WASHINGTON, July 13, 2015 – The Maven has just returned from a fun weekend in scenic Shepherdstown, West Virginia. There, in that quaint colonial university town, he and his alter-ego (along with Mrs. Maven) traveled Friday evening to review the kickoff weekend of the 25th annual Contemporary American Theater Festival (CATF) of new American plays. Theater fans can follow these adventures over in CDN’s Entertainment Section.
Today is yet another business Monday, however. It finds the Monday-blue Maven returning to the next not-so-thrilling episode of the Grexit. Unfortunately, this one turns out to be another tired re-run of this long-running show’s last “Kick the Can” episode, albeit with some freshly added plot twists and turns, just like some of those CATF plays.
Frankly, we’ll spare you the details, since it will actually take weeks to flesh out yesterday’s conclusive mess of an agreement. Elements apparently involve requiring Greece to implement actual reforms right now instead of in the future, which means never.
That’s similar to standard Democrat-proposed legislation that goes through Congress, wherein Republicans are suckered to increase social programs now for the Democrats’ promise to pay for them later. But as always, “later” never comes.
So it has been with the Greeks, whose modern excuse for government involves an amorphous mess of tax cheating, dictatorship by oligarchy, and undying political hatred between the left and the right cadres who view the late 1940s Greek Civil War as having never quite been resolved.
The result, alas, has been a confederation of lies that have done the average Greek citizen no good at all, while the fat cats on both sides of the aisle become more and more bloated with wealth.
“I think it’s just a sigh of relief that it’s over, but let’s face it, they just kicked the can,” said Maris Ogg, president of Tower Bridge Advisors” this morning via CNBC. “It seems like we kicked the can on a number of fronts. Earnings probably will be front and center in the next couple of weeks.” As one of the Maven’s old merchant marine pals once observed, “Truer words never was spoke.”
Elements of the new Eurozone “bailout,” should it ever actually happen, include (for the moment) effective Eurozone “takeovers” of several Greek industries, the better to actually sell them off to the private sector. Although we’re not exactly clear on who would buy them and operate them as for-profit businesses as opposed to the graft machines that currently exist.
As this mess works itself out, we figure another Greek government will take power at some point, more ups and downs in the stock market will happen, and nothing will be solved again as usual, since none of the rich people, whether European or otherwise, want to write down their investments in a good, old-fashioned, efficient bankruptcy procedure. They’d rather fleece the taxpayers over time, making them take the losses that the wealthy actually engineered.
Don’t laugh. It’s happening here and all over the globe as well. The real solution here is to hang all the politicians and bankers who’ve gradually caused this long-festering economic catastrophe to erupt after over 40 years of unrestrained greed. It may yet come to that. But in the meantime, everyone has lied his or her way out of the current Eurobox, so markets are again happy, at least today.
Even better news: Hillary was finally sighted, giving a speech today in which she essentially proposed that the solution to all our problems was a form of Obama Lite. Instead of increasing tax burdens on all, she proposes to lower “middle class” tax rates while jacking up tax rates for the rich, which, as always, the rich will never pay.
Hill also proposes somehow to boost the “sharing” economy, in the sense that companies/institutions like Uber, Lyft and Airbnb “share” rather than make money. What a bunch of hooey, from a woman who’s never “shared” a damned thing except kickbacks and international bribes.
Furthermore, what does this greedy, talentless excuse for a presidential candidate know about a “sharing” economy anyway? What she’s really looking at are early but obvious examples of American businesses and individuals who are choosing new, innovative ways of Going Galt in order to escape the clutches of a failing economy being run into the ground by clueless politicians.
Jefferson, Adams and Madison would be crying in their pints of Sam Adams Boston Lager (Brewer, Patriot) if they were alive today and staring at the pile of steaming horse by-products their shining experiment in democracy has generated in this century thus far.
As for us, we’re stuck with the here and now. As of late afternoon Monday, all U.S. averages are up nicely though not thrillingly. But it’s hard to get back in with confidence in the current, phony environment.
Today’s trading tips
Reflexively, the only thing that interests the Maven even slightly today is the chance to nibble a bit on the still sleeping banking sector. We’re not inordinately fond of the larger institutions.
Instead, we’re more interested in the regionals which should benefit more quickly when interest rates begin to rise once again, inducing them to make more and more profitable loans, even as Dodd-Frank forces the Big Boys to sit on trillions of dollars of taxpayer money, just cuz.
That’s money that could have productively been lent out years ago, causing the economy and employment to grow apace. But Democrats don’t know anything about how this works, so what did we expect.
In any event, bond vigilantes are already sneaking those interest rates up, Federal Reserve or no. Our guess is that when the Fed actually does scoot those rates up a bit, they’ll already find themselves behind the curve.
Meanwhile, regional banks are able to scoot their loan rates up bit by bit as the underlying 10-year bond yield slowly increases. So in a way, the Fed doesn’t matter. Small bank profitability should continue to rise, though almost imperceptibly at first.
We’re already into small positions in First Niagara (Symbol: FNFG) and New York Community Bank (NYCB). We’re considering adding Huntington Bancshares (HBAN) and would love to add some Zion (ZION) as well, except that it ran away from us a few weeks back and we’d prefer a better price.
Note here that we’re outlining our own positions and thoughts here, and they don’t necessarily need to be yours, since we no longer operate as registered reps or financial advisors.
That said, smaller banks are worth paying attention to. These stocks are a long, slow build if and when times improve, and patient investors often reap significant profits when they buy and hold small banks at unpleasant moments in economic history—like this one.
* Cartoon by Branco. Reprinted here by agreement and arrangement with LegalInsurrection.