• Tim Knight from...
    12/21/2014 - 09:37
    The five remaining equity bears on Earth are all saying the same thing: "We'll get 'em in 2015." To which I ask: why? What's going to change?

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“We Are This Far From A Turnkey Totalitarian State" - Big Brother Goes Live September 2013

George Orwell was right. He was just 30 years early.

In its April cover story, Wired has an exclusive report on the NSA's Utah Data Center, which is a must read for anyone who believes any privacy is still a possibility in the United States: "A project of immense secrecy, it is the final piece in a complex puzzle assembled over the past decade. Its purpose: to intercept, decipher, analyze, and store vast swaths of the world’s communications as they zap down from satellites and zip through the underground and undersea cables of international, foreign, and domestic networks.... Flowing through its servers and routers and stored in near-bottomless databases will be all forms of communication, including the complete contents of private emails, cell phone calls, and Google searches, as well as all sorts of personal data trails—parking receipts, travel itineraries, bookstore purchases, and other digital “pocket litter.”... The heavily fortified $2 billion center should be up and running in September 2013." In other words, in just over 1 year, virtually anything one communicates through any traceable medium, or any record of one's existence in the electronic medium, which these days is everything, will unofficially be property of the US government to deal with as it sees fit... As former NSA operative William Binney who was a senior NSA crypto-mathematician, and is the basis for the Wired article (which we guess makes him merely the latest whistleblower to step up: is America suddenly experiencing an ethical revulsion?), and quit his job only after he realized that the NSA is now openly trampling the constitution, says as he holds his thumb and forefinger close together. "We are, like, that far from a turnkey totalitarian state."



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A Canadian Journalist Recalls His Banker Days, Or Was The Soul-For-Cash Exchange Worth It

In the aftermath of the "Greg Smith" phenomenon, where now a variety of sources (for now of the terminated kind, but soon likely from those still on the payroll) have stepped up against the Wall Street and D.C. omerta, it is assured that we will see many more such pieces before the coolness factor of public employer humiliation. It is our hope that these lead to an actual improvement in America's criminal corporate culture (such as in "How a Whistleblower Halted JPMorgan Chase's Card Collections"), which is nowhere more prevalent than in the corner offices of Wall Street, long a place where "obfuscation" and "complexity" (recall that it was none other than the Fed telling us that "Liquidity requires symmetric information, which is easiest to achieve when everyone is ignorant") have been synonymous with legalized wealth transfer (after all, we now know that nobody ever read the fine print, and when the chips fell it was all the rating agencies' fault). Alas we are skeptical. But while we wait, here is a slightly lighter piece from the Globae and Mail's Tim Kiladze, who while not exposing anything new, shares with his readers just what the transition from "soulless banker" to a "less demanding, more fulfilling life" entails, and that it does, in the end, pay off. As Tim says - "The latter is a real option: I’m proof of it." Here is his story for all those 'wannabe Greg Smiths' who are on the fence about burning that bridge in perpetuity.



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Chris Martenson And Marc Faber: The Perils of Money Printing's Unintended Consequences

Marc Faber does not mince words. He believes the money printing policies of the Federal Reserve and its sister central banks around the globe have put the world's currencies on an inexorable, accelerating inflationary down slope. The dangers of money printing are many in his eyes. But in particular, he worries about the unintended consequences it subjects the populace to. Beyond currency devaluation, it creates malinvestment that leads to asset bubbles that wreak havoc when they burst. And even more nefarious, money printing disproportionately punishes the lower classes, resulting in volatile social and political tensions. It's no surprise then that he's feeling particularly defensive these days. While he generally advises those looking to protect their purchasing power to invest capital in precious metals and the equity markets (the rationale being inflation should hurt equity prices less than bond prices), he warns that equities appear overbought at this time.



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"You Are Here"

A casual reminder courtesy of Edwards Jones.



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The Numbers That Matter: $15,564,809,891,768 And $8.354 Billion

Without wasting our readers' time, here are the only two numbers that matter today:

  1. $15,564,809,891,767.99 - This is how high record US federal debt is as of today. Although "record" and "US debt" in the same sentence is now redundant. So just debt. (source)
  2. $8.354 billion. This is how much net US tax revenues (net of refunds of course) are lower in fiscal 2012 to date compared to the same period in 2011. In this Bizarro world, economic recovery is apparently based on weaker numbers (source).


