Archive - Nov 19, 2013

• J.P. Morgan, U.S. Reach Historic Settlement (WSJ)
• OECD cuts global growth forecast (AP)
• Guess the profit margin: Wal-Mart Touts $98 TV as Holiday Seen Weakest Since 2009 (BBG)
• Republicans defy threat, block another Obama judicial pick (Reuters)
• Fed Ponders How to Temper Tapering Without Rate Increase (BBG)
• Wall Street uses 'merchant' workaround to cling to commodity assets (Reuters)
• PBOC to ‘Basically’ End Normal Yuan Intervention, Zhou Says (BBG)
• Italy’s leader warns Germany of rise of anti-European sentiment (FT)
• Yellen Nomination for Fed Chairman to Get Vote This Week (BBG)
• As U.S. default threatened, banks took extraordinary steps (Reuters)
• NSA vowed repeatedly to fix its collection errors (AP)

When all else fails, and/or when the president is caught in yet another major scandal, there is only one way out: war. As many expected, but as nobody knew what shape the latest provocation would take, overnight at least 23 were killed and dozens hurt after a twin bomb attack shook the Iranian embassy in Beirut. As NBC reports, a local al Qaeda affiliate, the Abdullah Azzam brigades, claimed responsibility for the explosions – the latest sign that Syria’s civil war is spilling over the border into Lebanon. Burning cars, bodies and pools of blood littered the front of the embassy building, in the Hezbollah-dominated south of the city. The Zahraa hospital nearby told AFP that it had received the bodies of five people and was treating at least 35 others for wounds. Lebanese media broadcast harrowing images from the scene of the blast, with charred bodies on a street lined by blazing cars and strewn with the rubble.

It is time for the centrally-planned markets to "try" for the round number trifecta of 16000, 1800 and 4000 again, although it may be a tad more difficult on a day in which there is no double POMO and just $2.75-$3.50 billion will be injected by the NY Fed into the S&P - perhaps it is Bitcoin that will hit the nice round number of $1000 first? Overnight, the Chinese Plenum news rerun finally was priced in and the SHComp closed red, as did the Nikkei 225 as the Asian euphoria based on communist promises about what may happen by 2020 fades.  What's worse, the Chinese 7-day repo rate is up 140bp this morning to 6.63% amid talk of tightening domestic liquidity conditions, and back to levels seen during the June liquidity squeeze. All this is happening as China continues leaking more details and hope of what reform the mercantilist country can achieve, and how much internal consumption the export-driven country can attain: overnight there were also additional reports of interest rate liberalization and that the PBOC are to set up a floating CNY rate. Good luck with that.

Money means power. Money only deprives people on the losing team of their fundamental rights in society and it’s money that makes the world go round.

In 1997, the SE Asian Tigers all faced severe economic stresses, partially triggered by a primarily foreign capital-funded massive real estate bubble in Thailand. Today the EXACT same thing is happening as untempered foreign investment into Thailand’s real estate market has created not a “soaring” real estate market as economists always incorrectly explain them, but massive real estate market distortions better known as a bubble.