Suddenly the delicate balancing of variables is once again an art and not a science, ahead of a week packed with binary outcomes in which the market is already priced in for absolute perfection. Per DB: We have another blockbuster week ahead of us so let's jump straight into previewing it. One of the main highlights is the German Constitutional Court's ruling on the ESM and fiscal compact on Wednesday. On the same day we will also see the Dutch go to the polls for the Lower House elections. Thursday then sees a big FOMC meeting where the probabilities of QE3 will have increased after the weak payrolls last Friday. The G20 Finance Ministers and Central Bank Governors will meet on Thursday in Mexico before the ECOFIN/Eurogroup meeting in Cyprus rounds out the week on Friday. These are also several other meetings/events taking place outside of these main ones. In Greece, PM Samaras is set to meet with representatives of the troika today, before flying to Frankfurt for a meeting with Draghi on Tuesday. The EC will also present proposals on a single banking supervision mechanism for the Euro area on Tuesday. If these weren't enough to look forward to, Apple is expected to release details of its new iPhone on Wednesday. In summary, it will be a good week to test the theory that algos buy stocks on any flashing red headlines, no longer even pretending to care about the content. Think of the cash savings on the algo "reading" software: in a fumes-driven market in which even the HFTs no longer can make money frontrunning and subpennyiong order flow, they need it.
Prevent WWIII (Which Would Be Really Bad for Your Investment Portfolio, Notwithstanding Keynesian Thinking) by Learning this Little-Known Secret of History
Today's ZH articles in audio summary! "It's a slap in the face. A wake up call. Turkey, anyone?" Everyday, 8pm New York Time.
Moments ago we learned that the Democrats have once again reinstated language into their party platform that recognizes Jerusalem as the capital of Israel as well as the words "God-given" that were removed in this year's platform. However, the 'vote' on this controversial decision (shown in the clip below), brings back vivid memories of the GOP convention's own Ron Paul moment; and must be seen to be believed as the true state of our nation's "democratic process" is once again exposed for all to see. Simply remarkable...
And NOTHING Has Changed ...
The heightening tension between the United States government and Iran’s is based off of the fallacious notion that nuclear weapons have a legitimate purpose outside of killing enormous amounts of people. Yet they have no other real purpose in the end. Governments possess nuclear weaponry because there is little recourse for state-sanctioned murder. The millions of innocent lives that stand to be vanquished off the face of the Earth have little meaning to the power-tripping political elite. So while the Iranian government’s pursuance of nuclear weapons should be condemned, the United States government, the Israeli government, and others capable of waging nuclear war are in no place to criticize.
- Romney Promises to 'Restore' U.S. (WSJ)
- Dirty Harry Makes Surprise Appearance (WSJ)
- It has always been about the gold: Time for eurozone to reach for the gold reserves? (FT)
- EU Plan Said to Give ECB Sole Power to Grant Bank Licenses (Bloomberg)
- More attempts to marginalize Germanty: Brussels pushes for wide ECB powers (FT)
- Justice may be blind but it has geographic limits: Apple Loses Patent Lawsuit Against Samsung in Japan (BBG)
- ECB Said to Use Greek Myth for Security on New Euro Banknotes (Bloomberg)
- Alberta deficit set to triple on slumping oil prices (Globe and Mail)
- Reid's ties to China-Nevada solar plan draw ire (Reuters)
- Bernanke may hint at QE without boxing Fed in (Reuters)
- Berezovsky loses against Abramovich (FT)
- Spain Considers Bankia Re-Capitalization Without EU Money (Bloomberg)
"Everybody's going to war but we don't know what we are fighting for."
– Nerina Pallot, from "Everybody's Gone to War"
All sides in the coming conflict – except for the civilian populations and the soldiers maimed and killed – believe they will benefit from a limited war in the Middle East if everything goes according to plan. However, nothing ever goes according to plan in wars and this is the problem the world will face. Prolonged recession or depression, wealth and benefit confiscation throughout the EU, US and other Western democracies and the risk of a Middle East conflict spreading around the world is our fear. Who is guaranteed to win regardless of the outcome of the war and whether it can be contained? The Anglo-American financial elites and the bankers always win every conflict regardless of the military outcome. This is the history of the 20th century and we see no reason that will change now.
