The Economist

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Brazilian Presidential Candidate Dies In Jet Crash





UPDATE: *BRAZIL PRES. CANDIDATE CAMPOS DIES IN PLANE CRASH: GLOBONEWS

Brazil's stock market is reeling this morning as rumors and now news hit that Brazilian Presidential candidate Eduardo Campos was on board a private jet that crashed in the city of Santos. Polls had put Mr. Campos head-to-head with Ms. Rousseff (but behind Ms. Silva). A police official in Santos said there were "certainly" fatalities in the crash, but could not say how many or provide any additional information. Campos had run on a platform of less government intervention and proposed a bill to ensure central bank indpendence.

 
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Deflation Hits Oldest Profession In The World: Hookers By The Numbers





As The Economist finds, the internet is making the buying and selling of sex easier and safer (from what we have been told). But it's not all Pretty Woman... not only is the oldest profession in the world seeing prices going down (the dreaded deflation) as the shift online has boosted supply by drawing more locals into the trade; but as the following four charts show, rates vary dramatically by 'services', ethnicity, geography, build, and bust size.

 
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ISIS And The Coming Escalation In Iraq





ISIS has attracted an entire generation of radicalized Sunni militants to the region. If one watches interviews with their enemies such as e.g. Peshmerga fighters, one topic that is occasionally mentioned is that they don't seem to fear death much. Combined with their well-known brutality, this undoubteldy makes them a formidable fighting force. However, there is evidently far more to ISIS than that. All of the above suggests that it will be exceedingly difficult to effectively destroy ISIS. It seems to us that if the goals the president has announced in recent days are to be achieved, nothing short of a full-scale invasion of Iraq (as well as of Syria for good measure) is likely to suffice – and even then, success is by no means guaranteed.

 
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If Goods Don't Cross Borders, Armies Will





While the conflict in Ukraine rages on, EU member states havedecided to impose (not so much more stringent)economic sanctions against Russia, which was predictably followed by Russian counter-measures. The question which isn't being asked often enough, is whether these sanctions will actually improve the situation. Here's an analysis following four concrete questions:

1. Can things get even worse in Russia?
2. Is the West able to guide Russia and Ukraine down the right path?
3. Can the West contribute to a sharpening of the crisis?
4. How can the West protect itself against this conflict?

 
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Obama To Corporate CEOs: "If You Have A Complaint, You Can Keep your Complaint"





President Barack Obama has a direct message for the leaders of America’s biggest companies: if you have a complaint, you can keep your complaint. "If you look at what’s happened over the last four or five years, the folks who don’t have a right to complain are the folks at the top," Obama said in an interview with The Economist published over the weekend. As The WSJ adds, Obama maintained that complaints from corporate CEOs in the current environment should be taken with “a grain of salt” as most policies he has implemented have "generally been friendly towards business." In other words, thank me for the recovery, but don't blame me for the inequality - an irony we have noted numerous times.

 
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5 Things To Ponder: The Interest Rate Conundrum





After several months of quite complacency, investors were woken up Thursday by a sharp sell off driven by concerns over potential rising inflationary pressures, rising credit default risk and weak undertones to the economic data flows. One of the primary threats that has been readily dismissed by most analysts is the impact from rising interest rates...

 
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214 Years Of Sovereign Defaults In One Chart





From 1800 to 1950, Argentina had been a relatively low frequency 'defaulter', but as the following chart from The Economist shows, since then (as we noted here) they have made up for it.

 
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Bonds & Peso Slide As Fernandez Slams Holdouts For "True Aggression Against Argentina"





With hours to go until Argentina's grace period runs out and default occurs, investors are less than frantically selling Argentine bonds and pesos. They are lower but do not appear in full panic mode as we presume investors cling to hope that Argentina folds and pays off the holdouts (though there has been no sign of that so far). ARG 2033 bonds are down 3 points to 81 and the black-market peso is modestly weaker at 13.0 (near its record lows). Argentine CDS tightened modestly (as BofA warns the facts surrounding Argentina’s bond payments continue to be unique and deciding if CDS are triggered could take longer than expected) but 1Y CDS are holding at 4600bps (equivalent) - a 52% probability of default. Paul singer continues to defend himself (and the holdouts) from claims they are "dangerous fundamentalists" hell-bent on making it impossible for foreign sovereigns to restructure their debts.

 
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The Economist Touts "Cyberdream" Of Global 'National ID System'





Would you like to have a digital identity card that is automatically issued to you at birth?  In one European nation, residents use such a card when they go to the hospital, when they do their banking, when they go shopping and even when they vote.  This card has become so popular that this particular European country actually plans to start issuing them to millions of non-citizens all over the planet who request them.  Never heard about this?  Neither had I before this week.  The Economist is calling for the entire planet to adopt this “national identification system” that the little nation of Estonia has adopted.  The Economist is touting all of the “benefits” of a “national identification card”, but are there dangers as well?  Could adopting such a system potentially open the door for greater government tyranny than we have ever known before?

 
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Never Mind Their Distrust Of Data And Forecasts; Austrians Can Help You Predict The Economy





"Of all the economic bubbles that have been pricked, few have burst more spectacularly than the reputation of economics itself." – From The Economist, July 16, 2009.

Mainstream economists continue to dominate their profession and wield huge influence on public policies. They merely needed to close ranks after the financial crisis and wait for people to forget that their key theories and models were wholly discredited. Meanwhile, heterodox economists who stress credit market risks and financial fragilities – the Austrians, the Minskyites – remain stuck on the fringes of the field. It doesn’t much matter that the crisis validated their thinking. Nonetheless, we’ll continue to explain why we think a shake-up is overdue...“Mythbusting” the theories of mainstream economists.

 
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Bubbles Everywhere: Krugman Wrong Again; Austrians And The BIS Are Correct





Paul Krugman is at it again – distorting or misinterpreting work by other economists to attack critics of today’s central bank driven low interest rate environment and to defend policy status quo or to push for even more stimulus.

 
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Krugman’s Bathtub Economics





It is fortunate that Paul Krugman writes a column for New York Times readers who want the party line sans all the economist jargon and regression equations. So here is the plain English gospel straight from the Keynesian oracle: The US economy is actually a giant bathtub which is constantly springing leaks. Accordingly, the route to prosperity everywhere and always is for agencies of the state - especially its central banking branch - to pump “demand” back into the bathtub until its full to the brim. Simple.

 
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Guest Post: Proof That Government Economic Numbers Are Being Manipulated





How in the world does the government expect us to trust the economic numbers that they give us anymore? For a long time, many have suspected that they were being manipulated, and as you will see below it appears we now have proof that this is indeed the case.

 
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After Shakedown, Overnight Markets Regain Their Calm





The S&P500 has now gone 47 days without a gain or loss of more than 1% - a feat unmatched since 1995, according to AP.  Overnight markets are having a weaker session across the board (except the US of course). Even the Nikkei is trading with a weak tone (-0.7%) seemingly unimpressed by the Third Arrow reform announcements from Prime Minister Abe yesterday (and considering in Japan the market is entirely dictated by the BOJ, perhaps they could have at least coordinated a "happy" reception of the revised Abe plan). Either that or they have largely been priced in following the sizable rally in Japanese stocks over the past month or so. Abe outlined about a dozen reforms yesterday including changes to the GPIF investment allocations and a reduction in the corporate tax rate to below 30% from the current level of 35%+. Separately, the Hang Seng Index (-0.06%) and the Shanghai Composite (-0.41%) 98closed lower as traders cited dilutive IPOs as a concern for future equity gains.

 
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