Archive - Jun 2015

Last month, Chicago saw its debt cut to junk at Moody's, triggering billions in accelerated payment rights and jeopardizing efforts to improve the city's finances in the face of a budget gap that's set to triple over three years. Citi has more on the dreaded "downgrade feedback loop."

“Why do you think NSA [and other intelligence agencies] support it?” --William Binney

The somewhat farcical journey home from Europe for Secretary of State John Kerry continues. As we noted previously, after breaking his leg on an arbidged Tour de France'-esque accident in which he hit a curb, he was flown to Geneva in a helicopter where he was "stable and never lost consciousness," which makes sense (unless as many have suggested his brain lies considerably lower in his body than most humans). But then the escapade got beyond unreal as The White House sent a massive "specially-equipped" C-17 airplane (used to carrying over 100 combat troops and equipment into battle) to fly him to Boston for surgery. We assume he is covered by Obamacare, since the cost of this rescue mission - assuming roughly 10 hours flight-time - is at least $250,000... and all to avoid an Iran deadline no one expects to meet...

"Japan's pension system has been hacked and more than a million cases of personal data leaked, authorities said on Monday, in an embarrassment that revived memories of a scandal that helped topple Prime Minister Shinzo Abe in his first term in office," Reuters reports. China to be blamed in short order.

Presented with no comment...

On a year-over-year basis, average spending in May of 2015 was $7 less than 2014, and nearly identical to  2013, when the US unemployment rate was nearly 3% higher, and the economy was supposedly sputtering badly enough for the Fed to launch QE3. Finally, as the chart below shows, this was the biggest month of May consumer spending drop in nominal dollar terms since the 2008 financial crisis.

"The real lesson from Europe is actually the opposite of what conservatives claim: Europe is an economic success, and that success shows that social democracy works."--Krugtard

"US authorities need to take serious actions to show some sincerity, and to prove that they are not bad guys. Perhaps letting one of the most controversial intelligence-related acts expire is an acceptable solution."

With the tragic deaths (in a taxi accident) of John Nash and his wife, we explain Nash’s contributions to the general public. With real-life examples, from "the battle of the sexes" to picking your future wife/husband we hope everyone can better understand just what Nash accomplished in his celebrated 27-page doctoral dissertation.

"The real lesson from Europe is actually the opposite of what conservatives claim: Europe is an economic success, and that success shows that social democracy works."

"This market has a lot to be concerned about," warns Carl Icahn in an interview with FOX Business Network's Trish Regan, slamming Fed policy, "by keeping interest rates this low you are creating bubbles that you don’t even know about." While mainstream media pundits are instantly feverish over every bullish AAPL word the aging activist has to say (or tweet), it seems that when it comes to facing facts and reality of the broad market, few, if any, are willing to share his thoughts as he concludes, "it’s not just a question of it could be the beginning... It’s not will it happen. It’s when it will happen."

At some point in the middle of the last century, economics of money shifted to economics of psychology. Abenomics is the perfect example of this faith-based policy. The Japanese economy, to any clear mind, took a huge turn for the worst under Abenomics yet its practitioners are still, somehow, given the final word on judging its performance, meaning that the mainstream still, somehow, subscribes to the religion.

We have long argued that the most likely endgame for Greece is that PM Tsipras caves to the troika, compromises on the government’s ‘red lines’ and risks a government reshuffle on the way to a third program, thus averting a euro exit and keeping Greece from descending into a drachma death spiral, even as the “solution” effectively strips the Greek people of their right to choose how they want to be governed — a tragically absurd outcome in what is the birthplace of democracy. It now appears that scenario is set to unfold.

Back in 1976, Congress decided that they needed more information on US companies’ international trade activities. So they passed a law requiring the Department of Commerce to survey the biggest businesses in America to find out more about what they were doing abroad. These days, the survey is conducted every five years. And like most surveys it’s a bunch of useless bureaucratic drivel that only wastes the time of the poor souls who have to fill it out. Now it’s something that can get you thrown in jail.

Will global QE carry on forever...the next month may give out some clues..will it be Junemaggedon after we had May-hem??