In January we noted 'Smart Restaurant' - the burger-flipping robot - and just last month we reported on China's robotification of the fast-food business; but, as The Washington Post reports, the greatest enemy to the minimum-wage-demanding fast-food worker has arrived: you can now order your own quarter-pound bacon cheeseburger from a welcoming, non-judging machine. With McDonalds sales the worst in almost a decade, it appears their need to maintain profits has stoked a move towards dehumanization. One wonder how long before tabltes are also declared 'unpatriotic'.
A look at new arguments suggesting that globalization is fragmenting. Are they really new? Are they true?
Generally since 1999, and especially since 2008, the financial world has been dominated by Keynesian lunacy. Collectively, Central Banks have cut interest rates over 500 times and printed more than $12 trillion combating a brief 9-12 month period of deflation.
US Industrial Production and the NY Fed Empire State Manufacturing survey are the two main releases for the US. In Europe, the euro area trade balance will be the notable print. Beyond today, US PPI, German ZEW and UK CPI are the main economic reports tomorrow. Wednesday will see the release of BOE’s meeting minutes, the US CPI, and the Euro area inflation report. On Thursday, President Obama will host Poroshenko and on the data front we have Philly Fed, initial claims, and building permits to watch out for, but the biggest market moving event will surely be the Scottish independence referendum. German PPI will be the key release on what will otherwise be a relatively quiet Friday.
Friday saw the largest demonstration in the history of Barcelona with 1.8 million people showing up, exceeding all previous records, calling for Catalan independence... and as Deutsche Bank warns "Catalonia matters!" seeing four key scenarios.
Q. What are traders talking about at the present time here at the New York Stock Exchange?
Cashin: We are concerned about two questions. First, how will the Fed do in keeping money reasonably easy without causing inflation? Second, where do we stand with the current geopolitical challenges? For now, these challenges seem to be short term concerns. But should we begin to see a financial contagion and pressure building on banks in Europe, perhaps out of the Ukraine situation, things could theoretically turn into what I call a «Lehman moment». That is when markets come under pressure but seem to be under control, and then things change suddenly.
Getting out of a Liquidity Trap with monetary policy playing the lead role necessarily involves a Dornbuschian sequence of rational overshooting: The Fed must drive up Wall Street prices, which move quickly, so as to get to Main Street prices that move up slowly, most importantly, wages. This sequencing implies that Wall Street prices must become very rich relative to Main Street prices in order to achieve so-called escape velocity from the Liquidity Trap. At the transition point, Wall Street prices will be rationally “overvalued” relative to their long-term “fair value.” The dominant risk for Wall Street is not bursting bubbles, but rather a long slow grind down in profit’s share of GDP/national income. And you can stick that into a Gordon Model, too! Bonds and stocks may at present be rationally valued, but borrowing from the lyrics of Procol Harum’s Keith Reid: Expected long-term returns are turning a more ghostly whiter shade of pale.
There is now less than one week of campaigning remaining before the Scottish Independence Referendum, which takes place next Thursday, September 18.
The pro-union ‘no’ vote campaign is back in the lead this week after the latest opinion poll from pollsters YouGov put them at 52%, marginally ahead of the pro-independence ‘yes’ campaign.
While BofAML's Michael Hanson expects Yellen’s overall tone to remain dovish, market perception will be key. The combination of changes to the forward guidance language, upward drift of the dots, and any comments seen as potentially hawkish, could lead to a selloff...
UPDATE:*BARCELONA POLICE SAY 1.8M PEOPLE AT PRO-INDEPENDENCE DEMO
The Spanish government is militarizing, gearing up for violent protests against the EU that are expected to turn up before a hot autumn. Spain is now equipping the police with over one billion million euros with new combat equipment. Opposition leader Antonio Trevin called the purchase therefore “a return to the times we would rather forget.” The Interior Ministry has responded merely justifying their rearming as necessary - “because of the current social dynamics”, reports the Guardian. Simply put, Spain is moving toward civil war.
A paradigm shift for the Eurozone...
Quick update, and outline of reasons to suspect anxiety over Scottish independence has peaked.
You live in a country run by idiots when...
Well, I am profitable on this latest move up in 10-year yields, and I expect yields to continue rising through the 10 and 30 year bond auctions later this week ...
Yesterday, former Fed Chairman Alan Greenspan was the keynote speaker at KPMG’s 2014 Insurance Industry Conference Tuesday, where he answered questions such as 1) where the economy is going, 2) why, and 3) when (if ever) is it likely to improve. The answers, as reported by Property Casualty 360, are: 1) nowhere fast, 2) because nobody is willing to invest, and 3) eventually, but nobody can tell when. He listed 9 specific reasons why the "economy stinks", although surprisingly, nowhere did he mention the fact that the current and future economic disaster is all a direct result of his ruinous reign at helm of the Fed where as a result of his "great moderation" and the Fed's catastrophic monetary policies conceived mostly under Greenspan himself, the economy is now perpetually stuck in a boom-bust cycle, and where every time a bubble bursts another has to replace it or else the entire western way of life will be gone in a heartbeat.