The Chart That The Fed Fears The Most

Inflation, meh! Growth, bleh! Unemployment, whatever! The terrifying news is that it seems, despite the ongoing 'surge' to new all-time highs in stocks, they are losing the confidence of the "rich". With everything hinging on the 'wealth effect' of moar QE and a levitating US stock market, the fact that Bloomberg's Comfort Index for the most affluent earners just collapsed (and stayed at) seven-month lows - in the face a rip-your-face-off rally in stocks - suggests even the wealthy know when the music is beginning to end...

Janet Yellen Exposed Part 2 - Justifying Speculative Leverage

Last week, Peter Schiff began his epic take-down of the myth of Janet Yellen's forecasting ability. As proof of her wisdom supporters had pointed to speeches she delivered in 2005 and 2006 in which she supposedly issued clear warnings about the dangers then building in the frothy real estate markets.  Without any attempt at reasonable fact checking, these claims have been parroted by the media.. and that is what Schiff so diligently destroyed. However, Schiff notes in this follow-up, there is a key statement she makes (in justifying the 'fundamentals' behind the housing bubble) that relates to credit and speculative leverage that is crucial to understand the way she sees the world and thus - what to expect from her Fed.

Guest Post: The Growing Rift With Saudi Arabia Threatens To Severely Damage The Petrodollar

The number one American export is U.S. dollars.  It is paper currency that is backed up by absolutely nothing, but the rest of the world has been using it to trade with one another and so there is tremendous global demand for our dollars.  The linchpin of this system is the petrodollar.  For decades, if you have wanted to buy oil virtually anywhere in the world you have had to do so with U.S. dollars.  But if one of the biggest oil exporters on the planet, such as Saudi Arabia, decided to start accepting other currencies as payment for oil, the petrodollar monopoly would disintegrate very rapidly.  For years, everyone assumed that nothing like that would happen any time soon, but now Saudi officials are warning of a "major shift" in relations with the United States.  In fact, the Saudis are so upset at the Obama administration that "all options" are reportedly "on the table".

 

Head Of Fortress Recommends Investing In Bitcoin

At first glance, when the CIO of Fortress Investment Group says:

"Put a little money in Bitcoin...Come back in a few years and it’s going to be worth a lot."

One might think, the firm that manages $54.6 billion is advocating the end of the USD as we know it... Or is this more muppetry at work?

While Bernanke May Not Understand Gold, It Seems Gold Certainly Understands Bernanke

"We see upside surprise risks on gold and silver in the years ahead," is how UBS commodity strategy team begins a deep dive into a multi-factor valuation perspective of the precious metals. The key to their expectation, intriguingly, that new regulation will put substantial pressure on banks to deleverage – raising the onus on the Fed to reflate much harder in 2014 than markets are pricing in. In this view UBS commodity team is also more cautious on US macro...

Administration Enforces Radiosilence On Obamacare Enrollment Numbers

During this morning's Congressional hearing on the failure of Obamacare, one of the developer's let slip a little too much truth:

While the self-proclaimed 'most transparent' administration fights off the French and the German over spying 'lies', and gags insurers from publicizing how many people have signed up for Obamacare, it seems the cover-up goes even further with everyone involved silenced (for now).

Guest Post: Buying Stocks On Margin At The Top - They Never Learn

It’s like the movie Groundhog Day. Greed and hubris are the downfall of the mighty. Believing it is different this time is the mistake of the feeble minded. Watching the ensuing carnage will be a laugh riot. Seeing the blubbering of the bubble headed bimbos, pinhead pundits and Wall Street shysters when the inevitable collapse occurs will be worth the price of admission. If you think we're wrong, pony up to the trough, borrow some money and buy Twitter on IPO day. You can’t lose.

When "Offshore Drilling" Takes On A Whole New Meaning

Before Hercules Offshore collapsed into bankruptcy, they (like every other company in the USA it would seem, that faces falling revenues) were desperate to cut costs. Unfortunately for the offshore drillers that worked for the firm, Hercules chose to squeeze out the last drops of expense in a 'different' way...

Trannies On Best Run In 16 Months As Gold Hits 1-Month Highs

Homebuilders have surged to the best performing sector off the debt-ceiling-debacle lows now (up a stunning 8.3%) despite a mixed bag of performance today with Trannies once again (10th of the last 11 days) surging to new all-time highs (as Oil prices slide further south). This is the best 11-day run (+9.9%) for the Dow Transports since June of last year. Treasury yields rose modestly once again (despite SocGen's threat of moar QE next week) but remain 3-6bps lower on the week. Gold and Silver had another solid day (+2.3% and 3.6% respectively on the week). The USD flatlined (-0.5% on the week) with EUR strength continuing (and CAD and AUD weakness continuing). Credit markets continue to disagree with the equity exuberance of the last 5 days...

