Archive - Sep 2015 - Story

Greece went to the polls on Sunday with a choice that really wasn't a choice and even as Alexis Tsipras looks set to prevail the most shocking electoral outcome is this: neo-Nazi Golden Dawn is set to come in third and garnered the most support of any party among Greece's unemployed.

One can’t help being left slack-jawed witnessing that the Fed has just publicly inserted itself into geopolitics via its monetary policy as de facto first responder/savior of all economies. Even if it puts U.S. savers, retirees, along with its economy in the back seat.

Q: What is your own view of the appropriate liftoff date?

A: Our own answer to that question has long been 2016. In fact, our own view is similar to that of Chicago Fed President Charles Evans, who recently shifted his call from early 2016 to mid-2016.... At this point, our “GSFCI Taylor rule” suggests that the FOMC should be trying to ease rather than tighten financial conditions. Our own view in terms of optimal policy is quite strongly in favor of waiting well into 2016.

With both Russia and Iran seemingly prepared to do what's necessary to ensure Bashar al-Assad isn't toppled in Syria, John Kerry admits that the US strategy of brining about regime change in Damascus is now in serious jeopardy. Speaking from London on Saturday, Kerry attempted to hang on to the “Assad must go” narrative, but in what might fairly be described as the most conciliatory language yet, Washington’s top diplomat essentially admitted that the timetable for Assad’s exit is now completely indeterminate. Meanwhile, Moscow and Tehran are set to hash out Syria's future seemingly without any input from the Americans.

Rousseff - hand-picked by Lula da Silva to succeed him - appears to be caught up in da Silva's backdraft. Opposition parties also claim she violated Brazil's fiscal responsibility law when she doctored government accounts to allow more public spending prior to the October election last year. Rousseff in turn described the attempt to use Brazil's economic crisis as an opportunity to seize power a modern day coup.

Winston Churchill famously said in 1939: “I cannot forecast to you the action of Russia. It is a riddle wrapped in a mystery inside an enigma; but perhaps there is a key. That key is Russian national interest." In making ISIS, not Assad, public enemy No. 1, Putin has it right. It is we Americans who are the mystery inside an enigma now.

"At the start, China wasn't very confident. The worry was that there was no money for this."

The man who made a billion dollars on Black Monday sums up his strategy perfectly in this excellent FOX Business clip with the money-honey, "I'm a hedge fund manager that actually hedges for his clients. This is something of an old fashioned idea in this day of just gambling on the next Fed bailout." Spitznagel, who is wholly unapologetic in his criticism of The Fed (and any central planner), unleashes eight minutes of awful truthiness on what is going on under the surface of the so-called 'market', concluding ominously, "if August was scary for people, they ain't seen nothin’ yet."

Most just scoff at the notion that there has been a historic global Bubble, let alone that this Bubble has over recent months begun to burst. Talk of an EM and global crisis is viewed as wackoism. Except that the Federal Reserve clearly sees something pernicious in the world that requires shelving, after seven years, even the cutest little baby step move in the direction of policy normalization. The Fed and global central banks responded to the 2008 crisis with unprecedented measures. When the reflationary effects of these policies began to wane, the unfolding 2012 global crisis spurred desperate concerted do “whatever it takes” monetary stimulus. This phase has now largely run its course, and there is at this point little clarity as to what global central bankers might try next.

When 2-and-20 looks more like 50-50...

"It’s not right to say we’re worse off... If you go back 20 years ago, cars were worse, the air was worse. People didn’t have iPhones." That’s what you get when you ask a billionaire executive from a taxpayer bailed out, unaccountable industry for his thoughts on income inequality.

As Foreign Policy reports, "the new plans, according to the senior defense official, have two tracks. One focuses on what the United States can do as part of NATO if Russia attacks one of NATO’s member states; the other variant considers American action outside the NATO umbrella. Both versions of the updated contingency plans focus on Russian incursions into the Baltics, a scenario seen as the most likely front."

"At a recent investor gathering a question was asked, prior to the FOMC meeting, in the spirit of why the Fed should raise rates, whether or not anyone could argue that tapering itself was a “mistake”. It is an interesting question but the answer is surely a resounding “yes”. While a counterfactual is hard to prove, the impact of tapering in rates space is self evident. From the moment it began we saw a relentless fall in long term rates and a return to where those rates more or less stood around the onset of (endless) QE3." - DB

“The poll also confirms a deteriorating environment. A majority in both countries say things are heading in the wrong direction... In Syria, just 21% prefer life now to what life was like under the full control of Bashar al Assad."