en Chinese Commodity Crash Continues, But Pigs Are Flying <p>When it comes to keeping track of China's economy, one can listen, <em>and ignore, </em>the official goalseeked and <em>made-up-on-the-fly</em> data released by the government, or one can simply observe the price dynamics of the all-important Chinese commodities sector (because with fixed investment accounting for <a href="">well over 50% of GDP</a>, the marginal price of the commodities that are behind the capex tell us all we need to know about the true state of the Chinese economy). It is here where we find that contrary to the recent performance of the Shanghai Composite, which has been trading exclusively on the coattails of the most recent unofficial QE by the PBOC, commodity prices in China are actually crashing across the board, which in turn suggest that the real GDP is most likely anywhere between 20% and 60%, if not more, below the "official" 7.5% GDP print.</p> <p>Here are the charts, alongside some commentary from Bank of America:</p> <p><em>Last week, Qinhuangdao (QHD) 5,500k thermal coal price was at RMB480/t, unchanged from the week prior. QHD coal inventory decreased to 5.6mt, down 0.5% wow.</em></p> <p><a href=""><img src="" width="600" height="351" /></a></p> <p>&nbsp;</p> <p><em>In August, growth of daily coal consumption at 6 major IPPs dropped by 22.5% yoy, down from the -16.3% yoy in July.</em></p> <p><a href=""><img src="" width="600" height="366" /></a></p> <p>&nbsp;</p> <p><em>Rebar price was RMB3,058/t, down 1.1% wow. Rebar inventory in 34 major cities was at 5.47mt, down 1.9% wow. Concerns about the property market and relatively high steel production are still weighing on steel prices.</em></p> <p><a href=""><img src="" width="600" height="354" /></a></p> <p>&nbsp;</p> <p><em>Iron ore price was US$88.0/t, down 1.9% wow. Iron inventory at Chinese ports was 112mt, up 1.4% wow. Iron ore prices have been under immense pressure since the beginning of the year and are likely under continuous pressure from the weak housing market.</em></p> <p><a href=""><img src="" width="600" height="362" /></a></p> <p>&nbsp;</p> <p><em>National average cement price was RMB347.5/t, down 0.9% wow.</em></p> <p><a href=""><img src="" width="600" height="366" /></a></p> <p>&nbsp;</p> <p>That said, for the inflation watchers, there is some good news: pigs are flying! <em>"Last week, national average pork prices increased by 2.3% from the previous week to RMB23.3/kg. Meanwhile, the hog-to-corn price ratio edged up to 5.57 compared to a breakeven point of 6 for pig farmers.</em>"</p> <p><a href=""><img src="" width="600" height="358" /></a></p> <p>&nbsp;</p> <p>Actually did we say, "good news"... in a contracting economy, the last thing China can afford is surging food prices from the most prevalent protein. Keep a close eye on this as should pork prices approach or take out 2011 highs just RMB5 higher from here, the events from the Arab Spring will be due for a quick and violent comeback.</p> <p>* * * </p> <p>Finally, for the data purists, here are the three most "representative" charts: electricity, rail and autos. </p> <p><a href=""><img src="" width="600" height="367" /></a></p> <p><a href=""><img src="" width="600" height="368" /></a></p> <p><a href=""><img src="" width="600" height="344" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="771" height="470" alt="" src="" /> </div> </div> </div> Bank of America Bank of America China fixed Housing Market Tue, 02 Sep 2014 17:41:35 +0000 Tyler Durden 493818 at ISIS Allegedly Decapitates Second American Journalist <blockquote class="twitter-tweet" lang="en"><p><a href="">#IS</a> Beheads Steven Joel <a href="">#Sotloff</a>, Threatens to Execute Briton David Cawthorne Haines</p> <p>— SITE Intel Group (@siteintelgroup) <a href="">September 2, 2014</a></p></blockquote> <script src="//"></script><p>&nbsp;</p> <blockquote class="twitter-tweet"><p>BREAKING: Video purports to show beheading of U.S. reporter Steven Sotloff (center, black helmet) by ISIS. (Getty) <a href=""></a></p> <p>— The Denver Post (@denverpost) <a href="">September 2, 2014</a></p></blockquote> <script src="//"></script><p>&nbsp;</p> <p>&nbsp;</p> <p>Sadly<a href=""> it seems his mother's calls fell on deaf ears</a>...