Archive - Nov 2, 2013 - Story

A report by Bruce Bennett and the RAND Corporation has brought attention to one of the most important issues for international politics. Ironically, despite being a region of vital interest within American foreign policy, there has been very little public discussion of what to do in the event of government collapse in North Korea. Bennett’s timely report provides a series of vital contributions to the discussion and further outlines the lack of preparation in political, social, economic and military terms. Yet beyond the critical end game for the Korean peninsula are deeper questions concerning how any international force might respond. Specifically, how can the U.S. and Republic of Korea effectively mobilize regional powers with their differing security and development goals? Preparing for the unthinkable is not a simple moral imperative, but responsible leadership in the twenty-first century.

Having done a bang up job in Syria, where Obama nearly started world war III so Qatar could send its natgas to Europe at a lower price than  Gazprom's, while alienating America's legacy allies in the region, Saudi Arabia and Israel, and ensuring its enemies see it even weaker in the international arena following Obama's schooling by Putin, the US president continues to win friends abroad (while spying there, here and everywhere, namely the Pope) with the latest snafu coming from Pakistan, another former ally, where America just droned the leader of the Taliban fighters on Saturday, leaving his body "damaged but recognizable". 

Renegade Economist's "Four Horsemen" documentary lifts the lid on how the world really works. "Four Horsemen is a breathtakingly composed jeremiad against the folly of Neo-classical economics and the threats it represents to all we should hold dear." Free from mainstream media propaganda -- the film doesn't bash bankers, criticize politicians or get involved in conspiracy theories. It ignites the debate about how to usher a new economic paradigm into the world which would dramatically improve the quality of life for billions. Since it is becoming abundantly clear that we will never return to 'business as usual', 23 international thinkers, government advisers and Wall Street money-men break their silence and explain how to establish a moral and just society.

Any of these characteristics recognizable?

The Fed will have to increase QE (not taper it) because systemic debt is compounding faster than production and interest rates are already zero-bound. Lee Quaintance noted many years ago that the Fed was holding a burning match. This remains true today (only it is a bomb with a short fuse). Thirteen years after the over-levered US equity market collapsed, eleven years following Bernanke’s speech, five years after the over-levered housing bubble burst, and four years into the necessary onset of global Zero Interest Rate Policies and Long-Term Refinancing Operations, global monetary authorities seem to have run out of new outlets for credit. In real economic terms, central bank policies have become ineffective. In other words, the US is now producing as much new debt as goods and services.

Real estate guru Mark Hanson updates his housing view following this week's dismal housing industry data:

Sept. Pending Sales... the largest MoM drop since Sept 2001... not 2011... yes, 2001.

Don't let them tell you 'this is normal for Sept'. The 'oh-crap' moment is now in the can. Going forward, "Existing Sales" volume will disappoint on a YoY basis for several quarters. There is no way around it...

Following the slaying of two members of Greece's far-rght Golden-Dawn party (and wounding of a third) on Friday evening, the Greek government’s crackdown on the country’s 'extremist' party has revived a vexing question that seemed to have disappeared with the Cold War’s end: Is there a place within liberal democracies for apparently anti-democratic parties?

With the recent adoption of explicit forward guidance as a stimulative policy tool by the major European central banks, virtually every major central bank is now using the tool in some form. The potential benefits and dangers of such policies as central bank communications have evolved are unclear as "the form of guidance" matters. As Robin Brooks notes, and is so well illusrated below in the example of the Riksbank's and Norges Bank's 'failures', "[In terms of implications for rates] the jury is still out on how well forward guidance works. What is clear, though, is that markets prefer 'deeds' to 'words'."

The ironically-named Quality Software Services Inc (QSSI) allegedly responsible for the SNAFU that is the Obamacare website's data hub has, incredibly, been named the new general contractor in charge off repairing the glitch-plagued HealthCare.gov. As The NY Post reports, as if the $150 million so far paid to this UnitedHealth subsidiary for its farcically bad implementation was not enough, the executive vice president of the firm (Anthony Welters) and his wife were among Obama's largest personal campaign contributors during the 2008 election cycle (and the firm has spent millions "lobbying" for Obamacare). The cronyism runs deep as the Post also points out that visitor logs show at least a dozen visits between the two by the end of 2012, the most recent information available.

Paper gold in the developed world may trade based on the whims of marginal momentum chasers, and of course, the daytrading mood of the BIS gold and FX trading desk, but when it comes to physical gold and China's appetite for it, one word explains it best: unstoppable.

As we enter into the two final months of the year, it is also the beginning of the seasonally strong period for the stock market.  It has already been a phenomenal year for asset prices as the Federal Reserve's ongoing liquidity programs have seemingly trumped every potential headwind imaginable from Washington scandals, potential invasions, government shutdowns and threats of default.  This leaves us with four things to ponder this weekend revolving around a central question:  "Does the Fed's Q.E. programs actually work as intended and what are the potential consequences?"

Not even Paul and John would have any clue what the message is or what is going on in this psychedelic, Yellow Subamrine-inspired TV ad slot for Obamacare titled "Fly With Your Own Wings", part of the Cover Oregon campaign (funded by US taxpayers). Perhaps: enroll in Obamacare, get a lifetime supply of LSD for free...