I’ve
not posted to my website, etc., (except for myahoo daily news since the dates
are already posted), since 2-08-13 because … it’s the lunar new year and
Chinese markets are not open …… just kidding! ….. because I’m on vacation …
just kidding again! …..actually, because I’m backing up my entire website to
one of my laptops. It’s taking longer than anticipated as I now enter the
fourth day of download (has taken five days, total) [through no fault of Time
Warner – they offer a superfast internet service/connection for more money
which is far more than I need relative to cost though truth be told, I lamented
it would have been handy for this time-consuming, ‘laborious’/tedious task
(requiring surface attention, ie., file overwrites, preventing automatic
shutdown for installation of windows updates, etc., interrupting the FTP flow)
which I didn’t want to foul by usurping bandwith/memory for this mundane
endeavor]. The new HP laptop with extra-large disk space running windows 8
which I specifically bought for this intended purpose of backup became
problematic inasmuch as the screen-saver was not readily turned off as is
easily discernible and accomplished in other windows op systems and which cut
out my ftp connection (filezilla courtesy of mozilla/firefox is great) when
operative. The fixes as per google search either weren’t present in this
windows 8 offering or, from my perspective, not worth the risk (one such was a
registry editing program/script that disabled screensaver which I could not and
did not risk – remember, with google/nsa links you see what they want you to
see, which of itself is informational). I thereupon used a crossover cable to
transfer files from my other laptop which I’m using for the backup files -
windows 8 saw it just fine which had not been the case with prior windows
versions when I tried same. Interestingly (or not), and I can’t even say how,
on the new windows 8 laptop, after some belated ‘tinkering’, up popped an AMD
power/vision window which allowed for my ‘never’ entries on screensaver for
both battery (longer battery-held charge probably the reason for the ‘intended’
difficulty regarding disabling same?) and plug-in/adapter, but the older HP
laptop’s already doing just fine.
Who Tells Us What To Think? Does The Mainstream Media =
The Matrix?
http://theeconomiccollapseblog.com
http://albertpeia.com/mainstreammediamatrix.htm
Show This To Anyone That Believes That “Things Are
Getting Better” In America
http://theeconomiccollapseblog.com
http://albertpeia.com/thingsgettingworseinamerica.htm
40 Ways That China Is Beating America
http://endoftheamericandream.com
http://albertpeia.com/40wayschinabeatingamerica.htm
It’s Time For Name That Insolvent Banking System!
WARNING: The EU Crisis is BACK and Will Be Getting Worse
in the Coming Weeks
http://albertpeia.com/eucrisisbackandworse.htm
Petrogold: Are Russia And China Hoarding Gold Because
They Plan To Kill The Petrodollar?
http://theeconomiccollapseblog.com
http://albertpeia.com/deathofpetrodollar.htm
The Prophecy Of The Popes: The Next Pope (Petrus Romanus)
Will Be The Final Pope According To A 900 Year Old Prophecy By St. Malachy
http://albertpeia.com/900yearoldprophecy.htm
23% Of America Is
Illiterate
Submitted by Tyler Durden
on 02/13/2013 - Following on the heels of the dumbing down of the
State of the Union speech we noted yesterday, we thought a simple
visualization of just how stunningly poor our nation's reading skills really
are would be useful. One in five Americans lacks the basic reading
skills beyond a 4th grade level - are you one of them?
Home Prices Are
Back... To 1894's Levels
Submitted by Tyler Durden
on 02/13/2013 - Six years after the onset of the
traumatic US housing crisis, the optics are there that suggest a stabilization
is occurring. Whether real or manufactured by record-low foreclosures, bank
supply withdrawals, and fed-subsidized cash REO-to-rent trades, the sad truth
is that jobs (and the GDP-enhancing multiplier effect that they create) are
just not coming. Even Bob Shiller prefers the potential for 4% gains in stocks
over housing risk in the medium-term as he points out that - inflation-adjusted
- house prices are back at levels first seen in 1894... now that is a long-term
investor.
El-Erian
On Stocks: "Prices Are Artificially High - It’s Time to Take Profits"
Submitted by Tyler
Durden on 02/15/2013
"It’s not going away, it’s going to get worse," is how PIMCO's
Mohamed El-Erian warns Yahoo's Lauren Lyster about central bank policy and the
currency wars that are so much in discussion currently. Central banks have been
compelled to undertake unconventional measures, things they haven’t done
before, because other policymakers are not stepping up to take responsibility
on the fiscal side. These implicit devaluations and beggar-thy-neighbor
policies force a lot of liquidity into the system and by pushing up asset
prices, central banks believe, create a 'weath effect'. It can also trigger “animal
spirits” – we get all excited and invest more. In terms of equity markets,
El-Erian says investors are split into two camps. One camp believes that
everything will go higher and central banks will succeed in their efforts. The
other camp believes asset prices are going to come down to meet the
fundamentals. El-Erian puts himself in the second camp. “We think
that prices are artificially high, that maintaining them here is going to be
hard as central banks become less effective, and that it’s time to book some
profits and to wait for some better entry points,” he explains. He
clarifies that this is not a “Lehman moment." But “prices that have
gotten way ahead of what policy can deliver,"
The Ultimate Global
Equity Valuation Matrix
Submitted
by Tyler Durden on 02/13/2013 Tired
of getting caught tongue-tied at the polo field bar when someone asks whether
Russian Utilities are cheap? Annoyed at the lack of your ability to instantly
respond on the richness of British Beverage companies when racing Veyrons in
Dubai? Have no fear. UBS, Global Valuation Heat Map provides an at a
glance table of the best (and worst) global sectors for your hard-earned local
currency to be devalued in.
Six More Equity
Offerings Price After The Close As The Greater Fools Start Getting Second
Thoughts
Submitted by Tyler Durden
on 02/13/2013 - It appears that not only we are
tracking the phaseout in equity inflows, all of which are simply the reversal
of the massive $220 billion surge in bank deposits in the month of December due
to fears of Fiscal Cliff dividend and capital gains tax increases (explained
previously), and which as today's ICI update indicates
have trickled down to just $683 million - the lowest weekly inflow year to
date. Among the others who are keeping track of the weekly reduction in inbound
capital euphoria, in addition to the six companies which priced equity
offerings on Monday as was shown previously,
are these fine corporations and existing stakeholders, including Apollo,
KKR, Carlyle, Blackstone, Thomas H. Lee, and Bain, who just
can't wait to get out while the getting is good, split once again evenly
between secondaries and follow ons.
Guest Post: Meet
Stingray Surveillance: The "Unconstitutional, All-You-Can-Eat Data
Buffet"
Submitted by Tyler Durden
on 02/13/2013 - It’s getting impossible to
keep track of all the new spy tools being rolled out by the police
state in the name of “fighting terrorism”, aka spying on innocent American
citizens unconstitutionally. I thought that I had my hands full the other
day with ARGUS: The World’s Highest Resolution Video Surveillance Platform, but
this “Stingray” system is already being deployed illegally in cities throughout
the United States. As the EFF states: “The Stingray is the
digital equivalent of the pre-revolutionary British soldier.”
Japan Refuses To Exit
Triple-Dip Recession As Q4 GDP Disappoints Expectations Of A Positive Print
Submitted
by Tyler Durden on 02/13/2013 Despite
so much pent up hope that Japan would post a 0.4% annualized growth (and a 0.1%
rise Q/Q) in its Q4 GDP, finally exiting that pesky triple dip recession it has
been stuck in for the past five years, moments ago the Cabinet Office
reported that contrary to optimistic expectations, in the 4th
quarter the economy again contracted for the third straight quarter, this time
by 0.4% annualized, and 0.1% on a Q/Q basis. This was driven by a whopping 14%
SAAR implosion in exports, which should not come as a surprise to those who
have been tracking the ongoing destruction of Japan's trade balance (and
current account surplus). "Japan's economy may show some weakness for the
time being. But it is likely to resume a moderate recovery thereafter due to
the Bank of Japan's monetary easing, the effect of an emergency economic
package, as well as an expected moderate recovery in the global economy,"
Economics Minister Akira Amari said in a statement. True: there is hope. And
there is the reality that all the BOJ is doing is
desperately trying to offset the loss of the Chinese export market, which
courtesy of the ever escalating foreign relations snafu involving a few islands
close to a massive gas field, remains as shut as ever. And as long as China
refuses to assist Japan in its trade and current account deficit predicament,
Amari can hope, and hope, and hope.
"Boomerang
Foreclosures" Are Back As Bernanke's Second Housing Bubble Begins To Pop
Submitted by Tyler Durden
on 02/14/2013
As always happens when central
planning is involved, when one tries to stop a leak here, two new leaks appear
elsewhere. Because while the Homeowners Bill of Rights managed to grind
foreclosure activity to a halt in California, what is happening elsewhere is
the dreaded Boomerang Foreclosure phenomenon, or, said simply, redefaults.
In other words, those homeowners who tried to take advantage of the most recent
housing bubble mania created over the past year by the unholy trinity of the
Fed (open-ended liquidity, REO-to-Rent programs, and $40 billion in
monthly purchases of MBS), foreign buyers (who launder illicit
money courtesy of the NAR's anti-money laundering exemption and park it in
ultra luxury US real estate, usually sight-unseen) and of course, the
banks, who with the aid of the robosigning fiasco and the Homeowner
Bill of Rights, have over the past year subsidized the housing market by
keeping non-cash flow generating mortgages on their books in exchange for a
wholesale subsidizied rise in housing prices, ran out of cash before they could
flip the "hot potato" that is the house they just bought, to a
greater fool, and since they had no actual cash to pay the mortgage with, and
with no fear of retribution, handed it right back to the bank. As the chart
below shows, while California foreclosure activity is collapsing, things in
other places are starting to indicate that the second housing bubble blown by
Bernanke in 5 years, is finally starting to crack:
Jesse
Jackson Jr Charged With Stealing $750,000 In Campaign Cash Used To Purchase
"Fur Capes And Parkas" And Much More
Submitted by Tyler
Durden on 02/15/2013 - And so the surreal criminal saga of former Illinois
Congressman Jesse Jackson Jr. has ended. Jackson, 47, a prominent Chicagoan son
of the civil-rights leader of the same name for the handful of people who are
unaware, was a national co-chairman of President Barack Obama’s 2008 campaign
and an advocate of traditional Democratic Party constituencies. He disappeared
in June, and it was later revealed that he was being treated at the Mayo Clinic
for bipolar disorder and gastrointestinal issues, although now it appears
kleptomania may have been one of the afflictions treated too. He returned to
his Washington home in September but went back to the clinic the next month. As
Bloomberg summarizes,
"he pushed to maintain government support for the poor, including welfare,
assistance for heating bills and the Head Start early education program."
He certainly was very generous with other people's money. So generous, in fact,
that hours ago he was charged with "misusing", also known as
stealing, some $750,000 in campaign funds for purchases including a $43,350
gold Rolex watch, $5,150 for fur capes and parkas, $10,000 worth of
"children's furniture", Michael Jackson and Bruce Lee memorabilia and
much more.
How
The Super-Rich Avoid Paying Taxes
Submitted by Tyler
Durden on 02/15/2013 If you're one of the 1% of Americans who control
over 40% of the country's wealth, life is full of choices. Among them - how
best to keep all that money away from the government? The U.S. economic system
offers no shortage of loopholes allowing the ultra-rich to shortchange Uncle
Sam. The following infographic explains how exactly do the super rich
hide that much money from the government every year?
Weekly
Bull/Bear Recap: Feb. 11-15, 2013 (And G-20 Preview)
Submitted by Tyler
Durden on 02/15/2013 - This objective report concisely summarizes
important macro events over the past week. It is not geared to push an
agenda. Impartiality is necessary to avoid costly psychological traps,
which all investors are prone to, such as confirmation, conservatism, and
endowment biases. Also - from Citi's Steven Englander - what to worry about
from this weekend's G-20 extravaganza...
Biderman
On The Market's 'A-Ha' Moment And Obama's (Apparent) Omnipotence
Submitted by Tyler
Durden on 02/15/2013 - TrimTabs' CEO Charles Biderman finds it hard to
hide his disdain for the omnipotent reality that President Obama espoused of a
non-deficit increasing State of the Union solution to all our ills (from
climate, income inequality, opportunity, and health) as he notes the politicians
"do not seem to understand is that big government is, in fact, the
problem, not the solution." The problem is it is hard to find one
service the government provides that is effective, other then writing checks.
We have not won the federal wars on poverty, or drugs, nor overseas wars in
Iraq, and Afghanistan - so although governments have rarely successfully
provided services, we have a government committed to doing just that. This
faith in government omnipotence is now bleeding over into stocks, as Biderman
notes "since January 1, investors are pouring billions into the markets in
the mistaken belief that the “fake” money created by central banks is just
as good as previously existing money, and the markets will keep soaring.
But for how long?" He is clear on the implication of this "magical
thinking" At some point "the markets will have an “aha”
moment and stop allowing central banks to use newly created money with
which to pay government bills. When that happens the markets will
crash."
Guest
Post: Five Tools To Protect Your Privacy Online
Submitted by Tyler
Durden on 02/15/2013
We’ve discussed many times before - hardly a month
goes by without some major action against Internet users... from Obama’s ‘kill
switch’, to ACTA, SOPA and PIPA, to stasi tactics against people like Kim
Dotcom. Online privacy is becoming more important by the day.
And nobody is going to give it to you, you have to take steps yourself to
secure it. Below are five different tools and services that will get you
started...
The
New Buffett Rule: Equities Are Overvalued
Submitted by Tyler
Durden on 02/15/2013
Based on Heinz' new best friend from Omaha's "best
single measure of where valuations stand at any given momen," US equities
are now over-valued for the first time since 2007. Buffett's measure -
the percentage of total market cap (TMC) relative to the US GNP - as Cullen
Roche indicates on Bloomberg's Chart of the Day, crossed 100% this week into
stretched territory. As Gurufocus notes,
this implies a mere return of around 3.3% annualized (including dividends) ove
rthe folowing years - though as is clear from the chart below - the ride is
extremely bumpy...
SEC
Charges Heinz Call Buyers With Insider Trading
Submitted by Tyler
Durden on 02/15/2013
Yesterday, after the news of the Heinz acquisition
hit the market just in time to wipe away the bitter aftertaste of the biggest
GDP drop in Europe since 2009, we brought you the
undisputed fact that someone made nearly $2 million in call options, which
soared 1700% overnight and was bought the day before. It appears even the SEC
finally is back to doing what its historic task was before it discovered
internet porn, and one day after the report, has charged unidentified traders operating
or trading out of Zurich, Switzerland with generating some $1.8 million in
profits. Notably, the trade occurred through an "omnibus account located
in Zurich, Switzerland in the name of GS Bank IC Buy Open List Options GS &
Co c/o Zurich Office (the "GS Account")." Does GS stand for
Goldman Sachs one wonders? And while we commend the SEC on finally doing its
job, our original question still stands: who
leaked the details of the transaction one day before its formal
announcement?
POMO-Less
Day Plunges Stocks And Precious Metals. VIX/VWAP Save The Day
Submitted by Tyler
Durden on 02/15/2013
JPY dumping early as G-20 showed they were as much
use as a chocolate fireguard. Precious metals (then the rest of the commodity
complex) cracked lower in the pre-open and USD strength but vol-crushing was
not taking a day off and VIX-compression led S&P futures to test new highs
(actually a tick off the week's highs) on dismal volume. Treasury yields pushed
higher (though we note the 2s10s30s butterfly was the main carry driver).
Correlations in general drifted lower as stocks slipped gently off their highs
on mixed ECO data. As Europe closed, selling began but we noticed an
odd thing - the selling continued - it was a non-POMO day! Then the
WMT news broke and there was no POMO ammo to soak up the selling as the stock
chipped away chunks of the Dow... but sure enough, the huge volume surge into
the downturn was tickled all the way back up (as stocks tried to recouple with
their more exuberant VIX neighbor) and touched VWAP into the last few minutes.
VIX selling pressure into a long-weekend is not unusual but to new multi-year
lows is becoming farcical. Gold -3.5%, Silver -5%, 10Y +6bps, USD +0.3%,
Oil Unch, S&P +3pts, VIX -0.5vols. Quite a week of
volumeless lethargy as the S&P 500 closed 1518, 1517, 1519, 1520, 1521,
1518.
