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Obama On The Red Line And On The Rat Line

Read Seymour Hersh’s devastating account of Obama’s Red Lines and Rat Lines and weep for the Republic. It is no more.



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Guest Post: If It's Such A Privelege, Why Do They Have To Stick A Gun In Your Face?

Two. Billion. Hours. That’s how much time people in the Land of the Free waste each year preparing and filing their tax forms to the IRS– roughly 13 hours for each of the ~150 million individual returns filed.

Taxes are morally reprehensible. Taxes rob an entire population of its financial resources in favor of a tiny political elite that has a long-term track record of incompetence and deceit.

Unfortunately, though, this humiliating exercise is forcibly perpetrated at gunpoint.



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"The Next America" - Two Dramas In Slow Motion

That America has - or perhaps more accurately that the administration is desperate to create - a wealth divide, gender divide, and certainly ethnic divide, is hardly a secret. Yet all of those may pale in comparison to the transformation that the US is undergoing currently, according to the most recent Pew research study, one which finds that the world's one time superpower, is in the midst of two slow-motion dramas right now. "Our population is becoming majority non-white at the same time a record share is going gray. Each of these shifts would by itself be the defining demographic story of its era. The fact that both are unfolding simultaneously has generated big generation gaps that will put stress on our politics, families, pocketbooks, entitlement programs and social cohesion.



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31-Year-Old Hedge Fund Trader Made More Than The CEOs Of The Six Biggest Banks Combined

Over the weekend, there has been some consternation over the report that the CEOs of the 6 largest US banks: JPM, BAC, GS, MS, C and WFC, collectively made $96.1 million in 2013, more than $86.3 million the year before and the most since the financial crisis. However, we are confident those same people would have an aneurism if they were to learn that James "Jimmy" Levin, a 31-year-old hedge fund trader - head of global credit and an executive managing director at Och-Ziff - last year made a whopping $119 million, or more than all of the CEOs of the six largest firms combined.



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Barclays Asks Is It Finally Time To Short Japanese Bonds?

For a decade or two, it's been dubbed the widowmaker (though truth be told, the losses are more bleed than massive capital loss like those holding US growth stocks currently), but as Barclays notes the Japanese bond market 'conundrum' (that nothing like a recovery is priced into the JGB curve, which is failing to price even a partial, eventual success of the Abe government's reflationary agenda) may finally be ready to be played..."We are always on the lookout for asset prices that seem inconsistent with the more plausible economic and financial scenarios. Sometimes these discrepancies point toward necessary alterations of our fundamental world view. In other cases, they point toward investment opportunity. At the moment, one of the most glaring discrepancies between macro and markets is the long end of the Japanese curve."



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"A Triumphant Recovery"? A First-Person Perspective Of What Is Really Happening In Greece

In light of the recent "triumphant" return of Greece to the capital markets with its brand new 5 Year bond issuance (which much to the chagrin of the flippers is already trading below its breaking price), one of our Greek readers decided to provide his "on the ground" perspective on what is really happening in Greece: "I am writing you in an effort to get you to provide a more public and harsh(I mean realistic) description of what has been going on, for the past few days with relation to what’s left of my country. I doubt it will not take you long to discover its mostly spent on “political commissions” and interest payments (I’d bet only 6-7% actually flows through). I am sure you are aware that according to Greek law all political parties receive some kind of (substantial) financial support from the government budget. The government has not delivered. There are still over 900,000 people working for public and government related services, for a population of roughly 11 million. The banks still maintain negative real equity and have consistently defrauded investors over the past few years."



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HFT Purge Begins: SEC Prepares To "Remove" Some High Frequency Trading Firms

Ever since Goldman's anti-HFT Op-Ed less than a month ago, and since the even more recent full-hearted support by Goldman of Michael Lewis' most recent entry into the anti-HFT crusade (one promoting the Goldman-supported IEX exchange), one thing has been clear: the days of market structure in its current format are numbered. This was further confirmed after Goldman exited both its legacy Spear Leeds & Kellogg designated market making post at the NYSE, and is said to be winding down its market-dominating dark pool, Sigma X. Sure enough, Post reports that just three weeks after the Gary Cohn Op-Ed, the SEC is "preparing to remove some high-frequency trading firms."



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One Killed, Many Wounded After Shooting Breaks Out Between Ukraine Special Forces And Pro-Russia Separatists

"Ball is in Kiev's court." That is how we concluded our article yesterday reporting that Moscow won't accept force against demonstrators after Kiev warned it would use special forces to quell ongoing "terrorist" uprisings across cities in east Ukraine. Predictably, Ukraine couldn't wait to shoot the ball right back at Russia and re-escalate (in hope that the west will finally stand up and side along the acting government in what continues to be a very foolish gambit) and early this morning local time, units of the Ukraine special forces started an anti-terrorist operation in eastern town of Slavyansk, where police station was seized yesterday by separatist protesters, as reported by the Interior Minister Arsen Avakov posts on Facebook, who also warned local residents to stay inside, saying separatist protesters have opened fire in direction of approaching special police units. Moments later the operation turned deadly after at least one member of the special forces was killed and as many as 9 wounded, as well as an unknown number of casualties on the "separatist" side. But most importantly, Russia now has a pretext to step in and "defend" its ethnic population just as it warned it would do.



