Today we’re going to channel a bit of Holden Caulfield, the protagonist of the book The Catcher in the Rye. That’s because we’ve had a gutful of ‘phonies’, or ‘God damn phonies’, as Holden would say.
The G20 conference that took place this week in Mexico was the biggest gathering of phonies we’ve seen all year. And just last night, a bunch of Federal Reserve phonies finished a two day meeting to tell us that they got their economic growth forecasts wrong. Are we meant to believe the new ones?
Let’s deal with the biggest phonies first — the G20. Here’s a picture of them. Looking at their big, fat phony smiles reminds us of a classic soul song, ‘Smiling Faces Sometimes’. The song kicks off with:
Smiling faces sometimes pretend to be your friend
Smiling faces show no traces of the evil that lurks within
Smiling faces, smiling faces sometimes
They don’t tell the truth uh
Smiling faces, smiling faces
Tell lies and I got proof
The truth is in the eyes
Cause the eyes don’t lie, amen
Anyway, once they lose their jobs in the next few years (and we reckon every one of them will as this economic debacle unfolds) they should head to Broadway, where their next career awaits. Actually make that off-Broadway…as far as theatre goes, the G20 gatherings are not very believable.
Source: The Telegraph
If you really want to make yourself puke you can check out the G20 Mexico website. But if you’re the queasy type, perhaps this little snippet from the concluding press release will be more than enough:
‘The Los Cabos Action Plan for Growth and Employment was signed. The plan established commitments to deal with the eurozone, strengthen demand, economic growth and financial systems, ensure the fiscal consolidation of advanced economies, reinforce solid, sustainable growth in emerging economies and maintain trade liberalization. To this end, an innovative Accountability Mechanism for G20 Objectives was implemented.’
If anyone, anywhere, can decipher this gibberish, please drop us a line. Do you really need a gathering of the world’s biggest phonies to secure a ‘commitment to deal with the eurozone’? Puh-lease…
Anyway what exactly is that commitment? Well it turns out to be another shot at a rescue by acronym. Soon after the conference wound down the financial media came out with the obligatory ‘rescue’ headlines.
‘Spain and Italy to be bailed out in £600 billion deal’ (from London’s The Telegraph).
‘Under the proposed deal, two European rescue funds – the £400 billion (€500 billion) European Stability Mechanism (ESM) and the £200 billion (€250 billion) European Financial Stability Facility (EFSF) – will buy bonds issued by European countries.
‘It is hoped that the move, which represents a substantial shift in policy for Germany’s chancellor, Angela Merkel, will send a strong signal to financial markets that Europe’s biggest economy is finally prepared to back its weaker neighbours.’
There’s that word again…hope.
After reading that hopeful article yesterday, we went back to the Telegraph’s website this morning for an update. Uh-oh…
‘Angela Merkel put Germany on a collision course with its European neighbours by insisting an idea to allow bail-out funds to buy Spanish and Italian debt was “purely theoretical”.
‘The German Chancellor agreed that the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM) had the “possibility of buying bonds” but said no discussions were being held about such a move.’
After spending a few days downing shots of tequila in Los Cabos in Mexico, the G20 hangover has set in already. Apparently what happens on tour stays on tour…
Or maybe Merkel mentioned to Monti at some late night Mexican bar that theoretically Germany could easily bailout Italy…and Spain, but that practically it was a difficult matter. And Monti, sucking on a lemon after his tenth shot of tequila, didn’t hear the word ‘theoretically’…
Of course we jest…but this confusion and backpedalling just goes to show what a phony farce these gatherings are. Who do these people think they are? Do they think that we will lap this stuff up? All we can say is that we encourage more of these meetings. The more meetings they have, the more disappointments they produce. And soon, you’ll see widespread condemnation of their solutions. Because even the dullest wit will realise that these people are incompetent.
for The Daily Reckoning Australia
From the Archives…
The Problem With the Spanish Bailout
2012-06-15 – Keith Fitz-Gerald
Australian Housing – How to Avoid This Pauper’s Retirement Trap
2012-06-14 – Kris Sayce
Why Warren Buffett is Loading Up on Tungsten
2012-06-13 – Don Miller
China’s Economic Data Statistics: Just Add Salt
2012-06-12 – Dr. Alex Cowie
Why Graphite is One of the Few Places For Savvy Investors to Make Money
2012-06-11 – Dr. Alex Cowie