All Articles Finance Modern Money While You Were Working - March 20

While You Were Working – March 20

FinReg sausage making, BoE with a deft touch, Cobalt comes to the fore, and where for art thou, Mark Zuckerberg?

3 min read

Modern Money

Mark Zuckerberg

It's all good, bro. (David Ramos/Getty Images)

On the sausage making of Dodd-Frank rollbacks

For months now, media coverage of the Dodd-Frank rollbacks making their way through Capitol Hill have included uncertainty in some corners of the banking industry (read: small- and medium-sized banks) about whether they would be unshackled from all the rules that have limited them to just billions of dollars in earnings. I wasn’t too worried … and for good reason.

The folks pushing for rollbacks aren’t stupid. They know it is always a better idea to insert the real juicy bits of financial regulatory reform at the last minute. That way there is less time for Sen. Elizabeth Warren to sound the specific alarms. Well played K Street, well played.

Stern words and a light touch

Remember when the US Federal Reserve announced a few years ago that it was going to try to be more transparent in its communications so as to (perhaps) make it intentions more clear and future policy move less surprising? Well, the Fed has done an okay job thus far, but it still isn’t perfect politics and prose. 

Well, now it sounds like the Bank of England is getting into the whole “maybe how we say something is as important as what we say” game. The BoE has apparently adopted more precise wording and clearer direction in its the letters it write to banks. Don’t get me wrong, I am all for the BoE finding its voice, but it does seem a wee bit odd to come at a time when the scales of regulation are tipping toward lighter touch. 

But what about cobalt?

I have written in this space before about the increasing importance of cobalt as one of the world’s precious resources. Cobalt is a key ingredient in batteries that power all manner of things from cars to mobile phones. So while Team USA is concering itself with slapping tariffs on steel and aluminum, Glencore CEO Ivan Glasenberg says they are missing the boat on cobalt.

“The motor car industry hasn’t woken up to the fact, I don’t think, how important cobalt is and how ‘tight’ cobalt is.”

I just came from Namibia, which like the Democratic Republic of Congo is a big cobalt producer, and I can tell you the Chinese everywhere (I mean everywhere!). And before the Chinese, the North Korerans were there (building relationships and ugly buildings). With the US and other Western powers nowhere to be found, Glasenberg says the Chinese are set to see their African natural resource strategy pay off.

“The Chinese will have most of the offtake of cobalt. They’re not going to sell batteries to the world, more than likely they’ll produce batteries in China and sell electric vehicles to the world.”

This isn’t some kind of surprise development. And yet, many of the world’s powers didn’t see it coming. How did they miss it?

Where for art thou, Mark Zuckerberg?

The silence from the Facebook boss has been deafening. I bet he has some media advisor telling him to stay quiet until things get sorted out. That is baaaaaaad advice.

WYWW Appetizers