Archive - Mar 19, 2014
Busted! – U.S. Tech Giants Knew Of NSA Spying Says Agency's Senior Lawyer
Submitted by Tyler Durden on 03/19/2014 23:06 -0500
Last week, Mark Zuckerberg made headlines by posting about how he called President Barack Obama to express outrage and shock about the government’s spying activities. Of course, anyone familiar with Facebook and what is going on generally between private tech behemoths and U.S. intelligence agencies knew right away that his statement was one gigantic heap of stinking bullshit. Well now we have the proof. Earlier today, the senior lawyer for the NSA made it completely clear that U.S. tech companies were fully aware of all the spying going on, including the PRISM program. So stop the acting all of you Silicon Valley CEOs. We know you are fully on board with extraordinary violations of your fellow citizens’ civil liberties. We know full well that you have been too cowardly to stand up for the values this country was founded on. We know you and your companies are compromised. Stop pretending, stop bullshitting. You’ve done enough harm.
Australian PM Says May (Or May Not) Have Found Objects Belonging To Flight MH370
Submitted by Tyler Durden on 03/19/2014 22:18 -0500Australian Prime Minister Tony Abbott has some interesting comments in the dreadful disappearance of Malaysia Airlines Flight 370. While addressing parliament today, he stated:
- *AUSTRALIA FINDS POSSIBLE OBJECTS LINKED TO MH370, ABBOTT SAYS
- *OBJECTS FOUND IN SEARCH MAY NOT BE MH370, ABBOTT SAYS
- *ABBOTT SAYS NEW, CREDIBLE INFORMATION IN RELATION TO MH370
- *ABBOTT: AMSA HAS RECEIVED INFO. BASED ON SATELLITE IMAGERY
- *ABBOTT: OBJECTS IN SOUTH INDIAN OCEAN MAY BE RELATED TO SEARCH
There is not much color yet but it appears that 2 objects have been found and the Aussies are diverting more aircraft to search the area.
The Music Just Ended: "Wealthy" Chinese Are Liquidating Offshore Luxury Homes In Scramble For Cash
Submitted by Tyler Durden on 03/19/2014 22:11 -0500
One of the primary drivers of the real estate bubble in the past several years, particularly in the ultra-luxury segment, were megawealthy Chinese buyers, seeking to park their cash into the safety of offshore real estate where it was deemed inaccessible to mainland regulators and overseers, tracking just where the Chinese record credit bubble would end up. Some, such as us, called it "hot money laundering", and together with foreclosure stuffing and institutional flipping (of rental units and otherwise), we said this was the third leg of the recent US housing bubble. However, while the impact of Chinese buying in the US has been tangible, it has paled in comparison with the epic Chinese buying frenzy in other offshore metropolitan centers like London and Hong Kong. This is understandable: after all as Chuck Prince famously said in 2007, just before the first US mega-bubble burst, "as long as the music is playing, you've got to get up and dance." In China, the music just ended.
Beef Prices Surge Most In A Decade As Food Inflation Soars
Submitted by Tyler Durden on 03/19/2014 22:02 -0500
Just a month ago we warned that food inflation was on its way. Today we got the first confirmation that problems are on their way. While headline data washes away the nuance of what eating, sleeping, energy-using human-beings are paying month-in and month-out, the fact, as WSJ reports, that beef prices surged by almost 5% in February - the biggest change since Nov 2003 - means pinching consumers and companies pocketbooks that are still grappling with a sluggish economic recovery. "Things are definitely more expensive," exclaimed on mother of three, "I can't believe how much milk is. Chicken is crazy right now, and beef - I paid $5 a pound for beef!" Just don't tell the Fed!
How Gold Performs During FOMC Weeks (Spoiler Alert: Not Good)
Submitted by Tyler Durden on 03/19/2014 21:30 -0500
What is more confidence-inspiring in the Fed's ability to manage the world and the continued dominance of the US Dollar as global reserve currency than a falling gold price... and when better to show that than FOMC meeting weeks... welcome to the centrally-planned world where the announcement of ongoing trillions in fiat dilution constantly crushes the price of undilutable money.
The Chinese Yuan Is Collapsing
Submitted by Tyler Durden on 03/19/2014 20:57 -0500
The Yuan has weakened over 250 pips in early China trading. Trading at almost 6.22, we are now deeply into the significant-loss-realizing region of the world's carry-traders and Chinese over-hedgers. Morgan Stanley estimates a minimum $4.8bn loss for each 100 pip move. However, the bigger picture is considerably worse as the vicious circle of desperate liquidity needs are starting to gang up on Hong Kong real estate and commodity prices. For those who see the silver lining in this and construe all this as a reason to buy more developed world stocks on the premise that the money flooding out of China (et al.) will be parked in the S&P are overlooking the fact that the purchase price of these now-unwanted positions was most likely borrowed, meaning that their liquidation will also extinguish the associated credit, not re-allocate it.
