Archive - Apr 2015

Everyone is reportedly "out of danger"...

Confused as to whether good news is bad news, bad news is good news, or no news matters whatsoever, this brief clip summarizing every mainstream media report on the economy explains it all...

The best contra-indicator at work...

There’s no getting away from it. Banks create money out of nothing when they extend loans and then charge borrowers interest on this newly created capital. The result is an ongoing multi-billion pound/ dollar subsidy breaking the basic rules of capitalism. Galbraith was right. Governments should be more pragmatic. Politicians should stop hiding behind the skirts of ‘the market’ and make some judgement calls. As many have said, we need banking but we don’t need banks, at least not banks like this.

Earlier this morning, RT reports that Saudi Arabia rejected Russia’s amendments to a Security Council draft resolution which would see an all-inclusive arms embargo on all parties in the Yemeni conflict. Saudi stocks did not like the news and began to tumble - now down over 3%, back at January lows as the fighting continues to spiral out of control with civilian death toll climbing. At least 185 people were left dead and more than 1,200 wounded as a result of fighting in Aden, a medical official told AFP Saturday, three-quarters of them civilians. In the meantime, Reuters reports The Houthis are gaining ground in Aden, despite the onslaught of airstrikes; and the Saudi ambassador to the United States, said sending ground troops remained "on the table."

Another spring chicken...

Today’s clueless Keynesian central bankers essentially believe that they can keep the pedal-to-the-metal until a 1970’s style inflationary spiral arises. But none is coming because  the worldwide central bank money printing spree of the last two decades has generated massive excessive capacity and malinvestment all around the planet. What is coming, therefore, is not their father’s inflationary spiral, but an unprecedented and epochal global deflation. So the central banks just keep printing, thereby inflating the asset bubbles world-wide. What ultimately stops today’s new style central bank credit cycle, therefore, is bursting financial bubbles. That has already happened twice this century. A third proof of the case looks to be just around the corner.

When you’re running an epic socialist experiment while simultaneously attempting to preserve the legacy of a now-deceased “anti-imperialist” geopolitical legend and your country’s most valuable asset has unexpectedly become a liability, it’s sometimes necessary for the common man (and woman) to make sacrifices...

With a long weekend upon us, ConvergEx's Nick Colas takes the opportunity to wax a bit philosophical.  The question for the day: "How do you survive middle age while working on Wall Street?"  After polling a few friends of a similar vintage to his own 25 year history on the Street, he has come up with a Top 10 list of dos and don’ts.  The key take away from all these thoughts is pretty simple – the journey never stops, so keep investing in yourself, your friends, and your allies. These may not guarantee success, but ignoring them surely leads to failure. 

From little black dresses to big white pussies; Fashion designer and photographer Karl Lagerfeld claims his chic cat, named Choupette made $3.22 million last year from just two modeling gigs. Unbelievable, perhaps; but as the insanely wealthy Lagerfeld explains, "she is the center of the world. If you saw her, you would understand."

As the world awaits the outcome of next Iran "deadline"- the June 30 conclusion of the finalization of the Iran deal - the US is already hedging its bets. According to the WSJ, the Pentagon has "upgraded and tested the largest bunker-buster bomb in the U.S. arsenal, senior U.S. officials said, readying a weapon that could destroy or disable Iran’s most heavily fortified nuclear facilities should a nuclear deal fall apart and the White House decide to take military action."

There is only one way to value gold, and that is to quantify the expansion of the fiat currency in which it is priced.

Germany has been kind enough to provide an idea where the foundering Greek "radical leftist" government can find some additional funds: by freezing and raiding the bank accounts of wealthy Greeks. Of course, the legal loophole provision is that only those suspected (not convicted) of tax fraud would be eligible for such an asset  freeze, however since in Greece virtually nobody pays the amount of tax they should, this is essentially a carte blanche to freeze and raid the funds of the wealthiest Greeks who have bank accounts in Germany (and soon in all other European nations) no questions asked.

Thank the Lord (Keynes) for economic hockey-sticks...

With the Fed supposedly steeling itself at last to remove a little of its emergency ‘accommodation’, it has suddenly become fashionable to warn of the awful parallels with 1937 as an excuse The Fed must not act today. We strongly refute the analogy. Instead, the real Ghost of ’37 takes the form of mean-spirited and, counter-productive 'pitchfork populism' politics and the spectre should not be conjured up to excuse the central bank from further delaying its overdue embarkation on the long road back to normality and policy minimalism.