Wall Street Journal
Nikkei 225 futures are up over 1600 points since QE ended and topped 17,000 in a quiet Asian holiday session. USDJPY topped 113, up a stunning 5 big figures since QE ended. But it's not all hyperinflationary ponies and rainbows as The Wall Street Journal stuns its readership by admitting "although economic theory says a falling yen should make Japanese goods more competitive overseas and boost exports, that didn’t happen." Of course, that merely means moar is needed and therein lies the problem as opposition (internal and external) to Kuroda's policies are growing. In other news, EURUSD retraced half its mysterious crash losses and China's Yuan fix weakened the most since March.
While the Fed and the BOJ were by far the biggest news of the past week, explicitly admitting that the world simply can not exist without one central bank passing the monetization torch to someone else, a surprising, and scare for its shareholders, development took place when REIT American Realty Capital Properties, with a then-market cap of over $10 billion, announced, under the cover of the Fed ending QE3, that it had overstated its adjusted funds from operation, a cash flow key metric used by REITs, from the first- and second-quarters of 2014.As the WSJ reminds us, while the amount of money involved, some $23 million, was "relatively small", the irregularities resulted in the resignation of the company’s chief financial officer, Brian Block, and chief accounting officer, Lisa McAlister.The result: a crash in the stock that wiped out nearly 30% or nearly $4 billion in market cap.
...people love to hear about how technology always saves the day... "Among the thousands of shale producers, you can guarantee there are pioneers just like those who started the shale revolution. As profit margins erode due to low or even lower future prices, the pioneers will try out the revolutionary new shale techniques that have yet to be deployed." It sounds good in the same way that Twinkies taste good. We would remind people here that back in the 1700's the South Sea company, the stock shares of which bubbled up enormously - even causing Isaac Newton himself to lose the then-staggering sum of 20,000 pounds - was billed as “a company for carrying out an undertaking of great advantage, but nobody to know what it is". Would it be unreasonable to restate the author's claim as "shale operators to deploy new technology of great advantage, but nobody to know what it is?". Ungrounded hype is the same thing no matter when or where it happens.
If you require more evidence that the United States is a dysfunctional society, observe American elections. Election season is slander season. Each party’s attack teams focus on misrepresenting, defaming, and ridiculing the opposing party’s candidates. Attack ads have replaced debates and any discussion of what the issues are, or should be, and how candidates perceive the public’s interest. Each attack team tells lies designed to enrage various voters about the other team’s candidate. Whoever is elected is indebted not to voters but to the special interests that provided the campaign money.
When Calpers buys an international asset for its investors, is it intervening in the forex market on behalf of the US?
Before: "The U.S. economy expanded steadily again during the third quarter, a sign of sustained growth fueled by American consumers and businesses despite mounting concerns about the health of overseas economies."
After: "The U.S. economy expanded at a healthy pace during the third quarter, a sign of sustained growth fueled by government spending and a narrower trade deficit despite mounting concerns about the health of overseas economies."
While the last clause in that sentence maintains the sunshine optimism, it is hardly the same interpretation, is it?
Over the last 2 days, more than two dozen Russian military aircraft, in four groups, were tracked and intercepted conducting aerial maneuvers around Europe, according to NATO. As The Wall Street Journal reports, this activity is on a scale seldom seen since the end of the Cold War, prompting NATO jets to scramble in another sign of how raw East-West relations have grown. "There is a troubling trend... of sabre rattling" warned The White House, noting that NATO has intercepted over 100 incursions by Russia year-to-date to which the US Army chief of staff ominously warned, this is "Russian aggression," and "we have to reassure our allies."
"Gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments." ... "I don’t think it’s possible" for the Fed to end its easy-money policies in a trouble-free manner. ... "Effective demand is dead in the water" and the effort to boost it via bond buying "has not worked."
QE has finally come to an end, but public comprehension of the immense fraud it embodied has not even started. In stopping QE after a massive spree of monetization, the Fed is actually taking a tiny step toward liberating the interest rate and re-establishing honest finance. But don’t bother to inform our monetary politburo. As soon as the current massive financial bubble begins to burst, it will doubtless invent some new excuse to resume central bank balance sheet expansion and therefore fraudulent finance. But this time may be different. Perhaps even the central banks have reached the limits of credibility - that is, their own equivalent of peak debt.
Could we have imagined anything more far-fetched and unlikely as this practice by the SEC itself? We’ll answer this question. No.
Despite the mainstream media's effusive celebration of ApplePay - despite numerous payment systems and NFC devices alreadt existing and failing to achieve any paradigm shift - it appears Tim Cook has pushed his company into an area of competition he was not full prepared for. Seemingly expecting the world's retailers to embrace the 'unique' payment system, first Wal-Mart & Best Buy, then CVS and now Rite-Aid have all blocked ApplePay. While proclaiming the success of signing up over a million credit card users in the first 72 hours, Cook seemed ticked off at the retailers who blocked him, "it's a skirmish," he said, as Reuters reports, jabbing "merchants have different objectives sometimes. But in the long arc of time, you only are relevant as a retailer or merchant if your customers love you."
Deutsche Bank executives are dropping like flies. Just days after receiving a clean bill of health from Europe's oh-so-stressful stress-tests, Deutsche Bank has decided that longtime finance chief Stefan Krause needs to be replaced. Perhaps most interesting is the bank that faces 'serious financial reporting problems' in the US and has a derivatives book literally the size of (actually 20 times bigger) than Germany, has decided the right man for the job is an ex-Goldman Sachs partner. Marcus Schenck, according to WSJ, will replace Krause, having worked at German utility E.ON until last year when he joined Goldman.
“Don’t let anybody tell you it’s corporations and businesses create jobs,” Clinton said to a crowd in Boston, reminding everyone of her views on spending from the past, "The money has to go to the federal government because the federal government will spend that money better than the private sector will spend it."
"What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we’re somehow going to know about that shift ahead of time. Any student of history knows that’s not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly."
- Canada PM vows crackdown after capital shocked by fatal attacks (Reuters)
- Canada Gunman Was Convert to Islam With Criminal Record (BBG)
- Some U.S. hospitals weigh withholding care to Ebola patients (Reuters)
- But... Great rotation... Bond funds stock up on Treasuries in prep for market shock (Reuters)
- Saudis at War With Islamic State Confront Echo of Kingdom’s Past (BBG)
- EU’s Top Banker Warns of Rule Fixation ‘Going Beyond Reason (BBG)
- U.S.-led air strikes killed 521 fighters, 32 civilians in Syria (Reuters)
- Growing Kurdish Unity Helps West, Worries Turkey (WSJ)
- Don’t Be Distracted by the Pass Rate in ECB’s Bank Exams (BBG)
- Hedge Funds Add to Venture-Capital Bounty (WSJ)
- Speed-of-Light Trading Grows in Europe With McKay Network (BBG)