SWIFT

"They’re at it again! US inequality is surging and the Fed has created another house price boom. Does this matter? Well I think so. But who cares what I think. Warren Buffet, Bill Gross and Stanley Druckenmiller think it matters. Clients marvel at how the US profits’ share of GDP remains so high and that labour remains so weak. Marc Faber said recently that in postponing the QE taper, we have merely climbed to a higher diving board. I go further. I see growing inequality draining the swimming pool dry. The crunch, when it comes, will be ugly"...  Investors should make no mistake. The anger of the 99% will ultimately not be bought off by yet another central bank inspired housing bubble, engineered to pacify them and divert their attention as their real incomes fall and inequality continues to grow." - Albert Edwards

New Revelations Are Breaking Every Day

Imagine for a second you're a terrorist intent on inflicting unimaginable harm on your enemy. Now let's further imagine that your enemy is the United States...

• Expectations for Fed to begin to taper asset purchases by USD 10-15bln
• Ranges for pace of Treasury purchases: high USD 45bln, low USD 25bln
• Ranges for pace of MBS purchases: high USD 45bln, low USD 30bln
• Some see FOMC lowering unemployment threshold from current 6.5%
• Summary of Economic Projections and Press Conference from Fed Chairman Bernanke follow the announcement

With the NSA already tracking and recording every form of communication and electronic data exchange, it would hardly come as a surprise that the final piece of the puzzle was also actively being intercepted and collected by General Keith Alexander's superspy army: money, or rather tracking the global flow thereof. Which is why we were not surprised to learn just this, following the latest report from Germany's Spiegel that "The National Security Agency (NSA) widely monitors international payments, banking and credit card transactions" and has even created an internal branch titled appropriately enough "Follow The Money" (FTM). Once collected, the data then flows into the NSA's own financial databank, called "Tracfin," which in 2011 contained 180 million records. Some 84 percent of the data is from credit card transactions. But while collecting credit card data was to be expected, what is even worse is that the NSA has also secretly planted itself in the nexus of the entire global USD-intermediated financial transactions system courtesy of SWIFT.  In other words, America's unsupervised uber spies, when not checking in on their former significant others, spend the bulk of their time tracking who is buying what, where, and with whose money.

As macro news continues to trickle in better than expected, the latest batch being benign (if completely fake) Chinese inflation data (CPI 2.6%, Exp. 2.6%, Last 2.7%) and trade data released overnight which saw ahigher than expected trade balance ($28.5bn vs Exp. $20.0; as exports rose from 5.1% to 7.2%, and imports dipped from 10.9% to 7.0%, missing expectations), markets remain confused: is good news better or does it mean even more global liquidity will be pulled.  As a result, the release of an encouraging set of macroeconomic data from China failed to have a meaningful impact on the sentiment in Europe this morning and instead stocks traded lower, with the Spanish IBEX-35 index underperforming after Madrid lost out to Tokyo to win rights to host 2020 Olympic Games. Even though the news buoyed USD/JPY overnight, the pair faced downside pressure stemming from interest rate differential flows amid better bid USTs. The price action in the US curve was partly driven by the latest article from a prolific Fed watcher Jon Hilsenrath who said many Fed officials are undecided on whether to scale back bond purchases in September. Hilsenrath added that the Fed could wait or reduce the programme by a small amount at the upcoming meeting. Going forward, there are no major macroeconomic data releases scheduled for the second half of the session, but Fed’s Williams is due to speak.

This stillbirth portends more than just bad news for Microsoft ARM products. Pundits, inveestors and consumers should be paying closer attention.

The conclusions I have come to are somewhat threatening in the short term, but even more disconcerting in the intermediate term, as the developing image is exposing a crystal clear picture of the ominous resource wars looming directly ahead. Equally dismaying, are the "honorable distinguished gentlemen" presiding over this Middle East mayhem, which are showing themselves to be either grossly incompetent cretins or dangerous duplicitous megalomaniacs

Imagine Dick Cheney in a “Saturday Night Live” skit fantasizing about Barack Obama handling the pressures of going to war...

