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3 Things Worth Thinking About

This won't last... here's 3 reasons to consider why...



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CBO: Obamacare Discourages Work

Remember all those allegations that Obamacare would be an unmitigated disaster for businesses, especially smaller companies? Well, now we have some facts. A week ago we noted that the Philly Fed found that Obamacare was a disaster for business, and now no lessor entity than the Congressional Budget Office (CBO) is out with its latest forecasts, concluding "certain aspects of the Affordable Care Act will tend to reduce labor force participation." While we already noted that 'work is punished' in America, it appears now that with Obamacare, non-work is actually incentivized.



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Can A National Quasi-Religion (Pro Sports) Go Broke?

Attending costly games is on the margins of the household budget. When the credit card gets maxed out, attending is no longer an option. We're not suggesting professional sports isn't the greatest thing since sliced bread: we're simply asking if attending pro sports games has become unaffordable to the average American.



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Chelsea Clinton is Quitting Her $600,000/Year NBC "Reporter" Job

Shortly after it was revealed by Politico that NBC had stooped to new lows in favoritist nepotism, having paid Chelsea Clinton an annual salary of $600,000 for "occasional" reporting work, in effect making her one of the highest paid if not the highest paid "reporter" in the world, the former first daughter quickly stunned everyone when, in the aftermath of her mother's just as stunning commentary on personal wealth and what being "broke" in the New Normal apparently means, she stated rhetorically that "I was curious if I could care about money and I couldn't." So, moments ago, to prove that she really no longer cares about such earthly things as money, since between her hedge fund husband and her parents, she has more than she can possibly spend in one lifetime, AP reported that Chelsea Clinton is quitting her job as a reporter at NBC News.



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Goldman Slashes EURUSD Forecast To 1.20

UPDATE: *JPM CUTS 1Q EUR/USD EST TO 1.28 VS 1.30; 2Q EST TO 1.26 VS 1.28

Having flip-flopped from forecasting EUR strength for the next 12 months in April (target 1.40), Goldman has rapidly ratcheted down its expectations for the flailing currency to 1.30 previously and now forecasts EURUSD at 1.20 in 12 months. As Goldman notes, "because we believe the dynamics of the Euro have fundamentally changed and because we expect cyclical outperformance of the US, a prolonged period of Euro undervaluation can be expected and this is reflected in our longer-term forecasts." Trade accordingly...



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Poland Blocks Flight Of Russian Defense Minister's Plane

The last time Poland 'spoke' it was to accuse Russia of invasion (and the time before that it was to accuse the government of giving the USA blow jobs), but this time actions speak louder than words:

*POLAND BLOCKS FLIGHT OF RUSSIAN DEFENSE MINISTER'S PLANE: RIA

Defense Minister Soigu's plane was forced to U-turn and land back in Bratislava.



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Stocks Catching Down To Treasury's Fresh 15-Month Low Yields

It appears a combination of Cameron scaremongery and weak-spending-driven GDP downgrades has sparked a realization in stocks (for now) that maybe bonds are on to something. As 30Y Yields drop closer to a 3.05% handle (and fresh 15-month lows), stocks have rolled over notably this morning... Of course, it is Friday though and all that pent-up de-escalation buying power on the sidelines is just itching for new new highs in stocks.



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UK's Cameron Goes Full Scaremonger: "We Will Be Fighting ISIS For Decades"

Following his nation's elevated terror threat level, UK Prime Minister David Cameron went full scaremonger:

"We are in the middle of a generational struggle against a poisonous extremist ideology that I believe we will be fighting for years and probably decades."

Warning that "ISIS represents a greater threat than anything before," (even Hitler?) he plans to introduce new laws to "make it easier to take people’s passports away."



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Here Come The Q3 GDP Downgrades...

Following the significantly weaker-than-expected spending data, the sell-side has begun its inglorious downgrades of the exuberant hockey-stick growth expectations they all extrapolated off Q1 lows... Goldman cut from +3.3% to +3.1% and Barclays slashed Q3 GDP expectations from +2.7% to a mere +2.2%.



