Archive - Jan 16, 2010 - Story

Crude oil futures fell for five straight sessions as warmer weather in the U.S. dispelled forecasts of unusually low temperatures and allowed concerns about demand to come to the fore. The price for Nymex’s West Texas crude fell about 6% during the week, starting at nearly $83 and finishing at $78.

"An interesting article by Ambrose Evans-Pritchard came my way the other day. It’s worth a read, if for no other reason than that he paints an appropriately dark picture of the current state of the U.S. economy. You can read it here. While I very much share Mr. Evans-Pritchard’s view that the global economy is far from out of the woods, our views diverge in that he sees devastating deflation speeding our way down the tunnel. Casey Research readers of any duration know that we see devastating inflation.
While we could both be right, with deflation first and inflation later, I’m not so convinced." David Galland, Casey Report

And you thought JP Morgan was aggressive. Goldman just threw out the last trump card in its current sell-side arsenal by increasing Q4 GDP estimates from 4% to a paroxysmal attack inducing 5.8%. While Zero Hedge long ago gave up discussing corporate fundamentals due to our long-held tenet that currently the only relevant pieces of financial information are contained in the Fed's H.4.1, H.3 statements, and, when Ron Paul's attempt at Fed deobfuscation is finally successful, the Fed's daily Sources and Uses of Funds statement, it would appear even macro economic data now is essentially one big joke. We are confident that JPM and Goldman are right on the money, and that the government will present the economy as having grown by nearly 6% in Q4. What is troubling is that after having taken over the housing and treasury market, and according to some others, the equity market as well, the Treserve (thank you Marla) has also singlehandedly added several log scale orders of magnitude of volatility to the general economy itself. Too bad GETCO does not have some predatory algo floating around, and overextending GDP momentum in any one general direction, as at this rate we would not be in the least surprised if Obama's Disinformation Czar (TBD) were to announce that the US is now competing for 10% GDP growth with China. As the two countries' centrally-planned economic systems now differ, well, not at all, it is only a matter of time before the race to the bottom in currency devaluation is enjoined by a competition as to who can fabricate, manipulate, inflate, stimulate and other "-ates", the fastest.

It is difficult not to come away with the impression that the many officials and quasi-officials issuing forth from the Federal Reserve and the Treasury (hereinafter the "Treserve") to defend from all enemies, foreign and domestic, the current structures that define these institutions richly enjoy and leverage the complexity, opacity and inscrutability in which they have cloaked themselves. That the Treserve's cadre now traverse through a complex weave of dim shadows, crossing the dark tendrils of financial and regulatory obscurity with practiced ease is a function of... well... the great deal of practice they have had at it.