Archive - Nov 16, 2014

A rubber band can remain stretched for some time, but it takes some force to keep it stretched. In this case, the force is the daily VIX body-slam and the resulting pop up in equities. This has worked to keep RUT and its cousins aloft for several weeks of going nowhere, but the chart suggests all the kiddies who are supremely confident that Santa will deliver more equity gains might find their complacency is not rewarded.

When a member of the press dared to ask Obama if the head of the "most hypocritical transparent administration ever" "misled Americans" about the taxes and about keeping the plan "in order to get the bill passed" the response was "No, i did not." This was Obama's conclusion after he had just gotten "well-briefed before he came out here." Indeed, nothing escapes the American president who continued: "The fact that some adviser who never worked on our staff expressed an opinion that I completely disagree with in terms of the voters is no reflection on the actual process that was run." Unfortunately, because Obama apparently wasn't briefed quite as well as he would have hoped, let's just take a look at what Dr. Gruber did do.

As the G-20 meeting comes to a 'successful' end with back-patting congratulations having agreed to create $2 trillion more GDP out of thin air (or maybe hookers and blow), it appears that someone - or more than one - among these nations was less than diplomatic towards every nations' best friend - America. As AP reports, The State Department has taken the unprecedented step of shutting down its entire unclassified email system as technicians repair possible damage from a suspected hacker attack. Earlier attacks have been blamed on Russian or Chinese attackers, although their origin has never been publicly confirmed.

This process is not over, not by a long shot. As anyone who invested during the Peso crisis or Asian crisis can tell you, when carry trades blow up, the volatility can be EXTREME.

The inevitable result of the centrally planned Asian Miracle Model is credit bubbles and the crippling misallocation of capital in Building Bridges to Nowhere.

In what the pro-Russian separatists call "an act of genocide," Ukraine's President Poroshenko signed a decree Friday that will explicitly withdraw state support for the regions within a month. While appearing to implicitly recognize the regions of Donetsk and Luhansk as autonomous, the decree means that the central bank will no longer service bank accounts, prisoners will be transferred (inmates with minor offences will be released), and perhaps most troubling as the cold winter begins, the order covers all public services, including crucial ones, such as schools, hospitals, and emergency services; and local heating and power plants will be subject to new laws that could involve cutting energy supplies altogether to the plants that don’t pay. Luhansk's leader exclaimed, "the total socio-economic blockade of Donbass is de facto an act on genocide and devastation of our people," and as the images below show, bank runs have already begun across the region with long lines forming at ATMs.

If there were no puppet masters in Washington DC or the Kremlin, what would happen next week?  

Perhaps in prompt and direct refutation that the infamous executioner "Jihadi John" had been injured, a few hours ago, ISIS release its latest execution video. Yet, oddly, as in several previous instances, the 15-minute video released Sunday doesn’t show the beheading according to the WSJ, but closes with a masked man clad in black standing above what he claims is Mr. Kassig’s severed head. The extremist spoke with a British accent, and appeared to be the same man who appeared in four videos released over the past few months showing the killing of British and American hostages, i.e., the same Jihadi John who was said to have been injured.

Some may herald the new ISIS coins as the successor of the dollar.  Fat chance.  It may not be fiat money, but is still not viable currency outside of where ISIS rules by sword.  

Wondering where all the Russian gold is coming from? Stop looking and start reading...