New York Times
Update: Slovakia’s Lawmakers Delay European Bailout Fund Vote, WSJ Says. WSJ reports that Repeat vote on EFSF may be held later this week; unlikely to take place Wed. as more time for political talks needed, WSJ reports, without citing anyone. Govt expected to lose confidence vote, paper says. However, the confidence vote is expected to still pass, or rather, fail. Which would lead to a government reshuffle into a configuration that will pass the EFSF vote. All speculation.
In terms of binary events on today's docket, the most important for the euro and eurozone by a wide margin is the Slovakian EFSF-ratification vote which is set to begin shortly, and where hopes have faded that a favorable resolution can be reached, at least in the immediate horizon. Those who want to follow developments in real time can do so courtesy of the following live blog at sme.sk updated every several minutes.
Physical demand for gold in Shanghai has been “extremely strong” this week following the week-long Chinese holiday, Mitusi note in their morning report. UBS are more circumspect but note that physical demand in China appeared to be “quite decent” in the first trading day after the Golden Week holiday. They note that combined volumes for the SGE Au9999 and Au9995 contracts surged to the highest since February 14th. Year-to-date volumes are now 11% higher than 2010 levels. UBS “expect demand to remain strong until the Chinese New Year holidays in late January 2012.” A further sign of the significant scale of demand from Asia and from China in particular is seen in the news today that China has installed its first gold vending machine. More importantly, China and Chinese banks are planning to roll out another 2,000 gold ATMs nationwide. Each ATM can hold up to 200 kilograms of gold bullion in varying denominations at once.
Dire numbers prove that running up deficits and printing trillions can't create a healthy economy. Yet, inexplicably, it's what the status-quo media continue to propagate.
In the last 12 months, the numbers of distinct users on Hulu.com (in the United States) have outpaced the metered Nielson ratings of all FOUR television networks combined.
Our tribute to Steve Jobs..
The White House is lobbying European governments to shut up and do something. No more disputes in public. The world is collapsing, and it's time to act boldly. Hank Paulson's extortion racket is back.
On 17 September The Wall Street Journal published a fascinating article on “peak oil,” “There Will Be Oil,” written by Daniel Yergin, chairman of IHS Cambridge Energy Research Associates, an energy research and consulting firm and deserved recipient of Pulitzer Prize for his 1991 book, The Prize: The Epic Quest for Oil, Money and Power. According to The Wall Street Journal, “There Will Be Oil” “is adapted from his new book, The Quest: Energy, Security and the Remaking of the Modern World.” The essay will doubtless have widespread influence amongst prosperous The Wall Street Journal readers, but in his glib dismissal of “peak oil” theory advocates, Yergin glosses or ignores a number of issues fundamental to the larger picture, for whatever reason, and these oversights should be considered in any evaluation of the piece and the peak oil “specter.”
As we have been pointing out since the beginning of the week, the one defining feature of the past 5 days has been a relentless short covering rally. And while the mechanics were obvious, one thing was missing: the reason. Well, courtesy of David Rosenberg's latest, we may now know what it is. Bottom line: for all who think that Bernanke is about to serve just Operation Twist next week... you ain't seen nothing yet. "The consensus view that the Fed is going to stop at 'Operation Twist' may be in for a surprise. It may end up doing much, much more." Rosie continues: "Look, we are talking about the same man who, on October 2, 2003, delivered a speech titled Monetary Policy and the Stock Market: Some Empirical Results. I kid you not. This is someone who clearly sees the stock market as a transmission mechanism from Fed policy to the rest of the economy. In other words, if Bernanke wants to juice the stock market, then he must do something to surprise the market. 'Operation Twist' is already baked in, which means he has to do that and a lot more to generate the positive surprise he clearly desires (this is exactly what he did on August 9th with the mid-2013 on- hold commitment). It seems that Bernanke, if he wants the market to rally, is going to have to come out with a surprise next Wednesday." In other words, stocks are now pricing in not just OT 2, and a reduction in the IOER, but also an LSAP of a few hundred billion. There is, however, naturally a flipside, to Bernanke's priced in announcement: "If he doesn't, then expect a big selloff." In everything, mind you, stocks, bonds, and certainly precious metals. And, of course, vice versa.
High-Level Officials Eager to Spill the Beans About What REALLY Happened on 9/11 … But No One In Washington or the Media Wants tSubmitted by George Washington on 09/09/2011 02:12 -0400
This post doesn't get into whether 9/11 was caused by incompetence, criminal negilgence or something more sinister ... It focuses only the fact that high-level whistleblowers want to tell us what happened, but no one in Washington or the flapping jaw media wants to hear about it
Following today's New York Times invasion of CNBC, where two of its most irrelevant columnists are now part of CNBC's most irrelevant hourly block so at least it is symmetric, Rick Santelli and "The Earth is flat...but I sure am round" author Tom Friedman had a choice exchange of words which culminated with Rick Santelli finally telling the world's most overhyped patron saint of globalization the bitter truth. In the meantime, not even the very non-flat Friemdan had an answer to Santelli's very simple question: is Social Security a ponzi scheme... And while we are there, we wonder just what noun would be used to describe Friemdan if asked if the entire Keynesian model is an even bigger ponzi.
Yesterday Bruce Krasting proposed a thesis, which despite some notable complications and substantial political challenges, does have its merits: namely that in pursuing a mass "beneficial" refi of agency mortgages to some threshold interest rate level, say 4%, accompanied by a surge in Fed MBS prepayments (recall that this component of QE Lite has stalled massively and now accounts for about $15 billion in POMO each month - a sad reminder of the $100 billion + beast it was in its QE2 heyday), the administration and the Fed would effectively enact a GSE-funded version of Operation MBS Twist, in which the Fed reduces its agency holdings while extending Treasury duration. Alas, Bruce may not have made it clear that this version of Twist with a Twist has an annual cost of about $85 billion invoiced to US taxpayers each year. And while we believe that plain vanilla QE (either LSAP or Chubby Checker) has a chance of passing, especially if stocks do plunge by another 20%+, QE that has to be indirectly funded by taxpayers (in the form of quarterly capital make wholes for the GSEs from the Treasury), has virtually no chance of passing. But we have been wrong before. Regardless, here is Dick Bove, whose opinion for some inexplicable reason is still relevant (and yes, we are guilty in spreading it), who takes the refi stimulus thesis and presents his views on its feasibility. And while we are the first to mock Bove, his conclusion does have some merit: "Until [the administration] figures out that more production is what is required we will continue to take money out of one pocket to put it into another and assume that we have accomplished something."
Every now and then it is easy to forget that the one or two "better than expected" data points blasted by flashing headlines do nothing that merely mask what is an otherwise quite deplorable and deteriorating reality. For the disconnect between America and the rest of the world look no further than this chart showing the dramatic divergence between the DJIA, which has just gone positive for the year, and every other major global stock market. Yet for those who require a narrative to go with their numbers, here is The Economic Collapse with the latest of their traditionally comprehensive bulletins, this time summarizing the "25 signs that the financial world is about to hit the big red panic button."
Although we waxed skeptical here the other day about Warren Buffett’s just-announced $5 billion stake in Bank of America, we allowed for the possibility that the deal will provide a handsome payoff to him no matter what happens to the bank. B of A could implode, after all, a victim of sinking collateral values for its mortgage loans, and of litigation over its securitized-lending business.
Anyone who thinks Buffett’s decision to buy BAC is a positive for the market needs to get their heads checked. Buffett bought GS right before the entire financial world imploded!!! You think he somehow timed this purchase well?
No, Mr. Krugman ... war is NOT good for the economy!