Archive - Dec 29, 2013 - Story

Last week China celebrated Mao Zedong’s birthday. Mao was many things to many people; but he was first and foremost a revolutionary. For this reasons, Mao’s birthday seems like an apt time to ponder why Americans are so fascinated and supportive of revolutions. If the U.S. wants a world full of democracies, it must do a better job at formulating and sustaining long-term policies promoting evolutionary changes within societies, instead of holding out for widespread mass unrest to immediately replace authoritarian states with full-fledged democracies.

In a vacuum, the U.S. is enjoying strengthening economic growth buttressed by a positive feedback loop due in large part to improving household debt dynamics and job creation. Asia seems to be adequately managing economic growth as well; investors remain sanguine on China and the general region’s long-term outlook. While Europe struggles to grow, due to continued austerity, the situation has improved. Taken together, RCS Investments' Rodrigo Serrano notes that these 3 regions illustrate an ongoing global recovery that remains on weak foundations, susceptible to influence by both positive and negative factors. Below are the most important trends investors need to keep an eye out for over the coming year.

"According to the DOE data, for Bakken and Eagle Ford the legacy well decline rate has been running at either side of 6.5 per cent per month. When these fields were each producing 500,000 bpd that legacy decline therefore amounted to 33,000 bpd per month per field. With both fields now producing 1 million bpd the legacy decline is 65,000 bpd per month. Production from new wells has been running at about 90,000 bpd per month per field meaning net growth in production is 25,000 bpd per month. It will become smaller as output grows and that’s why ceteris paribus growth in output for both fields will continue to slow over the coming years."

Presented with nothing but a sad "no comment"...

It was the Year of the Zombies. Not in the sense of most of humanity dying from a horrible plague and then reanimating as mindless flesh-eating ghouls. No, it was much worse than that...

The noise in the jobless claims data over the past few months has been unprecedented and yet the impressive jump lower in recent weeks has been trumpeted as the all-clear for Tapering and as a signal that the recovery is 'real' this time. Except, thanks to a huge 'glitch' in Florida's new CONNECT unemployment claims website, the data is completely FUBAR...

While the world may have become habituated to (and perhaps revels in, thank you social media exhibitionist culture) the fact that the NSA is watching anyone and everyone, intercepting, recording, and hacking every electronic exchange regardless if it involves foreign "terrorists" or US housewives, the discoveries from the Snowden whistleblowing campaign continue. The latest revelation from the biggest wholesale spying scandal since Nixon, exposed by Germany's Spiegel which continues the strategy of revealing Snowden leaks on a staggered, delayed basis, involves a back door access-focused NSA division called ANT, (which supposedly stands for Access Network Technology), described by Spiegel as "master carpenters" for the NSA's TAO (Tailored Access Operations, read more about TAO here). The ANT people have "burrowed into nearly all the security architecture made by the major players in the industry -- including American global market leader Cisco and its Chinese competitor Huawei, but also producers of mass-market goods, such as US computer-maker Dell." More importantly, thanks to Spiegel (and Snowden of course), the NSA's 50-page catalog of "backdoor penetration" techniques has been revealed.

Russian Deputy Prime Minister Dmitry Rogozin has sent NATO a rather unusual New Year's card... picturing Santa alongside a Russian inter-continental ballistic missile.

"Conventional economic theory says 'crisis don't happen' unless they are hit by an [outside] shock" exclaims Steve Keen, adding that numerous Nobel Prize winning economists have suggested that "capitalism is stable..." and "the problem of avoiding depressions has been solved for many decades." They are wrong...

Almost a year ago, the French constitutional court ruled against Francois Hollande's triumphal blast into socialist wealth redistribution, with his proposed 75% tax rate on high earners, and so indefinitely delayed the exodus of the bulk of French high earners (even if some, like Obelix, aka Gerard Depardieu, promptly made their way to the country that has become the land of solace for all oppressed people everywhere, Russia) into more tax-hospitable  climes. That delay is now over, when earlier today the same court approved a 75% tax on all those earning over €1 million. The proposal passed after the government modified it to make employers liable for the 75% tax. As BBC reports, the levy will last two years, affecting income earned this year and in 2014.

"I can give you a guarantee to protect the Winter Olympics in the city of Sochi on the Black Sea next year. The Chechen groups that threaten the security of the games are controlled by us... " - Saudi Arabia's Bandar bin Sultan to Vladimir Putin, spoken in hope of Russia selling out the Syrian regime, summer 2013.