First a secret "Doomsday book", and now this?
Copious amounts of monetary whiskey have been downed in the global economy and yet the recovery remains weak at best. The mother of all monetary hangovers awaits us all and will likely manifest in stagflation and sharply higher inflation.
Here we go again. Exactly two months after the deadly shooting of Michael Brown by a local police officer in Ferguson, MO, it is time for part two. Overnight, in nearly the same spot as the Brown shooting, a white off-duty policeman shot and killed a black teenager in St Louis, officers said, triggering a night of protests just miles from the site of another police shooting of another black youth in the suburb of Ferguson. Reuters has the details: police said the 18-year-old was armed and fired three shots while he was being chased by the officer, and they had recovered a gun at the scene. The youth was killed almost two months to the day since sometimes violent protests erupted in Ferguson after a white police officer shot dead unarmed black 18-year-old Michael Brown. Said otherwise, cops say Myer was armed but witnesses say he was only holding a sandwich when he was tased, fell over & then was shot at 17 times of which "only" three hit.
- Five U.S. airports to screen for fever (Reuters)
- Danger, central banks trading with each other: Bipolar U.S. Stocks See Biggest Mood Swing in Three Years (BBG)
- Draghi Policies Blunted in Berlin as German Protests Grow (BBG)
- White policeman kills black teen in St Louis, triggering fresh protests (Reuters)
- Au Revoir to France’s Welfare Model as Socialists Cut Spending (BBG)
- Here comes Roberto Cavalski (Reuters)
- There are 49 U.S. venture-capital-backed companies with a valuation of $1 billion or more—the highest number on record (WSJ)
- Pressure mounts on Hong Kong leader over payout amid crisis (Reuters)
"Even though bitcoin is volatile, it's still safer than the national currency," said one young 'tech-savvy' Venezuelan, who as Reuters reports, is looking to bypass President Maduro's dysfunctional economic controls. "I'm teaching people to use bitcoin to bypass the exchange controls," said Gerardo Mogollon, a business professor who styles himself as 'Dr. Bitcoin Venezuela,' speaks at conferences and appears in online videos to urge Venezuelans to adopt the crypto-currency..."Bitcoin is a way of rebelling against the system."
Global economic growth remains weak and vulnerable and the global financial system remains very fragile. The ebola virus has the potential to be the straw that breaks the proverbial camel’s back.
Stocks and commodities fell globally today due to concerns about the spread of Ebola and declining economic growth. Precious metals bounced from near multi month lows.
US Ebola-Fighting Troops Mission Could Last A Year; Spain Quarantines 6, Euthanizes Dog; US Patients Conditions WorsenSubmitted by Tyler Durden on 10/08/2014 08:48 -0400
Africa's US commander has admitted troops will be fighting Ebola for about a year (and in direct contact with infected individuals). Both US Ebola patients conditions are worsening, as Reuters reports, Thomas Duncan is fighting for his life on a ventilator (and undergoing dialysis) and NBC cameraman Ashoka Mukpo is receiving blood from Ebola-survivor Dr. Kent Brantly. The outbreak in Spain has spread with 6 "high risk" patients under quarantine (and Excalibur the dog is set to be euthanized - raising questions about transmission mechanisms). The economic impact on West Africa continues to surge with The World Bank estimating a $32billion hit by the end of 2015.
- Turkey says Syria town about to fall as Islamic State advances (Reuters)
- Only now? Growth worries grip stocks, oil (Reuters)
- Hong Kong Protest Leaders ‘Furious’ at Agenda for Talks (BBG)
- Earthquake Damages Thousands of Homes in Southern China (BBG)
- Keystone Be Darned: Canada Finds Oil Route Around Obama (BBG)
- Where Is North Korea's 31-Year-Old Leader? (BusinessWeek)
- Australia to Revise Employment Data (WSJ)
- Americans Living Longer as Fewer Die From Heart Disease, Cancer (BBG)
- A 401(k) Conundrum: Can You Make Cash Pile Last for Life? (BBG)
- China Services Sector Slows in September (WSJ)
And it all started off so promisingly, when after the biggest selloff in US stocks in two months, the BOJ and its preferred banks once again sold 6J (i.e., bought USDJPY) in the morning Japan session (while collecting CME liquidity rebates of course), sending the pair from below 108 to half the way to 109, and naturally taking global futures higher while pushing yields lower when as ITC says a "large TY seller knocked USTs to lows during the session" - hmmm, wonder who the large seller was. And then... the "rebound euphoria" fizzled a la Sodastream, sending the Nikkei sliding 1.2%, and US equity futures back to unchanged with the bond surge returning and sending German Bunds to new all time highs once again, while the Dax briefly broke below under 9000 before stabilizing at the key support level. It is unclear what caused the failure in central bank euphoria, although some suggest that the latest bevy of disappointing economic news wasn't quite bad enough.
