Corruption

Meet the next piece of work...

Dr. Faber prudently advises clients not only to diversify among asset classes but to also to diversify within asset classes. We share this view. We advise our clients to hold gold and silver in various locations and in various forms but always in secure vaults and safe jurisdictions such as Singapore or Switzerland.

• The $9 Billion Witness: Meet JPMorgan Chase's Worst Nightmare (Matt Taibbi)
• Explains the midterm results: Optimism precedes job data (Reuters)
• EU Dream Ebbs Amid Weak Growth, Putin's Jets, 25 Years After Wall Came Down (BBG)
• SEC Probing Trading Activity at Apple Supplier GT Advanced (WSJ)
• Boehner touts bills to repeal Obamacare, build Keystone (Reuters)
• China Gold Buying Means Price Floor to Standard Chartered (BBG)
• High-Speed Ad Traders Profit by Arbitraging Your Eyeballs (BBG)
• Central Banks Can’t Be ‘Only Game in Town’ Boosting Economies (BBG) - less talking, more getting to work

Please don't claim anything changes if one party or the other is in the majority. Anyone clinging to that fantasy is delusional.

Being 2 for 2 in losses this week (The US Election and Time's "world's most powerful person), it appears President Obama has fallen back on his regulatory army to take the fight to Vladimir Putin. As WSJ reports, U.S. prosecutors have launched a money-laundering investigation of billionaire Gennady Timchenko - a member of Putin's inner circle. The allegations are that Timchenko (who was among the first Russian businessmen to be sanctioned by the U.S. following Russia’s intervention in Ukraine’s Crimea region) transferred funds linked to allegedly corrupt deals in Russia through the U.S. financial system. The probe is also examining whether any of Mr. Putin’s personal wealth is connected to allegedly illicit funds. Timchenko warned in August, "there are reasons to be seriously afraid of provocations from the U.S."

• LOL@Fundamentals: European Stocks Fall as Investors Seek Stimulus Clarity (BBG)
• Obama, Republicans sound conciliatory note but battles loom (Reuters)
• Firms drop Pimco funds from managed accounts (Reuters)
• Not All QE Is Created Equal as U.S. Outpunches ECB-BOJ (BBG)
• Ukraine Accuses Russia of Sending Troops as Truce Wobbles (BBG)
• Lenovo Slumps After Projecting China ‘Hypergrowth’ to End (BBG)
• Palo Alto Networks discovers new malware targeted at Apple devices (Reuters)
• IPO That Brought In $1 Billion in March Implodes in Denmark (BBG)

Economic data from China have generally been on the weak side of late, but not catastrophically so. And yet, apart from growing weakness in aggregated data, we also see more and more anecdotal evidence that the economy is deteriorating.

As the 'new' alternative political party - "We Can" - surges to the lead in polls in Spain, it appears extreme parties from around Europe are taking note. As KeepTalkingGreece reports, the Spanish branch of the neo-fascist Golden Dawn party has been officially registered as a political party in Spain. Between Catalan secession, record youth unemployment, and government corruption, throwing some right-wing extremists into the mix should 'help'.

"Capitalism is a system according to which capital is owned by private citizens, who in turn determine its price and flow by interacting with one another. Capitalism implies that private citizens get to keep most of the fruits of their labor or the profitability of their capital. Capitalism is neither a “state of nature” nor a primitive scrum. It can work (i.e., create value for owners and for society while being acceptable to the citizenry, including those without capital) only with appropriate rules of fairness and honesty, and workable standards of disclosure. To these factors must be added the ability for people, in a meritocratic way, to have a chance to participate in capitalism. The proper combination leads society to buy into the concept that the individual freedom to own property leads to the most efficient allocation of resources, which in turn results in the highest economic growth and prosperity. Capitalism is never perfect, but the closer society adheres to its general principles, the better it is for the population at large."

Watch Spain closely in the months ahead. It will be another canary in the coal mine for the entire Western world.

With French youth revolting, Spanish regions seeking secession, and GREXIT back on the cards, Europe's social unrest concerns are starting to rise once again to troubling levels. However, it is in Europe's poorest nation, Bulgaria that the message of dissatisfaction is loudest. As The BBC reports, a woman has set herself ablaze near the presidency building in the Bulgarian capital Sofia. There were six similar self-immolations in Bulgaria last year, amid anger over chronic poverty and alleged corruption.

• Republicans expect gains, but many races close on election day (Reuters)
• Ahead of tough election, White House blames dismay with Washington (Reuters)
• On Election Day, a Tale of the Young and the Old (WSJ)
• Because the recovery: Sprint to Cut 2,000 Jobs as Mobile Customers Keep Leaving (BBG)
• Ukraine's rebel leader is sworn in, crisis deepens (Reuters)
• Brilliant: Burkina Faso Army Promises Religious Leaders It Will Step Down (BBG)
• More Unknowns Leave Central Banks Facing Greater Internal Strife (BBG)
• Scapegoat found: IBM to Change Leadership at Global Services Unit (WSJ)
• Explains why Europe just slashed its GDP forecast: Don’t Be Fooled by Warm Spell as Cold Air About to Return (BBG)

"Solutions to the world's problems are not produced in a meeting between Bill Gates and George Soros... Renewal has to come from below... Limiting the influence [of the richest] is of the utmost importance... so that today's upper-class, high-finance capitalism can once again revert to being a capitalism of the real economy and the societal center."

• Futures rally after BOJ ramps up stimulus (Reuters), Japan's central bank shocks markets with more easing as inflation slows (Reuters)
• Kuroda Jolts Markets With Assault on Deflation Mindset (BBG)
• Japan Mega-Pension Shifts to Stocks (WSJ)
• Russia Raises Interest Rates (WSJ)
• Oil-Price Drop Has Saudi Officials Divided (WSJ)
• Not anymore, the BOJ is here: Fed Exit Could Spark Slump in All Markets, ATP CEO Says (BBG)
• Wal-Mart Weighs Matching Online Prices from Amazon (WSJ)
• Euro-Area Inflation Picks Up From Five-Year Low on Stimulus (BBG)
• Big Banks Brace for Penalties in Probes  (WSJ)
• Ex-UBS Trader Defense Could Be Threat to U.S. Forex Cases (BBG)

When Chinese property developer Agile Property Holdings Ltd. said this month that its chairman was taken into custody by authorities, the disclosure was a shock to Western banks that lent the company money, according to China Spectator as the fog of ever-rising asset values suddenly evaporates into the reality of an opaque real estate credit market slap them in the face. The simple fact is "it is very difficult to get a handle on the financials of a Chinese company," as a local investigative consulting firm warns "in China, nothing is what it appears to be."