Where
Pigs Really Get Slaughtered
Submitted by Tyler
Durden on 02/15/2013
Bulls make money; Bears make money; but Pigs get
slaughtered - in massive amounts in China compared to the rest of the world... and
unlike Ben Bernanke's apparent life-long vendetta against bears and their
deflationary threat, this post actually means real pigs...
RANsquawk
Weekly Wrap - 15th February 2013
Submitted by RANSquawk
Video on 02/15/2013
Chart
Of The Day: The DV01 Time Bomb Beneath The World's Equity Tranche
Submitted by Tyler
Durden on 02/15/2013
While everyone is very familiar, and at times
hypnotized, with the plain vanilla equity chart of stock prices which at least
in the US are near all time highs, and where the small-cup Russell 2000 -
long the object of Bernanke's affection - is already at never before seen
levels, one chart virtually nobody has seen, perhaps the most important chart
for the global capital markets right now, is the following from Goldman, which
shows that while outright market cap for the G7 countries (ex basket case
Japan) is near all time highs courtesy of the $15 trillion in liquidity pumped
by central banks, the ratio of equity market cap to the outstanding
value of debt securities underlying this equity is
near all time lows!
Wal-Mart
Says February Sales "Total Disaster", Worst Monthly Start Since 2006;
Stock Drops Submitted
by Tyler Durden on 02/15/2013 Wal-Mart shares are plunging as the
firm reports a 'total disaster' in its February sales. Bloomberg obtained
internal emails that note:
"In case you haven’t seen a sales report these
days, February MTD sales are a total disaster,” Jerry Murray,
Wal-Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to
other executives, referring to month-to-date sales. “The worst start to
a month I have seen in my ~7 years with the company.... That points to
our competitive landscape, which means everyone is suffering and
probably worse than we are”
Things must not be
serious over in Bentonville for this much truth to suddenly hit the tape. One
senior executive summed it up perfectly - “Well, we just had one of those weeks
here at Walmart U.S. Where are all the customers? And where’s their
money?” The company notes the end of the payroll tax cut by Obama and
asks "We need to stop the stupid."
Live
Tracking Asteroid D14 As It Misses The Earth By 17,500 Miles At 2:25pm Eastern
Submitted by Tyler
Durden on 02/15/2013 - Update: it missed.
It is only fitting that in the aftermath of the
earlier meteor explosion above the Russian Urals, that the world's attention
next shifts to yet another historic celestial event, this time of near-Earth
asteroid 2012 DA14, which will make a historic flyby of the planet, missing
Earth by some 17,500 miles. According to scientists at NASA's Jet Propulsion
Labs, the asteroid, which is 150 feet in size, an object of this size makes a
close approach like this every 40 years. The likelihood of a strike is every
1,200 years. Of course, the neo Keynesian among us would wish the latter number
was much smaller: just think of the untapped GDP potential that would result
from the epic destruction. And while a direct impact would not lead to any mass
extinctions as was the case 65 million years ago, when the earth was hit by a
meteor 6 miles across, this rock could still do immense damage if it struck
given its 143,000-ton heft, releasing 2.4 megatons of energy and wiping out 750
square miles. The closest approach will take place at 2:25 pm Eastern, and NASA
will be covering the event live below.
Shiller On Housing:
Back? On Track? Or Still Cracked?
Submitted
by Tyler Durden on 02/14/2013
Following on from our earlier
discussion of the boomerang
foreclosure problem, we thought a recent interview between Goldman
and Bob Shiller well worth considering - given his relative independence and
honesty - on the reality of the housing 'recovery' - he is not gung ho. Has the
US housing market bottomed? "Maybe, but I still worry about further
price declines. There’s no really concrete reason for an upturn now... are
all clouds on the horizon. That’s why I think home prices may still go
down," and on the recent improvement in prices, "I also
think that price increases that were likely caused by the decline in
foreclosures may have been mistakenly taken by the public as a note of
optimism." And with Obama pushing homeownership and
refinancing acts once again, Shiller adds: "We were so single-mindedly
pursuing home ownership that we allowed our lending practices to deteriorate to
a tragic end. And there are many advantages to renting, which oftentimes allows
more flexibility and more convenience."
Germany, Spain Set
To Pull The Plug On Green Energy
Submitted by Tyler Durden
on 02/14/2013
Over ten years ago, when Europe was a
bright and shining example of experimental monetarist "brilliance", and
when the money was flowing, the continent decided to do the ethical thing and
actively promote the pursuit and development of renewable energy through
countless government subsidies. As a result, Germany and Spain became the
undisputed leaders in the race for a green future, and both created similar
laws to encourage the development of renewable energy. There were two problems:
i) green energy, while noble in theory, is about the worst idea possible when
it comes to profitability and capital self-sustainability and constantly needs
governmental subsidies, and ii) it was the end consumers who would pay for the
government's generosity, in the form of a surcharge on electric bills. In
Germany, for example, as the industry grew (in size, and thus in losses) demand
for the subsidy increased, driving the surcharge higher. In January, the
surcharge, which amounts to about 14% of electricity prices, nearly doubled to
5.28 euro cents per kilowatt hour. And here is where a third problem comes into
play, because while German and Spanish consumers were happy to pay a surcharge
in the golden days of a Dr. Jekyll Europe when everything was great, soon
Europe become a doomed Mr. Hyde-ian Frankenstein monster, with imploding
economies, 60%+ youth unemployment and resurgent neo-nazi powers. In short: the
German and Spanish consumers have had it with funding an infinite money drain
(even bigger than Greece), when cash flow is scarce and getting worse, and have
just said "Basta" and "Nein",
respectively.
Japan's Amari
Backtracks On "Stock Market Targeting", Says Government Has No Price
Target For The Nikkei
Submitted by Tyler Durden
on 02/14/2013
If anyone is confused why the BOJ
refused to do anything of note until January 1, 2013 at which point it would
proceed with open-ended monetization a la the Fed and the ECB's OMT,
the reason is simple: it allows the country's (transitory) leaders to jawbone,
threaten, cajole and coax, in what will be daily attempts to talk the currency
lower without actually implementing any monetary action: just like the
ECB has done so far. Case in point: the now daily speeches by Japan's
economic and fiscal policy minister Akira Amari, who every single day of the
past week has been talking to reporters, on many case openly contradicting
himself, and whose only purpose is to spook any remaining Yen longs into
submission. Sure enough here comes today's sermon:
AMARI: ABE CAREFULLY CONSIDERING BOJ
GOVERNOR CANDIDATES
AMARI: ABILITY OF BOJ CANDIDATES MORE
IMPORTANT THAN BACKGROUND
But funniest of all:
AMARI: GOVERNMENT HAS NO
TARGET FOR STOCK MARKET
Wait, back up, what? It was just four
days ago that Amari himself made it very clear that he
would not sleep until the Nikkei hit 13,000 by the end of March.
Are Price Controls
Coming To Venezuela, Where "Nymphomania" For Dollars Is The Next Big
Thing
Submitted by Tyler Durden
on 02/14/2013
In typical 'crazy-talk' ways,
Venezuela is 'pledging' that its currency devaluation will not increase
inflation in the country and, as The FT reports,
has warned it will crack down on businesses that raise prices. Hot on the heels
of Argentina's
ignoration of inflation and recent price controls (and advertising bans),
it would appear Venezuela is next as grey market dollars are changing
hands for 22 Bolivars - massively lower than the official (just devalued) 6.3
Bolivars per USD rate. An 'equilibrium' rate is believed to be around
9 Bolivars but with Chavez still MIA and Maduro running the show, the 'nymphomania'
for dollars - as Venezuela's finance minister called it - continues as
businesses are simply unable to find tenable USD to use for imports. Contagion
is also spreading as Colombia's FinMin Cardenas fears goods being smuggled
across the border - creating inflation there too.
The Great
Rebalancing: 10 Things To Watch In 2013
Submitted by Tyler Durden
on 02/14/2013
The great trade,
capital flow and debt imbalances that were built up over the preceding two
decades must reverse themselves. Michael Pettis notes,
however, that these imbalances can continue for many years, but at some point
they become unsustainable and the world must adjust by reversing those
imbalances. One way or the other, in other words, the world will rebalance. But
there are worse ways and better ways it can do so. Pettis adds that, any
policy that does not clearly result in a reversal of the deep debt, trade and
capital imbalances of the past decade is a policy that cannot be sustained.
It is likely to be political considerations that determine how quickly the
rebalancing processes take place and whether they do so in ways that set the
stages for future growth or future stagnation. Pettis' guess is that we have
ended the first stage of the global crisis, and most of the deepest problems
have been identified. In 2013 we will begin to see how policymakers respond and
what the future outlook is likely to be. The following 10 themes are
what he will be watching this year in order to figure out where we are likely
to end up.
Sweet Revenge:
Moody's Downgrades S&P, Two Years After S&P Downgraded Moody's
Submitted by Tyler Durden
on 02/14/2013
Just over two years ago, we reported
that "The Farce Is
Complete: S&P Downgrades Moody's To BBB+ From A-2", or in
other words, one rating agency downgraded another rating agency, with the
following rationale: "While we believe it is likely that the new pleading
standard will lead to an increase in litigation-related costs at Moody's and
therefore poses an element of risk, whether the new pleading standard may
increase the likelihood of successful litigation against Moody's will be
determined in the future by the courts.... Moody's management has stated that it
plans to adapt its business practices in an effort to offset any potential new
litigation-related costs associated with the legislation. Nevertheless, we
believe that Moody's will likely face higher operating costs, lower margins,
and increases in litigation-related event risk that we believe may
present risks to the company's reputation." Well talk about
irony, and of course role-reversal, now that it is not Warren Buffett's pet
company Moody's (which is just as guilty as US-downgrading S&P was in
rating financial toxic garbage as AAA), but S&P that was just sued by the
DOJ and the kitchen sinks. And the last laugh - the piece de resistance as it
were - sure enough, belongs to Moody's, which just downgraded S&P parent
McGraw Hill.
Bullish?
Submitted by Tyler Durden
on 02/14/2013
Another day, another ugly glimpse of
economic reality, another volume-less bid for every dip in stocks as momentum
is all. Today, it seems, the bullish meme remains: earnings,
which we know were abysmal if judged
correctly (and appear extended longer-term); valuations,
which we know are higher than at the
previous peak on a forward P/E (and are notably expensive on a
long-term cycle basis); dividends and cash on the balance sheet
(which has been created by
relevering firms significantly and in no way represents 'flexibility');
and buybacks - if management is buying then we're all in -
which, based on SocGen's Albert Edwards' excellent works, turns out to be a
great market-timing tool for bulls to run for the hills. Four charts
for the bullish faint of heart...
Guest Post: The
Unending British Deleveraging Cycle
Submitted by Tyler Durden
on 02/14/2013
As the charts below show, more
quantitative easing is unlikely to have a beneficial effect. The transmission
mechanism is broken. What good is new money if it’s just sitting
unused on bank balance sheets? What new productive or useful output can be
summoned simply by stuffing the banks full of money if they won’t lend it? The
sad truth is that a huge part of the financial sector has failed. Its
inefficiencies and fragilities were exposed in 2008, as a default cascade
washed it into a liquidity crisis. And yet we have bailed it out, stuffed it
full of money in the hope that this will bring us a new prosperity, in the
delusional hope that by repeating the mistakes of the past, we can have a
prosperous future. The sad truth is that the broken, sclerotic parts of
the financial sector must fail or be dismantled before the banks will start
lending again, start putting monies into the hands of people who can
create, innovate and produce our way to growth.
Herbalife Soars As
Icahn Goes Medieval On Ackman, Reports 12.98% Stake In The Company
Submitted by Tyler Durden
on 02/14/2013
Remember when Bill Ackman told Icahn
on CNBC he should tender for the company (to a less than favorable reply)?
Well, Icahn may have done just that: moments ago the belligerent billionaire
just reported a 12.98% stake in Herbalife, adding that he intends "to
have discussions with management of the Issuer regarding the business and
strategic alternatives to enhance shareholder value, such as a recapitalization
or a going-private transaction." Needless to say, the stock
soars, and it remains to be seen if the epic short squeeze that we predicted,
and that Icahn confirmed on TV could happen if there is not enough float to
satisfy all the shorts, will be next. Volkswagen anyone?
The Average
American Contributed $2,733 To Their 401(k) In 2012
Submitted by Tyler Durden
on 02/14/2013
While it is commendable that Bernanke
has generated a wealth effect of some 12% for those few who are planning for
retirement, another problem is where the funding for this increase has come
from. As Bloomberg explains,
while two thirds of the increase came courtesy of the stock market, or some 8%
in absolute terms, the rest was from funded (and matched) contributions to
accounts. This is equal to $2733 in actual money set aside for retirement in
2012, a far cry from the maximum allowed $17,500 per year, with the actual cash
outflow excluding the corporate match substantially less. This amount
to a measly $228 per month (less net of matching) that the average
American who has a 401(k), has set aside for retirement. We understand now why
Bernanke is so hell bent on hitting that Dow 32,000 bogey - without it, the
average retired American will wake up very soon one day and realize that the
money is gone. All gone.
Bonds Up, Stocks
Up, USD Up, JPY Up! Fed Up?
Submitted by Tyler Durden
on 02/14/2013
Nothing matters -
that is all. Some of the ugliest macro data we have seen in a while (apart from
an 'estimated' initial claims print) and the moment the US opens - the bid is
in (discounting Buffett's inflows?). It seems that the market has decided that
if it quietly goes up day after day by a point here or there then noone will
notice - and call it for what it is. S&P 500 has closed within a 4 point
range for the last week - 1518, 1517, 1519, 1520, 1521.
Financials were bid, Utilities offered, and Tech tracked AAPL up and down.
Treasuries rallied notably from the open of the US day session, recoupling with
stocks from yesterday's 'great rotation' sell-off. The USD leaks higher, with
GBP weakness and modest JPY strength on the week, weighing on PMs further as
Silver ran lower this morning (to test unchanged YTD) but bounced from the open
on. VIX compressed to 12.65% and held stocks up. Oil remains bid above
$97 - handy outperfortmer on the week. So summing it up - 4
days of uber low volume, falling average trade size, gently
rising stocks, flat USD, flat Treasuries, lower gold, and higher oil. And
for the record, S&P options skew (complacency) is now at pre-crisis levels.
Mike Bloomberg
Wants To Ban Styrofoam
Submitted by Tyler Durden
on 02/14/2013
If 2012 was the year Mayor Mike
crushed the (apparently second) greatest evil in society: super-size sugary
drinks, in 2013 he has found a new target in his neverending nanny-state
vendetta: the pure, concentrated evil that is styrofoam.
Meet America's
Largest, Brand New Airline
Submitted by Tyler Durden
on 02/14/2013
Until last night, United which
combined with Continental in 2010, was the nation's largest airline (surpassing
Delta which had merged with Northwest some two years earlier). This morning
this changed when the previously disclosed merger between US Airways and
bankrupt American Airlines, was formally announced. The resulting airline, with
some 26% of the market share is now the nation's largest legacy carrier, bigger
than United at 19.3%, Delta with 19.2%, and discounted Southwest with 18.2%.
Below are some of the key highlights of this brand new airline behemoth. And
just like that, taxpayers now eagerly await the bailout of United
South-American Deltawest Airlines in 2-3 years: the first Too Big To
Take Off airline.
SEC To Investigate
Insider-Trading In HNZ Deal
Submitted by Tyler Durden
on 02/14/2013
It seems the massive gains and
obvious pre-deal trades that we highlighted
earlier nudged the SEC off their kiddy-pr0n sites and into action. Via
Bloomberg:
*SEC SAID TO REVIEW
POSSIBLE INSIDER TRADING IN HJ HEINZ :HNZ US
But, of course, this is the SEC...
*SEC HEINZ REVIEW MAY
NOT LEAD TO INVESTIGATION, THE PERSON SAID
We await their justification that
because no downgrade of the US was conducted by the perpetrator of this glaring
insider trade, no charges will be forthcoming.
Frontrunning:
February 14
Submitted by Tyler Durden
on 02/14/2013
John Kerry just got
happier: Berkshire Hathaway, 3G Buying Heinz for $72.50 a Share, or $28 Billion
- ~20% premium to last price (CNBC)
US Airways, AMR to Merge (WSJ) -
can thousands of workers spell "synergies"?