There is a frequent tendency to over state the importance of the Fed and its policies and ignore the primary fundamentals driving the gold market which are what we have long termed the ‘MSGM’ fundamentals. As long as the MSGM fundamentals remain sound than there is little risk of gold and silver’s bull markets ending. What we term MSGM stands for macroeconomic, systemic, geopolitical and monetary risks. The precious metals medium and long term fundamentals remain bullish due to still significant macroeconomic, systemic, monetary and geopolitical risks. We caution that gold could see another sharp selloff and again test the support at €1,200/oz and $1,550/oz. If we get a sharp selloff in stock markets in the traditionally weak ‘Fall’ period, gold could also fall in the short term as speculators, hedge funds etc . liquidate positions en masse. To conclude, always keep an eye on the MSGM and fade the day to day noise in the markets.
Military budgets are only one gauge of military power. A given financial commitment may be adequate or inadequate depending on the number and capability of a nation's adversaries, how well it spends its investment, and what it seeks to accomplish, among other factors. Nevertheless, trends in military spending do reveal something about a country's capacity for coercion. The following charts, from the Council of Foreign Relations, present historical trends in U.S. military spending and analyze the forces that may drive it lower.
I just finished reading Octopus by Guy Lawson, and it's one of those that fit the "I Couldn't Put It Down" category, much like Den of Thieves, published in 1992. It is the tale of Sam Israel, whom you may remember in 2006 was on the lam from his failed hedge fund/Ponzi scheme. He faked his suicide, was captured, and is now hanging out for the next couple of decades (with none other than Bernie Madoff) in a state prison named, of all things, Valhalla.
The jury is still out whether Israel will or will not attack Iran, despite the endless and relentless (dis)information in the media from all sides, and certainly when such an attack might happen, but if it did take place, these are all the logistically possible formats what an airborne attack could look like.
Syria and Iran are, in a way, the first dominos in a long chain of terrible events. This chain, as chaotic as it seems, leads to only one end result: Third world status for almost every country on the planet, including the U.S., leaving the financial institutions, like monetary grim reapers, to swoop in and gather up the pieces that remain to be fashioned into a kind of Frankenstein economy. A fiscal golem. A global monstrosity that removes all sovereignty whether real or imagined and centralizes the decision making processes of humanity into the hands of a morally bankrupt few. The only people celebrating at the end of the calamitous hostilities will be the hyper-moneyed power addicted .01%, who will celebrate their global coup in private, laughing as the rest of the world burns itself out, and comes begging them for help.
Whether its 'Trade' Wars or 'Real' Wars, tensions appear to be escalating at an increasing clip around the world. The AP is reporting that Israeli officials say Egypt is violating their 1979 peace treaty by deploying tanks in the demilitarized Sinai desert, which borders Israel.
- German central bank warns country’s financial health not a given (WaPo)
- Secret Libor Committee Clings to Anonymity After Rigging Scandal (Bloomberg)
- Peru Declares State of Emergency to Quell Violent Mining Protests (Dow Jones)
- Euro-Area Economic Adjustment Only Half Complete, Moody’s Says (Bloomberg)
- Wall Street Leaderless in Rules Fight as Dimon Diminished (Bloomberg)
- China Swaps Drop From Three-Month High as PBOC Adds Record Cash (Bloomberg)
- China invest $1 billion in U.S. Cheniere's LNG plant, Blackstone to act as intermediary buffer (FT, Reuters)
- Romney Offers Lukewarm Support for Fed Audit - Hilsenrath (WSJ)
- U.K. Unexpectedly Posts Deficit as Corporation Taxes Plunge (Bloomberg)
- Obama issues military threat to Syria (FT)
- Merkel Allies Signal Concessions on Greece Before Samaras Visit (Bloomberg)
- Chinese banks warned of foreign exchange risks (China Daily)