Archive - Sep 2013

What's really going on in Syria? Let's look at the evidence from a non-mainstream media perspective...

Meet the Real Bosses ...

Reading the financial press, one gets the impression there are only two sides to the austerity debate: pro-austerity and anti-austerity. In reality, we have three forms of austerity. There is the Keynesian-Krugman-Robert Reich form which promotes more government spending and higher taxes. There is the Angela Merkel form of less government spending and higher taxes, and there is the Austrian form of less spending and lower taxes. Of the three forms of austerity, only the third increases the size of the private sector relative to the public sector, frees up resources for private investment, and has actual evidence of success in boosting growth.

Standard & Poor's has broken its relative silence over the US government's $5 billion fraud lawsuit against it in style. Slamming the DoJ's suit as "impermissibly selective, punitive, and meritless," S&P - seeking to dismiss the lawsuit with prejudice - exclaimed that the suit was brought "in retaliation for [their] exercise of their free speech rights with respect to the creditworthiness of the United States of America." The government says there was "no connection" between the downgrade and the filing of the lawsuit which is focused on the S&P inflating ratings to win more fees from issuers and failing to downgrade CDOs. Interestingly, as Reuters notes, S&P noted yesterday that $4.6bn of the alleged losses were from CDOs structured and marketed by BofA and Citi...

US equities were drifting quietly lower after a modest rise overnight fadsed through Asian anxiety and European political issues in Italy but all that changed once McCain said "no" and proposed a broader-scope, deficit-growing Syrian plan. Stocks instantly rushed higher to Russia "catastrophic consequences" levels from last week with Trannies and the NASDARK having their best day in a month. Commodity markets  - most notably silver, copper, gold, and crude oil - were all sliding lower before McCain, and oddly accelerated lower in his news. Treasures also rallied into the morning and then sold off significantly after McCain's comments with 10Y now up 11bps on the week at high yields with 10Y closing at its highest yield in 25 months. The USD slipped lower as AUD smashed to its best 3-days in 21 months and EUR slid but that left the USD unchanged on the week (compared with S&P's +1.6%). Stocks gave up some gains into the close but ended with Healthcare and Discretionary almost unchanged from Kerry's 8/26 speech.

• Robert Menendez, D-N.J. - net worth from $317,005 to $680,000
  
• Barbara Boxer, D-Calif. - net worth from $1,147,008 to $5,380,000
  
• Ben Cardin, D-Md. - net worth from $1,416,074 to $3,998,000
  
• Jeanne Shaheen, D-N.H. - net worth from $1,692,382 to $5,223,360 
• Chris Coons, D-Del. - net worth from $2,690,584 to $7,095,576
  
• Dick Durbin, D-Ill. - net worth from $1,208,567 to $1,443,564 
• Tim Kaine, D-Va. - net worth from $667,015 to $1,507,000
  
• Bob Corker, R-Tenn. - net worth from $6,625,018 to $76,453,998 
• John McCain, R-Ariz. - net worth from $3,226,239 to $15,247,981 
• Jeff Flake, R-Ariz. - net worth from $-234,998 to $299,999 

Why on earth does the UN Security Council still exist when the rules and regulations that the people who have the right to veto set up in the first place are dumped just as quick as you can say Bachar al-Assad?

And like that, the first step to all out war has been taken:

• SENATE PANEL AUTHORIZES LIMITED U.S. MILITARY STRIKE IN SYRIA

Vote breakdown: 10 Yes; 7 No; 1 Present. The measure includes new language saying U.S. policy is to "change the momentum on the battlefield in Syria" in way that brings about negotiated settlement of conflict, leading to a democratic govt in Syria. In other words: a pro-Qatari/Saudi coalition government that will permit the passage of natgas pipelines under Syria, through Turkey and into Europe, breaking Gazpromia's marginal energy monopoly over the broke continent.

One has to wonder whether the proximity of this stock's price to $500 once again was a trigger for NASDARK's issues this morning... but it is clear that the narrow-range oscillation is anything but 'normal' on an exuberant stock market day...

Now that the house "recovery" myth is blowing up before everyone's eyes, the confidence spin crew, headed by the Fed itself, is stuggling to come up with any shred of evidence that despite everything seen so far, despite spiking mortgage rates, despite the scramble to cash out of all "homes for rent" ventures, despite the rush to cash out of major rental, and housing, investments by the smartest money of all, there is still room for hope. Today's hook came courtesy of the Beige Book, which otherwise was lethargically boring (same old "modest to moderate growth"), was promptly used to serve as an theme of "construction worker shortages" across areas of the country, and thus to indicate that there is simply too much demand, and not enough supply, resulting in not enough transactions. Well, if that is true, that means that the level of construction workers already employed should be near or approaching previous capacity levels, right? Let's take a look shall we...

Presented with little comment aside to note that following last month's Porsche news, the Lambo release, and now this... the 'recovery' is truly here...

While China was absorbing all the best that the "West" had to export to it over the past three decades (credit cards, MTV, inflation, apps, youtube), it was also importing the worst. Such as a sedentary, lazy lifestyle which at a massive social scale, usually has one inevitable conclusion - diabetes. And even as the world is focused on all the other pending crashes China has to offer: housing, credit, demographic, it has been largely ignorant of what is rapidly becoming a "catastrophic" epidemic. According to Bloomberg, which cites just released findings in the Journal of the American Medical Association, "the most comprehensive nationwide survey for diabetes ever conducted in China shows 11.6 percent of adults, or 114 million, has the disease. This means that another 22 million diabetics, or the population of Australia, have been added to a 2007 estimate and means almost one in three diabetes sufferers globally is in China. By comparison in America "only" 11.3% of the population have been diagnosed with diabetes.

Wondering where we are with "war-on", "war-off" discussions? Confused at whether war is good or bad? Here is a week in the life of the S&P 500 and the Syria-related headlines that appeared to be driving it...

Aerospace technology experienced a Golden Age of rapid technological development that leveled off once fundamental technologies had matured. Investment in further advances reached a point of diminishing return: the cost of squeezing out modest gains exceeded the profit potential of the advances. We can expect the same trajectory of change in consumer electronics: it will be ubiquity that creates change, rather than technological leaps in capabilities.

While John Kerry remains adamant that it is "undeniable" that the Assad regime was behind the chemical weapon attacks in Syria, the results of Russia's probe suggest the truth is anything but undeniable...

• *RUSSIA SAYS SHELL USED IN ATTACK WASN'T STANDARD SYRIA ORDNANCE
• *RUSSIA SAYS SHELL USED IN CHEMICAL ATTACK WAS MAKESHIFT DEVICE
• *RUSSIA SAYS GAS USED IN SYRIA WASN'T INDUSTRIALLY PRODUCED

And perhaps most critically, as Reuters reports, the foreign minstry statement asserts that Russian expert findings show the weapon used in the Syrian chemical attack was similar to the ones made by a rebel group.