Archive - Sep 2014

While Iceland's serene landscape may be the perfect analogy for world markets currently, the eruption of its Bardarbunga volcano shows what fierce reality lies just beneath the surface. Capitalism and free markets will always find away though, and as RT reports, one travel company is cashing in on the incredible awe-inspiring images by offering tours over the volcano at a height of around 150 meters. As the following stunning clip shows, at $920, it may well be the trip of a lifetime...

There’s not a single day that we’re not treated to more smart treats about stimulus measures. Are they necessary, are they good, are they bad, who profits from them. It gets really long in the tooth. Today, former ECB head Trichet says unlimited stimulus ‘risks’ blowing bubbles. “Supplying unlimited amounts of liquidity at interest rates close to zero has “unintended counterproductive consequences.” No shit, assclown. Does Jean-Claude really mean to claim he just figured that one out now? Why else did he never say it before? There are 1001 other wise guys like Trichet who’ve only recently seen a sliver of light, and see fit to make the great unwashed party to their new found wisdom.

While Americans seem quite comfortable with the US government 'breaching' their privacy, the surge in private sector cyber-attacks and data hacks in recent months is worrisome to many. As Bloomberg illustrates below, so far the efforts have been focused on retail merchants (as opposed to banking) with Home Depot's latest breach yet to be sized but believed to be "massive."

President Obama has swung from "we have no strategy" to "keep in mind this is something we know how to do," in a week, and speaking on Meet The Press this morning he teased the world's allies (and terrorists) with the promise that he will address the nation Wednesday to lay out U.S. plans for combating the Islamic State of Iraq and Syria (ISIS), promising the U.S. can and will defeat the group. As CBS reports, while not quite as gung-ho as Biden's "gates of hell" speech, President Obama appears to have stepped up his rhetoric from 'contain' to 'defeat' as he stated "we will hunt down [ISIS] members and assets wherever they are," but carefully added putting U.S. troops on the ground would be a "profound mistake."

One trillion is a big number. In this short clip, we try to help you get a sense for just how big; but the reality is simply that the human brain can't really suitably comprehend magnitudes this large. Which is why we should be concerned that the US' money supply has ballooned to over $12 trillion dollars over the past decade. And that its outstanding debts and liabilities are many multiples that amount. We have reached the point where we’re operating in territory beyond our neural programming. As a result, unintended consequences to our current policies are guaranteed.

The constant to-and-fro of lies, propaganda, and misinformation continues among all sides in Ukraine; but this 'denial' occurred very rapidly. As Reuters reports, a senior aide to Ukraine's President Petro Poroshenko said on Sunday that Kiev had reached agreement during the NATO summit in Wales on the provision of weapons and military advisers from five member states of the alliance. However, four of those five swiftly denied making any such pledge.

Today, high inflation seems so remote that many analysts treat it as little more than a theoretical curiosity. They are wrong to do so. No matter how much central banks may wish to present the level of inflation as a mere technocratic decision, it is ultimately a social choice. And some of the very pressures that helped to contain inflation for the past two decades have been retreating. Modern central banking has worked wonders to bring down inflation. Ultimately, however, a central bank's anti-inflation policies can work only within the context of a macroeconomic and political framework that is consistent with price stability. Inflation may be dormant, but it is certainly not dead.

Straight-forward discussion about the investment climate and the week ahead.  Light on hyperbole, heavy on analysis.  

NO STINKIN' FOOD OR BEVERAGES WITH THIS POST...

"We had a relatively dry period during the Medieval Warm Period, 900-1400AD. There were several prolonged periods of drought that lasted decades to over a century during that time. That period was followed by a cooler, wetter period (the Little Ice Age) that continued until the 19 century. However, the tree-ring records suggest that the 20 century was unusually wet, meaning we had fewer droughts on average than the previous 1000 years....  the past decade in California and the West has been pretty dry, and the concern is that these climate conditions could continue for several more decades. We've seen these broader cycles of wet-dry in the past."

Say hello to the next financial crisis, brought to you courtesy of the dumbest new bill of the week: H.R. 5148: Access to Affordable Mortgages Act.

In the wake of the theft of private images from several prominent celebrities, many people are rightly wondering whether how vulnerable their data is. The answer appears to be “very,” and if you use Apple, the following article from Slate may leave you seething with a sense of anger and betrayal.

Thanks to yesterday's dismal jobs data, we now know that there has never been a lower percentage of white men over 20 working in America...

Google "grocery prices last 12 months" and it's post after post beginning with "Consumer prices rise" or "Rising food prices bite." One person who is happy about this is the New York Times’ Paul Krugman, for instead of being like Europe, that is “clearly in the grip of a deflationary vortex,” America only teeters on the edge of a general price plunge. “And there but for the grace of Bernanke go we,” writes the voice of Grey Lady economics wisdom. However, Mr. Krugman shouldn’t declare defeat to the deflationists just yet. Bankers are learning to say ‘yes’ again, and that means velocity and price increases.

Think CDS were the scourge of humanity, think again. As Pension360 reports, several Wall Street firms are selling securities backed by longevity risk - the risk that retirees receiving benefits will live longer than expected (and thus incur a higher cost on their retirement plan). As Ted Ballantine notes, 'no one ever said Wall Street wasn't creative'; but one wonders just how the banks are mitigating this risk...