• 12/23/2014 - 13:41
    The system itself is completely corrupt and thoroughly rigged folks. What started as the totalitarian tiptoe has now turned into an extremely dangerous crony capitalist state.

Mexico

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It Would Cost Less Than Half To Put Inmates On Carnival Cruise Ships Than To Keep Them Locked Up In Jail





Virtual currencies are not the only ones having a bad day, at least in USD-denominated terms (which for all those bullish BitCoin, or Gold, or Silver the fiat-alternative currency, not the asset, should make all the difference in the world - alas most people still don't grasp the difference). Another entity that has seen better times is the terrifying accident-magnet also known Carnival Cruises. Following what seemed an endless barrage of TV crews scouring Carnival cruise ships, bringing a new definition to the term "poop deck", the inevitable has finally happened: CCL has been forced to admit that absent changing something very drastically, it is doomed. And since it can't or won't afford to spend billions on CapEx to actually repair and modernize its assets (like virtually every other S&P500 company), it has done the only thing it can: crush prices, and pray to make up for this in volume and impulse purchases what it is about to lose in cruise revenues. As Bloomberg reports, in order to "entice" customers to come back to the good life, Carnival is now offering a cruise at the low, low price of $38 a night, or less than a stay at a Motel 8.

 
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Key Events And Issues In The Week Ahead





The week ahead is light on major market moving data releases. From a policy perspective and in light of the recent moves in treasuries, FOMC minutes are likely to be followed by markets. Retail sales in the US are likely to print below consensus both on the headline and on the core metrics. That said, this needs to be seen against the backdrop of first quarter retail consumer spending data surprising to the upside. Producer prices are also likely to come in on the soft side of market expectations. Finally, do not expect large surprises from the U of Michigan consumer confidence.

 
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The 21 Key Statistics About The Explosive Growth Of Poverty In America





If the economy is getting better, then why does poverty in America continue to grow so rapidly?  Yes, the stock market has been hitting all-time highs recently, but also the number of Americans living in poverty has now reached a level not seen since the 1960s.  Yes, corporate profits are at levels never seen before, but so is the number of Americans on food stamps.  Yes, housing prices have started to rebound a little bit (especially in wealthy areas), but there are also more than a million public school students in America that are homeless.  That is the first time that has ever happened in U.S. history. So should we measure our economic progress by the false stock market bubble that has been inflated by Ben Bernanke's reckless money printing, or should we measure our economic progress by how the poor and the middle class are doing?  Because if we look at how average Americans are doing these days, then there is not much to be excited about. Unfortunately, that bubble of false hope is not going to last much longer.  In fact, we are already seeing signs that it is getting ready to burst.

 
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Guest Post: The Myth Of U.S. Energy Independence





There is no hope whatsoever of so-called U.S. "energy indepedence" unless three things happen. First, environmental rules have to be wound back to 1970 standards -- in other words, disband the EPA and make civil plaintiffs show actual harm, not just hypothetical harm because someone goofed on a sheaf of mandated paperwork. Second, stop wasting taxpayer money on nonsense like $25 per gallon biofuel. Third and most urgently, stop subsidizing Wall Street. Let the market decide what interest rates make sense, rewarding companies who can find and produce oil, instead of gorging themselves sick on artificially cheap junk bonds that money-losing shale swindlers will never pay off.

 
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Ten Fast Facts On The Economics Of Immigration





While immigration was pretty far down on the priority list at this time last year, recently the topic has taken a front seat in lawmakers’ chambers down in Washington. ConvergEs's Nick Colas notes that policymakers on both sides of ideological spectrum are establishing positions and recommendations for reform, and are familiarizing themselves with some of the lesser-known facts about immigration. In a nutshell, he explains: immigration is not all about border crossings from Mexico and undocumented workers. There are many more figures – and costs – associated with immigration, most of which have palpable and measurable impacts on the US economy. From GDP growth to the health of the housing market, immigration’s influences may not be widely known, but should be in order for policymakers and investors to make informed decisions.

 
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Guest Post: The Cyprus Deal And The Unraveling Of Fractional-Reserve Banking





The “Cyprus deal” as it has been widely referred to in the media may mark the next to last act in the the slow motion collapse of fractional-reserve banking that began with the implosion of the savings-and-loan industry in the U.S. in the late 1980s. The happy result will be that depositors, both insured and uninsured, in Europe and throughout the world will become much more cautious or even suspicious in dealing with fractional-reserve banks. They will be poised to grab their money and run at the slightest sign or rumor of instability. This will induce banks to radically alter the sources of the funds they raise to finance loans and investments, moving away from deposit and toward equity and bond financing.

