Archive - May 2015 - Story

On the heels of pledging $46 billion in infrastructure aid to Pakistan, China is set to invest as much as $50 billion in Brazil including $10 billion on a cross-mountain railway that will connect Latin America's largest economy with Peru's ports in what Premier Li calls "a new road to Asia." The move is a dramatic example of China's growing foothold in what is ostensibly Washington's strongest sphere of influence.

"More than 50 consumer and labor organizations sent a joint petition on Tuesday to U.S. Secretary of Education Arne Duncan, urging him to cancel federal student loans owed by 78,000 who attended Corinthian schools," Reuters reports, confirming the notion that for-profit colleges may represent the next multi-billion dollar taxpayer bailout.

Stanley Kubrick's highly-disturbing film-version of A Clockwork Orange takes place in a dystopian futuristic London and exposes the extreme battle of good versus evil. Extracting out the violence, we can’t help but notice the symbolic similarities of the motif-ridden story with the 2008 financial market fallout and subsequent attempts at economic rehabilitation. The film forces us to consider how much liberty we are willing to give up for order, and how much order we are willing to give up for liberty.  The central idea of the film has to do with the freedom of the individual to make free choices, but free choice becomes problematic when it undermines the safety and stability of society. It reminds us of the markets price discovery mechanisms (or lack thereof).

If your doctor drives any, and certainly all of the cars listed below, there is a virtually 100% certainty said doctor is a criminal...

"we're beyond the point of being able to successfully manage this... and I worry about another leg down in the economy causing social disruption."

"Gold should be a part of everybody's portfolio to some degree because... it is the alternative money. Warren Buffett is making a big mistake."

An official WalMart “New Associate Orientation” video has surfaced. In the poorly acted but exceedingly funny nine minute clip (entitled “Protect Your Signature”), WalMart patiently explains to new hires why unions are bad.

A robust economy would allow central banks to raise rates and still allow debts to be paid down. But that is not what is happening. And it won’t happen. Junkies rarely go out and get a job... and gradually “taper off” their habit. No. They have to crash... hit bottom... and sink into such misery that they have no choice but to go cold turkey. Now, major central banks are committed to QE and ZIRP forever. They have created an economy that is addicted to EZ money. It will have to be smashed to smithereens before the feds change their policies.

Weather or no weather, even the sell-side's most exuberant hope-mongers appear to be losing faith in 'revisions', 'double-seasonals', or 'rebounds' saving the US economy...

"The government agency charged with calculating the nation's growth rate is acknowledging problems with its numbers and pledging a series of fixes over the next several months", Steve Liesman reports, confirming that the BEA is about to do precisely what we predicted two days ago and seasonally adjust its seasonally adjusted data in what might very well be the most blatant instance of goal-seeking in the history of statistical analysis.

Asked whether he would repeat an assurance he gave in late 2012 that Greece wouldn't default, Wolfgang Schäuble told The Wall Street Journal and French daily Les Echos that “I would have to think very hard before repeating this in the current situation.” To which Moody's had just one thing to add: "there is a high likelihood of an imposition of capital controls and a deposit freeze."

Record highs in stocks....thanks to the illegal miracle of spoofing.

A gentle reminder from the minutes that many seemed to have missed: "some indicators suggested that valuations remained stretched for some asset classes."

"... it was suggested that the tendency for bond prices to exhibit volatility may be greater than it had been in the past, in view of the increased role of high-frequency traders, decreased inventories of bonds held by broker-dealers, and elevated assets of bond funds."

Federal Reserve officials meeting in late April doubted they would be ready to raise short-term interest rates by midyear, according to WSJ's Jon Hilsenrath's translation of the minutes of the meeting released Wednesday. They generally did not rule out the possibility of a June rate hike, Fed officials are trying to make sense of a first-quarter economic slowdown.

FED OFFICIALS GAVE NUMBER OF REASONS WHY 1Q WEAKNESS TRANSITORY
MANY FED OFFICIALS SAW JUNE RATE RISE AS UNLIKELY
FED OFFICIALS HIGHLIGHTED RISKS OF VOLATILITY AFTER LIFTOFF

and yet:

FED OFFICIALS GENERALLY DIDN'T RULE OUT RATE RISE AT JUNE FOMC