Draghi, Carney show ascent of
"whatever it takes" central bankers (BBG) ...
to preserve the Goldman way of life
Euro zone economy falls deeper than
expected into recession (Reuters)
Soros has made $1 billion betting
against the Japanese Yen (WSJ)
Ex-Analyst at SAC Felt Pressured for
Tips (WSJ)
Desalination Seen Booming at 15% a
Year as World Water Dries Up (BBG)
China's 'Wall' Hits Business (WSJ)
Israel publishes some details as
Australian spy mystery deepens (Reuters)
Tata Motors Profit Falls 52% (WSJ)
AB InBev Will Sell Corona Unit to Salvage
Modelo Takeover (BBG)
"Blade Runner" Pistorius
charged with murdering girlfriend (Reuters)
In Ohio and beyond, Obama sees model
for manufacturing revival (Reuters)
Futures Slump As
Global Q4 GDPs Dump
Submitted
by Tyler Durden on 02/14/2013
It started overnight in Japan, where
Q4 GDP posted a surprising and disappointing 3rd quarter of declines, then
quickly spread to France, whose Q4 GDP declined -0.3% Q/Q missing expectations
of a -0.2% drop, down from a +0.1% increase, then Germany, whose GDP also
missed expectations of a -0.5% drop, declining from a +0.2% increase to a -0.6%
drop, then on to Italy (-0.9% vs Exp. -0.6%, last -0.2%), Portugal (-1.8%, Exp.
-1.0%, last -0.9%), Greece (down -6.0%, previously -6.7%), Hungary (-0.9%, Exp.
-0.3%), Austria (-0.2%, down from 0.1%), Cyprus (-3.1%, last -2.0%), and so on.
To summarize: Eurozone GDP dropped far more than expected, or posting a -0.6%
decline in Q4, worse than the -0.4% expected, which was the largest
drop since Q1 2009, and down from the -0.1% posted in Q3. And since
this was a second consecutive negative quarter of GDP decline for the Eurozone,
the technical recession (double dip? triple dip? is anyone even counting
anymore?) in Europe too is now official.
RANsquawk EU Market
Re-Cap - 14th February 2013
Submitted by RANSquawk Video
on 02/14/2013
How GETCO Went From
HFT Trading Giant To Dwarf, And Raked Up Over $50 Million In T&E Expenses
Along The Way
Submitted
by Tyler Durden on 02/13/2013 There
was a time back in 2009 when GETCO was the absolute titan of the high frequency
trading arena, printing money with the reckless abandon of a Federal Reserve on
full tilt. It even got its own profile piece in the WSJ in the summer of 2009:
"Meet Getco,
High-Frequency Trade KingMeet Getco, High-Frequency Trade King."
However, the good days were not to last as shortly thereafter we got a flash
crash, then we got three + years of Ben Bernanke's (and every other bank's)
central planning and some $10 trillion in combined exogenous liquidity to prop
up the market, both of which resulted in the complete loss of faith in a
standalone stock market by the retail investor (and once the current unwind of
the December rotation
from stocks into savings accounts over capital gains tax fears ends,
the outflows will resume especially as latest ICI data shows with the smallest inflow into
domestic equities to date in 2013). And since retail orders no longer would
feed the frontrunning, sub-pennying, quote churning, flash crashing juggernaut
that is HFT, that meant less revenue and profit for algo master GETCO. How much
less? A whopping 82% less in the nine months ended September 30, 2012
compared to a year prior, and 92% less when annualizing 2012 results
compared to the firm's heyday in 2008, the year in which it made a record $430
million in net income. Getco's net income as of September 30, 2012: a
tiny $25 million.
How VIX ETFs Help
To Crush Vol And Ramp Risk Every Day
Submitted by Tyler Durden
on 02/13/2013 - There are underlying options on the
S&P 500 that trade on exchange or OTC (depending on size and strike and
margin package - arb or outright). On top of that set of options lies a world
of futures and options on a 'created' VIX (that are predicated on the implied
vols of the underlying S&P options). And to top it all off - the wonderful
world of Exchange Traded Products (ETPs) overlays various levered and unlevered
short and long products for retail (and professionals) to speculate on (and
some have their own compound options). As you can tell - there is a
large amount of 'flow' impacting up and down the chain in this vol landscape.
Guest Post: Don't
Worry; Be Resilient
Submitted by Tyler Durden
on 02/13/2013 - At some point, absorbing more information
about the unsustainability of modern society yields diminishing returns. It
becomes emotionally draining and thus counterproductive. Part of this
exhaustion results from recognizing our powerlessness within the Status
Quo, where independent thinking and structural innovation are
intentionally winnowed out as threats to existing institutions and industries.
Another part arises from the burden of knowing that the supposedly permanent
Status Quo is far more vulnerable than generally believed. This is the
psychology of knowing what lies ahead in The
Burden of Knowing. These 'burdens of knowing' can diminish the small
but real joys of the present - anti-thesised by an attitude such as “don’t
worry; be happy.” And it certainly makes sense when life is still comfortable
and enjoyable. But the philosophy of “thinking about the future is a downer, so
I live in the present” ultimately rests on a false confidence
that the future will take care of itself. Though Keynesian economists argue
that nations are not like households, in truth debt/financial fragility is
scale-invariant, meaning that rising debt, a high cost basis, and zero
savings/investment lead to fragility in households, enterprises, communities,
and nations alike.
Greek Consumers
Most Pessimistic On Earth: 40% Have No Disposable Income
Submitted by Tyler Durden
on 02/13/2013
Chronicling the collapsing Greek
socioeconomic reality would be an interesting business school case study of
what a zombie monetary regime kept alive at all costs does to the "weakest
link(s)" (most recently "Greek Economy
Grinds To A Halt As New Construction Implodes By 66.6%"), if
only there weren't real men and women suffering as a result of the stupidity
and greed of a few entrenched individuals who will stop at nothing to see their
paper wealth preserved at all costs. The latest salvo of the utter misery Greek
society finds itself in comes from Nielsen research, which reports that Greeks
are now the most pessimistic consumers on the planet, with the Greek consumer
confidence index dropping to 35 points in the last quarter of 2012. That is
the lowest level among a total of 58 countries surveyed and 11 points lower
than the same period last year in Greece. It gets worse. As Kathimerini reports:
"Four out of 10 Greeks told the same survey that they no longer
have any disposable money left after covering their basic needs, which is the
highest rate ever recorded in Greece and the biggest in the October-December
period in Europe. A year earlier (in Q4 2011) that rate had stood at 34 percent
and in Q4 of 2010 it had been at 25 percent." Obligatory spin:
once nobody has any disposable income, things can only get better. Unless, as
Rajoy might add, they get much worse.
What Comes Next:
1518, 1517, 1519, 1520, ...
Submitted by Tyler Durden
on 02/13/2013
Volumes were pitiful
once again and while the range picked up a little (after yet another top-side
stop-run) average trade size remains falling as equities appear all gung ho on
the surface but the S&P 500 has closed the day session in a 2 point range
for the last 4 days - 1518, 1517, 1519, 1518. All this as Treasury
yields have actually been bleeding higher (+6-8bps this week), USD
flat, Oil up 1.5%, and Gold and Silver -1.5%. Homebuilders remain in a
high-beta world of their own +3% on the week with all the other S&P sectors
between -0.25% and +0.75% (as Tech is dragged lower along with AAPL again). S&P
500 futures saw quite a drop intraday (9 points high to low) which is
sad to get excited about but the ubiquitous VWAP ramp into the close saved the
day and limped us into the green on the day (which was oddly accompanied by a
huge sell block volume in AAPL). VIX pushed back up to 13% and
credit made some more correction back up to stocks right at the close. The last
3 days in ES have seen the lowest aggregate volume in six months - not exactly
the new bull market meme?
Guest Post:
Explaining The WTI-Brent Spread Divergence
Submitted by Tyler Durden
on 02/13/2013
Something totally bizarre has
happened in the last three years. Oil in America has become much, much cheaper
than oil in Europe. Oil in America is now almost $30 cheaper than oil in Europe.
Why? The ostensible reason for this is oversupply in America. But
there’s something fishy about this explanation...
A Modest Proposal
To Save The Postal Service: Hyperinflation
Submitted
by Tyler Durden on 02/13/2013
"The financial problems of the
Postal Service are getting bigger every year," is how US Postmaster
General Donahoe tried to convinced Congress not to block the bill the
end Saturday delivery of mail. Raising the specter of mutually
assured destructive bailouts in the future, the CEO rattle lawmakers (and other
stakeholders) as NBC News reports, Representative Darrell Issa noting
"It's very clear that ultimately, either the rate payer or the
taxpayer will have to pay the $20 billion in debt of the Postal Service."
Indeed Mr. Issa - so by our reckoning the plan to tax emails was a non-starter
and so we compare the 73.5
billion pieces of mail handled by the USPS and the $20bn budgetary gap,
it would appear the answer is simple - the current 46c stamp will have
to rise in value by 27c or 60% in order to meet the shortfall. The
problem of course is the legal limit on increasing stamp prices is bounded by
what the BLS' official annual inflation report is, and which as the Fed is
happy to reminds us, is at best 2% per year. Luckily, every problem, in this
case too little inflation, has a solution: in this case hyperinflation.
"When You Have
Fiat Currency, What Level Of Value Is Real", Santelli Asks
Submitted by Tyler Durden
on 02/13/2013
The rise in energy prices; the surge
in food prices; and the march higher in nominal stock market indices - all
symptoms of one thing - central bank (or government) policy; and CNBC's Rick
Santelli is calling them to task for their two-faced ignorance. "What is
the difference between outright currency manipulation versus the collateral
damage to one's currency based on central bank programs?" he rhetorically
asks, "in my mind, very little, but obviously, in the minds of many
leaders of G-7 developed economies, there's a huge distinction." And
therein lies the rub. As Japan follows Bernanke's decade-old plan to reflate by
literally printing money into existence - just as every other developed fiat
currency nation - their argument is that they are fighting deflation - or
stimulating growth - when, in fact "The distinction between
collateral damage and outright manipulation is absolute malarkey."
Now that the currency wars have gone global - no matter what well-placed op-eds
will try to convince otherwise - Santelli sums it all up perfectly, "in
the end when you don't have a standard and you have printing and fiat
currency, what level of value is real?" We remind those
bullish Japanese stocks that the 11% rise in the NKY since the holidays has
created 0% wealth for a USD investor thanks to the JPY destruction - ask the
Zimbabweans how wealthy they felt.
Global Mobile Phone
Sales Post First Decline Since 2009
Submitted by Tyler Durden
on 02/13/2013 One of the fundamental creeds held by
the proponents behind every new technology and gizmo market, including cell
phones, smart phones, tablets, Sony Walkmen, 8-tracks, VHS tapes, juice
extractors, tape rewinders, etc., is that their growth rate (and by implication
the consumers' discretionary income), is completely dissociated with gravity
and will grow at a far faster pace than global economic growth virtually in
perpetuity. This is the case until empirical evidence reminds them, and
everyone else, that gravity eventually always wins. Which is precisely what
happened with global mobile phone sales, which in 2012 posted their first
decline since the cataclysmic 2009. Gartner reports that the global cell phone
market declined by 1.7% in 2012, down from 1.78 billion devices sold in 2011 to
1.75 in 2012. "Tough economic conditions, shifting consumer preferences
and intense market competition weakened the worldwide mobile phone market this
year," the report says.
Platinum And
Palladium Rise On Supply Concerns – Zimbabwe Now
Submitted by Tyler Durden
on 02/13/2013 - Platinum and palladium surged Tuesday
on renewed concerns that supplies of the platinum group metals will shrink.
Zimbabwe's government has given platinum producers two years to begin refining
the precious metals in Zimbabwe. This means that production of platinum will
drop, because mining companies are now expected to build refineries – something
which they may not do, due to the real risk of confiscation and nationalisation
of assets. Both metals climbed more than 1% yesterday with platinum for April
delivery rising $21.10 to settle at $1,717.2/oz. Palladium for March delivery
rose $12.80 to $771.40/oz. "The worry is that it's going to restrict
production," said James Steel, chief commodities analyst at HSBC in New
York. "That was the prime motivator for the price movement today."
60 Days Without A
5% Correction And Counting
Submitted
by Tyler Durden on 02/13/2013 - The
beginning of every year under the New "centrally-planned" Normal
regime is no stranger to seemingly relentless rallies: while in the first 29
trading days of 2013 alone, the benchmark S&P 500 Index has gained a
respectable 6.5%, such initial strength out of the gates has in fact been the
norm over the past three years, with the S&P 500 returning 7.5% and
5.7% during the first 29 trading days of 2012 and 2011, respectively.
And, just like in 2013, both prior occasions were spun by pundits as indicative
of great rotations, economic recoveries and what not, until
reality reasserted itself when the gobs of liquidity pumped by western central
banks finally made their way to China and sent local inflation surging at which
point China pulled the plug in the "great reflation." This time will
not be different, especially since as we showed yesterday, the market is now more bullish than
99% of all prior readings. And while the recent spike in the market
has been less acute than on previous occasions, what is notable about the
current rally is the duration without any marked correction. As the following
chart from Stone McCarthy shows, since March 2009, there have been only 4 times
in which the rally continued for a longer period of time without a notable, or
>5%, correction.
10 Year Prices At
2.05%: Highest Yield Since March 2012
Submitted by Tyler Durden
on 02/13/2013 - It was well-known that today's 10
Year auction would price somewhere north of 2.00%, for the first 2%+ print
since April of 2012, it just wasn't known where. Sure enough, moments ago the
US Treasury priced $24 billion in 10
Year paper at a high yield of 2.046% (38.76% allotted at high), the
highest since last March when we had a 2.076% 10 Year auction (and a carbon
copy environment in which every pundit was screaming about a great rotation out
of bonds), only to see the April and especially May auction tumble in yield
when Europe once again became unfixed. What was notable about today's
auction is that it tailed the When Issued modestly, which was bid 2.039% at 1
pm, implying a 0.7 bps tail. Also notable: the Bid to Cover dropped to 2.68,
below January's 2.83, and well below the 12 month TTM of 2.99. Dealers took
down 47.7% of the auction, Directs as has recently been the case ended up with
a sizable 24.2%, while Indirects took only 28% of the auction, higher than the
December 24.2%, yet worse than all other auctions going back all the way to
April 2009. For those confused - don't be - we have been here in 2012, and
2011, and 2010, when risk assets were surging, and when yields were sliding,
only to see a modest subsequent pick up in inflation, mostly in China, but
certainly Europe, at which point the global liquidity glut ceased and the
economy (if not the centrally-planned market) resumed on its downward
glideslope.
Japan Reflation
Deathwish Leads To A 20% Refinery Capacity Cut
Submitted
by Tyler Durden on 02/13/2013 As if
the 20% JPY devaluation over the last few months was not enough, the Japanese
government is going directly at the core of the inflation manufacturing
business... they have imposed sanctions
that Japan's five largest refiners cut their production by 1.1million barrels
per day (or 20%). We recently noted (here and
here)
the rise in both the price of gasoline (at record highs) and JPY-based price of
the raw material (WTI or Brent) - and it seems Abenomics can only see the
upside of the inflationary cycle (as they cut supply) - as opposed to the
consumer-sentiment-sapping margin-crushing deflationary impact of higher input
costs to life. One thing is for sure, Abe is all-in - no matter what G-20
defense he offers. Perhaps this is why JGBs have not reacted as much -
they are seeing through the short-term inflationary hope to the longer-term
deflationary dump.
Some Taxing
Questions About (Not So) Record Corporate Profits
Submitted by Tyler Durden
on 02/13/2013 - One of the recurring memes of the now
nearly 4 years old "bull market" (assuming the recession ended in
June 2009 as the NBER has opined), is that corporate profits are soaring, and
that despite recent weakness in Q4 earnings (profiled most recently here),
have now surpassed 2007 highs on an "actual" basis. For
purely optical, sell-side research purposes that is fine: after all one has to
sell the myth that the US private sector has never been healthier which is why
it has to immediately respond to demands that it not only repatriate the $1+
trillion in cash held overseas, but to hand it over to shareholders post-haste
(see recent "sideshow" between David Einhorn and Apple). However, a
problem emerges when trying to back this number into the inverse: or how
much money the US government is receiving as a result of taxes levied on these
supposedly record profits. The problem is that while back in the summer
2007, or when the last secular peak in corporate profitability hit, corporate
taxes peaked at well over $30 billion per month based, the most recent such
number shows corporate taxes barely scraping $20 billion per month!
