• EconMatters
    07/13/2014 - 22:47
    Market participants are far too levered up, all on the same side, and well behind the monetary normalization curve of when the first rate hike is actually going to occur. 

New Normal

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Forbes Reveals Its "Top 30 Under 30" In Finance





With Trader Monthly magazine having, ironically, gone out business long ago, all those traders whose egos demanded that their insider trading connections put them at least in one of the iconic "Top X under X" league tables, pardon, rankings, had to bide their time in expectation of one day when their prowess to frontrun others or move markets with repeated calls to 555-7617 (with or without references to Anacott Steel) would be appreciated by such sterling Wall Street "experts" as Anthony Scaramucci. Well, for this year's crop of some 30 traders under 30, the day has arrived. And while Forbes may not be Trader Monthly, the amusement, the hubris and the behind the scenes dealing to appear in such a list, sure are still the same...

 
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JFK, Roads Closed, Northeast Paralyzed After Up To 20 Inches Of Snow Drop; Wind Chill Hits -40; 100 Milllion Affected





Snow and cold weather... in the Northeast... in January. Surely, such an unprecedented development in the New Normal should predictably justify explaining away at least a 1% miss of Q1 GDP (which when inventory destocking is factored in, will likely come in negative). Still, 20 inches of snow dropping in one night is somewhat abnormal, especially when one adds a blast of cold air to accompany them, and explains why even the area major airport hubs - JFK in New York and Logan in Boston - are all closed currently, while key NYC transportation hubs, I-84 and the LIE, closed at midnight and won't open until 8 am.

 
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Four Key Lessons From 2013





2013 already saw violent unrest in some of the most stable countries in the world like Singapore and Sweden, all underpinned by absolute disgust for the status quo. Whether today or tomorrow, this year or next, there will be a reckoning. The system is far too broken to repair, it must be reset. It’s simply absurd to look at the situation objectively and presume this status quo can continue indefinitely... that this time is different… that we’re somehow special and immune to universal principles.

 
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"Rich Will Keep Getting Richer In 2014" - In 2013, Top 300 Billionaires Added Half A Trillion In Net Worth





All the pundits who preach an economic recovery in the US always fall strangely silent when asked to share their thoughts on the following chart (taken from the St. Louis Fed), showing the annual change in real disposable income per capita in the US. What seems to stump them most is that aside from the 2012 year end aberration (due to accelerated distribution of dividends ahead of the 2013 tax hikes) is that in November the series finally posted its first Y/Y decline (-0.1%) since the Lehman collapse. But as the chart notes, the data is "per capita" and as everyone knows, under the New Normal, some "per capitas" are more equal than other "per capitas." Enter the billionaires. As Bloomberg summarizes, "The richest people on the planet got even richer in 2013, adding $524 billion to their collective net worth, according to the Bloomberg Billionaires Index, a daily ranking of the world’s 300 wealthiest individuals. The aggregate net worth of the world’s top billionaires stood at $3.7 trillion at the market close on Dec. 31, according to the ranking. "The rich will keep getting richer in 2014," John Catsimatidis, the billionaire founder of real estate and energy conglomerate Red Apple Group Inc., said in a telephone interview from his New York office.

 
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2013 Greatest Hits: Presenting The Most Popular Posts Of The Past Year





The fifth anniversary of Zero Hedge is just around the corner, and so, for the fifth year in a row we continue our tradition of summarizing what you, our readers, found to be the most relevant, exciting, and actionable news of the year, determined objectively by the number of page views. Those eager for a brief stroll down memory lane of prior years can do so at their leisure, by going back in time to our top articles of 2009, 2010, 2011 and 2012. For everyone else, without further ado, these are the articles that readers found to be the most popular posts of the past 365 days...

 
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Chart Of The Day: Worst. Loan Creation. Ever





For all the endless talk of a recovery during the past five years, there is a very tangible reason why for most people this is nothing but spin, propaganda and lies: when one strips away the retroactively adjusted GDP, the seasonally adjusted (and politically mandated) counting of temp jobs, the constantly upward revised jobless claims, the Fed's $4+ trillion balance sheet of course, and even the declining (yes, declining) real disposable income per capita, what one is left with is the lowest loan creation out of a recession (or depression) in history, and is at indexed levels last seen during the Lehman collapse over five years ago!

