Archive - Dec 9, 2015

On Tuesday, Wired and Gizmodo revealed the identity of the man they say is Satoshi Nakamoto, the pseudonymous creator of Bitcoin. Hours later, Australian authorities stormed his home and businesses in what was descrbed to reporters only as "an operation." According to the reports released yesterday, "Cold fish Craig" - as the man is known in the Austrailian suburb where he resides with his wife - may be in for a protracted standoff with the country's tax authorities.

If the American Dream depends on skyrocketing debt built on a weakening foundation of stagnant productivity and income, then it is indeed over. Voters sense this fragile, debt-dependent economy is one repricing away from implosion, and they're uneasy for good reason. Voters are rightly angry that the official statistics mask or manipulate this reality, for if we can't face reality then we have zero hope of solving any problems.

According to Bank of America's credit and debit card spending data, core retail sales (those excluding autos which are mostly non-revolving credit funded) just dropped by 0.2% in November, the first annual decline since the financial crisis!

The huge spike in the BofAML High Yield CCC’s that we noted last week is proving to be a real event, real trading and possibly a wholesale reset of the whole funding and liquidity environment. This is far, far more serious than just oil trading below $40 once more.. and brings the death of "transitory."

Do you feel "safe" now?

More signs that the economy is actually not all that well. It may yet recover on its own (believe it or not, but from a historical perspective the data in their totality are not yet decisive), but we think this is a very low probability scenario at this stage. There is likely already way too much malinvested capital in need of a significant purge.

Google announced yesterday that Chicago and Los Angeles could be two of the next cities to receive their 1 Gbit/s Internet service. 

We know, we know... "pent-up demand" and "buy the dip!"

While popular perception holds that debt-ridden, broke millennials are the ones driving the rental market, the truth is far more nuanced... and depressing for those who still cling breathlessly to The American Dream. The truth is millions of Americans were reduced to neo-feudal serfs by the financial crisis, and how those who ruined the economy profited handsomely from the process.

“Hedge funds have cost the states tens of billions in opportunity costs the last five years."

"Taxpayers and those who count on government services and investments will pay the price.”

If you said just more of the same, with corporate management teams buying back their own stock in near record quantities (boosting their own stock-linked compensation in the process) and serving as the biggest marginal buyer in the market, then give yourself a pat on the back.

The number of radical Salafists in Germany has more than doubled over the past five years, according to a new estimate by German intelligence officials. And now, Salafists disguised as aid workers are canvassing German refugee shelters in search of new recruits from among the nearly one million asylum seekers who have arrived this year from Africa, Asia and the Middle East. Some Salafists are offering gifts of money and clothing, with literature saying "Come to us. We will show you Paradise."

"... a default cycle in commodity-related areas at this point is unavoidable, and the only real question here is whether it stays contained to those areas or extends itself to other sectors."

With prices below $50, what is a stripper to do?