The One Chart Stock
And Bond Holders Should Be Paying Attention To
Submitted
by Tyler Durden on 02/13/2013 We
have shown divergence after divergence as an indication of the market's
relative exuberance. One of the key 'supports' for these hope-driven nominal
levels has been forward inflation expectations. In fact, inflation expectations
have become the anchor for higher equity (P/E) valuations and yet, they remain
unconvinced that this time is different. As Barclays' Jordan Kotick notes,
perhaps it is inflation break-evens lack of confirmation of new equity
highs that is the chart to watch for the 'believers' to really think
this time is different.
The Real Reason the
Economy Is Broken (and Will Stay That Way)
Submitted by Tyler Durden
on 02/13/2013 - We are far enough and deep enough
into the most heroic monetary and fiscal efforts ever undertaken
to finally ask, why aren't these measures working? Or at least we should
be. Oddly, many in DC, on Wall Street, and the Federal Reserve continue
to steadfastly refuse to include anything in their approaches and frameworks
other than "more of the same." So we are treated to
an endless parade of news items that seek to convince us that a bottom is in
and that we've 'turned the corner' – often on the flimsy basis that in the past
things have always gotten better by now. Oil is the primary lubricant
of economic growth and that it is not just the amount of oil one has
to burn but also the quality, or net energy, of the oil that matters. If we
want to understand why all of the tried-and-true monetary and fiscal efforts
have failed, we have to appreciate the headwinds that are offered by both a
condition of too-much-debt and expensive energy. Neither alone can
account for the economic malaise that stalks the world.
How Bad Could It
Get For Bonds?
Submitted by Tyler Durden
on 02/13/2013 - With stocks pushing to new multi-year
highs - seemingly all-in on the Fed's newfound transmission mechanism - the
bond market is beginning to quake just a little. 10Y rates shifted quickly
through 2.00% today - hovering around 10-month highs - but the
question is, just how bad could it get for bondholders if the Fed were to lift
their repressing foot of the yield-seeker's throat. While we believe they are
missing the circular nature of any Fed implied tightening on stocks (and
therefore bonds reflexively), Goldman sees 10Y yields 120-240bps under 'fair'
currently thanks to Fed QE efforts - and believes 4.0% yields are on
the cards by 2016. Our question - what exactly would HY spreads look
like under this 'bullish' scenario? And for the stock bulls - is this just
catch-up by bonds or the great rotation so many hope for? And if Goldman
believes this - why is their (and their primary dealer friends') holdings of
Treasuries so extremely high?
ECB Smacks Down
Euro Again, Says EUR Strength Will Hurt Recovery In Crisis States
Submitted by Tyler Durden
on 02/13/2013 - Just like yesterday, it was some
anonymous Yen vigilante smacking down the USDJPY saying the initial G-7 statement
was misinterpreted, so today it is the ECB's turn, which just smacked down the
EUR royally, for the second time in a week following last week's Mario Draghi
comments, when it said that:
THE ECB IS WORRIED
EURO STRENGTH WILL HURT RECOVERY IN CRISIS STATES
And just like yesterday the
refutation came via shady pathways, i.e., an anonymous leak in D.C., so today,
apparently the information comes from that venerable ECB conduit: Bild. What can
one say - all is fair in central bank love and currency war.
Frontrunning:
February 13
Submitted by Tyler Durden
on 02/13/2013 - 07:35
Obama Paints Wider Role for
Government in Middle Class Revival (BBG)
Obama to Seek a New Trade Deal With
EU (WSJ)...
or this is strawman why 2016 GDP will be higher
Mobile phone sales fall for the first
time since 2009 (Telegraph)
Sequester Looms, No Deal in Sight (WSJ)
Neither US party swallows a
compromise (FT)
Embattled Economies Cling to Euro (WSJ)
For China, Spending Is Harder Than It
Looks (WSJ)
Bank of England's Sir Mervyn King
says recovery in sight (BBC) -
just a little more inflation first
G7 fails to defuse currency tensions
(FT)
Japanese Leader Urges Firms to Boost
Wages (WSJ) -
so does the US one
Fed Bank Chiefs Back Money-Fund
Overhaul (WSJ), or
force everyone out of MMFs and into stocks
#SOTU - The
Summary: Minimum Wage, Maximum Genomes, Macs, And Moar Cyber-Security
Submitted by Tyler Durden
on 02/12/2013 5%
fewer words, slightly shorter than last year but just as hope-full. From a hike
(and inflation-indexed) in the minimum wage to a 140x multiplier of genome
sciences investment (now that is Keynesian awesomeness); from extending
homeownership (and refinancing plans) even more to energy independence; from
Apple, Ford, and CAT's US Manufacturing to Bridge-Building and infrastructure
spending; and from Trans-Pacific and -Atlantic Trade to cyber-security; it's
all gonna be great - because as President Obama reminded us at the start... "Our
housing market is healing, our stock market is rebounding," and
this won't add a dime to the deficit... oh and that Student loan bubble - no
worries, there's a college scorecard so now you know where to get the biggest
bang for your credit-based buck. Summing it all up: Guns 9 : 3 Freedom
; Jobs 31 : 17 Tax ; Congress 17 : 40 Work ; Recovery 2 : 0 Unicorns ; Spending
3 : 2 Cutting
The (Two) GOP #SOTU
Responses
Submitted by Tyler Durden
on 02/12/2013
Well, this is awkward, but in our always fair and balanced way,
we present the two sides of the GOP's response to Obama's SOTU - the 'official'
Marco Rubio response and Rand Paul's Tea Party Express
response, with speech excerpts and streams...
“If Congress refuses to obey its own rules, if Congress
refuses to pass a budget, if Congress refuses to read the bills, then I say:
Sweep the place clean. Limit their terms and send them home!”
And Summarizing It
All...
Submitted by Tyler Durden
on 02/12/2013
The State Of The
Union - Live Webcast
Submitted by Tyler Durden
on 02/12/2013
*OBAMA CALLS FOR MINIMUM WAGE TO INCREASE TO $9/HOUR
Last year's 6,977 word homage
to jobs provided just over an hour's worth of applause-impacted
rhetoric create much ado - more with what was
not said than what was said. This year's 9pmET speech will likely be
dotted with hope, and change, and jobs, and congress, and of course our union
is strong... because the S&P is up 16% since last year's SOTU.
But, by our measurement from Bloomberg's data from December 2011 (the last NFP
before 2012's SOTU) to January 2013 (this year's last NFP) - Non-Farm Payrolls
(NSA) dropped from 133.292 million to 132.705 million (or a 587,000 job
loss).
*OBAMA SAYS
`GENERATION'S TASK' IS TO BUILD STRONG MIDDLE CLASS
*OBAMA SAYS GOVERNMENT
MUST WORK `ON BEHALF OF THE MANY' NOT FEW
*OBAMA SAYS PROPOSALS
WILL NOT INCREASE DEFICIT BY `SINGLE DIME'
*OBAMA CALLS FOR
`SMARTER GOVERNMENT' NOT `BIGGER GOVERNMENT'
*OBAMA ORDERS DHS TO
DEVELOP REAL-TIME CYBERSECURITY RESPONSE
Enjoy...
The Thinking,
Drinking, And Gambling Man's Guide To The State Of The Union
Submitted by Tyler Durden
on 02/12/2013 Over the past couple of hundred years,
the State of the Union has been enjoyed by pamphlet, radio, TV, and webcast and
each and every year, the citizenry has sat avidly awaiting their 'word' to come
up on SOTU Bingo or for the bets they made on the average length to be
confirmed. As WaPo notes, the average minutes spent on the address has
grown from a mere 36:53 under President Jimmy Carter up to 1 hour and 5 minutes
under the current president. From comparisons of various word
frequencies (e.g. tax vs cut or job vs hope) to the ultimate SOTU Drinking
Game, and from an 51/53 minute over/under to the color of Obama's tie, below is
everything you need to know about SOTU but were absolutely embarrassed to
ask...
Sentiment More
Bullish Than 99% Of All Prior Readings
Submitted by Tyler Durden
on 02/12/2013
Movements in equity prices are driven by many factors, such as
the economy, government policy, earnings, interest rates and valuation. But we
think tactical moves (<3 months) are often better explained by sentiment,
positioning and technicals. While macro, policy and valuations matter,
sentiment has worked well in recent years as a contrarian tool to identify
short-term inflection points in asset prices. According to BofAML's new Bull
& Bear Index investor sentiment toward risk assets is at a more
bullish level today than 99% of all readings since 2002. The current
reading of 9.6 (out of 10) is close to max bullish and thus triggers a
contrarian "sell" signal for risk assets. In their view, the relative
risk-reward of owning equities is unfavorable at this juncture. Since 2002 a
"sell" signal of 8.0+ was on average followed by a 12%
peak-to-trough correction in global equities within three months.
The State Of The
Union Is... Dumber
Submitted by Tyler Durden
on 02/12/2013
Since James Madison's 1815 Address, the 'linguistic standard' of
the State of the Union speech has plunged. As The Guardian notes,
the lowest on record was George H.W. Bush's 1992 address - only just
beating Obama's 2011 address for 'dumbest' speech ever. Whether this is
representative of the American people as a whole or the lowest common
denominator is unclear but one thing in this evening's speech comes to mind; if
you were the President, would you invite, as your personal guest, a CEO who 1)
has overseen massive wealth destruction in the last six months, 2) refuses to
spend his massive cash hoard in the USA, and 3) outsources his manufacturing to
china? Dumb and dumber indeed...
Greek Economy
Grinds To A Halt As New Construction Implodes By 66.6%
Submitted by Tyler Durden
on 02/12/2013 Some time ago we used to joke that
the Greek economy, and by implication society, is literally falling apart due
to its sacrifice at the altar of preserving the European, and thus global,
status quo. It is no longer a joke, and the latest confirmation of the absolute
halt in the Greek economy, which is now way beyond the liqudity trap and is now
in a liquidity (and everything else) tiger cage is data on Greece Construction
activity which according to data released on Tuesday by the Hellenic
Statistical Authority is in complete freefall. From Kathimerini
"In November 2012, total activity dropped 66.6 percent
year-on-year in terms of building permits, 63.3 percent in terms of surface
area and 65.4 percent in terms of volume." Just 1,156 permits
were issued across the country, corresponding to 197,000 square meters and
706,900 cubic meters. In the first 11 months of last year construction activity
shrank by 36.4 percent in terms of permits, 30.3 percent in surface area and
28.7 percent in volume, compared with the same period in 2011. The statistics
observed in private construction activity are virtually the same as the above,
as activity in the public sector has effectively ground to a halt.
10 Immutable Laws
Of Money
Submitted by Tyler Durden
on 02/12/2013 Money –
we all want it, but few of us are willing to sacrifice to get it. Those
that have it generally don't understand it, and those that don't have it come
up with excuses why they can't get it. If this sounds confusing – it
is. For all that we have accomplished in the United States in the last 200+
years we have failed miserably at teaching our children the basics of money
management. We are not talking about stock and bond portfolios but
rather the basics of spending less than you make, understanding of credit,
and how to balance a check a book. We are inundated daily with credit card
commercials that show how great life can be – just charge it. We are enticed to
buy things that we don't really need though the use of zero percent financing –
but only while it lasts. We are motivated to consume anything and everything in
pursuit of the American dream but no one ever talks about the consequences of
our actions. The secret, of course, is the true road to wealth and
happiness. It is irrefutable, undeniable and absolutely achievable - spend less
than you make.
Dorner's Last Stand
- Live Webcast
Submitted by Tyler Durden
on 02/12/2013 - It appears that the authorities have
finally caught up with the infamous LAPD vigilante, who is now engaged in a
shoot out with the police in the Big Bear area. Follow his last stand at the
following CBS newsfeed live. A separate stream from the inland CHP can be found here.
Oil Pops, Apple
Drops, And Stocks Take Out More Stops
Submitted by Tyler Durden
on 02/12/2013 Another low volume, low range, low
average trade size day in stocks as recent high
(stops) were run again with FX markets ruling the day in terms of volatility.
The G-7's initial statement fell on deaf ears , after Draghi's early comments
(on a higher EUR implying a stable Europe) pushed the USD lower against EUR,
then the restatement rallied JPY and that USD weakness provided further support
for US equities. New highs in the S&P (though not in the Nasdaq as AAPL
slumped 2.5% because Tim Cook didn't unload all his cash into shareholders high
beta pockets). Homebuilders saw their biggest gain in almost 8 months
before pulling back a little in the afternoon. Oil prices continue to
rise and Treasury yields bled higher (though 10Y remained below 2.00%). Gold
and silver limped higher (along with the USD) after Europe's close. Credit
markets (CDX) jumped tighter today (especially IG) after dislocating for the
last few days - and HYG outperformed - as we suspect the credit-equity arb has
become too tempting. Will SOTU be a catalyst for a pullback - VIX sure didn't
think so as it dropped 0.3 vols to 12.6 - its lowest close in 3 weeks.
Cov-Lite Loans Hit
Record In 2012 As January High Yield Covenant Protection Drops To New Lows
Submitted by Tyler Durden
on 02/12/2013
Those who traded credit in the frothy days of 2007 will recall
that virtually every piece of new paper, including LBO debt, would come to
market with the skimpiest of creditor protections, i.e., "covenant
lite" which to many was an indication that money was literally being
thrown without any discrimination in the last epic chase for yield, just as
many were preparing for the imminent market backlash. Which they got shortly
thereafter. Judging by the amount of covenant lite loans issued in 2012 as a
percentage of total and compiled by Brandywine
Management, which just surpassed the credit bubble frenzy of 2007 at
more than 30% of total issuance, the bubble in credit is now well and truly
back - a job well done Federal Reserve, just 5 years after the last credit
bubble.
Caption Contest:
European Math Lesson
Submitted by Tyler Durden
on 02/12/2013
Count alongside Spain's economy minister as the IMF instructs
him how many trillion in bonds the Spanish pension fund will have to buy before
the IMF finally bails out the country.
US Posts Two Month
Combined Surplus As Debt Rises By $137 Billion
Submitted by Tyler Durden
on 02/12/2013
Moments ago, and a few hours ahead of the president's State of
the Union speech, the FMS announced (with a 20 minutes early leak), that in
January the deficit of the US government was in fact a surplus
of
some $2.883 billion, better than the expected $2 billion deficit.
This was the first January surplus since 2008, and was an improvement on the
already impressive $1.191 billion deficit from December, which in turn brings
the total fiscal year to date deficit to $290 billion. On the surface this
would be great news as it indicates that tax hikes are having an impact on the
US budget surplus, but of course, a quick glance below the surface reminds us
that January was the month during which the Treasury was forced to raid the
various government retirement funds to fund operations, and otherwise operate
under the debt ceiling, which was only hiked in the last days of the month. And
another glance indicates something fishier: while December and January combined
resulted in a surplus of some $1.7 billion on the book, a quick glance at the
total US debt over the period, shows an increase of some $137 billion in the
same time period (or at least through February 4, when the accurate debt
picture was once again revealed). In other words, while the US government was
arguably generating funds from operations over the past two months and thus did
not need a single penny in outside funding, debt soared.
It Sure Feels Like
A Recession
Submitted by Tyler Durden
on 02/12/2013
While stocks suggest all is well, and anecdotal macro data
(seasonally slandered by fiscal cliff drag-forwards and 'weather') might offer hope
that green shoots are back; one glance at the following chart of US,
Europe, and Asia (ex-Japan) EBITDA tells a very different story.
With cashflow clearly barely budging, is it any wonder that companies are
creating conservative balance sheets? It sure feels like a recessionary
environment...
Guest Post: Show
This To Anyone That Believes That "Things Are Getting Better" In
America
Submitted by Tyler Durden
on 02/11/2013 - The economic collapse is not a single
event. The economic collapse has been happening, it is is
happening right now, and it will continue to happen. Yes, there will be
times when our decline will be punctuated by moments of great crisis, but that
will be the exception rather than the rule. A lot of people that
write about "the economic collapse" hype it up as if it will be some
huge "event" that will happen very rapidly and then once it is all
over we will rebuild. Unfortunately, that is not how the real world works.
We are living in the greatest debt bubble in the history of the world, and once
it completely bursts there will be no going back to how things were before. But
other than that, everything is rainbows and lollipops, right?
Meanwhile In Los
Angeles...
Submitted by Tyler Durden
on 02/11/2013
Just because mistakes are made all the time.
What's So Great
About Economic Freedom?
Submitted by Tyler Durden
on 02/11/2013 Economic freedom involves more than
just the freedom to buy and sell products and services. It allows us to be free
in our interactions with other people. Economic freedom enables us to travel,
to say what we want to say, to do what we want to do.
