en The Global Monetary Reset Is Under Way <p><a href=""><em>Via Zero Hedge comments from AI Tinfoil</em></a>,</p> <p><strong>The Global Monetary Reset is under way, but people have not noticed it yet.</strong> <em>The key is the move to zero interest rates.</em> </p> <p>Government debt almost everywhere is too high to ever pay off, let alone pay a traditional rate of interest on.&nbsp; <strong>As debts come due, including as bond issues mature, the only option governments have is to roll over the debt and accumulated interest, and the only way they can afford to do that is if money printing is a continued practice and interest rates are at or near zero.</strong>&nbsp; QE is the latest name for money-printing, inflating the amount of currency available.&nbsp; Logically, QE dilutes the value of a currency by inflating the number of currency units in circulation, and, theoretically, should lead to price inflation.&nbsp; However, if all nations engage in monetary expansion, the effects of money printing on exchange rates may be effectively concealed by a balance of expansion.&nbsp; <strong>Or, as in the case of the US dollar, a currency with the status of world reserve currency may be expanded with relative impunity by the nation creating that currency, effectively exporting its inflation to the rest of the world that continues to sell to that nation, or trades in a monetary system based on that currency</strong>. Injections of QE into an economy with weak fundamentals is likely to result in speculative bubbles as QE funds show up in investors' hands and not in the hands of general consumers.&nbsp; </p> <p>Inflation has become a necessary element of economic life according to the mainstream meme of economists.&nbsp; <strong>Inflation is a key strategy in coping with immense and increasing debts.</strong>&nbsp; Debt so large that it cannot be paid must be inflated away or governments must default.&nbsp; Deflation makes current debt increasingly difficult to pay or service out of deflating GDP and tax revenue.&nbsp; </p> <p><strong>Exporting nations have engaged in competitive exchange rate reductions to gain or maintain competitiveness for their exports.&nbsp;</strong> A strong currency hurts export competitiveness but lowers the cost of imports.&nbsp; A weak currency raises the cost of living of residents who must buy imports - a common feature for nations that import oil, for example.&nbsp; There is a necessary balancing act between export competitiveness and consumer price inflation, regulated often through exchange rate manipulation.&nbsp; Some of the Euro zone nations are learning the painful effects of locking themselves into one currency and losing the ability to use exchange rates to maintain export competitiveness.</p> <p><strong>The monetary expansions of the past ( done to re-inflate the world economy when it met a crunch - thank you Greenspan and successors) have flooded the world with currency.&nbsp;</strong> That currency has expanded speculation portfolios to the extent that the volume of currency sloshing around in search of returns or safety can quickly overwhelm a country's financial system and trade relations (competitiveness impaired, artificial investment bubbles, sudden debt crises when money is withdrawn, etc.).&nbsp; </p> <p><strong>The international trade and financial systems have made most countries relatively defenceless against trade and, more critically, capital flows. </strong>Vast sums can flow in or out of a country and its currencies almost instantaneously via computer clicks.&nbsp; Huge profits and losses can be made betting on exchange rate fluctuations, and on manipulating those exchange rates.&nbsp; ZIRP and NIRP are now regularly employed, ostensibly to dissuade residents from hoarding cash rather than adding to monetary velocity by spending, but ZIRP and NIRP are also used to dissuade speculators from buying a country's currency and hence raising its exchange rate.</p> <p><strong>Traditional stores of value and media of exchange among central banks - precious metals- have been debased through price manipulation in paper markets.</strong></p> <p><strong>The strategies that seem unique and strange, and contrary to tradition - rampant money printing, the monetizing of debt through central banks buying government bonds, ZIRP, NIRP, and the suppression of precious metal prices, are the necessary strategies of a new monetary system set up to cope with the problems arising from monetary excesses of the past.&nbsp;</strong> They are the new normal.&nbsp; By disabusing the public of the notion that currency should be a stable store of value, that saving is a virtue, and that money borrowers should pay a reasonable rent on the money borrowed, the monetary authorities are conditioning the public to the new normal.