Haters gonna hate, but the “Bitcoin bubble” meme has become the financial equivalent of a viral online cat video – wildly popular but pretty vacuous. In an effort to separate fact from fiction, ConvergEx's Nick Colas reviews 11 bitcoin myths (and dispels them). Still, there’s no doubt that the public is entranced: there are now 3x more Google searches for “bitcoin” than “Western Union”, and 33x more than for “Gold coins”. We started writing about bitcoin back in February because it was – and still is – a fascinating invention (for better or worse). How it plays out, we will just have to wait and see.
With even Bank of England head Mark Carney admitting UK housing prices may be a little bubbley (and affordability plumbing new depths), RT reports that a hostel in east London has come up with the ingenious idea, to try and solve homelessness amid soaring rents in the British capital, of converting a shipping container from China into a tiny low cost home for hard up and desperate Londoners. The boxes, called mYpads, cost GBP75 per week - around one-quarter of the rent of most distant yet commutable borough in London - and are affordable for even those on minimum wage.
There was much concern that heading into the holiday season the US consumer would hunker down, which is why the just released retail sales came as a bit of good news: the headline and core (ex-autos) numbers both beat expectations of 0.6% and 0.2%, printing at 0.7% and 0.4% respectively, and refuting rumors of a big consumer slowdown into the holiday season. On the other hand, core retail sales, ex-autos, showed a declining growth rate, following the 0.5% increase in October, declining to 0.4% in the past month, while the ex-autos and gas number remained flat from October to November, or 0.6%. It is unclear if this number is good enough to send futures sliding on the back of the horrible claims report which has so far managed to push futures into green territory, but with the bulk of the monthly change contained in the seasonal adjustment, any 0.1% increments of change or beats of expectations are very much noise.
While the Labor Department admits "difficulties in seasonally adjusting" the data, this is the biggest spike ex-Sandy in the all-important initial claims data since 2005. At 368k (versus 320k expectations), this is the worst miss sicne Sandy also (absent the government shutdown debacles) and the Labor department says no states were estimated. This is the worst initial claims print since March... just enough bad news to provide the Fed some leeway? Of course, with enough statistical noise to sink an economy, it would appear another government-inspired data series has become next-to-useless ammo for the baffle 'em with bullshit brigade.
No new news as a catalyst this morning but it appears someone decided it was highly inappropriate for the precious metals to be holding their gains as stocks and bonds revert back to pre-payrolls 'taper' levels. Gold and Silver have been monkey-hammered lower this morning as heavy volume hit futures markets about 419ET and 645ET. Futures were not halted. Some speculation that gold's drop followed positive comments from Ukraine's foreign minister but that seems a stretch...
The more the cops, the safer: that's what conventional wisdom says. The contrarian view, of course, is that when police per capita are far above average, there is usually a reason. Or, it the distribution could be just pure noise, depending on how much money can be allocated to police budgets or how prone to cop extortion a given country is. The chart below doesn't provide a definitive answer, with Russia leading the world in most police per 100,000 persons according to the UN and ONS, while Greece and Serbia mark the trailing end. Still, those who would rather avoid police brutality and paying a bribe to corrupt law enforcers, may be urged to avoid the left end of the chart below...
- J.P. Morgan to Pay Over $1 Billion to Settle U.S. Criminal Probe Related to Madoff (WSJ)
- Ford board aims to pin down CEO Mulally's plans (Reuters)
- Raising Minimum Wage Is a Bad Way to Help People (BBG)
- Japan Lawmakers Demand Speedy Pension Reform (WSJ)
- EU reaches landmark deal on failed banks (FT)
- In which Hilsenrath repeats what we said in August: Fed Moves Toward New Tool for Setting Rates (WSJ)
- Senators Vow to Add to Iran Economic Sanctions in 2014 (BBG)
- Centerbridge in $3.3bn LightSquared bid (FT)
- Banks, Agencies Draw Battle Lines Over 'Volcker Rule' (WSJ)
It has been another session of overnight weakness, in which, to quote Deutsche Bank, "something has changed" as ES algos no longer track every tick of the EURJPY (or other JPY pair variants). Usually in such transition periods where the robots are not sure how to trade risk based on highly leveraged inputs, things go bump in the night, and they did just that with the E-Mini trading just off its overnight lows, despite a notable rise in the EURJPY from yesterday's close. Keep a close eye on the now traditional pre-market ramp in the EURJPY - if unaccompanied by an increase in the E-mini, it may be time to quietly exit stage left.
