Archive - Apr 2014

April 28th

Tyler Durden's picture

Name The Continent: It Accounts For 7% Of The World's Population, 25% Of GDP And 50% Of Welfare Spending





Angela Merkel has a favourite mantra to offer troubled euro-zone countries: they should copy Germany. As The Economist notes, she put it last autumn: "What we have done, everyone else can do." Fifteen years ago, so she says, her country was widely regarded as the sick man of Europe; then it opted for fiscal austerity, cut labour costs and embraced structural reforms, turning it into an economic powerhouse. However, there is another mantra Mrs Merkel likes to repeat to her colleagues: Europe accounts for 7% of the world’s population, 25% of GDP and 50% of social-welfare spending. The Economist, and George Soros believe, Germany’s current course will exacerbate that problem as Europe's biggest economy is backsliding on structural reforms (as she preaches pre-growth reforms but implements anti-growth ones).

 

Tyler Durden's picture

Epidemic Of Hunger: New Report Says 49 Million Americans Are Dealing With Food Insecurity





If the economy really is "getting better", then why are nearly 50 million Americans dealing with food insecurity?  In 1854, Henry David Thoreau observed that "the mass of men lead lives of quiet desperation".  The same could be said of our time.  In America today, most people are quietly scratching and clawing their way from month to month.  Nine of the top ten occupations in the U.S. pay an average wage of less than $35,000 a year, but those that actually are working are better off than the millions upon millions of Americans that can't find jobs.  The level of employment in this nation has remained fairly level since the end of the last recession, and median household income has gone down for five years in a row.  Meanwhile, our bills just keep going up and the cost of food is starting to rise at a very frightening pace.  Family budgets are being squeezed tighter and tighter, and more families are falling out of the middle class every single day.  In fact, a new report by Feeding America (which operates the largest network of food banks in the country) says that 49 million Americans are "food insecure" at this point.  Approximately 16 million of them are children.  It is a silent epidemic of hunger that those living in the wealthy areas of the country don't hear much about.  But it is very real.

 

Tyler Durden's picture

Average Retirement Age In America Hits Record High





The average age at which U.S. retirees report retiring is 62, the highest Gallup has found since first asking Americans this question in 1991. While not a total surprise, given our previous discussion of the rise in employment that is so focused on the elder cohorts of society as they smash headlong into the realization that they have no retirement plan. As we pointed out here, the typical worker near retirement only has about 2 years of replacement income saved, or about 15 years short of the median lifespan post-retirement. What is perhaps more worrisome is the rapid rise that Gallup notes in the last few years, as we have pointed out in the past that in fact, over 60% of workers accumulated more debt than they contributed to retirement savings between 2010 and 2011.

 

Tyler Durden's picture

Re: Bank Of America. Remember The Lessons From Cyprus





Last month, Bank of America made a lot of noise about how they were going to buy back up to $5 billion worth of common shares. As CEO Brian Moynihan stated, “We have simplified our company and we have more than adequate capital to support our strategic plans. We are well positioned to return excess capital to our shareholders.” Needless to say, investors cheered the announcement, and BofA’s stock price rose nicely as a result. Fast forward 45 days… and boy what a difference reality makes.  Remember the lessons from Cyprus: last March, people went to bed on a Friday night thinking everything was just fine. The next morning they woke up to find that their entire banking system was insolvent and that the government had frozen their accounts.  Bottom line, just because they tell you the money’s there doesn’t mean the money’s there. Just because they tell you they’re well capitalized doesn’t mean they’re well capitalized.

 

Pivotfarm's picture

US Companies: Bribery Probe





It’s illegal but who gives a damn. As if we abided by the law these days. People annex countries when they want to so why worry about a little bit of bribery?

 

Tyler Durden's picture

Financial Crises And "The Tragedy Of Small Decisions"





In the second part of the series on the troubling repetition of financial crises, The FT's John Authers warns that while the 2008 financial crisis appears (judging my 'markets') to have been resolved; this has only sown the seeds of a further crisis. Bob Swarup, author of 'Money Mania', explains to John Authers how more needs to be done than such short-term fixes. Europe, for instance, Swarup notes is replaying the "tragedy of small decisions" that it went through in the 1920s as nations become ever more dependent and inter-connected and policy-makers around the world are faced with the uncomfortable reality of a highly complex world increasingly beyond the control of the fiscal and monetary policy manipulations.

