It’s over. Hans Riegel is dead. The world will never be the same again.
The man who popularised the modern Gummy Bear died aged 90 after surgery to remove a brain tumour. We’re having Gummy Bears for breakfast in his honour.
Don’t worry too much. Journalists assure us that more than 100 million bears will continue to be made each day in 15 different countries across Europe by privately owned maker Haribo.
RIP Hans. Long live Haribo!
In less important news, politicians in the US reached a deal at last. The US government is funded once more. Johnathan Chait at New York Magazine reckons ‘the events of yesterday amounted to utter success. The debt ceiling will be lifted, the crisis is over, and so, too, may be the larger Constitutional struggle it unleashed.‘
The Reserve Bank’s plans to ‘flood the banking system with cash‘which were reported on yesterday by the media won’t be needed. But it’s interesting to know they’re there.
We’re not sure what’s better. The presence of a debt ceiling deal or the absence of the endless debt ceiling news cycle. Either way, we’ll let you bask in relief for a few moments longer before reality clips you across the back of the head.
You see, the deal reached last night is not a resolution to the problem. Not even of the artificial problem of the debt ceiling and the missing budget, never mind the real problem of too much government debt. Mish Shedlock called the compromise reached in the US senate last night a ‘deal to continue bickering until February 7.‘Chris Weston at Australian Shares blog pointed out you’ve only made it through’Act 1 in the US default tragicomedy‘. The best is yet to come.
Here’s the lowdown on the showdown overnight: Congress will raise the debt ceiling enough for the government to borrow money until February 7th. The budget is agreed upon until January 15th, but negotiators have been told to reach a deal before Christmas on what happens to spending after that. In the end, almost no changes were made to Obamacare – the reason Republicans were holding out.
We doubt Hans Riegel put up with this kind of nonsense after he returned from an American POW camp to restart the company his dad founded in 1922. Apparently he spent his time looking at popular kid’s culture to try and find ways to ‘please children…and grownups just as much’, which is Haribo’s tagline. (It rhymes in German.)
Interesting how capitalism makes old billionaires spend their entire day trying to please children and grownups just as much. Politicians seem to try and annoy everyone, at children’s expense. The future taxpayers just don’t know about the tax bill that’s got their name on it. Yet. Many of them will decide not to become taxpayers at all when they discover it.
Meanwhile, America’s enemies are plotting against them. But instead of using political shenanigans, they’re using the Reigel route – capitalism.
Russia’s Putin announced a deal with the two Koreas that could circumvent the Suez Canal and connect East Asia and Europe by rail. In other words, he’s doing something useful. Trains cut the journey for freight from 45 days to 14, and the seamless transition to Europe’s rail network means easy access to a heck of a lot of consumers.
You’ve just got to love globalisation. It’s managed to overcome most of the military conflicts of the last 60 years in one fell swoop. The rail link pries open the Hermit Kingdom of North Korea and re-establishes rail links to South Korea, lets people in formerly communist China provide stuff to people in Western Europe, avoids the volatile Middle East’s Strait of Hormuz, and travels via formerly Cold War Russia, all at three times the speed.
We reckon they should call it the Peace Train. And Putin should win the Nobel Peace Prize. Hopefully competition with the Canal will make Egypt and its neighbours get their affairs in order too. Nothing like competition to make you behave like adults.
Of course, the Germans are well ahead of all this, establishing direct rail links to China via Poland, Belarus, Russia and Kazakhstan in 2011. They’re planning daily services on a trip that takes 15 days. We don’t know if Gummy Bears will be on board.
The message is that progress is being made in the world despite ridiculous political displays in the US. Consumers and producers are being matched, interdependence being forged and politicians sidelined. We don’t report on the good news stories enough in the Daily Reckoning. It doesn’t get much better than the Peace Train.
Here in the Land of Oz, all the debates and news stories are the same. House prices are too high, first home buyers are out, foreigners are in and office vacancies are at a 21st century high at just over 11%. Australia’s obesity epidemic doubled overnight after researchers changed how they measure it. Instead of the Body Mass Index, which puts 27% of adults over the line, waistlines put 49% in the obese category. (For political correctness, Americans were not included in the survey.) Oh, and Australia is in for a recession.
Not that Australia’s financial elite care about any of this. The Super industry’s version of the Brownlow Medal is on this evening. Don’t expect to see it televised though. People might get suspicious if they see 500 fund managers living it up on money we are forced to give them.
You get three guesses where the Australian Fund Manager Awards is going to be hosted. Yes, a casino. There’s an award for the manager who appeared in the media the most, called the Human Headline Award. Riveting stuff.
Much more important to Australia’s future was China’s economic data, released yesterday. Everything looked dandy on the face of it. But Westpac’s Phat Dragon digest noted component orders ‘slowed sharply‘ and exports are ‘cooling off‘. It’s just a month’s worth of data, but the fact that people are watching so closely tells you they’re worried.
The solution is to sell stocks and eat Gummy Bears.