Since the bank that decides what happens at the NY Fed, and by implication, at the broader Federal Reserve system, is none other than Goldman Sachs, it would be informative to read what none other than Goldman thinks of Ben Bernanke's thesis advisor Stanley Fischer, formerly head of the Bank of Israel, as the next vice chairman - as he is now actively rumored to become shortly. Conveniently, here is just such a Q&A from Goldman's Jan Hatzius - the man who feeds Bill Dudley all his economic and monetary insights over lobster sandwiches at the Pound and Pence.
Of the 25 companies with the largest corporate profits in the world; banking, energy and technology firms are absolutely raking it in. Despite stagnating incomes, these companies made $567,856,000,000 in 2012 alone... here's the subsidies, tax breaks, and offshoring that helped them do it...
In case you weren’t aware, several of China’s major cities have experienced record-breaking, extremely dangerous levels of smog in recent days. Only today, Chinese authorities raised the "safe" level of pollution to reduce the frequency of alerts. So how did China’s state-run media decide to respond to this environmental and public health disaster? With ridiculous propaganda about the “unexpected benefits” of smog of course. You have to see this to believe it.
"If we evaluate an organization's performance by what it promised when it was created, the Federal Researve has clearly failed the American people," is how Murray Sabrin concludes this documentary on the first 100 years of the Fed's reign. The sad truth, he details, is that "the USD has lost more than 95% of its purcahsing power since the Fed was created and the cost of living has skyrocketed since Nixon severed the last linkage between the USD and gold in 1971." In short, the revolution of 1913 shifted power from individuals, communities and states to the federal government and its powerful allies in the private sector.
If one believes the various US diffusion indices - among which key are the assorted regional Fed surveys the monthly PMI data - and listens to the pithy soundbites of their respondents, the US economy has hardly ever been better (of course, that 60% of "growth" in the past year has been due to inventory accumulation on hope that the consumer end demand will finally come is neither here nor there). However, we don't exactly believe said indices. Instead, to get a true sense of what is going on, it is always better to listen directly to those who are not only deep in the trenches, but are also accountable to their shareholders every quarter: the various CEOs and CFOs of America's public corporations. Below, courtesy of Bloomberg chief economist Rich Yamarone, who has compiled a selection of Q3 earnings call soundbites, is an indicative snapshot of the US economy as seen most recently through the prism of executives in a wide range of industries.
At a time when Wall Street is absolutely swimming in wealth, New York City is experiencing an epidemic of homelessness. According to the New York Times, the last time there was this many homeless children in New York City was during the days of the Great Depression. And the number of homeless children in the United States overall recently set a new all-time record. Americans like to think of themselves as "the wealthiest nation on the planet", and yet the number of young kids that don't even have a roof over their heads at night just keeps skyrocketing. There truly are "two Americas" today, and unfortunately most Americans that live in "good America" don't seem to really care too much about the extreme suffering that is going on in "bad America".
Productivity. Every employer loves it, and every employee is fascinated by it, especially if it comes in cute colors, a retina screen, and weighs under a pound... at least until such time as "productivity" results in the loss of the employee's job, which in turn makes the employer love it even more as it results in even higher profits, even if it means one more pink slip and a 91 million people outside the labor force. With a labor force already in turmoil as millions drop out every year never to be heard from again, made obscolete by the latest technological and computerized innovation, and students stuck in college where they pile up record amounts of student loans (at last check well over $1 trillion) hoping form some job, any job, upon graduation, unfortunately the future is not bright at all. In a recently published paper, "The Future of Employment: How Susceptible are Jobs to Computerisation," Oxford researchers Frey and Osborne, look at the probability of computerization by occuption. What they find is shocking for nearly half of the US labor force.