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Brent At $126 As Israel Security Cabinet Votes 8 To 6 To Attack Iran

Looking at the tranquil sea that is the S&P one may be forgiven to ignore the rapid intraday surge in Brent which was up over $3 in a few hours, approaching $126 once again. But why? After all the FOMC minutes were oh so very slightly hawkish, and not to mention that the Fed's scribe Hilsenrath told everyone at best the Fed would proceed with sterilized QE which would leave risk prices untouched. Maybe it has something to do with this. According to Israel's NRG, in a just completed cabinet vote, for the first time Netanyahu has gotten a majority (8 over 6) supporting an Iran attack. NRG also notes that at this point Israel has decided to not wait until the US elections in November before proceeding with sending crude to the stratosphere. From NRG (google translated): "Israeli political sources believe that Prime Minister Benjamin Netanyahu a majority Cabinet support Israeli military action against Iran without American approval....He announced that he would not hesitate to perform the operation without the approval of President Obama mentioned the precedent of the decision to attack the Iraqi reactor, Prime Minister Menachem Begin, and with the comments heard yesterday some cabinet ministers say privately that "It sounds like a speech preparation for attack." Political - Security Cabinet 14 ministers. According to estimates, at this stage tend to support Netanyahu and Barak's approach eight ministers, and six against it (including the traditional opponents octet: Moshe Ya'alon, Dan Meridor, Benny Begin and Eli Yishai)." So... $4.00 gas is just around the corner. As is, probably, $5.00 gas. And $6.00 gas.



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This Is All That Greece Needs

Listen up muppet masters - if you have put in a bid for that Greek jewel of Santorini on Ebay, it may be time to quietly withdraw from the auction. Because according to Georgia Tech, things may get rather shaky soon. Literally: "After decades of little activity, a series of earthquakes and deformation began within the Santorini caldera in January of 2011,” said Newman, whose research is published by Geophysical Research Letters. “Since then, our instruments on the northern part of the island have moved laterally between five and nine centimeters. The volcano’s magma chamber is filling, and we are keeping a close eye on its activity.” Because the only thing that Greece, whose primary business is tourism, needs, is for the biggest Cyclades tourist attraction to go up in a pyroclastic cloud.



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This Is Where "The Money" Really Is - Be Careful What You Wish For

We have long shown that "investors" whatever that term means in the New Normal - those gullible enough to put their money in Bennie Madoff, pardon Bennie Bernanke Asset Management? - have been not only reluctant to put their money into stocks, but despite week after week of artificial, low volume highs, driven entirely by Primary Dealers (and now European banks post the $1.3 trillion in LTROs, not to mention even foreign Central Banks recently buying high beta stocks) spiking the market ever higher courtesy of record reserves, but in fact continue to pull their cash out of the stock market with every thrust higher. Why, just last week another $1.4 billion in cash was pulled from domestic equity funds, nominal Dow 13,000 be damned. The truth is that the banks are desperate to start offloading their risk exposure to retail investors, and instead of selling, are furiously trying to send the market ever higher just to get that ever elusive "investor" back: just look at how much the market rose by last week, CNBC will say: do you really want to be out of this huge rally? Alas, the damage has been done: between the Great Financial Crisis, the Flash Crash, a massively corrupt regulator, rehypothecating assets that tend to vaporize with no consequences, and a central bank which effectively has admitted to running a Russell 2000 targeting ponzi scheme, the investor is gone. But what if? What if the retail herd does, despite everything, come back into stocks? After all the money is in bonds, or so the conventional wisdom states. What harm could happen if the 10 Year yield goes back from 2% to 3%, if the offset is another 100 S&P points. After all it is good for the velocity of money and all that - so says classical economic theory. Well, this may be one of those "be careful what you wish for." Because while investors have indeed park hundreds of billions out of stocks and into bonds, the real story is elsewhere. And the real story is the real elephant nobody wants to talk about. Presenting: America's combined cash hoard, which between total demand deposits, checkable deposits, savings deposits, and time deposits (source H.6), is at an all time high of $8.1 trillion.



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CFTC Pulls "JPM Whistleblower" Letter

Following the posting of a comment letter two days ago that has sent some in the commodity world agog, as it was supposedly by a JPM insider (who could have in that case provided evidentiary data from the JPM system to validate his accusations instead of merely providing blanket truism statements), even if it said absolutely nothing new and merely regurgitated existing speculation and assumptions, the CFTC has as of minutes ago gone one step ahead and truly stirred up the conspiracy theory hornets' nest, by taking down the entire comment pdf. So put it up one day, and take it down 48 hours later? Anyway, let the conspiracy theories commence.



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RANsquawk Weekly Wrap - Stocks, Bonds, FX – 16/03/12



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In Upwardly Distorting The Economy, Has "Global Warming" Become Obama's Best Friend?

Back in early February, Zero Hedge was among the first to suggest that abnormally warm temperatures and a record hot winter, were among the primary causes for various employment trackers to indicate a better than expected trendline (even as many other components of the economy were declining), in "Is It The Weather, Stupid? David Rosenberg On What "April In January" Means For Seasonal Adjustments." It is rather logical: after all the market is the first to forgive companies that excuse poor performance, or economies that report a data miss due to "inclement" weather. So why should the direction of exculpation only be valid when it serves to justify underperformance? Naturally, the permabullish bias of the media and the commentariat will ignore this critical variable, and attribute "strength" to other factors, when instead all that abnormally warm weather has done is to pull demand forward - whether it is for construction and repair, for part-time jobs, or for retail (and even so retail numbers had been abysmal until the just released expectations meet). Ironically, while everyone else continues to ignore this glaringly obvious observation, it is Bank of America, who as already noted before are desperate to validate a QE as soon as possible (even if their stock has factored in not only the NEW QE, but the NEW QE HD), that expounds on the topic of the impact of record warm weather. In fact, not only that, but BofA makes sense of the fact why GDP growth continues to be in the mid 1% range while various other indicators are representative of much higher growth. The culprit? Global Warming.



