Shah Gilani writes: Today I want to talk about a few things I've been scratching my head over lately.
First, about those polls leading up to the presidential contest.
How come they were so wrong? How come the candidates were inches apart right up to the finish line, and then it's like a "tortoise and the hare" kind of ending?
Did Romney even finish? Is he finished? Is the Republican Party finished?
Maybe the problem is the questions they ask, the pollsters, that is, or the way they ask them. Maybe they ask questions like a lawyer leading a witness would.
You have to wonder who pays for those polls, too. Survey says: the Super PACs - or is that the stupid hacks? Don't you wish they'd post the questions they asked along with the "Survey Says" results?
And, how stupid are the markets, make that investors, you know who you are. The day of the election, the market was anticipating a Romney victory, after all the polls said it was more than possible, so we got a smart little rally.
Then reality set in. Four more years. And you think it's going to get better?
Here's something else to chew on. If you think the Republicans are going to roll over and play dead, now that they are dead, think again.
The only way to fight back when you're dead is to kill the other guy, so you're both dead. Then, of course, you say, I was dead first, I couldn't have killed the economy, I couldn't have driven us over the fiscal cliff, they did it!
It looks like the market is saying, OMG (that's Oh My God, for you non-texters), we're going over the cliff and there's no stopping us.
Trust me on this one, that cliff everyone's been talking about - it ain't the only cliff.
There are a few others, one of which is a really big one, maybe bigger than the "fiscal cliff." I wrote about it here in Money Morning yesterday.
Let's move on, I hate talking about politics.
John Corzine, Yeah That's the Ticket
So, who do you think should be the next Secretary of the Treasury?
If you like the way things have been going on Wall Street and for the economy, then you might want to get behind Jon Corzine.
I hear he's making a bid for a comeback, and after all, he's got experience, don't you know. You know who he is, right?
He was the top gun over at Goldman Sachs (NYSE: GS) before he became a public servant, which was before he ran that little house of horrors MF (you know what that stands for, don't you?) Global.
Corzine has all the qualifications, you know. Oh, wait, he may not be available. He's hiding out until that seat at the head of the table over at the Federal Reserve is open. After all, after Goldman Sachs, only the Federal Reserve will do.
Me, I like Sheila Bair. But her chances at Treasury are exactly in-between slim and none.
Like I said, I hate politics.
Another Bright Idea From JP Morgan
Let's talk about something else I hate. The big banks. Let's talk about one in particular.
JP Morgan Chase & Co. (NYSE:JPM) just got permission from the Fed to buy back $3 billion of their stock. They came out on Thursday and said so.
They said, look at us, look how well we're doing. We're making so much money that we are going to return more of it to our shareholders.
What? Or, if you are a texter... WTF?
At the same time they announced they were able to continue to buy back shares (they wanted to buy back $12 billion worth this year, but a little $2 billion loss that CEO Jamie Dimon declared they were dealing with in London, back in May, turned out to be $6 billion and counting), they quietly also said their projected litigation-related costs, which includes payouts for getting caught mooning the public, rose in the past three months from $5.3 billion to $6 billion.
And they want to buy back more shares?
Why don't they just declare a special dividend if they really want to give money back to shareholders?
Why are they trading their stock? At the end of the day, they could spend $12 billion buying back stock, and the stock price doesn't go anywhere. They spent $11 billion in 2011. Look how well that worked. Not.
The bank game of buying back stock to reduce shares outstanding and to support the stock price (for bonuses and options grants and stuff like that) is bogus. Yeah, it's supposed to make earnings per share better, so what. It's just a game to reduce the pile of shares now, so they can sell more shares for capital later, when they need it and it's expensive.
Why don't regulators just make the big banks hold all that money they're making so they never get into trouble again?
And when they have so much money sitting around, we can break them up into hundreds of smaller banks who will actually benefit the economy and not soak us all when they have to play their giant economies of scale revenue-gathering schemes to line their deep pockets.
I hate big banks even more than I hate politics (make that politicians).
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