Archive - Dec 17, 2012
Guest Post: Meet Brandon Bryant: The Drone Operator Who Quit After Killing A Child
Submitted by Tyler Durden on 12/17/2012 23:36 -0500
Bryant saw a flash on the screen: the explosion. Parts of the building collapsed. The child had disappeared. Bryant had a sick feeling in his stomach. “Did we just kill a kid?” he asked the man sitting next to him. “Yeah, I guess that was a kid,” the pilot replied. “Was that a kid?” they wrote into a chat window on the monitor. Then, someone they didn’t know answered, someone sitting in a military command center somewhere in the world who had observed their attack. “No. That was a dog,” the person wrote. They reviewed the scene on video. A dog on two legs? The above article is a must read for every American citizen, particularly those that get up in arms about domestic gun control, but never think twice about the horror caused by our foreign policy, which regularly murders innocent children overseas.
Charting US Debt And Deficit Since Inception
Submitted by Tyler Durden on 12/17/2012 23:00 -0500
In the recent aftermath of the US just concluding its fourth consecutive fiscal year with a $1 trillion+ deficit, we have been flooded with requests to show how the current fiscal situation stacks up in a big picture context. Very big picture context. For all those requests, we present the following chart showing total US Federal debt/GDP as well as Deficit/(Surplus)/GDP since inception, or in this case as close as feasible, or 1792, which appears to be the first recorded year of historical fiscal data. We can see why readers have been so eager to see the "real big picture" - the chart is nothing short of stunning.
Japan’s NO EXIT Strategy
Submitted by testosteronepit on 12/17/2012 20:52 -0500Ministry of Finance official: “That’s why the MoF is trying to gain control over the Bank of Japan.”
State Communism's Newest (public) Advocate: Jeff Immelt
Submitted by CrownThomas on 12/17/2012 20:50 -0500"the one thing that actually works, you know, state run communism may not be your cup of tea, but their government works. They have five-year plans"
Latest "Grand Bargain" Compromise Shifts 'Rich' Threshold
Submitted by Tyler Durden on 12/17/2012 20:35 -0500The rumor mill on unnamed sources and strawmen is full tonight with Reuters, Bloomberg, and WaPo all reporting on a new new deal from Obama that 'meets the Republicans more than halfway' apparently. The crux appears to be a $1.2tn tax increase (over 10 years of course) thanks to higher rates on households earning over $400k (up from his original $250k but below Boehner's $1mm) and $930bn in spending reductions, including the much-discussed 'accounting' gimmick of cost-of-living-adjustments (and unChained CPI - see below) in Social Security. The offer also has a 'debt ceiling' proviso to increase the borrowing capability for two years via McConnell's proposal. S&P futures got a lift from this great 'austerity' news (that will perplex the Keynesians) but seemingly got most of the excitement out of the way this afternoon.
GE's Jeff Immelt: "We've Definitely Seen A Slowdown In The Fourth Quarter"
Submitted by Tyler Durden on 12/17/2012 19:51 -0500In what is likely the fist major under the radar profit warning of the current quarter, GE chief, and Obama Job Tzar, Jeff Immelt warned during GE's annual outlook meeting held earlier in Manhattan that the "economic uncertainty" in the current quarter has resulted in an investment "pause" that has resulted in a slowdown of corporate sales. Put into numbers, GE is now calling for about 8% growth this year, from a 10% forecast barely two months ago. Read: Q4 sales, and thus earnings, are set to be a major disappointment. And while no superstorms were blamed in this particular sales warning, the fiscal cliff did feature prominently. As the WSJ reports, "[Immelt] said ongoing jitters over the so-called "fiscal cliff" of tax increases and government spending cuts contributed to the trend." Then again, it is just as likely that the tapped out US consumer, whose savings rate is tumbling, whose real disposable income is now declining on a year over year basis, and whose real wage growth is decidedly negative, would be tapped out even if Obama and Boehner were not playing constant cat and mouse. But whatever the reason for the slowdown may be, one thing is certain: "Clearly, there has been an investment pause in certain industries," Mr. Immelt said. "We've definitely seen a slowdown in the fourth quarter." Bring on the spin brigade.
The Two Charts That Matter From Smith And Wesson's December Investor Presentation
Submitted by Tyler Durden on 12/17/2012 18:03 -0500
Presented without commentary.
Guest Post: Hey You
Submitted by Tyler Durden on 12/17/2012 17:02 -0500
The world makes less sense every day. Little children are randomly slaughtered in their schoolrooms. Corrupt, bought off politicians pander to the lowest common denominator as their votes are only dependent upon who contributed the most to their election campaigns, which never end. Delusional, materialistic, egocentric, math challenged consumers (formerly known as citizens) live for today, enslave themselves in debt, vote themselves more entitlements, and care not for future generations. The alienation and isolation created by our sprawling, automobile dependent, technology obsessed, government controlled, debt financed society has spread like a cancerous tumor, slowly killing our country. The oligarchs will not give up without a fight. Their realization that the Brave New World method of controlling the masses has run its course has convinced them to shift their methods towards Orwell’s 1984 tactics.
Volatility Hammered As Stocks And Bond Yields Close At Highs
Submitted by Tyler Durden on 12/17/2012 16:16 -0500
For anyone watching the last hour or two of today's market, there was plenty to entertain. VXX (the implied vol ETF) collapsed in a haze of glory dragging stocks to the highs of the day with financials seeing their best day in three months. Treasury yields, Gold, and Stocks have all recoupled from the election and perhaps that is what this bond weakness is related to (as for example LQD fell to 3 month lows today, while HYG remains close to record highs). Stocks closed at Thursday's highs amid heavy and large size trades - the vertical rampathon (or inverse Baumgartnering) suggests a quiet market desparate to auction to stops. The USD ended unch, as did Gold while 30Y added 8bps as testicular fortitude appeared under pressure today. Perhaps Citi should downgrade AAPL every day? Today's #Teppergasm (h/t @gubbmintcheese) saw the NASDAQ back to unchanged for December and Citi up a measly 13.3%.
