Archive - May 14, 2011

williambanzai7's picture

DoLLaR FReaK ShoW (PLuS SPeCiAL RePORT: IMF DiSoRDeR)





“When you're born you get a ticket to the freak show. When you're born in America, you get a front row seat.”--George Carlin

 

Leo Kolivakis's picture

Lunch With A Bear





Earlier this week, I had lunch with a friend of mine who is still bearish...

 

Tyler Durden's picture

Update: DSK Now In Police Custody; IMF Head Dragged Off A Plane, Arrested Following Hotel Maid Allegations Of Forced Head





If there was any threat that the IMF would launch an SDR alternative to the USD, it is all over now. According to the NYPost, IMF head Dominique Strauss-Khan (no Bob Pisani, it is not a she) was just arrested on board the first class cabin (thank you taxpayers) of a New York-Paris flight as it was about to take off. And here is where the story gets surreal: "Around noon today, a maid at the hotel knocked on the door of Strauss-Khan’s room. After letting the maid in, Strauss-Khan allegedly threw the maid on the room’s bed and forced her to perform oral sex on him, said police sources. Strauss-Khan let the maid leave — and soon afterward, headed off to Kennedy Airport for his flight to Paris." Of course this will not be the first sexual misconduct for the head of the world's global pseudo bail out organization: as a reminder back in 2008 the IMF hired a law firm to investigate whether its chief had an improper relationship with a female employee, Piroska Nagy. Back then he got off. This time he won't (even though he did... in a way), and it appears that the IMF is about to lose its head, meaning the fate of literally unlimited bailout funding is now up in the air. Also, it appears that being head of major bureaucracy does not automatically mean getting head on an ad hoc, and involuntary basis. Lastly, we are stunned it was not Herman Von Rompuy or G-Pap on the receiving end.

Update: Strauss Khan to be taken to Police Service Area 5 at 221 East 123rd Street

 

Tyler Durden's picture

Tim Geithner Responds To Druckenmiller With More Fearmongering And "Assured Destruction"





Not even 24 hours after Stanley Druckenmiller said to ignore all threats by the kleptocratic kartel [sic] of a world collapse should the debt ceiling not be hiked, as if on cue the tax-troubled treasury secretary has released another letter, this time to Michael Bennet, D-Colo, in which he rehashes all the usual threats that Hank Paulson pulled out of his sleeve when he presented his 3 page term sheet demanding congress give him unlimited powers to do anything Goldman, er, he saw fit to preserve the banker status quo. Nothing new in the letter, just more of the same: “A default would inflict catastrophic far-reaching damage on our nation’s economy, significantly reducing growth and increasing unemployment...Even a short-term default could cause irrevocable damage to the economy. A default on Treasury debt could lead to concerns about the solvency of the investment and financial institutions that hold Treasury securities in their portfolios, which could cause a run on money market mutual funds and the broader financial system. A default would call into question the status of Treasury securities as a cornerstone of the financial system, potentially squandering this unique role and the economic benefits that come with it." It is sad that the Treasury has succumbed to another bout of fearmongering because as Zero Hedge has been claiming since late 2009, and as Gross and Druckenmiller have recently reaffirmed, the only threat to the "confidence" of the US is if (or more correctly "when") the legislative bodies of the US succumb to this latest round of completely flawed, irresponsible and wrong mutual assured destruction rhetoric, and once again hike the debt target, this time to a total that is about 115% of US GDP.

 

Tyler Durden's picture

The Complete Overview Of The Setting Economy Of The Land Of The Setting Sun





Increasingly we have come to believe that the real marginal economy over the next several quarters will be neither that of the contracting US, nor that of the rapidly tightening, yet still very much inflationary China, but the (arguably) third largest one: that of Japan. Over the past month we have suggested that in addition to already latent deflationary tendencies, the recent post-earthquake collapse will require a dramatic, and very political intervention in BOJ monetary policies (here and here), in order to avoid a global contraction. Yet as David Koo proposed yesterday, the (infra)structural changes will demand an overhaul so profound that the contraction will be not only severe but likely very extended due to spillover effects into energy commodity demand, thus creating a non-virtuous feedback loop. So for those who are still new to the Japan story, below we present an extended presentation compiled by The Tail Chaser blog which compiles the relevant bits and pieces on the Japanese economy to scare even the most optimistic fan of the land of the setting sun (which certainly is not Dylan Grice who recently suggested that a very possible outcome is a Weimar repeat as the BOJ takes the von Havenstein route to excess debt resolution).