</p> <p><iframe src="//" width="560" height="315" frameborder="0"></iframe></p> <ul> <li><strong>*WHITE HOUSE CAN'T CONFIRM REPORTS OF SOTLOFF BEHEADING</strong></li> </ul> <ul> <li><strong>VIDEO WARNS GOVERNMENTS TO BACK OFF "THIS EVIL ALLIANCE OF AMERICA AGAINST THE ISLAMIC STATE"-SITE</strong></li> </ul> <blockquote class="twitter-tweet"><p>British <a href="">#ISIS</a> fighter warns Obama "as your missiles continue to strike our people, our knife will continue to strike necks of your people"</p> <p>— Jon Williams (@WilliamsJon) <a href="">September 2, 2014</a></p></blockquote> <script src="//"></script><p>&nbsp;</p> <blockquote class="twitter-tweet"><p>In "Second Message to America", <a href="">#ISIS</a> 'executioner' says "Obama I'm back". Sotloff asks "why paying price of your interference with my life"</p> <p>— Jon Williams (@WilliamsJon) <a href="">September 2, 2014</a></p></blockquote> <script src="//"></script><p>&nbsp;</p> <p><a href="">The clip can be found here...</a> (warning very graphic)</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="906" height="1085" alt="" src="" /> </div> </div> </div> Twitter Twitter White House Tue, 02 Sep 2014 17:10:53 +0000 Tyler Durden 493817 at The Morning After: What Happens When A Government Destroys Its Currency <p><em>Submitted by <a href="">Simon Black via Sovereign Man blog</a>,</em></p> <p>Imagine this scene:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>“Everyone in the country was in shock. People’s net worth had devalued more than 53% overnight.”</strong></p> <p>&nbsp;</p> <p><strong>“The value in savings accounts dropped in half and neither merchants nor consumers knew how to react because they had never been through something like it before…”</strong></p> </blockquote> <p>This is how an American business executive described living through Mexico’s devaluation of the peso exactly 38 years ago on September 1, 1976.</p> <p><strong><span style="text-decoration: underline;">Looking back, it was so obvious.</span></strong></p> <p>Mexico had a mounting debt, destructive policies, and a woefully unsustainable fixed exchange rate with the US dollar. All the writing was on the wall.</p> <p>But most people ignored the warning signs and kept their money in pesos.</p> <p><strong>Mexican President Luis Echevarria even went out on the radio to reassure people that the currency was safe.</strong></p> <p>Finally, under intense fiscal pressure, the government reached its breaking point. And on August 31, 1976, they made the decision to devalue the peso.</p> <p><strong>People woke up the next morning on September 1st to a 50%+ decline.</strong></p> <p>Coincidentally today is also the 75th anniversary of the Nazi invasion of Poland, the event that ultimately dragged the world into war.</p> <p>Germany had already invaded Austria and Czechoslovakia in the months before.</p> <p>By May 1939 Hitler had stated very plainly, “the decision remains to attack Poland at the first opportunity.”</p> <p>Even a week before the invasion, Hitler told his military commanders, “I have prepared . . . my ‘Death’s Head’ formations with orders to kill without pity or mercy all men, women, and children of Polish descent or language.”</p> <p>Germany had 60 divisions massed on the Polish border ready to invade.</p> <p>Yet people in Poland were told to keep calm, remain in place, and have confidence in their leaders.</p> <p>Finally, on August 30, the Polish government ordered a <em>partial</em> mobilization to meet the German threat.</p> <p>Needless to say, it was too little, too late. Germany invaded only hours later.</p> <p><span style="text-decoration: underline;"><strong>This is a familiar story that repeats across history. Despite obvious warning signs, people almost universally allow themselves to ignore reality.</strong></span></p> <p>It’s human nature to want to believe that everything is going to be OK. And when our political leaders whisper soothing words of hope and optimism, we take the bait.</p> <p>Looking back, it was plain as day that Mexico was going to devalue the peso. Everything about the economy and currency was totally unsustainable. Deep down people knew it.</p> <p>Similarly, it was plain as day that Hitler was going to decimate Poland. And people knew it.</p> <p><strong>Yet millions allowed their confidence to be misplaced in leaders who assured them that everything was OK.</strong></p> <p><strong>Are we so different today?</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The raw numbers tell us that most banks in Europe are insolvent. Bank in the US are dangerously illiquid.</p> <p>&nbsp;</p> <p>Most western governments are bankrupt. Pension and social security funds are insolvent.</p> <p>&nbsp;</p> <p>Financial markets are at precarious valuations. And the dollar is beginning to unravel as the dominant reserve currency.</p> </blockquote> <p><strong>These are data-driven assertions.</strong> And my guess is, deep down, your instincts are also telling you that something is seriously wrong with the system.