Global warning


This post is by from The price of everything


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“No bubbles. Because it’s normal
for large liquid asset classes to nearly double in value over less than a year
and then drop 10% in a day.”

 

      
Tweet from financial journalist Alen Mattich, 23
May 2013.

 

 

“An investment operation is one which, upon thorough
analysis, promises safety of principal and a satisfactory return. Operations
not meeting these requirements are speculative.”

 

      
Benjamin Graham and David Dodd, ‘Security
Analysis’.

 

 

“No warning can save people determined to grow suddenly
rich.”

 

      
Lord Overstone.

 

 

At the height of the
financial crisis (i.e. 2008) it was easy to despise just the bankers for their
serial and colossal ineptitude and rank hypocrisy. Now, five years into one of
history’s most alarming bubbles, it’s easy to despise just about everyone in a
position of financial or political authority, and for the same reasons. Take
the FT front page from last Wednesday: “America’s corporate titans fight back”.
With just a cursory look at the layout of the page, one could be forgiven for
thinking that “America’s corporate titans” were somehow fighting against a
common foe. But on closer reading it transpired that JP Morgan’s Jamie Dimon
had merely succeeded in defending his own interests – as chairman and CEO of
America’s most iconic bank – versus those of the people who notionally own his
company, i.e. JP Morgan’s shareholders. Apple’s CEO, Tim Cook, on the other
hand, was defending his company against the predations of some of America’s
biggest crooks, a.k.a. the US government. “We pay all the taxes we owe,” said
Mr Cook; “every single dollar. We not only comply with the laws but we comply
with the spirit of the laws.” In sympathy with Mr Cook, the Republican senator
Rand Paul added,

“I’m offended by the spectacle of dragging in executives from an
American company for doing nothing illegal. If anyone should be on trial here
it should be Congress.”

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