 

Tyler Durden's picture

The Second Biggest Delusion In US Culture





The debate over Thomas Piketty’s new book Capital in the Twenty-First Century is as dumb as every other issue-set in the public arena these days - a product of failed mental models, historical blindness, hubris, and wishful thinking... We doubt that the Warren Buffets and Jamie Dimons of the world will see their wealth confiscated via some new policy of the Internal Revenue Service - e.g. the proposed “tax on wealth.” Rather, its more likely that they’ll be strung up on lampposts or dragged over three miles of pavement behind their own limousines. After all, the second leading delusion in our culture these days, after the wish for a something-for-nothing magic energy rescue remedy, is the idea that we can politically organize our way out of the epochal predicament of civilization that we face. Piketty just feeds that secondary delusion.

 

Tyler Durden's picture

Saxo Warns "Markets Are Drifting Into Dangerous Territory"





A lack of volatility in the markets is dangerous, according to Saxo Bank's Chief Economist Steen Jakobsen, who says we need to know why the danger will be with us for some time. In this brief clip he warns, "...the world seems to think there is a stable permanent equilibrium which doesn't make sense if you think about it, unemployment is still rising, debt to GDPs are still rising, the Crimea situation is increasing in tension, not decreasing, The US still has a lot of stuff to do on social security and welfare spending…for two or three years down the road, with no activity, the world will fall into not only deflation, but also a recession." Jakobsen predicts that, year on year, world growth will actually be "a big fat zero" and therefore the markets are drifting into dangerous territory.

 

Tyler Durden's picture

Beware The Social Tipping Point





We have often suggested that, if we wish to know what is coming politically, socially, and economically in jurisdictions such as the EU and US, we might have a look at countries like Argentina and Venezuela, as they are in a similar state of near-collapse (for the very same reasons as the EU and US) but are a bit further along in the historical pattern. Such a bellwether was seen in Argentina recently.

 

Tyler Durden's picture

Herbalife's Earnings, And Carl Icahn's Activist Strategy, Summarized In Two Charts





Carl Icahn's brilliant "activist" plan revealed in all its glory.

 

Tyler Durden's picture

GOGO Bye Bye?





Some uncomfortable news for the airplane web provider after hours:

*AT&T SAYS IN-FLIGHT CONNECTIVITY SERVICE AVAILABLE LATE 2015

GOGO stocks are down 18%... Go Go Gadget "barriers to entry"

 

GoldCore's picture

Russian Sanctions Could See Gold Prices ‘Explode’





Conflict with Russia may have a “massively bullish impact on gold prices.” The concept of MAD or mutually assured destruction was what prevented war between the superpowers during the Cold War. Today, there appears to be a lack of awareness regarding the risk of mutually assured economic destruction.

 

 

Tyler Durden's picture

Selling Scramble Becomes Buying Panic But The S&P/Dow Fail To Hold April Gains





Owners of high-growth, high-beta stocks could not find a buyer for any of their crap today some mid-afternoon shenanigans between AUDJPY, VIX, and more utterly useless Russian headlines meant those same owners of high-growth, high-beta stocks were beating buyers away with a shitty stick. Pandora is a great example of the chaos (today's swings down 2%, up 4%, down 11%, then up 6%) as today's action in the so-called "market" was anything but human. The buying panic lifted the S&P, Dow, and Trannies briefly into the green for April but very late-day weakness left only the Trannies green for April.  We just hope the desperate BTFWWIII'ers didn't use up all their BTFTuesday ammo...

 

Tyler Durden's picture

Futures Surge On Yet Another "Diplomatic De-escalation" Bluff





The first rip was a "standard" VIX-based, AUDJPY-based ramp to VWAP to save the big boys and allow orders out but that rapidly escalated into a panic buying spree as headlines hit that yet another in a long-series of de-escalation optimisms...

RUSSIAN TROOPS RETURNED TO BASE FROM UKRAINE BORDER: IFX
RUSSIAN DEFENCE MINISTER SHOIGU TOLD U.S. DEFENCE SECRETARY HAGEL RUSSIA IS OPEN TO CONTACTS WITH ALL SIDES TO SEEK TO DEFUSE TENSION OVER UKRAINE

Think about it... we know what Russia wants, we know what they need to defise the situation and we know the US/West won't accept it... so "we" buy the fucking dip anyway..?

 

williambanzai7's picture

SeND IN THE NeoCLoWNS...





The circus never left Neoclown town...

 
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