The rise of Tomahawk force began in 1983 during the Reagan buildup, but the demise of the Evil Empire did not slow down its development one bit. By the end of the century the United States had about 150 surface ships and attack submarines that could launch these deadly cruise missiles and an inventory of nearly 5,000 missiles. Tomahawks have a range of seven hundred miles. This means that from their offshore platforms they can reach three-fourths of the world’s population. And during the last two decades they have been used in just this “stand-off” manner against targets in Iraq, Bosnia, Afghanistan, Sudan, Libya, and others—teaching presidents that they could meddle freely without getting bloodied.

Less than a month ago, potash stocks around the world cratered overnight following news that Russian potash producer OAO Uralkali announced its decision to break up a 'marketing venture' that controlled around 43% of global potash exports in the process ending the cartel that many US fertilized companies enjoyed for years. The end of the cartel was also a big hit for former partner Belarusian Potash Company (BPS) and the host nation Belarus, a country of 9.5 million people, where revenue from its potash industry accounts for almost 20 percent of the budget.  Everyone, Goldman Sachs, included were confounded by the move: Such behavior by Belaruskali in a structurally oversupplied potash industry should push for stricter competition for end customers and result in a significant swift decline in pricing... " What was most surprising is that Uralkali would voluntarily engage in this move, knowing full well that the Belarus government would retaliate. The only question is how severely. Turns out the answer is "very."

  Radiation Levels Will Concentrate in Pockets In Baja California and Other West Coast Locations

• Libor Settlements Said to Ease CFTC’s Path in Rate-Swaps Probe (BBG)
• Manhattan Homes Under $3 Million Never Harder to Buy (BBG)
• Just two years late: Abe Pledges Government Help to Stem Fukushima Water Leaks (BBG)
• Chesapeake drops energy leases in fracking-shy New York (Reuters)
• Hedge Fund Magnetar Won't Face Charges Tied to Mortgages (WSJ)
• U.S. envoy leaves Cairo after talks declared over (Reuters)
• Credit-Crisis Oracle Rajan to Head India’s Central Bank (BBG)
• Bank of England Changes Policy Tack (WSJ)

• Botulism toxin? There's an apology for that - Fonterra CEO apologizes, sees China dairy curbs lifted within days (Reuters)
• Patent troll-In-Chief strikes again: Veto of Apple Ruling Likely to Upend Big Patent Battles (WSJ)
• Because scapegoating means justice FTW - SEC Gets ‘Shot in the Arm’ With Victory in Tourre Case (BBG)
• Insider-Trading Probe Caught in a Washington Knot (WSJ)
• Miners return to hedging as gold  (FT)
• Toyota’s $37 Billion Cash Pile Means Turning Point for Abenomics (BBG)
• Inside the battle at Germany's Siemens (Reuters)
• ‘One million’ UK workers on zero hours contracts (FT)
• Wag the dog, part 1984: Iran Seen Trying New Path to a Bomb (WSJ)
• Tokyo Cheap to Hong Kong Luring Asian Bargain Hunters (BBG)

Over two years after Zero Hedge first accused Goldman and JPMorgan of becoming monopolists in the commodity warehousing business (see "Goldman, JP Morgan Have Now Become A Commodity Cartel"), and two weeks after the NYT's reminder the world of just this leading to the latest Kangaroo Court congressional hearing on the matter, which may or may not have resulted in JPMorgan announcing it would exit the physical commodities business, the long overdue legal fight began this Friday when lead plaintiff Superior Extrusion sued Goldman and London Metal Exchange owner HKEx for engaging in "anticompetitive and monopolistic behaviour in the warehousing market in connection with aluminium prices" and accusing the firms of violating the Sherman anti-trust act. Precisely what Zero Hedge said, some 26 months ago.