Just when you thought you had seen it all, Islamic State militants turn up the amplifier of terror to 11. As The Mirror reports, ISIS is launching bombs containing live scorpions as the latest terror weapon in Iraq. Canisters of the creatures are being blasted into towns and villages, according to a British military expert who has just returned from the country. Hamish de Bretton-Gordon, ex-head of chemical and biological weapons for the Army and Nato, said: "it's madness. IS have improvised devices to launch them." The weapon harks back to the scorpions stuffed into pots and launched by Iraqis thousands of years ago – in 198 AD.
What happens when rapacious cartels run out of billion-dollar-profit products? They jack up the price of what was previously low-cost. And why are they able to raise prices by 388% to 8,000% at will? Because they can.
The World is changing and the balance of power with it. The traditional post Cold-war unipolar US dominance is being increasingly tested. As BBVA notes in the following charts, World Conflict Intensity is on the rise (and has been for over a decade) as the world's balance of power adapts to the new economic shift. Social, political and economic systems are becoming increasingly interconnected; and new actors will arise and will start to make new demands.
Are libertarians are more rational than most people? "Not at all, not at all, but we're rational enough to realize none of us has all the answers. To paraphrase Dirty Harry, politicians and planners and control freaks gotta know their own limitations."
The rank economic cheerleading in the guise of “news” printed by the Wall Street Journal, Reuters and the rest of the financial press never ceases to amaze. But on the heels of Congress’ pathetic capitulation to Wall Street over the weekend you have to wonder if even the robo-writers who compose the headlines are on the take. How could anyone in the right mind label this weekend’s CRomnibus abomination “A Rare Bipartisan Success for Congress”? Apparently, that unaccountable plaudit was bestowed upon Washington by the WSJ solely because it avoided another government shutdown.
The recent increase in financial market volatility has raised some questions about any rhetorical response from the FOMC tomorrow. While we see some risk of this occurring, we think the most likely outcome is that the Committee refrains from highlighting the latest flare-up in the markets. In particular, we think they will still drop the 'considerable time' language while also indicating they are in no rush to raise rates.
The myth of harsh lending conditions in the US is probably only matched in its disconnect from reality by the just as entertaining narrative of the "one-time, non-recurring" harsh winter crushing Q1 GDP. A narrative which even needed support from none other than former Fed Chairman Bernanke who allegedly was denied a mortgage refinancing on the $672K loan he still owes for his 3-bedroom, 2100 square foot home (a story which is about as credible as 17 year olds making $72 million by cornering the penny-stock market). For the truth we go to the Office Of the Comptroller of the Currency, which just reported in its annual survey that for the third year in a row, U.S. banks relaxed loan underwriting standards, "a trend mirroring the lax lending just before the financial crisis." To wit: "This year's survey showed a continued easing in underwriting standards, with trends very similar to those seen from 2004 through 2006," said Jennifer Kelly, senior deputy comptroller for bank supervision.
We noted earlier the "noise" in VIX. We are starting to get a picture of what's happening... and it's not good. As Bloomberg reports, Group One Trading’s Dominic Salvino warns, inputs to the calculation are going skewy on the VIX in the past couple days because "safety parameters are set to hair triggers" and market makers are going wide more often than not. Yet another market - and The Fed's direct manipulation tool - is now entirely broken.
Lots of old market hands are talking about how its similar to the Russia default and crash of ‘98 all over again.. Actually... its worse. Much worse.