real Irish for a European bailout.  Irish debt will still be a bad bet for investors but now all Europe's taxpayers will share the pain of a default.  Stalling on needed tax increases won't help Ireland reassure European investors that they can put their house in order.  The EU has learned nothing from dealing with Greece.  Then again, Greece is making fitful progress towards forcing austerity on its people, so there's some slim hope for sanity after all. 

All of this makes me wonder if the iShares MSCI EAFE ETF will be headed down.  Its P/E of 12 makes it almost a good deal but it will take more than Continental-sized defaults to make the price reasonable for entry. 

Nota bene:  No position in EFA at this time.