</p> <p><strong><span style="text-decoration: underline;">Yet we’re all told to keep calm by our leaders. There’s nothing to see here, nothing to worry about.</span></strong></p> <p>Looking back, it’s all going to seem so obvious. If a major, global currency crisis hits within the next 12-months, people will think, “duh, how did I not see that coming?”</p> <p>Unfortunately by then it will be too late.</p> <p>It takes only a little foresight and planning to insulate yourself from an event that can have disastrous consequences.</p> <p>If you knew the Mexican peso was at an unsustainable level, why would anyone continue to hold pesos?</p> <p><strong>Similarly, if all the objective data suggests that the dollar is in store for an epic decline… and that the entire world is on a path to shift away from the dollar, why in the world would any rational person base his entire life savings in dollars?</strong></p> <p>It takes little effort to actually do something about it. Hold stronger currencies overseas. Own real assets. Move your retirement account abroad where your bankrupt government can’t steal it.</p> <p>These are common sense steps, just like putting on a seatbelt when you get into a car.</p> <p><strong>The time to act is now. Why play Russian roulette when the odds are clearly in favor of the house?</strong></p> <p>Don’t try to time it. Nobody has a crystal ball. It’s irrelevant whether the trend unfolds over weeks, months, or years. It’s pretty clear where this is all headed.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="309" height="229" alt="" src="" /> </div> </div> </div> fixed Germany Mexico Poland Reality Reserve Currency Tue, 02 Sep 2014 16:58:32 +0000 Tyler Durden 493816 at Russia Slams Barroso Over Leaked "Take Kiev In 2 Weeks" Comments, Revises Military Doctrine <p>As <a href="">we discussed yesterday</a>, <strong>Vladimir Putin's apparent 'threat' to EU's Barroso that "If I want to, I can take Kiev in two weeks,"</strong> prompted both anger and response as NATO reacted by stating a new "spearhead" force of 3-5,000 troops would be flown in to combat any (further) Russian aggression. However, Russia is not happy that the EC President leaked the conversation with Putin's aide Ushakov stating that <strong>recounting the private conversation was "inappropriate," "undiplomatic," and "unworthy of a serious political player.</strong>" More troublingly, the cold-war-tension-like escalation from NATO has prompted Russia to <strong>revise its military doctrine to account for “changing military dangers and military threats</strong>.”</p> <p>&nbsp;</p> <p>As <a href="">The Telegraph reports</a>,</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Vladimir Putin has boasted to European leaders that his forces could sweep into Kiev in two weeks if he wanted.</p> <p>&nbsp;</p> <p>The Russian president reportedly made the threat to the European Commission president during talks on the Ukraine crisis.</p> <p>&nbsp;</p> <p><strong>Mr Putin told Jose Manuel Barroso: “If I want to, I can take Kiev in two weeks,”</strong> Italy’s La Repubblica newspaper reported, implying this could be the result if the EU stepped up sanctions against Russia.</p> <p>&nbsp;</p> <p>His comments, relayed by Mr Barroso to colleagues at last weekend’s EU summit, emerged as <strong>Nato announced it would build a new “spearhead” rapid reaction force of up to 4,000 troops that can be flown into eastern Europe in 48 hours to respond to possible Russian aggression.</strong></p> </blockquote> <p><strong>Which prompted 2 responses from Russia..</strong></p> <p>First, a diplomatic talking to...</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Yuri V. Ushakov, an aide to Mr. Putin, said<strong> Mr. Barroso’s recounting of a private conversation was “inappropriate.”</strong></p> <p>&nbsp;</p> <p>“Whether these words were said or not, in my viewpoint, this quote given is taken out of context and it had absolutely different sense,” Mr. Ushakov said.</p> <p>&nbsp;</p> <p><strong>Disclosing details of conversation is undiplomatic, “unworthy of a serious political player”</strong></p> </blockquote> <p>And second, as The NY Times reports, a military one...</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>With NATO leaders expected to endorse a rapid-reaction force of 4,000 troops for Eastern Europe this week, <span style="text-decoration: underline;"><strong>a senior Russian military official said on Tuesday that Moscow would revise its military doctrine to account for “changing military dangers and military threats.”</strong></span></p> <p>&nbsp;</p> <p>In an interview with the Russian state news agency RIA Novosti, the official, Mikhail Popov, deputy secretary of Russia’s military Security Council, c<strong>alled the expansion of NATO “one of the leading military dangers for the Russian Federation.”