Thanks to the "pulling forward" of future production in the channel-stuffing-based inventory build of Q3, consensus estimates for the growth of the US GDP in Q4 2013 has collapsed to new lows for this cycle at a mere 1.5%. However, the "escape-velocity" recovery remains just around the corner as estimates for Q1 and Q2 2014 remain unimpacted by such nuance as reality...
This past Friday the Bureau of Labor Statistics released the November jobs report which sent the mainstream analysts and economists into an ecstatic state as the numbers were substantially stronger than estimates. However, in reality, the employment report continues to show that employment is being driven almost entirely by population growth rather than real economic strength. The long term implications of these secular shifts are crucially important to the future of everything from investing, to living and the future of our economy. It is not too late to change our future, but it eventually will be if we do not begin to make changes soon.
From liquidity-driven perception to the Keynesian endpoint economic reality... just follow the arrows...
If one was to believe the picture that most Western media outlets are painting, Ukraine has been lost to Russia. Though the country fought valiantly to sign an Association Agreement with the European Union in Vilnius, Lithuania last month, President Viktor Yanukovych suspended negotiations with the EU at the last possible moment, betraying Ukrainians everywhere. Two recent energy deals that Ukraine has reportedly made, one with Russia and the other with Slovakia, however, show that the reality of the situation is slightly more complex.
Haters gonna hate, but the “Bitcoin bubble” meme has become the financial equivalent of a viral online cat video – wildly popular but pretty vacuous. In an effort to separate fact from fiction, ConvergEx's Nick Colas reviews 11 bitcoin myths (and dispels them). Still, there’s no doubt that the public is entranced: there are now 3x more Google searches for “bitcoin” than “Western Union”, and 33x more than for “Gold coins”. We started writing about bitcoin back in February because it was – and still is – a fascinating invention (for better or worse). How it plays out, we will just have to wait and see.
"If we evaluate an organization's performance by what it promised when it was created, the Federal Researve has clearly failed the American people," is how Murray Sabrin concludes this documentary on the first 100 years of the Fed's reign. The sad truth, he details, is that "the USD has lost more than 95% of its purcahsing power since the Fed was created and the cost of living has skyrocketed since Nixon severed the last linkage between the USD and gold in 1971." In short, the revolution of 1913 shifted power from individuals, communities and states to the federal government and its powerful allies in the private sector.
With the Ukraine situation increasingly precarious, and now even the US state department getting involved with the occasional unexpected harsh warning into what Putin has made very clear is his brand new sphere of influence (it is unclear just why the US is responding in such a way: did the pro-Europe protesters not use Made in the US tear gas or chemical weapons?), Russia casually threw it out there earlier today that it would use nuclear weapons if it comes under an attack. As vice prime minister and defense industry chief made clear, "One can experiment as long as one wishes by deploying non-nuclear warheads on strategic missile carriers. But one should keep in mind that if there is an attack against us, we will certainly resort to using nuclear weapons in certain situations to defend our territory and state interests." Just in case it wasn't quite clear...
Former OMB director David Stockman rages to none other than Rick Santelli that the budget deal is a "betrayal and a joke" and "the final surrender of the House Republican leadership to beltway politics." The dismal reality - that little to no one in the mainstream media will dare utter - the budget adds $70 billion to spending this year and next year, and "then they're going to pretend to save it in '22 and '23." Stockman blasts, "they've not only kicked the can down the road, but kicked it into low-earth orbit." The only hope of getting our fiscal house in order was if House Republicans stand up, and Stockman warns "will trigger an enormous negative reaction from Tea-Party Republicans." The truth hurts...
Following yesterday's "selfie-gate" furore at Nelson Mandela's memorial service, it is perhaps unsurprising that the AFP photographer responsible for the series of incriminating photos come out with a wordy (and picturey) response to explain what we all saw. Roberto Schmidt notes, "it was interesting to see politicians in a human light because usually when we see them it is in such a controlled environment. Maybe this would not be such an issue if we, as the press, would have more access to dignitaries and be able to show they are human as the rest of us." Indeed, especially for a president whose only focus is to be seen as "one of the people" and not actually doing, you know, work to help the people.
JPY carry trades are not helping and stocks just keep testing lows and finding no new BTFATH-ers for now. This will come as a little surprise to those who have watched the saturated and less exuberant credit markets unable to join the party for the last 2 months.
Investors all over the world are confronted by markets that have been dressed up for the amusement of the crew in charge of the ship, and nobody seems to recognize what they are looking at. Sure, they look like markets, but at the same time there is an unfamiliarity that is extremely unnerving to at least a few in the gathering crowd. The majority of the mob, however, have decided that they look enough like markets to charge in blindly in the expectation that all will be as it should. Things are not as they should be. Far from it.
We’ve spent the last five decades learning to love our oppression, adoring our technology, glorying in our distaste for reading books, and wilfully embracing our ignorance. Huxley’s vision of a population, passively sleep walking through lives of self- absorption, triviality, drug induced gratification, materialism and irrelevance has come to pass. Only in the last two decades has Orwell’s darker vision of oppression, fear, surveillance, hate and intimidation begun to be implemented by the ruling class. We’ve become a people controlled by pleasure and pain, utilized in varying degrees by those in power. Stay tuned for our modern day Hunger Games after this commercial for your very own Duck Dynasty Chia Pet.
There has been quite a bit of discussion lately over the rapid reduction in the government's budget deficit as it relates to economic growth going forward. There are 3 issues that will likely impede further progress on the deficit reduction in the months ahead; 1) lower rates of tax revenue, 2) weaker economic growth and 3) greater levels of spending. The good news for stock market bulls is that deepening budget deficits increase the amount of bonds that the Treasury will need to issue to cover the shortfall in spending. This will give the Federal Reserve more room to continue their current monetary interventions which have inflated asset prices sharply over the last year. Creating financial instability to gain economic stability has been an elusive dream of the Federal Reserve since the turn of the century; yet someday it is hoped that they may just be able to "catch their own tail."
Wall Streeter's Lament Volcker Rule: "Liquidity Is About To Be Sacrificed At The Altar Of Ignorance & Fear"Submitted by Tyler Durden on 12/10/2013 16:55 -0500
"... The entire socio-economic model is now built on this and, whether right or wrong, it demands a very different sort of banking that the "pay 3% on deposits and lend them at 5%" kind of industry of the 70s and 80s. Volcker risks over-egging the pudding and, to mix my metaphors, killing the goose that lays the golden "growth" egg. Liquidity, the holy grail of markets, is possibly about to be sacrificed on the altar of ignorance and fear."