Archive - Aug 26, 2013

The reality is that the recession never ended for 95% of U.S. households, and by many metrics the recession has deepened. The trick is to not measure those metrics; what isn't measured doesn't exist, especially recession.

As Syria 'welcomed' the UN team of scientists to dispel the myth that al-Assad had used chimcal weapons, one of the team's two vehicles came under sniper fire and was rendered 'unserviceable'. The team "collected some samples" and interviewed survivors, witnesses and doctors on its first day on inspection but the attack on the UN team prompted secretary-general Ban to file a "strong complaint" with Syrian officials. We await John Kerry's pending statement at 2pmET for clarification of whether the Fed can Taper or not Taper...

Demand that Fish Be Tested for Radiation (Or Buy a Geiger Counter)

Pervasive, unchecked spying on millions of Americans and NSA agents eavesdropping on exes? A war with Syria? Fed tapering? A US that has been at its debt ceiling for months? A looming spending fight? Markets halting for hours due to "glitches"? Even Donald Trump? Naaaaah. According to Google Trends, this is what keeps America "up" at night.

“Indians want to maintain a store of value, so they go to gold.”

‘Gold is the last man standing as rupee fuels inflation’ was not published on Bloomberg.com but the story was published on Live Mint.

 What is happening in India is a prelude to what will be seen in other economies in the coming years as currencies depreciate.

With the UK on holiday (vacation), European markets were relatively quiet - apart from Italy... The Berlusconi debacle rolls on and sparked the worst sell-off in Italian sovereign bonds in 9 weeks and pushed the spread on BTPs over Bunds to its highest in 3 weeks. Most European equity markets closed mildly lower (with Germany's DAX unch - recovering from its EUREX-halting drop earlier in the day. Italian stocks were the big underperformer (down 2.2%). For the 3rd day in a row, Europe's VIX was smashed lower from an opening high print to close at its lows. The UK and its 'credit police' will be back tomorrow.

It's google to be evil...

2013 has not been kind to Hugh Hendry, whose Eclectica Absolute Macro fund has posted an unchanged performance year to date, broadly underperforming (alongside the bulk of the hedge fund community) the market. Below are his most recent macro thoughts, his holdings (few changes most notable of which is the closure of the Yen short), and his take on how Bernanke "infamously marched his troops to the top of the hill only to march them down again, one moment promising tapering, the next, unlimited accommodation."

With no keynote speaker at the Federal Reserve Bank of Kansas City’s Jackson Hole Economic Symposium, there was no opportunity for Fed officials to send signals about their policy intent. However, while it’s unlikely that the papers discussed did much to change opinions of the FOMC participants, as Morgan Stanley's Vince Reinhart notes, there were themes discussed that may reflect committee members’ views regarding how tapering should proceed: all signs are still that the Fed will start the process of trimming its asset purchases at its meeting on September 17-18. Further, we wouldn’t be surprised if they initially trim just Treasury purchases. So it seems the primary dealers will get what they expect and the market (ever-hopeful of its bad-news-is-good-news meme) will be disappointed.

11 of the 15 sub-indices for the Dallas Fed manufacturing outlook fell month-over-month with new orders, production, and finished goods notably weak. Of course, the modest headline beat will be all we hear about as the US economy makes 'progress'; but under the surface there is an even more concerning factor. While the number of employees rose modestly, the average employee workweek collapsed at its fastest pace in 2 years (and the last 2 months have dropped the most in 3 years) as it seems the Obamacare-effect smashes the workweek back to its lowest since October 2009.

If one were to lay $1 bills side by side, the current US National Debt would reach from the earth to the moon 32,358 TIMES AND BACK and to the sun 93 million miles away 83 times AND BACK.

What a difference a day makes. On Friday, Doctor Copper was surging on the back of dismal home sales data and the hope of moar money; today, following the terrible durable goods data, the economist-metal is plunging rapidly.

It has been revealed, thanks to Edward Snowden, that Google and other US tech companies received millions of dollars from the NSA for their compliance with the PRISM mass surveillance system. So just how close is Google to the US securitocracy?

"Google is getting WH [White House] and State Dept support and air cover. In reality they are doing things the CIA cannot do"

That Google was taking NSA money in exchange for handing over people’s data comes as no surprise. When Google encountered the big bad world, Google itself got big and bad.

The chart below, which we are quite speechless to comment on, shows the market cap of TSLA, which will sell 35,000 cars in 2013 and must sell between 500,000 and 3,000,000 cars by 2022 to grow into its valuation (as explained before), compared to some other car companies such as Fiat, Porsche, GM, Ford and Volkswagen. So yes: Tesla may be double the market cap of Fiat, but it is less than 20% the size of Volkswagen, so there is obviously much upside still.

As Dirty Harry would say.....