Great and wondrous things seem to be afoot among the righteous bankers of the world. A few months ago Matt Zames was named to get JPMorgan's CIO office out of trouble - and also happens to be the Chairman of the all-powerful Treasury Borrowing Advisory Committee. Just yesterday, Mark Carney completed Europe's full-house of ex-Goldman Sachs alum running the region's monetary policy. Today we hear Lloyd Blankfein will be sidling up to Obama tomorrow. And now this; from the never-crony-capitalist himself, billionaire Warren Buffett has publicly blessed Jamie "apart from the failure of control" Dimon as the best man for the top job at the Treasury. "If we did run into problems in markets, I think he would actually be the best person you could have in the job," Buffett added (sounding more like the 'we' meant he) and dismissed the London-Whale "failure of control" with sometimes "people go off the reservation." With Zames running the Shadow Treasury and Dimon running the Real Treasury, is it any wonder that inquiring minds are asking who really runs America (and for whom)? Of course, in the pre-Fed era - over 100 years ago, JPMorgan Sr. 'bailed-out' America before...
You've probably noticed the cookie-cutter format of most financial media "news": a few key "buzz words" (fiscal cliff, Bush tax cuts, etc.) are inserted into conventional contexts, and this is passed off as either "reporting" or "commentary" depending on the number of pundits sourced. Correspondent Frank M. kindly passed along a template that is "officially deny its existence" secret within the mainstream media. With this template, you could launch your own financial media channel, ready to compete with the big boys. Heck, you could hire some cheap overseas labor to make a few Skype calls to "the usual suspects," for-hire academics, hedge fund gurus, etc. and actually attribute the fluff to a real person.
- Don't jump to conclusions over general, Pentagon chief says (Reuters)
- Bad times for generals: Pentagon demotes 4-star General Ward (Reuters)
- Investors Pay to Lend Germany Money (WSJ)
- Noda will no longer be watching... watching: Japan PM honors pledge with December 16 vote date, to lose job (Reuters)
- New China leadership takes shape (FT)
- Hispanic Workers Lack Education as Numbers Grow in U.S. (Bloomberg)
- Quest for EU single bank supervisor stumbles (FT)
- Anti-austerity strikes sweep Europe (Reuters)
- Amazon faces new obstacles in fight for holiday dollars (Reuters)
- SEC Expands Knight Probe (WSJ)
- Singapore’s Casinos Lose Luster as Gaming Revenue Decline (Bloomberg)
- Amid Petraeus sex scandal, Air Force to release abuse report (Reuters)
- Geithner’s Money Fund Overhaul Push Sparks New Opposition (Bloomberg)
Farce #1: “Market value” and “free markets” have become a joke.
Farce #2: Private, self-assigned, fake value is being traded for public money at 100 cents on the dollar.
Farce #3: Printed money is backed by nothing.
Farce #4: We have a “free” enterprise system dominated by monopolies that force people to buy inferior goods and services at exorbitant rates.
Farce #5: High-level financial crimes, no matter how egregious or widespread, are not being prosecuted.
Farce #6: Risk is gone. Now there is only liability borne by citizens.
Farce #7: Productivity has been supplanted by parasitism.
- Obama Wins Re-election With Romney Defeated in Key States (Bloomberg, Reuters)
- Romney's last, greatest 'turnaround' falls short (Reuters)
- Control of Congress set to remain split (FT)
- Republicans to Hold Most Governor Offices Since 2000 (Bloomberg)
- Economic Unease Looms After Win (WSJ)
- Storm-lashed New York, New Jersey scramble as weather threatens (Reuters)
- Democrats Assured of Keeping U.S. Senate Majority (Bloomberg)
- Greece to vote on austerity, protests intensify (Reuters)
- France offers businesses €20bn tax break (FT) ... Wait, what?
- Putin Fires Defense Chief in Rare Move (WSJ)
- China premier Wen calls for deeper cooperation on disasters (China Daily)
- China wrestles over democratic reform (FT)
- Top-Performing Won Threatens to Hurt Korea Export Rebound (Bloomberg)
Round 2: Midget Mayhem
Alan Wheatley, Global Economics Correspondent for Reuters has written a very interesting article, 'Analysis: China's currency foray augurs geopolitical strains’ where he emphasizes China’s desire to wean out the US dollar’s currency reserve status. China is actively taking steps to phase out the US dollar which will decrease volatility in oil and commodity prices and deride the ‘exorbitant privilege' the USA commands as the issuer of the reserve currency at the centre of a post-war international financial architecture which is now failing. In 1971, U.S. Treasury Secretary John Connally said, "It's our currency and your problem". China is frustrated with what it sees as the US government’s mismanagement of the dollar, and is now actively promoting the cross-border use of its own currency, the yuan, or also called the renminbi, in trade and investment. China’s goal is to decrease transactions costs for Chinese importers and exporters. Zha Xiaogang, a researcher at the Shanghai Institutes for International Studies, said Beijing wants to see a better-balanced international monetary system consisting of at least the dollar, euro and yuan and perhaps other currencies such as the yen and the Indian rupee. "The shortcomings of the current international monetary system pose a big threat to China's economy," he said. "With more alternatives, the margin for the U.S. would be greatly narrowed, which will certainly weaken the power basis of the U.S."