This is how Prof. Antony Davies describes the 'positives' of the
somewhat commonsensical benefits of economic freedom. In this brief
clip, he shows how economic freedom is associated, in the data, with a number
of positive indicators of a healthy country. For the first 3:30 of this
fascinating discussion, the professor clarifies how great it all is... then
just when you're feeling wonderfully smug, he shows the facts for the USA, as we discussed
here and here,
things are trending away from economic freedom for Americans.
"Like Lambs To
Slaughter," Observations On The Real Lessons Of Keynes
Submitted by Tyler Durden
on 02/11/2013 - From the management of a global
currency war to the 1998 Committee to Save The World, QBAMCO provides an all
encompassing escape into the reality our current - and future - monetary (and
inflationary) world. While Brodsky and Quaintance do not expect a breakdown in
global monetary oversight, they do expect fiat currency debasement to continue
to mask the driver of real economic malaise and contraction - global bank
deleveraging; and they do expect this process to lead to a popular loss
of confidence in today’s major currencies as savings instruments –
perhaps beginning in the global capital markets in 2013. What
will eventually (or soon) occur will be the rare occasion when
return-on-savings trounces return-on-investment, implying precious metals will outperform
the great majority of financial assets (except for shares in precious
metals miners and natural resource producers).
What Are The G-20
Rules For Talking Down Your Currency?
Submitted by Tyler Durden
on 02/11/2013
With Abe talking his down explicitly, Weidmann talking his up
explicitly, Draghi's subtle talk-down, Hollande's outright plea, and the
developing world in full 'war' mode, Citi's Steven Englander sets out some
brief 'rules of engagement' for the G-20 nations as competitive
devaluation escalates.
Guest Post: This
Entire Country Has Become A Giant Offshore Bank Account
Submitted by Tyler Durden
on 02/11/2013
“Charming” is, I
believe, the word most often used to describe Uruguay.
People tend to make a lot of parallels to the United States in the 1950s – a
much slower pace of life, less government intrusion, and family focused. There
is an important thing to understand about Uruguay– it is heavily dependent on
Argentina. Over the years, Argentines began using this country as a sort of
bank account. They stashed US dollars in Uruguayan banks and bought up all the
high quality agricultural and beach property they could as a means to hold
assets outside of their home country. Argentines have wisely learned
through experience not to trust their government. Fool me once, shame on you.
Fool me twice, shame on me. One of the chief consequences is
inflation.
Lowest Volume And
Range Day In Months As Stocks Shrug Despite JPY Dump And Oil Pump
Submitted by Tyler Durden
on 02/11/2013
Today was simply dreadful. S&P 500 futures saw their
narrowest day-session range in six months and lowest day-session volume of the
year. No matter what was tried today - vol compression, EURJPY (carry)
ramps, Oil stop-run - equities did not respond with any algo-driven exuberance.
Stocks ended the day practically unchanged even as AAPL did its best to hold
them up - filling its post-earnings gap and fading. Five things
dominated the day: Gold and Silver were slammed lower early on;
ECB's Weidmann slammed EUR higher early on; Oil prices surged above $97 (WTI);
and then France's Moscivici spoke and retraced all the EUR's gains; and then a
3pmET rampathon in JPY. For the bulls, this is healthy stabilization; For
the bears, this is a day where normal risk drivers had no impact and stocks
never followed through on new highs. Credit remains pensive as
renewed rises in oil prices will crimp margins (and the consumer's pocket) but
none of that matters as JPY crosses remain in play.
How The Fed Is
Handing Over Billions In "Profits" To Foreign Banks Each Year
Submitted by Tyler Durden
on 02/11/2013 - Why has the Fed paid some $6 billion
in interest to foreign banks, in the process subsidizing and keeping insolvent
European and other foreign banks, in business and explicitly to the detriment
of countless US-based banks who have to compete with Fed-funded foreign banks
and who have to fire countless workers courtesy of this Fed subsidy to foreign
workers? And, perhaps more importantly, why will the Fed pay about $5
billion or much more in interest to foreign banks each year starting in
2014?
It's Not The Economy,
It's Inflation & The Fed Stupid
Submitted by Tyler Durden
on 02/11/2013 - It will not be a great shock to ZH
readers, but the sad truth (no matter what one is told by the plethora of
talking heads and commission takers) is that neither EPS upgrades nor EPS
outlooks are in any way correlated to equity market performance. Instead, the
central bank balance sheet size and forward inflation expectations are the key
factors. As Credit Suisse notes, in fact over the past few years, EPS
upgrades and outlooks are negatively correlated with stocks! Even as
current inflation (CPI) is supposedly fading, forward inflation
expectations have risen and supported equity P/E valuations, and until
recently, central bank balance sheets remain supportive of stocks... However,
in the last few weeks, as stocks have surged ahead, a few things have changed
with the world's central banks seeing the lowest growth in their balance
sheets since the crisis began, and in the last few weeks, forward
inflation expectations have dropped notably - after peaking at post-crisis
peaks once again. So, it's not at all about the fundamentals; it's about the
central banks and inflation - and in the short-term, they are losing
some willpower.
Guest Post: More
Stealth Inflation As Maker’s Mark Slashes Alcohol Content
Submitted by Tyler Durden
on 02/11/2013 - They just ain’t making Maker’s like
they used to. According to the company, an apparent bourbon shortage has
besieged the company leaving it no choice but to cut the alcohol
content of their booze from 45% to 42%. I’m sorry, but this excuse
reeks of marketing spin. What manufacturer decides to dilute their
product when they face high demand, rather than just raise the price by 3% and
keep the quality intact? In a world where horse meat is
increasingly finding its way into “all beef” product, where biotech salmon is
soon to hit the streets and where Subway’s foot long
sandwiches are less than 12 inches, I’d be willing to bet
this is simply just another case of good old fashioned stealth inflation.
Goodbye Bond
Vigilantes, Hello Brent Vigilantes
Submitted by Tyler Durden
on 02/11/2013 - The flood of Central Bank liquidity
into the world's asset markets has worked wonders for the optics of 'wealth' in
the last few years. While correlation is not causation, the divergence from any
sense of fundamental reality (and sheer miracle expectations of the future)
simply reflect back to the leaking of that central bank liquidity into risk
markets everywhere. However, there appears to be a limiter - or self-governor -
that comes along every few months to tap the world's 'belief in economic
miracles' on the shoulder. With the world's sovereign bond markets now
repressed or 'managed'; the only 'self-regulator" (almost) beyond
the control of the central banks is simply, the cost of energy - and a new
breed of Brent VigilantesTM
Janet Yellen
Discovers Okun's Law Is Broken, Confused Record Russell 2000 Doesn't Lead To
Plunging Unemployment
Submitted by Tyler Durden
on 02/11/2013 - Moments ago Fed vice-chair Janet
Yellen released a speech titled: "A Painfully Slow
Recovery for America's Workers: Causes, Implications, and the Federal Reserve's
Response." In it, Yellen finally revealed she is on the path to
realizing the it is none other than the Fed's own actions that have
broken the economic "virtuous cycle", and that Okun's Law - the
bedrock behind the Fed's flawed philosophy of assuming more debt -> more GDP
-> more jobs, is no longer relevant in the broken "New Normal." In
other words, Yellen finally starts to grasp what Zero Hedge readers knew a year
ago, when they read, "JP Morgan Finds Obama,
And US Central Planning, Has Broken The Economic "Virtuous Cycle."
Santelli Slams
Analyst And Media "Myside" Bias
Submitted by Tyler Durden
on 02/11/2013 The overwhelming herding of AAPL's
analysts highlighted by James Stewart in today's NY Times sets CNBC's Rick
Santelli on a path of truthiness not often seen on business media. Citing the
findings, most specifically, "analysts are, in the end,
salesmen," Santelli notes that the average investor (listeners
and viewers of financial media) have limited time and thus are forced to rely
on this herd-like behavior. The audience, of course, hears what it wants to
hear as confirmation or 'myside' bias' dominates each and every word uttered.
But it's not just the financial analysts, its the political pundits who
continue to abjectly ignore an exploding deficit in order to support the
'brand' of independence their media provides. The 'safety in numbers'
argument holds up as the analysts group together - all knowing the reality
ahead, but terrified to break ranks and admit the emperor is indeed naked.
Sovereign Defaults
Past And Present In One Chart
Submitted by Tyler Durden
on 02/11/2013 As the chart below shows, in some 200
years of history, when expressed as a ratio of total sovereign debt to tax
revenues, the empirical data as compiled by Reinhart and Rogoff ranges from 2x
to 16x. This is shown by the blue bars in the chart below. So where are
we in this cycle as the debt clock counts down? As the red bars show, we are in
a very uncomfortable place, with Japan now at the highest such ratio in
history, well above the highest recorded which always ended up in default,
while the US, whose such ratio is over 600%, is above the long-term average of
about 520% public debt/revenue. The problem is that every current and
subsequent attempt to reflate merely pushes both of these higher, until one day
the marginal growth creation of every dollar in new debt becomes negative. How
much higher can consolidated global debt go before global GDP is not only no
longer growing, but every incremental dollar in debt has a negative impact on
GDP, as was the case for the US in the fourth quarter? Keep an eye on global
economic growth: if and when the world enters outright recession: the most
feared outcome by all central bankers who realize they are out of weapons and
their only recourse is much more of the same, that may be cue to quietly leave
town.
Spain Kickback
Scandal Threatens Rajoy As 79% Find Corruption "Explanations" Weak
Submitted by Tyler Durden
on 02/11/2013 - Just like for Alice, Spain's farcical
kickback and bribery scandal's rabbit hole just keeps getting deeper. This
morning El Pais reports that the alleged providers of payments to the
government (via the kickback fraud) - known as 'Gurtel' - received an
unprecedented EUR115mm in government contracts. With more than 70
people facing charges ranging from money laundering to bribing a
public official, Rajoy's efforts at coming clean have fallen on deaf ears as 79%
of Spaniards are dissatisfied with the explanations. This follows a weekend
of disclosures including the fact that Rajoy gave himself a 32% pay
rise up to 2011 as he push austerity down the throats of his people.
As El Pais notes, "...The only thing that is clear is that most of the
recipients of payments on the former treasurer’s list have admitted that they
accepted money in cash...." The sad political truth is, as Deutsche notes,
the likeliest course of action at this stage, in our view, is that on the
basis of the internal investigation, Rajoy may go as far as letting go some
members of his cabinet, but we think that he will protect the “hard nucleus” of
his administration and will not resign. It appears, as they note, that the
Spanish government's room for maneuver (over further austerity) is
significantly diminished.
Getting Richer By
Getting Poorer - Japan's FX-Bond-Stock Trilemma
Submitted by Tyler Durden
on 02/11/2013 - JPY could fall a lot further because weak
JPY has been the most effective tool to create equity market wealth and spur
Japanese demand. Moreover, Citi's Steven Englander notes, Japanese
policymakers do not have many other options. If JPY is ticket for the
Nikkei to regains ground lost versus other equity markets, USDJPY would have
to go into three digits. By implication JPY would have to weaken a lot
more. The loss of market share in part reflects long-term structural issues but
Japanese governments (like others) are more mindful of incurring the
anger of domestic political constituencies by making tough structural reforms
than of G20 counterparts by weakening the exchange rate. From a
political perspective, the Nikkei-JPY relationship is too much a good thing
for Japanese policymakers to give up - but divergences are abundant at the
short- and long-end of the JGB curve - and too much of a good thing in this
case is a disaster.
ECB Enters Currency
Wars Backward As Weidmann Talks Euro... Up?
Submitted by Tyler Durden
on 02/11/2013 - Update: Just
as predicted, and right on schedule a few hours after this hit the tape, here
come the French: EURO GROUP MUST WATCH RISING EURO'S IMPACT ON GROWTH:
MOSCOVICI
* * *
The jawboning continues - but this time it's different. During a
speech this morning, the ECB's Weidmann made it clear that the optics of EUR
strength are critical to the union's survival (and Germany's balance
of power vs the French):
*WEIDMANN SAYS ECB
CANNOT SOLVE CRISIS, GOVERNMENTS MUST
*WEIDMANN: DEVALUATION
HISTORICALLY DOESN'T HELP COMPETITIVENESS
*WEIDMANN: IF MANY
NATIONS DEPRESS FX, CAN ONLY END IN FAILURE
*ECB'S WEIDMANN SAYS
EURO ISN'T SERIOUSLY OVERVALUED
*WEIDMANN WARNS POLICY
MAKERS AGAINST TRYING TO WEAKEN THE EURO
Of course, as we head towards the G-20, everyone wants to talk
their book - but in this case, Weidmann is talking the EUR up. As we have been
saying, Weidmann is scared of what happens when the EUR downward slide
accelerates and implicitly results in a blow up of peripheral yields leading to
even faster EUR collapse, and ultimately fears of EUR redenomination. This
has been the case every year; as the ECB had to step in and prop the EUR up - just
the opposite of what every other central bank does.
Italian Stocks
Slump As Berlusconi Proclaims Himself Poll Leader
Submitted by Tyler Durden
on 02/11/2013 - With Italy's stock market down almost
9% (and falling again today), and Italian bond yields surging (2Y +35bps to 1.67%)
in the last two weeks, it truly seems as though the two scariest words in
global investing are not 'Iran-Israel', or 'Federal Reserve', but 'Silvio
Berlusconi'. With the polls blacked out now until the election in just under
two weeks, the posturing has begun and the media mogul is not backing down. As ANSA.It reports,
Berlusconi has proclaimed "I believe that we have overtaken
them... they are now (trailing) behind us," as we have been
noting the convergence of the two parties poll results recently. Of course, he
is still the lecherous old bastard he always was - which seems only to endear
him to the Italian people (oh, and his promise of bread and circuses for all) -
as ANSA notes, he is defending himself on Sunday, after Berlusconi asked
a female solar power technician during a company visit if she made house calls,
if she "comes to homes" and how many times she is willing "to
come". Is debauchery the opposite of austerity? Never mind, the
key for now is psychological as the opposition sparring will need to begin to
avoid the "don't vote for the loser" bias.
The Pope Quits: Now
What?
Submitted by Tyler Durden
on 02/11/2013 - While Dan Brown fans are intimately
familiar with the details of Conclave, there are those who have not studied
Robert Langdon's every clue-busting eureka moment under a microscope. For them,
the AP has this handy step-by-step guide for how a new pope is chosen.
Traditionally, this flowchart if followed upon the death of the Pontiff, but following
today's first papal resignation since 1415, it
is time to apply a little of the "New Normal" to the Catholic church
as well. The only unknown after reading the below flowchart should be how
Diebold will rig the Cardinal vote so that a Goldman partner is elected.
Ron Paul: “6,000
Years of History, Gold Is Always Money, Paper Money Fails”
Submitted by Tyler Durden
on 02/11/2013 - Ron Paul spoke with Bloomberg
television and said that we are in a currency war and we have been for decades.
He noted that governments have always competed against each other’s currencies
even under Bretton Woods. It has always been a form or protectionism and will
make people want to export more. Dr. Paul said don’t blame countries like China
and Japan just look at the debt the U.S. is buying. There will always be
currency wars. The Bank of Japan claims it has to defend itself against
deflation and decades of slow growth. Ron Paul noted that the Bank of Japan’s
yen devaluations will eventually lead to further price inflations that are to
come. Investors and citizens will eventually reject the yen and switch to other
currencies like dollars or Swiss francs. Then eventually people will move
to hard assets altogether as they are losing confidence in paper assets.
Dr. Paul was asked, “Do you think protectionism will lead to a crash in the
international monetary system? He replied, “Nothing good can come of it. Even
short run trade benefits leads to a weaker economy and higher prices. It
doesn't solve the problem they won't face the truth. That is that all
governments spend too much money, there is too much debt and they get away with
it by taxing people”.
Art Cashin Rolls
His 'Snake' Eyes At The Bull Market
Submitted by Tyler Durden
on 02/11/2013 As most of Asia is on vacation for the
lunar new year, UBS' Art Cashin is growing more and more concerned with
the excessively bullish tone. While not screaming for an outright
short, the venerable volatility-handler fears many factors he sees in the
market currently from sentiment to vauation, and a lack of 'rotation', and
while the January Effect and the Super-Bowl are in the bulls favor, he gently
reminds that the 'Year of the Snake' has typically not been a good one
for markets or man...
Weak Jobs Report?
