Archive - Jun 2015

“I expect that we may have a similar encounter because we’re operating in this part of the world,” US Naval Commander Rich Jarrett tells Bloomberg, referencing the likelihood of a maritime confrontation between the US and China. Meanwhile, the Pentagon is concerned that Beijing is "closing the gap" when it comes to air and space technology.

There’s a specific sort of instability in the world today – a game theoretic instability – which means that it has an identifiable pattern and rhythm you can understand in order to improve your investment strategy. It’s the instability of the game of Chicken, and once you start looking for it, you will see it everywhere here in the Golden Age of the Central Banker. Greece vs. the Troika? Chicken. Western sanctions on Russia over the Ukraine? Chicken. OPEC vs. US energy producers? Chicken. ECB vs. the Swiss National Bank? Chicken. Fed monetary policy communications to markets? Chicken. Abenomics? Chicken. US policy towards China? Chicken. ISIS vs. the world? Chicken.

74% of American men are either overweight or Obese (up from 63% in 1994) according to a new report using data from the National Health and Nutrition Examination Survey. As MSN reports, the researchers exclaim "obesity is not getting better. It's getting worse, and it's really scary. It's not looking pretty," warning that America's "car dependence" and poverty ("processed and fast foods are less expensive") are to blame and America's weight problem is an issue that will not be resolved through a purely medical solution. "This generation of Americans is the first that will have a shorter life expectancy than the previous generation."

Following the removal of Confederate Flag merchandise from WalMart; Sears, Ebay, ETSY, and prominent flag maker Valley Forge Flags have all joined the 'movement' and stopped selling the 'controversial' flag. However, as with any and all government-'suggested' actions, there are unintended consequences in the hypocrisy of implicitly banning this symbolic banner... sales of Confederate Flags are soaring everywhere else (as the "guns and ammo"-like threat of scarcity has led to a run on the products).

"It's June. Winter is coming..."

Welcome to the new normal efficient "market" - where 7 sevenths are worth 3.5% more than the whole...

"...my personal strategy for change has morphed from speaking to power in favor of becoming a monk rather than a martyr. If I could stand in front of a tank and have it force positive change I would do so but clearly that opportunity won’t happen or present itself in this leaderless, narrowing, putrefied, lying lawless system of festering corruption. Beyond 2015, I fear it will continue to be everyman for himself and thus divided we'll fall having rejected the spirit of one nation, indivisible, with liberty and justice for all."

Maybe WMT should start selling Confederate flags again...

Just as we warned earlier in the year, total uncertainty about the future of Greece has enabled a growing sense of moral hazard as "if the nation doesn't pay its debt, why should we" sweeps across the troubled nation. As Greeks' tax remittances to the government, which were almost non-existent to begin with, have ground to a halt, so The FT reports, so-called 'strategic defaults' have become a way of life among Greece's formerly affluent middle-class..."I still owe money on the car and motorboat I can’t afford to use. Even a holiday loan I’d forgotten about...I’m living with my mother looking for work and waiting for the bank to come up with another restructuring offer."

Time's running out...

With The IMF (and Germany to a less extent) apparently peeing in the Greek Deal pool, perhaps it is worth considering what happens next if this "Greece is rescued" deal is not done. Who can save Greece? Who will pay The IMF? Why, that's simple, the good ol' American taxpayer thanks to The Fed's lifeline...

Never a dull moment in Euro-land!

The 2008 Crisis was a stock and investment bank crisis. But it was not THE Crisis.

Despite near-record high equity prices, it appears soaring gas prices, stagnant incomes, and unaffordable homes are weighing on the American consumer far more than talking-heads would have investors believe. Gallup's latest economic confidence index re-tumbled to -9, 2015 lows and the lowest since Nov 2014. What is worse is the spread between current conditions and the outlook is gapping with hope for the future at its lowest since the end of QE3 after peaking In Feb.