Archive - Oct 2015 - Story

T-12 days till US default...

From the bowels of Australia’s iron ore mines to the top of Dubai’s pointless 100 story office towers, the entire warp and woof of the global economy has been distorted and bloated by the central bank money printing spree of the last two decades, led by the red credit machines of Beijing. Everywhere economies have succumbed to over-building, over-consumption, over-financialization and endless dangerous, unstable speculation. Stated differently, China’s red capitalism is the new black swan. There is nothing rational, stable or sustainable about it.

The ‘money’ in your account doesn’t even really exist. There’s just enough of a thin layer of confidence in the system (at the moment) that this is a widely accepted practice. It seems rather strange when you think about it. Though for thousands of years, early civilizations had some pretty wild ideas about money. There are examples from history of our ancestors using everything from animals skins, to salt, to giant stones, as their form of ‘money’. Though we suppose these weren’t any more ridiculous than our version of money - pieces of paper that don’t even really exist, controlled by unelected central bankers.

In what amounts to a slap in the face for a coalition of Leftist lawmakers who are opposed to the austerity programs that some believe are responsible for painful economic adjustments, Portugal has reappointed PM Pedro Passos Coelho. This sets the country up for an intractable political stalemate and will serve to embed an enormous amount of uncertainty in markets going forward.

"The basic assertion is the following: the U.S. economy is not showing signs of entering into recession, thus stocks are not at risk of falling into a sustained bear market. Unfortunately, this conclusion is not necessarily true. For history has shown on numerous occasions that you do not need to have an economic recession looming on the horizon to see U.S. stocks fall into a bear market."

Curious how Jim Cramer's stock picks perform? One person decided to test them out in an audited environment. Here are the results...

September was officially the warmest ever recorded around the globe (the 7th time this year a month has set a record) as El nino is back in a big way. As Bloomberg reports, its effects are just beginning in much of the world -- for the most part, it hasn’t really reached North America -- and yet it’s already shaping up potentially as one of the three strongest El Nino patterns since record-keeping began in 1950.  Expect "major disruptions, widespread droughts and floods," warned a senior scientist at the National Center for Atmospheric Research, adding that without preparation, "all kinds of mayhem will let loose." The last time there was an El Nino of similar magnitude to the current one, the record-setting event of 1997-1998, floods, fires, droughts and other calamities killed at least 30,000 people and caused $100 billion in damage.

It has been a horrible quarter for biotechs, and for AbbVie it just got worse.

"Some activity in auto loans reminds me of what happened in mortgage-backed securities in the run-up to the crisis. We will be looking at those institutions that have a significant auto-lending operation."

Trump embodies the American zeitgeist, circa 2015 – its virtues, its vulgarity, its inchoate mixture of common sense and incoherence. You may not like Donald Trump, for any one of a number of reasons, but anti-interventionists have to give him some credit for opening up the presidential debate to a critique of US foreign policy that hasn’t been seen or heard since the Ron Paul campaign.

The Fed has created permanent housing crisis from which there is no escape.

"Anything that protects the Syrian people and Syria from partition, we will not spare any effort to carry it out with our Saudi and Turkish brothers, no matter what this is. If a military intervention will protect the Syrian people from the brutality of the regime, we will do it."

It's a long way down...