Archive - May 2, 2013

Tyler Durden's picture

How Japan’s “Stealth Constitution” Destroys Civil Rights And Sets The Stage For Dictatorship





If there was ever a clear sign that the leadership of Japan is fully aware that the country is about enter a terminal economic catastrophe this is it. Using the cover of currency devaluation and a rising stock market, Japan’s Prime Minister, Shinzo Abe, is attempting to make it easier to change the country’s constitution so that they can eliminate freedom of speech and set the stage for a military dictatorship.

 

Tyler Durden's picture

"You've Reached Your Slice Limit Mayor Bloomberg" - The Food Police Meets The Pizza Nazi





After months of legislating soda sizes and steak rarenesses it seems the food police have finally met their match. As The Daily Currant "reports", in protest over the proposed soda ban in NY, the owners of Collegno's Pizzeria in Brooklyn refused to serve Mayor Michael Bloomberg a second slice of pizza during an informal lunch meeting. Ripped from the scripts of Seinfeld, or Pulp Fiction, or, appropriately enough, The Onion, when Bloomberg requested the second slice, the owner retorted, "I'm sorry sir, we can't do that. You've reached your personal slice limit." The exchange quickly escalated with the Mayor dropping f-bombs and the restaurant's owner climaxing with, "there's nothing I can do; maybe you could go to several restaurants and get one slice at each. At least that way you're walking. You know, burning calories." A fuming Bloomberg left the pizzeria and finished his meeting (and more pizza) at a rival restaurant.

 

Tyler Durden's picture

2011 vs 2012 vs 2013 - Spot The Odd One Out





Here is why for the 2013 edition of "attempt to decouple reality from stocks (and fail every time)", the global central banks realized that just the Fed (2011), and/or just the Fed and the ECB (2012) would not be enough. Thus, welcome Japan and your unsterilized $75 billion per month, and lots and lots of prayer that third time will be the charm to enable the "market" finally to break free from the tyrrany of evil fundamentals, macro factors and, generally, reality.

 

Tyler Durden's picture

Richard Koo On The Ineffectiveness Of Monetary Expansion





Nomura's Richard Koo destroys the backbone of the modern central bankers only tool in the tool-box in his latest paper. "As more and more people began to realize that increases in monetary base via QE during balance sheet recessions do not mean equivalent increases in money supply, the hype over QEs in the FX market is likely to calm down ...The only way quantitative easing can have a positive impact on economic activity is if the authorities’ purchase of assets from the private sector boosts asset prices, making people feel wealthier and thereby encouraging them to consume more. This is the wealth effect, often referred to by the Fed chairman Bernanke as the portfolio rebalancing effect, but even he has acknowledged that it has a very limitmed impact... In a sense, quantitative easing is meant to benefit the wealthy. After all, it can contribute to GDP only by making those with assets feel wealthier and encouraging them to consume more."

 

Tyler Durden's picture

22 Facts That Prove That The Bottom 90% Of America Is Systematically Getting Poorer





The middle class is being absolutely eviscerated, and poverty is soaring to unprecedented heights.  The fact that 90 percent of the population is constantly sliding downhill is not good for our society.  The United States is supposed to be a land of opportunity with a vibrant free market system that enables average people to make better lives for themselves. Unfortunately, free enterprise is being strangled to death in the United States today.  Entrepreneurs and small business are being pounded into oblivion by rules, regulations, red tape and oppressive levels of taxation. Our founding fathers warned that we should not allow such large concentrations of wealth and power, because they tend to funnel the rewards of society into the hands of a select few. The following are 22 facts that prove that the bottom 90 percent of America is systematically getting poorer...

 

Tyler Durden's picture

Why The US' Economic "Shirt" Can't Stay Clean For Long?





With any and every asset-gatherer capable of forming a sentence being trotted out on business media to proclaim victory and elucidate on why "there is no where else to invest but stocks" and "the US is the cleanest dirty shirt," we thought it might be useful to reflect on just how clean that shirt can remain as the rest of the world's growth slows down significantly. In the last decade, there has been particular growth in inter-regional trade, with a dramatic expansion in trade vis-à-vis Asia, reflecting globalization. At the same time, the deepening in global trade relationships means that the potential for a sudden shift in demand in one region can have a more significant impact on the rest of the world. This has been seen particularly in recent years, with the sharp retrenchment in domestic demand in southern Europe affecting the economy of Asia, particularly Japan. Looking at the rate of increase in regional imports (which we assume is what the 'heads' believe will power the US 'clean' shirt) and the picture is ugly. And while copper is enough of a tell for most, even the IMF (usually extraordinarily optimistic) sees World Trade slowing dramatically - and given these interconnections, perhaps being the cleanest shirt merely shows the stains even more clearly when they finally hit.

 

Tyler Durden's picture

The Next Escalation: Gold Goes 100% Initial Margin





The day many have predicted would come, has finally arrived: 100% initial margin on gold. For now it is just one Futures Commission Merchant, in this case ex-CBOT traders Crossland LLC (motto: "Where Speed And Service Matter"), but tomorrow it will be another, and another.

 

Phoenix Capital Research's picture

QE Has Been and Will Continue to Be a Complete Failure





There is not one single example in history in which QE has successfully created jobs. The UK has engaged in QE equal to over 20% of its GDP and hasn’t seen a real recovery in employment. Similarly, Japan has employed QE equal to nearly 25% of its GDP and GDP growth continues to slow while unemployment stays elevated.

