Archive - Aug 25, 2013
Is The Secular Bear About To Growl?
Submitted by Tyler Durden on 08/25/2013 21:11 -0500
Secular bear markets are not "one-way" down markets, but a series of "cylical" ups and downs. As the following series of charts of the inflation-adjusted S&P Composite shows, it would appear time (and price) is not on the side of this bull-market's extension...
More Than One-Third Of Louisiana Unemployment Payments Are "Improper"
Submitted by Tyler Durden on 08/25/2013 20:52 -0500
Louisiana tops the nation's list of "improper" payments for unemployment insurance with a 3-year rate of 38.67%. Of course, this is the "improper" payments they know about (as only 29.7% of overpayments have been recovered). A stunning 28% of Louisanans who claimed benefits did so even after returning to work. However, while the Louisiana data points are bad, they are not alone. As the chart below shows... 16 states have "improper" payment rates of over 14%. One wonders why the world doesn't trust the US so much anymore?
Guest Post: Obama Picks Cass Sunstein (America’s Goebbels?) To Serve On NSA Oversight Panel
Submitted by Tyler Durden on 08/25/2013 20:45 -0500
“It is the absolute right of the state to supervise the formation of public opinion.” - Goebbels
Only under the Obama Presidency, in which every appointment, minor or major, is handed only to the most corrupt, devious crony to be found, can a man like Cass Sunstein be appointed to serve on the NSA oversight panel. Cass is a noted propagandist, who has advocated that government agents should infiltrate groups and discussions that push “conspiracy theories” in order to delegitimize them. But don’t take our word for it...
US Bankrupt!
Submitted by Pivotfarm on 08/25/2013 20:35 -0500After the banks, after the city of Detroit it will be the USA that will be going bankrupt and filing for Chapter 11 bankruptcy. If only that were possible! But unfortunately it won’t be.
Things That Make You Go Hmmm... Like The Hypocrisy Of Bankers
Submitted by Tyler Durden on 08/25/2013 20:23 -0500
The Hippocratic Oath is one of the most widely known Greek medical texts. It requires a new physician to swear upon a number of healing gods that he will uphold a set of professional ethical standards. The premise of the original Oath, which supposedly started out like this is clear: First, do no harm. Over the last several years, a new oath has appeared in the world of finance as global investment banks have been hauled in front of Senate committees, Congressional panels, various regulatory bodies, and (what always used to be the harshest of judges) the public: the Hypocritic Oath. It begins thus: First, admit no wrong.
10-Year, Copper, Yen And Rupee: Key Technical Levels
Submitted by Tyler Durden on 08/25/2013 19:53 -0500
BofA's MacNeill Curry warns that "several major FX, commodity, and bond markets are flashing warning signals of a change of trend." Specifically, he notes that JPY is set to resume its devaluation path (USDJPY bullish) with a 106.00 target; US 10Y Treasury bonds are "at risk" of a bullish turn on a break back below a yield of 2.802%. This would suggest the charts are beginning to price in a "Taper-on" story (as USD repatriation flows cease and allow the JPY to weaken and bonds rally back on 'moar printing') and perhaps that is what fits with his view that the Indian Rupee melt-down is showing signs of stalling.
The Logic Behind The Fed's Overnight Reverse Repo Facility: Not Taking, But Adding Liquidity
Submitted by Tyler Durden on 08/25/2013 19:16 -0500Much has been said about the recently announced (with the release of the Fed's July Minutes) proposal for a full-allotment overnight reverse repo facility, some of it confused, some of it desperate to read deeply into what the Fed is suggesting with this superficially tightening process, and most of it just plain wrong. What the Fed is simply trying to do with the O/N RRP, in a few words, is alleviate collateral pressures for "high-quality assets" - the same thing that the TBAC has been whining about for the past 2 quarters - by making available an elastic supply of risk-free assets to a fairly broad set of investors. As BofA adds, "The full-allotment feature would mean that eligible investors could effectively place as much cash as they wished at a fixed rate, which would be determined in advance by the Fed." In brief, a Fed O/N RRP facility would substantially reduce or even eliminate concerns about the lack of high quality liquid assets.
