Fail

In its efforts to prop up the Too Big To Fail banks, the Fed has made keeping your money in a bank a low value proposition.

There is a tiresome debate as to whether or not volatility is an asset class. Let us end that debate... Volatility is the ONLY asset class. We are all volatility traders and the only question is whether we realize it or not.  If you disagree do me a favor and imagine you are an alien that just landed on earth and you know nothing about investing.

"If European leaders fail to agree a plan to counter the sudden inflows of refugees, it could mean the end of the European Union. If we don't find a solution today, if we don't do everything we can today, then it is the end of the European Union as such," Prime Minister Miro Cerar said. "If we don't deliver concrete action, I believe Europe will start falling apart."

How governments all around the world resort to absurd marketing to finance largesse

The previous Bubble was of the Fed’s making, and our central bank lost control. It became a Hobson’s Choice issue in the eyes of the Fed, and they fully accommodated the Bubble. These days, the Fed and global central bankers face a similar but much more precarious Bubble Dynamic: The Fed specifically targeted higher securities market prices as its prevailing post-mortgage finance Bubble (“helicopter money”) reflationary mechanism. This ensured that the Fed would again be unwilling to impose any monetary restraint before it would then become too risky to remove accommodation (Einstein’s definition of insanity?). In concert, global central bankers now aggressively accommodate financial Bubbles.

Like medical chemotherapy, Iceland's economic chemotherapy was horrible, but the cancer of debt-deflation was eradicated and the system made whole.

listening to the ECB panel trying to justify more stimulus of bond buying in their herculean fight to save ‘low’ inflation from damaging European citizens was just pure comedy beyond a Monty Python skit.

As long as politicians and media keep talking about disinflation and central bank inflation targets, and all they talk actually about is consumer prices, we will all fail to acknowledge what’s happening right before our very eyes. That is, the system is imploding. Deflating. Deleveraging. And before that is done, there can and will be no recovery. Indeed, this current trend has a very long way to go down. So far down that you will have a very hard time recognizing the world, and its economic system, on the other side of the process. But then again, you have a hard time recognizing the world for what it is on this side as well.

Tomorrow morning Mario Draghi is widely expected to if not announce an extension, or expansion, of the ECB's QE program, than to at least jawbone sufficiently, and push the EURUSD lower from its recently anchored level in the 1.10-1.20 range. But what are the specifics of Draghi's announcement: will he merely expand the monetization limit per security, as he did in early September, will he increase the universe of eligibile securities, or will he simply extend the maturity of the non-open ended QE from September 2016 to some indefinite date? The following list, courtesy of Bloomberg, summarizes what the sellside universe believes Draghi will unveil in just under 12 hours.

The "very serious people" are starting to get nervous, because while most other "commodities" have seen their prices plummet in the biggest crash since Lehman, gold just went green for the year. Enter Goldman Sachs: "While our base case remains for higher US real rates and lower gold prices, there are significant risks that our forecast for gold price weakness is pushed out, should the Fed surprise us and remain on hold in December."

Two recent surveys, along with numerous other studies and data, reveal most American households to be living on the brink of catastrophe, but continuing to act in a reckless and delusionary manner. Telling people the truth today is meaningless, as they don’t want their illusions destroyed. But destroyed they will be, when this teetering edifice of debt comes crashing down on their heads.

Anecdotal evidence from press reports, survey data and positioning data all agree on one point: very few people believe that the recent rally could actually be for real. With a pullback underway, we now have a chance to judge its nature – this should soon tell us if the recent rally was just another fluke or if it retains the potential to become a more sustained advance.

The entire global financial system is leveraged to the 'Modern Portfolio Theory' concept that stocks and bonds are always anti-correlated. It is impossible to estimate how many trillions of dollars are managed according to the simple 60/40 mantras but let us just assume something north of $1.4 trillion and something south of "more money than God."  However, the truth about the long-term (132-year) historical relationship between stocks and bonds is scary.  The last three decades of extraordinary anti-correlation has been an era of falling rates, globalization, accommodative monetary policy, and very low volatility of CPI. With the global economy now at the zero bound, those days are over.

"Anxiety and distress prevail throughout the land... Indeed, hope seems to have deserted the minds of the people... we are not a match to the crisis before us. These days are like the last days... We need more prayers."

The geopolitical and financial risks facing the global economy are well-known. Hot wars and currency meltdowns garner headlines around the world. But few even hear, much less discuss, four ticking global time-bombs