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Remember Fukushima: Presenting The Radioactive Seawater Impact Map

A few days after the one year anniversary of the Fukushima disaster, nobody talks about it anymore. After all it's "fixed", and if it isn't, the Fed will fix it. Remember in the New Normal nothing bad is allowed the happen. So for those who have forgotten, here is a reminder.



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Guest Post: Caution - Falling Currencies

Eventually, people will discover that they cannot save in terms of dollars (those who don’t figure it out will be rendered economically irrelevant as their wealth is removed from their hands). Savings is a necessary prerequisite for investment. Investment is necessary for companies to grow, to develop new technologies, products, and markets. Growth is necessary to hire new workers. As existing companies achieve higher productivity of labor, and do not need as many workers to perform the same work, they lay off unneeded people. In a free market, the unemployed would quickly be hired by growing companies that expand and develop new businesses. But today’s structurally high unemployment can be traced back to Friedman’s quack prescription (among other government interference). Weakening the currency not only discourages savings, it also weakens businesses who have to keep the currency on their balance sheet and who have to import some of their inputs. When a currency loses value, then all who hold it incur a loss. It is not possible to employ workers and run a business in a country without holding significant amounts of its currency. Currency debasement therefore imposes constant losses on enterprises that try to operate in such an environment.



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Since Morgan Stanley CEO Thinks Greg Smith's Op-Ed Was "Unfair", Here Are Some Questions

Where does one even possibly start with this: from the WSJ: "Morgan Stanley’s CEO James Gorman this morning criticized an op-ed written by a former Goldman Sachs Group employee, saying “I didn’t think it was fair.” Gorman, at a breakfast sponsored by Fortune Magazine in New York, said that he told the operating committee of his New York firm, not to try to take advantage of the criticisms of Goldman in the op-ed, which described a toxic culture in which profits come before client service."...“I don’t really care what one employee said,” said Gorman, who became CEO of Morgan Stanley at the beginning of 2010. “At any point, someone is unhappy… To pick a random employee, I don’t think it’s fair. I don’t think its balanced.” That's funny - Gorman is only the second CEO after Jamie Dimon to "not take advantage of the criticisms" and we wonder why? Could it have something to do with the fact that every single bank is in the same position, and both Dimon and Gorman know very they are both just one disgruntled employee away from having the truth about their own sinking ships exposed to the world? Could it also be that both of them also realize that with Wall Street compensation packages now effectively downshifted for good, that the incidence of precisely such "whistleblowing" Op-Eds will soar astronomically? Finally, could Mr. Gorman perhaps comment on the allegations of yet another whistleblower who emerged right here on Zero Hedge, who alleges that it was none other than Morgan Stanley who influenced the CBO in its "conclusions" over the implications of the robosigning scandal? We would be delighted in posting Mr. Gorman's view. Alternatively, we would be just as delighted in posting the views of his employees, whether happy or unhappy. Or at least those employees who are not fired in retribution for emailing Zero Hedge... wink wink Morgan Stanely - and now you know that we know that you know that we know.



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Will Hungary Be The Next Iceland? PM Orban: "Hungarians Will Not Live As Foreigners Dictate"

When it comes to being a NWO debt slave, one can accept their fate demurely and bent over, like a conditionally habituated dog electroshocked into perpetual submission just as the banker elites like it, with threats that the world would end the second one dared to change the status quo (see Greece), or one can do something about being a debt slave. Like Iceland. And then rapidly proceed to be the best performing economy in Europe. And reading some of the latest news out of Hungary, which has to count its lucky stars is not stuck in the inflexible nightmare that is the mercantilist Eurocurrency union, gives us hope that we may soon witness the next sovereign rebellion against the banker yoke. The WSJ reports: "Hungary's premier fired a new broadside in the country's running battle of wills with the European Union, saying that Hungarians should be free to make their own laws without interference from Brussels.  Speaking to a large crowd of supporters celebrating the anniversary of a 19th-century Hungarian revolt against Austrian rule, Prime Minister Viktor Orban said: "Hungarians will not live as foreigners dictate." This has promptly generated the anticipated response from European unelected dictator Barroso, who minutes ago said that Hungary's Orban doesn't get democracy. Oh, we think he does. What he doesn't seem to get, or like, is existence in a banker-governed technocratic, klepto-fascist state, in which the peasantry is merely an intermediary vessel for asset confiscation by insolvent banks. Like Greece... which however already is the butt of all jokes of personal submission to a foreign oppressor, so there is no dignity in kicking a dog that is down.



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