- Game Changer: China Starts Drilling It Own Rig Wells (China Daily)
- Cisco says customers delay tech purchases (FT)
- Greeks May Hold $510 Billion Trump Card in Renegotiation (Bloomberg)
- Liquid heroin addicts heart Chairsatan: Bernanke Gets 75% Approval From Investors in Global Poll (Bloomberg)
- How a Radical Greek Rescue Plan Fell Short (WSJ)
- Spain takes 45% stake in Bankia (FT)
- Facebook admits to mobile weakness (WSJ)
- FDIC Would Seize Parent, Allow Units to Operate While Mess Is Cleaned Up (WSJ) - Good luck
- AT&T Fast Network a Work in Progress in Race With Verizon (BBG)
- Pointed Spat Over World Trade Spire (WSJ)
Investors should be questioning their positive assumptions after the events of the past two weeks. Things have changed a great deal and rumors abound on how the authorities plan to support the market now. At the end of last month, only ten calendar days ago, the perky US equity market, the placid foreign exchange scene, calm credit spreads and rock-bottom volatility implied to us and anyone paying even cursory attention that the world was happy with the way things were turning out in 2012, no matter what the Mayan calendar might be saying. But now, after the Socialist victory in France, the Greek electoral disintegration, the poor US employment numbers and the disastrous European PMI readings the market is very uncertain with the EUR/USD below 1.30, Spanish 10-year Bonds back over 6.00% and equity markets down sharply around the world. Our cyclical analysis finds this weakness very appropriate as we should be in a decline. What makes the ground so uncertain beneath our feet is the reality of our current position: interest rates are at zero, fiscal budgets are stretched to the maximum, total national financial liabilities are at a breaking point and national monetary bases are a multiple of the highest they have ever been. Quite simply, there are no good borrowers. No one wants to loan anyone any money.
The entire bogus recovery is again being driven by subprime auto loans being doled out by Ally Financial (85% owned by the U.S. government) and the other criminal Wall Street banks. The Federal Reserve and our government leaders will continue to steer the country on the same course of encouraging rampant speculation, deterring savings and investment, rewarding outrageous criminal behavior, purposefully generating inflation, and lying to the average American. It will work until we reach a tipping point. Dr. Krugman thinks another $4 trillion of debt and a debt to GDP ratio of 130% should get our economy back on track. When this charade is revealed to be the greatest fraud and theft in the history of mankind, Ben and Paul better have a backup plan, because there are going to be a few angry men looking for them.
- Chinese dissident seeks exile, strains U.S.-China ties (Reuters)
- Sarkozy and Hollande lock horns on TV (FT)
- UK in furious rejection of EU bank plan (FT)
- EU Fails to Reach Deal on Capital (WSJ)
- China energy use may be capped for 2015 (China Daily)
- Buffett Trails S&P 500 for Third Straight Year (Bloomberg)
- King admits failing to ‘shout’ about risk (FT)
- Obama promises 110,000 new summer jobs for youth (Reuters)
- China sturdy enough for reforms: Geithner (Reuters)
- Geithner repeats call for stronger yuan (Reuters)
All you need to read and some more.
Obama Makes Secret Visit To Afghanistan On Anniversary Of Osama Death; Will Designate Country Major Non-NATO AllySubmitted by Tyler Durden on 05/01/2012 14:16 -0500
Just when we thought the president didn't have any tricks left up his pre-election sleeve on the anniversary of Osama's death announcement, here he comes and surprises everyone with what has just been disclosed as a secret visit to Afghanistan, where in a televised statement at 7:30 pm Eastern, the president will announce a strategic partnership with president Karzai, and where he will designate Afghanistan a major non-Nato ally - the "first such designation of the Obama presidency."
Is the United States turning into a giant prison camp?
