Archive - Oct 25, 2015

In reading various recent regulatory reports, it is clear that almost none of the promises that were made to the public about what was going to happen under Dodd-Frank financial reform is actually happening. Welcome to another day at the casino where the model continues to be — heads they win, tails you lose.

Despite the ongoing propaganda reinforcing America's "cleanest sheets in a brothel" economic growth, the fact is, there is a reason why The Fed folded, why Draghi doubled-down, why China cut, and why Kuroda will likely unleash moar QQE this week. It appears the 'trap' that central planners have set for themselves - by enabling massive financial asset inflation in the face of what is now the longest streak of economic weakness and data disappointment on record - now looks set to prove their impotence and/or Enisteinian insanity.

Doing as Yellen and her counterparts demand is the biggest risk of all. The Yellen Doctrine requires that central banks be both correct and able, abilities that have been (and can only be) in utter short supply. Her view would show more proactive and effective central bank management where only reactive and impromptu, last minute white-knuckling has abounded. Central banks have been in the past year only holding on for dear life, which is where obscurity has been their benefit. In the end, however, it will bring about their own downfall as it only serves to make matters worse. Yellen wants the central bank to be viewed as almost godlike, but they continually reveal themselves weak, deceptive and ineffectual; eschewing all long run sustainability in order to just make it through one day at a time.

When corrupt politicians do as they are told by their keepers on Wall Street and in the boardrooms of S&P 500 mega-corps....

Prussian roulette...

One would think that 'little incident in August' never happened. Yes, the markets once again rewarded the BTFD crowd. But (and it’s a very big but) not because it’s a market. This is what takes place in a casino. Confusing financial market expertise and casino gambling is the mistake today’s “bull” crowd keeps making. And just like most gamblers – the odds turn out of your favor just when you believed you had “the” sure-fire system to beat them.

The William F. Buckley Jr. Program at Yale recently commissioned a survey from McLaughlin & Associates about attitudes towards free speech on campus. Some 800 students at a variety of colleges across the country were surveyed. The results, though not surprising, are nevertheless alarming. By a margin of 51 percent to 36 percent, students favor their school having speech codes to regulate speech for students and faculty.

Hey, everybody. Look, I sort of fell out of the public eye once people stopped eating Wheaties, and I'm glad to have a second career as a reality show freak.

Since China devalued the Yuan and surprised the world's carry traders (and central planners) by stirring up FX volatility, the demand for 'paper' gold has begun converging to the demand for physical precious metals. Gold prices are now up over $100 since August 10th, but it is another (easier to 'transport') alternative currency that has soared. Bitcoin has spike post-China-devaluation (since dipping on 'governance' concerns), accelerating from under $200 to almost $300 today, and up 25% since our September 2 explanation why China's capital account crackdown is "great news" for bitcoin.

Defying the international call for an arms embargo over war crimes concerns, the U.S. Department of Defense (DoD) announced Tuesday it has approved an $11.25 billion deal to sell combat ships to Saudi Arabia, which has been waging a military assault against Yemen for more than six months. “The selling of arms in the middle of a war will obviously send the message that the Saudis can do whatever they want and get away with it,” said Farea Al-Muslimi, Beirut-based Yemeni writer and visiting scholar with Carnegie Middle East Center.

Following the latest hedge fund underperformance, it is no longer possible to ignore the obvious:in the year in which central banks will unleash the greatest amount of liquidity in the "markets" in history, and where we have seen at least 77 easing steps taken by global central banks, hedge funds are poised to record their worst performance since 2011, according to JPM.

If Bernie Sanders really believes that socialism is the solution, then he is misguided – even though his criticism of oligarchic cronyism is justified. Socialists believe that the society is just one “organic body” and as with all such entities resources are used indiscriminately by the organism so as to support its various functions, organs, faculties, etc., never mind who produces and who consumes the resources; those are for the whole system to use as is needed: “From each according to his/her ability, to each according to his/her need!” Trouble is some of the people will have to decide about all this.  It is not automatic, contrary to what Marxists think. And here is where the politicians and their appointed bureaucrats enter the picture.

"Our mistake in our understanding of what would happen once you removed the regime. Of course, you can't say that those of us who removed Saddam in 2003 bear no responsibility for the situation in 2015."

Watch out for a snowball-effect in the Treasury market...

How governments all around the world resort to absurd marketing to finance largesse