As the saying goes, ‘desperate times call for desperate measures.’ The phrase is bandied about so frequently, it’s generally accepted truth. But I have to tell you that I fundamentally disagree with the premise. Desperate times, in fact, call for a complete reset in the way people think. Desperate times call for the most intelligent, effective, least destructive measures. But these sayings aren’t as catchy. This old adage has become a crutch – a way for policymakers to rationalize the idiotic measures they’ve put in place...
If you want to get an idea of where the rest of America is heading, just take a trip through the western half of West Virginia and the eastern half of Kentucky some time. Once you leave the main highways, you will rapidly encounter poverty on a level that is absolutely staggering. Overall, about 15 percent of the entire nation is under the poverty line, but in some areas of eastern Kentucky, more than 40 percent of the population is living in poverty. After decades of decline, vast stretches of impoverished Appalachia look like they have been through a war. Those living in the area know that things are not good, but they just try to do the best that they can with what they have.
Despite 'blaming' the drop in the cost of dry bulk shipping on Colombian coal restrictions, it seems increasingly clear that the 40% collapse in the Baltic Dry Index since the start of the year is more than just that. While this is the worst start to a year in over 30 years, the scale of this meltdown is only matched by the total devastation that occurred in Q3 2008. Of course, the mainstream media will continue to ignore this dour index until it decides to rise once again, but for now, 9 days in a row of plunging prices is yet another canary in the global trade coalmine and suggests what inventory stacking that occurred in Q3/4 2013 is anything but sustained.
We are not sure how to interpret the fact that Hilter's manifesto Mein Kampf is #3 and #4 on iTunes Political books list; but undoubtedly it marks something of significance...
How fortunate for governments that the people they administer don’t think.
- Adolf Hitler
We remain hopeful that these sales trends spring from a curiosity on behalf of the population, rather than from a darker more hateful place.
Nearly a year ago, we predicted that the party for bond traders was over. The reason: MBS bond trader Jesse Litvak, formerly of mid-tier, perpetual aspirational bulge bracket, and the place where every fired UBS banker has a safety cubicle, Jefferies, got not only too greedy (that's ok, everyone on Wall Street is), but what's worse, got caught, and as we said at the time, ended the party for Wall Street's bond trading cash bonanza. Little did we know how correct we would be, because not only did the former MBS trader, who "proceeded to rip virtually all of his clients on seemingly every single trade he executed for the three years he was employed at Jefferies, lying to everyone in the process: both clients and in house colleagues, generating some $2.7 million in additional revenue for Jefferies for the duration of his tenure, and who knows how much in personal bonuses", end the party, but it appears he unleashed the next big regulatory crack down on Wall Street. And one which may just cost perennial Department of Justice favorite JPMorgan another several billion in "litigation reserves."
We are quietly confident that the gentleman selling the 'radiation-free' snow will be inundated with offers from Japanese winter sports enthusiasts (or perhaps even Sochi-ites)...
"Paper and digital markets levitate, central banks pull out all the stops of their magical reality-tweaking machine to manipulate everything, accounting fraud pervades public and private enterprise, everything is mis-priced, all official statistics are lies of one kind or another, the regulating authorities sit on their hands, lost in raptures of online pornography (or dreams of future employment at Goldman Sachs), the news media sprinkles wishful-thinking propaganda about a mythical “recovery” and the “shale gas miracle” on a credulous public desperate to believe, the routine swindles of medicine get more cruel and blatant each month, a tiny cohort of financial vampire squids suck in all the nominal wealth of society, and everybody else is left whirling down the drain of posterity in a vortex of diminishing returns and scuttled expectations."
Bottom line for financials is that 2014 is looking to be a tough year, even if the Sell Side wants to believe that growing earnings is still possible on flat revenue
Emerging Market equities have tumbled over 4% in the last 2 days on heavy volume. The last time the world experienced a major Emerging Market meltdown, the US was still by far the world's major 'consumer'. However, as the following chart from JPMorgan shows, that is very much not the case anymore and the last few days ugly echoes of the mid-Summer Taper Tantrum in Emerging Markets (most notably Asia), while being shrugged off by most, may be much more important to any sustained global recovery than your friendly local asset-gatherer would ever care to admit.
Despite the supremacy of Fed hubris and punter confidence in the Fed's Frankenstein Economy, the likelihood of some tail risk emerging out of nowhere is rising. Indeed, the very confidence in central planners, i.e. that the Fed is now the ultimate power in the Universe, is a prerequisite for collapse.
Seals, Sea Lions, Polar Bears, Bald Eagles, Sea Stars, Turtles, King and Sockeye Salmon, Herring, Anchovies, Sardines All DyingSubmitted by George Washington on 12/30/2013 21:34 -0400
"We're an easy target for recruiters," one homeless man explains. "We turn up here with all our bags, wheeling them around and we're easy to spot. They say to us, are you looking for work? Are you hungry? And if we haven't eaten, they offer to find us a job." As Reuters exposes, 3 years after the earthquake and tsunami that caused the meltdown at Fukushima's nuclear facility, Northern Japanese homeless are willing to accept minimum wage (from yakuza-based entities) for one of the most undesirable jobs in the industrialized world: working on the $35 billion, taxpayer-funded effort to clean up radioactive fallout across an area of northern Japan larger than Hong Kong.
"There's no near-term resolution in sight," warns TCW Group's David Loevinger, as "Thailand has entered an extended period of political instability." This uncertainty has led to foreigners abandoning the nation's stock market in record size - and collapsing the Thai Baht at the same time. Why should US investors be worried? Thailand was the catalyst that started the 1997 Asian crisis, broke LTCM, and instigated the most epic experiments in central bank liquidity provision on record. With the Fed Tapering, both Indonesia and Thailand (and Turkey) are already seeing major currency collapses but of course, as long as US equities rise, no one cares (which is exactly what they said last time)...
Propaganda, phony fixes and more debt can only cover the widening gap between fiscal reality and official fantasy for so long. So what else besides the potential for another global financial meltdown bears watching in 2014? Here are a few worthy prospects... as we doubt the same illusions and tricks will get the global economy through 2014-2015 unscathed.
It seems US sailors aren't the only ones who three short years after the Fukushima disaster are being stricken by cancers and other radiation-induced diseases. For once, the media blackout surrounding the Japanese nuclear power plant tragedy appears to have crumbled, and at least a portion of the truth has been revealed. Hong Kong's SCMP reports that fifty-nine young people in Fukushima prefecture have been diagnosed with or are suspected of having thyroid cancer. All of those diagnosed were under the age of 18 when the nuclear meltdown occurred in 2011 and while "experts" are divided over the cause, Okuyama University's head of oncology stated "the rate at which children in Fukushima prefecture have developed thyroid cancer... is several times to several tens of times higher [than average]."