Archive - Sep 9, 2014

China

Scottish voters are going to the polls in just over a week to decide if they should break away from the UK. And from the looks of things, the independence movement has a very strong chance of winning. Whenever major changes happen, this brings opportunities as well. For example, a newly independent Scotland would create its own tax and corporate laws, potentially providing a number of major incentives to attract foreign talent and productive companies. A Scottish passport would also be attainable for many people. Some basic guidance has already been issued...

Despite the exuberance of certain government-sponsored confidence surveys, Gallup's weekly measure of economic confidence in America continues to go absolutely nowhere. As they note, so far, 2014 has been a unique year for the U.S. Economic Confidence Index in its doldrum-like range, stagnant and still negative.

Two words - "waning participation"...

It's square with a metal band, rotating dial...

*APPLE INTRODUCES 'APPLE WATCH' WITH SMALL DIAL ON THE SIDE FOR ZOOM, SCROLLING

It appears the market is disappointed in the watch and loved the payments...

On the day when Apple unveils "Apple Pay," enabling hackers to now get access not only to actor selfies but to their credit card numbers too; following smaller online retailers' lead - such as Overstock - the world's biggest marketplace, Ebay, has announced its PayPal unit will begin accepting bitcoin for payments. As Bloomberg reports, Ebay said at TechCrunch's Disrupt conference, "over the coming months we’ll allow our merchants to accept bitcoin. On the consumer side it will be a sleek experience." As we previously noted, Overstock CEO Patrick Byrne's comments that "once we and some other major guys start accepting it things could change very quickly," and Ebay seems to agree, adding "we're at the right time for this, and to see how to propel it forward." Bitcoin prices have not reacted to this news as the virtual currency has become considerably more stable in recent months.

Treasury Secretary Lew's comments on tax reform yesterday indicate that in the absence of legislative activity to address the expatriation of US-based companies, the Treasury will lay out its own plans "in the very near future." Goldman interprets this to mean an announcement in the next couple of weeks. While the substance of the Treasury's forthcoming announcement is still unknown, Lew's comments seemed consistent with Jan Hatzius' expectation that the steps the Treasury will announce will be incremental and not enough to fundamentally alter the outlook for these transactions.

Here we go... Icahn's been adding and everyone's excited about a bigger screen (like Samsung), an iWatch (like Motorola and Samsung), payments (like NFC on Samsung phones), Health (like Samsung), or whatever magic Tim Cook and his 'innovators' have in store. Apple's launch of iPhone 6 et al. will take place shortly...

WTF is haggis you say...

Whether because eaters around the world and in the US would rather eat even fattier, more expensive, more calorific equivalents such as MCD-spinoff Chipotle, or because the global consumer/eater can not even afford the cheapest form of a dollar meal, is unknown, but what is quite clear is that the company which was once the bellwether of the US commodity eater, McDonalds, just reported global comp store sales which saw a decline of -3.7% from a year ago, its worst monthly print in a decade!

Forty years ago many Americans celebrated the demise of the imperial presidency with the resignation of Richard Nixon. Today it is clear they celebrated too soon. Nixon’s view of presidential powers, summed up in his infamous statement that, “when the president does it that means it is not illegal,” is embraced by the majority of the political class. In fact, the last two presidents have abused their power in ways that would have made Nixon blush.

As President Obama prepares to unleash his ISIS 'defeat' strategery tomorrow, we thought it appropriate to gather together what we know so far about the terrorist organization. While their annual report (as we noted here), is chock full of ugly details of a well-organized and well-funded entity, the following brief clip from WSJ explains how The Islamic State is operating like a government, with a bureaucratic hierarchy; and how it is structured.

"Ukraine and Georgia's NATO aspirations not only touch a raw nerve in Russia, they engender serious concerns about the consequences for stability in the region. Not only does Russia perceive encirclement, and efforts to undermine Russia's influence in the region, but it also fears unpredictable and uncontrolled consequences which would seriously affect Russian security interests. Experts tell us that Russia is particularly worried that the strong divisions in Ukraine over NATO membership, with much of the ethnic-Russian community against membership, could lead to a major split, involving violence or at worst, civil war. In that eventuality, Russia would have to decide whether to intervene; a decision Russia does not want to have to face." - US Ambassador to Russia William Burns, February 2008

These are questions that arise as a consequence of the digitization of the global/local supply chain in the peer-to-peer model. Just as we have reached Peak Central Planning and Peak Central Banking, we may have reached Peak Centralization not just in government and finance but in the corporate-cartel model of "low quality at high margins."