• Tim Knight from...
    01/26/2015 - 21:16
    "Oh, he's there to make sure high school kids don't jump in front of a train to kill themselves", I would reply. And you, assuming you come from a place that isn't insane, would be puzzled and...

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The US-Saudi Relationship (Summed Up In 1 Cartoon)

With President Obama shunning Bibi and cutting short his India trip (along with Michelle) to meet new Saudi Arabian King Salman (dementia and all), we thought this cartoon summed up the relationship between America and its oil-exporting ally...



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How Mario Draghi Unleashed A $1.4 Trillion Negative Interest Rate Tsunami

The ECB may have failed at everything else but it has certainly achieved one thing: sending 20% of Europe's universe of government bonds,  some €1.4 trillion, into negative territory.



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Repeat After Us: "Correlation Isn't Causation"

But if it walks like an idiot, and talks like an idiot...?



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What Crispin Odey, And His $12.4 Billion In AUM, Thinks Are The 6 Risks Underpriced By The Market

  1. Sovereign QE not working in Europe
  2. Emerging market capital flight
  3. Political risk/popularist governments
  4. US wage inflation
  5. Increased currency volatility
  6. Insurance against natural catastrophes


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"Oil Drillers Are Going To Die" In Q2, Conway Mackenzie Warns "Expect Outright Liquidations"

"The second quarter is going to be devastating for the service companies," warns Conway Mackenzie - the largest U.S. restructuring firm - adding that, despite slashing thousands of jobs, delaying (or scrapping) billions in capex amid the prolonged rout in oil prices, "there are certainly companies that are going to die." As Bloomberg reports, oil drillers will begin collapsing under the weight of lower crude prices during the second quarter and energy explorers who employ them will shortly follow with oilfield-service providers are facing a "double-whammy." As we noted here, there are more than a few candidates for this 'death' list as it appears increasingly clear that what was considered an "unambiguously good" narrative for the nation is anything but...



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With Syriza Leading By 7 Points, Greek Incumbents Fear-Monger Looming "Toilet-Paper-Run"

Left-wing anti-EU party Syriza has extended its lead over incumbent Nea Dimokratia (ND) to 7 percentage points in the polls ahead of tomorrow's crucial Greek election. As Keep Talking Greece reports, To Potami and Golden Dawn (the neo-Nazi party that is facing charges for being a "criminal organization") are running 3rd with 6-7% of the vote (Syriza 33.5%, ND 26.5%) and with 20% admitting they had changed their opinion about which party to vote for in the pre-election period, it appears ND incumbents have taken up the "Scotland" strategy - fearmongery. Speaking on Greek TV, just 48 hours before the elections, ND-candidate Sofia Voultepsi implied that if Syriza wins the elections and forms a government on Monday Greeks will run out of toilet paper... and with JPMorgan noting that deposit outflows hit EUR8bn last week (double the previous 2 weeks combined), the "bank run" could easily morph into Venezuelan "toilet paper runs."



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Davos – The Arrogance Of Officialdom

In 55BC, Cicero stood before the Senate of Rome (warning of its looming demise), spoke of the “arrogance of officialdom” and the more one studies going ons throughout history, the clearer it becomes – the story remains the same, only the actors change - history repeats because the passions of man never change. Those who may grudgingly support the ECB stimulus in the hope that it will buy time for governments to enact structural overhauls, keep praying that politicians will push aside their own personal self-interests for once and focus of the interests of the people. Such wishful thinking is foolish since history demonstrates that only takes place when the system collapses. People who do hold to this view are also worried that looser monetary policy may work against structural measures. The European Central Bank’s stimulus diminishes any incentive for governments to reform. The policy makers and specialists at Davos were divided over the effect of even that program; but where do these people get off assuming they have the ability and right to manipulate the world?



