Hugh Hendry: "I Believe Central Bankers Are Terrified"

"My premise hasn’t really changed since I published my paper explaining why I had become more constructive towards risk assets this time last year. That is to say, the structural deficiency of global demand continues to radicalise the central banking community. I believe they are terrified: the system is so leveraged and vulnerable to potentially systemic price reversals that the monetary authorities find themselves beholden to long only investors and obliged to support asset prices. However, I clearly confused everyone with my choice of language. What I should have said is that investors are perhaps misconstruing rising equity prices as a traditional bull market spurred on by revenue and earnings growth, and becoming fearful of a reversal, when instead the persistent upwards drift in stock markets is more a reflection of the steady erosion of the soundness of the global monetary system and therefore the rise in stock prices is something that is likely to prevail for some time."

About That Japanese Downgrade

While we no longer live in a world in which debt matters - because central banks will just monetize it in their ongoing and no longer covert effort to reflate the final bubble - and thus debt ratings are an irrelevant anachronism from a bygone era, we can't help but recall a certain statement by S&P from September of last year, in which the rating agency reminded everyone just why Japan has to proceed with both its first sales tax hike from 5% to 8%, (which, together with weather, has now been blamed on Japan's shocking quadruple-dip recession), but also the follow up from 8% to 10%, which as we now know, has been delayed indefinitely, and which was supposed to prefund welfare spending for Japan's demographic disaster which with every passing day gets closer and closer.

How The IRS & Homeland Security Are Expanding Undercover Work

“There is a danger to democracy,” a Supreme Court spokesman said, “in having police infiltrate protests when there isn’t a reasonable basis to suspect criminality.” "It is impossible to tell how effective the government’s operations are or evaluate whether the benefits outweigh the costs, since little information about them is publicly disclosed." Just another day in the American oligarchy.

Kissinger Warns "We Need A New World Order"; Ukraine Should Forget Crimea & NATO

Former U.S. Secretary of State Henry Kissinger says in an interview with Der Spiegel that there currently is an urgent need for a new world order, but its coming into being will be long and complicated. "There is the Chinese view, the Islamic view, the Western view and, to some extent, the Russian view. And they really are not always compatible," he warns, adding that introducing anti-Russian sanctions was a mistake. He added that Ukraine should not hope to become a member of NATO in the foreseeable future, as the alliance will never vote unanimously for the accession of Ukraine.

Japan’s Last Stand - Portent Of Keynesian Collapse

"Just when did Central Bankers become world media superstars and when do we get to put them back in their box?" Strutting the world stage, flitting from press conference to rubber chicken dinner, dispensing what passes for wisdom and prognosis as if the court astrologers have toppled the mighty Nebuchadnezzar and now rule in his place. Whatever happened to discreetly overseeing the balance of payments and facelessly staunching the worst panics only when absolutely necessary? This is clearly Japan’s last stand and there is no real exit strategy except to explicitly default on its debt. But an economic collapse and a sovereign debt default on the world’s third largest economy will contain massive economic ramifications on a global scale.

Greek Bonds Tumble As Bailout Talks Stall On $3bn Troika 'Savings' Demands

Can beggars be choosers again? Judging by the drop in Greek bond prices, the answer is no. As Bloomberg reports, Greek PM Samaras is pushing back against Troika demands for up to $3 billion more savings (i.e. cuts to spending) in 2015. "It's crucial that Greek authorities work with the troika to complete the current review,” but with the government in Athens refusing to concede there is a funding hole, the standoff means Greece may miss a Dec. 8 deadline for agreement on the steps required to unlock the 'aid' tranche.

The Biggest Beneficiary Of Mario Draghi's ABS-Purchasing Plan Has Been Revealed

One bank is already set to benefit from the ABS program no matter what its actual outcome and impact on the European economy: the same bank that spawned none other than ECB's head... Mario Draghi. According to Bloomberg, Goldman Sachs Group says it’s adding staff to its European asset-backed securities business as the bank prepares for a resurgence in the $305 billion market that shrank more than 40 percent over the past four years.

Jeremy Grantham's Bubble Watch Update: "S&P To 2250 Before It Crashes"

"My personal fond hope and expectation is still for a market that runs deep into bubble territory (which starts, as mentioned earlier, at 2250 on the S&P 500 on our data) before crashing as it always does. Hopefully by then, but depending on what the rest of the world’s equities do, our holdings of global equities will be down to 20% or less. Usually the bubble excitement – which seems inevitably to be led by U.S. markets – starts about now, entering the sweet spot of the Presidential Cycle’s year three, but occasionally, as you have probably discovered the hard way already, history can be a snare and not a help." - Jeremy Grantham

Don't Show The Exuberant Homebuilders These 2 Charts

NAHB homebuilder sentiment rose to 58 in November, from 54 in Oct, beating expectations but remains below the 59 cycle highs in September. Since those highs, Prospective Buyer Traffic is down the most but remains near cycle highs. The Northeast saw a huge spike in Prospective Buyer Traffic (from 39 to 51) and The West bounced back from its plunge in October. So if everything's so awesome, what's wrong with these two charts...