</strong></p> <p>&nbsp;</p> <p>Mr. Popov said <strong>Russia expected that leaders of NATO would seek to strengthen the alliance’s long-term military presence in Eastern Europe</strong> by establishing new military bases in the region and by deploying tanks in Estonia, a member of NATO that borders Russia.</p> <p>&nbsp;</p> <p>“We believe that the defining factor in our relationship with NATO remains the <strong>unacceptability for Russia of plans to move military infrastructures of the alliance to our borders, including by means of expanding the bloc</strong>,” Mr. Popov said.</p> </blockquote> <p>*&nbsp; *&nbsp; *</p> <p>Furthermore, Russia appears set to release the Putin-Barroso conversation...</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><span style="text-decoration: underline;"><strong>Russia ready to release audio recording of conversation between President Vladimir Putin and European Commission President Jose Barroso</strong></span>, Interfax cites Russian ambassador to European Union as saying.</p> <p>&nbsp;</p> <p>Unless EU objects, <span style="text-decoration: underline;"><strong>Russia will distribute recording of phone talk to establish truth within 2 days</strong></span>, Vladimir Chizov says in letter to Barroso, Interfax reports</p> </blockquote> <p>One can only wonder what Barroso said...</p> <p>*&nbsp; *&nbsp; *</p> <p>Un-de-escalation?</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="418" height="345" alt="" src="" /> </div> </div> </div> Eastern Europe Estonia European Union Newspaper Ukraine Vladimir Putin Tue, 02 Sep 2014 16:32:05 +0000 Tyler Durden 493815 at European Close Sends S&P Tumbling Back Below 2,000 <p>"Good news" it would appear in the exuberant ISM and construction data, has morphed into bad news now that Europe has closed and US equities are tumbling. Despite the best efforts of VIX and JPY, the <strong>S&amp;P 500 cash index just broke below the crucial 2,000 level</strong>.</p> <p>&nbsp;</p> <p>S&amp;P breaks back below 2000...</p> <p><a href=""><img src="" width="600" height="430" /></a></p> <p>&nbsp;</p> <p>and JPY carry is not helping...</p> <p><a href=""><img src="" width="600" height="329" /></a></p> <p>&nbsp;</p> <p>Neither is VIX...</p> <p><a href=""><img src="" width="600" height="526" /></a></p> <p>&nbsp;</p> <p>*&nbsp; *&nbsp; *</p> <p>Retirement off...</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1382" height="991" alt="" src="" /> </div> </div> </div> Tue, 02 Sep 2014 16:03:16 +0000 Tyler Durden 493814 at When A Marketing Campaign Goes Horribly Wrong <p>It has been a bad year for Malaysian Airlines: following the disappearance of MH-370 (which to our knowledge still hasn't been found), and the crash of MH-17 (which to our knowledge still hasn't had its Kiev ATC recordings released) the country's national carrier <a href="">reported </a>it would be delisted, and nationalized, with a follow up report last week that <a href="">some 6,000 workers would be laid off </a>to enjoy the recovery "confirmed" by the market's all time highs on their own. The year not only got worse, but outright bizarre, macabre and morbid following a marketing ploy revealed last week in which would-be passengers were given a chance to win a ticket if only they shared their... <strong>bucket list? </strong></p> <p>According to the <a href="">Malay Mail,</a> reported by <a href="">Time</a>, Malaysia Airlines launched a competition in Australia and New Zealand four days ago, according to media reports, in which it said it was <em>giving away free economy-class tickets and free iPads</em>. The competition name was, to say the least, bizarre: <strong>My Ultimate Bucket List</strong>. Contestants had to explain “<strong>What and where would you like to tick off on your bucket list?”</strong></p> <p>Where this goes from here hardly needs an explanation but here goes:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The Merriam-Webster definition of bucket list is <em>“a list of things that one has not done before but wants to do before dying</em>.” The association is horrific, given that 537 people lost their lives flying on the airline this year.</p> <p>&nbsp;</p> <p>The contest appears to have since been withdrawn, with the <a href="">original competition link </a>now leading to a 404 error page. A PDF of the competition terms and conditions could be found <a href="">here </a>at time of publication, but besides that there no longer appear to be details of the competition on the MAS site.