Good morning

The headlines:

  1. The Democrat Senate rejects five different budget plans. Link: WHAT is going on? It seems that the Republicans used some obscure rule to force the Senate to rule on all their proposed budgets (in a single day?) –  as an attempt to embarrass the Democrats for failing to organise a budget for the biggest economy in the world. Democratic fail. There’s the usual mud-tossing about the Democrats just shooting holes in suggested plans, whilst failing to come up with a plan of their own. Frankly – I found the “shooting holes” metaphor a bit of a cheap shot (pun intended) at the pro-gun control Democrats. The Democrats slung back with “the Republicans seem to have developed amnesia”. Entertainingly – only one budget plan looked at all like Obama’s original budget suggestion; and that plan was rejected 0-99 (ie. UNANIMOUSLY). So it seems that unanimous bipartisan agreement is something Washington is capable of – all it needs is Barack’s seal of approval to seal the Senate’s complete disapproval. Muchos gracias at Florida Senator Marco Rubia for highlighting that.
  2. JPMorgan’s shareholders sue over the $2 billion loss. They’ve sued both the bank and Jamie D in separate lawsuits. You see – when you say things like “this trading situation is, like, so totally just a little teapot tempest,” and it turns out that the tempest is a 2 BILLION DOLLAR LOSS – there are traders out there who are going to cruise out of Arizona on a highway train right to the door of your Manhattan apartment in search of blood and compensation and mostly the second one. Which is fine – except exacerbating the bank’s loss seems a little pointless. And going after Dimon – well hasn’t he punished himself enough by saying all those lowly deprecating things on TV in one of the wordiest displays of mea culpa the finance world has ever seen? Link: So then: to what end? 
  3. Merkel and Hollande (Merkellande? Horkel?) say that they will concede Greek growth measures if the Greeks stick with austerity. Actually – I lied. What Horkel said was that they would “consider” some measures if everygreek toed the austerity line. On a side-note – apparently the Horkel meeting was delayed because Hollande’s plane was struck by lightening mid-air?! Sweet Zeus! I would put money on the fact that there is a Greek contingent claiming God’s smiting retribution. Yes… But you know that Hollande is the Socialist one promoting growth? Conclusion: the divine order and/or the weather wants Europe to get austere. So enough of this Greek carrot business… Link: The German/Hollande Carrot = Europe’s Garrote?
  4. Days after increasing the price, Facebook is now increasing the volume of shares to be sold by 25%. Link: Thanks to Goldman and Accel. Yes – Goldman has now doubled the number of shares it’s offering, and Accel has increased its share offering by 28%. Potential investors should be VERY CONCERNED. Mainly because if the big boys are selling more, the best explanation is: the price is far too high. Oh, of course, there are some investors saying that it’s because the demand is high – which makes NO sense – if Accel and Goldman thought that the price was too low “but the demand is high”, that’s hardly encouragement for them to throw more shares onto the roadshow. Honestly. 
  5. Greece plans for new election on June 17. Link: Now framed as the Euro Referendum
  6. ECB won’t change its policy stance. At least, it has no intention of increasing monetary stimulus. Draghi has said that it would be better if Greece stayed in the euro, but the ECB won’t “compromise on its principles” to prevent an exit. Link: Draghi is a drag.
  7. Romney attacks Obama for not fixing Bush’s mess. Or, rather, he told Obama off for saying that he would fix it, and then not fixing it. Link: Overgrown Bush left uncleared – Obama is a bad gardener; Romney is a racist. But jokes aside, I think that the trouble is that Republicans have some sensible economic policies, and then get stupid about things like sorting the tax system. And the Democrats have some sensible economic policies, and then get stupid about things like cutting federal spending. Umm – do both.
  8. Treasuries fall before TIPS sale. Link: When Yields go Negative. Currently everyone is rushing to safety – and they’re willing to pay for it. That’s a negative yield: I’ll PAY to keep my money is US treasuries – mainly the ones that are Inflation-Protected (the IP part of TIPS – the T and S being “treasury” and “securities” respectively). However, there is now concern that the rates are too low, and this will curb demand at next week’s Treasuries auction (when the US sells/rolls more debt). By this time next week, who knows what Greece will have done? I’m sure that there will be no lack of demand.
  9. Zeti says Greek Euro Exit consequences will be “unimaginable”. Agreed – but… Link: Who is this Zeti person? She’s Malaysia’s Central Bank governor. Sometimes – I read Bloomberg’s headlines, and I wonder if this really really qualifies as a headline?
  10. Coffee drinkers live longer. Link: The I-Told-You-So Dance.
That’s all for now.
Have a good day.