Archive - Oct 2, 2014 - Story

"If they're not lying, they are grossly incompetent," said Dr. Gil Mobley, a microbiologist and emergency trauma physician from Springfield, Mo. as he checked in and cleared Atlanta airport security wearing a mask, goggles, gloves, boots and a hooded white jumpsuit emblazoned on the back with the words, "CDC is lying!" As The Atlanta Journal-Constitution reports, Mobley says the CDC is "sugar-coating" the risk of the virus spreading in the United States.

One thing we know from history is that people in power tend to become very paranoid about losing it. People who hold power based on fraud and deceit, and who start to lose the support of the masses, are particularly vulnerable to extreme paranoia. This is exactly what I think is happening to people in power throughout the world. From Hong Kong to Scotland. From Catalonia to the Middle East. All across the globe, young people are uniting in protest to achieve the same goal. They see a status quo in power that has destroyed their futures. They see centralized power far from where they live primarily being used by the super rich to become super richer. They are sick of it and they want something else. In fact, they are now beginning to demand something else.

It appears the ruling elite have finally woken up to the reality in which the rest of the world's laboring populace has been living. IMF head Christine Lagarde stated this morning she is "monitoring buoyant markets" with "lots of hesitation" while noting "weak economies." We have one simple question for the oompa-loompa-colored 'economic expert' - what took so long?

Against a consensus expectation of 215,000, Goldman forecast a 230,000 increase in September nonfarm payroll employment and a one-tenth decline in the unemployment rate to 6.0% (vs. consensus 6.1%). Overall they think the available employment indicators for September point to a solid report, despite slightly weaker data this week. In addition, the reversal of a couple of special factors from August should be a positive. If history is any guide, however, regarding downside risks, there has been some seasonal tendency for September payrolls to disappoint consensus.

The wobble in world markets continues, with stock indices across all time zones down steeply in recent sessions. Investors are not only realigning their exposure in anticipation of tighter liquidity conditions as the US Federal Reserve finally brings its asset purchases to a close later this month (see More Fools Than Money?). After today’s European Central Bank (ECB) meeting they are also looking nervously at the magnitude of the task facing eurozone policymakers. And they appear to be coming to the conclusion that generating a rebound in growth may be too tough a job for Europe’s leaders to accomplish in the near term.

Coast to coast, ordinary Americans are growing more fearful of what Ebola in America means. Despite reassurances from officials (President Obama on down) that it's contained, it appears it is not. By anecdote, as Reuters reports, in the Dallas community of Vickery Meadow (where Richard Duncan was staying), a cultural polyglot where about three dozen languages are spoken, the one word on everyone's lips is "Ebola." There is little indication a visitor to the community had been infected with a disease that has killed more than 3,000 people in West Africa, in the worst Ebola outbreak on record. "There's no notes on the doors. No one came to talk to us. I picked up my kids from school down the street and found out it was this close," one mother exclaimed, adding "right now, I'm not sure to take my daughter to school tomorrow... I'm getting so nervous."

The take-away from last month’s housing data was that “the market was returning to normal”, which despite the persevering weakness, was viewed as a “great thing”. This overly-simplistic and flawed assumption was made, as the all-cash cohort demand dramatically cooled and distressed supply and sales plunged YoY. What people are suffering from is a lack of a medium-term memory, as what’s happening today happened in 2007/08; “Peak Housing” It was the stimulus-driven, unorthodox “things” that drove the “V” bottom in demand and prices yet again, not coincidentally from exactly the time in 2011 that Twist was first announced and yields plunged. Although 2003-07 and 2011-13 were basically the same in nature, a big difference is that this stimulus-cycle was much greater in stimulus input over a shorter period of time than from 2003 to 2007. If stimulus “hangovers” are proportional to the amount of stimulus that preceded them, then this one could be a doozy.

Bloomberg's Consumer Comfort gauge dropped to 4-month lows this week with across the board collapses in personal finance confidence, buying climate, and the state of the economy (78% not-so-good). However, it is under-the-surface data that exposes the sad reality of this so-called 'recovery'. For those earning over $100k, "comfort" nears record highs, for those earning below $40k, "comfort" plunged in the last few weeks to near 2-year lows. This has surged the rich-to-middle-class discomfort gap to near 4-year highs... thank you Ben.

Next time you get into your car and drive to the supermarket, think about how much energy you consume on an annual basis. It is widely assumed that Westerners are some of the world’s worst energy pigs. While Americans make up just 5 percent of the global population, they use 20 percent of its energy, eat 15 percent of its meat, and produce 40 percent of the earth’s garbage. Europeans and people in the Middle East, it turns out, aren't winning any awards for energy conservation, either. Oilprice.com set out to discover which countries use the most energy and why. While some of the guilty parties are obvious, others may surprise you.

The plunge in the price of crude oil in the last few months has many global-recovery-truthers questioning their assumptions. Between slowing growth expectations, US (and Libya and Iraqi Kurds and Russia) supply, and Saudi Aramco cutting prices (argued as maintaining market share but has the smell of a quid pro quo over Syria), oil prices have broken below $90 today to 17-month lows. However, for some major suppliers there is concern that more pressure is to come, as Reuters reports, Russia's central bank is working on measures to support the economy should oil prices fall by as much as a third or more, as First Deputy Governor Ksenia Yudayeva as saying the central bank was working on a "stress scenario" that was likely to envisage an oil price of $60 per barrel. Of course, as we noted previously, there is always the 'oil-head-fake' and as one analysts noted, "the main OPEC countries would experience budget difficulties long before that and would have to take action to cut supply."

On Nov. 15, 2010, a letter signed by academics, economists and money managers warned that the Federal Reserve's strategy of buying bonds and other securities to reduce interest rates risked "currency debasement and inflation" and could "distort financial markets." As Bloomberg reports, they also said it wouldn't achieve the Fed's objective of promoting employment. Four years later, many members of the group, which includes Seth Klarman of Baupost Group LLC and billionaire Paul Singer of Elliott Management Corp., explain why they stand by the letter's content...

"amid the inevitable impending global economic and financial carnage, when people, like Queen Elizabeth ask, as she did in November 2008, why no-one saw this coming, tell them that many did. But just like in 2006, before the Great Recession, investors once again chose to tilt their ears towards the reassuring siren songs of the Central Bankers and away from the increasingly hysterical ramblings of the perma-bears and doomsayers."

"If you call a life of surveillance, anxiety and ceaseless toil in the service of a government you didn’t elect 'freedom', then you and I have a very different idea of what that word means." There are only two possible futures facing the United States, and neither one is pretty. Whether the collapse is gradual or gut-wrenchingly sudden, the results will be chaos, civil strife and fascism.

President Obama is saying the economy is better, Bernanke is warning that real people don't believe that; and while earning $250,000 per speaking engagement, Ye 'Olde' Fed head was unable to refinance his mortgage...

Presented with no comment...