Archive - Oct 12, 2012
What do Henry Kissinger, Le Duc Tho, Yasser Arafat, President Obama, And The EU Have In Common?
Submitted by testosteronepit on 10/12/2012 20:55 -0500From a "Europe in pieces" to a "Europe of peace" and back?
The Great Chess Game
Submitted by Tyler Durden on 10/12/2012 19:01 -0500
Everyone is aware of a multitude of problems that besets our world, however the nature of these problems and why they exist is distorted by the media and by governments all over the world. Our leaders, corporate heads, military top-brass etc. all have a fairly good idea of what is really happening, they just don’t want us – the ignorant masses known as the general public to know what they know. The multiple crises on this planet are caused by our insane mode of living – one that seems to be dominated by economics. Our way of life (unfortunately now for most of the world) depends on an ever-expanding economic system, for if it is not expanding it is contracting. This system was all well and good while there was plenty of capacity for continued expansion, but unfortunately for all of us the limits of expansion are not far off.
Visualizing America's Economic Freedom Plunge
Submitted by Tyler Durden on 10/12/2012 18:57 -0500
As we noted last week, the US, long considered the standard bearer for economic freedom among large industrial nations, has experienced a rather remarkable plunge in economic freedom over the last decade. This excellent infographic summarizes what factors drove us here, which countries are on the rise, and why we are more like Venezuela, Argentina, and Iceland than many would like to believe.
Guest Post: Opening Pandora’s Box: If Israel Strikes Iran, What About Hezbollah?
Submitted by Tyler Durden on 10/12/2012 18:51 -0500
As the day approaches when Israel may decide to launch a preemptive strike against Iran in order to cripple its nuclear infrastructure, Israeli policymakers and their allies abroad would carefully assess how the Lebanese-based group Hezbollah would react. With the debacle of the 2006 war against the Lebanese group still fresh in Israeli minds, the possibility that the "Party of God" Shi’a organization would renew hostilities against the Jewish state through cross-border raids, terrorism, or rocket attacks against its cities, will have to be part of Israel’s calculations for any “day after” scenario. The challenges posed by the Iranian nuclear program are numerous, with many of the different nodes being interrelated. The problem is made all the more intractable by an increasingly volatile region that is sharply divided along sectarian lines. Hezbollah is but one of the many players involved, but should it choose to do so, it has the capacity to inflict great harm on Israel.
Mike Krieger Topples The Last Domino
Submitted by Tyler Durden on 10/12/2012 17:11 -0500
With the election right around the corner, the chickens are going to come home to roost. Our ability to print our own currency and buy all the commodities we want with it is the exorbitant privilege that allowed us to export most of the problems within the monetary system elsewhere first. As Nixon’s Treasury Secretary John Connelly said when confronted by a group of European Finance Ministers: “it’s our currency, but your problem.” At the time he was correct, as we were at the very beginning of the fiat dollar standard. 41 years later the system is in its final days and our currency is about to become our problem as well. There were always going to be massive consequences to keeping this ponzi alive. The main point here is one I was hammering on in my last piece The Global Spring. You can only push people so far into hardship before things snap. They snapped in North Africa. They snapped in Southern Europe. They snapped in China. They are about to snap here. Oh, and one last thing. What do you think all of this signals for corporate margins?
Retirement: The Scary Numbers Behind The Soothing Lies
Submitted by Tyler Durden on 10/12/2012 16:30 -0500
The state of Americans’ retirement accounts is dismal is how ConvergEx's Nick Colas begins his critically important-to-read note on the reality that millions face. According to an early 2012 study by the Employee Benefit Research Institute, Colas notes only 58% of us are currently saving money for retirement – and 60% of those that are have less than $25,000. Thirty percent have less than $1,000. Needless to say, it’s a far cry from the 8x-10x final earnings suggested by most retirement planners. So why are we so far behind? Americans aren’t exactly known for impressive savings habits, but that alone does not explain our poor preparation for retirement. Rather, Colas cites a general lack of financial literacy, including basic understandings of savings growth and retirement income needs, superseding financial obligations, and basic behavioral finance biases keep us from putting cash away. But if we keep up at this pace, you can expect the ongoing political debate about Social Security to take on new and more strident tones.
Guest Post: About That "No Recession" Call
Submitted by Tyler Durden on 10/12/2012 15:46 -0500
The usual definition of a recession is GDP goes negative. But this isn't necessarily true. Notice that GDP never went below the zero line in the 2001 recession. Dipping close to zero was good enough. The more interesting line is our composite of economic activity. We can pose the "recession" question in this way: if real investment, net earnings after debt service and M2 money are all puking, how can the economy be "growing slowly but steadily"?