 
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The End Of The Central Bank Put: From Mugabenomics To MadMaxnomics





There exists a super-Bernanke who proved also a super-Hollande, a gentleman who Japanese Prime Minister Shinzo Abe cannot compete with: his name is Robert Mugabe, the president of Zimbabwe. When he took power, he seized the farmlands of one social group to give them to another social group. Afterwards, in part because the new social group did not manage the farms that well, the economy took a turn for the worse. Therefore, the state issued some bonds to finance its spending and asked the central bank to issue some money to buy this government debt. But they printed big time and turned the printing press into something of a cosmic proportion. According to Professor Steve Hanke from John Hopkins, monthly inflation was 80 billion percent, so per year it is a 65 followed by 107 zeros. This is what we call Mugabenomics, the conjunction of (i) state-forced wealth transfer between two social groups along with (ii) the monetisation of the debt. As we shall see below, Mugabenomics, or at least its mild version implemented now in the Western hemisphere, has drastic consequences on the final episode of the global financial crisis.

 
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Frontrunning: March 20





  • Cyprus works on Plan B to stave off bankruptcy (AP)
  • Cyprus seeks Russian bailout aid, EU threatens cutoff (Reuters)
  • Freddie Mac Sues Multiple Banks Over Libor Manipulation (BBG)
  • Bernanke Seen Keeping Up Pace of QE Until Fourth Quarter (Bloomberg)
  • Italian president seeks way out of political stalemate (Reuters)
  • Chinese factories struggle to keep staff (FT)
  • South Korean banks, media report network crash (CBC)
  • BlackBerry Inventor Starts Fund to Make Star Trek Device Reality (Bloomberg)
  • Osborne Should Be Fired, Voters Say in Pre-Budget Poll (Bloomberg)
  • Obama Begins First Visit to Israel as President (WSJ)
  • Anadarko finds ‘potentially giant’ oilfield (FT)
  • Britain's Osborne boxed in by austerity on budget day (Reuters)
  • MF Global reaches agreement with JPMorgan (FT)
 
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Is Spain Preparing For Its Own Deposit "Levy"?





While Spain's economy minister Luis De Guindos proclaimed in the Senate today that bank deposits under EUR100,000 are "sacred"and that "Spanish savers should stay calm," Spain, it would appear, has changed constitutional rules to enable a so-called 'moderate' levy on deposits - as under previous Spanish law this was prohibited. For now, they claim the 'levy' will be "not much higher than 0%" and is mainly aimed at regions in Spain that have "made no effort to collect taxes" based on new revenue expectations. As El Pais reports, the minister of finance and public administration, Cristobal Montoro, defends the need for such a 'levy' in their constitution on the basis of standardizing taxes across regions (and is preparing a proposal on the amounts to be paid) and although it would appear that while the European Commission could previously argue that such a 'tax' would violate the free movement of capital in Europe, it now leaves the door open to eventually effectively taxing the deposits. We can't help but remember the Tequila crisis and the constant reassurances from Zedillo up until even the night before Mexico devalued...

 
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Eric Holder: Organized Crime’s Man of the Year





If any person is too big to prosecute then your justice system is a sham, a lie, a farce, a joke, a bastardization of all that America used to stand for.

 
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Guest Post: Is The U.S. Oil Boom About To Bust?





The United States is expected to lead the pack among non-OPEC members in terms of oil supply growth for 2013. That's the assessment from this month's market report from the Vienna-based cartel. OPEC, in its forecast, said U.S. oil supply growth is projected at 600,000 bpd this year. That figure, however, is 40,000 bpd less than the previous year. The Vienna-based cartel said U.S. oil growth could go either way for 2013, but noted growth from tight oil developments in states like North Dakota is expected to slow down. While improved drilling technology may offset some of that decline, OPEC said that factors like price issues may dampen the oil boom in the United States.

 
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Carnival Becoming A Circus As Another Cruise Ship Suffers "Power Outages, Overflowing Toilets"





While "this time may be different" for the centrally-planned stock market, every historic example of subsequent ruin notwithstanding, the very recent past is again hitting Carnival Cruise Lines with a vengeance, as one short month after its disabled Triump cruise ship fiasco, in which passengers were trapped on board a filthy ship for five days, the cruise company is forced to suffer through a very humiliating case of deja vu. Reuters reports, "A Carnival Cruise Lines ship was stuck at port in St. Maarten in the Caribbean on Thursday with equipment trouble, a month after another Carnival vessel was disabled in the Gulf of Mexico by a fire, trapping thousands of passengers for nearly five days. The captain of the Carnival Dream reported a problem with the emergency diesel generator, which controls the ship's propulsion, a U.S. Coast Guard spokesman said.  "Right now the passengers are being kept on board the ship for accountability reasons," Doss said. "They were scheduled to leave today so the captain has decided to have everybody remain on board at this time. CNN reported that passengers aboard the Carnival Dream had contacted the cable news channel complaining of power outages and overflowing toilets, tales reminiscent of the troubles on the Carnival Triumph." And to think the passengers could have just stayed home, opened their E-trade accounts, BTFD, and basked in the glow of the wealth effect, knowing full well at the current rate of Fed liquidity injections they could all soon afford their own private island.

 
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