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This Is For You Steve Liesman... Welcome To Economics

The key is to understand why real median household incomes continue to decline and then how to correct it.  It all comes back to financial policies that incentivize investors to avoid economy-boosting investments and toward financial investments that have no economic benefit.  The result is a narrowing of income distribution exasperating the down spiral, while inflating wealth to the already wealthy.  As long as these policies remain intact the American quality of life will continue to spiral downward while the wealth at the top continues to accelerate until one day when the top pops off and all that wealth goes abroad.  And that Mr. Liesman is what we call economics.



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It Has Never Been More Expensive For 'Average Joe' To Buy Stocks

When all is said and done, the swing factor in the decision to work (or not work) is the income it generates (and lifestyle it supports). So we found it intriguing that, as the following chart shows, the number of hours or work required for the average American to buy the S&P 500 has never been higher...



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Kazakhstan Prepares For $40 Oil, Gary Schilling Says "Oil Going To $20"

"People should not be worried," explained Kazakhstan President Nursultan Nazarbayev in a TV address over the weekend, "we have a plan in place if oil prices are $40 per barrel." Kazakhstan, the second largest ex-Soviet oil producer after Russia, explains "there are reserves which could support people, preventing living conditions from worsening." However, if A. Gary Schilling's reality check of $20 oil being possible comes to fruition, as he explains, what matters are marginal costs - the expense of retrieving oil once the holes have been drilled and pipelines laid. That number is more like $10 to $20 a barrel in the Persian Gulf... We wonder who has a plan for that?



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Don't Tell Germany Draghi Is About To Monetize 90% Of Bund Issuance

The next time anyone is stupid enough to mention monetary policy "normalization", just show them this.



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Artist's Impression Of Christmas At The Capitol

No 'Surprise"...



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NatGas Crashes Most In 10 Months As Polar Vortex Arrival Delayed

Natural Gas prices are down over 11.5% in the last 2 days, falling to their lowest price since January 2013, as a familiar tale of excess production in the face of ebbing demand looms large. As WSJ reports, BNP Paribas' Teri Viswanath notes "the delayed return of cold weather has simply curbed all buying interest," and this was exaggerated by technical selling as the market broke previous support around 3.50. Ironically, given its detrimental impact on GDP, Macquarie points out, "it is increasingly apparent to us that weather will need to bail the market out again this winter - otherwise prices could see material downside during the spring and summer months."



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Demographics - Why The Great Recession Started (And Won't End Anytime Soon)

WWII is still reshaping our economic reality. The subsequent baby booms in the US and globally in Japan, Europe, and so many more locations which were affected by the war created a “pig in the python” moment. This unusually large wave of population growth from ’45-’55 was “pent up demand” from the war. But society and its leaders assumed this baby boom anomaly to be the new reality.  The “pig is passing” from the American and global workforce into retirement and now the wreckage and folly of such basic misnomers has come home to roost…and will get far worse.



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"Costs": North Korean's Internet Is Under Attack

Coincidence? Maybe not. Just hours after President Obama de-escalated himself from war to vandalism on the alleged North korea hacking of Sony, DYN Research reports North Korea's internet connectivity with the rest of the world has been spotty all day. As North Korea Tech blogs reports, North Korea’s Internet connection does suffer from periodic outages. but “I haven’t seen such a steady beat of routing instability and outages in KP before,” said DYN's Doug Madory.



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2 Year Treasury Auction Prices At Highest Yield Since March 2011

If the recent batch of longer-dated Treasury auctions were a barnburner with unprecedented demand for "high quality" collateral with duration longer than 3 years, then today's just concluded 2 Year issuance was somewhat more tame: moments ago the Treasury sold $27 billion in 2 year paper at a yield of .703%, 1 basis point inside the .713% When Issued. Still, this was the highest yield on 2 Year paper since March 2011.



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2014: The Year Of 'Proof-less' Accusations

"if anything defines 2014 for me, it’s the advent of incessant claims for which no proof – apparently – needs to be provided. Everything related to Ukraine over the past year carries that trait; the economy too, and now Sony/North Korea. Never any proof, you just have to believe what your government says."



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Bloomberg's Commodity Index Drops To Lowest Since 2009: What Does It Mean?

Moments ago we learned that for all talk of a commodity "bottom", the "energetic" dead cat has resumed its inverse bounce. To wit:

  • BLOOMBERG COMMODITY INDEX EXTENDS DROP TO LOWEST SINCE 2009

So what does that mean? The answer: it all depends on whose narrative one chooses to believe and/or which narrative the US Ministry of truth is promoting at any given day in order to boost confidence.



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"Isolated"? China Officially Offers Help To "Irreplaceable Strategic Partner" Russia

Just a week ago we detailed how China was preparing to bailout Russia's liquidity crisis via the 150 billion yuan swap line the two nations agreed in October. Today, as Bloomberg reports, we got confirmation as two Chinese ministers offered support for Russia. China will provide help if needed and is confident Russia can overcome its economic difficulties, Foreign Minister Wang Yi was cited as saying; and Commerce Minister Gao Hucheng said expanding a currency swap between the two nations and making increased use of yuan for bilateral trade would have the greatest impact in aiding Russia. The Global Times (mouthpiece for the Comunist Party) wrote in an editorial this weekend, "Russia is an irreplaceable strategic partner on the international stage." Isolated?



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Uncle Sam Does The Impossible: Loses $105 Million/Year Coining Money!

Kyle Bass' "nickel" trade is alive and well. A new report from the U.S. Mint reveals that it’s still not cost-effective to make pennies and nickels - Americans lost $105 million in 2013 due to their production.



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