- US Blasts Germany's Economic Policies (WSJ)
- Citigroup, JPMorgan Said to Put Currency Dealers on Leave (BBG)
- Watchdog: Syria Destroys Chemical-Arms Equipment (WSJ)
- Kynikos Alumni Start Hedge Fund Betting on Declining Stocks (BBG)
- China state media calls for stern action after Tiananmen attack (RTRS)
- IMF warns of financial shock risk to Africa (FT)
- Insurers Oppose Obamacare Extension as Danger to Profits (BBG)
- BoJ content to ignore Fed tapering and go its own way (FT)
- U.S. attorney wants DOJ to take civil action against BofA (RTRS)
- NSA Fallout Hits AT&T's Ambitions In Europe (WSJ)
It's painfully obvious that real estate valuations are once again at asset-bubble extremes. Defenders of current real estate valuations can draw upon an array of justifications, but they boil down to the same one used to justify valuations in every asset bubble: this time it's different.
Already, the Chinese have stopped accumulating dollars - preferring safer currencies, infrastructure, hard assets and commodities and of course gold. Even a small amount of Chinese selling could lead to substantial dollar weakness and much higher bond yields plummeting the U.S. into another recession.
"We see upside surprise risks on gold and silver in the years ahead," is how UBS commodity strategy team begins a deep dive into a multi-factor valuation perspective of the precious metals. The key to their expectation, intriguingly, that new regulation will put substantial pressure on banks to deleverage – raising the onus on the Fed to reflate much harder in 2014 than markets are pricing in. In this view UBS commodity team is also more cautious on US macro...
In addition to the already noted repeat spike in Chinese overnight repo rates as the PBOC refuses to inject liquidity for nearly a week offsetting the "news" of a better than expected HSBC PMI, the other kay datapoints to hit in the overnight session were various European PMIs which were broadly lower across the board. Of note being the French, which missed both the Manufacturing Index (49.4 vs 50.1 expected, down from 49.8) and the Services (50.2 vs 51.0 expected, down from 51.0) and Germany, which missed in Services (52.3 vs 53.7 expected, same as September), while modestly beating Manufacturing at 51.5 vs 51.4 expected, up from 51.1 last. On a blended basis, the Composite Flash PMI fell from 52.2 to 51.5, against the consensus expectation of a modest rise (Cons: 52.4). Today's correction brings to a halt a series of six consecutive monthly rises in the Euro area composite PMI.
America, as a nation and a culture, is now being held hostage and tortured into submission on a grand scale using economic terror by the elitist establishment which dominates BOTH major political parties. The goal? To push our society to conform completely with the concepts of globalization, bureaucratic micro-management, and greatly reduced living standards. We are being conditioned to accept defeat and failure, and like children, to cry out for a parental authority to save us in our state of helplessness and fear, even if that authority was the cause of our fear from the very beginning. With so many near misses culminating so close together, it may be wise to consider what could happen in the the next three months while we wait for debt debate theater part deux. Like a prisoner in Abu Ghraib, America is trapped, waiting for the next humiliation, the next degradation, or the next session of pain. Are we merely being acclimated to the idea of incessant crisis? Are we learning to become apathetic at the edge of the chasm? Or, are we being driven to madness, mass-madness, by a concert of elitist interrogators seeking our acquiescence? Again, the central purpose of torture is to acquire consent. Not just extorted consent, but voluntary consent. The globalist establishment wants us to beg them to save us from the tortures they create. If we never give them this, they will never win.
It seemed as if this morning's exuberant run into US equities would never stop but it would appear that comments from none other than Dan Loeb has (for now) put an end to the exuberance. With fundamentals collapsing, and even Cramer's "Cult stocks" tumbling, today's rally was yet another blindlingly obvious insight into the fact that this market is entirely artificial and Third Point's Dan Loeb, worried about the global economy, has reduced his exposure to equities. Furthermore, he plans to return 10% of capital to investors. Not exactly the wealth-effect enhancing, confidence-inspiring action that the Fed hoped for...
The macro picture for the world is dangerous. And high quality companies will not be spared the carnage if a market onslaught begins (which is looking increasingly likely).
NSA Busted Conducting Industrial Espionage In France, Mexico, Brazil, China and All Around the WorldSubmitted by George Washington on 10/21/2013 11:46 -0500
The Spying Has Been Going On For DECADES
The Chinese yuan has reached 20-year highs versus the U.S. dollar. It's a significant development with potentially huge ramifications for China and the world.
While 20-year highs for the CNY may be enough for many to question the USD's ongoing reserve status, it is clear that there are many other plans afoot that undermine the dominance of the greenback. On the global financial stage, China is playing chess while the U.S. is playing checkers, and the Chinese are now accelerating their long-term plan to dethrone the U.S. dollar. You see, the truth is that China does not plan to allow the U.S. financial system to dominate the world indefinitely. Unfortunately for us, the U.S. debt spiral cannot go on indefinitely. Our debt is growing far, far more rapidly than our GDP is, and therefore our debt is completely and totally unsustainable. The Chinese understand what is going on, and when the dust settles they plan to be the last ones standing.
The whole fulcrum of the bloated American state is beyond ready for a radical deconstruction. The same goes for most nation-states in the West. The continual borrowing, serviced indiscreetly by an accommodating central bank, has made an entirety of the populace fat and happy off of debt. This is no realistic method for operating any institution. Something has to give eventually. Any conservative who places high value on civil society over the intrusion of government should balk at the prospect of a higher debt load. It makes certain that the ruling political class will not cease in their effort to infiltrate private life. Unfortunately it appears as if some otherwise sharp minds have fallen prey to the liberal device of alarmism.
We already highlighted the return of gold lease rates to subzero yesterday, during the dramatic spike in gold following Gartman's latest sell recommendation. Now, it is time for the banks to also begin admitting that, as SocGen has just pointed out, the gold "physical squeeze returns."
The world’s developed countries face growth and employment shortfalls, while developing countries are confronting huge challenges in adapting to increasingly volatile capital flows while adjusting their growth patterns to sustain economic development. And yet America’s political dysfunction has come to marginalize these (and other) crucial issues. It is all very difficult to fathom. The threat of a default on US sovereign debt has been lifted – for now – but the deeper problem persists: For America’s Republicans and Democrats, negotiating a fiscal grand compromise appears to carry higher costs than playing a game of brinkmanship, even at the risk of default. Surely this involves a collective miscalculation of the longer-term costs.
One of our favorite indicators of leading "global growth" is the Goldman swirlogram released each month, for two reasons: i) it succinctly summarizes on one chart what the near-term state of the global economy is, and ii) it is rather silly. Regardless of ii), the methodology does look at the entire assortment of available global leading indicators (which in the case of the US isn't saying much(, to determine the current state of the world economy. According to the just released update, as a result of a plunge in leading indicator acceleration, the world has just had its most slowdown-y month in the past year.