San Fran Fed Reminds Everyone Why Fed Forecasts Are A Joke
Submitted by Tyler Durden on 12/17/2012 15:53 -0500Moments ago, the San Fran Fed, best known for spending taxpayer money to conduct such indepth analyses on topics including whether water is wet, and whether the Fed creates bubbles, has just released its most recent 'FedViews' economic outlook in which we read that "we expect growth to steadily accelerate in 2013 as the economy bounces back from harsh weather conditions and as the underlying expansion of consumer spending reemerges. We expect growth to register 1.7% in 2012 and 2.6% in 2013." This would be great if only a two minute Google search did not expose some of the San Fran Fed's previous attempts at forecasting the future, such as this one from October 14, 2010, in which the crack experts said that "we currently project that real GDP will expand around 2½% in 2010, below its potential of about 3% annually. We expect the recovery to gain momentum over the course of next year and that real GDP growth for 2011 will reach about 3½%." Final 2011 GDP growth: 2.4%.... or this one from June 9, 2011, in which we learned that "growth should rebound in the third quarter. We expect GDP to expand at an annualized 3½% rate in the second half of the year and to continue to strengthen throughout 2012." Final 2012 GDP growth: 1.8%. Or just 50% off. Applying the same undershoot error rate to the Fed's 2013 forecast means that real economic growth next year will be at best 1.3%. And that's with a fresh $1 trillion in monetary injections from the Fed.
36 UBS Bankers To Be Implicated In Liborgate, Criminal Charges To Be Filed
Submitted by Tyler Durden on 12/17/2012 15:28 -0500As the fallout of Liborgate escalates, the next big bank to be impacted in the fallout started by Barclays civil settlement "revelation" is set to be troubled UBS, already some 10,000 bankers lighter, where as many as three dozen bankers are reported by the implicated in the fixing of the rate that until 2009 was the most important for hundreds of trillions in variable rate fixed income products. Only instead of attacking the US or even European jurisdiction, where the next big settlement is set to hit is Japan: a country whose regulators as recently as half a year ago promised there were no major issues with Libor, or Tibor as it is locally known, rate fixings. And while this most recent development will have little material impact on UBS' ongoing business model, the one difference from previous settlements is that it will likely include criminal charges lobbed against some of the 36 bankers. From the FT: "UBS is close to finalising a deal with UK, US and Swiss authorities in which the bank will pay close to $1.5bn and its Japanese securities subsidiary will plead guilty to a US criminal offence. Terms of the guilty plea were still being negotiated, one person familiar with the matter said on Monday, adding that the bank will not lose its ability to conduct business in Japan. The pact between the bank and the US Commodity Futures Trading Commission, US Department of Justice, UK’s Financial Services Authority and UBS’s main Swiss supervisor Finma is expected to be announced on Wednesday, although last minute negotiations continue."
Santelli And Schiff On Bernanke's "Roach Motel Of Monetary Policy"
Submitted by Tyler Durden on 12/17/2012 15:07 -0500
From the government-induced structural unemployment malaise to the implosion of our entire 'artificial economy', Peter Schiff and Rick Santelli explore the dark side of monetary policy in this brief clip. On the Fed's new policy and potential exit strategy, Schiff notes that "the Fed is constructing goalposts so it never actually hits them; the Fed is never going to tighten." While Santelli tends to agree with Schiff on the eventual collapse of the USD under this never-ending Fed easing scenario, he notes that getting a fix on that USD weakness is hard given everyone is racing to debase. Schiff notes, oil prices, gold prices, food inflation, and real assets all send the signal that Bernanke chooses to ignore and on the topic of 'monetization' which Bernanke seemed so 'put off' by during the press conference last week, Sch-antelli both seemingly (obviously) conclude that the mere mention of an exit at some point in the future by the great and powerful Oz does not preclude the fact that 90% of current Treasury issuance ends up on the Fed's books... leaving the fact that selling any of this "would make 2008 look like a Sunday picnic."
2012's Mass Shootings And Some "Gun Control" Observations
Submitted by Tyler Durden on 12/17/2012 14:36 -0500
With the resurgence of gun control politics storming to stage center over the past 72 hours, and providing yet another fulcrum point of social division precisely at the time when the nation is already hopelessly divided on other key political talking points which look set to push the Fiscal Cliff debate unresolved into 2013, below we provide two useful benchmarks to frame the "gun debate." The first, courtesy of WaPo, is an interactive chart of all mass shootings, including all the relevant details, taking place in 2012. The second, is a dispassionate and fact-based observation courtesy of BusinessWeek of the realities and challenges facing politicians, and the broader society, as America grapples with 200+ years of Second amendment history on one hand, and a society that is ever more "troubled", and increasingly prone to violence and murder on the other.
Three Divergences Demanding The Stock Bulls' Attention
Submitted by Tyler Durden on 12/17/2012 14:32 -0500
Longer-term divergences tend to provide the most concerning backdrop for the current relative strength of stocks. BofAML's technical research analyst Mary Ann Bartels is concerned that the major negative divergence between market breadth and the S&P 500 indicates a risk of a deep correction in 2013. As she notes: "Although the advance-decline lines have moved up with the US equity market since mid November, bearish divergences remain in place for the S&P 500 and NYSE Stocks advance-decline. This is an important negative divergence as we enter 2013." Add to that the divergence between NYSE net new highs and the divergence with Transports and markets face a triple threat.






