Archive - Nov 2014 - Story

• Republicans expect gains, but many races close on election day (Reuters)
• Ahead of tough election, White House blames dismay with Washington (Reuters)
• On Election Day, a Tale of the Young and the Old (WSJ)
• Because the recovery: Sprint to Cut 2,000 Jobs as Mobile Customers Keep Leaving (BBG)
• Ukraine's rebel leader is sworn in, crisis deepens (Reuters)
• Brilliant: Burkina Faso Army Promises Religious Leaders It Will Step Down (BBG)
• More Unknowns Leave Central Banks Facing Greater Internal Strife (BBG)
• Scapegoat found: IBM to Change Leadership at Global Services Unit (WSJ)
• Explains why Europe just slashed its GDP forecast: Don’t Be Fooled by Warm Spell as Cold Air About to Return (BBG)

what is strange is that while traditionally such a major downward growth revision would have been sufficient to send futures soaring - why: because in a world where only central banks are left, it means more central bank global bailouts of course - this time the adverse update actually had the impact of sending futures to their lows of the session, granted just a few tiny points since the market is clearly disconnected with even the most pro forma, non-GAAP version of reality, but the reaction direction was clearly unexpected. Perhaps this is explained by the ongoing devastation in both WTI and Brent, which were trading at $76.70 and $82.50 at last check, both down almost 3% as the plan to use Saudi Arabia to crush Russia has instead backfired and the Saudi princes are now openly looking at destroying the US shale infrastructure, as we forecast in the worst, for Obama, scenario.

The Petrodollar, long serving as the US leverage to encourage and facilitate USD recycling, and a steady reinvestment in US-denominated assets by the Oil exporting nations, and thus a means to steadily increase the nominal price of all USD-priced assets, just drove itself into irrelevance. A consequence of this year's dramatic drop in oil prices, the shift is likely to cause global market liquidity to fall.  This decline follows years of windfalls for oil exporters such as Russia, Angola, Saudi Arabia and Nigeria. Much of that money found its way into financial markets, helping to boost asset prices and keep the cost of borrowing down, through so-called petrodollar recycling. But no more: "this year the oil producers will effectively import capital amounting to $7.6 billion.

There has always been a substantial level of incompetence at federal agencies, but under the Obama administration incompetence has risen to unprecedented levels.

"I was on a panel with Alan Greenspan a week ago... I said, you mean to say that the Federal Reserve is not independent? He immediately said, Marc, I never said the Fed was independent. In other words, the Fed and the Treasury and the government is basically one and the same."

"Japan is engaged in a Ponzi scheme"

"The oil price decline is not necessarily very good for the US - if oil prices went lower, it may actually have an adverse impact on the US economy"

"As a father, I want to raise responsible adults, which is why my wife and I will not be heading to the polls this election. Previously, I would have seen this stance as many people do: as an irresponsible act. Both Democrats and Republicans support militarism, taxation, spying on us, inflation, redistribution of wealth, Keynesian economics and corporatism once they get in office. My children need not to identify with this group of sociopaths, so to vote would be a bad example for them." Simply put, The lesser of two evils is still evil.

Spot the free-money, wealth-effect-pumping, inequality-driven difference...

One word - seppuku

Presented with no comment...

China first delegated the management of gold policy to the People's Bank by regulations in 1983. To our knowledge this subject has not been properly addressed by any private-sector analysts, which might explain why it is commonly thought that China's gold policy is a more recent development, and why even industry specialists show so little understanding of the true position. But in the thirty-one years since China's gold regulations were enacted, global mine production has increased above-ground stocks from an estimated 92,000 tonnes to 163,000 tonnes today, or 71,000 tonnes; and while the west was also reducing its stocks in a prolonged bear market all that gold was hoarded somewhere.

Three months ago when we questioned the FAA's decision to issue a no-fly zone over Ferguson "to provide a safe environment for law enforcement activities" because TV crews recording every incident put "law enforcement" in jeopardy? We were scoffed at by the usual suspects as conspiracy wonks who need to get out of our mom's basement. Sadly - for America and its citizenry - we have once again been proved 100% correct as yet another conspiracy theory becomes fact. As AP reports, audio recordings show that local authorities privately acknowledged the purpose was to keep away news helicopters during violent street protests. "They finally admitted it really was to keep the media out," said one FAA manager about the St. Louis County Police in a series of recorded telephone conversations obtained by AP.

More than originally estimated, apparently...

"For real world people, it is a simple common sense that wealth does not fall from the sky. It has to be produced. It is beyond me that such an obvious truth is so difficult for elite economists to comprehend. This is largely because they just sit in the ivy tower, imagining the magic golden touch such as monetary and fiscal policies, mocking practitioners. They are so ignorant and arrogant."

Presented with nothing but respect ahead of the US Midterm elections...

Herbalife: the harbinger of what happens when every stock buyback story inevitably turns very, very ugly.