TIDBITS

The game of beggar-thy-neighbor continues.

South Korea joined the fray Thursday in what caught some off guard, when the Bank of Korea cut it's base rate 25 basis points to a record low of 1.75 percent. It was the bank's first cut in nearly six months.

Of course deflation took the blame at least in part coupled with a weaker than hoped for economic picture. Korea joined a growing list of central banks ponying up to the gaming table. On Wednesday the Bank of Thailand cut rates, supposedly catching investors off stride.

Others cutting rates of late include India, China, Singapore, Indonesia and Australia. Everyone knows about Europe and Japan among others. The move by Korea pushed the KOSPI up nearly 0.5 percent while also helping other Asian markets. Much of this cutting comes at a time when the U.S. Federal Reserve Bank , according the the WSJ, is considering now a June rate hike.
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In Euroland the euro continued it's swan dive, settling at a 12-year low of $107, on its apparent route to parity with the greenback. The euro began this year at $1.20 amid much of the hue and cry for the ECB to do something by rolling out its version of U.S.-style QE which began earlier this week.

But the yield-hungry crowd, to some alarm, seems to be rushing for higher returns on their holdings, putting further downward pressure on the euro. Some analysts are calling for parity by the end of this year while others think it will land at $0.85 in 2017.
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Maybe what investors really need is to take a couple of deep breaths and a shot of powdered alcohol, the latest and most recent approval thanks to the Alcohol and Tobacco Tax and Trade Bureau. It's called Palcohol.

We don't know how much of a pal it will turn out to be, but we'd sure like to know the name of the bureaucrat who came up with the monicker.

The product, appropriately name "Palcohol", is alcohol in another form-powder in this case. Thinking out of the box, or rather out of the bottle, researchers were able to turn their favorite cocktails into powder form. Just add water, shake and sip. After all, the best drinks are shaken, not stirred.

Since last year's revocation in its first attempt at pushing the product through the bureau, Palcohol has worked out many of its earlier issues. Spokesperson for the bureau, Tom Hogue, says that all of its previous issues have been resolved to the point that now four varieties of Palcohol have now been approved. But the brand can't celebrate just yet. Just because it has made it through the bureau's guidelines doesn't mean it will be hitting shelves that soon.

While the product may be available for sale as this summer, many state legislators are pushing against the sale of powdered alcohol for fear of its potential implications. Even Colorado state legislators, who recently legalized the sale and use of marijuana, have expressed concern about the potential ease of access to minors, and the opportunity of concealing the potent substance. But the while the bureau has said that they are approving the product for sale, based on their own guidelines, they are by no means making the final call. That is up to each of the individual states and whether or not the company would like to fight their claims.

Hogue explains that the bureau's evaluation is based on whether or not the product matches its label, not "its potential for abuse.
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In other interest-rate related news governments and corporations are selling long-dated bonds like there is no tomorrow. As the Financial Times noted, "The rapid growth in multi-decade debt comes as borrowers seize opportunities to lock into interest rates that have been pushed down, even into negative territory, by central bank action and faltering economic outlooks."

There are some red flag terms in here that any savvy investor should be aware of like "lock in" and "central bank actions" and "faltering economic outlook." This is an opportunity if one isn't careful to get screwed twice without benefit of clergy or the KY jelly.

Central banks and central bankers are the culprits for all three of those things. The Times quoted one investment wag, noting that such borrowings might not be repaid in the lifetime of finance ministers and corporate treasurers, "It makes sense."

And that it does if you're the seller. If you're the buyer, however, you need to look up the definition of coney-catching.
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