Well, filmmaker Dan Abrams, Science Channel host Josh Zepps and Second City ETC founder Jeff Michalski have decided it’s time to stop crying about the economic crisis and recession ![[cnbc explains]](/CNBCexplainsicon1.gif){kind=small}
— and start laughing. They’re working on a mockumentary (think “Spinal Tap”) about the economic crisis called “False Profit.” But wait, don’t answer yet. You also get — an investment opportunity! Between them, they’ve worked with some of the most famous names in comedy, from Stephen Colbert to Robin Williams, but they’ve decided that YOU are the one to fund this project.They’ve launched a campaign on Kickstarter.com to raise money for the film. If they get $50,000, they’re totally doing it. (If they don’t, they’ll probably blow the money on cheeseburgers and hair products.) The Kickstarter page includes a trailer for the movie that includes narration in a voice that sounds like Dana Carvey doing George Bush (so read this in that voice): 2.8 trillion dollars …gone. Lehman and Bear Stearns … wiped out. Entire neighborhoods … foreclosed. Europe … breaking apart. And as the world crumbles, everyone is asking one question: “Who’s to blame?” The answer, as it turns out, is Eugene Kramer, a simple Iowa farmer who brought his folksy wisdom to Wall Street at an entry-level trading job in 2004. From the credit crash to the auto bailout, from the euro crisis to Occupy Wall Street, Eugene Kramer caused it all — and now it’s up to him to fix it.If you pledge $10 or more, you get a special digital download before the official DVD is released. At the $25 level, you get a special edition DVD/Blu-ray before the DVD release AND the digital download. For $50, you get all that AND the chance to attend a special online premier (are sequins still appropriate for that? what's the protocol for an online premier?!), plus access to several live streaming workshops on comedy with Michalski. They don't want to be around you until you reach the $100 level, where you get all that AND two tickets to a live screening. And for $250, you get four tickets, blah blah blah, AND an invite to the after-party. (Now we're talking.) You go $500, you also get an "associate producer" credit and at $2,000 or more, you get an "executive producer" credit.We’ve all been burned by some bad investment choices during the past few years, so it’s understandable if some investors are a little skittish. I mean, how can we know for sure they’re not the Bernie Madoffs of comedy and this is nothing more than a Ponzi film that you could have an executive producer credit on that could actually land you interviews with the FBI, SEC and Justice Department?!They assuage any concerns on their Kickstarter page, describing the project as a “gleefully absurdist farce,” in the vein of “Arrested Development” and “Best in Show.” Well, when you put it that way, it sounds better than any of the investments we’ve made in the past few years. Jimmy, hand me my wallet! And, scene. Disclaimer: Due to SEC regulations concerning qualified investments, Kickstarter and the aforementioned filmmakers are unable to sell equity or profit points on this project. So, you will have to be happy with the DVD, producer credit, etc., depending on the investment package you choose. Disclaimer, part deux: Both of Abrams's parents are corporate lawyers.More From CNBC.com: Email us at document.write("");document.write("ponyblog"+"@"+"cnbc.com");document.write('');or drop a line in the comment box below. More from The Pony Blog: ponyblog.cnbc.com
Such caution permeated last week’s report that the People’s Bank of China has recommended accelerated opening up of the Chinese financial system. Given what is at stake, in both China and the world, it is essential to consider the implications. Maybe the world will then do a better job of managing this process than it has done in the past.This plan was published by Xinhua, the state news agency, not on the PBoC’s web site. Moreover, it was published under the name of Sheng Songcheng, head of the statistics department, not that of the governor or a deputy governor. This must mean that it is more an exercise in kite-flying than a policy. Nevertheless, this was published with the PBoC’s approval and, quite possibly, with that of people much higher up still.The article lays out three stages for reform. The first, to occur over the next three years, would clear the path for more Chinese investment abroad as “the shrinkage of western banks and companies has vacated space for Chinese investments” and so presented a “strategic opportunity”. The second phase, in between three and five years, would accelerate foreign lending of the renminbi. In the longer term, over five to 10 years, foreigners could invest in Chinese stocks, bonds and property. Free convertibility of the renminbi would be the “last step”, to be taken at an unspecified time. It would also be combined with restrictions on “speculative” capital flows and short-term foreign borrowing. In sum, full integration would be indefinitely delayed.What are the implications of this plan? The answer is that it seems sensible. In reaching that view, one has to take into account the benefits and risks of financial “reform and opening” for China and the world.The arguments for such opening up to the world are closely connected to those for domestic reform. Indeed, the former cannot be undertaken prior to the latter: opening up today’s highly regulated financial system to the world is a recipe for disaster, as Chinese policymakers know. It is for this reason that full convertibility would come in the distant future, as this plan suggests.Happily, arguments for domestic reform are powerful. Dynamic financial markets are an essential element in any economy that wishes both to sustain growth and to begin rivaling rich countries in productivity, as China surely aspires to do. More immediately, as Nicholas Lardy of the Peterson Institute for International Economics notes in a recent study: “Negative real deposit rates impose a high implicit tax on households, which are large net depositors in the banking system, and lead to excessive investment in residential housing. Negative real lending rates subsidize investment in capital-intensive industries, thus undermining the goal of restructuring the economy in favor of light industries and services.”