</p> <p>&nbsp;</p> <p>The launch of the competition was <a href="">picked up </a>in the Australian travel-industry press and even <a href="">name-checked </a>in British tabloid the Daily Mail. But perhaps MAS has since realized that asking prospective passengers to think up a bucket list before accepting a free ticket on one of its planes might be construed as macabre.</p> </blockquote> <p>This is not the first such tragedy related gaffe out of the Pacific Rim: "in 2003, the Hong Kong Tourism Board ran <a href="">an ad </a>promising would-be visitors that “Hong Kong will take your breath away.” At the time, SARS — severe acute respiratory syndrome — had killed about 100 people, mostly in Hong Kong and China. But the ad ran in British and European print magazines — and there was no time to change the slogan before the presses started to roll."</p> <p>That said, in a world in which fading celebrities need a massive "cloud" hacking to rekindle their idle glory, it would not be at all surprising if as this marketing gimmick goes viral, that traffic yearning for a flight on board the Malaysian airline will soar, and not just thanks to jihadist suicide bombers.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1200" height="816" alt="" src="" /> </div> </div> </div> Australia China Hong Kong New Zealand recovery Tue, 02 Sep 2014 15:50:28 +0000 Tyler Durden 493813 at The Chart Obama Does Not Want Merkel To See <p>The weekend's headlines reeled from the collapse in <a href="">global manufacturing PMIs</a> and with them the last best hope for the world's economies to reach escape velocity all on their own. <strong>However, there was one nation that did not plunge...</strong> there was one country whose growth (based on the soft survey data) is at 10-month highs. Perhaps this is the chart that President 'we need moar sanctions and costs' Obama does not want Angela 'umm, wait a minute' Merkel to see...</p> <p>&nbsp;</p> <p>Since sanctions began the plunge in Euro-Area PMIs has been commensurate with the rise in Russia's (oh and according to survey-data, US is as good as it has ever been)...</p> <p><a href=""><img src="" width="600" height="320" /></a></p> <p>*&nbsp; *&nbsp; *</p> <p><strong>Seems pretty clear who is paying the price and suffering the costs of Western sanctions...</strong></p> <p>&nbsp;</p> <p>When does Europe draw its own red line around Obama's sanctions?</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="948" height="506" alt="" src="" /> </div> </div> </div> headlines Tue, 02 Sep 2014 15:47:46 +0000 Tyler Durden 493807 at "World Is Losing Battle To Contain Ebola Epidemic," MSF Warns Response "Lethally Inadequate" <p>The <strong><a href="">CDC's worst nightmare is coming true</a></strong>. Despite reassurances from the government that it was 'contained', the <strong>Ebola outbreak in Nigeria is accelerating fast</strong>. Health Minister Chukwu said that 17 had now been infected and 271 were under surveillance (including most horrifyingly, 72 in Lagos). In addition, Congo is seeing cases increase rapidly, with WHO reporting 53 cases of Ebola (31 dead) and warning, perhaps ominously, that there is no link with the West Africa strain. Liberian President Ellen Johnson Sirleaf said the situation in her country "remains grave," adding "People now don't see this as a Liberia or West Africa crisis. <strong>It could easily become a global crisis</strong>." Furthermore, <a href=""></a><strong><span style="text-decoration: underline;"><a href="">Doctors-without-Borders warns,</a> "the world is losing the battle to contain the Ebola epidemic."</span></strong></p> <p>&nbsp;</p> <blockquote class="twitter-tweet" lang="en"><p>Map of <a href="">#Ebola</a> transmission in West <a href="">#Africa</a> <a href=""></a> (29 Aug 2014) <a href=""></a></p> <p>— WHO (@WHO) <a href="">August 29, 2014</a></p></blockquote> <script src="//"></script><p>&nbsp;</p> <ul> <li><strong>*WORLD LEADERS ARE FAILING TO ADDRESS EBOLA EPIDEMIC, MSF SAYS</strong></li> <li><strong>*INTERNATIONAL RESPONSE TO EBOLA 'LETHALLY INADEQUATE', MSF SAYS</strong></li> <li><strong>*MSF: WORLD IS LOSING BATTLE TO CONTAIN EBOLA EPIDEMIC</strong></li> <li><strong>*MSF: NATIONS WITH DISASTER RESPONSE CAPACITY MUST ASSIST</strong></li> </ul> <p><a href=""><em>Via Doctors Without Borders,</em></a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Six months into the worst Ebola epidemic in history, the world is losing the battle to contain it. Leaders are failing to come to grips with this transnational threat.</strong></p> <p>&nbsp;</p> <p>In West Africa, cases and deaths continue to surge. <strong>Riots are breaking out. Isolation centers are overwhelmed.