 
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Tuesday Humor: Don't Just Sit There, Flip Something





Whatever one thinks of the New Normal economy, one sure can't say there is a shortage of flipping opportunities.

 

 
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On This Day In History, Gas Prices Have Never Been Higher





It seems not a day goes by when the mainstream media (or your local friendly asset gatherer) proclaims the drop in gas prices from a Middle-East-turmoiling Summer as "great news" and very positive and an implicit tax cut... as they try to juice hopes and dreams of a better-than-expected holiday spending season. The sad truth - something unusual in this new normal - is that regular gas prices (at $3.258) have never been higher on Christmas Eve. It seems context does matter...

 
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The Illustrated Guide To 4 Years Of Currency Wars





While central bank intervention in the foreign exchange markets is nothing new, the last 4 years have seen unprecedented use of direct and indirect (jawboning) manipulation of exchange rates. As Goldman Sachs notes non-cooperative exchange-rate mechanics (i.e. currency wars) remains the new normal dynamic in world markets; and while some of the moves are generally consistent with cyclical (or structural conditions), efforts by central banks to 'manage' developed market rates in a low volatility range may come under further pressure with the Fed "tapering" as emerging market nations face money flow crises.

 
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The Fed, The Taper & What Happens "When The Kidnapper Wears Prada"





The rich continue to grow richer, and as David McWilliams (of Punk Economics) so eloquently explains in this brief clip, this has pushed the Fed into a corner. As the Federal Reserve gets a new chair and decides what to do next, whether to print $85 billion a month more or not, McWilliams examines the heist that is the new normal financialized economy - who gets all the loot and why today's kidnappers wear Prada. "Wake up," he blasts, explaining the uncomfortable reality of what happens when financial kidnappers dress up as loyal patriots and extort money in the name of the common good.

 
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Caption Contest: Back In The U.S.S.R.





Q. "How does it feel to be back in the "New Normal" USSR?"

A. "Horosho"

 

 
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ECB Fails To Sterilize Bond Purchases For Second Time In A Month





Back in November 2011, when the ECB failed to fully sterilize its weekly outstanding amount of bond purchases under its now defunct SMP program (replaced with the even more impotent OMT non-existent "bond buying" program), it caused a plunge in the Euro and sent European stocks reeling over fears what this may mean for European bank liquidity. This happened just as Europe was "turmoiling" and the ECB announced the flooding of the European banking system with hundreds of billions in excess liquidity via the collateral-soaking LTRO 1 and 2. A few hours ago, the very same thing happened after the ECB found only 109 bidders for today's weekly attempt to sterilize €184 billion in outstanding SMP holdings, and instead got bids for only €152.3 billion of the total leading to a €32 billion shortfall. This happened just a month after another failed ECB sterilization on November 26. The market barely noticed.

 
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Monday Humor: "New Normal" Retail Discounting





When all else fails...

 
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Larry Summers On Why "Stagnation Might Be The New Normal"... And Bubbles





"If secular stagnation concerns are relevant to our current economic situation, there are obviously profound policy implications... Some have suggested that a belief in secular stagnation implies the desirability of bubbles to support demand. This idea confuses prediction with recommendation. It is, of course, better to support demand by supporting productive investment or highly valued consumption than by artificially inflating bubbles. On the other hand, it is only rational to recognize that low interest rates raise asset values and drive investors to take greater risks, making bubbles more likely. So the risk of financial instability provides yet another reason why preempting structural stagnation is so profoundly important."

 
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The Uncomfortable Truth Of A New Normal America (In One Cartoon)





Despite the ongoing declarations by Wall Street's strategists and Washington's leaders that recovery is here (or just around the corner), record numbers of Americans in poverty and government handouts suggest otherwise. However, the insidious chipping away at the possibility of the American Dream has been replaced by an IPO-chasing, zero-interest-income-earning, yield-reaching, insider-trading, 'dance-while-the-music-is-playing', beggars can be choosers, get-rich-quick-scheme nation of takers (and entitled-ers)...

 
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