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"QE Benefits Mostly The Wealthy" JPMorgan Admits, And Lists 8 Ways ECB's QE Will Hurt Everyone Else

Over the past 48 hours, the world has been bombarded with a relentless array of soundbites, originating either at the ECB, or - inexplicably - out of Greece, the one place which has been explicitly isolated by Frankfurt, that the European Central Bank's QE will benefit everyone. Setting the record straight: it won't, and not just in our own words but those of JPM's Nikolaos Panigirtzoglou, who just said what has been painfully clear to all but the 99% ever since the start of QE, namely this: "The wealth effects that come with QE are not evenly distributing. The boost in equity and housing wealth is mostly benefiting their major owners, i.e. the wealthy." Thank you JPM. Now if only the central banks will also admit what we have been saying for 6 years, then there will be one less reason for us to continue existing. 



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Chart Of The Day: Souring "Mother's Milk" Edition

If earnings are the "mother's milk" of equity market returns, then stocks are about to turn sour (that is of course if fundamentals have anything whatsoever to do with it anymore). As we detailed previously, Q4 is shaping up to be the worst in years for earnings, and with next week seeing the bulk of names (36% of the S&P 500) reporting (including many of the biggest belwethers and major energy firms), we suspect the 2014 EPS chart below (and the already collapsing consensus expectations for 2015 earnings) will continue to plummet.



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America's Frightening "Policing For Profit" Nightmare

Just as people enjoy the presumption of innocence in a criminal trial, property owners never convicted or even charged with a crime should not be presumed guilty in civil asset forfeiture proceedings. The Civil Asset Forfeiture Reform Act of 2000 has proven inadequate for curbing abuses, as countless Americans across the nation, having done nothing wrong, continue to lose their homes, businesses, and, sometimes, their very lives to the aggressive, acquisitive policing that this law encourages. Civil asset forfeiture is a big challenge. While the Justice Department has recently stepped up to limit the scope of this problem, it is time for Congress to act.



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De-Dollarization Complete: Iran Abandons US Dollar In Foreign Trade

Since last May (and likely long before) when the topic of "de-dollarization" was first uttered in official circles (and not just tin-foil-hat-wearing blogs), the rest of the world (un-isolated as they are) has been warming to the idea that perhaps - just perhaps - it is time to de-dollarize (more or less depending on the despotic region in question). From currency swap agreements to bi-lateral trade agreements to selling US Treasuries and greatly rotating USD reserves into gold, the world's nations (small and large) appear less and less comfortable holdings dollars in this tempestuous world. Among the supporters of that first "de-dollarization" meeting were China and Iran and while the former continues to work down its exposure, the latter - Iran, according to Tasnim news agency, has almost entirely eliminated USDollars from its reserves and is no longer using dollars in foreign trade. De-dollarization complete...



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Draghi Is "Bouncing Economic Rubble With Trillion-Dollar Debt Missiles"

Someday, maybe, these central banks will find that secret formula that unlocks the commanded utopia from its monetary prison, but I think it more like what led to the end of the first Gulf War, where continued air raids upon Iraqi positions amounted to destroying rubble. As Colin Powell put it, “we were bouncing rubble with billion-dollar missiles.” That seems to be a fitting, paraphrased description of the European state of monetarism, bouncing economic rubble with trillion-euro debt missiles.



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Pro-Separatist Rebels Launch Offensive On Ukraine City Of Mariupol, Where At Least 21 Die After Intense Shelling

Yesterday the main separatist leader in the rebellious Donetsk region, Alexander Zakharchenko, vowed to push Ukrainian soldiers out of the area and said insurgents would not take part in any more cease-fire talks. Another rebel went even further, saying they would not abide by a peace deal signed in September. The separatists said rebel fighters went on the offensive to gain more territory and forestall a Ukrainian attack. He declared they would push government troops to the border of the Donetsk region and possibly beyond. Which, according to the latest news, is precisely what they have done. As AP reports, indiscriminate rocket fire slammed into a market, schools and homes Saturday in the eastern Ukrainian city of Mariupol, killing at least 21 people, authorities said. Ukraine's top rebel leader announced that an offensive had begun on the strategically important port.



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This Is What Gold Does In A Currency Crisis, Euro Edition

Yesterday the European Central Bank acknowledged that the currency it manages is being sucked into a deflationary vortex. It responded in the usual way with, in effect, a massive devaluation. Eurozone citizens have also responded predictably, by converting their unbacked, make-believe, soon-to-be-worth-a-lot-less paper money into something tangible. They’re bidding gold up dramatically.



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