Archive - Jul 30, 2013

Is there such a thing as a ‘safe’ fiat currency? The term itself is as intellectually disingenuous as terms like ‘fair tax’ or ‘government innovation’. But as we’ve been exploring recently why modern central banking is completely dysfunctional, it does beg the question – is any currency ‘safe’? Let’s look at the numbers for some data-driven analysis. But which is the safest major currency?

Amid the glory of an Amazon fulfillment center (better known in spoken English as "warehouse") in Chattanooga, President Obama will unveil another hour-long reprise of the same tired anecdotes, finger-pointing, blame everyone else, things are great but things are tough new deal plan for the middle class in America. We can't wait to see the select few chosen to represent this broad-swathe of the US citizenry and sit in praise of the leader.

Divining the impact of 'taper' expectations and growth expectations is difficult but one thing is clear - not all markets have reacted in the same way to the Taper/Un-Taper discussions since the last FOMC. However, there is one indication that concerns us greatly...

While Manning still faces other charges, the most serious - that of 'aiding the enemy' - is now off the table:

*US ARMY PFC BRADLEY MANNING ACQUITTED OF AIDING THE ENEMY: AP

*BRADLEY MANNING CONVICTED OF 5  ESPIONAGE COUNTS: AP

The 'aiding the enemy' charge would have carried a maximum life sentence in prison. Manning could still face 144 years in jail for the 19 lesser charges in the Wikileaks case. Full charge and punishment schedule below.

There was a time when Jamie Dimon liked everyone to believe that his JPMorgan had a "fortress balance sheet", that he was disgusted when the US government "forced" a bailout on it, and that no matter what the market threw its way it would be just fine, thanks. Then the London Whale came, saw, and promptly blew up the "fortress" lie. But while JPM's precarious balance sheet was no surprise to anyone (holding over $50 trillion in gross notional derivatives will make fragile fools of the best of us), what has become a bigger problem for Dimon is that slowly but surely JPM has not only become a bigger litigation magnet than Bank of America, but questions are now emerging if all of the firm's recent success wasn't merely due to crime. Crime of the kind that "nobody accept or denies guilt" of course - i.e., completely victimless. Except for all the fines and settlements. Here is a summary of JPM's recent exorbitant and seemingly endless fines.

“Intentional ignorance” undermined in a targeted manner the principle of political responsibility

Eurozone taxpayers and the IMF are left wondering what their bailout funds have been spent on in Greece. The Hellenic Financial Stability Fund (HFSF) has spent EUR38bn (or 75% of its total) bolstering the capital of Greece's four biggest banks (and winding down eight small lenders). The EUR50bn fund looks set to be drained further  - despite the banks comments that costs have been cut, funds raised, and assets sold - as non-performing loans continue to surge. About a quarter of all loans are non-performing and that share is likely to increase as the country's six-year recession, which has wiped out over a quarter of the economy, shows little sign of abating. Have no fear though, since stress tests will be carried out later this year to establish whether Greek banks have more capital needs. Of course the key question is - just where were these rescue funds diverted within the bank shells.

So the second and third largest economies in the world are in collapse with stock market crashes. What are the odds the world will pull through this?

And so Bloomberg's initial foray into testing the limits of America's nanny financial capital is officially over. Moments ago Reuters reported that Mayor Mike's quest to limit what New Yorkers may or may not drink is officially over after his forced plan to ban large sugary drinks from restaurants and other eateries was halted and deemed an "illegal overreach of executive power," a state appeals court ruled on Tuesday, upholding a lower court decision in March that struck down the law. Wait, if illegal overreaching of executive power is, well, illegal, there are a few other people in position of power that America's court system may want to take a close look at. Alas it won't.

JP Morgan has been fined the sum of $410 million due to improper practices involving price manipulation via its subsidiary JP Morgan Ventures Energy Corp today in California and the mid-west by the Federal Energy Regulatory Commission in the US.

With GDP set to be revised (upwards we are sure) through the power of intangible accounting, the dismal reality of the Q2 GDP print is likely to get lost in the shuffle (especially given all the hope that a 'real' recovery is just around the corner). However, as comments regarding second quarter activity suggest, economic conditions decelerated from the first three months of the year. In fact, based on recent comments from key companies, a looming recession may be signaled by the GDP report this week. Of course, focusing on the bellwether stocks as an indication of reality will never do - instead we are treated to short-squeezed stocks-du-jour and manufactured EPS beats as evidence that "everything's great." It's not.

Beats the pants off the Russian Mafia...

Obamacare is not about, "protecting young adults and eliminating burdens on businesses and families," but rather our government is helping us to destroy our own children with entitlement and to burden our own businesses and families with unnecessary costs.

The American Homeownership Dream is officially dead. Long live the New Normal American Dream: Renting.

President Transparency, in the interest of protecting his Administration’s spotless record of least transparent ever, has decided to erase sections of his original campaign website so that inconvenient and broken promises (i.e., every single thing he said) can’t be so easily exposed. The section in question... 'Protect Whistleblowers'...