</strong>&nbsp; Health workers on the front lines are becoming infected and are dying in shocking numbers. Others have fled in fear, leaving people without care for even the most common illnesses. Entire health systems have crumbled.</p> <p>&nbsp;</p> <p><strong>Ebola treatment centers are reduced to places where people go to die alone,</strong> where little more than palliative care is offered. It is impossible to keep up with the sheer number of infected people pouring into facilities.<strong> In Sierra Leone, infectious bodies are rotting in the streets.</strong></p> <p>&nbsp;</p> <p>Rather than building new Ebola care centers in Liberia, we are forced to build crematoria.</p> <p>&nbsp;</p> <p>Last week, the World Health Organisation (WHO) projected as many as 20,000 people infected over three months in Liberia, Sierra Leone, and Guinea.</p> <p>&nbsp;</p> <p><strong>We are in uncharted waters. Transmission rates are at unprecedented levels, </strong>and the virus is spreading quickly through Liberia’s capital, Monrovia.</p> <p>&nbsp;</p> <p>...</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>We have been losing for the past six months. We must win over the next three.</strong></span></p> </blockquote> <p>Nigeria is bad and getting worse fast.. <a href="">(via Reuters)</a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Nigeria has a third confirmed case of Ebola in the oil hub of Port Harcourt, <strong>bringing the country's total confirmed infections to 17, with 271 people under surveillance</strong>, the health minister said on Monday.</p> <p>&nbsp;</p> <p>... </p><p>&nbsp;</p> <p>Patrick Sawyer, the first case, came from Liberia, and then collapsed at Lagos airport on July 20.</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>The shift to Port Harcourt shows how easily containment efforts can be undermined.</strong></span> Nigeria's government acted quickly at the end of July, setting up an isolation ward and monitoring contacts closely. But one of Sawyer's contacts in Lagos avoided quarantine and traveled east to Port Harcourt.</p> <p>&nbsp;</p> <p>...</p> <p>&nbsp;</p> <p>Health Minister Onyebuchi Chukwu said in a press conference that <strong>72 people in Lagos, a city of 21 million people, were still under surveillance. Another 199 people were under surveillance in Port Harcourt.</strong></p> </blockquote> <p>Congo is accelerating... <a href="">(via WHO)</a></p> <ul> <li><strong>*WHO SAYS IDENTIFIED 53 CASES CONSISTENT W/EBOLA IN DRC, 31 DEAD</strong></li> <li><strong>*NO LINK BETWEEN WEST AFRICA, CONGO EBOLA OUTBREAKS, WHO SAYS</strong></li> </ul> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>"There are now 31 deaths," </strong>Eugene Kambambi, the WHO's head of communication in DR Congo, told AFP, citing Congolese authorities and stressing that the epidemic<strong> "remains contained" in an area around 800 kilometres north of the capital Kinshasa.</strong></p> <p>&nbsp;</p> <p>Kabamba added that there were "53 confirmed, suspected or likely cases" of Ebola, while 185 people were under medical watch because they had admitted to contact with patients or were believed to have had dealings with people stricken by the highly contagious disease.</p> <p>&nbsp;</p> <p>The government announced on August 25 that the DRC was facing its seventh Ebola outbreak since the disease was<strong> first identified in the former Zaire in 1976.</strong></p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>The health minister has ruled out any link with a serious Ebola epidemic sweeping parts of west Africa, at a cost of more than 1,500 lives, on the grounds that there had been no contact between those distant nations and Boende. The WHO has taken the same position.</strong></span></p> </blockquote> <p>And Liberia is a disaster... <a href="">(via CNN)</a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Liberian President Ellen Johnson Sirleaf said Monday that the situation over the massive Ebola outbreak in her country "remains grave."</p> <p>&nbsp;</p> <p>"Our health delivery system is under stress. The international community couldn't respond quickly," Johnson Sirleaf told CNN's Nima Elbagir in an interview.</p> <p>&nbsp;</p> <p>She warned a bigger response is needed to prevent that.</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>"People now don't see this as a Liberia or West Africa crisis. It could easily become a global crisis."