Tag Archives: Guest Writing

Twas the Night Before Taper: A Wall Street Holiday Poem

After several months of silence, Mustafa Mond, whom we last heard from in April, has resurfaced. Today, Mr. Mond offers us this holiday poem:

TWAS THE NIGHT BEFORE TAPER

By Mustafa Mond

Twas the night before Taper, when all through the Street
Not a whale was stirring, not even a veep.
The earnings were prepped by accountants with care,
In hopes that bonuses would be much more than fair.

The bankers were settled all smug in their spreads,
While Fed interventions entranced all their heads.
And Barack with his selfie, and Michelle with hers too,
Readjusted their cameras to spy just on you.

When out in the markets there arose such a cry,
Barry sprang from West Wing to see what was nigh.
To the news wires he flew like a bat of hell,
Knowing hestill had the masses to quell.

Markets were speeding, out of control,
The VIX off the charts—who spiked the punch bowl?
When, what to his wondering eyes should appear,
But a great big helicopter with pallets in the rear!

With an exhausted driver, tired of dollar-yen,
And a new co-pilot, it must be St. Ben.
Faster than a flash crash his beneficiaries came,
And he whistled, and shouted, and called them by name!

“Now Blankfein! Now Dimon! Wells Fargo and Citi!
On Gorman! On Moynihan! NYSE and BONY!
To the highest of highs! ‘Til market bears have fled!
After all, in the long run, we’ll all be dead!”

The yield-hungry traders scrambled for carry,
Locking in profits before the curves vary.
And up to the market-top prices arose,
While Barack’s disapproval relentlessly grows.

And then, with the microphones set to full blast,
The media watched carefully for any contrast.
Trading floors went silent, as they are apt to do,
As Fed chairman testimony makes sense to so few.

He spoke all in jargon, acronyms and indices,
Durables and deficits and payrolls and factories.
A big pile of assets he still wants to backstop:
A mortgage, a bankruptcy, a credit default swap.

His data—how thorough! Statistics—such authority!
And his protégé, this Yellen, confirmed with a majority!
His post-Fed retirement expectantly awaits,
No doubt duly hedged for much higher interest rates.

Europe and China, oil exporters like Canada,
The Saudis and Russia, and fiefdoms like Panama,
Listened closely for signs of any new shocks,
But at least they have product–unlike tech stocks!

He was measured, cogent, lacking Greenspan’s grandiloquence,
But the reaction, as always, was irrational exuberance,
As he made quite clear that ZIRP would continue,
And Wall Street rejoiced–“to the discount window!”

Thus ended St. Ben’s last public report
As chairman of the lender of last resort:
Tapering delayed, until 2014,
When St. Ben will no doubt be far from the scene.

He sprang to his chopper, having completed his duties,
Leaving risks to be rated by S&P, Fitch and Moody’s.
And on his way out, they asked, “what of safety nets?”
He cried, “Happy Holidays! And good luck with your debts!”

MustafaMond.signature

A May Day Special: Why To Travel When You’re Young

terraqueous-globeI rarely republish in full something from another source, but excerpting this would really not do it justice. Fortunately, Andrew Henderson of Nomad Capitalist has granted us permission to do just that:

Why to travel abroad while you’re young… or not so young

I was talking to about travel with a close friend of mine recently. I was showing him the twenty or so countries I’ll be living in or visiting in the next year or so, and I could tell he was intrigued.

His mind was blown when I said my hotel room in Siem Reap, Cambodia would cost $9 a night. Private room. Private bath. Free wi-fi and breakfast. No forced labor in the afternoons.

Then he went on to tell me how he had all the opportunities to travel when he was younger. He could have taken the summer after high school to backpack through Europe with friends. Then he could have taken a year exploring the world before going back to grad school. Then he could have taken time off from work to go to England with his friends.

But he never did.

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Taxation With Representation, By Mustafa Mond

I am pleased to present a new guest contributor today, who goes by the tag of Mustafa Mond, presumably inspired by Aldous Huxley’s Brave New World.

In recognition of today as that annual rite of American citizenship–Tax Day–Mr. Mond has graciously offered us a piece of his mind.

Ladies and Gentlemen, Mustafa Mond: 

Democracy-Taxation-With-Representation-Mustafa-Mond

The first person to correctly identify all the references here will receive a prize to be determined at a future date.

Che Misterio On Argentina’s Summer Of Discontent

2012.10.18.Che MisterioLadies and Gentlemen, Che Misterio:

Argentina Lumbers On

By Che Misterio

Evidence mounts that Argentines will do whatever possible to leave the country and earn in hard-currency – even head the Catholic Church, if necessary.

As is customary when a financial crisis looms in this country, the government ups the rhetoric regarding the Falklands. The day before Bergoglio was elected Pope, a referendum on the Falklands could hardly have been clearer: of 1,518 votes cast, 1,513 voted in favor of remaining British, 2 were unable to successfully fill out what could not have been a particularly complex voting slip, and 3 voted in favor of becoming Argentine. Who were those three? I’d love to meet them. I barely follow British politics and the entire EU seems to be in a mess currently, but really – would anyone actually choose to be governed by the Kirchner government if they had a choice?

Argentina’s problems would apparently vanish if only they had those scraps of land some 500km off the coast, despite most of Patagonia remaining a vast unexploited expanse of nothingness. Sure, the islands are financially self-sufficient and they boast an enviably high GDP per capita which exceeds even that of Norway, with full-employment. But would this continue under Argentine management? The rest of the country’s economic performance does is not reassuring.

