While the divergence between macro data 'dismalness' and equity price exuberance is by now well known, there is a greater threat looming to the rampapalooza that is underway. As forward Price-to-Earnings ratios have soared in the last year (aided and abetted - as Alan Greenspan explained - solely by The Fed's largesse) so bottom-up earnings growth expectations have cratered. So much so that veteran stock market investors and traders now see the divergence between multiple 'hope' and growth 'reality' as "ridiculous." Just how ridiculous? Worse than 1987, 2002, and 2011, when stocks fell over 20% upon realization of reality.
Another quarter of no “escape velocity” on main street and a further round of Kool Aid drinker speculation on Wall Street takes us just that much closer to the brink. Yet the Fed remains oblivious and continues to manufacture excuses and equivocations as to why ZIRP should extend into its 80th month and beyond. This is mis-governance on a colossal scale. So when the next thundering crash occurs - it is devoutly to be hoped that “audit the Fed” turns out to be the least of the threats descending on the Eccles Building.
WSJ Praises "Waiter, Bartender Recovery" While 74% Of Americans Believe They Will Work Until They DieSubmitted by Tyler Durden on 02/28/2015 - 18:44
The lines bethween the New Normal and the New Paranormal, between the real and the surreal are increasingly getting blurred when, having nothing else to praise about the US economy, the WSJ focuses on the "wage gains" of burger flippers... meanwhile 75% of Americans are confident they will work until their death.
Previously, the Obama administration attempted unsuccessfully to ban the AR-15. That didn’t work, so now Obama is going after the ammunition. This is yet another example of the war on preppers that is going on all over the nation. Whether you are a gun owner or not, this assault on our constitutional rights should disturb you greatly.
As Greece Scrambles To End Its Bank Run, JPM Throws A Wrench: Says Deposit Outflows Continued After "Deal"Submitted by Tyler Durden on 02/28/2015 - 16:42
Just when Greece thought it had bought itself some breathing room in its desperate attempt to rebuild confidence in its financial system, here comes JPM and effectively calls Yanis Varoufakis a liar, suggesting that Greek deposit outflows have continued at a brisk pace despite the bailout extension "deal."
"If you drop anybody into any momentous period in history, it’s really tough to perceive it at the time. It’s only when you look back on these things with the benefit of hindsight that you really see how historic they really are. But for many people right now who can forget the narrative and can forget what they're being told by various interested parties, if you can stand back far enough and take a practical look at what’s happening, I think it’s much easier to see certainly how far from normality things are today. "
Just a few short hours after the terrible murder of Russian opposition politician and outspoken Putin critic Boris Nemtsov, US' John Kerry was quick to condemn the actions of the "reformer" and demand Russia's "expeditious investigation," and President Obama has since issued a statement "admiring [Nemtsov's] struggle against corruption" Putin spokesman Dmitry Peskov says the Nemtsov murder was "100% provocation... It looks like a contract killing."
"My hope is that as policy makers of the world continue to prescribe their remedies for the ailing economic patient, that they do not render it worse off... As with their predecessors, I suspect there is no doubt in the minds of our central bankers that they are the smartest they’ve ever been. Yet, I fear they are not the smartest they will ever be."
Nothing says limited government and separation of powers like a bureaucracy unaccountable to the voice of the people! Then again, Yellen doesn’t care much for democratic oversight. She’s a caricature of Randian libertarianism: someone who wants to do whatever, whenever, without rulers. The problem is Yellen isn’t operating a private railroad company. She’s the figurehead for a government institution created by Congress. If democracy means anything, it’s that voters have some measure of control over political bureaucracies.
Who controls NATO, or the IMF? I’m sure you understand it’s not you. Still, when an organization exhibits aggressive behavior in your name, or lends out your money in your name, you should at all times feel that you are in control, through those you elect to represent you. Well, do you? Or are you merely thinking: that’s too far away from me? Organizations, like so many things in life, don’t scale up well, if at all. Beyond a certain critical mass, they become counterproductive, as Illich states. They become predators on their own creators. That goes as much for NATO, IMF and EU as it does for schools and hospitals.
The day the Buffet "value-investing" fanatics have been looking forward to all year, almost as much as the annual pilgrimage to Omaha, has finally arrived - hours ago Warren Buffett released his historic, 50th annual letter to shareholders, which is extra special because as the Oracle notes in the foreword, "Fifty years ago, today’s management took charge at Berkshire. For this Golden Anniversary, Warren Buffett and Charlie Munger each wrote his views of what has happened at Berkshire during the past 50 years and what each expects during the next 50."
And then there were 21. Hours ago on Saturday, the country whose currency is largely pegged to the dollar which itself is now anticipating a rate hike in the coming months, surprised the world by confirming its economic slowdown yet again following a recent rate cut just this past November when it lowered its benchmark rate by 40 bps, after it again cut benchmark lending and deposit rates by 25 bps starting on March 1. Specifically, the PBOC will lower the one-year lending rate to 5.35% from 5.6% and its one-year deposit rate to 2.5% from 2.75%. It also said it would raise the maximum interest rate on bank deposits to 130% of the benchmark rate from 120%.
Prominent Politician And Putin Critic Shot To Death In Moscow; "Shocked" John Kerry Urges Russia To Bring JusticeSubmitted by Tyler Durden on 02/27/2015 - 23:30
Update: John Kerry has decided to comment: U.S. URGES RUSSIA TO ACT IN EXPEDITIOUSLY IN NEMTSOV MATTER, SAYS BORIS NEMTSOV SOUGHT TO REFORM RUSSIA
Just nine hours after tweeting "Putin annexed Crimea and is now handing over Siberia to the Chinese," and three ours after calling for a "Russian Spring" march, prominent Vladimir Putin critic and opposition politician (who back in 1997 was also deputy Prime Minister of the Russian Federation) Boris Nemtsov, has been killed in the center of Moscow. As The BBC notes, the Russian opposition politician and former deputy PM was shot to death on a Moscow street. Life News is reporting he was shot in the chest four times on a street very close to Red Square.