Obama: "When we buy I.T. services generally, it is so bureaucratic and so cumbersome that a whole bunch of it doesn’t work or it ends up being way over cost."
...and yet, we've been told we must buy a product, and things have been set up so we can only go through the government's market (the "exchange"), and the government has already demonstrated that its market doesn't work. But you can't walk away, you're forced to buy, and there's nowhere else to go. And yet, he wants us to feel bad about the cumbersome bureaucracy the government encountered trying to procure the wherewithal to set up the market it had already decided we would all need to use.
- Mounting Wall Street fears of US default (FT)
- This is what the US government does when it is "shut down" - CIA ramping up covert training program for moderate Syrian rebels (WaPo)
- SEC Weighs Overhaul of Exchanges’ Self-Regulatory System (WSJ) - just let Goldman and JPM do all the policing; not like anyone cares anymore
- Reid Sets Tone for Democrats in Shutdown Fight (WSJ)
- No Movement in Shutdown Standoff (WSJ)
- Shutdown will not slow Fed nomination, says Obama (FT)
- Syrian Regime Chokes Off Food to Town That Was Gassed (WSJ)
- Tesla Says Car Fire Began in Battery (AP)
- China Services Index Increases in Sign of Sustained Rebound (BBG) or sustained data manipulation
* * * We make no claims that any of the presented is in any way accurate or representative of the truth. It is sourced from a "hack" by €Wagn3r of what the hacker purports to be numerous emails of one Colonel Anthony James MacDonald, his wife, and various other "Pentagon officers." However, if accurate, the exposed data sheds some critical, if circumstantial, light on the events that transpired in the days ahead of the Wednesday, August 22 "nerve gas" chemical attack alleged to have been executed by Syria's president al-Assad, and presented "beyond a doubt" as such, and as the basis for full-scale military operations and "surgical strikes" targeting Syrian assets, which in the coming days will involve a Congressional vote to determine the fate of the Syrian government and ostensibly of ten of thousands of innocent civilians caught in the crossfire. While we doubt the Pentagon, the US Military, or any person in the administration will officially address these "hacked" emails, the world has a right to be aware of the existence of this information, and to come their own conclusions about the veracity of the official "case" for Syrian involvement * * *
- Humans Beating Robots Most Since ’08 as Trends Shift (BBG)
- Easing of Mortgage Curb Weighed (WSJ)
- European Banks Face Capital Gap With Focus on Leverage (BBG)
- Signs Suggest China Warming to Idea of Stimulus (WSJ)
- China Coal-Fired Economy Dying of Thirst as Mines Lack Water (BBG)
- Jeans and shoes show criminal underbelly of China-EU trade (Reuters)
- How U.S. drug sting targeted West African military chiefs (Reuters)
- Japan scrambles jets after China plane flies by southern islands (Reuters)
- Apple Plots Return to Growth After Coping With Aging Lineup (BBG)
- AT&T Falls Shy of Analyst Estimates as Discounts Hurt Margins (BBG)
- SAC insider trading case takes twist (FT)
Let’s face it, the Las Vegas real estate market has gone full Chinese. By full Chinese, we mean a centrally planned bubble has been created that is just asking to blow up. We’ve covered the renewed insanity of the Las Vegas market before, but this article from yesterday’s Wall Street Journal provides even more detail. In a nutshell, as a result of Assembly Bill 284, which essentially made foreclosures impossible in Nevada, extremely delinquent homes are not coming for sale, and this phony market signal is leading to rampant overbuilding and price speculation. Bubbles and bullshit. It’s the American way.
Do you ever get the feeling that no one in the Washington power elite is willing to seriously deal with the major economic threat to future prosperity facing the United States today: mounting government debt and the associated deficits? As a taxpayer, you did not borrow the funds, you did not spend the funds, and you have no moral obligation to repay the funds. Rothbard’s recommendation: “I propose, then, a seemingly drastic but actually far less destructive way of paying off the public debt at a single blow: outright debt repudiation.” Repudiation is not only a sound economic solution to our fiscal crisis, but it is also the morally correct solution.
- Boehner comments show tough road ahead for "fiscal cliff" talks (Reuters)
- Argentina angry at hedge fund court win (FT)
- EU Spars Over Budget as Chiefs See Possible Deadlock (Bloomberg)
- Merkel doubts budget deal possible this week, more talks needed (Reuters)
- Greek deal hopes lift market mood (FT)
- Greek Rescue Deal Faltering Cut in Rescue-Loan Rate (Bloomberg)
- Japan's Abe Pushes Stimulus (WSJ) - Unpossible: a Keynesian in Japan demanding stimulus? Say it isn't so.
