On Wednesday evening, it all fell apart in Brazil when the judge spearheading government corruption probes released wiretaps which seem to prove that Dilma Rousseff indeed appointed former President Lula to chief of staff in order to shield him from prosecution. When the tapes were released, Congress broke into a shouting match and Brazilians poured into the streets in 17 of 26 states calling for an overthrow of the government.
We now have an absolutely clear idea of why the Fed is impaled on its own petard. At the end of the day, managed rates will prove to be the ultimate destroyer of capitalism. They transform financial markets from organizers and allocators of real capital and the savings of producers and workers into gambling casinos which fuel massive speculative bubbles.
It seems as though Brazil can’t get through a single day without some piece of political news or economic data creating confusion and turmoil. Wednesday was no different.
When it comes to raking in questionable dough via the abuse of political power, the Clintons are in a league all to themselves. In fact, their shamelessness is so rampant and sloppy, the only explanation is they simply thought no one would ever dare hold them to account.
Just last week, the BRL was riding high on news that former President Luiz Inácio Lula da Silva was detained in connection with money laundering. He was then charged with corruption by state prosecutors. The market hoped his arrest and possible prosecution would give momentum to the effort to impeach Rousseff. Then, in a dramatic turn of events, Rousseff invited Lula to accept a ministry post yesterday. Initially, reports indicated he would resist the idea of accepting, but that soon changed.
You know something is strange when "the riskiest" country in the world is the nation whose central bank everyone is relying on to 'save the world' and "the safest" stock market in the world is from a nation whose neighbor is actively test-firing nuclear missiles? It appears activist central banks - following Draghi's "kitchen sink" - have become the new normal's 'nukes'.
On Sunday, millions of Brazilians took to the streets to call for the ouster of President Dilma Rousseff, who is thought to have cooked the fiscal books in 2014. She’s not yet implicated (directly anyway) in the long-running Carwash probe, but some think that may change soon as the investigation seems to get closer and closer to her officer with each passing week. But it’s not just corruption that Brazilians are fed up with. It's the economy, stupid...
While Asia was up on China's bad data, and Europe was higher again this morning to catch up for the Friday afternoon US surge, US equity futures may have finally topped off and are now looking at this week's critical data, namely the BOJ's decision tomorrow (where Kuroda is expected to do nothing), and the Fed's decision on Wednesday where a far more "hawkish announcement" than currently priced in by the market, as Goldman warned last night, is likely, in what would put an end to the momentum and "weak balance sheet" rally.
In the end, the oil attrition wars may lead us not into a future of North American triumphalism, nor even to a more modest Saudi version of the same, but into a strange new world in which an unlimited capacity to produce oil meets an increasingly crippled capitalist system without the capacity to absorb it. Think of it this way: in the conflagration of the take-no-prisoners war the Saudis let loose, a centuries-old world based on oil may be ending in both a glut and a hollowing out on an increasingly overheated planet. A war of attrition indeed.
The market is worried about China. Worried about growth, worried about whether Beijing can actually manage to pull off the transition to a consumption-led economic model, worried about the yuan, and perhaps most pressingly, worrried about whether a push to stamp out the excess capacity that's driving the global deflationary supply glut will end up creating an employment crisis. Here to 'reassure" you are People’s Bank of China Governor Zhou Xiaochuan and Xiao Yaqing, who oversees the government commission that looks after state assets.
The technical situation for the gold price has sharply improved, to the evident surprise of many mainstream analysts, but what are the reasons behind the turnaround, and implications for the future?
It's no coincidence that three major BRICS nations are simultaneously under attack - on myriad levels: Russia, China and Brazil. The concerted strategy by the Masters of the Universe who dictate the rules in the Wall Street/Beltway axis is to undermine by all means the BRICS's collective effort to produce a viable alternative to the global economic/financial system, which for the moment is subjected to casino capitalism. It's unlikely Lula, by himself, will be able to stop them.
What are the “top trumps” that could send bond, credit and equity markets substantially higher or lower than currently expected? Here are the six "positioning, policy and profits" indicators that will determine the next leg in the market.