The G20 – A Big, Fat Bunch of Phonies

Today we’re going to channel a bit of Holden Caulfield, the protagonist of the book The Catcher in the Rye. That’s because we’ve had a gutful of ‘phonies’, or ‘God damn phonies’, as Holden would say.

The G20 conference that took place this week in Mexico was the biggest gathering of phonies we’ve seen all year. And just last night, a bunch of Federal Reserve phonies finished a two day meeting to tell us that they got their economic growth forecasts wrong. Are we meant to believe the new ones?

Let’s deal with the biggest phonies first — the G20. Here’s a picture of them. Looking at their big, fat phony smiles reminds us of a classic soul song, ‘Smiling Faces Sometimes’. The song kicks off with:

Smiling faces sometimes pretend to be your friend
Smiling faces show no traces of the evil that lurks within
Smiling faces, smiling faces sometimes
They don’t tell the truth uh
Smiling faces, smiling faces
Tell lies and I got proof

The truth is in the eyes
Cause the eyes don’t lie, amen

Anyway, once they lose their jobs in the next few years (and we reckon every one of them will as this economic debacle unfolds) they should head to Broadway, where their next career awaits. Actually make that off-Broadway…as far as theatre goes, the G20 gatherings are not very believable.

Source: The Telegraph

If you really want to make yourself puke you can check out the G20 Mexico website. But if you’re the queasy type, perhaps this little snippet from the concluding press release will be more than enough:

‘The Los Cabos Action Plan for Growth and Employment was signed. The plan established commitments to deal with the eurozone, strengthen demand, economic growth and financial systems, ensure the fiscal consolidation of advanced economies, reinforce solid, sustainable growth in emerging economies and maintain trade liberalization. To this end, an innovative Accountability Mechanism for G20 Objectives was implemented.’

If anyone, anywhere, can decipher this gibberish, please drop us a line. Do you really need a gathering of the world’s biggest phonies to secure a ‘commitment to deal with the eurozone’? Puh-lease…

Anyway what exactly is that commitment? Well it turns out to be another shot at a rescue by acronym. Soon after the conference wound down the financial media came out with the obligatory ‘rescue’ headlines.

‘Spain and Italy to be bailed out in £600 billion deal’ (from London’s The Telegraph).

‘Under the proposed deal, two European rescue funds – the £400 billion (€500 billion) European Stability Mechanism (ESM) and the £200 billion (€250 billion) European Financial Stability Facility (EFSF) – will buy bonds issued by European countries.

‘It is hoped that the move, which represents a substantial shift in policy for Germany’s chancellor, Angela Merkel, will send a strong signal to financial markets that Europe’s biggest economy is finally prepared to back its weaker neighbours.’

There’s that word again…hope.

After reading that hopeful article yesterday, we went back to the Telegraph’s website this morning for an update. Uh-oh…

‘Angela Merkel put Germany on a collision course with its European neighbours by insisting an idea to allow bail-out funds to buy Spanish and Italian debt was “purely theoretical”.

‘The German Chancellor agreed that the European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM) had the “possibility of buying bonds” but said no discussions were being held about such a move.’

After spending a few days downing shots of tequila in Los Cabos in Mexico, the G20 hangover has set in already. Apparently what happens on tour stays on tour…

Or maybe Merkel mentioned to Monti at some late night Mexican bar that theoretically Germany could easily bailout Italy…and Spain, but that practically it was a difficult matter. And Monti, sucking on a lemon after his tenth shot of tequila, didn’t hear the word ‘theoretically’…

Of course we jest…but this confusion and backpedalling just goes to show what a phony farce these gatherings are. Who do these people think they are? Do they think that we will lap this stuff up? All we can say is that we encourage more of these meetings. The more meetings they have, the more disappointments they produce. And soon, you’ll see widespread condemnation of their solutions. Because even the dullest wit will realise that these people are incompetent.


Greg Canavan
for Markets and Money

From the Archives…

The Problem With the Spanish Bailout
2012-06-15 – Keith Fitz-Gerald

Australian Housing – How to Avoid This Pauper’s Retirement Trap
2012-06-14 – Kris Sayce

Why Warren Buffett is Loading Up on Tungsten
2012-06-13 – Don Miller

China’s Economic Data Statistics: Just Add Salt
2012-06-12 – Dr. Alex Cowie

Why Graphite is One of the Few Places For Savvy Investors to Make Money
2012-06-11 – Dr. Alex Cowie

Greg Canavan
Greg Canavan is a contributing Editor of Markets and Money and is the foremost authority for retail investors on value investing in Australia. He is a former head of Australasian Research for an Australian asset-management group and has been a regular guest on CNBC, Sky Business’s The Perrett Report and Lateline Business. Greg is also the editor of Crisis & Opportunity, an investment publication designed to help investors profit from companies and stocks that are undervalued on the market. To follow Greg's financial world view more closely you can subscribe to Markets and Money for free here. If you’re already a Markets and Money subscriber, then we recommend you also join him on Google+. It's where he shares investment research, commentary and ideas that he can't always fit into his regular Markets and Money emails. For more on Greg go here.

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3 Comments on "The G20 – A Big, Fat Bunch of Phonies"

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michael prete

What is the Daily Reckoning’s solution(s) to the economic problems being experienced in Europe and the US? Please dedicate an article to this question. It would be a refreshing break from the ongoing blaming/criticisms of leaders and banks.
Looking forward to reading the article.


Let a TBTF bank fail. Gov’t buys it as a bankrupt entity. Guarantee the small depositors. Sack and sue the senior management. Sell the assets at the clearing price. Promise the same to the next bank needing a taxpayer bailout.

Delete central bank, let market set interest rates.

Sack Bernanke and Geithner, sue Paulson, investigate and sue GS, Corzine and all other crony capitalists for all their frauds.

Vote out all your sitting members.

There, fixed it for you.


This was just another gabfest by lying, bribe-bloated politicians who are worried that the Second Great Depression is coming. G20 summit is more like ‘rearranging the deck chairs on the Titanic.’

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