QE has finally come to an end, but public comprehension of the immense fraud it embodied has not even started. In stopping QE after a massive spree of monetization, the Fed is actually taking a tiny step toward liberating the interest rate and re-establishing honest finance. But don’t bother to inform our monetary politburo. As soon as the current massive financial bubble begins to burst, it will doubtless invent some new excuse to resume central bank balance sheet expansion and therefore fraudulent finance. But this time may be different. Perhaps even the central banks have reached the limits of credibility - that is, their own equivalent of peak debt.
10Y Russian bond yields have broken above 10%, trading at the highest yields since 2009 as the Ruble plunges once again to fresh record lows against the dollar. These significant moves come on the heels of two notable headlines overnight. First, German exports to Russia slumped 26.3% YoY in August (down a stunning 16.6% year-to-date with vehicle exports plunging 27.7%) as sanctions batter bilateral trade. Secondly, Rosneft has proposed what is being described as "radical" reactions to the West's sanctions, which the Kremlin has (for now) denied.
Oil Residue The Size Of Rhode Island Covers Gulf Of Mexico Seafloor In Macondo Well Disaster AftermathSubmitted by Tyler Durden on 10/29/2014 - 09:39
Ever since the April 2010 disaster on the BP-operated Macondo well in the Gulf of Mexico, there was one big outstanding question: where did the bulk of the oil gol? Now, thanks to a research team led by David Valentine, a microbial geochemist at the University of California, Santa Barbara, sampled more than 534 locations near the spill site, gathering more than 3,000 individual samples, we know the answer: the oil spill - some 10 million gallons of coagulated oil - left an oily "bathub ring" on the sea floor of the Gulf of Mexico, about 25 miles from the well, that's about the size of Rhode Island.
In what appeared to be a sign of discord, Bloomberg reported in September that Ferrari Chairman Luca Cordero di Montezemolo was poised to leave the super-car maker because of a clash over strategy with the brand’s parent Fiat, proclaiming "Ferrari is now American," which represents "the end of an era." It now seems Marchionne's Fiat strategy to compete with Volkswagen's Lambo division is no set to fail as Bloomberg reports: FIAT CHRYSLER PLANS TO SPIN OFF FERRARI. Expected to list in US and European markets, the IPO of 10% of Ferrari is expected to be completed in 2015... another sign of the top?
Could we have imagined anything more far-fetched and unlikely as this practice by the SEC itself? We’ll answer this question. No.
There it was --- a real market come and gone in half an hour, like a pregnant panda at Edinburgh zoo. What did it mean and what should you do? You should pay attention to what happens to the direction of prices when volumes surge and markets work. When the veil is lifted, pay attention to what you see beneath. Last Wednesday, in the space of half an hour of active trading, the Treasury market had one of its most rapid rises ever recorded and equities fell sharply. There is a very simple lesson that when the markets finally break through the manipulation they move to price in deflation and not inflation. This is key because it means financial repression has failed. Such repression requires the artificial depression of interest rates but, crucially, it must be paired with boosting inflation above such rates. On October 15th 2014, if only for a few short minutes, market forces broke out and the failure of central bankers was briefly evident.
- Fed set to end one crisis chapter even as global risks rise (Reuters)... you mean, for the third time?
- Insider-Trading Probe Focuses on Medicare Agency (WSJ)
- He's sorry: Rajoy Apologizes as New Wave of Graft Allegations Hits Spain (BBG)
- China could 'punish' Hong Kong over protests, says ex-HK central bank chief (Reuters)
- Dubai Insists the Boom is Not a Bubble This Time Around (BBG)
- Bank-Data Sharing Accord Expands Push to Find Tax Cheats (BBG)
- Deutsche Bank Sinks to Third-Quarter Loss on Legal Costs (BBG)
- Kim Jong Un Executes 10 Officials for Watching Soap Operas (BBG)
- French drugmaker Sanofi sacks CEO Viehbacher (Reuters)
As Deutsche Bank observes, the Fed has been wanting to hike rates on a rolling 6-12 month horizon from each recent meeting but never imminently which always makes the actual decision subject to events some time ahead. They have seen a shock in the last few weeks and a downgrade to global growth prospects so will for now likely err on the side of being more dovish than in the last couple of meetings. They probably won't want to notably reverse the recent market repricing of the Fed Funds contract for now even if they disagree with it. However any future improvements in the global picture will likely lead them to step-up the rate rising rhetoric again and for us this will again lead to issues for financial markets addicted to liquidity. And so the loop will go on for some time yet and will likely trap the Fed into being more dovish than they would ideally want to be in 2015.
"Since 9/11, those thank yous have been aimed at veterans with the regularity of the machine gun fire that may still haunt their dreams. Veterans have also been offered special consideration when it comes to applications for mostly menial jobs so that they can “utilize the skills” they learned in the military. While they continue to march in those welcome home parades and have concerts organized in their honor, the thank yous are in no short supply. The only question that never seems to come up is: What exactly are they being thanked for?"
The Swiss establishment has been reliant upon the public’s ignorance, but now they are up against a formidable opponent in Egon von Greyerz. Not only that, but they can clearly see that, as elsewhere around the world, the public is fast becoming disenchanted with the status quo; and that is potentially very dangerous for these people. What is important to understand here is that if the initiative passes it will be part of the Swiss constitution IMMEDIATELY - as some are suggesting. This means that the government and parliament cannot touch it. Only another referendum can change it. This is proper democracy for you. The closer we get to the vote on November 30, the bigger this story is going to become, and the bigger it becomes, the higher the chance that the yes vote wins. Should that happen, it will undoubtedly set off alarm bells throughout the gold market, as yet more physical gold will need to be repatriated and another sizeable, price-insensitive buyer will enter the marketplace.
Having disproven the "yield curve is not inverted so there cannot be a recession anytime soon" meme, we thought the following chart of a much more macro-economic-data-related indicator that appears to be a useful timing tool for suggesting recessionary conditions exist would provide some more useful context than an articially-manipulated 'market' interest rate. As Evergreen Gavekal notes, the ratio of coincident-to-lagging conference board indices has an admirable record as a recession forecaster... and is at its lowest level since Sept 2009.
How does it feel to live under a government that is getting even more paranoid with each passing day? The American people are told that the emerging Big Brother police state is for our safety, but the truth is that it isn’t there to protect us. It is there to protect them.
Despite the mainstream media's effusive celebration of ApplePay - despite numerous payment systems and NFC devices alreadt existing and failing to achieve any paradigm shift - it appears Tim Cook has pushed his company into an area of competition he was not full prepared for. Seemingly expecting the world's retailers to embrace the 'unique' payment system, first Wal-Mart & Best Buy, then CVS and now Rite-Aid have all blocked ApplePay. While proclaiming the success of signing up over a million credit card users in the first 72 hours, Cook seemed ticked off at the retailers who blocked him, "it's a skirmish," he said, as Reuters reports, jabbing "merchants have different objectives sometimes. But in the long arc of time, you only are relevant as a retailer or merchant if your customers love you."