Ford

• Obama Decries Big Bonuses at Bank Trading Desks as Risky  (BBG)
• India central bank seeks to swap gold to improve reserves quality (Reuters)
• There goes Q3 GDP: Arthur Strengthens to Become First Atlantic Hurricane (BBG)
• Airports Serving U.S. Tighten Checks on Stealth-Bomb Threat (BBG)
• Fear, cash shortages hinder fight against Ebola outbreak (Reuters)
• Brent Declines as Libya Rebels Say Ports Are Open (BBG)
• Shiites Train for Battle in Iraqi Holy City (WSJ)
• Dimon’s Cancer Has 90% Cure Rate With Demanding Therapy (BBG)
• Goldman says client data leaked, wants Google to delete email (Reuters)
• ECB Watchers in the Dark Look to Draghi for Illumination (BBG)

Last week, Nick Hanauer explained how the pitchforks were out for him and his 'zillionaire' friends' he was right; but his 'solution' is far from correct..."If Hanauer really wants to test out his theory, I propose this to him: shed your billions of dollars and give the money directly to your employees. Drain your bank accounts and give the proceeds to the spend-happy middle class. If consumer demand truly grows the economy, then the profits will come roaring back. Hanauer is right that economic inequality can create resentment. But he doesn’t see the real culprit: a government that insists in meddling in the marketplace. His solutions don’t fix the problem; only exacerbate it."

We could focus on whatever events took place in the overnight session or the seasonally-adjusted economic data avalanche that will dominate US newsflow over the next two days (ADP, ISM New York, Factory Orders, Services ISM, Yellen Speaking, and of course Nonfarm payrolls tomorrow), or we could ignore all of that as it is absolutely meaningless and all very much bullish, and use a phrase from Standard Chartered which said that "the dollars Yellen is removing could be compensated for by cheap euros from the ECB; result may be enough cash sloshing around to underpin this year’s run-up in risk assets even if  the Fed begins mulling higher interest rates too." In other words, the bubble will go on, as the Fed passes the baton to the ECB, if not so much the BOJ which is drowning in its own imported inflation. Case in point: two of the three HY deals priced yesterday were PIK, and the $1 billion in proceeds was quickly used to pay back equity sponsors. The credit bubble has never been bigger.

• Ceasefire over, Ukraine forces attack rebel positions (Reuters)
• No Good Iraq Options for Obama as Russia, Iran Jump In (BBG)
• Japan’s Cabinet Agrees to Allow Military to Help Defend Allies (BBG)
• Obama says to reform immigration on his own, bypassing Congress (Reuters)
• South Stream Pipeline Project in Bulgaria Is Delayed (NYT)
• Foreign Banks Still in the Dark About Missing Metals in China (WSJ)
• Quelle indignity: several bankers at French bank BNP Paribas will face demotions and cuts to their pay and bonuses (FT)
• Symantec Warns of Hacker Threat Against Energy Companies (BBG)
• Shrinking Office Spaces Slow Recovery (WSJ)
• Rand Paul Slams ‘Fat Cats’ With Hedge Fund in Top Donors (BBG)

The Great Depression did not represent the failure of capitalism or some inherent suicidal tendency of the free market to plunge into cyclical depression - absent the constant ministrations of the state through monetary, fiscal, tax and regulatory interventions.  Instead, the Great Depression was a unique historical occurrence - the delayed consequence of the monumental folly of the Great War, abetted by the financial deformations spawned by modern central banking. But ironically, the “failure of capitalism” explanation of the Great Depression is exactly what enabled the Warfare State to thrive and dominate the rest of the 20th century because it gave birth to what have become its twin handmaidens - Keynesian economics and monetary central planning. Together, these two doctrines eroded and eventually destroyed the great policy barrier - that is, the old-time religion of balanced budgets - that had kept America a relatively peaceful Republic until 1914. The good Ben (Franklin that is) said,” Sir you have a Republic if you can keep it”. We apparently haven’t.

• Obama Administration Widens Export Potential for U.S. Oil (BBG)
• WTI Pares Gains as U.S. Export Ruling Seen Limited (BBG)
• Senator Cochran defeats Tea Party rival in Mississippi Republican runoff (Reuters)
• Militants attack Iraq air base, U.S. assessment teams deploy (Reuters)
• Maliki rules out national emergency govt (AFP)
• Koch to Start EU Power Trading as It Plans LNG Expansion (BBG)
• Obama Said to Ready Sanctions on Russian Industries (BBG)
• Ghana Sends Plane With $3 Million to Calm World Cup Team (BBG)
• Ghana’s First Hedge Fund Planned by Ex-Exchange Regulator (BBG)
• SEC Is Gearing Up to Focus on Ratings Firms (WSJ)
• Abe Declares Deflation End as Growth Plan Confronts Skeptics (BBG)

Perhaps the miserable failure of the bear case on global equities over the past 5 years has more to do with marketing the message than anything actually wrong with the arguments for higher volatility and lower asset prices. As a reminder, ConvergEx's Nick Colas notes the classic "4 P’s" of marketing are: Product, Price, Promotion, and Place (Distribution), pointing out that when it comes to getting the bear case out, it is clear which component is missing: Price. Stock markets that churn higher - as they do right now - simply make it too expensive to sit out the rally.  The “Product” and “Promotion” are both fine – you can read negative commentary in many reputable places and speak with very intelligent bears. That takes care of “Place” as well; it’s not hard to find cautionary investment opinions. The take-away from this approach is simple: calling the top may not be as hard as you think. The first 10% pullback may be enough to complete the 4 Ps. Until then, however, it’s just too hard a story to sell.