&nbsp; In the paradigm of Modern Monetary Theory, currency creation can continue to infinity without destructive inflation since interest rates and expectation of return on lent money can be maintained at or near Zero.&nbsp; <strong>Any interest rate significantly above zero will crash the system</strong>, so do not expect interest rate increases except as a short-term emergency strategy to counter a fall in the exchange rate of a currency.</p> <p><strong>Necessity is the mother of invention, and the necessity of coping with overwhelming debt and unfunded liabilities has led us to the invention of Modern Monetary Theory.&nbsp;</strong> Add to this the new rule of bank bail-ins, the rule that bank deposits are part of a bank's capital, and the pledging of the public purse to bail out bank losses.&nbsp; This is the public/government debt side of the strategy.&nbsp; For those with large sums of currency who wish to continue to speculate, there are the stock and commodities markets, and the casino is open for derivatives bets.&nbsp; To accomodate the speculators, we have seen the insulation of Wall Street from criminal liability for fraud, the repeal of Glass Steagall, the weakening of Dodd Frank, the delay of the Volker Rule, the use of the public purse to bail out Wall Street losses in 2008, and the recent pledging of the public purse to cover Wall Street losses from any future derivative bets losses - all in the CRomnibus bill.</p> <p><strong>Welcome to the New Normal.&nbsp; We shall see how long it lasts.</strong></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="310" height="283" alt="" src="" /> </div> </div> </div> Bond Central Banks default ETC Glass Steagall New Normal Reserve Currency Tax Revenue Mon, 22 Dec 2014 01:15:32 +0000 Tyler Durden 499414 at The Hidden Leverage In "Shiny Objects" - Banks Sell Record Amount Of Equity-Linked Structured Notes <p><strong>Banks are selling a record amount of U.S. structured notes tied to the stocks of fast-growing, volatile technology companies such as Facebook and Twitter.</strong> <a href="">As Bloomberg Briefs reports,</a> sales of securities linked to Facebook soared to $457.6 million this year, more than double the $204.2 million issued during the same period of 2013. Bloomberg notes that investors are flocking to products tied to social media companies, where more volatile share prices help banks improve structured-note terms that have been hurt by low interest rates... and <strong>issuers are &quot;trying to put shiny objects in front of the client,&quot; as the BTFD mentality gets increased leverage (and downside risk)</strong>. Investors have purchased $1.88 billion of structured notes linked to the 10 most popular technology stocks so far this year - 31% more than the same period in 2013 - and <strong>$32.7bn equity- and commodity-linked notes this year alone (up ~10% YoY)</strong>. <a href="">As we warned last week, <strong>counterparty risks are rising</strong>.</a></p> <p>&nbsp;</p> <p><a href=""><img height="377" src="" width="600" /></a></p> <p>&nbsp;</p> <p><a href="">While we showed the payoff structures of various notes last week, </a>Morgan Stanley sold $13.9 million of notes linked to the S&amp;P GSC Brent Crude Index. The 20-month securities, issued Dec. 10, <span style="text-decoration: underline;"><strong>pay 1.5 times the gains of that index, and proportionate losses if the gauge declines, with all principal at risk</strong></span>, according to a prospectus filed with the U.S. Securities and Exchange Commission.</p> <p><strong>The 7 most actively traded equity-linked structured notes this week were all energy-related...</strong></p> <p><a href=""><img height="233" src="" width="600" /></a></p> <p>And by way of example - this is <strong>the performance of the most-actively traded equity-linked structured note this week...</strong> 50% capita loss in 4 months</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 312px;" /></a></p> <p><strong>Europeans love these deals...</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><u>Spanish buyers of structured products are sacrificing capital protection and accepting longer maturities as they chase returns amid record-low interest rates.</u></strong></p> <p>&nbsp;</p> <p><strong>Maturities of three to four years were common in past years, but &quot;we are now quoting seven years&quot; </strong>for products that pay above-market coupons, said Alfonso de Miguel, head of global structured solutions at Banco Bilbao Vizcaya Argentaria SA in Madrid. At Banco Santander SA, terms have risen as high as eight years, according to a Madrid-based spokesman for the bank.