Archive - Nov 2014

It’s not just voters who buy into popular myths. Many investors do too. Few have wider appeal than the myth that central banks can create economic growth via the printing press.

The Dutch and German governments were preparing emergency plans for a return to their national currencies at the height of the euro crisis it has emerged. These plans remain in place.

With all eyes focused on the malls around America, we thought a glimpse at two of the most important commodities to the world economy would provide food for thought...

What was truly notable in Weidmann's statement is his open jab at the stupidity of Keynesian economics itself. To wit from Bloomberg: ECB Governing Council member Jens Weidmann says at event in Berlin that consumer prices in euro area “are strongly influenced by the energy prices, which are at the moment experiencing a positive supply shock.” The punchline:  "There’s a stimulant effect coming from the energy prices - it’s like a mini stimulus package." But wait a minute, isn't deflation under Keynesian voodoonomics, the biggest bogeyman imaginable? It turns out deflation is only bad when it impacts... the S&P 500.

Black Friday is the day when the trademark US consumerism takes center stage for its annual manic, full-frontal exposure around the globe. Here is what it looked like around the US...

The French delivery of two Mistral ships to Russia may be postponed indefinitely (a move which ultimately would cost Hollande over $4 billion in contract breach penalty fees he simply can't afford to pay), but that doesn't mean the Russian navy has been hobbled or is hiding in the corner. To the contrary: according to the following tweet from the UK Ministry of Defense, Russia's navy is getting quite bolder. "Four Russian ships escorted through Dover Strait from North Sea by @RoyalNavy HMS Tyne this morning. Ships have left UK waters."  What happened? As Bloomberg reports, at least 4 vessels which departed the Russian Northern Fleet main base on November 20, led by anti-submarine ship Severomorsk, entered English channel for exercises that include anti-sabotage training, damage control in case of fire and water intake, state-run news service RIA Novosti says, citing statement from Navy.

• Oil Seen in New Era as OPEC Won’t Yield to U.S. Shale (BBG)
• Alberta Producers With World’s Cheapest Oil Face Cascading Woes (BBG)
• Bundesbank’s Weidmann Rejects Calls for German Stimulus Plan (WSJ)
• Google Should Be Broken Up, Say Euro MPs (BBC)
• Calm comes to troubled Ferguson; protests dwindle across U.S. (Reuters)
• Russia’s Banks Feel Capital Squeeze in Grip of Sanctions (BBG)
•  Italian Unemployment Rate Rises to Record, Above Forecasts (BBG)

This looks like the tip of the golden iceberg...

The biggest, and most market-moving, event overnight continues to be yesterday's shocking OPEC announcement, which is still reverberating across the energy space as markets largely ignore European and Japanese inflation data which is once again sliding back dangerously fast, or Italian unemployment which rose more than expected, and joined France in hitting a new record high. As a result European shares remain lower, close to intraday lows, with the oil & gas and industrials sectors underperforming and telco and travel outperforming as oil continues its decline. EU inflation slowed in Nov. to 0.3%. Italian and Swedish markets are the worst-performing larger bourses, Spanish the best. The euro is weaker against the dollar. And while US equity futures are largely unchanged even as, or perhaps because, the world is screaming economic slowdown, bonds are finally getting the message with U.S. 10yr bond yields falling to only 2.20% as Japanese yields also decline.

Recently we posted the following article commenting on the impact of USD appreciation and dollar circulation among oil exporters, as well as how the collapsing price of oil is set to reverberate across the entire oil-exporting world, where sticky high oil prices were a key reason for social stability. Following today's shocking OPEC announcement and the epic collapse in crude prices, it is time to repost it now that everyone is desperate to become a bear market oil expert, if only on Twitter...

When Americans celebrate Thanksgiving, they don’t know what they are celebrating.

In light of the recent epidemic of shady civil asset forfeitures, what many people fail to realize, is that you aren’t obligated to have casual conversations with police when you have been pulled over. In fact, such conversations are often used solely to manufacture an excuse for further action against you.

Just do it!

While some are already neck deep in Black Friday-eve shopping, we hope more than a few will be relaxing at home watching a movie, dozing in a tryptophanic trance... we suggest the following in preparation for tomorrow's markets...