• Tea Party struggles to repeat Cantor-style shock in Tennessee (Reuters)
• Iran Deploys Forces to Fight al Qaeda-Inspired Militants in Iraq (WSJ)
• Oil Rallies as Militant Advance in Iraq Threatens Crude (BBG)
• Gold Set for First Back-to-Back Weekly Gain Since April (BBG)
• Hedge Funds Get Stung by Slow Markets (WSJ)
• Sterling nears 5-year high after Carney speech (FT)
• Britain Warns Boom in Real-Estate Prices Threatens Economy (WSJ)
• East Europe Leaders Urge EU Unity to Counter Russia (BBG)
• Formula One Said to Be Valued at $8 Billion as Malone Seeks Stake (BBG)
• Dumb and dumber: Abe Plans Company Tax Cut in 2015 as Kuroda Warns on Budget (BBG)

As student loan bailouts rain down from Washington, we thought it may be useful to consider where the world's wealthiest University alumni are. As Private Wealth reports, following a survey of 70,000 millionaires around the world, eight of the top ten universities with the highest number of rich alumni are based in the U.S., with the U.K. home to the other two. Engineering degrees produced the most millionaires, although most engineering grads made money as entrepreneurs, the study revealed. MBAs, law, accounting, and finance degrees also led to financial success.

Henry Ford once said, “It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” We hope this brief discussion raises that 'understanding'.

If it looks like insanity, smells like insanity, tastes like insanity, feels like insanity and struts about barking, “This is insanity”, then perhaps it might just be insanity.

The ever-rising ranks of youth unemployment coupled with the increasingly cheap and easy access to "distractions" from the dismal realities of life (if one is not a wealthy leveraged shareholder) mean a lot of potentially productive time is totally and utterly wasted in this world... how much time? As The Economist joking notes, the loony music video “Gangnam Style” surpassed two billion views on YouTube this week, making it the most watched clip of all time. At 4:12 minutes, that equates to more than 140m hours, or more than 16,000 years (the equivalent manpower it would take to build 4 Great Pyramids of Giza or 20 Empire State Buildings). The opportunity cost of watching PSY’s frivolity is huge, but humanity has at least been entertained.

Timothy Geithner is likely to go down in American history as one of the most dangerous, destructive cronies to have ever wielded government power. The man is so completely and totally full of shit it’s almost impossible not to notice. The last thing we’d ever want to do in our free time is read a lengthy book filled with Geithner lies and propaganda, so we owe a large debt of gratitude to former Congressional staffer Matt Stoller for doing it for us. Stoller simply tears Geither apart limb from limb, detailing obvious lies about the financial crisis, and even more interestingly, Geithner’s bizarre bio, replete with mysterious and inexplicable promotions into positions of power..."Geithner is at heart a grifter, a petty con artist with the right manners and breeding to lie at the top echelons of American finance..."

• Inside the White House's decision to free Bergdahl (Reuters)
• Dimon’s Raise Haunts BNP Paribas as U.S. Weighs $10 Billion Fine (BBG)
• Jobs Are on the Line as Banks' Revenue Slides (WSJ)
• Wall Street Adjusts to the New Trading Normal (WSJ)
• Nothing like objective, intense probes: GM recall probe to clear senior execs, finds no concerted coverup (Reuters)
• ECB ready to cut rates and push banks into lending to boost euro zone economy (Reuters)
• China Should Resist Further Stimulus, IMF Says (BBG)
• Carney Finds Ally in Draghi as Key Rate Kept at 0.5% (BBG)
• Assad wins Syria election with 88.7 percent of votes (Reuters)

If yesterday's non-record, red-tick close can be attributed to algos applying the wrong ISM seasonal factor to the day, believing it was Wednesday instead of the permabullish Tuesday, today there is no such excuse, which is why we fully expect the unallowed redness with which futures are currently trading to promptly morph into a non-red color especially with the USDJPY doing it best to ramp to 103.000 levels overnight, stopping out all shorts, and push spoos to fresh record highs. It is an algo world after all.  It appears that already record low volatility is being pushed even lower in anticipation of numerous imminent data releases, including today's ADP and Services ISM (first, second and final release), tomorrow's ECB announcement and Friday's payrolls number. Which while good for low volume levitation means bank trading revenues continue to deteriorate forcing banks to pitch M&A deals to clients, which in turn result in even more synergies and more layoffs: because in order to preserve the bottom line, crushing real employment further is perfectly acceptable collateral damage.