*Yet, as Mr Lardy also knows, this distorted financial regime is part of a wider system for taxing savings, promoting investment and repressing consumption, which has led to huge interventions in foreign currency markets and vast accumulations of foreign currency reserves. The deeper case for reform is that this system no longer contributes to a desirable pattern of development. But it has become so deeply entrenched in the economy that reform is politically fraught and economically disruptive. The question is even whether such reform is politically feasible. It is surely likely to be a slow process.How would the PBoC’s proposed moves towards opening up then fit with such a cautious reform? Presumably, the greater freedom for capital outflows envisaged for the next five years would partly substitute for accumulations of foreign currency reserves. Yet if this went with suggested moves towards higher real interest rates, China’s savings and current account surpluses might explode, worsening the external imbalances.This point underlines just how big a stake the rest of the world has in the nature of China’s reform and opening up of the financial sector.China’s gross savings are running at an annual rate of well over $3 trillion, which is more than 50 per cent larger than the gross savings of the U.S.. Full integration of these vast flows is sure to have huge global effects. China’s financial institutions, already enormous, are also almost certain to become the biggest in the world over the next decade. One need only think back to Japan’s integration in the 1980s and subsequent financial implosion to recognize the possible dangers. We should be pleased, therefore, that China is taking a cautious approach.The world has a huge interest in a shift of China’s economy towards more balanced growth. It has a parallel interest in the way China manages its domestic reform and opening up of the financial system. A whole range of policies need to be co-ordinated, particularly over financial regulation, monetary policy and exchange rate regimes. If this is done well, today’s high-income countries’ crisis will not be promptly followed by the “China crisis” of the 2020s or 2030s. If it is done badly, even the Chinese might lose control, with devastating results.The PBoC suggests a timetable of reforms that would fit with China’s and the world’s needs. But if this is to happen, thorough discussion of all the implications must now occur. China’s policies do not matter for the Chinese alone. That is what it means to be a superpower — as the U.S. should note.* Sustaining China’s Economic Growth After the Global Financial Crisis, Peterson Institute for International Economics, 2012.
Travelpix Ltd | Photographer's Choice | Getty ImagesThe chances are that the cash will indeed cool the fever, buying more time for Europe's politicians to find a cure for the underlying malady and so tempering what by common consent is the biggest risk facing the global economy. The ECB on Wednesday will offer banks, for the second time, an unlimited volume of cheap three-year loans. A Reuters poll of economists shows that banks, not about to look a gift horse in the mouth, will take 492 billion euros from the ECB, close to the 489 billion borrowed in the first deal just before Christmas. "I don't expect this operation can solve all the problems, but hopefully it will take us past the worst point of the crisis," said Riccardo Barbieri, chief European economist at Mizuho International in London. The first Long Term Refinancing Operation, or LTRO - one of several ugly acronyms spawned by the crisis - worked wonders. At a stroke, cash-flush banks no longer had to worry about rolling over a big batch of maturing bonds. The threat of a catastrophic bank failure evaporated, and government bond yields in Italy and Spain, previously driven sky-high by a buyers' strike, started to fall. Business confidence rose, as did stock markets. What the massive injection of liquidity has not done is to get the real economy moving. Cautious banks are conserving capital and parking spare cash at the ECB rather than lending. "While we may have avoided a broad credit crunch, the 'Great Deleveraging' in Europe seems far from over; history suggests that European banks have a long way to go and the LTRO will slow but not stop the process," analysts at Morgan Stanley said in a report. Barbieri at Mizuho agreed that banks were under pressure, but he said a relaxation of collateral rules for the new LTRO would principally benefit second-tier banks, enabling them to lend more to exporters and smaller enterprises. "It would be disappointing if there wasn't a beneficial effect, but it will take some time for these effects to show up in the statistics," he said. Balm, Not a CureThe green shoots of recovery, though still fragile, are already pushing up in the United States and economists will scrutinize Thursday's Institute of Supply Management survey to gauge the momentum of growth. For the first time since January 2011, Citigroup economists this month made a small upward revision to their 2012 global growth projection and to forecasts for the euro area and Japan. If things are looking up, it is surely in part because major central banks have thrown caution and cash to the winds to ride out the global financial crisis. But Marc Chandler with Brown Brothers Harriman in New York said the LTRO was likely to conclude this activist phase, partly because a rise in crude oil prices to nine-month highs was complicating the economic outlook. Few expect Federal Reserve Chairman Ben Bernanke to signal a third round of asset purchases, dubbed quantitative easing, when he testifies to Congress on Wednesday and Thursday. Including this week's operation, the ECB, the Fed and the Bank of England will have nearly trebled their balance sheets since mid-2007 to almost $8 trillion, according to Paul Schulte with China Construction Bank International in Hong Kong. The ECB's cash gusher effectively neutralizes the risk of a slump in European bank lending to Asia, Schulte said. In fact, in an echo of 2009, Asia was now at risk of a liquidity glut due to what he called "uncoordinated global loosening". As for Europe, Nicholas Spiro of Spiro Sovereign Strategy, a London advisory firm, said it did not bear thinking what state the markets would be in without the ECB's actions. But he also had reservations. The liquidity-driven turnaround in sentiment contrasted starkly with deteriorating economic fundamentals in Spain and Italy. "The euro zone crisis is in abeyance. This should not be mistaken for its resolution. Investors would be well advised to be cautious," he said. Copyright 2012 Thomson Reuters. Click for restrictions.