Ian Cumming and Joseph Steinberg are out with their annual letter to shareholders of Leucadia National Corporation, which may be of interest to non-shareholders because of its commentary on some public policy issues:
Usually we begin our Letter to Shareholders with a recap of last year's earnings, but this year all business including Leucadia's plays second fiddle to the sad state of our body politic or more simply put the mess in Washington. It is true that unemployment is down and the economy is showing signs of a pickup, but the recovery is fragile and we think quite prone to relapse back into recession. The recovery seems more beholden to money printing by the Federal Reserve than to a growing strength in the underlying economy. It is ironic that the financial shenanigans that begat the financial crisis in the first place are being treated and ostensibly cured by financial shenanigans of our own government. Our national debt has gone up two and a half times in twelve years and government expenditures are now consuming 25% of GDP, up from a more normal 20%. All of the above is not sustainable and when interest rates get back to normal we'll be the headline, not Greece. Without fixing our fiscal infrastructure high inflation seems inevitable....any plan that doesn't attack entitlements is not a plan....The debt elephants in the room are national and state governments.
On energy: "Since 2007, we have been working with the Federal Energy Regulatory Commission ("FERC") and state and local authorities to permit the site for an onshore LNG terminal; a process that is agonizingly difficult and absurdly slow. How the politicians can expect to find solutions to our long term energy needs in the byzantine and illogical regulatory environment they have created is above our pay grade to understand."
There's some wisdom in there about investing, as well: "volatility is frequently the boon companion to profitability."
And there's an account of what happened to Jefferies, the investment bank in which Leucadia is a big shareholder: "we believe coordinated short sellers pounded the stock."
Disclosure: I own some shares of Leucadia.