Ten dark suited men entered the premises of FBME bank in Cyprus on Friday afternoon and took it hostage. The men were from the Central Bank of Cyprus (CBC). And they commandeered FBME because an obscure agency within the US government recently issued a report accusing the bank of laundering money. It just so happens that FBME... and Cyprus in general... is where a lot of wealthy Russians hold their vast fortunes. Bear in mind, there has been no proof that any crime was committed.
Moments ago Netflix reported Q2 Revenue and EPS which were precisely in line with Wall Street estimates, at $1.34 billion and $1.15 EPS. None of this mattered, because just like Amazon, nobody cares about where NFLX is now, everyone is much more focused on where it will be at some indefinite point in the future, with an emphasis on what many believe is virtually unlimited subscriber growth both in the US, but primarily, in the international market. Here is what NFLX reported to its subs growth.
The central banks have created moral hazard on a scale which is simply unbelievable and set a stage for a bonfire of the vanities seldom, if ever, seen in history. Professional Investors who have spent a lifetime playing these contrarian opportunities offered by human behavior are being carried out on stretchers as historic market behaviors fail to materialize. "Never in my 30+ year career as a market observer have I seen so many out on a limb which is about to be sawed off." Those who live within the matrix are fully loaded for a recovery which is not and will not appear. But when the leverage fails, the world’s developed economies will be thrust into the next leg of the cleansing process of deleveraging and the destruction of it will be equally bigger. This conclusion is firmly on the horizon; let’s call it the great insanity.
Judging by the narrative promoted after last Friday's idiotically connived jobs report, any job is a good job... however, as The Guardian reports, that does not include a job working for Amazon.com. Quarter after quarter, we highlight the growth in Amazon employees (and death-cross-like plunge in annual sales growth). While Amazon makes no secret of the fact that it relies on seasonal work force, what went unsaid and unnoticed during President Obama's visit last year, was that the Amazon 'employees' would not have jobs or prospects after the holidays. Many of the people in those Amazon warehouses were among the long-term unemployed – shuffling from one temporary job to another to another; and due to this unstable employment, a growing number of them have found themselves living in shelters... 'employed' but homeless (or "the working poor" in America).
Another morning melt up after a less than impressive session in China which saw the SHCOMP drop again reversing the furious gains in the past few days driven by hopes of more PBOC easing (despite China's repeated warning not to expect much). A flurry of market topping activity overnight once again, with Candy Crush maker King Digital pricing at $22.50 or the projected midpoint of its price range, and with FaceBook using more of its epically overvalued stock as currency to purchase yet another company, this time virtual reality firm Oculus VR for $2 billion. Perhaps an appropriate purchase considering the entire economy is pushed higher on pro-forma, "virtual" output, and the Fed's capital markets are something straight out of the matrix. Despite today's pre-open ramp, which will be the 4th in a row, one wonders if biotechs will finally break the downward tractor beam they have been latched on to as the bubble has shown signs of cracking, or will the mad momo crowd come back with a vengeance - this too will be answered shortly.
If our inner self, our essence, is not centered and at peace, at best we will be ineffective and at worst just a miserable person.
Once again the smell of NAPALM is in the air
Selling hope, after all, is the stock and trade of the Sell Side. But we all need to take a step back and ask ourselves just where we stand on the proverbial economic timeline...
As we begin 2014, it is important to recognize the levels of INSANITY currently existent in the world enabling us to understand the apocryphal nature of the times we live in and prepare ourselves to meet the challenges it represents. The world is leveraged to an extent that has never before seen in history! Debt now masquerades as NOMINAL growth and REAL growth has ceased. Headline economic reports are now nothing more than POLITICALLY CORRECT HOAXES to FOOL the public at large and mask the betrayal of the public by the leaders who hold the reins of power. ECONOMIC Stagnation emerged after the 2008 Global financial crisis and in real terms has NEVER ENDED!
- Traders Seek an Edge With High-Tech Snooping (WSJ)
- Gold Drops Below $1,200 an Ounce for First Time Since June (Bloomberg)
- SAC Manager Guilty as Insider Focus Turns to Martoma (Bloomberg)
- Why Ukraine spurned the EU and embraced Russia (Reuters)
- Target confirms major card data theft during Thanksgiving (Reuters)
- Zuckerberg is no suckerberg: Company to Sell 27 Million Class A Shares While CEO Will Offer 41.4 Million (WSJ)
- Facebook, Zuckerberg, banks must face IPO lawsuit (Reuters)
- Swiss Christmas Trees Feel Chill as Franc Helps Rivals (BBG)
- Iran, six powers to resume nuclear talks after snag (Reuters)
- Dolphins Suffering From Lung Disease Due to Gulf Oil Spill, Study Says (WSJ)
While what little remains of America's middle class is happy and eager to put in its 9-to-5 each-and-every day, an increasing number of Americans - those record 91.5 million who are no longer part of the labor force - are perfectly happy to benefit from the ever more generous hand outs of the welfare state. Prepare yourself before listening to this... calling on her self-admitted Obamaphone, Texas welfare recipient Lucy, 32, explains why "taxpayers are the fools"...
"...To all you workers out there preaching morality about those of us who live on welfare... can you really blame us? I get to sit around all day, visit my friends, smoke weed.. and we are still gonna get paid, on time every month..."
She intends to stay on welfare her entire life, if possible, just like her parents (and expects her kids to do the same). As we vociferously concluded previously, the tragedy of America's welfare state is that work is punished.
You can’t overstate the baleful effects for Americans of living in the tortured landscapes and townscapes we created for ourselves in the past century. This fiasco of cartoon suburbia, overgrown metroplexes, trashed small cities and abandoned small towns, and the gruesome connective tissue of roadways, commercial smarm, and free parking is the toxic medium of everyday life in this country. Its corrosive omnipresence induces a general failure of conscious awareness that it works implacably at every moment to diminish our lives. It is both the expression of our collapsed values and a self-reinforcing malady collapsing our values further. The worse it gets, the worse we become. The citizens who do recognize their own discomfort in this geography of nowhere generally articulate it as a response to “ugliness.” This is only part of the story. The effects actually run much deeper.
Summer optimism on euro area recovery has faded to grey winter skies. Looking ahead we see continue weak growth in the region with a very gradual recovery only. For the 2007 to 2018, we expect GDP per capita to be essentially flat, marking a lost decade of growth for the region. We blame much of this weak performance on a slow policy response in tackling both the sovereign and banking crisis, and the still too slow pace of structural reform. The fear is now that the euro area is on the verge of deflation.
It would appear that the Horatio Alger myth - that hard work and pluck will lift a person from dire circumstances to enviable success - is not living up to expectations for Americans. As WSJ's Lauren Weber notes, 40% of Americans think it’s fairly common for someone to start off poor, work hard and eventually rise to the top of the economic heap but a new Pew study shows that in reality, only 4% of Americans travel the rags-to-riches path. Unfortunately, they discovered considerable “stickiness” at both ends of the income spectrum and that Americans attached to the rags-to-riches myth might be disappointed to know that other countries show greater mobility among have-nots - "this is what we call the 'parental penalty,' and it's really high in the U.S. - If you’re born in the bottom here, your likelihood of sticking in the bottom is much higher."