Blame It On Snow In The Winter
Submitted by Tyler Durden
on 02/11/2013 - As we said a week ago in "Scapegoating Nemo",
it was only a matter of time before Wall Street's heroic band of permabullish lemmings
used a snow storm in the middle of, gasp, winter, as a "valid" excuse
to justify why an economy priced to central planning-perfection may deviate
slightly from a path that has missed every major upside inflection point in the
past four years (but... but, there is always a reason... if only for the Fed to
print). And appropriately enough, the first such excuse comes from none other
than Groundhog Phil's
nemesis Joe LaVorgna who just cut his Non-farm payroll forecast to
125K due to "inclement winter weather." Truly odd how there is never
an exogenous reason for "better than expected" data. Ever. Next, and
as always, rain in the spring will be blamed for a Durable Goods plunge in
April, sun and balmy warm weather in the summer will be the cause of a collapse
in retail spending in July, and finally, a gust of wind in the fall will lead
to a double dip depression.
Too Much European
Integration? Romanian Donkey Meat In UK "Beef" Burgers
Submitted by Tyler Durden
on 02/11/2013 - Thanks to a law banning horses from
Romanian roads, the ever-enterprising and integrated European Union workers
have apparently found a use for the millions of horses and donkeys that were
slaughtered. In a bizarre report from The Independent,
it appears 'donkey meat' has turned up on the shelves of British,
French, and Swedish supermarket shelves (and no it doesn't taste like
chicken or ass). The unintended consequence of the Romanian horse (and
donkey) ban appears to follow a truly remarkable path from abattoirs
in Romania (who must be busy) to a dealer in Cyprus (subcontracting for a Dutch
dealer) to a meat plant in France which sold its frozen 'meat' onto a
distributor in Luxembourg. French and British governments have forced the
removal of the 'fake' beef from supermarket shelves as "a case of fraud
and conspiracy against the public." Given last week's incredible footage
from Greece, we suspect more than a few are willing to choke it down, as for
now the British are pushing to ban meat imports.
9 Killed When Car
With Syrian Plates Explodes At Turkish-Syria Border Crossing
Submitted by Tyler Durden
on 02/11/2013 It appears the tensions between
Turkey and Syria are far from easing, as evidenced by the just reported car bomb
explosion at the Turkish-Syria border where at least 9 people have been killed
according to TV24. According to AA,
the blast happened in a vehicle with a Syrian license plate, which is certain
to inflame tensions between the two countries even more. Keep an eye on the
already soaring Brent-WTI spread.
Gold, Silver Plunge
In Sympathy With Popexit
Submitted by Tyler Durden
on 02/11/2013 - The precious metals market appears to
have found a size seller this morning. Despite record breaking demand for
physical coins from the Mint, gold and silver prices hit an air pocket
around 8amET but had been sold all day in Europe. We humbly suggest
that his Holiness spread out his retirement selling... of course we saw a
similar gap last Tuesday and Thursday as Europe's risk-asset markets continue
to slide (and perhaps collateral margin calls come due). Of course, the more
important questions remain: which TBTF bank will the pope end up as
vice-chairman in, and which ex-Goldman Managing Director/Partner will be the
next head of the Vatican bank... and incidentally Catholic Church (it appears a Canadian
is front-runner, rather coincidental given Carney's recent
appointment).
Households On
Foodstamps Rise To New Record
Submitted by Tyler Durden
on 02/11/2013 - While hardly presented by the
mainstream media with the same panache dedicated to the monthly ARIMA-X-12
seasonally-adjusted, climate-affected, goal-seek devised non-farm payroll data,
the three month delayed Foodstamp number is according to many a far greater
attestation to the "effectiveness" of the Obama administration to
turn the economy around. And far greater it is: since his
inauguration, the US has generated just 841,000 jobs through November
2012, a number is more than dwarfed by the 17.3 million new
foodstamps and disability recipients added to the rolls in the past 4 years.
And since the start of the depression in December 2007, America has seen those
on foodstamps and disability increase by 21.8 million, while losing
3.6 million jobs. End result: total number of foodstamp
recipients as of November: 47.7 million, an increase of 141,000 from the prior
month, and reversing the brief downturn in October, while total US households
on foodstamps just hit an all time record of 23,017,768, an increase of 73,952
from the prior month. The cost to the government to keep these 23 million
households content and not rising up? $281.21 per month per household.
Frontrunning:
February 11
Submitted by Tyler Durden
on 02/11/2013 - 07:36
Pope steps down, citing frailty (Reuters)
Japan’s economic minister wants
Nikkei to surge 17% to 13,000 by March (Japan Times)
Venezuelan devaluation sparks panic (FT)
Rajoy releases tax returns, but fails
to clear up doubts over Aznar years (El Pais)
Companies Fret Over Uncertain Outlook
(WSJ)
Home Depot Dumps BlackBerry for
iPhone (ATD)
Kuroda favors Abe's inflation target,
mum about BOJ role (Kyodo)
A Cliff Congress May Go Over (WSJ)
U.S., Europe Seek to Cool Currency
Jitters (WSJ)
Radical rescue proposed for Cyprus (FT)
Franc Is Still Overvalued, SNB’s
Zurbruegg Tells Aargauer (BBG)
Northeast Crawls Back to Life After
Crippling Blizzard (WSJ)
Quiet Start To G-20
"Currency Warfare Conference" Week
Submitted by Tyler Durden
on 02/11/2013
In what has been a quiet start to week dominated by the G-20 meeting
whose only purpose is to put Japan and its upstart currency destruction in its
place, many are expecting a formal G-7 statement on currencies and what is and
isn't allowed in currency warfare according to the "New Normal" non-Geneva
convention. Because while there may not have been much overnight news, both the
EURUSD and USDJPY just waited for Europe to open, to surge right out of the
gates, and while the former has been somewhat subdued in the aftermath of the
ECB's surprising entry into currency wars last week, it was the latter that was
helped by statements from Haruhiko Kuroda (not to be confused with a Yankee's
pitcher) who many believe will be the next head of the BOJ, who said that
additional BOJ easing can be justified for 2013. He didn't add if that would
happen only if he is elected. Expect much more volatility in various FX pairs
as the topic of global thermonuclear currency war dominates the airwaves in the
coming days.
RANsquawk EU Market
Re-Cap - 11th February 2013
Submitted by RANSquawk Video
on 02/11/2013
Pope Benedict XVI
Announces Resignation At End Of Month
Submitted by Tyler Durden
on 02/11/2013 - 0Dear Brothers, I have convoked you to
this Consistory, not only for the three canonizations, but also to communicate
to you a decision of great importance for the life of the Church. After having
repeatedly examined my conscience before God, I have come to the certainty that
my strengths, due to an advanced age, are no longer suited to an adequate
exercise of the Petrine ministry. I am well aware that this ministry, due to
its essential spiritual nature, must be carried out not only with words and
deeds, but no less with prayer and suffering. However, in today’s world,
subject to so many rapid changes and shaken by questions of deep relevance for
the life of faith, in order to govern the bark of Saint Peter and proclaim the
Gospel, both strength of mind and body are necessary, strength which in the
last few months, has deteriorated in me to the extent that I have had to
recognize my incapacity to adequately fulfill the ministry entrusted to me. For
this reason, and well aware of the seriousness of this act, with full freedom I
declare that I renounce the ministry of Bishop of Rome, Successor of Saint
Peter, entrusted to me by the Cardinals on 19 April 2005, in such a way, that
as from 28 February 2013, at 20:00 hours, the See of Rome, the See of Saint
Peter, will be vacant and a Conclave to elect the new Supreme Pontiff will have
to be convoked by those whose competence it is.
Argentina's
Financial Collapse - Past Is Prologue
Submitted by Tyler Durden
on 02/10/2013 - The following rather stunning
documentary provides a critical insight into what Europe (and Argentina once
again) could well be progressing towards. There is a reason we highlight the
'scariest chart in Europe' as that of youth unemployment and with the central
banks printing money at ever increasing paces and the next round of global
competitive devaluation beginning, the debt slaves will suffer ever more. In
2001, Argentina collapsed; after many years of apathy in the country,
the insurrection exploded. As TopDocumentary
notes, the spontaneous revolt of 'faceless' people meant saucepans
were being banged in every neighborhood. What happened to Argentina? How
was it possible that in so rich a country so many people were hungry? The
country had been ransacked by a new form of aggression,
committed in a time of peace and in a democracy. Ever since independence,
almost 200 years ago, Argentina’s foreign debt has been a source of
impoverishment and corruption and the biggest scandals. This foreign debt
always went hand in hand with big business, and with the complicity of nearly
every government. The policy of indebtedness gave rise in Argentina to
generations of technocrats and bureaucrats, who favored banks and international
corporations over their own country. It didn't end well then, and it won't end
well this time...
Guest Post: Note To
Fed: Giving The Banks Free Money Won't Make Us Hire More Workers
Submitted by Tyler Durden
on 02/10/2013 - The Federal Reserve's policy of
targeting unemployment is based on a curious faith that low
interest rates and lots of liquidity sloshing around the bank system with
magically lead employers to hire more workers. I say this is a curious faith
because it makes no sense. In effect, the Fed policy is based on the implicit
assumption that the only thing holding entrepreneurs and employers back from
hiring is the cost and availability of credit. But as anyone in the actual
position of hiring more staff knows, it is not a lack of cheap credit
that makes adding workers unattractive, it is the lack of opportunities to
increase profit margins by adding more workers. If the economic boom
of the mid-1980s proves anything, it is that the cost of credit can be very
high but that in itself does not restrain real growth. What restrains growth
is not interest rates, it is opportunities to profitably expand operations.
Russia Flips
Petrodollar On Its Head By Exporting Crude, Buying Record Gold
Submitted by Tyler Durden
on 02/10/2013 - China has been a very active
purchaser of gold for its reserves in the last few years, as we extensively
covered here and here,
but another nation has taken over the 'biggest buyer' role (for the same
reasons as China). Central banks around the world have printed money
to escape the global financial crisis, and as Bloomberg reports,
IMF data shows Russia added 570 metric tons in the past decade.
Putin's fears that "the U.S. is endangering the global economy by
abusing its dollar monopoly," are clearly being taken seriously as
the world's largest oil producer turns black gold into hard assets. A lawmaker
in Putin's party noted, "the more gold a country has, the more
sovereignty it will have if there’s a cataclysm with the dollar, the
euro, the pound or any other reserve currency." It appears Russia-China is
now the 'hard-money' axis and perhaps, to some extent, it is the relative price
of oil that defines their demand for the barbarous relic.
Key Events In The
Coming Week And Complete February European Calendar
Submitted by Tyler Durden
on 02/10/2013 - With China offline celebrating its
New Year, and potentially
mobilizing forces in (not so) secret, and not much on the global
event docket, the upcoming G20 Finance Ministers meeting in Moscow at the end
of the week will be the key event for FX markets, which these days define every
other aspect of risk. It should surprise nobody the last couple of weeks have
seen increased attention on exchange rates and the frequent use of the
“currency war” label by policymakers in many countries. No news announcements
are expected at the BoJ meeting on Thursday, following the formal announcement
of a 2% inflation target and an open-ended asset purchase program. On the data
side, US retail sales on Wednesday will provide an important signal about the
strength of the US consumer following the largest tax increase in decades.
Although January auto and same store sales data was reasonably solid, new taxes
will soon begin to weigh on spending. Also on Wednesday, Japan Q4 GDP will be
released. On Thursday, Q4 GDP for France, Germany, Italy and the Euro area will
be released. While Q4 contraction is assured, the key question mark is whether
German can rebound in Q1 and avoid a full blown recession as opposed to a
"brief, technical" one, as the New Normal economic term goes.
The Impossibility
Of Economic Calculation In A Fiat World
Submitted by Tyler Durden
on 02/10/2013 - The purpose of keeping accurate
accounts is to quantify net worth at any given point in time – as well as the
change from a prior date. It goes without saying that the
measure used, money, should be constant if comparisons over time are to mean
anything. Only then do prices of capital goods, consumer goods and services
truly reflect their changing values, giving important signals to businessmen.
With unstable fiat money market signals lose much of their meaning. But those
of us who understand that currency devaluation only serves to defraud the
majority of society must be alarmed that the governments of nearly all the
advanced economies are racing each other to rob their citizens in this way. Instead
of bringing about a Lazarene recovery in the economy, this approach is already
failing, because the very basis of economic calculation is being destroyed.
Who knows the value of anything anymore? We do however know the inevitable
outcome of this lunacy, and it is not good.
US To Use Drones In
Chris Dorner Manhunt
Submitted by Tyler Durden
on 02/10/2013 - Update: this
just in - Authorities offer $1 million reward for information
leading to arrest of ex-LAPD officer Christopher Dorner
We were hoping to evade coverage of the latest mass distraction du
jour, that of the former LAPD officer Chris Dorner who recently went rogue
following a three man murder spree and who has vowed to kill again as per his 6,000 word
manifesto, but the US government had made it impossible following
confirmation that the search for Dorner is now the first official drone-hunt in
US history.
Inflation,
Mean-Reversion, And 113 Years Of Bond & Stock Returns
Submitted by Tyler Durden
on 02/10/2013 The
baby boomers now retiring grew up in a high returns world. So
did their children. But, as Credit Suisse notes in their 2013 Yearbook,
everyone now faces a world of low real interest rates. Baby boomers may find it
hard to adjust. However, McKinsey (2012) predicts they will control 70% of
retail investor assets by 2017. So our sympathy should go to their
grandchildren, who cannot expect the high returns their grandparents enjoyed.
From 1950 to date, the annualized real return on world equities was 6.8%;
from 1980, it was 6.4%. The corresponding world bond returns were 3.7% and
6.4%, respectively. Equity investors were brought down to earth over the first
13 years of the 21st century, when the annualized real return on the world
equity index was just 0.1%. But real bond returns stayed high at 6.1% per
year. We have transitioned to a world of low real interest rates.
The question is, does this mean equity returns are also likely to remain lower.
In this compendium-like article, CS addresses prospective bond returns and
interest rate impacts on equity valuations, inflation and its impact on equity
beta, VIX reversions, and profiles 22 countries across three regions. Chart
pr0n at its best for bulls and bears.
Guest Post: On
Corruption And The Status Quo
Submitted by Tyler Durden
on 02/10/2013 - Sometimes, it feels good to hope. But
since last September, nothing has really changed. At
least not fundamentally. The zero-interest rate policies were going to
encourage share buybacks, dividend payments and any method to allow the
extraction of whatever real value is still available to extract from
corporations/businesses by their owners. This meant leverage was going to
increase, unemployment would remain high, capital expenditures were going to
decrease and the risk of defaults was to going to rise. A year later, all these
symptoms are starting to surface. One more reason to avoid stocks and
be long gold. But in my view, it will take longer than many believe,
for these imbalances to burst "...As long as the people of the EU put
up with this situation and the EU Council (…) effectively kills democracy at
the national level AND as long as the Fed continues to extend US dollar swaps,
this status quo will remain… Whenever the political sustainability of the EU is
challenged, we will see a run for liquidity... The trend is for asset
inflation, and will last as long as the people of the EU and the US do not
challenge the political status quo..." Unemployment and the
tolerance of those unemployed will tell us when the time has come.
Berlusconi Ally
Supports Alternative Currency To Euro
Submitted by Tyler Durden
on 02/10/2013
Back in November 2011, when the ECB did its damnedest to make
sure Silvio Berlusconi resigned and never came back (it succeeded in the first,
but is failing in the second as the Berlusconi block is rapidly rising in the
polls two weeks ahead of the Italian elections and is now one margin of error
away from the frontrunning Democratic Party) the central bank knew the Bunga
Bunga PM would be bad news for the status quo - a fixed exchange status quo
which as we showed in an earlier post,
is there merely to enrich the rich, and impoverish the poor. The reason is that
Sylvio has always refused to play ball with the banker oligarchy, whose
survival depends first and foremost on the perpetuation of the EUR (as a
collapse of the Eurozone means all reflation and DJIA 36,000 bets are
off), and where every hint of a weakening of the Eurozone is to be eliminated
at inception. Which is why news that Belusconi's coalition ally in the
parliamentary election - Roberto Maroni, head of the Northern League, has
suggested the creation and use of a local currency in northern Italy as an
"alternative" to the Euro will hardly be seen as favorable
by Europe's technocratic overlords for whom any initiative to structurally
destabilize and weaken the European currency has to be crushed at the roots.
As Egypt Runs Out
Of Dollars, Is It Next On The Devaluation Bandwagon?