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Why The Standoff At The Bundy Ranch Is A Very Big Deal

Bundy ranchUPDATE: The BLM has ceased rounding up Bundy's cattle - because of safety concerns

If you haven’t been following the unfolding drama at the Bundy Ranch about 80 miles northeast of Las Vegas you need to start now. The escalating confrontation between irate local residents and federal agents of the Bureau of Land Management (BLM) has the potential to take a very dangerous turn for the worse at any moment, as hundreds of militia members from states across the country are expected to descend upon the area and make a stand with 67-year-old Nevada rancher Cliven Bundy. The kindling for social upheaval has been growing in America for quite some time. Disrespectful and ignorant statements from billionaire oligarchs only make it worse. The question in my mind has always been what will the catalyst be to spark the brushfire? Will it be the Bundy Ranch? We’ll have to wait and see.



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All The Presidents' Bankers: The World Bank And The IMF

"Just after the United States entered World War II, two simultaneous initiatives unfolded that would dictate elements of financing after the war, through the joint initiatives of foreign policy measures and private banking whims. Plans were already being formulated to navigate the postwar peace, especially its international power implications for finance and politics, in the background. American political leaders and scholars began considering the concept of “one world” from an economic perspective, void of divisions and imbalances. Or so the theory went. The original plans to create a set of multinational entities that would finance one-world reconstruction and development (and ostensibly balance the world’s various economies) were conceived by two academics: John Maynard Keynes, an adviser for the British Treasury, and Harry Dexter White, an economist in the Division of Monetary Research of the US Treasury under Treasury Secretary Henry Morgenthau."



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"Analysts" Lower Revenue Growth Expectations By Most In 18 Months

"Estimates have come down more dramatically than usual," warns BofAML's Savita Subramanian as so-called "analysts" slash their expectations to lower the bar even further for firms to hop over. This hype-hope-reality plunge in expectations is nothing new as the chart below shows but Q1’s gap between the starting and ending growth rates was 5.6 percentage points - the widest gap in at least 18 months. The widest spread for 2013 was 4.4 points, recorded in the second quarter. The reductions may help firms beat expectations but do nothing to sustain the hype priced into markets. Once again we ask, why do we listen to analysts?



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Guest Post: Oil Limits and Climate Change – How They Fit Together

We hear a lot about climate change, especially now that the Intergovernmental Panel on Climate Change (IPCC) has recently published another report. At the same time, oil is reaching limits, and this has an effect as well. How do the two issues fit together? Unfortunately, the real situation is that the laws of physics, rather than humans, are in charge. Basically, as economies grow, it takes increasing complexity to fix problems, as Joseph Tainter explained in his book, The Collapse of Complex Societies. Now we are reaching limits in many ways, but we can’t - or dare not - model how all of these limits are hitting.



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Caption Contest: Magnum PI-MCO

Add a 70s style moustache (and a red Ferrari) and BusinessWeek's Bill Gross cover is the spitting image of Tom Selleck's infamous investigator... but the analogies run deeper as the PIMCO front-man continues to search for his next steps and figure out the past

*GROSS ON EL-ERIAN: "I THOUGHT I KNEW HIM BETTER"
*GROSS SAYS FOR MOST PART, "I'M THE PERSON I THOUGHT I WAS"

Very philosophical - but as the cover asks "is he really such a jerk?"



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Putting The "Bank Loans Are Rising & Animal Spirits Are Reviving" Meme In Context

Much has been made of the "sharp acceleration" in bank lending in the last few months promulgated by the status quo huggers that 'animal spirits are reviving' and, despite a collapse in equity market valuations for 'growth' stocks, that escape velocity growth and that so-longed-for surge in Capex is just around the corner. However, when put in context... when looked at over more than a few months, and when considered against the typical economic cycle... this is anything but sustainable and merely reflects on the inventory-stacking mal-investment debacle of Q4 that is now unwinding en masse as hoped for 'aggregate demand' shows no signs of appearing.



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Rich-Poor Comfort Divide Surges To 2-Month Highs

Following Fed Governor Tarullo's comments this week on central bank policies and the recovery benefiting high-income earners disproportionately - potentially damaging the "nation's democratic heritage", we thought it ironic that this week's Bloomberg Comfort Index data showed that the rich (high incomes) just got a whole lot more comfortable and the poor (low incomes) got a whole lot less comfortable. In fact, the rich-poor comfort divide jumped back to 2-month highs.



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