B+

Bitcoin, at $400, is now at its highest since November 2014, having surged over 100% since the late-August 2015 lows when we first warned of China capital outflows using the virtual currency conduit. As we suggested, and was confirmed overnight, it appears the Chinese are just getting started...

“Some Chinese traders are expressing a view on the CNY exchange rate after the last devaluation and you have interest by mainland speculators to move to other assets after the stock market fallout.”

The Pentagon just won another small skirmish in its long war with Social Security and Medicare. That is the unstated message of the budget deal just announced gleefully by congressional leaders and the President.  To understand why, let’s take a quick trip down memory lane.

I thought I'd change my tone and write up a genuinely positive, optimistic post. This has to do with what I think will be a tectonic shift over the next twenty years: transportation.

In the US, there is a natural tendency to punish political candidates when they lie, but mostly about their personal peccadillos. If a country’s political culture is such that all agree on condemning intentional lies and liars, especially when their goal is to promote hatred, a country may avoid big evil. But this is not the case in Venezuela. Its government has run the country’s economy and society into the ground, overseeing the world’s steepest decline in output, highest inflation rate, and second highest murder rate, not to mention shortages beyond compare. And now it is systematically lying about the causes of the mess it created and inventing scapegoats.

In a "world of disappointments", where beta is king and where alpha has become a joke (or, now that equity is a risk-free asset and debt is risky, is outright punished) where growth no longer exists, drowning under the weight of $200 trillion in debt, and where value strategies have been all but forgotten replaced instead with "stories" about companies that have no cash flows but just might be "the next big thing" (one day), what should one to do? Why, engage in the most idiotic of strategies: chase momentum.

To believe this isn’t a bubble is to believe that all of the hot momo money from insti’s, high/biotech, flipper, flappers, fraudsters, and foreigners buying houses is fundamental and here to stay, which is exactly what everybody thought in 2006. Or, to believe that interest rates will keep falling 1% per year going forward, which would lend an element of support to prices.

Having disappointed an expectant market by voting overwhelmingly (8-1) to leave monetary policy unchanged, the initial plunge in USDJPY and Japanese stocks has found a mysterious (and massive) JPY seller and Nikkei 225 buyer. USDJPY is now 100 pips and Nikkei 225 500 points above post-BOJ dip lows... because hawkish is the new bullish...

Once more in this new normal in which we 'live', the necessary creative destruction of capitalism is eschewed in favor of saving a zombie company that the CEO admitted was "overwhelmed." The good news for American taxpayers is that it is Canadian taxpayers - via a generous $1.3 billion 'investment' by the Quebec government - that are bailing out private-jet-maker Bombardier. Following aircraft projects plagued by overruns, missed deadlines, and scant interest from airlines, Bombardier posted a $4.9billion loss in Q3. Well never mind that, Quebec taxpayers now own 49.5% of the challenged CSeries program.

Stop-running algos are panic-buying WTI crude this morning as a slightly disappointing GDP print must have triggered the "bad news is good news" function to horde oil with both hands and feet...

There are few political hacks in Washington more deserving of everlasting ignominy than retiring speaker John Boehner. So here’s a vehement good riddance to the man who has single-handedly destroyed whatever pathetic semblance of fiscal responsibility that remained in Washington.

In order put an end to the "Greek outrage" that Yanis Varoufakis may be doing what Hillary and Bill Clinton have been so good at, namely engaging in a "self-enrichment drive" and profiting from speeches made after his political departure (which in the Clintons' case was merely a tacit way of purchasing influence and future favors, i.e., bribing), and laid out all his public speeches and the associated fees since August 2015.

If you still haven’t heard of the psychotic violence perpetrated on a high school girl by Senior Deputy Ben Fields, it’s time to get up to speed (before he is fired this afternoon). If you want a gauge as to how far this society has fallen, this is all you need to see.

If there's no risk of a systemic event, why are regulators moving to implement rules that would make it so firms and funds can freeze your money in the event of a crisis?

If you haven’t already, now’s the time to get out your party hats to celebrate the 14th anniversary of the USA PATRIOT Act. You know about the law, I’m sure; passed barely six weeks after the 9/11 attacks, the USA PATRIOT Act is one of the most sweeping, liberty-destroying pieces of legislation in American history.