Hi Mark, <<Some random thoughts - not requiring any reply or even consideration>> … what you posted are great lines of inquiry for a mind exercise. Difficult to work out and had I been not energized by Grace’s discourse on wealth, I would not have attempted the stress.
(1) <<Daimler bought Chrysler>>: a share based merger with no transfer of money, idle or otherwise, resulting in global electorates holding ballots in Chrysler waking up one morning and discovering the same electorates holding Daimler Chrysler shares. The nationality of the shareholders is less relevant than at all times past, as we will see later;
(2) <<FX: flow of funds weakened euro, increasing costs of imports to euro area>>: there was no flow of funds other than some lawyer fees and airplane tickets, in both domiciles, probably netting out to be gitdotzero, purchasing parity speaking. Given the subsequent collapse of profit and the then required debt to plug the equity hole, the flow of fund probably lead to Japan, as it certainly did not come from J6P savers;
(3) <<Chrysler suffered large net loss, enterprise value shrunk>>: along with the subsequent EV shriveling of Daimler which probably would have happened anyway, even without the merger, selling over-engineered machines to a soon to be demystified end-user and financial market, as we march through the linearly marked equation of time. Losing EV now and later, for the LTBH (most private and institutional shareholders in such shares) crowd, is exactly the same;
(4) <<Daimler Wealth lost to previous holders of Chrysler>>: followed by the previous Chrysler shareholders losing it to money heaven. For the life guard who is head-locked gurgling to the deep abyss by a doomed swimmer, the sequence of drowning is not even of academic interest;
(5) <<Loss of wealth hurt previous holders of Daimler, likely German interests>>: and global electorates, including all sources of equity and debt funding, with the spigot probably eventually leading to the generous, hard working and thrifty Japanese not really having a clue of how to enjoy their wealth other than physically eating flecks of precious metal that should better remain in vaults, on electronic circuit boards, or physical and metaphysical Toyota tail pipes;
(6) <<Who got the benefit of the wealth transfer? Americans?>>: In the aggregate, given the full length of the time line and the inevitable process by the equation of time, there is little wealth transfer to all but the quick-footed global speculators. Wealth has not been transferred. As CB would say, it went to money heaven;
(7) <<For all we know, it could have been the Japanese>>: If winning entails going through twin atomic bombings, followed by decades of grinding hard work, topped off with a decade of meandering wealth vaporization, and looking at dino-like extinctions over the next 50 years, or alternatively or concurrent, swamped by influx of less desireable neighbors, all of us do not want to win. Ok, enough of my big picture rant, for I know what you meant;
(8) <<... who see continued real wealth grow as a result of deflation and the existence of savings>>: If true, then the financier of the world will soon become the richest folks in the world, and if realized, it will be because everyone else got poorer. We now may have inadvertently discovered the secret of true wealth, a relative concept, with the score kept in PPP points, and the number of Caterinas frolicking in the surf. Not productivity, efficiency, proforma earnings, or busy money chasing dry dreams;
(9) <<Maybe the Japanese are truly smarter than we give them credit for>>: They are, they escaped to cash in time so as to be able to ride out a 12 year tsunami, in contradiction to the CNBC rant that the Japanese escaping to cash caused a 12 year tsunami. The Japanese are very intelligent, some what eccentric, extremely wealthy, and yet, they can do nothing about their plight, as we may all not be able to do about what is coming at us;
(10) <<Maybe they are winning the competition for global wealth in a manner less than obvious. Through the slow accumulation of real wealth.>>: and if they are, as I stated elsewhere, they will do so by watching others committing financial suicide by swallowing the fatally toxic fantasy wrapped in shimmering hope tied with comforting propaganda presented on a platter of official deceit.
Chugs, Jay |
