Archive - Dec 6, 2015 - Story

Iraq “may soon ask Russia for direct military intervention in response to the Turkish invasion and the violation of Iraqi sovereignty."

"Is that all there is? We need a new President - FAST!"

"As we looked out the window a second set of shots goes off [...] and we saw a man fall to the floor. Then we just looked and we saw three men dressed in all black, military attire, with vests on they were holding assault rifles. As soon as they opened up the doors to building three [...] one of them [...] started to shoot into the room... It looked like their skin color was white. They look like they were athletic build and they appeared to be tall.”

"While funding continued to be available, such a large negative basis indicates potential market dislocations. And this may call into question how smoothly US dollar funding conditions will adjust in the event of an increase in US onshore interest rates. Similar pricing anomalies have also emerged in interest rate swap markets recently, raising related concerns."

Terrorism works on the perception of the victims. It seems incredible that ten mediocre individuals, with a few primitive weapons, could cause world-wide panic. But it is a fact. Bolstered by the mass media, which thrive on such events, local terrorist acts turn themselves nowadays into world-wide threats. The modern media, by their very nature, are the terrorist’s best friend. Terror could not flourish without them. The next best friend of the terrorist is the politician. It is almost impossible for a politician to resist the temptation to ride on the wave of panic. Panic creates “national unity”, the dream of every ruler. Panic creates the longing for a “strong leader”. This is a basic human instinct.

"... if nominal growth is 3 percent and the debt GDP ratio is 300 percent, the implied equilibrium nominal rates is around 1 percent. This is because at 1% rates, 100% of GDP growth is necessary to service interest costs."

Over the last few months, in a prime example of currency failure and euro-defenders' narratives, Finland has been sliding deeper into depression. Almost 7 years into the the current global expansion, Finland's GDP is 6pc below its previous peak. As The Telegraph reports, this is a deeper and more protracted slump than the post-Soviet crash of the early 1990s, or the Great Depression of the 1930s. And so, having tried it all, Finnish authorities are preparing to unleash "helicopter money" to save their nation by giving every citizen a tax-free payout of around $900 each month!

“There have been arrests and crackdowns before on grass-roots labor organizations here,” one activist, He Shan, said in a telephone interview from Shenzhen, a mainland city that abuts Hong Kong. “But this is the most concentrated, the most serious. For us, this is unprecedented.”

Monetary policy 'rules' are no more accurate at determining interest rates than meteorologists are at forecasting the weather. The only difference between the two is that weathermen are precise on occasion, whereas the federal funds rate under the Taylor Rule is, at best, less wrong. Setting the price of money and credit in the name of unleashing the economy’s supposed potential output is the equivalent of enacting price controls on milk to unlock its full buying power. It’s a fallacy that cannot be achieved. The sooner the Fed pawns off its printing press, the sooner its market distortions will be lifted; and the sooner that each individual will be able to make rational decisions that make sense for not only himself or herself, but for the economy at large as well.

The best gun salesman in America is about to explain how he will 'fix' the new un-normal rash of mass shootings, terrorist-attacks, murders, and general civil disorder by continuing down the path of stricter, tighter, confiscation-er gun control laws. As we previewed earlier President Obama wasted no time to launch this impromptu address to the nation at 8:00 pm on the "threat of terrorism and keeping the American people safe." Administration staff confirmed that the president will specifically call on Congress to review certain gun control measures. In short, the latest steps in Obama's crusade to disarm the US and make even legal purchases of guns as difficult as possible, even though limiting the legal means of purchasing guns will have absolutely no impact on gun violence in the US - for the perpetual case study, see Chicago. That, however, does not mean that Obama won't try or succeed.

"It is our humble belief that the consensus at the Fed does not fully understand the magnitude of the problems in corporate credit markets and the unintended consequences of their policy actions."

You've seen those internet ads that offer "one weird trick" for eliminating belly fat or boosting testosterone, right? Well, here's one weird trick for getting rid of ISIS and boosting our security from terrorism. The "trick" is non-intervention. And it is only weird in the sense that it is so uncommon in this age of war. Nonetheless, it works. The "one weird trick" has three easy steps. These steps are only "easy" for Westerners, because they basically amount to us refraining from constantly screwing things up. Once we get out of their way, the hard work will be done by locals, which is as it should be.

As we approach the Fed meeting expect markets to get more volatile. While the odds favor a move, it isn’t a sure thing until it is actually done. We found out last week what happens when forward guidance turns out to be forward misdirection. All those traders who thought they had a sure thing, who assumed that Draghi wouldn’t dare disappoint the market, got whipped. Whipped good.

“The new levy raised the estimated cumulative income tax on Wal-Mart Puerto Rico Inc. to an astonishing and unsustainable 91.5% of its net income!”

It’s important to respect the power of econometric models. It’s important to work with econometric models. But we don’t care who you are... whether you’re the leader of the world’s largest central bank or you’re the CIO of an enormous pension fund or you’re the world’s most successful financial advisor... it’s a terrible mistake to trust econometric models. But we all do, because we’ve been convinced by modeling’s henchman, The Central Tendency.