Submitted by Tyler Durden
on 02/10/2013 Late on Friday Venezuela shocked the
world when instead of reporting an update on the ailing health of its leader,
as many expected it would, it announced the
official devaluation of its currency, the Bolivar by nearly 50%
against the dollar yet still well below the unofficial black market exchange
rate. By doing so, it may have set off a chain reaction among the secondary
sovereigns in the world, those who have so far stayed away from the
"big boys" currency wars, or those waged by the Big 6 "developed
world" central banks, in an attempt to also "devalue their way to prosperity"
and boost their economies by encouraging exports even as the local population
sees a major drop in its purchasing power and living standards. So in the game,
where the last player to crush their currency inevitably loses, the question is
who is next. The answer may well be America's latest best north African friend,
and custodian of the Suez Canal: Egypt.
Europe: The Last
Great Potemkin Village Where "The Rich Get Richer, And Poor Get
Poorer"
Submitted by Tyler Durden
on 02/10/2013 - Let’s be very clear here: this is
what the euro has wrought. This destruction of the non-German
industrial bases has taken place with the active complicity of the European
technocrats. They did not even realize that France, the EMU’s second
largest economy, for example was becoming hopelessly uncompetitive. This
is a zero sum game if there ever was one, with Germany being the main winner
and the other three economies massive losers. Instead of leading to
convergence in euroland economies, the euro project has led to massive
divergences, with the strong getting stronger, and the weak getting weaker... The
ECB has thrown enough money at the market to, for now, reduce borrowing costs
and allow equity prices to rise (unfortunately so is the euro, threatening
exports). This buys time—but these actions are not enough to solve the structural
problems created by the euro. The private sector has shriveled in Southern
Europe, as government spending and debt has soared. If we have France,
Italy and Spain together enter a debt deflation/debt trap, the crisis will be
far too big for Germany to handle: and if this happens before German federal
elections are held (no later than October) we could see the European political
crisis revive in full force.
'Cleanest Dirty
Shirt' Or Greatest Fool Standing?
Submitted by Tyler Durden
on 02/10/2013 - Typically, we humans will anchor on the
most recent patterns - especially if they conform to our anchored inherently
optimistic bias. It seems, once again, that just as in previous euphoric stages
of equity market cycles, we are doing the same again. There are plenty
of market movements that remove any hope for the 'who could have seen it
coming?' herd: European stock and bond markets 'breaking' their
positive contagion trends (core and periphery); US credit markets seeing very
disturbing trends of selling pressure and technical outflows; and US equity
valuations reaching multi-month highs in the face of declining earning,
declining macro fundamentals, and declining GDP expectations. With US
stocks at highs against a plunging US macro background and EU stocks slumping
against a rising EU macro background, it appears good is bad and bad is good
and while we do not know what catalyst stalls the can-kicking hope in the
short-term, the longer the divergence from reality lasts, the bigger
the fall to come.
What's Wrong With
These Google Search Results?
Submitted by Tyler Durden
on 02/10/2013
US society in a nutshell: Chris Dorner has been around for a
week and has 222 million results on Google; the Federal
Reserve has been around for one hundred years and has 187 million
results.
Guest Post: China
Surpasses U.S. As Number One Global Trading Power
Submitted by Tyler Durden
on 02/10/2013
U.S. exports and imports last year totaled $3.82 trillion, the
U.S. Commerce Department said last week. China’s customs administration
reported last month that the country’s total trade in 2012 amounted to $3.87
trillion. China had a $231.1 billion annual trade surplus while
the U.S. had a trade deficit of $727.9 billion. For those who are still not
aware of why this is such a big deal, it is essentially a turning point moment
in global trade. There is no doubt that China will now be inducted into
the SDR, and that their importance as a trade and consumption center will
quickly lead to a move away from the dollar. To put it simply, the dollar
is going to lose its world reserve status VERY soon. Many will cheer this
change as necessary progress towards a more “globally conscious” economic
system. However, it’s not that simple. Total centralization is
first and foremost the dream of idiots, and in any mutation (or amputation)
there is always considerable pain involved. The proponents of this “New
World Order” (their words, not mine) seem to have placed the U.S. squarely in
their crosshairs as the primary recipient of this fiscal pain.
Guest Post: The
U.S. Economy Is Now Dangerously Detached From Reality
Submitted by Tyler Durden
on 02/09/2013 We now live in an entirely fabricated
fiscal environment. Every aspect of it is filtered, muddled, molded, and
manipulated before our eyes ever get to study the stats. The metaphor may
be overused, but our economic system has become an absolute “matrix”. All
that we see and hear has been homogenized and all truth has been sterilized away.
There is nothing to investigate anymore. It is like awaking in the middle
of a vast and hallucinatory live action theater production, complete with
performers, props, and sound effects, all designed to confuse us and do us
harm. In the end, trying to make sense of the illusion is a waste of
time. All we can do is look for the exits…
The Fed's Bailout
Of Europe Continues With Record $237 Billion Injected Into Foreign Banks In
Past Month
Submitted by Tyler Durden
on 02/09/2013 - ‘Last
weekend Zero Hedge once again broke the news that just like back in June
2011, when as part of the launch of QE2 we demonstrated that all the
incremental cash resulting form the $600 billion surge in the Fed's excess
reserves, had gone not to domestically-chartered US banks, but to
subsidiaries of foreign banks operating on US soil. To be sure, various
other secondary outlets picked up on the story without proper attribution, most notably the
WSJ, which cited a Stone McCarthy report adding the caveat that
"interpreting the data released by the Federal Reserve is a bit
challenging" and also adding the usual incorrect attempts at
interpretation for why this is happening. To the contrary: interpreting
the data is quite simple, which is why we made an explicit prediction:
'We urge readers to check the weekly status of the H.8 when it comes out every
Friday night, and specifically line
item 25 on page 18, as we have a sinking feeling that as the Fed
creates $85 billion in reserves every month... it will do just one thing: hand
the cash right over straight to still hopelessly insolvent European banks."
So with Friday having come and gone, we did just the check we suggested. As the
chart below shows, we were right.
Paul Krugman:
"We Should Kick The Can Down The Road. It’s The Responsible Thing To
Do"
Submitted by Tyler Durden
on 02/09/2013 - The below article, recreated in its
grotesque entirety, is a real, serious Op-Ed written by a
supposedly real, non page-view trolling, Nobel-prize winning economist, in a serious
paper, the New York Times.
It can be classified with one word: jaw-dropping:"We’re not going
to resolve our long-run fiscal issues any time soon, which is O.K. — not ideal,
but nothing terrible will happen if we don’t fix everything this year.
Meanwhile, we face the imminent threat of severe economic damage from
short-term spending cuts. So we should avoid that damage by kicking the
can down the road. It’s the responsible thing to do."
2013 Earnings Are
Now Forecast To Be Less Then 2009 Earnings Were Projected To Be In 2007
Submitted by Tyler Durden
on 02/09/2013 - Over the past few weeks, virtually
all of the empty chatterboxes on financial comedy TV have been repeating ad
infinitum just how much cheaper the market now is compared to its prior
peak in 2007 because, get this, it trades at "only" a 15x multiple
compared to the 18x or so reached at its peak in 2007. By doing so these same
hollow pundits simply confirm just how painfully clueless their cheerleading
is, as the market, or what's left of it in the "new Bernanke
centrally-planned abnormal", never trades on current earnings but
always future discounted EPS, or in other words, forward P/E, or any other
valuation, multiples. And it is when one looks at the future on an apples to
apples basis, that the market now is more expensive than it was back in
2007!
Days After Freezing
Prices, Argentina Bans All Advertising
Submitted by Tyler Durden
on 02/09/2013
"We are from the government and
we are here to help you"
- Anonymous government worker
A week after Argentina resorted to every failing authoritarian
government's last ditch measure to (briefly) control inflation before runaway
prices flood the nation and result in political and social upheaval, namely freezing
retail prices - a decision which never has a happy ending, the
country is pressing on through the rabbit hole and in the latest stunner of a
government decree (which like Venezuela yesterday is merely a harbinger of what
is coming everywhere else), has banned advertising in the Argentina's
newspapers in an attempt to weaken what's left of a private, independent
media, and to punish those who don't comply with the government's propaganda.
Guest Post: Is The
NDAA Lawsuit Headed To The Supreme Court?
Submitted by Tyler Durden
on 02/08/2013 - The NDAA lawsuit is one of the key
topics we have written about over the past year or so. For those of you
that aren’t up to speed, one of the most popular posts we ever wrote was NDAA: The Most
Important Lawsuit in American History that No One is Talking About.
Basically, Section 1021 of the NDAA allows for the indefinite detention of
American citizens without charges or a trial. Journalist Chris Hedges and
several others sued Obama on the grounds of it being unconstitutional. Judge
Katherine Forrest agreed and issued an injunction on it. This was
immediately appealed by the Obama Administration to a higher court, which
promptly issued a temporary stay on the injunction. Yesterday, oral arguments
began in front of this aforementioned higher court; the 2nd Circuit.
As Chris Hedges states in the interview below, if they win the case then it
will likely be brought in front of the Supreme Court within weeks. On the
other hand, if the Obama Administration wins and the Supreme Court refuses to
hear the appeal, Hedges states: “at that point we’ve just become a
military dictatorship.”
Show This To Anyone That Believes That “Things Are
Getting Better” In America
http://theeconomiccollapseblog.com
http://albertpeia.com/thingsgettingworseinamerica.htm
40 Ways That China Is Beating America
http://endoftheamericandream.com
http://albertpeia.com/40wayschinabeatingamerica.htm
Drudgereport: GALLUP: 92% of Pakistanis now
dislike America... { Winning hearts and minds … and not just in
Pakistan! }
Bankrupt Alabama county OK's
debt deal with European bank...
Atlantic City's Trump Plaza --
Sold for Only $20 Million?
Gas prices hit new historic
high...
STATE OF THE UNION: China
Eclipses USA as Biggest Trading Nation...
America owes communists $1.2
Trillion...
BODY REMOVED FROM CABIN...
On-scene reporter caught in gun
fight...
Dorner held couple hostage for
days...
OUT OF SIGHT: Media Told To
Pull Helicopters...
Fans Cheer Him On TWITTER:
'Fight The Power'...
BURNED ALIVE
Obama calls economy 'unfinished
task'...
Takes 57 Vacation Days Since
Vowing He 'Will Not Rest'...
STATE OF THE UNION: 11,629 MORE
GO ON FOOD STAMPS EACH DAY...
EXCLUSIVE: RUBIO'S STATE OF THE UNION EXCERPTS...
Mark Levin BLASTS both parties
for destruction of country...
Seismic Activity Indicates
NKorea Nuke Test...
4.9 mag 'quake'...
Map...
May fire off missiles...
DEFIANT...
Japan's PM Calls Urgent
Security Meeting...
Perry Tours CA Asking Firms to
Move to TX...
Neurosurgeon Lectures Obama on
Obamacare...
WSJ: Ben Carson for President!
Trail for rogue LAPD cop goes
'very cold'...
Manhunt moves to mountains...
'Heavily armed, trained and
dangerous'...
SoCal on Edge...
Accused killer cheered by
left...
'We are all Chris Dorner'...
Left 20-page manifesto on
FACEBOOK...
Uncensored...
Supports gun control, Obama and
Piers Morgan...
POLL: Obama's approval rating
collapses; 46%...
HA HA! Ohio Election Official:
'I Voted Twice for Obama'...
2nd Family Accuses DISNEYLAND
of Racism After Donald Duck Refuses to Hug Son... { Well let’s
see…either way, the wallet’s the target…steal it or sue for alleged
‘pedophilic’ hug … Come on! People are fed up with the niggers! }
From: "Adam Green,
BoldProgressives.org" <[email protected]>
To: Albert Peia <[email protected]>
Sent: Wednesday, February 13, 2013 10:36 AM
Subject: Social Security & Xavier Becerra
Albert...Overnight, 40,000 people became citizen supporters of Congressmen
Alan Grayson and Mark Takano's letter against cuts to Social Security,
Medicare, and Medicaid benefits.
-----
Dear Mr. Green Et Als:
I frankly have been immediately involved as follows:
I’ve not posted to my website, etc., (except for myahoo daily
news since the dates are already posted), since 2-08-13 because … it’s the
lunar new year and Chinese markets are not open …… just kidding! ….. because
I’m on vacation … just kidding again! …..actually, because I’m backing up my
entire website to one of my laptops. It’s taking longer than anticipated as I
now enter the fourth day of download (has taken five days, total) [through no
fault of Time Warner – they offer a superfast internet service/connection for
more money which is far more than I need relative to cost though truth be told,
I lamented it would have been handy for this time-consuming,
‘laborious’/tedious task (requiring surface attention, ie., file overwrites,
preventing automatic shutdown for installation of windows updates, etc., interrupting
the FTP flow) which I didn’t want to foul by usurping bandwith/memory for this
mundane endeavor]. The new HP laptop with extra-large disk space running
windows 8 which I specifically bought for this intended purpose of backup
became problematic inasmuch as the screen-saver was not readily turned off as
is easily discernible and accomplished in other windows op systems and which
cut out my ftp connection (filezilla courtesy of mozilla/firefox is great) when
operative. The fixes as per google search either weren’t present in this
windows 8 offering or, from my perspective, not worth the risk (one such was a
registry editing program/script that disabled screensaver which I could not and
did not risk – remember, with google/nsa links you see what they want you to
see, which of itself is informational). I thereupon used a crossover cable to
transfer files from my other laptop which I’m using for the backup files -
windows 8 saw it just fine which had not been the case with prior windows
versions when I tried same. Interestingly (or not), and I can’t even say how,
on the new windows 8 laptop, after some belated ‘tinkering’, up popped an AMD
power/vision window which allowed for my ‘never’ entries on screensaver for
both battery (longer battery-held charge probably the reason for the ‘intended’
difficulty regarding disabling same?) and plug-in/adapter, but the older HP
laptop’s already doing just fine.
That said, it's no mystery that john boner is not a bright man,
a fact that's not lost on anyone including his (rusted, rust-belt) home state
of ohio which lamentably was carried by wobama who should be impeached. It
doesn't matter what wobama says, but rather what he does that counts. First,
start with prosecution/disgorgement from the huge frauds in the trillions,
protected on capital hill, including the likes of wobama contributor, jon
corzine et als. Second, fraud in social security disability is rampant and must
be eliminated. Term limits and paycuts for congress are appropriate owing to
egregiously failed performance, along with cuts to budgetary allotments to the
wasteful government employee slugs and bureaucracy. People should be educated
on the notion of 'utility' of, ie., a dollar to a rich man relative to a poor
man, which argues for progressive rates of taxation; and hence, as supported by
warren buffet, higher taxes in absolute terms on the rich without gorging them
(most wealthy people in america are either overpaid, ie., ceo’s relative to
other countries, or are criminals in deriving their fortunes, as ie., wall
street, trump, other mobsters/mafia, etc., and as I've alluded to from my
direct observation and experience, immediately infra (that's all for now as I
must get back to finishing my backup tasks which are nearly complete.
This probably is indicative of their acknowledgement of their
concerted, failed money-printing/over-spending modus operandi and the
inevitable hyperinflation to follow.
Kyle Bass Tells
'Nominal' Stock Market Cheerleaders: Remember Zimbabwe Submitted by Tyler Durden
on 02/01/2013 { Yeah … the stock markets worldwide have become huge ‘QE-fed’
scams/frauds that everyone else is or will be paying for in a very big,
deleterious way! } “Amid the euphoria of today's crossing
of the Dow's Maginot Line at 14,000, Kyle Bass provided a few minutes of sanity
this morning in an interview with CNBC's Gary Kaminsky. Bass starts by
reflecting on the ongoing (and escalating) money-printing (or balance
sheet expansion as we noted here) as the driver of stock movements
currently and would not be surprised to see them move higher still (given the
ongoing printing expected). However, he caveats that nominally bullish
statement with a critical point, "Zimbabwe's stock market was the best
performer this decade - but your entire portfolio now buys you 3 eggs" as
purchasing power is crushed. Investors, he says, are "too focused on
nominal prices" as the rate of growth of the monetary base is destroying
true wealth. Bass is convinced that cost-push inflation is coming (as the
velocity of money will move once psychology shifts) and investors must not take
their eye off the insidious nature of underlying inflation - no matter what we
are told by the government (as they will always lie when its critical)…”
Insiders now aggressively bearish
Marketwatch
Too Scared To Jail: Untouchable Banks http://www.wealthdaily.com FEB 06 - ADAM ENGLISH Department of (In)Justice We're all second
class citizens when the Department of Justice refuses to enforce the law. It's
"too big to jail" that comes out on top... Read More...
