Wednesday, March 03, 2010
Some people just like a good moan every so often. Take, for example, your intrepid author; when the morning train service faces yet another severe disruption (courtesy of a fire in the London Bridge area), does he resignedly shrug his shoulders and adopt the standard "musn't grumble" attitude of the plucky Brit? No! He instead seizes the opportunity to make "clever" cutting remarks to his friends or, in their absence, random passers-by.
Similarly, when the deputy governor of PBOC says "hey, we're getting worried about inflation" but the Chinese Commerce Minister says "we're gonna stick to our own pace" and "keep the yuan basically stable", does Macro Man stay silent? Of course not! What's the use of hand-crafting a soapbox if you cannot step upon it every so often to point out that the Chinese currency peg is a patent absurdity: in what possible world can it make sense for the world's second largest economy (and owner of the world's largest current account surplus) to mechanistically link its currency value to that of the world's largest economy (and owner of the world's largest current account deficit)?!?!
Still....when it comes to having a good moan, Macro Man must tip his cap to the undoubted creme de la creme, the cadre of European policymaking "elites" who see fit to pronounce upon matters of international finance. Monday's comment from Jean-Claude "Zed" Juncker about the torture implements he keeps in his basement were as remarkable as they were misguided.
While hit-n-run buyers of sovereign CDS protection are pretty clearly suboptimal from both a social and market utility perspective, speculative focus on the sordid fiscal shenanigans of Greece has unearthed a pattern of malfeasance that would make the Gimp blush. For the DOJ to potentially start investigating bearish euro bets is beyond ludicrous.
There weren't any complaints last year, when the euro fell more sharply against the dollar than it has thus far in 2010. (Particularly perceptive readers may also observe that EUR/USD is actually some 10c higher than it was this time last year.)
Moreoever, it was JUST THREE MONTHS AGO that a certain "Z. Juncker, esq." said that "the euro was overvalued and that some adjustment in that area would be desirable." Unless, evidently, that adjustment was based on a fundamental flaw in the single currency project, in which case the perpetrators should be subjected to Zed's dodgy extracurricular fantasies.
M. Juncker, Macro Man salutes you. Your capicity to moan far outstrips his and, he suspects, just about everyone else's. Well, perhaps except for this chap, who's struck upon a cunning plan to fix the stock market!