Inflation is always somebody else’s fault. Ludwig von Mises called out finger pointing central bankers and politicians decades ago in his book, Economic Policy. “The most important thing to remember is that inflation is not an act of God, that inflation is not a catastrophe of the elements or a disease that comes like the plague. Inflation is a policy.” Don’t expect the printing to stop any time soon. Central bankers believe they are doing God’s work. “To ensure that my people survive, I had to print money,” Zimbabwe's Gideon Gono told Newsweek. “I found myself doing extraordinary things that aren’t in the textbooks. Then the IMF asked the U.S. to please print money. The whole world is now practicing what they have been saying I should not. I decided that God had been on my side and had come to vindicate me.”
It appears it's not enough to have a record year on your stock market? Economic hardship, socialism, starvation, and not enough toilet paper have apparently led to the bloodiest riots in Caracas in years. As AP reports, at least 2 people were killed as large anti-Maduro protests engulfed the nation's capital.
- J.P. Morgan to Pay Over $1 Billion to Settle U.S. Criminal Probe Related to Madoff (WSJ)
- Ford board aims to pin down CEO Mulally's plans (Reuters)
- Raising Minimum Wage Is a Bad Way to Help People (BBG)
- Japan Lawmakers Demand Speedy Pension Reform (WSJ)
- EU reaches landmark deal on failed banks (FT)
- In which Hilsenrath repeats what we said in August: Fed Moves Toward New Tool for Setting Rates (WSJ)
- Senators Vow to Add to Iran Economic Sanctions in 2014 (BBG)
- Centerbridge in $3.3bn LightSquared bid (FT)
- Banks, Agencies Draw Battle Lines Over 'Volcker Rule' (WSJ)
Quick: which BRIC nation has the highest consumer loan default rate?
If you said China, India or Russia, you are wrong. Actually, if you said China you are probably right, but since absolutely all economic "data" in China is worthless, manipulated propaganda, only a retrospective post-mortem after the Chinese credit, housing, commodity, consumption bubbles have all burst will we know the answer. So excluding China, which country's consumers after a multi-year shopping spree funded entirely on credit, are suddenly suffering the epic hangover of soaring non-performing loans as they suddenly find themselves unable to even pay the interest on the debt? Just ask former billionaire Eike Batista whose OGX oil corporation is days away from filing bankruptcy. The answer, with 5.6% of all loans in default, above Russia, South Africa, Mexico, Turkey and India, is Brazil.
- Syrian Rebels Hurt by Delay (WSJ), U.S. seeks quick proof Syria ready to abandon chemical weapons (Reuters)
- Lavrov Brings Acerbic Pragmatism to Syria Meet With Kerry (BBG)
- Five years after Lehman, risk moves into the shadows (Reuters)
- U.S. shares raw intelligence data with Israel, leaked document shows (LA Times)
- Japan to raise sales tax, launch $50 bln stimulus (AFP) - so 1) lower debt by sales tax, then 2) raise debt through stimulus.
- Blackstone’s Hilton Files for $1.25 Billion U.S. Initial Offer (BBG)
- Second Life Bankers Thrive in Dubai as Boutiques Boost Fees (BBG)
- Brussels probes multinationals’ tax deals (FT)
- Wall Street's Top Cop: SEC Tries to Rebuild Its Reputation (WSJ) ... and fails
- Tablet sales set to overtake PCs (FT)
- The end of angst? Prosperous Germans in no mood for change (Reuters)
- In Hong Kong, ex-CIA man may not escape U.S. reach (Reuters)
- Backlash over US snooping intensifies (FT)
- Apple to Revamp IPhone Software, Ending Product Funk (BBG)
- Nothing like revising history: Japan revises up Q1 growth to annual 4.1% (FT), just don't look at the trade deficit
- Coffee Exports From Indonesia Seen Slumping to Two-Year Low (BBG)
- Euro bailout Troika nears end of road with patchy record (Reuters)
- Treasuries Little Changed Before Bullard Speaks Amid QE Debate (BBG)
- Schwab Topping Goldman Sachs Presages Return to Stocks (BBG)
- Hedge funds take over another city: London’s Forced Renters Fuel Apartment Investing Boom (BBG)
- Reports on surveillance of Americans fuel debate over privacy, security (Reuters)
- Apple to Yahoo Deny Providing Direct Access to Spy Agency (Bloomberg)
- Misfired 2010 email alerted IRS officials in Washington of targeting (Reuters)
- Spy vs Spy: Cyber disputes loom large as Obama meets China's Xi (Reuters)
- When NSA Calls, Companies Answer (WSJ)
- How the Robots Lost: High-Frequency Trading's Rise and Fall (BBG)
- Japan's Pension Fund to Buy More Stocks (WSJ)
- ‘Frankenstein’ CDOs twitch back to life (FT)
- China’s ‘great power’ call to the US could stir friction (FT)
- Toyota Tries on Corolla Look That’s Just Different Enough (BBG)
- Global Stocks Tumble as Treasuries Rally, Yen Strengthens (BBG)
- China Export Gains Seen Halved With Fake-Data Crackdown (BBG) - so a crash in the GDP to follow?