</strong></span></p> </blockquote> <p>*&nbsp; *&nbsp; *<br />"contained"</p> <p><a href=""><img src="" width="600" height="442" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="538" height="440" alt="" src="" /> </div> </div> </div> DRC Reuters Twitter Twitter Tue, 02 Sep 2014 15:20:43 +0000 Tyler Durden 493812 at The Underbelly Of Corporate America: Insider Selling, Stock Buy-Backs, Dodgy Profits <p><em>Submitted by Charles Hugh-Smith of OfTwoMinds blog,</em></p> <p><span><i>The hollowing out of corporate strengths to enable short-term profiteering by the handful at the top leads to systemic fragility.</i></span></p> <p><span><b>Anonymous comments on message boards must be taken with a grain of salt, but this comment succinctly captures the underbelly of Corporate America:</b>&nbsp;massive insider selling, borrowing billions to buy back their own stocks to push valuations to the moon so shares granted as compensation can be sold for a fortune, and dodgy accounting strategies that boost headline profits and hide the gutting of investments in long-term growth.</span></p> <div><b><span>Here&#39;s the comment:</span></b></div> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><div><i><span>&quot;I&rsquo;m occupying a vantage point that allows me to see what is going on inside the top Fortune 50 companies. I have never seen such rot before. Of the 50, at least 30 have debt at 120% of cash. Most have cut capex, R&amp;D and maintenance by 80%. Most have been borrowing money to do stock buy-backs, while simultaneously selling off business units and doing layoffs.</span></i></div> <div>&nbsp;</div> <div><i><span>Of the 50, at least 20 have 100% insider selling. For some, you would have to go back decades to find a point where all of the acting board of directors are selling. In essence, they are paying the mortgage with their credit cards. Without bookkeeping games, there are no solid earnings. There will be no earnings growth.</span></i></div> <div>&nbsp;</div> <div><i><span>&ldquo;Executive compensation based on stock performance&rdquo; is killing corporate America.</span></i></div> <div>&nbsp;</div> <div><i><span>A black swan is not needed to make it fall, a gentle breeze will do just fine.&quot;</span></i><br /><em><span>(<a href="" target="resource">source message thread</a>)</span></em></div> </blockquote> <div><b><span>So let&#39;s try contesting these points.</span></b><br />&nbsp;</div> <div><span>Where is the data showing insiders buying hand over fist at these valuations?</span><br />&nbsp;</div> <div><span>Insider selling has been raising red flags since March 2014:&nbsp;<a href="" target="resource">In-the-know insiders are dumping stocks</a></span><br />&nbsp;</div> <div><span>Where is the data proving Corporate America isn&#39;t borrowing billions of dollars and using the nearly-free money to buy back shares? Buying back shares reduces the float (stocks available for purchase by the public), reducing supply and creating demand which pushes prices higher.</span><br />&nbsp;</div> <div><span><a href="" target="resource">Stocks&rsquo; Biggest Gains Are an Inside Job</a>:&nbsp;<i>Companies spent $598.1 billion on stock buybacks last year, according to Birinyi Associates in Westport, Conn. That was the second highest annual total in history, behind only 2007, Birinyi calculated. The pace picked up in the first quarter of 2014, when companies spent $188 billion, the highest quarterly amount since 2007.</i></span><br />&nbsp;</div> <div><span>Where is the data showing Corporate America has added jobs?</span><br />&nbsp;</div> <div><span style="color: black; font-family: Verdana, sans-serif;"><a href="" target="resource">Who actually creates jobs: Start-ups, small businesses or big corporations?</a>&nbsp;<i>During the 1990s, American multinational companies added 2.7 million jobs in foreign countries and 4.4 million in the United States. But over the following decade, those firms continued adding positions overseas (another 2.4 million) while cutting 2.9 million jobs in the United States.</i></span><br />&nbsp;</div> <div><span>As for dodgy accounting: when the dodgy accounting has been institutionalized, it&#39;s no longer viewed as dodgy. Which brings us to the money shot of the comment:&nbsp;<b>&ldquo;Executive compensation based on stock performance&rdquo; is killing corporate America.</b></span><br />&nbsp;</div> <div><span>When executives and others at the top of the corporate pyramid have such an enormous incentive (stock options worth tens of millions of dollars) if they can push the stock price higher with buy-backs paid with borrowed money and accounting gimmicks that inflate headline earnings, then why wouldn&#39;t they do precisely that?</span><br />&nbsp;</div> <div><span><b>The profits are as bogus as the stock prices:</b>&nbsp;both are relentlessly gamed to make sure fortunes can be reaped in a few years by those at the top.