Friday Pearls of Folly 28 Sep 2012

Happy Friday

• China is going to have another bad year. Time to short German exporters.

 

• The CLO trade in the US is done. Apply similar recipe for Europe.

 

• The trouble with central banks trying to inflate asset prices is that eventually, hedge funds start shorting something real.

 

• Austerity for fiscal balance is like giving up your right arm to be ambidextrous.

 

• Governments lie and cheat. So does everyone else but governments do it with impunity, and its part of their standard process.

 

• Buy the USD. Every central bank is debasing their currencies but the US have the better print quality.

 

• You can rely on human nature. On that basis, expect the economic crisis to escalate into war.

 

• The Japanese and Taiwanese have descended into a spitting match in the East China Sea. They do not stand a chance if the Chinese get involved.

 

• Consensus in government means you can debate all you want but the final decision is mine.

 

• The world’s oldest central bank was a failed bank.

 

• The world’s second oldest bank was a distressed debt hedge fund.

 

• All the world’s central banks are now pawn shops.