Maybe what we want and what we need has been confused. Maybe the thin veneer of ebullient hollow markets has been confused for the real activity of real companies. Maybe the theatre of a Wise Man with an Answer has been confused for intellectually honest leadership. Maybe theoretical certainty has been confused for practical humility. The problem with sparking renewed economic growth in the West is that domestic politics in the West do not depend on economic growth. What we have in the US today, and even more so in Europe (ex-Germany), are not the politics of growth but rather the politics of identity.
“At This Point You Just Have to Laugh”. In every important respect, the Fed and the ECB and their brethren are no longer central banks at all. They are Ministries of Markets, no different from a Ministry of Industry or – even more eerily similar – the Ministry of Culture you would find in most European governments. At this point the Narrative hegemony is complete. There’s no longer even a cursory bow to the idea that fundamentals matter. So I’m calling a top. Not a top in markets, because I honestly have no idea what’s going to happen next. But I’m calling a top in the Narrative of Central Bank Omnipotence because it has, in fact, reached its asymptotic limit of influence and belief.
- Global stocks bounce on sign ECB could launch ABS program (Reuters)
- Putin unveils Ukraine ceasefire plan, France halts warship (Reuters)
- Poroshenko Flummoxes Investors With About-Face on Truce (BBG)
- No Free Lunch for Companies as IRS Weighs Meal Tax Rules (BBG)
- Turkey Struggles to Halt Islamic State 'Jihadist Highway' (WSJ)
- Lego Becomes World's Largest Toy Maker on Movie Success (WSJ)
- U.N. says $600 million needed to tackle Ebola as deaths top 1,900 (Reuters)
- Goldman Sachs Named 'Stabilization Agent' for Alibaba Stock Offering (WSJ)
Russia Sanctions Blowback: Finland's Largest Dairy Lays Off 800, Spain Seeks EU Aid, Poland Complains To WTOSubmitted by Tyler Durden on 08/13/2014 14:44 -0400
Well that didn't take long. Mere day after Russia announced its ban on Western nation food imports, European countries are scrambling (as we explained why here). Greece has already expressed dismay, but now Spanish officials will meet with EU leaders to discuss offsetting the country’s estimated up to $800 million in food and agriculture losses due to sanctions. Poland is pissed and has complained to the WTO claiming "Russia has broken international law in both its embargo;" and Finland's largest dairy producer has announced 800 layoffs due to the sanctions. When does Europe tell Washington - enough!
Rogers tells us he's buying Chinese financials, remains long the yen and thinks gold could be going much lower.
Hint: it's not designer clothes, shoes, bags or watches.
- Hilsenrath: Next Cut in Fed Bond Buys Looms - Reduction to $65 Billion Could Be Announced on Jan. 29 (WSJ)
- China Workforce Slide Robs Xi of Growth Engine (BBG)
- Obama pulls the race card: Obama Says Race May Blunt Poll Standing in Interview (BBG)
- Chinese firm's IPO deal switches banks as chairman's daughter moves from JPMorgan to UBS (SCMP)
- China and Russia may hold joint naval drill in the Mediterranean (RT)
- Iran invite to Syria talks withdrawn after boycott threat (Reuters)
- Seven Chinese IPOs Halt Trading After 44 Percent Share (BBG)
- U.S. military says readying plans for Olympic security assistance (Reuters)
- Thank you Bernanke: Investors Most Upbeat in 5 Years With Record 59% Bullish in Poll (BBG)
- From His Refuge in the Poconos, Reclusive Imam Fethullah Gulen Roils Turkey (WSJ)
Patrick Byrne, the embattled CEO of Overstock.com, had plenty to say in a recent Fortune interview. The outspoken CEO, whose company recently became the first US retailer to accept Bitcoin (beginning later next year) aligns his beliefs with Ron Paul, holds enough gold that if "zombies walked the Earth," he'd be taken care of. Byrne believes "the long-run value of all fiat money is zero," adding that,"we're not going to get rid of the Federal Reserve any time soon, so bitcoin is a step in the right direction."
Perhaps it is because the prevalent theme of the past five years has been the ascent of central planning in the name of the Bernanke wealth effect, headed by Saint Ben himself, that has forced Americans to reassess, and moderate, their belief in "conventional" topics such as god, miracles and heaven. According to a new Harris Poll while a strong majority (74%) of U.S. adults do believe in God, this belief is in decline when compared to previous years as just over four in five (82%) expressed a belief in God in 2005, 2007 and 2009.
"...as an investor, nearly always if you buy panic and you know what you are doing, and then hold on for a number of years, you are going to make a lot of money.
You also have to be sure that your crisis or panic is not the end of the world, though..."
- Summers Faces Key 'No' Votes if Picked for Fed (WSJ)
- NYT Editorial Board Says Summers Would Be Wrong Fed Choice (NYT)
- Russia says it's compiled 100-page report blaming Syrian rebels for a chemical weapons attack (McClatchy)
- China says Syria crisis can't be resolved with military strike (Reuters)
- G-20 Faces Growth Threats as Syria Adds to QE Exit Risks (Bloomberg)
- Apple Supplier Fire Spurs Biggest Chip Price Rise in 3 Years (BBG)
- U.S. Decided Not to Horse-Trade With Russia on Assad (WSJ)
- Financial Crisis: For Corporations and Investors, Debt Makes a Comeback (WSJ)
- Gorman Says Chance of Another Financial Crisis ‘Close to Zero’ (BBG) and in other news, "no risk of a Us downgrade" - Tim Geithner
- A Biotech King, Dethroned (NYT)
It seems I arrived in New Zealand just in time to see the country implode over a bit of botulism and bad PR. Good thing I haven't converted all my dollars into kiwis just yet!
As the President prepares to address Congress (and the nation) with his next new new 'better bargain' deal to secure the economic future for the US, we thought it appropriate to dust off the economic scorecard for how things are going under his old new deal. Obviously, the President of the United States is not really solely responsible for where we are economically. The condemnation, or praise, must be applied equally to all branches of government responsible for the fiscal and monetary policy decisions made. The problems that exist today were not due to just the last few years of excess but rather come as a result of more than 30 years of fiscal irresponsibility that spans both Republican and Democratic Administrations alike. However, since President Obama has taken the position of responsibility for "clearing away the rubble and getting us back to where we were", we can review the economic data to see whether, or not, this is indeed the case.
From the huge demand for physical gold from Asia to repatriation demands, and from the draining of COMEX gold inventories to the excess supply of paper gold, there is an increasing 'gap' between the perceived 'price' of gold and the cost to get one's hands on the precious metal. Santiago Capital's Brent Johnson provides a brief but complete summary of the various conundra (which we have described in detail) occurring currently in the manipulated metals market. Perhaps the most telling phrase comes towards the end when Johnson notes, "I don't know how to say 'Hunt Brothers' in Mandarin, but it might not be a bad idea to learn."