- FBI and Microsoft take down botnet group (FT)
- Quant hedge funds hit by bonds sell-off (FT)
- Russia's Syria diplomacy, a game of smoke and mirrors (Reuters)
- Obama Confidantes Get Key Security Jobs (WSJ)
- BMW to Mercedes Skip Summer Breaks to Keep Plants Rolling even as European auto demand slides to a 20-year low (BBG) - thank you cheap credit
- Paris threat to block EU-US trade talks (FT)
- Dimon’s ‘Harpooned’ Whale Resurfaces With Senate Findings (BBG)
- Greece and lenders fall out over firings (FT) - as predicted 48 hours ago
- Dallas Fed Cap Seen Shrinking U.S. Banking Units by Half (BBG) - which is why it will never happen
- Xi elected Chinese president (Xinhua)
- Russia Bond Auction Bombs as ING Awaits Central Bank Clarity (BBG)
- U.S. and U.K. in Tussle Over Libor-manipulating Trader (WSJ)
- Chinese firm puts millions into U.S. natural gas stations (Reuters)
- In Rare Move, Apple Goes on the Defensive Against Samsung (WSJ)
- Berlin Airport Fiasco Shows Chinks in German Engineering Armor (BBG)
- Ex-PIMCO executive sues firm, says was fired for reporting misdeeds (Reuters)
- Bank of Italy Tells Banks in the Red Not to Pay Bonuses, Dividends (Reuters)
- MSM discovers window dressing: Fund Managers Lift Results With Timely Trading Sprees (WSJ)
- White House Unyielding on Debt Limit (WSJ)
- Obama, Boehner talk; Geithner prepared to go off "cliff" (Reuters)
- Republicans urged to resist tax rises (FT)
- China looms large over Japanese poll (FT)
- As predicted here two months ago, Greek Bond Buyback Leads S&P to Cut to Selective Default (BBG)
- Japan opposition LDP set to win solid election majority – polls (BBG), but...
- Japan Opposition LDP’s Main Ally Cautions Abe on BOJ Pressure (BBG)
- U.S. and Europe Tackle Russia Trade (WSJ)
- King Seen Maintaining QE as Osborne Extends Fiscal Squeeze (BBG)
- Syria pound fall suggests currency crisis (FT)
- Irish budget seeks extra €3.5bn (FT)
- U.K. Extends Cuts Due to Poor Outlook (WSJ)
- ECB Seen Refraining From Rate Cuts as Yields Sink on Bond Plan (BBG)
At 2:15 pm the general public will watch with fascination as Ben Bernanke descends into his throne, in his dollar green Vera Wang wearing a stunning Control Print and Arpels tungsten necklace, following with trepidation each and every shake and quiver of his chin in those ultra rare instances when he speaks the truth. He will be surrounded by a cohort of FOMC preapproved sycophants who, as can be seen on the clip below, are now on page 2 of Monetary Policy for Dummies, which they started reading back on April 27 during the first ever FOMC press conference. As usual, nothing of significance will be asked, and most certainly, answered, but do expect the dollar (and, inversely, ES) to go up, then down, then up, and so forth as random vacuum tubes blow in NYSE's ultramodern Mahwah collocation facility.
In a January 2009 ABC interview with George Stephanopoulos, then President-elect Barack Obama said fixing the economy required shared sacrifice, "Everybody’s going to have to give. Everybody’s going to have to have some skin in the game." For the past two years, American workers submitted to the President’s appeal—taking steep pay cuts despite hectic productivity growth. By contrast, corporate executives have extracted record profits by sabotaging the recovery on every front—eliminating employees, repressing wages, withholding investment, and shirking federal taxes. Washington’s embrace of labor market flexibility ensured companies encountered little resistance when they launched their brutal recovery plans. Leading into the recession, the US had the weakest worker protections against individual and collective dismissals in the world, according to a 2008 OECD study. Blackrock’s Robert Doll explains, “When the markets faltered in 2008 and revenue growth stalled, U.S. companies moved decisively to cut costs—unlike their European and Japanese counterparts.” The U.S. now has the highest unemployment rate among the ten major developed countries.
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