Guest Post: All Is Well
Submitted by Tyler Durden
on 02/06/2013
“Facts do not cease to exist because
they are ignored.”
– Aldous Huxley
The entire system is
corrupt to its core. Both political parties, regulatory agencies, Wall Street,
the Federal Reserve, and mainstream media are participants in this enormous
fraud. They grow more desperate and bold by the day. The lies, misinformation
and propaganda being spewed on a daily basis become more outrageous and audacious.
They are using the Big Lie method on a grand scale. They frantically need to
lure the muppets into the stock market and the housing market to keep the game
going a little longer. You can sense we are reaching a tipping point. The
system they have created is mathematically unsustainable. Therefore, it will
not be sustained.
Opinion: Congress,
president have insatiable need to spend STLtoday.com { Yes!
This is why, along with the pervasive corruption and defacto bankruptcy of the
nation, term limits across the board are necessary, and without exceptions.
After all, in the immortal (campaign slogan) words of dick (nixon), ‘experience counts’! Indeed it does! For good or
ill, and nobody can deny the nation’s very ill. Term limits would eliminate the
perceived and in fact need to refrain from enforcing laws against huge
fraudsters/campaign bribers/contributors. Moreover,’pork’ would give way to
leaner cuts/spending more rationally based. By every rational criterion,
congress will have to work for their pay consistent with their promises; and,
not get to comfortable just ‘being there’ and all that that unfortunately
entails. I’ve seen the lack of
resolve/courage/principle/competence first-hand: http://www.albertpeia.com/112208opocoan/ricosummarytoFBIunderpenaltyofperjury.pdf
http://www.albertpeia.com/112208opocoan/PeiavCoanetals.htm
http://albertpeia.com/fbimartinezcongallard.htm }
It’s Not a “Fiscal Cliff” … It’s the Descent Into
Lawlessness
Posted
by: George Washington
It’s Not a Tax or Spending Problem … It’s a Devolution
Into Lawlessness
http://albertpeia.com/americasdescentintolawlessness.htm
Post-Hyperinflationary
Zimbabwe Welcomes The Holidays With 80% Unemployment, Empty ATMs And Paralyzed
Transport { Just another
typical nigger! Speaking of niggers, if wobama is given the opportunity as he
has thus far, he’ll tread the same path as fellow nigger mugabe. } …
Zimbabweans are facing bleak holidays this year amid rising poverty, food and
cash shortages and political uncertainty, with some describing it as the worst
since the formation of the coalition government in the southern African
nation.... Banks have closed, ATMs have run out of cash and transport services
have been paralyzed." It gets worse: "Zimbabwe's unemployment is
pegged at around 80 percent with many people in Harare, the capital, eking out
a living by selling vegetables and fruits on street corners." And all of
this is after the massive economic imbalances in Zimbabwe's economy should have
been "fixed" (or so conventional economic theory would have one
believe) courtesy of hyperinflation, which left any savers in tatters,
destroyed the value of the old currency, benefited solely debtors but
also allowed a fresh start to a government, which could only remain in power
due to a violent power grab by the democratically elected-turned-dictator
Robert Mugabe.
U.S. Government Claims – Just Like the Nazis – that the
Truth Is Too Complicated and Dangerous to Disclose to the Public
by: George Washington http://albertpeia.com/usnaziapproach.htm
http://albertpeia.com/americagone.htm
Bill Gross Gets It { Gets what? Why is this surprising? With $4 trillion gone
missing (still) at the ny fed, americans should not trust the ny fed. Germany’s
move is totally rational. How can anyone trust fraudulent, thieving americans
with their money or gold, particularly in the fraud capital of the world, new
york city Michael Savage: Don't trust feds on flu shot...{
Or anything else, for that matter. Indeed, from my direct experience, the
actions/inaction of the feds are geared toward making one reliant/dependent
upon them (ie., food stamps, faux disability, unemployment comp extensions,
‘protection’ from rampant, blatant crime or not, etc., despite america’s defacto bankruptcy and the
unaffordability of same), despite their unequivocal incompetence and venality.
In fact, stepping back, I have seen first hand those siding with/benefiting
from (and the encouraging of more crime), ie., RICO defendants et als, actually
rewarded by the pervasively corrupt/defacto bankrupt american system (ie.,
trumps, alito, fed slugees, etc., essentially a combination of and tantamount
to what is essentially hush money, bribes, etc.). Pervasively corrupt, defacto
bankrupt america is a failed meaningfully lawless nation of marauders/thieves
that no longer even remotely resembles what it purports to be and arguably once
was. Replaying Chris Christie's Epic Anti-Boehner Meltdown
ZH {
The bigger, fatter, more rotund question everyone’s asking is, will they ever
be able to put humpty dumpty back together again? The newyork/jersey/conn tristate
national drains (huge wall street frauds, organized crime, and all etc.) feel
slighted; yet, how can you miss him? I’ve been waiting far longer for
resolution to the corrupted process regarding funds due and owing to me from
primarily the corrupt tristate region, the beltway’s no.virginia, and banana
republic extraordinaire (the entire nation’s become one, but caleefornia takes
the cake) california. http://www.albertpeia.com/112208opocoan/ricosummarytoFBIunderpenaltyofperjury.pdf
http://www.albertpeia.com/112208opocoan/PeiavCoanetals.htm
http://albertpeia.com/fbimartinezcongallard.htm Armed Robberies Spike Following Game... { Indeed!
A LaPierre: ‘bad guys (criminals) with guns can only be stopped by good
guys with guns’. Moreover, I would add that criminals will always have (and
have access to getting) guns. To strip the good, the innocents of their like
defense against same is insanity. I hearken back to and reiterate the (famed
NRA truism and) reality that it’s ‘people that kill people’ and the numerous
examples he gave of armed defense being the only real, true protection for
those in need, as ie., children, etc., of protection from the nefarious
elements of our increasingly less than civilized society. Let me also add from
direct experience, if you’re relying upon, ie., the feds and (corrupted)
process, to protect and save your property, life, liberty and happiness
consistent with rules of law and civilized behavior … then, you’re
finished/done/dead! http://www.albertpeia.com/112208opocoan/ricosummarytoFBIunderpenaltyofperjury.pdf
http://www.albertpeia.com/112208opocoan/PeiavCoanetals.htm
http://albertpeia.com/fbimartinezcongallard.htm
CONGRESSMAN WARNS OBAMA: IMPEACH YOU [ http://albertpeia.com/wasntbornintheusa.htm http://albertpeia.com/obp.jpg http://albertpeia.com/impeachobama.htm ]
White House readies 19 executive orders on guns... }
http://albertpeia.com/americagone.htm
Government Dependents Outnumber Those With Private Sector
Jobs In 11 U.S. States
http://albertpeia.com/moretakersthanmakers.htm
55 Reasons Why California Is The Worst State (Only New
Jersey is Worse) In America
http://albertpeia.com/55reasonscaliforniaworststateafterjersey.htm
{
With jersey, it’s necessary to look under the hood(s)! }
20 Outrageous Examples That
Show How Political Correctness Is Taking Over America
http://albertpeia.com/20outrageousexamplesofpoliticalcorrectness.htm
"Trenton Makes, The Mayor Takes" Mack Indicted
On Corruption Charges
Just a few months back we noted
the FBI's arrest of Tony Mack, the Mayor of New Jersey's salubrious capital
Trenton. Today, via AP, the mayor and his brother have been indicted on eight
counts of extortion, bribery, and mail and wire fraud. The Mayor has continued
in his position - even since the September arrest - but the federal
indictment relates to an alleged scheme to accept $119,000 in bribes in
exchange for his influence in the development of a garage on city-owned land.
Shocked? not so much; but it seems maybe "Trenton Makes, The Mayor
Takes" is more appropriate.
The 11 "Death Spiral" States http://albertpeia.com/deathspiralstates.htm
Submitted by Tyler Durden
on 12/04/2012
Eleven states made Forbes' list of
danger spots for investors including California, New York, Illinois,
and Ohio. They warned (and with the cliff it is even more
critical),
if you have muni bonds in these states - clean up your portfolio; if your
career takes you there - rent, don't buy! Two factors determine their list of
'fiscal hellholes'. The first is whether there are more takers (someone who
draws money from the government) than makers (the gainfully employed). The
second is a state
credit-worthiness score (via Conning) based on large debts,
uncompetitive business climates, weak home prices, and bad trends in
employment. Conning rates North Dakota the safest state to lend money to,
Connecticut the most hazardous. A state qualifies for the Forbes' death spiral
list if its taker/maker ratio exceeds 1.0 and it resides in the bottom half of
Conning’s ranking. See below for the 11 states to avoid...no matter what Bob
Toll, Larry Yun, Bob Pisani, or Alexandra Lebenthal tells you..
Worst-run states
New Jersey
Between
2010 and 2011, New Jersey’s GDP contracted by 0.5% — more than all but three
states. The state’s median household income and poverty rate both ranked third
in the nation. On the other hand, the state’s tax burden on its residents was
second highest in the U.S. in 2010. Residents paid 12.4% of their income in
state and local taxes — higher than any other state except neighboring New
York. The state has budget problems, as well, according to the 24/7 Wall St.
analysis. New Jersey’s debt as a percentage of revenue was 91.6%, the
fifth-highest of all states.
The Fed is Beginning to Remove the Punchbowl… Are You
Ready For What’s Coming?
http://albertpeia.com/fedpunchedout.htm
Do Wall Street Insiders Expect Something Really BIG To
Happen Very Soon? http://albertpeia.com/marketcrashcomin.htm
U.S. stocks close lower on buying fatigue Marketwatch
{ Wow! Buying fatigue! Riiiiight! How ‘bout those paper bubble-market QE fed
air bubble stocks are not worth the paper they’re printed on, beyond the fraud
and computerized manipulation; particularly when factoring macro and micro
economic reality! } , , Tony Bennett:
If Americans Keep Firearms, “Rest of the World Will Really Take Care Of Us” Kurt Nimmo | Compares America upholding
Second Amendment to Nazi Germany. {
Come on! Who takes anthony dominick
benedetto aka tony bennett seriously … his herpes virus has probably migrated
to his brain! Probably a Mussolini fan and in real time at that! } , The European
House of Cards is About to Collapse
http://albertpeia.com/europeanhouseofcards.htm
Who Controls The Money? An Unelected, Unaccountable
Central Bank Of The World Secretly Does
http://albertpeia.com/bankforinternationalsettlementscontrolsthemoney.htm
Shocking Numbers That Show The Media Is Lying To You
About Unemployment In America
http://albertpeia.com/medialyingaboutusunemployment.htm
A MeSSaGe To THe BuNDeSBaNK FRoM BeNDiTo BeN... http://albertpeia.com/germangoldgone.htm
Congressman Boasts Salary Requirements
’I Will NOT Be Silenced by a Congressman! He is the Georgia Representative you
may remember from back in 2010, when he told Admiral Robert Willard he was
worried too many troops stationed on the island of Guam would cause it to
capsize... The actual quote is as follows: “My fear is that the whole island
will become so overly populated that it will tip over and capsize.”… { Just
another dumb, incompetent, glomming
nigger! What a waste of money, time, and resources these incompetent,
corrupt, venal federal slugs are! }
1000x Systemic Leverage: $600
Trillion In Gross Derivatives "Backed" By $600 Billion In Collateral
Prepare to pay the piper Marketwatch
Regards,
Al Peia
http://www.albertpeia.com/todayspage.htm
http://albertpeia.com/todaysbusinesssummarylinks.htm
http://albertpeia.com/fbimartinezcongallard.htm
http://albertpeia.com/stansberrycorruptiondeclineofamerica.htm
http://albertpeia.com/22signsglobalrecessiondepression.htm
What in the World Has Happened to the FBI/DOJ?
http://albertpeia.com/fbinazibikersbustfbinazibikers2.htm
Global ‘credit supernova’ turns
2013 bull to bear Marketwatch
Paul B. Farrell Archives | Email alerts Feb.
9, 2013, 6:02 a.m. EST Global ‘credit supernova’ turns 2013 bull into bear
Commentary: Bill Gross warns about
Fed’s cheap-money schemes
By Paul
B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) —
Bill Gross predicting a “Credit
Supernova.”
Yes, that’s
what the “Bond
King” sees
dead ahead. He knows, his firm has $2 trillion at risk of collapsing into the “Black
Hole”
coming after the Credit Supernova, when the Federal Reserve cheap money finally
explodes in America’s
face, brings down the economy, again.
Gross’s Credit Supernova metaphor is the explosive
headline on his latest Pimco newsletter. So what’s a supernova? Jump over to
the Space.com’s parallel universe where you’ll discover a supernova happens
when a “blindingly bright star bursts into view in a corner of the night sky
... burns like a ... brilliant point of light.”
A supernova is “the
explosion of a star that has reached the end of its life ... Supernovas can
briefly outshine entire galaxies and radiate more energy than our sun will in
its entire lifetime.”
Yes, a supernova is
the “explosion of a star that has reached the end of its life.”
“End of its life?” Is
America’s star economy burning out? Sure sounds like it: Gross is doing more
than just hinting with his Credit Supernova metaphor. He’s predicting the collapse
of the American economy and global financial markets, far worse than the 2008
Wall Street bank credit collapse, worse than the 2000 dot-com crash.
As the folks over at
Business Insider put it: “Investment banks have morphed markets with ‘Ponzi
Finance.’ And time is almost up.”
Fed’s Ponzi scheme: Credit expansion
killing economic growth
Business Insider’s Matthew Boesler summarized Gross’s
rather cryptic metaphor this way: Gross’s newsletter “tackles the relationship
between credit expansion and real growth” where under Bernanke the Fed’s
cheap-money bubble makes our monetary problems get bigger as the Fed keeps
kicking them down the road.
So the Fed’s “Ponzi Finance” must run its printing presses
full blast to pump more and more credit into the economy “just to cover
increasingly burdensome interest payments, with accelerating inflation the end
result.”
The problem is huge: Bernanke’s Ponzi Finance is
self-sabotaging. Endless cheap money upsets the balance between credit
expansion and real economic growth, resulting in diminishing returns: “Each
additional dollar of credit seems to create less and less heat. In the 1980s,
it took four dollars of new credit to generate $1 of real GDP. Over the last
decade, it has taken $10, and since 2006, $20 to produce the same result.” Bad
news.
Yes, Wall Street and central banks worldwide are the
engine driving Bernanke’s Ponzi scheme straight into a Credit Supernova bubble.
Why? Because in the past generation more and more of the Fed’s new credit was
channeled into market speculation, distorting the balance between markets and
the real economy.
“Investment banking, which only a decade ago promoted
small-business development and transition to public markets, now is dominated
by leveraged speculation and the Ponzi Finance.”
Gross warns: As a result, “our credit-based financial
markets and the economy it supports are levered, fragile and increasingly
entropic — it is running out of energy and time. When does money run out of
time? The countdown begins when investable assets pose too much risk for too
little return; when lenders desert credit markets for other alternatives such
as cash or real assets,” a trend that’s already accelerating as more and more
investors wise up to Wall Street’s dangerous Ponzi Finance, anticipating that a
Credit Supernova will soon bring down Bernanke’s totally mismanaged monetary
system, probably in 2013, months before his scheduled retirement.
After Credit Supernova will banks
see the light ... or stay blinded?
Alan Blinder is familiar to Wall Street Journal readers
and investors. The former vice chair of the Federal Reserve just published
“After the Music Stopped: The Financial Crisis, the Response, and the Work
Ahead.” His recent New York Times op-ed piece is a perfect playbook of what’s
coming after Wall Street’s Credit Supernova explodes.
Blinder opens by quoting Hegel: “What experience and
history teaches us is that people and governments have never learned anything
from history.” But then Blinder adds, “actually, I think people do learn. The
problem is that they forget, sometimes amazingly quickly. That seems to be
happening today, even though recovery from the economic debacle of 2008-9 is
far from complete. Evidence of this forgetting is everywhere.”
His list of Wall Street’s mental blocks is all too
familiar. They are blind, in denial. So Blinder “encapsulates what we must
remember about the financial crisis into 10 financial commandments, all of
which were brazenly violated in the years leading up to the crisis.”
Imagine his frustration, like Moses coming down from the
mountain, seeing the people partying, honoring false idols, the golden calf of
profits. Wall Street did the same, forgot in 2000, forgot again in 2008, went
back to the same old tricks.