Frontrunning: December 19

  • Traders Seek an Edge With High-Tech Snooping (WSJ)
  • Gold Drops Below $1,200 an Ounce for First Time Since June (Bloomberg)
  • SAC Manager Guilty as Insider Focus Turns to Martoma (Bloomberg)
  • Why Ukraine spurned the EU and embraced Russia (Reuters)
  • Target confirms major card data theft during Thanksgiving (Reuters)
  • Zuckerberg is no suckerberg: Company to Sell 27 Million Class A Shares While CEO Will Offer 41.4 Million (WSJ)
  • Facebook, Zuckerberg, banks must face IPO lawsuit (Reuters)
  • Swiss Christmas Trees Feel Chill as Franc Helps Rivals (BBG)
  • Iran, six powers to resume nuclear talks after snag (Reuters)
  • Dolphins Suffering From Lung Disease Due to Gulf Oil Spill, Study Says (WSJ)

A Quick Guide To What's Fake: Everything That's Officially Sanctioned

Neofeudal financialization and unproductive State/corporate vested interests have bled the middle class dry. Yet we accept the officially sanctioned narratives as authentic and meaningful. Why? Perhaps the truth is simply too painful to accept, so we will reject it until we have no other alternative.

Is War With China Inevitable?

As a general rule, extreme economic decline is almost always followed by extreme international conflict. Sometimes, these disasters can be attributed to the human survival imperative and the desire to accumulate resources during crisis. But most often, war amid fiscal distress is usually a means for the political and financial elite to distract the masses away from their empty wallets and empty stomachs. War galvanizes societies, usually under false pretenses. We're not talking about superficial “police actions” or absurd crusades to “spread democracy” to Third World enclaves that don’t want it. No, we're talking about REAL war: war that threatens the fabric of a culture, war that tumbles violently across people’s doorsteps. The reality of near-total annihilation is what oligarchs use to avoid blame for economic distress while molding nations and populations. Because of the very predictable correlation between financial catastrophe and military conflagration, it makes quite a bit of sense for Americans today to be concerned.

The Pain In Spain Is Mainly... Everywhere

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.

Frontrunning: December 10

  • U.S. set to adopt Volcker rule to curb bank trading gambles (Reuters) After vote, lawsuits likely next hurdle for Volcker rule (Reuters)
  • U.S. Congress budget talks could produce Tuesday deal, aides say (Reuters)
  • Wealthy Go Frugal This Holiday Amid Uneven U.S. Recovery (BBG)
  • Tearful Thai PM urges protesters to take part in election (Reuters)
  • Fed’s Bullard Sees Higher QE Taper Odds as Labor Market Improves (BBG)
  • Coeure Says ECB Would Offer More LTROs Only When Banks Can Lend (BBG)
  • Inside China's Super-Sterile Chicken Farms (WSJ)
  • Mandela Service Rivals JFK’s as Leaders Meet in South Africa (BBG)
  • China data defy slowdown forecasts (FT), and of course the word is "data"
  • Cold, ice grip U.S. as more snow to blanket East (Reuters)

U.S. Military Changes Drone Rules To Make Targeting Of Civilians Easier

Despite President Obama's claims that drone strikes do little damage to civilian populations, in July we discovered that “of the 746 people killed in drone strikes in Pakistan from 2006-2009, an incredible 20% were civilians and 94 (13% of the total) were children.” We suppose that number just isn’t good enough, because, as The Washington Post reports, "The Pentagon has loosened its guidelines on avoiding civilian casualties during drone strikes, modifying instructions from requiring military personnel to “ensure” civilians are not targeted to encouraging service members to “avoid targeting” civilians." Can’t. Make. This. Stuff. Up.

