Archive - Jul 1, 2014 - Story

You have probably heard about the extremely controversial Facebook “emotional contagion” study in which the company intentionally altered its news feed algorithm to see if it could manipulate its users’ emotions; but here is where it starts to get really strange. Initially, the press release from Cornell highlighting the study said at the bottom: “The study was funded in part by the James S. McDonnell Foundation and the Army Research Office.” Once people started asking questions about this, Cornell claimed it had made a mistake, and that there was no outside funding. Jay Rosen, Journalism Professor at NYU, seems to find this highly questionable.. and it gets even more interesting from there.

In American society, 'debt' and 'income' have become increasingly synonymous over the past 3 decades; but as Rick Santelli blasts (commonsensically), "they certainly shouldn't be." It appears the average joe has been led to this conclusion by the Central Banks. Rhetorically asking "where's the horsepower in the economy coming from?" Rick reflects on the auto-loan fears we discussed earlier, santelli notes that 55% of used cars (and 30% of new cars) are financed by subprime lenders... and rages, "if we continue as a country to fuel our consumerism with debt, there is no way the bond market's going to be wrong."

We live in a world that is becoming increasingly unstable, and people need to understand that the period of relative stability that we are enjoying right now is extremely vulnerable and will not last long. The following are 18 signs that the global economic crisis is accelerating as we enter the last half of 2014...

VIX was monkey-hammered lower once again today, lifting stocks vertically to Russell 2000 record highs and The Dow within a point of 17,000. The question is who (or what) is doing it. Nanex seems to have found out who... It appears the un-visible hand of VIX manipulation (that we have shown previously) has been forced into the open public markets as Barclays goes dark. Simply put, massive bursts of 1-lot TVIX orders flood and delay the markets enabling HFTs to manipulate the tail that inevitably wags the market (via VXX, SPX options hedges and leverage) and now that the dark pools are disappearing, we see it all in real-time.

Goldman's June Final GLI came in at 3.1% year-over-year, down from the revised 3.3% year-over-year reading in May. Momentum came in at 0.15% month-over-month - flat from last month’s revised reading. Ever optimistic, Goldman views this results, as continuing to locate the global industrial cycle close to the ‘Expansion’ phase but has yet to signal positive acceleration... oh so close... The 3 big drivers of the deterioration were Japan's Inventory/Sales ratio worsened, US Initial Jobless Claims were marginally higher, and as we have been vociferously noting, The Baltic Dry Index continued to come in softer as well.

A recent court ruling giving cities and towns in New York State the authority to ban hydraulic fracturing (“fracking”) represents an enormous blow to the shale gas industry, which has been hoping to expand operations into the state for several years.

Global GDP growth expectations for 2014 have dropped 15% since the start of QE3 in Dec 2012... Global stocks are up 35% in that same period. At 2.67% GDP growth expectations are the lowest on record for 2014 and with MSCI World stocks at record highs the death cross has never been more crossed...

ISIS, or rather IS as it is now know, now has a country, er caliphate, so now it needs religious fanatics and workers. Which is why the leader of the self-proclaimed al-Qaeda spin off nation, Abu Bakr al-Baghdadi, in addition to a broad religious call to arms, so to speak, also beckoned workers with a specific skillset to present themselves for duty: namely those with military, medical and managerial skills were urged to flock to the newly-declared state in an audio recording released Tuesday.As Al Arabiya reports, the newly named “caliph” said the appeal especially applied to “judges and those who have military and managerial and service skills, and doctors and engineers in all fields." But where it gets interesting is that Al-Qaeda can hardly ignore what is essentially a declaration of war from an upstart that has scored a string of successes, said Magnus Ranstorp, an expert on radical Islamic movements at the Swedish National Defence College.

When the price of everything is rising, there's nothing more important that knowing the cheapest (and most expensive) places in the world to get a drink...

“Economics is haunted by more fallacies than any other study known to man.” – Henry Hazlitt, Economics In One Lesson. The great Henry Hazlitt’s wise words came to mind while reading a recent New York Times post by George Mason economist Tyler Cowen who strangely observed that “The world just hasn’t had that much warfare lately, at least not by historical standards,” and “Counterintuitive though it may sound, the greater peacefulness of the world may make the attainment of higher rates of economic growth less urgent and thus less likely.” As Forbes' John Tamny lambasts, "They’re ultimately only words, but Cowen’s about war theoretically boosting animal spirits are pretty disturbing ones..."

He may be "richer than you", but when it comes to cancer everyone is equal. Moments ago, Dow Jones and Bloomberg broke news that JPMorgan CEO Jamie Dimon has been diagnosed with throat cancer.

•  J.P. Morgan JPM Chairman, CEO Jamie Dimon Tells Employees, Shareholders He Has Been Diagnosed With Throat Cancer, Condition Curable—J.P. Morgan
• Dimon Says Prognosis "Excellent," Cancer "Caught Quickly"—J.P. Morgan
• Dimon Says Cancer Confined, No Evidence Elsewhere—J.P. Morgan
• Dimon to start Radiation and Chemotherapy Treatment at Memorial Sloan Kettering, treatment to last 8 weeks
• Dimon advised able to continue to be actively involved in the business

And now the best healthcare that money can buy will be promptly put to use. We wish him a speedy recovery as it would be far more equitable for the JPM CEO to answer for his actions in full health before a jury of his peers, where guilt can not be "admitted or denied" away.

This shortened week is dominated by a veritable explosion of critical jobs market data on Thursday. As Citi's Steven Englander notes, there are five key US labor indicators - two of which will be initial asset market drivers: Citi expects disappointment; and three more that will give signals more relevant to the medium term evolution of asset markets and Citi think will give a more positive signal.

It appears the faithful are losing belief... Gallup reports that Democrats economic confidence has faded to its lowest since January (less than half the levels of confidence when President Obama unleashed his 2nd term). Despite exuberance conference board (government sponsored) surveys of confidence (and seasonally adjusted happiness in PMIs and ISMs), Gallup notes U.S. Economic Confidence Index remained flat in June having hovered at this lower level for most of the year (with no post-weather rebound). The outlook also remains dismal - hovering at its lowest since Dec 2013 with only 39% of Americans saying the economy is getting better and 56% saying it is getting worse.

It appears the faithful are losing belief... Gallup reports that Democrats economic confidence has faded to its lowest since January (less than half the levels of confidence when President Obama unleashed his 2nd term). Despite exuberance conference board (government sponsored) surveys of confidence (and seasonally adjusted happiness in PMIs and ISMs), Gallup notes U.S. Economic Confidence Index remained flat in June having hovered at this lower level for most of the year (with no post-weather rebound). The outlook also remains dismal - hovering at its lowest since Dec 2013 with only 39% of Americans saying the economy is getting better and 56% saying it is getting worse.