Archive - Aug 29, 2015 - Story

Having recently explained (in great detail) why QE4 (and 5, 6 & 7) were inevitable (despite the protestations of all central planners, except for perhaps Kocharlakota - who never met an economy he didn't want to throw free money at), we found it fascinating that no lessor purveyor of the status quo's view of the world - Citigroup's chief economist Willem Buiter - that a global recession is imminent and nothing but a major blast of fiscal spending financed by outright "helicopter" money from the central banks will avert the deepening crisis. Faced with China's 'Quantitative Tightening', the economist who proclaimed "gold is a 6000-year old bubble" and cash should be banned, concludes ominously, "everybody will be adversely affected."

The virtuous circle that has sustained the dollar and buoyed USD assets for decades has definitively been broken. Now, with China's Treasury liquidation serving to exacerbate the pressure from the demise of the petrodollar, it's critical to take stock of accumulated petrodollar reserves in order to understand how large the unwind could ultimately be in a worst case scenario. As it turns out, narrowly focusing on official FX reserves could understate the size of petrodollar accumulation by some $2.5 trillion.

To many Americans, even many who did not vote for him, the election of Barack Obama seemed to hold out the promise that our racial divide could be healed by a black president. Even Obama’s supporters must concede it did not happen, though we would, again, argue angrily over why.

Is AAPL the next AOL, and is Tim Cook the next Thorsten Heins? It all depends on China: if the world's most populous nation can get its stock market, its economy and its currency under control, then this too shall pass. The problem is that if, as many increasingly suggest, China has lost control of all three. At that point anyone who thought they got a great deal when buying AAPL at $92 will have far better opportunities to dollar-cost average far, far lower.

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While status quo-huggers are all too happy to point out gold and silver's lack of utter exuberance amid this week's carnage, perhaps they need to re-comprehend the difference between a heavily manipulated 'paper' market and the surging demand for physical precious metals that is evident in the 20-plus percent premium - and rising - being paid for silver bullion currently...

No one should attempt to treat Ayn Rand and Murray N. Rothbard as uncomplicated and rather similar defenders of the free society although they have more in common than many believe.

It’s been noticed more than a few times that there aren’t many substantive differences between the Republicans and Democrats. What they have in common - at least the mainstream varieties - is a desire to use the state to shape society in whatever way they see fit. As Andrew Napolitano put it, "We have migrated from a two-party system into a one-party system, the big-government party. There’s a democratic wing that likes taxes and wealth transfers and assaults on commercial liberties and there’s a republican wing that likes war and deficits and assaults uncivil liberties." And both parties love prohibition, just of different things.

When it comes to soliciting opinions, the NY Fed in general, and former Goldmanite Bill Dudley in particular, care about just one group of "advisors" - the Investor Advisory Committee on Financial Markets (a group created in July 2009 after the 2008 market crash) also known as the billionaires who run the country's biggest hedge funds, prop desks and PE firms, including JPM, Credit Suisse, Apollo, Blackrock, Blue Mountain, Brevan Howard, Tudor, Fortress, and lo and behold, David "Balls to the Wall" Tepper.

Here are some modestly optimistic musings on what may be next in the cards for Greece...

Donald Trump is no phenomenon or wonder, only someone money has been immunized and given a suit of armor under our capitalist system; a person with true elite-freedom. No, Trump is just a figurehead for those with closeted anger trying to resist unstoppable change in the world and resent their loss of power.

"The [Chinese] slowdown was predictable, predicted, unavoidable," Lagarde was quoted as saying." Well, yes, it was... by everyone but the IMF. Here is the history of the IMF's Chinese GDP growth forecasts taken straight from its World Economic Outlook quarterly pieces. The graph needs no explanation.

Tens of thousands of demonstrators poured into the streets of Kuala Lumpur on Saturday to call for the resignation of Prime Minister Najib Razak whose government has been accused of obstructing an investigation into how some $700 million from the Goldman-backed 1Malaysia Development Berhad mysteriously ended up in Najib’s personal bank account. Meanwhile, the country stands on the precipice of an outright financial meltdown.

Today's most anticipated event at tthis year's Jackson Hole event was the panel on "Global Inflation Dynamics", not because there is any core inflation in the world (at least not in the way the CPI measures it), especially not now that China is finally in the deflation exporting business, but because the most important speaker at this year's Jackson Hole, Fed vice chairman Stanley Fischer, alongside BOE's Mark Carney, the ECB's Constancio and the RBI's Raguram Rajan, would comment. Moments ago he just did, and courtesy of Market News, here are the highlights.

Iif there is one currency in the world that “deserves”, so to speak, ultimate execution it is that of the Japanese. The Bank of Japan has done more than any other central bank for far longer to kill it, but like any horror movie villain it seems immune to any reckoning or even the laws of financial sense. In the bigger picture, that is as much a damning indictment as a tale of orthodox resilience. It shows that monetary redistribution is nothing but a trap, an incredibly narrow and locked economic existence that can and will be permitted by any sustained apathy.