Archive - Oct 20, 2015 - Story

With the ticker symbol RACE, what could possibly go wrong?

Pursuing a blasphemous vendetta against a 'dumb creature'...

For the 4th week in a row, US Crude inventories rose according to API. With a larger than expected 7.1 million barrel build (3.5mm exp.), which follows DOE's reported 7.56 mm build last week, it is clear that stocks are piling up considerably faster than expected. The reaction was an immediate algo slam to the lows of the day...

The uncertainties are awkward, but we’re all trapped in a gigantic mess not of our own making. As Voltaire is believed to have said, doubt may be uncomfortable, but certainty is absurd. Almost as absurd as believing that a tiny group of unelected bankers can read the runes of the global economy and manage the price of money accordingly.

"Data"-Dependent...

In what is truly historic flip flop, just a month after Consumer Reports said the Tesla Model S is the best car it has ever tested, the agency has not only yanked its original review, but has come out with what is clearly a hitjob sponsored by another highest bidder, aimed squarely at Elon Musk's overpriced science experiment.

Remember that September jobs report when the US supposedly only added 142,000 jobs, which was so bad it sent stocks soaring the most in years? As it turns out the sum was far greater than the parts, because according to today's BLS breakdown of jobs by state, not only did more than half, or 28, states lose jobs in September, but the total number of jobs losses, at 120,000, was about 20% more than the cumulative job gains of 99,000.

On the basis of the fundamental economic backdrop, Goldman Sachs sees VIX fair-value at least 19, with low-teens more consistent with ISM in the upper 50s (not the current sub-50 levels). However, credit (and FX) protection markets imply significantly more risk ahead with CDX HY stalled at 2month lows (while VIX hits 3 month lows). Given historical relationships, credit markets suggest a VIX of 25 is more consistent with reality (especially as Skew tail risk rolls down to normal risk).

Rising rents have been cited as a reason millennials aren’t moving out of their parents’ basements. But higher rents could force some boomers to move in with their children... it is shaping up to be a crisis for some boomers for the following reasons...

With less than two weeks until a possible debt ceiling "accident" and with investors dumping T-Bills at near record pace, Ron Paul rages that any delay in, or opposition to, raising the debt ceiling will inevitably be met with hand-wringing over Congress’ alleged irresponsibility. But the real irresponsible act would be for Congress to raise the debt ceiling.

"We wish that Iran would change its policies and stop meddling in the affairs of other countries in the region, in Lebanon, Syria, Iraq and Yemen. We will make sure that we confront Iran's actions and shall use all our political, economic and military powers to defend our territory and people."

The US has seen that movie before, it's not a happy ending. Oh, and enjoy that AAA credit rating while it lasts.

Many of the systems we take for granted are historical accidents. Either based on legacy systems hundreds of years old (higher education) or assembled in a short-term, ad hoc fashion (post-1940 national defense/ national security), these systems have expanded into vast patronage systems that are completely out of touch with 21st century needs, costs or realities. The U.S. healthcare system was not planned; it is largely accidental.

"It was like ‘Hey,…. its Crackas With Attitude.’ He was like ‘What do you want?’ We said ‘2 trillion dollars hahhaa, just joking. 'How much do you really want?' 'We just want Palestine to be free and for you to stop killing innocent people.'"