• Gold Standard I...
    07/24/2014 - 01:47
    There is confusion over what legal tender law does. It doesn't force merchants to accept dollars under threat of imprisonment. It attacks lender, by granting debtors a right to repay in dollars.

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China Seals Off Yumen City After Outbreak Of Bubonic Plague

With Colorado suffering from pneumonic plague, and the dreadfully sad report of Sierra Leone's chief Ebola doctor contracting the virus, it appears China is taking no chances. As Yahoo reports, Chinese officials have blocked off parts of Yumen, a city in northwest China, preventing about 30,000 of the city's people from leaving after one resident died from bubonic plague. About 150 people who had contact with the plague victim have been placed under quarantine but US experts are perplexed at the response, "there's something here that we don't know, because this seems a very expansive response to just one case."



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The Decline Of Influence

From Alexander the Great to British rule, history, if it has a lesson, teaches us that no group of men can conquer the world. It’s simply too big, too vast, and too complex. Humanity is far too restless to sit and take orders from dictators halfway across the globe. The mindset that wishes one country to have an iron-grip on world affairs is horribly naïve. Empires are not free. Washington’s credit card can’t be charged to infinity. The need for prudence is growing larger by the day. For the sake of average Americans, and peaceful citizens across the world, let’s hope it gets here sooner than later.



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Chart Of The Day: For Caterpillar The "Great Recovery" Is Just As Bad As The Great Financial Crisis

If we call that first period of 19 consecutive months of CAT sales decline the "Great Financial Crisis", we are confused: is the proper name of this identical 19-month period of declines beginning in December 2012 the Great... "Recovery?"



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IRA Contributions Hit Record High As Unpatriotic Americans "Save More, Pay Off Debt, Spend Less"

In what could be the most unpatriotic report ever, Fidelity reports that average IRA contributions for tax year 2013 reached $4,150 - an all-time high. That's great news, right? Not if you ask Janet Yellen as Fidelity notes younger investors, those in their 20s, 30s and 40s, are adopting the strongest savings behaviors as Americans are "saving more, paying off debt, and spending less." This is not acceptable in the new normal, don't they know "debt is the bridge between hard work and play?"



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Where Facebook's Second Quarter User Growth And Revenue Generation Was In Charts

Moments ago Facebook, unlike AT&T which missed on revenue and EPS, beat both the top line expectations of $2.81 billion print reporting $2.91 billion on EPS of $0.42, higher than the $0.32 expected.  Here is the full breakdown.



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No Data, Mo War, No Worries: S&P Hits New Record High

On a day with no macro data and more warmongering, it only makes sense that stocks should continue to levitate. Aside from The Dow (troubled by weakness in Boeing dragging 20 points off the index), US equity markets rose with the S&P 500 breaking to new all-time record highs just shy of 1990 (2000 tomorrow?) Treasuries were very quiet, trading in a 2bps range and ending basically unch. Gold and silver limped lower (but were also quiet) as the USD pushed modestly higher (with AUD strength on the inflation print overnight the big story). Oil prices recovered yesterday's losses closing back above $103. Biotechs were a notable mover (on M&A hopes) as they retraced all Yellen's warning losses. This is the 3rd day in a row that "most shorted" stocks were snap-squeezed higher at the open.



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5 Reasons Why The Market Won't Crash Or Will

One of the biggest mistakes that investors make is falling prey to cognitive biases that obfuscate rising investment risks. Here are 5 counter-points to the main memes in the market currently...



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High-Yield Bonds "Extremely Overvalued" For Longest Period Ever

The high-yield bond market has been "extremely overvalued" for a record nine consecutive months, according to Martin Fridson, a money manager at Lehmann, Livian, Fridson Advisors LLC. As Bloomberg Brief's Matt Robinson notes, the streak breaks the previous record of eight months set in October 2006 to May 2007. As Fridson notes, "overvaluation (whether extreme or non-extreme) has put together an unbroken streak of 25 months, nearly double the previous record." It appears Yellen was right about something as Frisdon warns "the pressure to find yield is causing investors to rationalize investing in paper that is subject to major price risk... this has to be a concern to those who believe, as I do, that the market distortions of 2007 aggravated the subsequent dislocations experienced in 2008."



