Archive - Sep 2015

Forget about a housing recovery: for the vast majority of Americans, the housing crisis is about to get worse. Much worse.

"We’re not Bolivia for God’s sake"...

What can we expect to happen in our homeland when finally even the generally uninformed population also understands that governments they have elected for decades, and its Fed facilitator or controller, jointly have waged a century-long war on its citizens? The people of America cannot make a counter offensive similar to those of sovereign nations; however people are uniting in resistance to robber baron policies, as evidenced by the popularity of nonpoliticians currently in candidacy for the office of president. These troops will mass also, it just remains to be seen what form their eventual counter offensive will be. The established order will be challenged.

With Abenomics seemingly a total failure (aside from managing to collapse the currency and living standards of the population - worst Misery Index in 33 years) the demographic crisis that Japan faces just got more crisis-er. As Japan's population continues to fall (4th year in a row), what makes the situation worse, as NHKWorld reports, is that there are now a record 33.8 million people over the age of 65 (a record 26.7%), more than double the number under the age of 14 (16.2 million). The ministry says the population will likely continue declining for some time as fewer babies are born and society ages... and as America is beginning to see as retirement dream remain elusive, the number of working elderly increased for 11 years in a row to reach a new record figure of 6.81 million in 2014.

"I don’t blame America. I am America, you are America. I don’t blame you. I blame bad policy. I blame the interventionists. I blame the neoconservatives who preach this stuff, who believe in it like a religion — that they have to promote American goodness even if you have to bomb and kill people. In short, I don’t blame America; I blame neocons."

AsiaPac stocks are opening mixed after the US session gains. Perhaps the biggest news of the evening is, as China's bankiong regulator has been meeting with foreign banks to express concerns over lack of risk control around non-performing loans. As CBRC said, rather stunningly honest for a government entity, "the current situation is more severe than the time in 2008 during the financial crisis." With stocks up while commodities (Zinc) limit-down, PBOC injects another CNY50 bn and devalued the Yuan fix for the 2nd day in a row.

Democracy is an incredibly successful long con. It works because of the illusion of consent. People actually believe they are "represented." The 'proof' of American democracy continues to wax. One hundred years ago, we were at what you might call the hard cider, or the beer and wine stage. We are now at the Jack Daniels stage. How much longer before we are at the methanol stage? It depends on how much longer the long con that we are "represented" – and have given our "consent" – holds up.

With the global economy sliding into recession, the one strawman repeatedly used by straight-to-CNBC pundits to justify some mythical case for US decoupling has been that US corporate profits are "fine." Here is the truth.

Russia has now confirmed that it is intervening in the Syrian war on the side of the Assad government; and, as Al-Arabiya's Azeem Ibrahim notes, the response of the U.S. betrays its impotent incredulity. Russia is poised to return to the Middle East, from which it was ejected with the collapse of the USSR. The United States seems to be telling Russia to go ahead, because, as Raghida Dergham explains, it is unwilling to engage – though it is not yet ready to fully retreat.

Having accurately foreseen the current events instead of just levering up on even more beta and praying the BTFDers return and bail out his underwater positions, John Burbank's opinion actually matters as does his outlook on what happens next. What he foresees is not pleasant.

Our current economic policy suffers from a fatal degree of magical thinking: sufficient new resources will emerge if the price is high enough. As any fourth grader will tell you, a finite system will not yield unlimited resources. But that perspective is not shared by those controlling the printing presses. And so they print and print and print, yet remain flummoxed when supply (and increasingly, demand for that matter) does not increase the way they expect. Is this any way to run an economy? Or a finite planet for that matter?

"Possible Actions: Publicize presence of transiting (or externally focused) extremist groups in Syria, not limited to mention of Hamas and PIJ. Publicize Syrian efforts against extremist groups in a way that suggests weakness, signs of instability, and uncontrolled blowback. The SARG,s argument (usually used after terror attacks in Syria) that it too is a victim of terrorism should be used against it to give greater prominence to increasing signs of instability within Syria."

News That Matters

"I do believe that markets ultimately prevail. I do believe that supply and demand will ultimately prevail. I’m confident that we will see that occur... The fact there are some very substantial new players coming into the sector and taking positions in gold and silver... I think that’s showing that things will change and I think things are in the works as we speak."