Gold Double-Slam Takes Out All Bids Following Price Spike
Submitted by Tyler Durden on 08/25/2013 18:49 -0500
Minutes after ramping above the critical $1,400 level, gold has been slammed lower instantaneously, twice in the last hour, as a result of a rumored trade originating at the BIS (and specifically the desk of our old friend Benoit Gilson) slamming down the entire bid stack in a desperate case of "banging the open", giving up gold's gains from Friday's close...
Gold, Crude Spike On Pre-War Jitters
Submitted by Tyler Durden on 08/25/2013 18:14 -0500
Events over the past 48 hours have shown beyond a reasonable doubt that the US may have the most confused, conflicting foreign policy of any western nation, on one hand banging the populist drums and demanding loudly that Syria allow UN inspectors, while on the other demanding even louder that no inspectors be allowed because they won't find anything. And while the US population has already spoken, with those who are against a US intervention outnumbering the false flag warmongers by a ratio of over 6 to 1, it is the market that is speaking even louder following the start of premarket trading on Sunday night with both key hard assets, gold and crude, spiking in early trading.
BreaKim Bad: 40-50% Of North Koreans Seriously Addicted To Meth
Submitted by Tyler Durden on 08/25/2013 17:20 -0500
Perhaps in an effort to numb themselves of the daily grind of a delusional dictator amid widespread starvation, North Koreans have turned en masse to the 'bingdu' or ice. As the WSJ notes, a study in the Spring of 2013 found that "Almost every adult in that area (of North Korea) has experienced using ice and not just once," and the author noted that "at least 40% to 50% are seriously addicted to the drug." Unsurprisingly for the closed nation, there is no official data, but as poppy fields disappeared in the nation, meth dealers were quick to step in and 'Heisenberg' the people's needs. Now "doing ice is a social thing; it is a lot of fun," as the 'epidemic' has spread from mid-ranking officials and police officers in 2004-2008 to the general population of students and youth now.
Africa: The Next Major Boom-Bust Cycle?
Submitted by Tyler Durden on 08/25/2013 16:16 -0500
As Western economies start to regress in earnest following decades of failed and destructive monetary inflation and debt accumulation, yield-starved investors are allocating real capital to the one industrially untapped continent in the world: Africa. However, we’re not seeing industry moving to Africa to set up shop. Rather, politically-directed capital flowing into the African resources sector is fueling and financing the strongest consumer boom in the world. It’s a vendor financing model for Asia, and it portends a major boom and bust cycle for the African continental economy.
Three Years After Warning Of "Currency War", Brazil Goes All In
Submitted by Tyler Durden on 08/25/2013 15:16 -0500
In September 2010, Guido Mantega coined the phrase "currency war" as he proclaimed the world's central bank's FX interventions were dangerous for citizens' purchasing power and would lead to a vicious circle of competitive devaluations. In March, Mantega unleashed a mini-war by taxing foreign borrowings and threatening capital controls. But this week, after the BRL devalued over 26% since March as Fed Taper talk and EM capital flight takes hold around the world, Brazil has waded into the world's currency war with the largest currency intervention the nation has ever planned. Following a dismal current account deficit print, as The FT reports, "Brazil will launch a currency intervention program worth about $60bn to ensure liquidity and reduce volatility in the nation’s foreign exchange market" - offering USD500 million per day in currency swaps to support the Real. But, as Citi warns, it does not fix any of Brzail's problems.
Why The Post-Lehman Reflation Is Reaching Its Limits
Submitted by Tyler Durden on 08/25/2013 14:03 -0500
It’s ironic, or it seems that way to us, that two of the least understood financial markets by equity investors are two of the most systemically important – repos and gold. Even more ironic is how so many investors don’t even consider them to be all that important. In our view, stability in both markets is a pre-requisite for maintaining confidence in the financial system and keeping the credit/asset bubble inflated. The significance of these markets is not lost on governments, central banks and regulators, although the definition of “stability” in each of them is slightly different. Looking underneath the bonnet/hood, we are doubtful that either of these markets, repos or gold, can reasonably be described as “stable” right now. There also seems to be a paradox where the current low repo rates and gold prices are, we suspect, fooling people into a false sense of complacency. What’s really piqued our interest, however, is whether there is a similar issue which is increasingly impacting both of these systemically important markets? This issue relates to the availability of sufficient collateral...
Thoughts on the Week Ahead: Pitfalls around the Corner
Submitted by Marc To Market on 08/25/2013 13:57 -0500Next weeks events placed within the larger context.






