Archive - Apr 2015

Following Thursday's H.4.1 update by the Fed, is that, inexplicably, in the week ended April 1, the amount of Treasurys held in custody by the Fed jumped by the most ever, or $63 billion in one week, to $2.963 trillion.

The root of support for the drug war is simply this: trust in government. Unnecessary, irrational, and naive trust in government. The war on drugs is a war on individual liberty, private property, limited government, the Constitution, American taxpayers, personal responsibility, the free market, and a free society that has ruined more lives than drugs themselves. Every facet of government that contributes in some way to the monstrous evil that is the war on drugs should be dismembered, root and branch, and cast to the four winds.

Auto ABS has "dominated" new consumer issuance YTD and $7 billion in new subprime supply suggests buyers are generally oblivious to worsening credit profiles. Is this a good time to pledge a devaluing asset to buy an overvalued asset?

"...the deterioration in both economic data and profitability data leave a good bit of cause for near-term concern..."

When discussing the Iran "deal" which isn't a deal, but merely a " Joint Comprehensive Plan of Action", there are two key things one must keep in mind: the location of Iran's nuclear facilities and its oil infrastructure. Here is a quick take on both.

Considering several recent contentious situations in Ferguson (Michael Brown) and New York (Eric Garner), and judging from recent events in Germany and Canada, it appears the Department of Homeland Security is intent on enhancing its ability to bring unruly crowds under control, so if you are a “less lethal” munitions supplier, you may want to check out the business opportunity the government has for you.

Even before the disappointing US jobs data, we anticipated a downside correction in the dollar after a sharp advance in Q1.   

In Order To Beat 'Em, You Have to Know Their Game ...

California's oil and gas industry is estimated (with official data due to be released in coming days) to use more than 2 million gallons of fresh water per day; so it is hardly surprising that, as Reuters reports, Californians are outraged after discovering that these firms are excluded from Governor Jerry Brown's mandatory water restrictions, "forcing ordinary Californians to shoulder the burden of the drought."

“Calling our society a democracy is very misleading... We’re not a republic; we’re not a constitutional republic. We live in a state that’s dominated by these technocratic agencies.” Thiel says that organizations like the Federal Reserve have been allowed to roam too far, calling government agencies “deeply sclerotic and deeply nonfunctioning.”

As the market ponders how quickly an Iran nuclear deal and subsequent lifting of sanctions will affect crude prices, record production in Iraq leaves 5% of the world's tanker fleet parked in the Persian Gulf.

With 'shocked' OSCE observers noting that the Minsk accord ceasefire is not holding in Ukraine's Shyrokyne, it appears sabre-rattling around the world is picking once again. Military exercises in Russia's Astrakhan region, conducted successful launches of the 'hypersonic' S-300 anti-aircraft missile systems, repelling an "enemy" air assault. This follows another drill invloving ten aircraft including helicopters in simulated attacks by an "enemy" near the Chinese border. Meanwhile, North Korea has test-fired four short-range missiles into the sea off its west coast, in protest at US-South Korean military drills, which are currently ongoing, and a 2nd drill is underway " supervised by Kim Jong-Un."

"It is hard to be “reasonably confident” in the inflation outlook given current economic conditions, unless several inflation drivers rise at the same time. We therefore do not have much confidence in the inflation outlook and believe that the right policy would be to put hikes on hold for now."

- Goldman Sachs

The drought in California is getting a lot worse. In fact, California has been losing more than 12 million acre-feet of groundwater a year since 2011, and wells all over the state are going dry. Once the groundwater is all gone, what are people going to do?

At its core, currency manipulation is any intentional intervention that results in an undervalued currency and a substantial current-account surplus – exactly what the ECB is doing. If the ECB maintains this policy for an extended period, tension with the US is all but inevitable – tension that may obstruct the TTIP’s approval by the US Congress or hinder the treaty’s actual operation, resulting in its deterioration or termination. This runs counter to the popular view, which drove the eurozone’s creation, that Europe needs a single currency to compete with large economies like the US, China, and India.