The year is half over. I predict the second half of 2013 will require a record amount of sarcasm.
The EU is pretending to be angry that the US might have been reading its mail while it was vacationing in Cyprus. Really? Come on. There is no way that heads of state don't know what's really going on. The frustration that Europe's left-leaning blocs are venting could be bought off if Europe weren't so indebted. Negotiations for trans-Atlantic trade deals may be delayed but they won't be cancelled. Trade deals benefit business elites who underwrite political campaigns. That's why they get done.
China continues to miss its growth targets. Even China's official statistics, false as they are, can't hide the slowdown anymore. I ignore alarmism over China setting export quotas for rare earth elements. Industrial output will easily fall under any material export targets it sets.
The bond market is slipping as the Fed starts to lose control of the long end of the yield curve. Investors are responding predictably by fleeing to cash. Fleeing to cash now is not a bad move unless investors stay there when policymakers start pushing inflationary solutions.
Student loan interest rates just doubled. This is good news because it will price a whole bunch of non-intellectuals out of worthless college degrees that they should not be pursuing. America needs STEM graduates but not everyone is smart enough to handle the work. America also needs plumbers, carpenters, mechanics, and electricians who do not need college degrees. Cheap trade schools have better ROIs than expensive liberal arts colleges.
I didn't spend my whole day today looking up sarcastic things on the Interwebs. I got out of the Alfidi Capital headquarters complex to hear some expert wisdom. The Urban Land Institute's San Francisco chapter held a seminar with a noted local developer. His best point on financing was the importance of a long-term, fixed-interest, self-amortizing, non-recourse loan. That's important to remember whether you're buying your first home or launching a 400-unit residential development. His other lesson was the importance of timing. He began his most successful developments when the real estate market was soft, and they were ready for occupancy by the time the local market had turned favorable. That's a lot like buying low and selling high in the stock market. Some things never change.
I also went to a Commonwealth Club lecture on FDR's pre-WWII diplomacy. He didn't trust the State Department's professional diplomats or even his own ambassadors' cables. He relied on the personal diplomacy of hand-picked aides, all of whom had long Establishment family pedigrees and sharp political sensibilities, to develop relationships with potential European allies before America entered the war. There isn't much room for sarcasm there, except to note that the American hereditary aristocracy will never relinquish its hold on policymaking.
