Archive - Sep 2015

Some high-profile commentators think they smell a Marxist clothed in white papal robes, who dreams of redistributing the world's wealth. Pope Francis insists that he has little interest in Marxism and that his political advocacy against materialism, capitalism, greed and idolatry are largely religious in nature but with the UN poised to strong-arm member nations to sign on to an impossible globalist agenda that will require a total shift of the world's wealth, and a restructuring of international politics and economics with a one-world government and a universal religion at the steering wheel. Even to the Pope's admirers, that sounds a less like peace and love and more like a utopian totalitarian nightmare.

Yellen's Last Hurrah: at this point, Janet "the antichrist" Yellen will have license to do Whatever The Hell She Wants to "fix" things. This will be her last free pass to do so.

Quantitative easing, as this policy is known, has bailed out bonus-happy banks and made the rich richer.  Banks have been the biggest beneficiaries, with their 20- or 30-times leveraged balance sheets. Asset managers and hedge funds have benefited, too. Owners of property have made out like bandits. In fact, anyone with assets has grown much richer. All of us who work in financial markets owe a debt to QE.

Most economists and financial analysts think that 'currency war' merely refers to the competitive devaluations that nations sometimes engage in to help boost their domestic economies, as they had done in the 1930's for example. This time the currency war is a much more profound confrontation of differing agendas revolving around the historically unusual role of the US dollar, based on nothing more than the will of the Federal Reserve and the 'full faith and credit' of the US, as the reserve currency for global central banks and international trade.

Germany’s ZDF public television network headlines on Tuesday September 22nd, "New U.S. Atomic Weapons to Be Stationed in Germany," and reports that the U.S. will bring into Germany 20 new nuclear bombs, each being four times the destructive power of the one that was used on Hiroshima. Hans Kristensen, the Director of the Nuclear Information Project at the Federation of American Scientists, says, "With the new bombs the boundaries blur between tactical and strategic nuclear weapons.”

The economics of Hillary Clinton is first and foremost about expanding the power and scope of the US government, and as government gains more control, the more employers and business owners need to be in the good graces of American politicians. To be blunt, Clinton believes that people like herself can continually loot US businesses, with business owners paying their protection money without complain. After all, Hillary knows best; just ask her.

With the SEC moving to head off the risk of a bond market meltdown triggered by a dangerous combination of illiquidity and bond fund proliferation, WSJ decided to see which fund providers are the most at risk in a crisis. The list may surprise you...

"The people cannot be all, and always, well informed. The part which is wrong will be discontented, in proportion to the importance of the facts they misconceive... what country can preserve its liberties if their rulers are not warned from time to time that their people preserve the spirit of resistance? Let them take arms. The remedy is to set them right as to facts, pardon and pacify them."

WTI crude prices jerked to the highs of the day after API reported another larger than expected (and bigger than last week's 3.1mm draw) inventory draw of 3.68 million barrels (and Cushing fell 490k).