Archive - Apr 23, 2015 - Story

The war on cash is escalating. Just a week ago, the infamous Willem Buiter, along with Ken Rogoff, voiced their support for a restriction (or ban altogether) on the use of cash (something that was already been implemented in Louisiana in 2011 for used goods). Today, as Mises' Jo Salerno reports, the war has acquired a powerful new ally in Chase, the largest bank in the U.S., which has enacted a policy restricting the use of cash in selected markets; bans cash payments for credit cards, mortgages, and auto loans; and disallows the storage of "any cash or coins" in safe deposit boxes.

We've all seen Chinese stocks explode in the last year; we've all seen margin lending soar to fund this exuberance; we've all read the dominant buyer in this trading frenzy is high-school-educated housewives; and we've all seen the analogs to the 2000 dotcom bubble. But, we guarentee you have never - ever - seen anything like this...

"As the Russians gradually assumed control of Uranium One in three separate transactions from 2009 to 2013, Canadian records show, a flow of cash made its way to the Clinton Foundation... Since uranium is considered a strategic asset, with implications for national security, the deal had to be approved by a committee composed of representatives from a number of United States government agencies including the State Department, then headed by Mr. Clinton’s wife, Hillary Rodham Clinton... And shortly after the Russians announced their intention to acquire a majority stake in Uranium One, Mr. Clinton received $500,000 for a Moscow speech from a Russian investment bank with links to the Kremlin that was promoting Uranium One stock."

"Fed has created abnormal market conditions by printing money and keeping interest rates low. Investors are looking for growth anywhere they can find it and tech companies are good targets - at these values, however, all tech stocks are expensive - even looking at 5+ years of revenue growth down the road. This means that most value-driven investors have left the market and the remaining 5-10%+ increase in market value will be driven by momentum investors. At some point there won't be any momentum investors left buying at higher prices, and the market begins to tumble. May be 10-20% correction or something more significant, especially in tech stocks."

Tomorrow, Friday, April 24th, the finance ministers of Europe will again meet to discuss the fate of Greece’s bailout program. Although no definitive course of action is expected to come out of this meeting, it is yet another chance to assess the potential consequences if indeed the Greek government defaults on its loans.

You know the world has gone mad when one of the world's largest pension funds, mired in its need for the maintenance of the status quo, begins to sound like 'digital dickweeds in their parents' basements'. Norway's massive $890 billion wealth fund has stepped out of the shadows to slam global central bankers for affecting "pricing in today’s market to such an extent that monetary policy itself has been a risk you have to watch;" and market structure, criticizing the proliferation of dark pools, "there’s a rent extraction from all these intermediaries... we’re in favor of trying to reduce the number of block-crossing venues," Schanke said, "one would probably be perfect."

Texas Department of Public Safety trooper Abraham Martinez doesn't take kindly to motorcyclists who run stop signs, which is why when Steven Gaydos ignored a red octagon and led Martinez on a high speed chase, he ended up getting shot in the thigh before suffering the wrath of the trooper's flying jumpkick.

Instead of merely plugging the hole left from declining liabilities (deposits), what the ECB's ELA funding appears to also be doing is compensating for a rapid write down in bank assets (loans) as well, in the form of charged off Non-Performing Loans. According to Reuters, one of the leading Greek financial institutions, Piraeus Bank will write off credit cards and retail loans up to 20,000 euros ($21,484) for Greeks who qualify for help under a law the leftist government passed to provide relief to poverty-stricken borrowers, it said on Thursday.

"...choosing to raise your children to be independent thinkers who don’t automatically want to control others by force, can sometimes lead to tension with family and friends, especially older ones. I find most of them to be just innocent victims who happily reside within the matrix, merely repeating thoughts they were subliminally conditioned to believe."

"Companies that obsessively buy back their shares could be making a big mistake," Moody's head of head of leveraged finance tells CNBC, echoing what we have said on too many occasions to count. With IG supply at all-time highs and with companies pouring the money into share repurchases instead of investing in future productivity and growth, we say yet again that the theatre of financial engineering will continue only until it can no longer continue.

No matter what other problems may or may not be linked to hydraulic fracturing, or fracking, the disposal of wastewater from oil and gas drilling almost certainly is primarily responsible for the recent spate of earthquakes in Oklahoma, normally a seismologically quiet state. That’s the conclusion of a report issued April 21 by the Oklahoma Geological Survey (OGS). What’s important about Andrews’ and Holland’s conclusion is that they represent the state of Oklahoma, where energy is an important industry, providing about one-quarter of the state’s jobs.

“It’s absolutely possible we’ll see some draconian measures from the regulators,” a UBS strategist tells Bloomberg, referring to steps Beijing may have to take to curb China's equity mania. Meanwhile, in a new note, the bank says that "the challenge with almost all retail-driven liquidity rallies (like this one) is that they generally don't abide by the more fundamental rules we follow." It's all liquidity and "animal spirits" in China folks — look out below.

At HSBC — whose Swiss arm is the international gold standard for money laundering — Mexican drug cartels and terrorists were once welcomed, but porn site operators will apparently have to take their business elsewhere.  

When we deny reality and engage in irrational wishful thinking, we are engaging in something called 'hopium': "The irrational belief that, despite all evidence to the contrary, things will turn out for the best." Right now that propaganda matrix is assuring the American people that everything is going to be just fine. Well, they better be right.  Because if not, they are going to have millions of people extremely angry with them when things really start falling to pieces.

Entrepreneurs around the world are "drowning in this nothingness reality," and Saxobank CIO Steen Jakobsen sees a crisis correction as the only outcome of a zero environment in his opinion. "We have zero growth, zero inflation and zero hope," he explains based on his recent global travels meeting business leaders and key investors whose shared negative outlook was striking. The following brief clip concludes ominously, with Jakobsen noting that he "believes a Fed hike will act as a margin call on the global economy."