</p> <p>&nbsp;</p> <p>...</p> <p>&nbsp;</p> <p><strong>Societe Generale is selling more capital-at-risk products</strong> that tie returns to the worst-performing of several assets, Munoz said. The bank is also improving terms by offering more notes that <strong>include &quot;knock in&quot; options that can leave an investor with potentially steep losses if a price barrier is breached.</strong></p> </blockquote> <p><strong>Credit risk is rising - counterparty contagion fears rise</strong> as structured notes are typically unsecured debt. That leaves buyers in danger if the issuer fails, as happened with Lehman Brothers Holdings Inc.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 412px;" /></a></p> <p><strong>Who is the biggest issuer of equity-linked structured notes...</strong></p> <p><a href=""><img alt="" src="" style="width: 599px; height: 697px;" /></a></p> <p>*&nbsp; *&nbsp; *<br /><a href="">As we concluded previously,</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>In the mid 2000s, it was massive one-way levered bets on &quot;house prices will never go down again.&quot; When the cracks started to appear, the mark-to-market losses in derivatives led to forced liquidations and snowballed systemically. In the mid 2010s, it is massively levered one-way asymmetric bets on &quot;stocks or commodity prices [oil] will never go down much for long ever again.&quot;</strong></p> </blockquote> <p>*&nbsp; *&nbsp; *</p> <p>And of course, no one will talk about this (or suggest it is &quot;contained&quot; until the loss of capital collapses some big name fund).</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="1635" height="1027" alt="" src="" /> </div> </div> </div> Crude Lehman Lehman Brothers Morgan Stanley Securities and Exchange Commission Twitter Twitter Mon, 22 Dec 2014 00:30:00 +0000 Tyler Durden 499413 at The Keynesian PhD Brigade Strikes Again: Sweden’s Riksbank Joins The ZIRP Mania <p><a href=""><em>Submitted by David Stockman via Contra Corner blog</em></a>,</p> <p>Folks, it&rsquo;s a tyranny of the PhDs. <strong>Recently the central bank of Sweden was subject to a withering tirade by that oracle of Keynesian rubbish, professor Paul Krugman, who accused it of &ldquo;sado-monetarism&rdquo;&nbsp;for leaving the Swedish economy exposed to the mythical economic disease of &ldquo;deflation&rdquo;.</strong></p> <p><strong>So the Riksbank threw caution to the wind, and a few months ago joined the global central bank plunge into ZIRP and promised to&nbsp;ladle out&nbsp;free money&nbsp;until at least 2016. </strong>To leave no doubt about its intentions, it is currently&nbsp;cranking up plans&nbsp;for &ldquo;direct lending&rdquo;,&nbsp;&ldquo;asset purchases&rdquo;, negative interest rates (N-ZIRP) and the rest of the&nbsp;recently invented&nbsp;central bankers&rsquo; voodoo kit.&nbsp;Anything to achieve its sacred 2% inflation target!</p> <p>So still another central bank has been infected by the 2% inflation shibboleth&mdash;-a folly&nbsp;the greatest central banker of our era dispatched recently&nbsp;with a single sentence:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Mr. Volcker,who believes the Fed&rsquo;s main goal is to defend the dollar&rsquo;s stability, said he doesn&rsquo;t even understand why the Fed adopted a 2% target for inflation. He asked, &ldquo;Do we want prices to double every generation?&rdquo;</p> </blockquote> <p><strong>Yes, today&rsquo;s Keynesian central bankers don&rsquo;t particularly&nbsp;care what happens in the next&nbsp;30 years or even 30 months. It&rsquo;s all about the noise-ridden &ldquo;in-coming&rdquo; data and whether the&nbsp;gap between actual production and employment, one the one hand,&nbsp;and&nbsp;a theoretical figment called full employment or &ldquo;potential&rdquo;&nbsp;GDP, on the other,&nbsp;has been closed.</strong></p> <p>It is downright amazing that the $75 trillion global economy&nbsp;is in thrall to the stupid math models of a couple of hundred PhDs. And these so-called DSGE models (dynamic stochastic general equilibrium) are, indeed,&nbsp; just plain stupid.</p> <p>Not a single major economy in the world is a closed system. Nor&nbsp;is the capacity to produce iron&nbsp;ore, petroleum liquids, sheet steel, autos,&nbsp;machine tools, solar panels, networking gear, server farms,&nbsp;e-commerce order fulfillment, warehousing services, quick-serve restaurant meals, shopping boutiques, violin lessons&nbsp;or yoga classes fixed and measureable. Instead, it is&nbsp;a giant, swirling global flux driven by billions of prices and competitive dynamics that continuously bring new capacity into being, put old and obsolete capacity out to pasture and stretch, bend and extend existing &ldquo;capacity&rdquo; in ways that are too deep in the economic weeds to observe, measure or manage.