Privacy: the final frontier. These are the voyages of the NSA, as it enters every computer and pries whatever data can be stolen and recorded in perpetuity. Its ongoing mission: to explore the internet and all TCP/IP packets, to seek out new emails, phone records, backdoors, webcams and bank accounts, to boldly go where no man with or without a search warrant has gone before.
Merkel Wins Bellwether Vote As Coalition Partner Founders; Anti-Euro Party Ascent Could Derail CoalitionSubmitted by Tyler Durden on 09/15/2013 12:50 -0500
There was good and bad news for Angela Merkel as today's exit polls from the Bavaria (GDP of $619 billion, bigger than the output of Poland or Austria) state elections - the bellwether vote ahead of next weekend's federal elections (previewed here) - were released. On one hand, the CDU's sister party, the Christian Social Union or CSU, was set to win a majority in Bavarian state elections (where the CDU does not contest the ballot), giving the incumbent a boost as she heads into the final week of her campaign before a national vote Bloomberg reports. But the surprise of the day was the strong showing of the The Free Voters, who want Greece to exit the euro, oppose euro-area bailouts and want to trim the power of the European Union, won 8.5 percent, the ZDF projection showed. It is precisely the ascent of anti-Euro powers that could upset the final election "arithmetic" in jeopardy. As Reuters reports, "a new anti-euro party could enter Germany's national parliament after an election next week, pollsters said on Sunday, potentially upsetting Chancellor Angela Merkel's hopes of returning to power with her current coalition partner."
Financial circles in Hong Kong are buzzing today on the new Goldman Sachs projection that gold may drop below $1,000 an ounce. The central thess: since the US economy is out of the woods, there’s no longer a need for gold as a risk hedge. But as one senior-level manager at a major investment bank noted, "Nobody knows what the f**k is going on..." However, this mentality entirely misses the point of precious metals. When the hopes and dreams of the entire global financial system rest on the lies of politicians, the whims of central bankers, and the mountains of debt they have all accumulated, things could turn on a dime... tomorrow. Gold is an insurance policy. It’s a form of money that you might never need to use. But should that need ever arise, you’ll be so much better off for owning it.
Overnight asset classes got a jolt following a report by Nikkei that Obama was moving toward naming Summers the next Fed chairman, citing “several close US sources,” pushing stocks modestly lower in Europe, with bond yields higher. According to the report, Obama is to name Summers as next Fed chairman as early as late next week, after the Federal Open Market Committee meeting. Otherwise, risk is still digesting the news of the confidential Twitter IPO, as it is becoming quite clear that some of the largest names (Hilton also announced yesterday) are seeking to cash out in the public markets. Is this the top?
Stanley Druckenmiller's World View: "Catastrophic" Entitlement Spending, "Bizarre" & "Illusory" Asset Markets, & Beware The TaperSubmitted by Tyler Durden on 09/11/2013 20:50 -0500
During an extended interview with Bloomberg TV, billionaire investor Stanley Druckenmiller provided a seemingly fact-based (and non-status-quo sustaining, commission-taking, media-whoring) perspective on a very wide variety of topics. The brief clips below touch the surface, with the detailed annotated transcript below providing details, as Druckenmiller opines on the looming catastrophe in entitlement spending "when you hear about the National debt being $16tn; if you actually took what we promised to seniors and future taxes, present value to both of them, that number is $200tn," why the Fed exit will be a big deal for markets, "it is my belief that QE has subsidized all asset prices and when you remove that, the market will go down," and his changing views on Obama "I was drinking the hope and change Kool-aid... in hindsight, he probably needed more experience for this job." Looking back to the financial crisis, he warns, "...a necessary condition to have a financial crisis, in my opinion, is too loose monetary policy that encourages people to take undue risk and go on the risk curve and do silly things. We should have shut this down in 1998, 1999. The NASDAQ bubble, we should have raised rates, we didn’t. Then we got the implosion."
I’ll scratch your back and you can scratch mine is the motto of the National Security Agency according to the latest revelations made about the data stored by the immense surveillance program of the NSA, which routinely provides intelligence data with Israel.