- Authorities Tried to Flip Trader in Insider Case (WSJ)
- Hillary Clinton Accepts Blame for Benghazi (WSJ)
- In Reversal, Cash Leaks Out of China (WSJ)
- Spain Considers EU Credit Line (WSJ)
- China criticizes new EU sanctions on Iran, calls for talks (Reuters)
- Portugal sees third year of recession in 2013 budget (Reuters)
- Greek PM says confident Athens will secure aid tranche (Reuters)
- Fears over US mortgages dominance (FT)
- Fed officials offer divergent views on inflation risks (Reuters)
- China Credit Card Romney Assails Gives Way to Japan (Bloomberg)
- Fed's Williams: Fed Actions Will Improve Growth (WSJ)
- Rothschild Quits Bumi to Fight Bakries’ $1.2 Billion Offer (Bloomberg)
The problem we are going to face at some point as a nation and in fact as a civilization is this: there is no well-developed economic theory inside the corridors of power that will explain to the administrators of a failed system what they should do after the system collapses. This was true in the Eastern bloc in 1991. There was no plan of action, no program of institutional reform. This is true in banking. This is true in politics. This is true in every aspect of the welfare-warfare state. The people at the top are going to be presiding over a complete disaster, and they will not be able to admit to themselves or anybody else that their system is what produced the disaster. So, they will not make fundamental changes. They will not restructure the system, by decentralizing power, and by drastically reducing government spending. They will be forced to decentralize by the collapsed capital markets. The welfare-warfare state, Keynesian economics, and the Council on Foreign Relations are going to suffer major defeats when the economic system finally goes down. The system will go down. It is not clear what will pull the trigger, but it is obvious that the banking system is fragile, and the only thing capable of bailing it out is fiat money. The system is sapping the productivity of the nation, because the Federal Reserve's purchases of debt are siphoning productivity and capital out of the private sector and into those sectors subsidized by the federal government.
Much has been said about Apple's recent victory over its key component supplier, Samsung, in a recent US court decision the direct result of which has been the halt of sales of several Samsung products which are already obsolete in cell phone year terms. The paradox here is that AAPL's victory is quite pyrrhic: if and when Samsung feels sufficiently threatened, it can just pull a Gazprom and halt the supply of mission critical components to the world's biggest publicly traded company. Alternatively the Chinese politburo can one day decide to pull FoxConn's operational license, in the process bankrupting AAPL overnight. But these are of course M.A.D. scenarios which in rational, non-centrally planned market would never take place, and so we have no reason to worry about them. That said, it is increasingly becoming clear that patent warfare fought in partial domestic judicial systems, will be the next form of protectionism as pertains to that most faddy of technology: the ubiqutous smartphone. And while Apple may have won the first battle, the outcome of the war is still very much unclear: in fact, the return salvo after Samsung's big defeat on US soil may come quite soon, this time courtesy of another Chinese Apple "clone", HTC Corp, which if it goes against the Cupertino company, could have a large impact on revenues.
We have been mis-lead first by the short term effects of the LTRO and then by the political commentary that everything had returned to normal. Hard data will show that things now are about as normal as 9/15/08, the day Lehman filed for bankruptcy... It is just not Greece and Ireland that are experiencing huge drop-offs in the M-1 money supply but Portugal -14.00%, -13.80% in Italy and Spain is quickly approaching double digit numbers. Even in developed countries the signs are worsening as the Henderson Global Investors gauge, the Real Narrow Money Supply, peaked at 5.1% in November, then dropped to 3.6% in January and was 2.1% for February. This is comparable to the declines seen in mid-2008 and so I bring this to your attention. Equally as worrisome is M-2 in the United States which fell below 1.6% last month for the first time since records have been kept in 1959.
It has been just over 48 hours since our call that PIIGS the world over will scramble to demand the same concessions that were just granted to Greece courtesy of its economy being in the toilet and getting worse (thanks to lies to misrepresent the Greek economy as being worse than it really was). We already got Ireland yesterday. Now it is Portugal's turn. Reuters reports that "Portugal asked Mexico on Saturday to tell fellow G20 members next week that the United States should offer "financial help" to resolve the euro zone sovereign debt crisis, describing it as a "systemic and global" problem, a Portuguese government source said." Of course, the "US" is a clear proxy for "everyone else" - that the US, whose politicians can't agree on a fiscal stimulus for the US, let alone for some country by the straits of Gibraltar they have never heard of, will not move an inch to save Portugal is a given. Which means that once Portugal is, as it anticipates perfectly well, shut down by the US it will commence demanding for help from those who at least can grant it - the EMU and the Eurozone. And when those refuse, Portugal will do the glaringly obvious: take a page right out of the Greek textbook and proceed to suicide its own economy. And why not - it worked miracles for Greece. Now: two down and two to go. The only question is when does Italy do precisely the same logical next step, and tell the world that its $2+ trillion in debt, the second most in the Eurozone after only Germany, is unsustainable, and will need a modest haircut. 20% should do it. We wonder, what will that do to French banks (and their "perfectly hedged" US proxies - such as MF Global and others)?
BP would NEVER lie to us ...