</p> <p>Likewise, the other component of the DSGE&mdash;so-called &ldquo;aggregate demand&rdquo;&mdash;-is also a&nbsp;fairy tale.&nbsp;That is, &ldquo;spending&rdquo;, as it is&nbsp;computed in the Keynesian GDP accounts, and then spit back by the DSGE models&nbsp;which pretend to &ldquo;forecast&rdquo; it, is a function of either income or fiat credit.</p> <p><em><strong>In a stable, productive&nbsp;and honest&nbsp; economic system, spending always and everywhere comes from income.</strong> </em>Workers earn incomes through the act of production, and then &ldquo;spend&rdquo; the major part of it&nbsp;on their current cost of living and save or pay taxes with&nbsp;the rest.</p> <p>Likewise, businesses distribute some of their net income or profits to shareholders/owners and then reinvest the rest&mdash;along with newly raised capital obtained from household savers. Government&rsquo;s also&nbsp;&ldquo;spend&rdquo; a fair amount on goods, services and transfer payments, but obtain the financing via levies on the pre-tax incomes of households and businesses.</p> <p>And that&rsquo;s all there is; there ain&rsquo;t no more in an honest&nbsp;free market economic system.&nbsp;Investment spending is obtained from current savers; debt is one form by which savings are channeled to investors along with equities and various hybrids. Household consumption spending&mdash;the famous 70% of GDP&mdash;comes from the disbursement of labor and capital incomes to these units; and, yes, when governments run a deficit to finance their spending in an honest system, they tap the savings pool in competition with other investors.</p> <p>It goes without saying, of course, that in an honest economic system there could theoretically be a lot of debt&mdash;&ndash;that is, if households were inclined or motivated by high interest rates to save a larger portion of their incomes. The latter increment to the pre-existing savings pool, in turn,&nbsp;could be borrowed by businesses or&nbsp;governments to augment their&nbsp;own&nbsp;spending at&nbsp;higher levels than could otherwise be&nbsp;financed by&nbsp;post-dividend&nbsp;profits or tax inflows, respectively.</p> <p>An&nbsp;honest &ldquo;high debt&rdquo; economy, of course, would reflect the market-clearing price of savings and debt. And,&nbsp;most likely, given human propensity to prefer a bird in the hand to one in the bush, it&nbsp;would mean a high interest rate&nbsp;system&mdash;-an arrangement&nbsp;that in and of itself would tend to&nbsp;curtail the level of&nbsp;debt.</p> <p>Indeed, as in almost everything else in&nbsp;economics, high prices (of interest) are the best cure for high debt. But then we come to &ldquo;fiat credit&rdquo;&mdash;-the kind of debt&nbsp;that is manufactured out of thin air by central banks when they&nbsp;purchase existing financial securities&mdash;mainly government notes.</p> <p>Despite all of the gussied-up theories about the function and theory of central banks, the only thing they really do is introduce a deadly economic virus into the system. Namely, debt that is not funded by savings.</p> <p>Needless to say, the more central banks hit the &ldquo;print&rdquo; button, the more the fiat credit disease flourishes, and the greater the distortions in the financial system. Central bank created fiat credit is inherently fraudulent because it amounts to &ldquo;something for nothing&rdquo;. And, as a practical matter, it causes debt to be underpriced because increasing demands for its issuance&nbsp;do not need to be greenlighted by savers asking for high interest rates in order to defer current spending.</p> <p>Instead, it is greenlighted by monetary central planners who are inherently prone to an occupational disease. Namely, the unfounded belief that they can generate higher societal growth and wealth by keeping interest rates persistently and systematically below free market clearing levels.</p> <p>Yes, there is an argument that private fractional reserve banks can create fiat credit, too. But what they really do is more in the nature of &ldquo;maturity transformation&rdquo;, which means they turn short-term liquid deposits into long-term, relatively illiquid loans. Get rid of deposit insurance, the Fed discount window and the legal shield against fraud suits&mdash;&ndash;and fiat credit out of the private banking system would not get too far. The high rollers who went all-in making loans and thereby generating &ldquo;new&rdquo; deposits would either crash land in insolvency eventually from bad loans; or they would be&nbsp;cut-off at the pass by real savers, who would take there deposits to safer and sounder institutions.