Archive - May 2014

Capture, corruption, irreparable harm--and little hope for change.   

"This is the future if nothing is done to stop it," is the ominous way The Atlantic describes the recent Big Brother tactics used by LA County Sheriffs to "police" areas such as Compton. Residents were unaware ("A lot of people do have a problem with the eye in the sky, the Big Brother, so to mitigate those kinds of complaints we basically kept it pretty hush hush")that, as the police stated, "we literally watched all of Compton during the times that we were flying, so we could zoom in anywhere within the city of Compton and follow cars and see people," as they trialled a new system which if adopted, would mean Americans can be policed like Iraqis and Afghanis under occupation. As The Atlantic concludes, the sheriff didn't conclude that the "wide area surveillance" wouldn't be like Big Brother after all, just that Big Brother capabilities would help to solve more crimes... so why not tryout mass surveillance?

If the advance from January 2013 to the top in early 2014 isn't a blow-off top, it's certainly a pretty good imitation of one. If the NASDAQ surpasses the high of 4,371 and moves higher, the head and shoulders pattern is negated. If the NAZ fails to rally to new highs, that could be a signal that the rally from 2009 is reversing or has entered a new phase.

While every state has at least some residents who are looking for greener pastures; as Gallup reports, nowhere is the desire to move more prevalent than in Illinois and Connecticut. In both of these states, about half of residents say that if given the chance to move to a different state, they would like to do so (against an average 33% of all Americans who would prefer to live in another state than their own). The 'greenest pasture' or least disliked, according to Gallup, is Hawaii and Montana (where only 23% would prefer to leave). The biggest factor driving the desire to leave the current state - unsurprisingly - jobs (or business opportunities)... and Nevada residents (thank you Harry Reid) the most anxious to leave in the next 12 months.

That's right, I.N.N.F.

As tensions between all parties in Eastern Europe boil over, Chris Martenson provides a brief tour through just some of the antics surrounding the US' involvement in bringing about change (you can believe in!) in Ukraine. We raise these items to counter the usual clutter and complete lack of context being provided in the US press and to illustrate that the US is already in pretty deep and therefore unlikely to back down now. Before we move on, do you not find it at all strange that the US media, usually extremely sensitive to anti-semitism, has given the McCain and Nuland support of the Svoboda party a complete pass? I find it to be like the case of "the dog that did not bark", meaning the silence reveals a very fickle moral compass at the heart of the western press. The demonization of Putin as the bad guy here is near complete in western media. But there’s plenty of mischief all around and, as usual, the US finds itself with some pretty strange bedfellows as it seeks an outcome it likes.

The great attempt to prop up the US economy through spending and printing money is at an end. The world takes a long time to catch on to these changes, but the shift has already begun. It’s now just a matter of time before stocks figure it out.

After 3 months of range trading, Treeasury yields have resumed their year-to-date downtrend. The Friday Bearish Outside Bar (a bearish chart pattern indicating further downside) and closing break of the 2.591% range lows says lower 10yr yields are coming (targeting 2.40%)for 10Y Simply put, BofA's Macneil Curry warns - Don't Fade This Breakdown... Watch US equities.

Did you know that there are nearly 102 million working age Americans that do not have a job right now?  And 20 percent of all families in the United States do not have a single member that is employed.  So how in the world can the government claim that the unemployment rate has "dropped" to "6.3 percent"?  Well, it all comes down to how you define who is "unemployed".  For example, last month the government moved another 988,000 Americans into the "not in the labor force" category.  According to the government, at this moment there are 9.75 million Americans that are "unemployed" and there are 92.02 million Americans that are "not in the labor force" for a grand total of 101.77 million working age Americans that do not have a job.  Back in April 2000, only 5.48 million Americans were unemployed and only 69.27 million Americans were "not in the labor force" for a grand total of 74.75 million Americans without a job.  That means that the number of working age Americans without a job has risen by 27 million since the year 2000.  Any way that you want to slice that, it is bad news.

Of the economic reports and events in the week ahead, we identify four potential drivers and emphasize one--the ECB meeting.  

Now that the situation in Ukraine has officially been upgraded to "war", what really happens on the ground will remain largely wrapped by the fog of war on either side, with just one thing assured: a war it may be but more than anything it is a proxy war - one in which both western and Russian interests are manifest in the fighting, and killing, of mostly innocent civilians in Ukraine - a carbon copy replica of what happened last year in Syria.  The latest reminder of just this comes from AFP which reports, citing Germany's Bild, that "dozens of specialists from the US Central Intelligence Agency and Federal Bureau of Investigation are advising the Ukrainian government."

India has long been an economic laggard to China but that may be about to change.

China is a case of bastardized socialism on credit steroids. At the turn of century it had $1 trillion of credit market debt outstanding—-a figure which has now soared to $25 trillion. The plain fact is that no economic system can remain stable and sustainable after undergoing a 25X debt expansion in a mere 14 years.

For 364 days of the year, the theater that the press and the administration are on the opposite sides of the table, continues without a glitch. However, one day a year, during the annual White House Correspondents' Association dinner, the facade falls and Obama, together with his fawning press corps, have a night of laughs in an Oscar-inspired night of self-congratularoty excess. Which, just like every other night in Washington, is at the taxpayers' expense. Here are the highlights from last night's festivities.

Whatever You Think of Putin, You Should Understand How Russia Thinks