Government Agency Warns If 9 Substations Are Destroyed, The Power Grid Could Be Down For 18 Months
Submitted by Tyler Durden on 03/19/2014 19:49 -0500
What would you do if the Internet or the power grid went down for over a year? Our key infrastructure, including the Internet and the power grid, is far more vulnerable than most people would dare to imagine. These days, most people simply take for granted that the lights will always be on and that the Internet will always function properly. But what if all that changed someday in the blink of an eye? According to the Federal Energy Regulatory Commission's latest report, all it would take to plunge the entire nation into darkness for more than a year would be to knock out a transformer manufacturer and just 9 of our 55,000 electrical substations on a really hot summer day. The reality of the matter is that our power grid is in desperate need of updating, and there is very little or no physical security at most of these substations.
"The Cacophony Of Fed Confusion," David Stockman Warns Will Lead To "Economic Calamity"
Submitted by Tyler Durden on 03/19/2014 19:22 -0500
"We never should have painted ourselves so deep in this QE corner in the first place," chides David Stockman, "because the whole predicate [of Fed policy] is false." The author of The Great Deformation holds nothing back in this brief 3-minute primer of everything is wrong with the American economic system (and the CNBC anchors definitely did not want to hear). "We are already at peak debt and forcing more into the economy didn't work," and won't work as is merely funds Wall Street's latest carry trade to nowhere and fiscal irresponsibility in Washington. Simply put, "the private credit channel of monetary transmission is busted," so the Fed is exploiting the only channel it has left - "the bubble channel."
The Problem With Forward P/Es
Submitted by Tyler Durden on 03/19/2014 18:46 -0500
It is always interesting that, following two major bear markets, investors have forgotten that it was these very same analysts that had them buying into the market peaks previously. As we know repeatedly from history, extrapolated projections rarely happen. Therefore, when analysts value the market as if current profits are representative of an indefinite future, they have likely insured investors will receive a very rude awakening at some point in the future. There is mounting evidence, from valuations being paid in M&A deals, junk bond yields, margin debt and price extensions from long term means, "exuberance" is once again returning to the financial markets.
The 16 "Dots" That Sent Stocks Reeling
Submitted by Tyler Durden on 03/19/2014 18:18 -0500
Much has been said about Yellen's Freudian slip involving the "6 month" considerable period language, which as we pointed out earlier, is said to have been the catalyst that sent stocks sharply lower just after 3 pm when it was uttered. However, in reality all this statement suggests is a rate hike some time in mid-2015, half a year after when QE is said to have ended, which if one listens to the market experts, is what is supposed to be priced in (of course, what the experts won't tell you is that the market wants its cake and endless liquidity injections by the Fed too). However, one thing that was far more unexpected and certainly remained unexplained by Yellen, is the curious case of the Fed dots, or the estimations by the individual committee members, of where they see rates at the end of 2016. What was surprising here was the sharp upward jump from 1.75% as of December to 2.25% currently.What is even more inexplicable, is that the Fed hiked its rate forecast even as it lowered its GDP projections for the next two years. Why? Not even Janet Yellen could answer that.
Pay Our Pensions Or We'll Throw You In Jail: The Legalization Of Looting
Submitted by Tyler Durden on 03/19/2014 17:40 -0500
Rather than deal forthrightly with the reality that unrealistic promises made to their employees cannot be honored, local government has pursued a strategy of legalizing looting. The gradual erosion of civil liberties, legal rights and government ethics are connected: our rights don't just vanish into thin air, they are expropriated by government: Federal, state and local. Though much is written about the loss of civil liberties at the Federal level, many of the most blatantly illegal power grabs are occurring in local government. When local government looting is legalized, the entire system is illegal. Here are three recent examples of blatantly illegal looting by local governments.
Ukraine Announces Joint US Military Exercises As Obama Rules Out "Military Incursion" - Recap Of The Day's Events
Submitted by Tyler Durden on 03/19/2014 17:12 -0500
With the story of the day undoubtedly Yellen's first (bungled) press conference, it was easy to forget that the second coming of the Cold War is raging in the Ukraine. For those curious what they may have missed, here is a summary of the major events that took place in the troubled country this afternoon. Highlights from AP, AFP, Reuters, WSJ, Bloomberg, RIA and Interfax.
Ron Paul On The "Illusion" Economy And "Why Socialism Always Fails"
Submitted by Tyler Durden on 03/19/2014 16:41 -0500
"If we look only at the stock market, then we're in denial," warns Ron Paul in this brief 'uncomfortable-for-the-anchor' CNBC interview, adding that "it's an illusion." While the stock market has performed well, Paul explains that the economy-at-large continues to struggle noting that it's due to the Fed: "I don't think any one individual knows how to plan the economy by manipulating interest rates' [they] are so important that if you give this power to one small group - there will be distortion." That's why socialism fails, slams the Fed critic, "it's the invisible hand that we lack, not the wisdom of a few people. Few people can't be wise enough to dictate the market," and the Fed's history shows their track "record is pretty bad."
AND NoW FoR ToDaY'S EDiTioN oF FOMC WeaTHeR...
Submitted by williambanzai7 on 03/19/2014 16:27 -0500BEVERAGE AND KEYBOARD WARNING...
Janet Yellen's Full Press Conference Transcript
Submitted by Tyler Durden on 03/19/2014 16:09 -0500Much has been said about Yellen's less than stellar first press conference so we will let her own words do most of the talking. First, from the transcript of her prepared remarks and the following Q&A, here are some highlights.




