• Tim Knight from...
    11/26/2014 - 19:43
    I read your post Pity the Sub Genius and agreed with a lot of what you wrote. However you missed what I think is the biggest killer of middle class jobs, and that is technological...

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Central Bank Credibility, The Equity Markets, And Gold

Central bank credibility is at all-time highs. As a consequence, we suggest, equities are near all-time highs too while gold is scraping multi-year lows. A change though may be in the offing with all three. Not today, nor tomorrow. But perhaps sooner than most think. Here’s how we see it...



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Stocks Close At Recordest Highs Ensuring 'Confident' Black Friday, Despite Macro Massacre

The S&P 500 closed at new record-er-est highs (a record 29th day above the 5DMA) providing just the right amount of confidence-inspiring 'wealth creation' to ensure you spend, spend, spend this weekend all those gas price savings (despite 9 of 9 macro data misses today). Dow and Trannies underperformed today as Nasdaq surged on AAPL strength. The USDollar fell for the 3rd day (first time in a month) and Treasury yields tumbled (down 5-8bps on the week) near 18 month closing lows. VIX traded briefly with an 11 handle and lost its inversion (1st day in 6). Gold prices flatlined for the 3rd day (as EURCHF fell) ahead of the Swiss gold referendum this weekend. Oil tumbled to fresh 4-year lows as OPEC hinted at no cuts and copper slipped to fresh 4 year closing lows. Late-day shenanigans sent stocks ripping higher... in a totally rational manner. Turkey prices are at $1.67/lb and have been remarkably stable over the past few years.



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19 US Shale Areas That Are Suddenly Endangered, "The Shale Revolution Doesn't Work At $80"

“Everybody is trying to put a very happy spin on their ability to weather $80 oil, but a lot of that is just smoke... The shale revolution doesn’t work at $80, period.



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This Country Will Be The Next Zimbabwe...

Meanwhile, in politics and economics we live in a fantasy world. The feds claim to improve our economy. We pretend to believe it. Did a central bank ever add one single centime, one peseta, one zloty or one fraction of a mill to the world’s wealth? Not that we are aware of. But all over the world, central bankers pretend to sweat and toil on behalf of mankind – correcting… adjusting… nullifying the decisions of honest men and women going about their daily business. Interest rates are too high! Inflation is too low! Not enough demand! Too much savings! They are omniscient as well as all-powerful.



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The 'Modest' Economic Implications Of Obama's Immigration Policy Changes

The executive actions on immigration announced last week look likely to have only a modest economic effect, because, as Goldman Sachs explains, most of the individuals eligible for the programs are already in the US and, in most cases, are likely already working. That said, Goldman estimates that the changes should increase the labor force by about 300k over the next couple of years and that possible wage gains among those gaining work authorization would increase average wages by less than 0.1%.



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"It's Different This Time?" What Happened To US Oil Drillers During The Last Price War

History may not repeat but it rhymes so loud sometimes that Einstein would be rolling in his repetitively insane grave. As Bloomberg notes, the last time that U.S. oil drillers got caught up in a price war orchestrated by Saudi Arabia, it ended badly for the Americans. "1986 was the big price collapse and the industry did not see it coming,” said Michael Lynch, president of Strategic Energy and Economic Research who has covered the oil sector for 37 years, "it put a lot of them out of business. You just don’t forget it. It’s part of the cultural memory." Think it can't happen again? Think again... consider how levered US Shale drillers are and just what Saudi has to gain from keeping their foot on the US neck... In 1986, the U.S. industry collapsed, triggering almost a quarter-century of production declines, and the Saudis regained their leading role in the world’s oil market.



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Spot The Turkey - Live Feed

Some folks are not going to be beheaded today...



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3 Things Worth Thinking About

"The time to liquidate a given position is now seven times as long as in 2008, reflecting much smaller trade sizes in fixed income markets. In part the current liquidity illusion is a product of the risk asymmetries implied by the zero lower bound on interest rates, excess reserves in the system, and perceived central bank reaction functions. However, interest rates in advanced economies won’t remain this low forever. Once the process of normalization begins, or perhaps if market perceptions shift, and it is expected to begin, a re-pricing can be expected. The orderliness of that transition is an open question."



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The Vendetta Continues: Ackman's Latest Herbalife Deathwish And Other Observations - The Full Q3 Letter

For those who care what Bill Ackman has been thinking and doing lately, aside from colluding with and piggybacking on desperate for M&A "strategics" to go activist, and buying a boatload of calls in advance of announcing a material, market-moving position and in the process generating a 43.4% YTD return while the SEC sits on its hands doing nothing and proving once again the market is a rigged playground catering to billionaires, here is his full Q3 letter.



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Misery Mounts As Airline Delays & Cancellations Surge On East Coast

As of 1220ET, 505 flights have been cancelled in the US today (and 1,731 additional flights are subject to delays) as airlines both pre-emptively and reactively prepare for the worst case nor'easter due to hit the East Coast any hour now. Chicago O'Hare is subject to the most flight delays, followed by New York's JFK. Newark, Laguardia, and Philadeplhia airports are seeing the most cancellations currently. "In most cases, the worst time to travel in the mid-Atlantic and New England due to the storm will be on Wednesday and Wednesday night."



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For The World's Largest Rig Operator, The "Recovery" Is Now Worse Than The Post-Lehman Crash

The last time the world's largest oil and gas drill operator, Seadrill, halted its dividend payment was in 2009, shortly after Lehman had filed and the world was engulfed in a massive depression. Retrospectively, this made sense: the company was struggling not only with depressionary oil prices, but with a legacy epic debt load as can be seen on the chart below. So the fact that the stock of Seadrill collapsed by 20% today following a shocking overnight announcement that it had once again halted its dividend despite what is a far lower debt load than last time, indicates that when it comes to energy companies, the current global economic "recovery" - if one believes the rigged US stock market - is actually worse than the Lehman collapse.



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"It's All Good, Right?"

It really isn’t hard to connect the dots and see the real economy in the real world, outside Wall Street, is a disaster and getting worse by the hour. Below are a bunch of dots that have been issued in the last 24 hours. Here are the facts.



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Most Indirect Bidders For 7 Year Paper Since US Downgrade Means Lowest Yield In Over A Year

After describing this week's prior two bond auctions as "blistering" and "scorching", we were concerned we would run out of hyperbolic adjectives to describe today's last for the week 7 year auction. As it turns out, our concerns were unfounded, because moments ago the Treasury announced it sold $29 billion in 7 Year paper at a 1.96% yield, a small 0.4 bps tail to the When Issued in an auction that was just modestly weaker than the prior two, relatively speaking, even if in absolute terms the high yield, down from 2.02% last month, was still the lowest since October 2013, and as can be seen on the chart below, is continuing to drop. The Bid to Cover also showed a substantial pick up in interest, jumping to 2.635, the highest since February, and well above the 2.54 TTM average.



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The Mystery Of Surging Q3 GDP Explained And Why Americans Are Suddenly $80 Billion "Poorer"

In order to "suggest" that the US economy had grown by a far greater than expected run-rate, the BEA was forced to revise away personal income, and "assume" these had instead been invested in the US economy, in the form of a surge of durable goods purchases. Sure enough, while both incomes and savings tumbled, spending magically surged: So if that "statistical" amount of money you thought you had saved in the BEA's savings.xls spreadsheet just dropped by 10%, fear not dear Americans: it was all used for a good cause: to fabricate a much stronger than expected Q3 GDP number.



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Something Is Wrong With This Chart

Israel's leader Benjamin Netanyahu said this morning "we will rectify this absurdity." We suspect he was talking about this chart!!



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