 

Tyler Durden's picture

Guest Post: Nicholas Taleb Against Establishment Economists





What once used to be a field in which men of towering intellect tried to establish, discuss and lay down the tenets of what was widely considered an entirely new science as recently as the late 19th century, has become a field in which a great many rather mediocre intellectuals are mainly serving the interests of the State. Nassim Taleb recently too to task a number of the so-called mainstream economists - assessing and analyzing the flaws of modern policy-making and central economic planning as well as the fractionally reserved banking system. We wish him success in tackling the handmaidens of statism and their pseudo-scientific output. Anyone criticizing the producers of fig leaves for interventionism deserves our support. Of course, if an economist rejects interventionism and supports the establishment of an unhampered free market, then there is obviously no role for him as an 'economic planner' and 'adviser to policymakers' (except for advising them to stay the hell out of the economy and stop meddling with it). 

 

Tyler Durden's picture

Joe LaVorgna vs Randomness, And Randomness Wins, Or What Tomorrow's NFP Will Not Be





The "predictive capabilities" of Deutsche Bank's amusing permabull strategist Joe LaVorgna are well known to Zero Hedge readers. Just recall that when it comes to forecasting the future, even one Groundhog Phil has a success rate of 71%, or over a standard deviation more accurate compared to Joe "Coin Toss" LaVorgna's 51%. But perhaps there is a way to harness this horrendous track record of being correct about the future precisely half the time. Indeed, as the following analysis conducted by John Lohman proves, predicting NFP payrolls based on simply extrapolating the previous month's number, or for all intents and purposes, "randomly" one month into the future and comparing it to the original actual NFP print, would have led to a smaller absolute median and average error rate than listening to LaVorgna (46 error vs Joe's 56 median error).

 

Tyler Durden's picture

Ron Paul & Jim Rogers: "There's More Chaos To Come"





Nations are going bust. And the worse things get, the more desperate their tactics become. This isn't the first time that the world has been in this position. This time is not different. History shows that there are serious, serious consequences to running unsustainably high debts and deficits. And those consequences have almost invariably involved pillaging people's wealth, savings, livelihoods and liberties... either directly or indirectly. What's happening right now is playing out in textbook fashion. More taxes, more debt, more printing, more confiscation, less freedom. Many people will resist the change and instead cling desperately to the old system - the cycle of debt and consumption that provided jobs, stability, and prosperity. These people will have their lives turned upside down because that system is gone forever. And in case it still weren't obvious, here is three minutes of clarity from Ron Paul and Jim Rogers..."I would expect that there is going to be a lot more chaos still to come." - Ron Paul; “They won’t take our bank accounts…they will take our retirement accounts.” - Jim Rogers

 

Tyler Durden's picture

Meet Canada's New Central Bank Head





As is well known, Goldman's Mark Carney is leaving the Bank of Canada on June 1 to take over the UK money printer in a few months, at which point he will proceed to create about GBP25 billion per month out of thin air, pushing the total monthly G-7 liquidity injection to a healthy $200 billion (an annualized rate of $2.5 trillion). Which meant that a successor had to be found. Moments ago we learned just who that is, and surprisingly it does not appear to be yet another Goldman Sachs Partner, MD or even Vice President. Carney's replacement is Stephen Poloz, the former head of Export Development Canada. Promptly upon the announcement Poloz noted that flexible inflation targeting no threat to credibility, and Canada's monetary policy has helped through crisis, and that experience at EDC gives him a feel for Canada's economy. If nothing else, at least he has held a real job. Unlike those mandarins in the Marriner Eccles building. Either way, his monetary stance is largely unknown, although it will hardly be a hurdle to the other lunatics who have taken over the money printing asylum.

 

Tyler Durden's picture

S&P Hits New All-Time Highs With Oil's Biggest Spike In Six Months





Another POMO, another dip bought, another all-time high in the S&P 500 but we are sure there is some disappointment that the '1600' caps have to go back in the closet for one more day. The S&P's best day in over a week was greeted with an almost perfect 'unchanged' for Treasuries and while stocks went out near their highs, Treasuries closed at the low yields of the day (2-3bps lower than the highs). Of course, the 'most shorted' names were smashed higher (at the open and at 1515ET) providing today's ammo. The USD started weak but Draghi's -ve rates comment sparked a USD surge (up 0.3% on the week) but stocks didn't care. WTI jumped back above $94 with its best day in six months (though little talk from the 'heads' of the removal of the implicit tax?). Gold and Silver also jumped (as did Copper) all ending the day up around 0.75%. Homebuilders banged over 2% higher on the day (as Lumber was limit down at 5 month lows) and while the Dow and S&P closed the previous all-time high, the Trannies remain -1.4% from Tuesday's close.

 

Tyler Durden's picture

How Much Is The Argentinian Peso Worth? That Depends





While last week saw the economy minister of Argentina fumble, stumble, and finally crumble over the difficult question of what Argentinian inflation rates were (11% official versus 26% estimated), it seems the nation has another Schrodinger-like problem. While officially the exchange rate is around 5.15 Pesos to the US Dollar, in reality the black market exchange rate (or so-called Blue-Dollar purchase rate) is more like 9.6 Pesos to the US Dollar... An 86% devaluation priced into the local economy's desire to NOT hold Pesos and demand for USD liquidity. Oh, and as a side note as the S&P 500 pushes towards 1,600, think of the wealth creation... Argentina's stock market, one of the best performing in the world, is up 72% since November - that must be good, right?

 

Reggie Middleton's picture

New Apple Research Coming Up, But BoomBustBloggers Don't Need It For Apple's Performed Exactly As I've Forecast!





999 basis point drop in earning power in less than a year! Whoa, let's trip over ourselves and lock in bond rates of 70bips over treasuries for 30 years. 1st we have margin compression, now we have common sense compression!

 
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