Guest Post: Obamacare Side Effect – Doctors Abandon The Health Care Insurance System Altogether

Imagine for a moment what might happen if the government were to get out of healthcare altogether and there would be free competition between all health care service providers. What would happen to prices in that case? It is probably fair to assume that they would come down precipitously even from the low prices free market doctors are already able to obtain for their patients nowadays. It is actually a good bet that the onerous red tape and the likely explosion in costs due to Obamacare will accelerate the move toward a free market in health care – unless the government explicitly forbids it, that is (unfortunately we cannot rule out completely that such tyrannical steps will eventually be taken – the government generally doesn't like it when its 'help' is refused). If so, the Obamacare Act could turn out to become a win-win by mistake so to speak, as more and more people decide to opt out of the system.

Did The Fed Just Begin To "Pop" The Credit Bubble?

When Jeremy Stein warned in February of "froth" in the credit markets, it was much discussed but little action'ed. However, today we start to see some actions:

  • *FED SAID TO ISSUE WARNING ON LAX LEVERAGED LOAN UNDERWRITING

With cov-lite issuance at all-time record highs (as we explained here most recently and Moody's tried to ignore), Stein's bubble is even bigger and whether or not the Fed 'tapers' it is clear now by this signal that their concerns over bubbles are growing day by day.

It's 315 PM: Have You BTFATH Today?

With the Dow Transports leading the way (now up for the 10th of the last 11 days and 9.7% off its debt-ceiling-debacle lows), US equity markets are engorged on the euphoria of this "can't lose" scenario that offers free lunches (and ponies) for everyone. On the heels of SocGen's call (eerily reminiscent of Schiff's and Faber's prophecy of rising QE no matter what), it's 315pm, have you greatly rotated your money on the sidelines to BTFATH yet?

Here We Go: SocGen Warns There Is "Possibility" Fed May Increase QE Next Week

And so, one by one, the crazy pills theories start rolling out. Yesterday, as we first pointed out, Deutsche Bank made waves when it became the first "serious" organization to suggest that the Fed has now missed its tapering window, and will plough on thorough until the next downturn without ever lowering the pace of Flow (of course the reflexive paradox that the economy would be in an out of control depression without QE in the first place somehow does not figure in that calculation). And while this has not been a novel idea (we first predicted that once perpetual QE starts it will never taper, long before QE 3, aka QEternity was even publicly announced last summer)  today, all the penguin "pundit" copycats have jumped aboard this theory. Well, not all. SocGen has decided to make waves of its own with an even crazier pills idea: instead of no taper... ever... the Fed, that glorious redistributor of wealth from the middle class to the 1%, while happy to adhere to that old saying: "a funded welfare program a day, keeps the guillotines away" will not only not announce a Taper in next week's FOMC meeting but will in fact hike QE!

Guest Post: Economic Policy And The Price Of Gold

Economics isn't a science. It is a mistake to think it would be so. Science does not have schools. Only philosophies have schools. The difference between a science and a philosophy is the difference between seeking truth while honestly admitting you don't know it and declaring that truth is something you define. The distinction between science and philosophy with respect to economics is important because economists have an annoying ability to set policy - policy that affects the quality of your lives.

Another Naval Base Shooting Incident; Two People Shot, Shooter In Custody

There are reports of at least two people who have been shot in Millington. Emergency crews are responding to 5650 Attu which is listed as the Army National Guard recruiting center. We are told the shooter is in custody. A shelter in place order has been given on the base. Multiple ambulances are on the scene.

NQ Mobile Cut In Half In Minutes Following Muddy Waters "Strong Sell" Report

While the recent track record for Muddy Waters has been uninspiring, their "strong sell" report on NQ Mobile this morning has garnered attention since it has halved the stock's market cap in minutes. NQ is now down 50% on the day having been halted numerous times. Still, if you feel like catching this knife, a full 5 out of 5 analysts that cover the stock have 'buy' recommendations with Topeka's Fred Ziegel topping the list at $33.50 (a 200% rise from current levels). Full report below...

Biderman Blasts Barack Obama's Biggest Of The Big Lies

"Inherent in the nature of government itself is the fact that it is incapable of effectively providing services," Biderman blasts, noting that "by 'effective', he means dollars and hours." The TrimTabs CEO is breathless in his beration of "the biggest of the big lies," that continues to be believed by most of America ("given their re-election of Barack Obama" he adds), that government can effectively provide services. The reality is "governments are not capable of getting anything done cost-effectively," and Biderman, focused on Obamacare as a recent example, concludes "its all FUBAR."

Guest Post: Is RV Nation at Risk?

A reduction in retirees' disposable income coupled with a global rise in the price of oil could crimp the assumptions underpinning RV Nation.