Five years after the financial crisis former Treasury Secretary Henry Paulson says "the world shouold prepare for a new financial crisis" in tomorrow's Handelsblatt newspaper. His view, based on the "unacceptable" nature of too-big-to-fail banks and the lack of reform of the GSEs and the shadow-banking industry, stands in direct opposition to the leader of one of those TBTF banks. James 'not Jim' Gorman, CEO of Morgan Stanley, told Charlie Rose last week that "the probability of [it] happening again in our lifetime is as close to zero as I could imagine." Who would you trust?
No, that is not a typo, at least not according to the blog of traffic counting website Compete.com, which notes that with 7.1 million unique visitors, the website of the newspaper that broke the Edward Snowden scandal and has been covering the NSA's spying scandal has seen an unprecedented increase in traffic. Granted the Y/Y number is an aberation due to the switchover from Guardian.co.uk to an impartial dot com address, but either way, as Compete notes, just "Guardian.co.uk over the recent months also shows that the news outlet had their best month for unique visitors (UVs) in two years."
I guess this means we can quote him on it...
Sylvio Berlusconi is no stranger to being a catalyst for European crisis: in November 2011 it was his unwillingness to leave the PM post (and be replaced with a Goldman technocrat), that precipitated a bond crisis accented by the ECB's unwillingness to interject and buy Italian bonds until the career politician had left. Tomorrow, an Italian Senate committee is due to begin hearing arguments on whether to eject ex-PM Berlusconi from Parliament and on. The special Senate Elections and Immunities Committee will have its first hearing on Berlusconi’s expulsion from the Parliament and six-year ban on 9 September. It seems now less likely that a vote will already take place on 9 September. The decision of the commission will be followed by a vote of the whole Senate. According to Deutsche Bank, the duration of the process is unclear. Indeed, it could be lengthened by several months if the commission (or the parliament) asks for a ruling of the Constitutional Court. However, a worst case scenario could see the government fail, early elections being called, and a repeat of this February's political circus all over again, only this time with even less political capital, if such a thing ever existed in Italy.
- 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)
Russia’s only aircraft carrier will visit Moscow’s small naval base in Syria later this year, BBC Monitoring reported citing a newspaper published by the Russian government. Earlier this year a Russian naval officer told Interfax that the Navy had decided to end the Admiral Kuznetsov’s scheduled maintenance early and deploy it on a mission that would include a stopover in the Mediterranean Sea, where Russia has established a permanent naval task force in response to the hostilities in the Middle East. That report did not specify whether it deployed to the Tartus military base in Syria, although speculation abounded.
- Yes: Support Builds in Congress for U.S. Strike Against Syria (WSJ)
- No: Boehner backs Obama on Syria, but House leaning toward ‘no’ (The Hill)
- U.S. Congress fight over Syria pits establishment versus upstarts (Reuters)
- Wednesday humor: Japan’s Abe Says Fukushima Will Be Resolved Before 2020 Olympics (BBG)
- Bank of Japan to Consider Further Easing if Sales Tax Hike Goes Ahead (Reuters)
- S&P accuses U.S. Justice Department of filing $5 billion lawsuit against it in "retaliation" for the company's downgrade of America's debt in 2011 (WSJ)
- German Candidates Spar Over Records (WSJ)
- Emerging Nations Save $2.9 Trillion Reserves in Rout (BBG)
- Split Congress Mulls Denial of Military Force Request (BBG)
- Sharp Fall in Overseas Investment By Chinese Firms (WSJ)
- Jorge Lemann: He Is...the World's Most Interesting Billionaire (BusinessWeek)
- Why Amazon Is on a Warehouse Building Spree (BW)
With the value of the rupee plunging to new lows, the current account deficit at an all-time high and inflation running at nearly a ten-percent annual clip, India is in serious economic trouble. Indeed many are beginning to wonder whether the country is edging toward a replay of the events in the summer of 1991. Back then, an acute balance of payments crisis forced New Delhi into the indignity of pawning its gold reserves in order to secure desperately needed international financing. At a small public event the other week, Duvvuri Subbarao, the outgoing head of the central bank conceded that policymakers rarely learn from their mistakes: "...in matters of economics and finance, history repeats itself, not because it is an inherent trait of history, but because we don’t learn from history and let the repeat occur."
The newspapers of the mainstream media across the Western world are jumping on the same bandwagon and making sure that the most used word this week is Syria followed closely by ‘bomb the b’stards’.