Just hours after the World Health Organization warned "It is quite unavoidable, that [Ebola] incidents will happen in the future because of the extensive travel both from Europe to the affected countries and the other way around," CDC Director Tom Frieden announced that:
U.S. TO ANNOUNCE FURTHER TRAVEL MEASURES VS EBOLA IN DAYS: CDC
This merely confirms all suspicions and our earlier note that 'air traffic is the driver' of global contagion.
Despite being described by Spain's public health director as "a national jewel," the head of Spain's Nursing Council warns "something went wrong" in the health care system's protocols. As RT reports, Spanish health officials have 4 patients interned including infected initial nurse, her husband, and a 2nd nurse (male). Furthermore, 22 more possible Ebola cases are under surveillance having had direct contact with the infected nurse during her vacation after being infected (officials have said they 'don't know' how she became infected with the deadly virus). Images within the hospital show "irregularities" and make-shift isolation units and an insider account said "I do not want to create social alarm, but explain what is still a reality everyday for a few months of nursing staff at the ICU.". One researcher noted "air traffic is the driver.," and added ominously, "it's just a matter of who gets lucky and who gets unlucky."
Relative to stock market indices, broad commodity indices are now at their lowest levels since the late-1990s dot com boom. Key commodity price ratios, such as those between precious and industrial metals, are already at levels associated with financial crises such as that of 2008. In other words, there is already ‘blood on the commodity streets’, presenting investors and commodity traders with potentially attractive opportunities.
- Liberian Rubber Farm Becomes Sanctuary Against Ebola (WSJ)
- The World’s Most Powerful Central Banker: Janet Who? (BBG)
- Islamic State moves into south west of Syrian Kurdish town (Reuters)
- Waldorf to Be Biggest Chinese Property Purchase in U.S. (BBG)
- Spain Seeks People in Contact With Ebola-Infected Nurse (BBG)
- Hong Kong protests at crossroads as traffic, frustration pile up (Reuters)
- Immigration: Grim Caseload at the Border (WSJ)
- China Cuts Thousands of ‘Phantom’ Workers From State Payroll (BBG)
- U.S., U.K. Regulators Push to Settle Deutsche Bank Libor Case This Year (WSJ)
- Wall Street Moles Go to NY’s Top Cop, Spurning SEC Cash (BBG)
- Pimco's outflow headaches only just beginning (Reuters)
- Japan Lawmakers Flag Need for Exit Strategy as Yen Falls (BBG)
Having lost billions of dollars for quarter after quarter, The US Postal Service has a cunning plan to cut costs - end door-to-door postal delivery. More than 30 million American homes get door-to-door delivery and another 50 million get their mail dropped at their curbside mailboxes, but as Reuters reports, with the 'entity' buckling under massive financial losses, it sees savings in centralized mail delivery. This is good news for the customer though - apparently - as Postal Service spokeswoman Sue Brennan explains "converting delivery away from door delivery to either curb line or centralized delivery would enable the Postal Service to provide service to more customers in less time."
Venezuela's economic crisis has led to some shocking and surreal price distortions that hit people's buying power dramatically. While the government of President Nicolas Maduro calls the country's minimum wage of Bs. 4,252 the highest in the region when converted to $675 using the official exchange rate, the galloping black market for currency considers it as just $42.50 when converted at the street rate of Bs. 100 per US dollar, the rate which many importers and retail outlets must use to acquire hard currency. From Coke to crayons and carrots and from Tires to TVs, Venezuelan prices offer a glimpse of a modern-day hyperinflation.