Malodorous taper emanations and bankruptcies are a toxic mix for munis
David Stockman's exclamation at the "betrayal" realized within the latest so-called "festerng fiscal" budget deal is taken a step further with Peter Schiff's head-shaking diatribe on Congress' inability to show that it is truly "capable of tackling our chronic and dangerous debt problems." So America blissfully sails on, ignoring the obvious fiscal, monetary, and financial shoals that lay ahead in plain sight. I believe that will continue this dangerous course until powers outside the United States finally force the issue by refusing to expand their holding of U.S. debt. That will finally bring on the debt and currency crisis that we have created by our current cowardice.
it's not Spago, nor Per Se. It isn't located on Rodeo Drive or in Columbus Circle. The restaurant with the longest waiting list, five-years to be precise, is a small, nondescript, 12-table basement located in Earlton, N.Y., named simply enough Damon Baehrel after its owner and chef. Its guests come from 48 countries and include such celebrities as Jerry Seinfeld, Martha Stewart and Barack Obama himself. However what makes Baehrel's restaurant the most exclusive restaurant in the world is not the decor, nor the patrons, some who fly overnight from Manhattan to pay $255 for dinner (before wine and tip), nor the hype (although all the advertising is through word-of-mouth), but the food, which is all cultivated, grown, prepared, cooked and served from and on the property, and where Baehrel is literally the only employee. "I’m the chef, the waiter, the grower, the forager, the gardener, the cheesemaker, the cured-meat maker, and, as I will explain, everything comes from this 12-acre property."
There are only a few UK and U.S. banks on the list of global safe banks. This should give pause for thought. Notice that many of the safest banks in the world are in Switzerland and Germany.
- Presidential Task Force Recommends Overhaul of NSA Surveillance Tactics (WSJ)
- Monte Paschi's Largest Shareholder Says It Will Vote Against $4.1 Billion Capital Increase (WSJ)
- SAC Reconsiders Industry Relationships—and Its Name (WSJ)
- Icahn’s Apple Push Criticized by Calpers as ‘Johnny Come Lately’ (BBG)
- In Yemen, al Qaeda gains sympathy amid U.S. drone strikes (Reuters)
- Missing American in Iran was on unapproved mission (AP)
- In China, Western Companies Cut Jobs as Growth Ebbs (WSJ)
- U.S. lays out steps to smooth Obamacare coverage for January (Reuters)
- Las Vegas Sands Said to Drop $35 Billion Spanish Casino Proposal (BBG)
- Twitter Reverts Changes To Blocking Functionality After Strong Negative User Feedback (TechCrunch)
While the generic overnight futures meltup is present this morning, it is nothing compared to what the epic surge in the EURJPY early in the overnight session suggested it would be, and in fact the levitation in US equities driven as usual by Yen carry trades (just what is the P/E or PEG on the USDJPY, or the EURUSD for that matter?) is far more muted than seen in recent days. The main reason for the easing of the carry-risk signal pair is the increasing confusion over what may happen next week when increasingly more are convinced Bernanke will announce a Taper, and since everyone remembers the summer very vividly, the last thing anyone wants is to be the last Kool-aid drinker at the centrally-planned party.
Despite rumors of a 'deal', "The major issues that we think are necessary to jump-start the American economy continue to languish," reflects one lobbyist on what Bloomberg reports will be Congress's least productive year ever, with just 56 pieces of legislation signed into law so far. The former record low, reached in 1995, was 88 new laws. 2013 was supposed to be the year lawmakers, free of immediate election pressures, would revamp U.S. immigration policy, pass a debt-lowering budget and expedite a pair of trade deals. Instead, partisan rancor grew deeper; and to make matters worse, the politicians took plenty of time off - the House has been out 191 days, and the Senate 199 days.
Despite the ratings agencies (Moody's Dec 5th and S&P Nov 22nd) seemingly premature raising of the outlook for the nation's sovereign credit rating (from negative to stable), economic hardship in Spain looks likely to continue as loan defaults surge and the unemployment rate remains the second highest in the EU.
