Once gold goes into China’s vault, it’s like going into a black hole.
- Tough Question for Fed: Time to Act? (Hilsenrath )
- Merkel Begins Third Term Strengthened by SPD Partner Backing (BBG)
- Wary of Roma, Europe cold-shoulders its new eastern workmates (Reuters)
- New Medicines Emerge, but Few Blockbusters (WSJ)
- SIP in the crosshairs: U.S. Exchanges Near Deal for Infrastructure Upgrade (WSJ)
- Secret Inside BofA Office of CEO Stymied Needy Homeowners (BBG)
- AIG Said to Near Sale of Plane Unit to AerCap (BBG)
- Inside the Saudi 9/11 coverup (NYPost)
- Russian Bank Chief Weighs Firings as Costs Absorb Revenue (BBG)
- Video Boom Forces Verizon to Upgrade Network (WSJ)
- Chinese Manufacturing Slows (AP)
From Bernanke's infamous 2008 "not forecasting a recession" call to Fannie Mae CEO Franklin Raines 2004 "subprime assets are riskless" commentary, the following 10 "predictions" - as opposed to Wien "surprises" - will go down in infamy for their degree of errant-ness...
The spin does not get any better than this... As they reported they would,
- *LEW SAYS U.S. SOLD ALL REMAINING SHARES OF GENERAL MOTORS RECOUPING $39 BLN OF ORIGINAL GM INVESTMENT
That is a $10.5 Billion loss! But, The Center for Automotive Research, a Michigan nonprofit organization that analyzes auto industry issues, those funds “saved or avoided the loss of $105.3 billion in transfer payments and the loss of personal and social insurance tax collections -- or 768% of the net investment.” We can't wait to hear how much Bill Ackman made or saved on his Herbalife investment...
Don`t fall in love with market exposure as even Wall Street Sharks get eaten alive in financial markets.
The rock is reality. The squishy place is the illusion that pervasive racketeering is an okay replacement for an economy. The essence of racketeering is the use of dishonest schemes to get money, often (but not always) employing coercion to make it work. Some rackets can function on the sheer cluelessness of the victim(s).
There are a couple of disturbing points that came out of her take on bubbles and the rationale behind not tapering a mere 10 or 15 Billion dollars given the monthly commitment of 85 Billion in Fed Purchases every month.
Since the Financial Crisis erupted in 2007, the US Federal Reserve has engaged in dozens of interventions/ bailouts to try and prop up the financial system. Now, I realize that everyone knows the Fed is “printing money.” However, when you look at the list of bailouts/ money pumps it’s absolutely staggering how much money the Fed has thrown around.
- China to Ease One-Child Policy (WSJ), China announces major economic and social reforms (Reuters)
- Consumers line up for launch of PlayStation 4 (USAToday)
- Trust frays between Obama, Democrats (Politico)
- Yellen Stands by Fed Strategy (Hilsenrath)
- Hero to zero? Philippine president feels typhoon backlash (Reuters)
- Brussels warns Spain and Italy on budgets (FT)
- Moody’s Downgrades Four U.S. Banks on Federal Support Review (BBG)
- CIA's Financial Spying Bags Data on Americans (WSJ)
- Germany Digs In Against Risk Sharing in EU Bank-Failure Plan (BBG)
- Bill Gates wants Norway's $800 billion fund to spend more in Africa, Asia (RTRS)
Here is a summary of the key stock additions, sales, initiations and liquidations conducted by the most prominent US hedge funds in the third quarter.
- China premier warns against loose money policies (Reuters)
- Brussels forecasts tepid Eurozone growth (FT)
- SAC Case Began With Informant’s Tips on Cohen, Rajaratnam (BBG)
- Dirty Munich Home’s Nazi Loot Estimated at $1.35 Billion (BBG)
- Mortar hits Vatican embassy in Damascus, no casualties (Reuters)
- India Launches Mars Mission (WSJ)
- Lael Brainard to leave Treasury, heading to Fed (FT)
- U.S. Takes Aim at 'Forced' Insurance (WSJ)
- Wife of Jeff Bezos attacks book about Amazon (FT)
- Fall of Brazil’s Batista embarrasses President Dilma Rousseff (FT)
- The One Thing People Still Really Like About BlackBerry (BusinessWeek)
- US admits surveillance on foreign governments ‘reached too far’ (FT)
- He must be so proud: Obama halted NSA spying on IMF and World Bank headquarters (RTRS)
- Obamacare website gets new tech experts; oversight pressure grows (Reuters)
- R.B.S. to Split Off $61 Billion in Loans Into Internal ‘Bad Bank’ (NYT)
- Draghi’s Deflation Risk Complicates Recovery (BBG)
- Abenomics: Nissan slashes full-year profit forecast 15% (FT)
- Credit Suisse Dismisses London Trader Over 'Unusual Trading' Losses (WSJ)
- RBS avoids break-up with 38 billion pounds 'internal bad bank' (Reuters)
- Twitter Said to Attract More Than Enough Interest for IPO (BBG)
I present to you a video in which POTUS Barack Obama could learn much from the wisdom of 16-year-old Pakistani teenager Malala Yousafzai.
Ye Gods! Even that discredited old hack, Alan Greenspan ? the man who bears as much responsibility as anyone for the hypertrophy of state- supported finance and thus for the havoc it continues to wreak ? is at it, trying to tell us that because of a low ‘equity premium’ (read: ludicrously intervention?depressed bond yields), the ‘momentum’ of stocks ‘is still relativel. Such a market is therefore likely to suck everyone in to its last, Plinian updraft no matter how stretched everything becomes and no matter how great the risk of being cast into perdition in the pyroclastic collapse to come.
What politicians want from their regulatory efforts is a world of pure beta and zero alpha. This is the ultimate “level playing field”, where no one knows anything that everyone else doesn’t also know. The presumption within regulatory bodies today is that you must be cheating if you are generating alpha. How’s that? Alpha generation requires private information. Private information, however acquired, is defined as insider information. Insider information is cheating. Thus, alpha generation is cheating. QED. Why would politicians want an alpha-free market? Because a “fair” market with a “level playing field” is an enormously popular Narrative for every US Attorney who wants to be Attorney General, every Attorney General who wants to be Governor, and every Governor who wants to be President … which is to say all US Attorneys and all Attorneys General and all Governors. Because criminalizing private information in public markets ensures a steady stream of rich criminals for show trials in the future. Because the political stability of the American regime depends on a widely dispersed, non-zero-sum price appreciation of all financial assets – beta – not the concentrated, zero-sum price appreciation of idiosyncratic securities. Because public confidence in the government’s control of public institutions like the market must be restored at all costs, even if that confidence is misplaced and even if the side-effects of that restoration are immense.