Archive - Nov 7, 2014 - Story

For some reason, the Council of Foreign Relations, where ex-Fed-Chief Alan Greenspan spoke last week, decided the following discussion should be left out of the official transcript. We can perhaps understand why... as Gillian Tett concludes, "comments like that will be turning you into a rock star amongst the gold bug community."

They say a picture is worth one thousand words.  And so here’s a twelve thousand word equivalent essay that quite clearly depicts how the policies of the new millennium are shaping the new world order.  The powers that be have looked at these same charts, understand their implications and yet continue on the current path.  The objective then is clear.  The death of the working class.

Economic forecasting is a dangerous job. As Mark Twain put it in his novel Pudd’nhead Wilson, “October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.” Every wrong prediction could doom a career, or a bank account. Prudence and humility are the only sound tools for building one’s reputation. The talking heads on CNBC appear to know neither. They pledge allegiance to the flag of the tinkering bureaucracy. It explains the loss of ratings, and loss of confidence in the ability of “experts” to see what’s coming down the tracks. Refusing to learn from mistakes will lead to future blunders. Pundits that don’t heed this message are doomed to fail.

"If a third party person gets anywhere along, they are going to do everything they can to stop that from happening," blasts Ron Paul, explaining to RT's Erin Ade that the 'monopoly' system run by the leaders of the two main parties was all too evident as Americans went to the polls this week. "It's a monopoly... and they don’t even allow a second option," Paul concluded, lashing out that "here at home, we don’t have true Democracy."

The upper middle class in the US, defined as everyone in the top half below the richest 20 percent, owns 11.9% of the wealth. Indonesia at 10.5% and Russia at 7.5% are worse off, but in all other nations the corresponding upper middle classes own 12 to 27%of the wealth. America’s bottom half compares even less favorably to the world: dead last, with just 1.3% of national wealth.

Unsure of your political leanings? Then take this brief quiz and all will become clear...

Today, with little fanfare, Russia's president Putin - whose economy is said to be reeling as a result of a plunging currency, paradoxically something Japan would love to be able to achieve on such short notice - told the media ahead of his visit to the Asia Pacific Economic Conference on November 9-11, that Moscow and Beijing have agreed many of the aspects of a second gas pipeline to China, the so-called western route, or as some already are calling it, the "second holy grail." “We have reached an understanding in principle concerning the opening of the western route,” Putin said. "We have already agreed on many technical and commercial aspects of this project laying a good basis for reaching final arrangements,” the Russian President added.

"I have zero doubt that Japan is about to get smacked in the mouth. And when that happens the monetary policy calculus in Japan... and the UK... and even the EU will take on a very different shape. The domestic political dictates may still overwhelm the international economic consequences of extraordinary monetary policy easing."

Stay young, my friend...

"The enemy isn't conservatism. The enemy isn't liberalism. The enemy is bulls**t." - Lars-Erik Nelson

Following a heavy volume flush and reversal around midnight ET, gold prices surged today. The 3.3% rally is the best day since September 2013.

Stocks end the week on a weaker note roundtripping off premature exuberance into the European close after jobs data that missed expectations (or did they). Of course the kneejerk response took the S&P and Dow to record highs before the weakness set in. Thanks to a late day panic-buying rip though, Nasdaq and Russell 2000 close the week unch - no need to call Mr. Bullard. Treasury yields collapsed today, ending the week down around 3-4bps. The USD sold off today to close the week up 0.6% with JPY and AUD the weakest against the greenback on the week. Gold (and silver) rallied to close the week almost unchanged. Interestingly, despite VIX's best efforts (almost breaking under 13), stocks rolled over this afternoon (then ripped). Oil prices pushed modestly higher early on and ended the day around $78.50. The ubiquitous Friday late-day buying panic ripped everything higher - on absolutely no news - "proving" that the jobs data was great (expect, why were safe haven bond and bullion so heavily bid?)

When we think of electric cars, probably the first thing that comes to mind is the Chevrolet Volt. But if you think electric cars still deserve consideration, take a look at the “Grimsel,” which can accelerate from 0 to 60 in 1.785 seconds, using less than 30 meters of track. That’s nearly twice as fast as Tesla’s fleet Model S P85D. And it’s record-breaking.

But... but... that weak jobs report was so very strong. Who could have possibly seen that coming?