In a "new normal" "market" that has long since given up discounting fundamental news, and merely reacts to how any given central planner banker blinks, coughs, sneezes, or otherwise hints on future monetary injection plans at any given moment, it is useful to know the only market players that matter. Courtesy of Guggenheim, they are listed out below - these are no longer the major TBTF banks, Jamie Dimon and Lloyd Blankfein ambitions to rule the world notwithstanding; they are now the world's central banks, whose assets are rapidly approaching their host sovereign GDPs even as their overall leverage is increasing by leaps and bounds on a daily basis, putting such recent Investment Bank overlevered behemoths to shame. It is in this playing field where the price of any one "risk asset" is no longer indicative of anything more than monetary, and in a world in which politicians have long been made obsolete by the central planners, fiscal policies. It also means that capital markets are only whatever the various central bankers want to make them... and nothing else.
"It's defining a new category in real estate" is how the ultra-luxury apartment business is seen in New York. Goldman's Lloyd Blankfein and his buddies (including Sting) at 15 Central Park West are set to double their money as Bloomberg reports four condos in the Richie-Rich style extravaganza of a building have hit the market at asking prices at an average 192% over what owners paid in 2007 and 2008. The most expensive (a five-bedroom 35th floor pied-a-terre), topping Oaktree's Howard Mark's previous $52.5mm record purchase at 740 Park, is priced at a stunning $95mm. Testing the glass ceiling of a $100mm apartment is nothing though - as just like the rest of the nation's apparent house price recovery 'tight supply is supporting the current spate of eye-popping asking prices' which obviously will mean an influx of 'very expensive' inventory hitting the market in the coming years. For $95mm we wondered exactly what the apartment comes with? Perhaps $90mm of gold bars on the coffee-table? Perhaps Hugh Verrier and his wife Celia sum up the largesse perfectly: "we just thought of it as a living space". Indeed, Hugh, indeed.
I just finished Days of Destruction, Days of Revolt by Chris Hedges and Joe Sacco. It is superb, and I've spent a fair amount of time typing in passages from the book below in order to capture some of its theme.
Why Don’t the Corrupt Players On Wall Street and In D.C. Show Remorse for Their Destructive Actions…And Why Don’t We Stop Them?Submitted by George Washington on 07/14/2012 10:57 -0400
Scandal After Scandal, Lie Upon Lie ... What's Going On?
As PFG Falls, a Return to the MF Global / Eric Holder Connection and How to Keep an Investigation StaleSubmitted by EB on 07/10/2012 07:56 -0400
Wasendorf take note: step 1, become powerful governor and/or senator (editor of SFO magazine won't cut it); step 2, hire Blankfein's lawyer for key personnel who can throw you under the bus
- Greek Banks Under Pressure (WSJ)
- France Seeks Eurozone Stability Package (FT)
- Germany Dashes Eurozone Expectations (FT)
- Geithner Says European Leaders Know They Must Do More (Bloomberg)
- In Athens, Party Aims to Delay Austerity (WSJ)
- Rajoy Battles ECB for Loans; Monti Appeals for EU Action (Bloomberg)
- Nokia Slashes 10,000 Jobs, Cuts Outlook (WSJ)
- H-1B Visas Hit the Cap, Sending Companies to Plan B (Businessweek)
- Swiss National Bank Vows to Defend Currency Floor (WSJ)
- Euro Crisis Deeper With Moody’s Downgrading Spain, Cyprus (Bloomberg)
- When all else fails... Truckers As Leading Indicator Show Stable U.S. Economic Growth (Bloomberg)
- Spain says markets are closing to it as G7 confers (Reuters)
- Germany Pushes EU Bank Oversight (WSJ)
- Falling Oil Prices Are No Mystery (Bloomberg)
- Aussie Rises After RBA Cuts Rate Less Than Swaps Suggest (Bloomberg)
- Euro falls on Spain worries as market awaits G7 (Reuters)
- Bad News Piles Up for China's Economy (Bloomberg)
- Japan Lawmakers Push to Curb Central Bank (WSJ)
- Lawyer Kluger Gets 12 Years, Bauer 9 for Insider Trades (Bloomberg)
- All eyes on Wisconsin governor's recall election (Reuters)
- The Global Obesity Bomb (BusinessWeek)