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UMich Consumer Confidence Rises On Surge in "Hope"

While the government Conference Board confidence measure remains the most exuberant, University of Michigan Consumer Confidence continues to tread water. August final print rose to 82.5 from the preliminary data (79.2) driven by a surge in "hope" from 66.2 to 71.3 mid-month. Short-term inflation expectations fell on the month. Despite exuberant all-time highs in stocks, UMich has been flat for the entire year and is now at the least exuberant relative to Conference board data in almost 7 years.



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Chicago PMI Explodes To Biggest Beat In 10 Months, Employment Drops Further

Having collapsed to 13-month lows in July - with the biggest miss on record - Chicago's PMI rebounded the way only US macro 'soft-survey' data can. After plunging from 62.6 in June to 52.6 in July, August printed a magnificent 64.3 - its highest since May - showing up this data's noisy nature as entirely useless. From worst miss on record (and 13-month lows) to best beat in 10 months and 5 month highs... brilliant. It would seem ISM has entirely given up on any credibility at all... However, given this exuberance (in production and new orders), the employment sub-index dropped yet again.



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JPMorgan Warns Military Escalation In Ukraine "May Lead To A Lehman-Style Shock"

The sudden military escalation in Ukraine in recent days has, according to JPMorgan's Alex Kantarovich, reduced the earlier hopes that the high level meeting in Minsk on 26 August would help to defuse the conflict. As Kantarovich warns, the markets are now bracing for the US/EU responses. In the worst case scenario, now appearing more likely, severe pressure on stocks may extend. As he concludes, "we believe that with the significant deterioration in the Ukrainian situation, markets may treat this as a Lehman-style shock."



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UK Raises Terror Threat Level To Severe (From Substantial)

UK Home Secretary Theresa May has announced that a terrorist attack on the UK is :highly likely," although stressed that there is no information to suggest an attack is imminent:

*UK TERROR THREAT LEVEL RAISED TO SEVERE FROM SUBSTANTIAL
*REAL AND SERIOUS THREAT IN THE UK FROM TERRORISM, MAY SAYS

Her decision is based on the latest intelligence from Syria and Iraq (and we suspect, as Brandon Smith notes, "the goal will be to terrify you and those around you into seeking out a more powerful, more centralized government authority to protect your security.")



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Personal Spending Suffers First Drop Since January As Consumer Income, Outlays Miss

Judging by the just released personal income and spending data, consumers are already forecasting a long, harsh winter. With incomes and outlays expected to rise by 0.3% and 0.2% respectively, the July data was a big dud, missing on both expectations, and while income rose by a modest 0.2%, far below the 0.5% in June, it was personal spending which in fact declined by 0.1%, a major drop from the 0.4% increase in the prior month, and the first outright decline in spending since January. As CNBC's Steve Liesman explained the disappointing data: "weather."



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Putin Says Everything U.S. Touches Turns Out Like Libya Or Iraq

Having been quiet for a few days, comfortable sitting back and watching NATO, Europe, and the US escalate each other's talking points to a frenzy of populist revolt, Russia's Vladimir Putin has come out swinging this morning:

  • *PUTIN: NO MATTER WHAT U.S. DOES, IT TURNS OUT LIKE LIBYA, IRAQ
  • *PUTIN SAYS UN CAN'T BE FOREIGN POLICY TOOL FOR U.S., ALLIES
  • *PUTIN: EUROPEAN LEADERS FAR FROM SHOWING INDEPENDENT THINKING
  • *PUTIN SAYS RUSSIA IS COUNTRY THAT DOESN'T FEAR ANYTHING

In addition to discussions of The Bolsheviks, agreeing Stalin was a tyrant, and slamming liberal economic models for creating crises, Putin notes his approval rating is high because "he is confident he's right."



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