Consumer protection

InBev Sued For Overstating Budweiser Alcohol Content

Maker's Mark recent foray into "diluting" reality by keeping prices flat while reducing the alcohol content - a painful reminder that stealth inflation comes in the most unexpected of shapes - came and went, with the outcry limited to a select group of Bourbon lovers. However, when the realization hits that every other alcohol producer may have been engaging in the same less than ethical behavior, including America's precious Budweiser, we expect the response to be faster and furiouser. We also expect the answer to the question of how it is that food inflation is not far greater, will be made even clearer. It will, however, certainly bring new meaning to the phrase the beer glass is half full. Of course, since the lawsuit was filed by two men who "routinely purchased as many as four cases of Bud per month for the past four years" one can see why it may not be taken very seriously.

A Primer On Europe's Common Bank Supervisor

The Eurozone was once again engaged in burning the midnight oil, in yet another futile endeavor, this time setting the stage for a common bank supervisor in the face of the ECB, which is somehow supposed to "regulate" Europe's thousands of banks. That this was a total practical dud can be seen in the response of the EURUSD to the news. However, for those interested in the theoretical nuances, whose actual implementation has once again been kicked into the future, here is a quick and dirty primer from SocGen.

Frontrunning: November 19

  • Israel Ready to Invade Gaza If Cease-Fire Efforts Fail (Bloomberg)
  • Petraeus: A Phony Hero for a Phony War (NYT)
  • IMF'S Lagarde says Greek deal should be "rooted in reality" (Reuters) "rooted" or "roofied"? And where was it until now?
  • ECB's Asmussen says Greece to need aid beyond 2014 (AP)
  • EU makes budget plans without (FT)
  • Japanese Poll Shows LDP Advantage Ahead of Election (WSJ)
  • Shanghai Composite Dips Below, Regains 2,000 Level (Bloomberg)
  • Bond investor takes big punt on Ireland (FT)
  • Noda defends BoJ’s independence (FT) Indewhatnow?
  • Inaba Says BOJ Could Ease More If Government Reins in Debt (Bloomberg) Actually it's the other way around
  • Miles Says Bank of England Can Do More If U.K. Slump Persists (Bloomberg) So much for the end of QE
  • US tax breaks worth $150bn face axe (FT)

Degrees For Dollars: Students Petition Uncle Sam To Refund Student Loans For Worthless Diplomas

Student debt has seemingly been the transmission channel of choice for pumping credit into the US economy for the last few years as the government addition of $1 trillion has done nothing but leave those under-55 with fewer and fewer jobs (especially above-minimum-wage jobs) while saddled with non-extinguishable debt. Of course, this 'pump' of credit has had the usual unintended 'inflationary' consequence of raising tuition prices (which as we noted this morning was the main driver of inflation in the UK overnight). So what would be fair? Cue: A Petition to "Provide University graduates the ability to trade their Diplomas back for 100% tuition refunds" The hope-driven (or hopelessness) push into higher education (and implicitly higher debt), in a nation where the marginal benefit of Calculus 101 over a strong right 'burger-flipping / coffee-machine-pressing' wrist is falling by the day, seems to warrant further societal protection. All that's needed is 25,000 signatures to move this forward.

The Ultimate Presidential Election Guide For Investors

With 20 days left to the big day and the candidates seemingly in a tighter race than many expected it seems appropriate to look at how the equity market is and will be positioned for a potential changing of the guard if Mitt Romney wins or if incumbent Barack Obama remains in charge. Credit Suisse has created a comprehensive 'cheat-sheet' outlining key issues for the election for each candidate, the sector impact of an Obama or Romney victory, and the extent to which that impact is already factored into current market prices. Everything you wanted to know about gaming the outcome of the election but were afraid to ask.

The Financial Crisis Of 2015 - A Non-Fictional Fiction

The financial crisis of 2008 shook politicians, bankers, regulators, commentators and ordinary citizens out of the complacency created by the 25-year "great moderation". Yet, for all the rhetoric around a new financial order, and all the improvements made, many of the old risks remain (and some are far larger). The following 'story' suggests a scenario based on an 'avoidable history' and while future crises are not avoidable, being a victim of the next one is.

"John Banks was woken by his phone at 3am on Sunday 26th April 2015. John worked for Garland Brothers, a formerly British bank that had relocated its headquarters to Singapore in late 2011 as a result of..."

Investors, Nostalgic For Logical Markets, Boycott New Centrally-Planned Normal

One of the deepest mysteries related to the ongoing rally in U.S. equities is the persistent lack of retail investor involvement. QAs we have vociferously noted, U.S. equity mutual fund flows remain solidly negative and interest in single stock trading among individual investors is similarly moribund - while corporate bond volumes remain flat and Treasury volumes higher.  As Nick Colas, of ConvergEx group, notes, one missing link to explain this dichotomy must be the fundamental lack of financial literacy among U.S. retail investors, yet this relationship is seldom mentioned as a reason for this group’s ongoing apathy in the face of 4-year highs for domestic stocks. You might argue that “It was always thus…” and that is a fair point.   American investors haven’t grown dumber on financial matters in the last decade; they never had the requisite knowledge to begin with.  But it does appear that the events of the last few years have caused some kind of “Tipping point” with regard to investors’ ability to process the world around them.

Aaaand It's Gone: This Is Why You Always Demand Physical

We have said it over and over, we'll say it again. For all those who for one reason or another would like to boycott the broken markets, yet trade gold in paper form, please understand that all the invested capital is at risk of total loss and can and will be lost, commingled and rehypothecated, not necessarily in that order, with little to zero recourse and the residual claim on liquidating assets pushed to the very end of the queue. Because if Lehman, MF Global, Peregrine, and countless other examples were not enough, here comes Amber Gold: a gold-based investment ponzi scheme out of Poland, in which it is likely needless to say that the gullible investors never had actual possession of the gold. And when they tried, it was gone. All gone.

Is Harry Reid The Most Hypocritical Man In The World?

While Dos Equis has its most-interesting-man, we think we have found the 'most hypocritical'. Until today we thought Sandy Weill was the undisputed champion in this category, but after seeing this clip we think he has strong competition. At around 40 seconds into this lengthy diatribe, everyone's favorite Libertarian Las Vegan utters the most two-faced hypocritical words that he could possible have uttered: "I think we should audit the Federal Reserve". Between Harry Reid's recent vehement anti-Paul behavior and the whip-order that Democrats received on Ron Paul's bill yesterday, this is stunning. While the sell-out nature of this kind of politician does not surprise us, we thought it prudent for all US citizens to understand the true nature of the political class that decides an increasing amount of our day to day lives.