If a referendum were to be conducted today in Argentina asking voters to choose between being governed by the current Kirchner government or the British, I wonder if it would be quite as overwhelming as the 99.8% seen on the Islands?

Meanwhile, the US dollar hit a new landmark – 8 to 1 on the black market. In fact, I am not sure it can really be called the black market, as barely anyone is using the other market, which still doggedly insists the rate is a smidge more than 5 to 1. Admittedly almost no one is allowed to buy dollars at this rate, and no one remotely astute is selling at this rate, so there’s little harm fabricating the rate for a non-existent market.

The state petrol supplier, YPF, seems to prefer cash, as the debit and credit card machines seem perpetually “out of order”. Even the airlines now accept cash. Flights are actually quite cheap for those with dollars able to pay in pesos via a quick visit to the money-changer. A recent article suggests US$1 million a day is fleeing across the border to Uruguay, and there are no more safety deposit boxes left in Colonia, just across the river from Buenos Aires.

Rumors of an imminent devaluation appear unfounded. Kirchner’s new BFF, Deputy Economy Minister Axel Kicillof, is said to be flirting with the idea of multiple exchange rates, another tried, tested and doomed strategy to manage (or manipulate) a currency. Inflation continues its relentless erosion of value for all local currency assets, with the exception of four supermarkets who have been enjoying price controls, a privilege which will end in April. Watch for a surge in purchases on April 30th and a spike in prices on May 1st.

Supermarket trolley-arbitrage: only in Argentina.

[Ed. note: You’ll notice a new tag, entitled, “Guest Writing.” Here is where you’ll find all guest articles.]

Cartoon of the Day: The PRI Has No Clothes

A reader identifying himself only as “SuperMandante Marcos” has just sent in the following cartoon. All I have to say is: OUCH.

The PRI Emperor has no clothes

Street Markets 101: Che Misterio Navigates Argentina’s Black Market for Dollars

2012.10.18.Che MisterioI am humbled, honored, grateful and excited to once again present Che Misterio in Argentina, who continues endangering his life for the purpose of shining a light on one of the blindest of economic blind spots in the world today: Argentina’s black market in foreign exchange. Che previously enlightened us in this space on the topics of Big Mac inflation and street level economics. The following was first published on Seeking Alpha under my name in a version suited to that publication’s editorial format, entitled, “How to Navigate Argentina’s Black Market in Foreign Exchange”. Below is the original as submitted by Che Misterio.

Ladies and gentlemen, Che Misterio:

Where Next for Argentina?

By Che Misterio

It is no secret that Argentina is now a two-tiered society. There are those with hard currency for whom the standard of living is quite cheap, and who are therefore immune to chronic inflation as their dollars and euros appreciate even quicker than prices. And then there are those without hard currency, and they live a precarious existence, to say the least: they cannot save their pesos, and even if they could it would be pointless as inflation rages on despite government insistence to the contrary; flagging confidence in the national currency and ever tighter regulations on foreign exchange means the only way to acquire a meaningful amount of hard currency is to pay an expensive premium on the black market.

I am grateful to belong in the first tier. I exchanged some euros recently on the black market, despite the terms being rather nebulous. For those unfamiliar with the street level workings of Argentina’s informal economy, this does not involve some suspicious character in dark sunglasses manning a backstreet stall flanked by security guards with black ear pieces protecting the stash. This was in an otherwise regulated bureau de change on a busy street, staffed by a man of average height, weight, complexion—what those in show business refer to as “the everyman look.”

The opening conversation went something like this:

“Hi, I’d like to change euros please”
“Where are you from?”
“Here.”
“We don’t change euros.”
“But Roberto changes euros, no?”
“Please wait here.”

“Roberto” was the code word a friend of mine had given me for signaling to this bureau de change that I wanted to transact at the black market rate. The man turned his back to me and knocked on the tinted glass of the door behind him. The door made a slight clicking sound as the magnetic lock loosened and the door opened. The man disappeared through the doorway and the door closed and locked, leaving me alone to wait. Two minutes later, the door re-opened, and he beckoned me to enter.

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Che Misterio asks: Could Argentina be manipulating Big Mac prices? A preliminary investigation.

I am pleased to once again present Che Misterio, who previously enlightened us with the realities of Argentina’s economy at the street level. Today, he takes on the very provocative question of whether that time-tested bulwark of American soft power, the Big Mac, might be the latest commodity to fall victim to Argentine price-fixing. Ladies and gentlemen, a preliminary investigation:

Big Mac Fraud

by Che Misterio

Could the Kirchner Administration be obsessive enough to fix the price of a Big Mac?

In Argentina everything is possible.

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Street Markets 101: Ground Zero in Argentina

I’m very excited to introduce the second installment of Street Markets 101 today (go here for the first installment), submitted by a guest writer in Argentina who for professional and security reasons is unable to use a real name. I modified this to suit a different editorial format for publishing last week on Seeking Alpha under my name with the headline, “A Street Level View Of Argentina’s Economy, The Peso And ARGT” (see here for the Seeking Alpha version) , but I could not have done it without the help of the source. Today, I present the original unabridged version. Without further adieu:

Ground Zero in Argentina

By Che Misterio

The nationalization of YPF, the falsification of economic data, inflation, mounting street protests and the volatile commodity prices…. these are all fascinating points for the international community to examine in any assessment of the unfolding crisis in Argentina. What has failed to reach the general audience is the impact of the CFK government upon the layman, particularly beyond the confines of Buenos Aires.

I am an economist and live in the “provinces”. I am not Argentine, but am intrigued by the ability of the Argentines to adapt to economic mis-management effectively and creatively. I assume this is simply due to a century of practice. Consider the following impacts on the layman:
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