NASDAQ Drops Most In 5 Months As Leaders Languish
Submitted by Tyler Durden on 10/12/2012 15:18 -0500
AAPL slumbered today (fading at VWAPs) and GOOG stumbled on FTC settlement chatter - dragging Nasdaq to its biggest weekly loss in almost 5 months. Financials were also sold hard (following what every talking head said was 'good' earnings by JPM and WFC this morning) - leaving the sector down 3.7% from post-QEternity highs with previous darling WFC slapped down to BofA/MS levels post-QE -6.5%. Dow Transports outperformed its peers on the week (ending very slightly red) but this remains more a pairs-trade story than anything to hang a 'recovery' on. The S&P has auctioned back to the top of the post-Draghi spike - battle is commencing. Treasury yields legged down once again (long-bond down 18bps on the week at lows) but pulled off the lows after Europe closed -5bps to -14bps as the curve flattened. The USD limped lower for the last few days but ended the week +0.45%. While Oil managed a 2% rise on the week, we saw commodities getting sold today with Gold/Silver sliding (-1.44% and 2.9% respectively on the week). After an early spike down, VIX leaked back higher all day ending at the magical 16% level - up 1.5vols on the week.
Ron Paul On The "One-Party System"
Submitted by Tyler Durden on 10/12/2012 14:56 -0500
Ron 'I'm playing the long-game' Paul will not go quietly into the night - and rightly so, it would seem, given his truthiness. In a recent brief interview on CNBC's Futures Now, he managed to diss Romney, smash the 'belief' in a 'two-party' system, and undermine any hope for economic change from the farce of an election. Summed up simply: "There is essentially no difference between one administration and another, no matter what the platform."
Guest Post: What Form Of Silver Should You Hold?
Submitted by Tyler Durden on 10/12/2012 14:29 -0500
We talk a lot about the importance of owning precious metals… and often for the sake of convenience, we lump gold and silver together in the same category. But while the two share similar characteristics as excellent inflation hedges and stores of value, silver has unique fundamentals worth considering. For starters, while the entire gold market is small, the silver market is even smaller. This means that, in a boom, silver is going to rise more rapidly than gold. In a bust, silver is going to drop more rapidly. This gives silver an interesting edge as a speculation. And one way to play this is to buy specific types of silver whose premiums soar during financial panics.
Citi On The Five FX Issues Waiting To Play Out
Submitted by Tyler Durden on 10/12/2012 14:04 -0500
With equities sat the edge of an ugly-looking cliff and precious metals leaking lower, FX markets remain somewhat less shell-shocked (for now). Citi's Steve Englander provides a quick-and-dirty view of the five key issues FX investors are focusing on.
Kaminsky On "Hypocrite" Biden: "I'd Have Punched Him In The Face"
Submitted by Tyler Durden on 10/12/2012 13:41 -0500
In a little over three minutes, CNBC's Gary 'Golden Gloves' Kaminsky not only pointed out the dismal reality of our political class but explained, in his out loud voice - which we assumed was typically suppressed for career-limiting reasons - exactly what he thinks of Joe Biden and what he would have done had be been sat next to him on that table. In saying what we suspect a lot of readers may have felt, Kaminsky exposes the underbelly; as like many of Wall Street who are 'compelled' to give politicians money (Biden has raised the great majority of his funds from financial services firms) hearing the hypocritical "wall-street-vs-main-street" double-talk and 'nasty' laughing and smirking last night made the ex-PM angry. Impressed at Ryan's calm, Kaminsky sums it all up, about Biden: "I would have punched the guy in the face!" - the truth.
Is This Why Gold Is Selling Off?
Submitted by Tyler Durden on 10/12/2012 13:14 -0500
From the morning of Draghi's press-conference on 9/6, Treasury bond prices and Gold have danced an interesting waltz around one another. After recoupling on 9/26, they once again divorced for two weeks, only to reconcile their differences once again today. Is the toing-and -froing of inflation views driving gold and bonds - and does that mean Gold is almost done with its drop here as Both the Long-Bond and Gold are now both up 1.22% from QEternity.
Did Bernanke Bluff About QE3?
Submitted by Phoenix Capital Research on 10/12/2012 13:06 -0500
I want to draw your attention to the fact that the Fed balance sheet is DOWN $50 billion year over year. This confirms that the Fed has in fact been engaging in mostly verbal intervention over the last year rather than actual monetary intervention.





