Archive - Apr 5, 2014

Tyler Durden's picture

All The Presidents' Bankers: The Hidden Alliances That Drive American Power





"The global financial landscape was evolving. Ever since World War II, US bankers hadn’t worried too much about their supremacy being challenged by other international banks, which were still playing catch-up in terms of deposits, loans, and global customers. But by now the international banks had moved beyond postwar reconstructive pain and gained significant ground by trading with Cold War enemies of the United States. They were, in short, cutting into the global market that the US bankers had dominated by extending themselves into areas in which the US bankers were absent for US policy reasons. There was no such thing as “enough” of a market share in this game. As a result, US bankers had to take a longer, harder look at the “shackles” hampering their growth. To remain globally competitive, among other things, bankers sought to shatter post-Depression legislative barriers like Glass-Steagall. They wielded fear coated in shades of nationalism as a weapon: if US bankers became less competitive, then by extension the United States would become less powerful. The competition argument would remain dominant on Wall Street and in Washington for nearly three decades, until the separation of speculative and commercial banking that had been invoked by the Glass-Steagall Act would be no more."

 

Tyler Durden's picture

Zillow Study Shows 1 In 3 Homes Are Unaffordable, But Vacation-Home Sales Are Soaring





In a further demonstration of the socially destructive and ever widening gap between the haves and have nots, we see that the affluent are buying second homes at an ever increasing clip (up 30% last year), while first home buyers recede into the abyss as private equity and Chinese buyers make purchasing a home unaffordable for the average American. Specifically, a recent study from Zillow showed that more than half the homes in seven major American cities are unaffordable based on historical standards.

 

Tyler Durden's picture

How Much Bad Debt Can China Absorb?





China is coming under close scrutiny these days, as the leadership scurries to find new sources of economic growth and control its debt. Some analysts have reassured China watchers that the Chinese government can simply write off its bad debt, at least within the major banks, and pass it on to the asset management companies that handle that resale of distressed debt (or have it later purchased by the Ministry of Finance). Others have warned that some of the debt is serious, such as that incurred by local government financing vehicles, and are dubious about the sustainability of these entities. To worry or unwind? How much debt can China really absorb?

 

Tyler Durden's picture

The Complete Interactive Guide To How The NSA Spies On Everything You Do





With all the hoopla about missing airplanes, renewed wars of the cold variety, and rigged markets, it is easy to forget that America is now officially a totalitarian state of the Orwellian kind, where the population has - involuntarily - ceded all of its privacy in exchange for... something. Because it certainly isn't security. So we are happy to provide a reminder of just this, especially since as BusinessWeek notes, it gets harder to keep track of all the bizarre ways the National Security Agency has cooked up to spy on people and governments. This may help.

 

Tyler Durden's picture

Is The Drone War Finally Being Questioned? (Spoiler Alert: Not Really)





The ethical problems associated with the US 'drone war', as well as the enormous blow-back potential it harbors are seemingly finally rousing Congress into asking questions. After hundreds of civilian deaths and the enormous help they have reportedly provided to Al Qaeda's recruitment drive in the regions concerned, it may indeed be time to wonder 'who is actually killed' by US drone strikes. It would surely be a case of 'better late than never', but one should actually better not get one's hopes up...

 

Tyler Durden's picture

And The World's "Most Powerful" Nation Is...





In terms of economic might, BBVA has created an index of "world market power" enabling an at-a-glance view of a nation's impact on the global economy via relevance of exports, exposure to external shocks, technological content, and retained value-added. And the winner is... Hint, not USA...

 

Tyler Durden's picture

Soaring Chinese Gold Demand And Its Geopolitical Strategy





Analysis of the detail discovered in historic information in the context of China's gold strategy has allowed us to make reasonable estimates of vaulted gold, comprised of gold accounts at commercial banks, mine output and scrap. There is also compelling evidence mine output and scrap are being accumulated by the government in its own vaults, and not being delivered to satisfy public demand. We believe that China is well on the way to having gained control of the international gold market, thanks to western central banks suppression of the gold price, which accelerated last year. For its geopolitical strategy to work China must accumulate large quantities of bullion... it appears well on its way to dominance of the physical gold markets.

 

Tyler Durden's picture

US Threatens Russia Over Petrodollar-Busting Deal





On the heels of Russia's potential "holy grail" gas deal with China, the news of a Russia-Iran oil "barter" deal, it appears the US is starting to get very concerned about its almighty Petrodollar:

U.S. HAS WARNED RUSSIA, IRAN AGAINST POSSIBLE OIL BARTER DEAL; U.S. SAYS ANY SUCH DEAL WOULD TRIGGER SANCTIONS; U.S. HAS CONVEYED CONCERNS TO IRANIAN GOVT THROUGH ALL CHANNELS.

We suspect these sanctions would have more teeth than some travel bans, but, as we noted previously, it is just as likely to be another epic geopolitical debacle resulting from what was originally intended to be a demonstration of strength and instead is rapidly turning out into a terminal confirmation of weakness.

 

Tyler Durden's picture

General Motors Week Summed Up In 2 Cartoons





Harsh... but fair...

 

Tyler Durden's picture

Russian Politician Demands Banning McDonalds After Fast Food Chain Halts Crimea Operations





A few weeks ago, when the US announced the first set of sanctions against Russia, we jokingly commented that among the possible retaliations would be a Russian explusion of that global US permastaple, McDonalds. As it turns out, yet another "joke" may be on its way to becoming the truth.

 

Tyler Durden's picture

Bulls Vs. Bears: Some Profit Margin Stories Are Better Than Others





Market bears take the position that stocks are expensive, citing a variety of indicators and arguing that profit margins should “mean revert” from record highs. On the other side, market bulls dispute the indicators and propose that fat margins are no big deal – they might just remain at record highs indefinitely.

“High margins reflect a long-term structural change, not a short-term cyclical one,” according to one account of a popular position. Or “It’s a mistake to think that margins will revert to a long-term mean just for the sake of reverting to a mean.”

The message seems to be that mean reversion is for losers. This is a new era, or it’s a new economy, or whatever. We're paraphrasing, but the story sounds a lot like the capital letter New Economy of the late 1990s. There’s even a technology angle once again, along with huge confidence in monetary policy and recession-free growth. Above all, there’s a notion that the world might be different. Needless to say, the new, new economy story comes with plenty of red flags.

 

Bruce Krasting's picture

On Lewis and HFT





Did the world forget about the Flash Crash?

 

Tyler Durden's picture

Mapping The World's Ebola Outbreaks





Ebola is one of the deadliest diseases on Earth, with a fatality rate as high as 90%. It causes bleeding from the eyes, ears, mouth and rectum and a bloody full-body rash leading to a quick demise. It’s one of a handful of diseases that are so deadly that governments consider it a threat to national security. Luckily, so far the cumulative death toll from Ebola has been limited to sporadic epidemics in Africa, although that may change. Here, courtesy of Blooomberg, is a map of Ebola's African outbreaks in recent history.

 

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