Apparently something finally occurred to the Swiss that has been admittedly slow in reaching a lot of the industrialized world, despite the best efforts of Adam Smith and David Ricardo: perhaps the people with the greatest stockpile of human capital, the greatest access to the entire world's financial capital, and the greatest social capital on the globe should maybe direct some of that towards industries other than low quality cheese. The Swiss have unilaterally ended all tariffs and subsidies, shifting their focus to higher quality products that do not require such a protectionist environment to thrive. Global luxury markets look set to explode as income inequality rises in South Asia, and there's nothing helps a Mangalore bank manager take the sting off a cobra bite like a nice cheese fondue.Also at an end is the ridiculous farce of protecting Swiss dairy farmers with an 89 franc tariff on Kraft slices, as it slowly occurs to the Swiss public that no amount of government interference in the market will allow their farmers to compete on price when Germany, Austria, Italy, and France are right next door. And really shouldn't the symbolism have tipped them off to the inevitable futility of agricultural protectionism when their most famous export product is as full of holes as their import protection strategy?
So for anyone looking to drum up hedge fund business in London, this week's convergence strategy is selling the pound short and going long on the QUID (that cash-only space motel industry will take off any day now, and they'll leave the light on for you), and the divergence play is shorting ham and swiss on the CME sandwich futures exchange, and going long on curry fondue on the BSE.
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