 

asiablues's picture

Slow Relief at the Pump As Gasoline Decouples From Crude Oil





With the record retreat in crude oil prices, many consumers are expecting big retail price drops by Memorial Day weekend. But this time around, the decoupling of gasoline and crude oil would mean gasoline prices may be harder to drop.

 

Bruce Krasting's picture

Blame the Fed for commodity speculation





Don't blame the specs. Look what's drawing the specs to the fire.

 

Tyler Durden's picture

Druckenmiller Calls Out The Treasury Ponzi Scheme: "It's Not A Free Market, It's Not A Clean Market", Identifies The Real Bond Threat





We hadn't heard much from legendary investor Stanley Druckenmiller since last August when he decided to shut down his Duquesne Capital hedge fund. Until today. In a must read interview, the man who took on the Bank of England in 1992 and won, says that he join the camp of Bill Gross et al, making it all too clear that all the recent fearmongering about the lack of a debt ceiling hike by the likes of Tim Geithner, Ben Bernanke and, of course, all of Wall Street, is misplaced, and that the real threat to the country is the continuation of the current profligate pathway of endless spending. From the WSJ: "Mr. Druckenmiller had already recognized that the government had
embarked on a long-term march to financial ruin. So he publicly opposed
the hysterical warnings from financial eminences, similar to those we
hear today. He recalls that then-Secretary of the Treasury Robert Rubin
warned that if the political stand-off forced the government to delay a
debt payment, the Treasury bond market would be impaired for 20 years. "Excuse me? Russia had a real
default and two or three years later they had all-time low interest
rates,
" says Mr. Druckenmiller. In the future, he says, "People aren't
going to wonder whether 20 years ago we delayed an interest payment for
six days. They're going to wonder whether we got our house in order." Which begs the question: if interest rates are so low today, is the market not appreciating the current path of "financial ruin"? And here is where Druckenmiller joins the Grosses and the Granthams of the world. Asked if the future is not so bad judging by today's low bond rates he says, "Complete nonsense. It's not a free market. It's not a clean market." The Federal Reserve is doing much of the buying of Treasury bonds lately through its "quantitative easing" (QE) program, he points out. "The market isn't saying anything about the future. It's saying there's a phony buyer of $19 billion of Treasurys a week." Of course, there is another name for this type of arrangement and so far only Bill Gross has used it: Ponzi Scheme.

 

Tyler Durden's picture

Weekly Chartology And The Amazing Levitating Corporate Profit Margins





The core topic of this week's chartology (in addition to all the charts that Goldman sees it fit to print), is the amazing never shrinking corporate margin, which continues to hit new all time highs, despite a "tepid economy" and surging input costs. As Goldman's David Kostin points out, it primarily has to do with the ability of companies to gradually pass on costs to consumer, indicating once again that the primary variable in this economy has nothing to do with the jobs picture, or even wage inflation (a key variable that many have said is necessary for inflation to return), but with the ongoing green light by the administration and big banks to allow a substantial number of Americans to live mortgage free (as disclosed previously up to 900 days in the states of New York and New Jersey, a number which actually is 7 years if one considers the backlog in the judicial system, as we will shortly demonstrate), thus removing the primary use of funds for the American household, and allowing a substantial demand price inelasticity for key consumption products such as gasoline, and iPads. As long as the deadbeat rent component in the economy is in the high double digit billions, it will translate in quarter after quarter of surprise margin beats, and latent price increases which for lack of a better word translate into inflation.

 
Do NOT follow this link or you will be banned from the site!