Frontrunning: December 6

  • Nelson Mandela: 1918-2013 (Reuters)
  • South Africans Flock to Nelson Mandela’s Home to Mourn His Death (BBG)
  • Hillary Clinton or Joe Biden? Obama says won't choose between them for 2016 (Reuters)
  • Fukushima water tanks: leaky and built with illegal labor (Reuters)
  • Sears Holdings Files to Spin Off Lands' End Business (WSJ)
  • Way cleared for landmark global trade deal (FT)
  • U.S. Oil Prices Fall Sharply as Glut Forms on Gulf Coast (WSJ)
  • German Factory Orders Decline in Sign of Uneven Recovery (BBG)
  • FCC Unlikely to Bless a Comcast-TWC Deal: Regulator (WSJ)

Bitcoin - A Cost-Benefit Analysis

David Woo's earlier discussion of the 'maximum' fair value for Bitcoin, we thought his colleague Ian Gordon's view on the advantages and disadvantages of the virtual currency were worth noting. Woo believes Bitcoin can become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money transfer providers. As a medium of exchange, Bitcoin has clear potential for growth, in his view, but its high volatility, a result of speculative activities, is hindering its general acceptance as a means of payments for on-line commerce...

French President Warns Of Immediate Military Intervention Hours After Reporting Soaring Unemployment

While we are sure it is just a coincidence that hours after his nation reports record and soaring unemployment rates, French President Hollande announces a doubling of troops in Central African Republic (CAR) deciding to "intervene immediately" after the UN authorization, adding "this intervention will be quick. It has no vocation to last and I'm sure it will be a success,"


The US State Department "welcomes France's decision to reinforce its military presence," adding that, the US is "appalled by today's reports of the murder of innocent women and children outside of Bangui."

"NSA's Mission Is Of Great Value To The Nation" - The Complete "Authorized" NSA Thanksgiving Dinner Talking Points

It seems getting an 8 pm "escape" from friends and family this Thanksgiving to rush into the nearby World Wrestling Federation Walmart may have been a welcome reprieve for some. Those some in question being NSA agents, and just in case their friends and family got a little too pesky, boisterous or simply inquisitive, all the employees of the National Security Agency and the Central Security Services received a prepared memo with preauthorized talking points designed to "guide" conversations over the Thanksgiving dinner table. Plastered at the head of the 2-page propaganda is a Douglas Adams-like (or was that Isaac Asimov) in its simplicity bullet point: "(1) NSA's mission is of great value to the Nation." How was it that "defenders" of the fatherland during the Third Reich were being brainwashed again? But we digress.

Stock Futures Rise To New Record Highs On Carry-Currency Driven Ramp

Another day, another carry currency-driven futures melt-up to daily record highs (the all important EURJPY soared overnight on the return of the now standard overnight Japanese jawboning of the JPY which sent the EURJPY just shy of a new 4 year high of 138 overnight), and another attempt by the ECB to have its record high market cake, and eat a lower Euro too (recall DB's said the "pain threshold" for the EUR/USD exchange rate - the level at which further appreciation impairs competitiveness and economic recovery - is $1.79 for Germany, $1.24 for France, and $1.17 for Italy) this time with ECB's Hansson repeating the generic talking point that the ECB is technically ready for negative deposit rates. However, with the halflife on such "threats" now measured in the minutes, and soon seconds, the European central bank will have to come up with something more original and creative soon, especially since the EURJPY can't really rise much more without really crushing European trade further.

White House Releases Iran Deal Fact Sheet - President Obama To Speak

The White House has released their (lengthy) fact sheet...

"During the six-month initial phase, the P5+1 will negotiate the contours of a comprehensive solution... Over the next six months, we will determine whether there is a solution that gives us sufficient confidence that the Iranian program is peaceful. If Iran cannot address our concerns, we are prepared to increase sanctions and pressure.


Suspend certain sanctions on gold and precious metals, Iran’s auto sector, and Iran’s petrochemical exports, potentially providing Iran approximately $1.5 billion in revenue

Israelis, Saudis, and Republicans are already questioning the decision...

Guest Post: Obamacare - The Neutron Bomb That Will Decimate The U.S. Economy

Sickcare is unsustainable for a number of interlocking reasons: defensive medicine in response to a broken malpractice system; opaque pricing; quasi-monopolies/cartels; systemic disconnect of health from food, diet and fitness; fraud and paperwork consume at least 40% of all sickcare funds; fee-for-service in a cartel system; employers being responsible for healthcare, and a fundamental absence of competition and transparency. Obamacare simply speeds up the coming collapse. The neutron bomb has gone off, unseen by politicos and the Elites who wrote the bill. It is already undercutting fulltime employment, and it will soon add momentum to the free-fall erosion of small business growth and employment.