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The Rot Within, Part II: Inflation Is Not "Growth"

Just as the Federal Reserve cannot directly force you to stick the needle of monetary heroin (debt) into your arm, it also can't force employers to pay employees more. The ultimate hubris of the Keynesian Cargo Cult (which includes the global economy's central banks) is the naive notion that they can manipulate an entire system with a few levers such that the desired outcome--and only the desired outcome--is the output. The idea that you can change one input in an interconnected system of systems and only affect the one output you want is not just naive and simplistic: it requires a level of blindness and incompetence that is off the charts.



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Confused Hamas Demands Truce But Only On Its Terms

Judging by the total lack of reaction across any markets, traders are just as confused by the headlines blurting out of Hamas leader Mashaal:

  • *SENIOR HAMAS OFFICIAL SAYS TRUCE TO BE ANNOUNCED SOON (ok great)
  • *MASHAAL SAYS 'WE ARE FOR A TRUCE BUT WE ARE PATIENT' (wait... you just said)
  • *MASHAAL SAYS NOBODY CAN DISARM PALESTINIAN RESISTANCE (hhmm)
  • *MASHAAL SAYS HAMAS SEES 'NO REAL BREAKTHROUGH' IN TRUCE SEARCH (wait what?)

So there may be a truce, there may not be... Mashall adds "we are ready to accept a humanitarian truce" but any truce "must" mean a lifting of the embargo on Gaza; oh and "nobody can disarm the Palestinian resistance... does not sound too hopeful.



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GM Announces Another 718K Recalls, Bringing 2014 Total To Nearly 30 Million

It had been almost a month without a GM recall announcement of some sort. So, as many knew was long overdue three weeks into the second half, GM just did what it truly excels in (aside from being bailed out by taxpayers at a massive loss): admit that it had skimped on the quality control and safety check of  another 717,950 cars, all of which were new models bult 2010 and later including Camaro, Equinox, Caprice, Regal, Malibu and so on. In other words, all cars built after GM emerged from bankruptcy. This bring the total number of recalls year to date to a ludicrous 29.2 million around the globe, or well over three time the total number of cars sold in the past three years.



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Obama Prepared To Unleash More Sanctions On Russia

With almost metronomic frequency, and perhaps related to Putin's emergency meeting of the State Duma, The Wall Street Journal is reporting that the Obama administration is prepared to expand a new set of economic sanctions against Russia if the country doesn't take steps to end Ukraine's conflict with pro-Russia separatist fighters. No details were exposed by the senior administration official, but as WSJ notes, current sanctions don't prevent U.S. entities from doing business with the Russian firms or freeze their assets. We await the new boomerang.



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Argentina Debt "Mediation" Goes Surreal As Neither Side Turns Up For Meeting, Black-Market Peso Tumbles

Despite Judge Griesa's demands that the holdouts and the Argentinian government hold "continuous" mediation until the debt conflict is resolved "or fear the worst," this morning's headlines are somewhat surreal:

*NEITHER SIDE IN ARGENTINE DEBT CONFLICT HAS ARRIVED TO MEETING

Argentina decided not to send the economy minister (just a 'delegation') as BTG analysts warn that "all the music from the Argentine government indicates default," and judging by the tumble in Argentina's black-market Peso (Dolar Blue) the last few days, that risk is starting to rise.



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Biotech Investors "Fight The Fed"

What does Janet Yellen know about Biotech stocks (or anything really)? Remember, "don't fight the Fed" ... unless they say 'Sell'.



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FX-Rigging Probe Settlement Accelerates With UK Regulator

As the proof piles up, and retired/suspended traders increase, Bloomberg reports that talks to reach the first settlement in the FX-rigging probe are accelerating, with Britain’s markets regulator preparing to reach a deal with a group of banks this year, people with knowledge of the talks said.

*FCA SAID TO BE SEEKING FAST-TRACK SETTLEMENT WITH NARROW SCOPE
*FCA TALKS SAID TO INCLUDE BARCLAYS, CITIGROUP, JPMORGAN, UBS, RBS, AND HSBC

The question remains, will guilt be admitted... or is the pending fine just another cost of doing business in the trillion dollar market manipulation miasma in which we find ourselves.



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