9 Torture Myths DeBUNKED
Whatever one thinks of the practical implications of the Kalecki equation (and as we pointed out a month ago, GMO's James Montier sure doesn't think much particularly when one accounts for the ever critical issue of asset depreciation), it intuitively has one important implication: every incremental dollar of debt created at the public level during a time of stagnant growth (such as Q1 2012 as already shown earlier) should offset one dollar of deleveraging in the private sector. In turn, this should facilitate the growth of private America so it can eventually take back the reins of debt creation back from the public sector (and ostensibly help it delever, although that would mean running a surplus - something America has done only once in the post-war period). This growth would manifest itself directly by the hiring of Americans by US corporations, small, medium and large, who in turn, courtesy of their newly found job safety, would proceed to spend, and slowly but surely restart the frozen velocity of money which would then spur inflation, growth, public sector deleveraging, and all those other things we learn about in Econ 101. All of the above works... in theory. In practice, not so much. Because as the WSJ demonstrates, in the period 2009-2011, America's largest multinational companies: those who benefit the most from the public sector increasing its debt/GDP to the most since WWII, or just over 100% and rapidly rising, and thus those who should return the favor by hiring American workers, have instead hired three times as many foreigners as they have hired US workers. Those among us cynically inclined could say, correctly, that the US is incurring record levels of leverage to fund foreign leverage, foreign employment, and, most importantly, foreign leverage.
The numeric implications as well as the magnitude of the student loan bubble have been discussed extensively before. Yet just like most people's eyes gloss over when they hear billions, trillions or quadrillions, so seeing the exponential chart of Federal Student debt merely brings up memories of a math lesson from high school, or at best, makes one think of statistics. And as we all know statistics are faceless, nameless and can never apply to anyone else. It is the individual case studies that have the most impact. Which is why we would like to introduce you to Devin and Sarah Stang - student loan debt slaves in perpetuity.
H.L. Mencken was a renowned newspaper columnist for the Baltimore Sun from 1906 until 1948. His biting sarcasm seems to fit perfectly in today’s world. His acerbic satirical writings on government, democracy, politicians and the ignorant masses are as true today as they were then. I believe the reason his words hit home is because he was writing during the last Unraveling and Crisis periods in America. The similarities cannot be denied. There are no journalists of his stature working in the mainstream media today. His acerbic wit is nowhere to be found among the lightweight shills that parrot their corporate masters’ propaganda on a daily basis and unquestioningly report the fabrications spewed by our government. Mencken’s skepticism of all institutions is an unknown quality in the vapid world of present day journalism.
H.L. Mencken understood the false promises of democracy 80 years ago:
“Democracy is also a form of worship. It is the worship of Jackals by Jackasses. It is the theory that the common people know what they want, and deserve to get it good and hard.”
We deserve to get it good and hard, and we will.
I often wonder who is worse: George W. Bush — the man who turned a projected trillion dollar surplus into the greatest deficits in world history, who bailed out the profligate Wall Street algos and arbitrageurs, who proceeded with two needless, pointless and absurdly costly military occupations (even though he had initially campaigned on the promise of a humble foreign policy), who ignored Michael Scheuer’s warnings about al-Qaeda previous to 9/11, who signed the Constitution-trashing PATRIOT Act (etc etc ad infinitum) or his successor Barack Obama. The answer, by the way, is Richard Nixon. Nixonianism has been the corporate aristocracy’s crowning achievement. And to some extent, this period of free lunch economics was a banquet, even for middle class Americans. The masses were kept fat and happy. But now the game is up — like Nixon’s Presidency — its days are numbered.
The campaign of Barack Obama in 2008 was a perfect example of the propaganda pageant, complete with visceral slogans like “Hope” and “Change”. After eight years of the clownish George Bush Jr., when our country spiraled down into a state of disturbed and vicious adolescence, people were looking for a renewal. They were looking for a path away from the edge of the abyss. Instead, they were given a better liar, with a brand new costume. The American Dream has become harder to sustain since…to say the least. In 2012, what I see is like a lightning bolt in slow motion. I can sense it branching out across the sky towards the ground and tearing through our surroundings, upending everything we know. Both the President and Congress have some of the lowest approval ratings in history. The question of whether anything can be accomplished through government has been answered for most people with a resounding “no”. The citizenry is on the verge of total fury. I wish I could say that most have abandoned the fleeting hollow satisfaction of choosing the “lesser of two evils”, but that would not be accurate.
As a Korean-American, many people expected me support Jim Yong Kim's appointment to the World Bank. Here is why I do not.