</span><br />&nbsp;</div> <p><span>As the comment noted,&nbsp;<b>this hollowing out of corporate strengths to enable short-term profiteering by the handful at the top leads to systemic fragility.</b>&nbsp;No shock is needed to bring down these fragile corporate structures: existing debt and the slightest tremor of global recession will be enough to topple the rickety facade.</span></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="530" height="514" alt="" src="" /> </div> </div> </div> Black Swan Corporate America Insider Selling Recession Tue, 02 Sep 2014 15:02:26 +0000 Tyler Durden 493811 at Central Bank Have Set the Stage For a Disaster That Will Make 2008 Look Like a Joke <p>The Central Bank policies of the last five years have damaged the capital markets to the point that the single most important item is no longer developments in the real world, but how Central banks will respond to said developments.</p> <p>&nbsp;</p> <p>Let us take a moment to digest that. Before 2008, for the most part, when something happened in the world, an investor would think about how that issue would affect the markets.</p> <p>&nbsp;</p> <p>Today, that same investor will try to analyze how the Central Banks will <em>react</em> to that issue, not the impact of the issue itself. This is why, for various periods between 2008 and today, the markets would rally on terrible economic data and other economic negatives: traders believed that because the data was <em>bad</em> the Fed would be more inclined to engage in more easing.</p> <p>&nbsp;</p> <p>After all, why do we invest? We invest because we want to make money. And when it comes to investing, we prefer easy money: gains that have a high probability of success. And thanks to Central Banks cutting interest rates over 500 times and printing over $10 trillion in money since 2008, what&rsquo;s the easiest way to make money by investing today?</p> <p>&nbsp;</p> <p>Front-run Central Banks policies.</p> <p>&nbsp;</p> <p>Consider Europe. In 2012, ECB President Mario Draghi promised to do &ldquo;whatever it takes&rdquo; to keep the Euro in one piece. Since that time, nothing has really improved in Europe&rsquo;s economy.</p> <p>&nbsp;</p> <p>France is approaching a triple dip recession. Germany may re-enter recession before the year&rsquo;s end. Spain remains an economic basket-case. Portugal just suffered another major bank failure. And on and on.</p> <p>&nbsp;</p> <p>And yet, bond yields on European Sovereign debt have fallen to <strong><em>multi-century lows</em></strong>. Germany&rsquo;s 10 year is now at 1%... an ALL TIME low. The reason for this? Investors, convinced that the ECB will buy sovereign bonds or, at a minimum, drive bond yields lower, have poured into European bonds.</p> <p>&nbsp;</p> <p>As a result, European bonds are now stretched to levels that far exceed a bubble. Remember, the entire sovereign debt crisis in Europe was based on the fact that most European countries are insolvent. When you include unfunded liabilities, most European countries are running <strong>Debt to GDP ratios north of 400%. </strong></p> <p>&nbsp;</p> <p><strong>The basic premise of investing is that you should be compensated for your risk exposure. The riskier an investment, the higher your expected returns should be. </strong></p> <p>&nbsp;</p> <p><strong>However, thanks to Central Bank meddling, today this is no longer the case. In Europe, where lending money to sovereign nations is in fact a high risk proposition, you are given almost <em>nothing</em> in the way of yields.</strong></p> <p>&nbsp;</p> <p>This will not end well. In fact, the ending will likely be catastrophic as the fast money herd panics and tries to move out of the various assets it only bought based on the assumption that it could unload its position on someone willing to pay a higher price (likely a Central Bank) down the road.</p> <p>&nbsp;</p> <p>We don&rsquo;t know when this will happen, but it WILL happen. And unlike stocks, when bond bubbles implode things tend to get VERY serious VERY quickly.</p> <p>&nbsp;</p> <p>This concludes this article. If you&rsquo;re looking for the means of protecting your portfolio from the coming collapse, you can pick up a FREE investment report titled <strong><em>Protect Your Portfolio</em></strong> at <a href=""></a>.</p> <p>&nbsp;</p> <p>This report outlines a number of strategies you can implement to prepare yourself and your loved ones from the coming market carnage.</p> <p>&nbsp;</p> <p>Best Regards</p> <p>&nbsp;</p> <p>Phoenix Capital Research</p> <p>&nbsp;</p> Bond Capital Markets Central Banks France Germany Portugal Recession Sovereign Debt Tue, 02 Sep 2014 14:50:05 +0000 Phoenix Capital Research 493810 at