Archive - Oct 2014

Barack Obama and the Federal Reserve are lying to you. The "economic recovery" that we all keep hearing about is mostly just a mirage...  For those out there that still believe that we are doing "just fine", here are 19 more facts about the messed up state of the U.S. economy.

Following investors who came to prominence together with Kyle Bass after shorting the sub-prime market in 2007

J.A. does not = Jack Abe...

The Japanese Yen's real effective exchange rate (REER) has collapsed to the weakest since 1982, according to Mitsubishi UFJ Morgan Stanley Securities. Simply put, REER is a trade-weighted measure of Yen strength (or weakness) against, in this case, 59 trading partners; and as the nation posts an unprecedented 27th straight month of trade deficits, Bloomberg reports MUFJ indicates "a structural shift" has taken place. As MUFJ chief FX strategist warns, "If the trade deficit doesn’t noticeably narrow from here, the yen’s real effective rate could fall to levels never seen before," and, ominously, "from a supply and demand perspective, yen selling for foreign currency by Japanese importers will just continue endlessly." And Japan becomes Venezuela...

Presented with no comment...

Saudi Arabia wants to use lower oil prices to pressure Russia to change its stance on Syria, to antagonize Iran, and to force US shale gas out of the market, Pepe Escobar explains the possible blowback...

"as part of its continuous monitoring activities at JPMC, FRBNY effectively identified risks related to the CIO's trading activities, governance framework, risk appetite, and risk management practices in 2010. Additionally, a Federal Reserve System team conducting a horizontal examination at JPMC recommended a full-scope examination of the CIO in 2009. However, FRBNY did not discuss the risks that resulted in the planned or recommended activities... As a result, there was a missed opportunity for the consolidated supervisor and the primary supervisor to discuss risks related to the CIO."

Sometimes, in the fog of whatever is the Mideast war du jour started initially under a "humanitarian intervention" pretext then quickly morphing into yet another counter-Syria campaign to appease various Saudi and Qatari emirs and princes, it is easy to lose sight over just what the purpose of said war is. Luckily, we have the US military industrial complex to remind us, and specificially weapons and ammunition specialists like General Dynamics. So here, for those confused, is a summary of the the first half of the great circle, which uses war, mass killings and civilian casualties, as a cover to deploy what else: US taxpayer money into the pocket of US corporations. Lots of it. As Reuters reports, the U.S. government on Monday said it had approved the sale to Iraq of $600 million in tank ammunition manufactured by General Dynamics Corp saying it would help the Iraqi government establish an integrated ground defense capability.

Want to live near the 0.1% and their problems? May I present to you 258 Middlefield Road, Palo Alto, California, which is located within walking distance from my house and is a mere $1,800,000 (well, that's the asking price, but it'll probably go for more). Behold.......

The sickening transformation of these United States into an authoritarian police state with an incarceration rate that would make Joseph Stalin blush, has been a common theme here. But now, as a result of our insane societal obsession with authority and disproportionate punishment, the WSJ reports that “nearly one out of every three American adults are on file in the FBI’s master criminal database.”

While we strongly suspect few are truly surprised by this turn of events, it is still yet another embarrassing stamp in the "do nothing stupid" foreign policy passport for President Obama's administration. As The Daily Beast reports, an ISIS-associated YouTube account posted a new video online Tuesday entitled, "Weapons and munitions dropped by American planes and landed in the areas controlled by the Islamic State in Kobani." While the authenticity of this latest video could not be independently confirmed, there is no doubt that the ISIS fighters in the clip are in possession of a rich bounty of American hand grenades, rounds for small rockets, and other supplies. The White House stated on CNN, "we feel very confident that, when we air drop support as we did into Kobani… we’ve been able to hit the target in terms of reaching the people we want to reach." Perhaps not all of them...

Spot the odd one out: Short-end Treasuries flat, JPY carry risk-off, IBM/KO/MCD dumped, HY Credit weak... Stocks best day in a year!

Summing it all up: Volumeless buying panic on ECB buying rumors!

What’s the true risk for the global economy? Its pronounced: /d??fl?SH(?)n/

The implication of the Ebola 2014 mutation rate is this:  A single Ebola mutation doesn't necessarily mean the virus will become 'airborne', or that the virus has altered tissue tropism, or that the virus spreads more easily.  But a high intrinsic rate of Ebola mutation means that such changes may become possible in the future.  If the number of people infected grows into the hundreds of thousands, or even low millions, then the probability of a significant 'constellation' of accumulated Ebola mutations with phenotypic impact becomes more likely.  The problem is that accumulated Ebola mutations will scale with the size of the population infected.  Conversely, in a small population, such Ebola mutations are not likely to have a significant impact.  It's a bit like the virus is buying lottery tickets... The more lottery tickets the Ebola virus 'buys', the more chances it has to 'win'. 

Just in case you need another reason to dislike the thieving Federal Reserve.