The grind higher in equities, and tighter in credit, continues as markets brush aside concerns about a December taper for the time being. Overnight futures levitation has pushed the Fed balance sheet driven record high S&P even higher, despite as Deutsche Bank points out, the fact that we had three Fed speakers advocate or talk up the possibility of a December taper, including the St Louis Fed’s James Bullard who is viewed as a bit of a bellwether for the FOMC. Bullard said the probability of a taper had risen in light of the strengthening of job growth in recent months. Indeed, he noted that the best move for the Fed could be a small December taper given the improving jobs data but below-target inflation readings. The Fed could then pause further tapering should inflation not return toward target during the first half of 2014. Looking at today’s calendar, the focus will be on US JOLTs job openings - a report which Yellen has previously highlighted as an important supplement to more traditional labour market indicators. US small business optimism and wholesale inventories are the other major data releases today. As mentioned above, US financial regulators are due to announce Volcker rules at some point today although as we just reported, the CFTC's meeting on Volcker was just cancelled due to inclement weather.
Japan's PM Shinzo Abe has seen his approval ratings collapse for the first time since his 'devalue-to-glory' strategy was unveiled a year ago. Kyodo News reported, support for Mr. Abe fell 10.3ppt to 47.6%, while Japan News Network reported a 13.9-point fall to 54.6% as WSJ reports, public concern over the controversial secrecy bill (designed by Kafka, inspired by Hitler) and its nationalist overtones merely exacerbated Japanese people's concerns about their pocketbooks (as incomes stagnate and costs rise). As Abe plays lip service to economic issues (with a very Maduro-like speech recently on profit margins and wage increases), there is little but public outrage to hinder his plans as his ruling Liberal Democratic Party has big majorities in both houses of parliament, with no election scheduled until 2016. So much for Abenomics...
As fear and nationalism rise in Japan (and Abe's grip on the people founders amid falling approval ratings and underperforming economic indicators such as GDP tonight), so another party has joined the debacle in the East China Sea. As NHK World reports, South Korea has officially announced that it will expand its air defense identification zone, making it partially overlap those of Japan and China. The game of chicken over small islands (and submerged rocks!) in the middle of nowhere continues...
You know that game involving word association at the psychotherapists? The one where you have to say the first word that springs to mind.
As we noted last month, President Obama sat down for an interview with Chuck Todd on November 7 and said: "When we buy I.T. services generally, it is so bureaucratic and so cumbersome that a whole bunch of it doesn’t work or it ends up being way over cost." Well, this week we learned that the gap’s been closed. The Department of Health and Human Services (HHS) told us so. In its official report, HHS not only announced that it had “met the goal of having a system that will work smoothly for the vast majority of users,” but wrote that “the team is operating with private sector velocity and effectiveness.” That sure was quick. Reviewing these facts, we suppose HHS could support their claim to “private sector velocity and effectiveness” with some semantic tricks. If you interpret that phrase as referring to the principle contractors’ adeptness at winning huge, no-bid contracts through personal connections, donations, fund raising and lobbying, then it all adds up.
With the mainstream media inundated with tales of low paid workers demanding higher minimum wages (thus theoretically expecting to be paid more than a market rate for their services), we thought a look at the other end of the scale was worthwhile (where, some might argue, the following 10 CEOs are also paid above market rates for their 'ability')...
- With website improved, Obama to pitch health plan (Reuters)
- Joe Biden condemns China over air defence zone (FT)
- Tally of U.S. Banks Sinks to Record Low (WSJ)
- Black Friday Weekend Spending Drop Pressures U.S. Stores (BBG)
- Cyber Monday Sales Hit Record as Amazon to EBay Win Shoppers (BBG)
- Ukraine's Pivot to Moscow Leaves West Out in the Cold (WSJ)
- Investment banks set to cut pay again despite rise in profits (FT)
- Worst Raw-Material Slump Since ’08 Seen Deepening (BBG)
- Democrats Face Battles in South to Hold the Senate (WSJ)
- Hong Kong reports 1st case of H7N9 bird flu (AP)
- In Fracking, Sand Is the New Gold (WSJ)