</p> <p>In any event, the artificial boost to credit availability and &ldquo;growth&rdquo; in the Keynesian GDP accounts that results from ever increasing amounts of central bank manufactured fiat credit is a one time parlor trick. At length and inevitably, it is stopped cold by the limits of &ldquo;peak debt&rdquo;.</p> <p>Suffice it to say, that almost everywhere on the planet that condition has now been reached. The mountainous rise of total credit outstanding&mdash;household, business,government and finance&mdash;&nbsp;in the US economy since 1971 is not&nbsp;remarkable merely owing to its magnitude,&nbsp;as shown below.</p> <p>The&nbsp;more relevant point is that the bottom left of the graph represented 150% of GDP&mdash;-an aggregate leverage ratio that had prevailed for a&nbsp;century since 1870; and which&nbsp;reflected&nbsp;either the absence of a central bank (before 1914)&nbsp;or the operation of the early Fed which, other&nbsp;than during wartime, was run by people who knew better than to sit&nbsp;around printing money and pretending that they were the masters of the national economy.</p> <p><em><strong>At the present time, that ratio is at&nbsp;350% of national income,&nbsp;and that&rsquo;s &ldquo;peak debt&rdquo; for all practical purposes.</strong> </em>Try as it might&mdash;&ndash;and&nbsp;expanding the Fed&rsquo;s balance sheet by 5X since September 2008 amounts to a whole lot of trying&mdash;the Fed has been able to only inch total credit outstanding upwards by hardly 2% per year compared to double digit rates which prevailed prior to 2008.&nbsp;That is,&nbsp;when central bankers were indulging&nbsp;in their one-time take-out of the economy&rsquo;s natural debt&nbsp;service&nbsp;capacity against income.</p> <p>In short, what the recent flattening trend in the chart below really means is that the days of turbo-charging the GDP computations via fiat credit financed &ldquo;spending&rdquo; are over. We are back to income based spending. And that condition surely describes most of the rest of the world&ndash;but especially Japan and Europe. <img alt="" src=";type=image/jpeg&amp;chart_type=line&amp;recession_bars=on&amp;log_scales=&amp;bgcolor=%23e1e9f0&amp;graph_bgcolor=%23ffffff&amp;fo=verdana&amp;ts=12&amp;tts=12&amp;txtcolor=%23444444&amp;show_legend=yes&amp;show_axis_titles=yes&amp;drp=0&amp;cosd=1971-01-01&amp;coed=2014-07-01&amp;width=670&amp;height=550&amp;stacking=&amp;range=Custom&amp;mode=fred&amp;id=TCMDO&amp;transformation=lin&amp;nd=&amp;ost=-99999&amp;oet=99999&amp;scale=left&amp;line_color=%234572a7&amp;line_style=solid&amp;lw=2&amp;mark_type=none&amp;mw=1&amp;mma=0&amp;fml=a&amp;fgst=lin&amp;fgsnd=2007-12-01&amp;fq=Quarterly%2C+End+of+Period&amp;fam=avg&amp;vintage_date=&amp;revision_date=" style="width: 601px; height: 493px;" /></p> <p><strong>In short, peak debt means that the one-time Keynesian parlor trick of fiat credit fueled GDP growth is over and done.</strong> Accordingly, actual &ldquo;aggregate demand&rdquo;&nbsp;today is&nbsp;nothing more or less than the spending that can be extracted from current production; and its particular mix reflects the manner in which the income from current production is whacked-up by households. business and government.</p> <p>So&nbsp;what you see is what you get when it comes to &ldquo;aggregate demand&rdquo;. State differently, production comes first, income follows, and spending results. There is no meaningful&nbsp;boost to GDP from fiat credit. It has&nbsp;been a modest sideshow during QE, and&nbsp;now, at least for the moment, there is no boost to income-based&nbsp;spending&nbsp;at all.</p> <p><strong>That&rsquo;s why the central bankers&rsquo; DSGE models are a complete crock.</strong> There is no measureable or achievable thing called &ldquo;potential GDP&rdquo;. There is no magic elixir called &ldquo;aggregate demand&rdquo; which is different from current production, and which can be goosed and &ldquo;simulated&rdquo; by central bankers. And there is no &ldquo;gap&rdquo; to fill owing to the ministrations of central bankers running a monopoly&nbsp;printing press.</p> <p><strong>In other words, DSGE amounts to a foolish kind of bathtub economics. </strong>That is, our benighted central bankers believe&nbsp;there is&nbsp;a full-employment line at the top of the tub; and there is a&nbsp;faucet that can be opened to&nbsp;fill that tub to the brim. Their job, they presumptuously aver,&nbsp;is to regulate the water flow through the crude tools of interest rate pegging, yield curve manipulation, wealth effects &ldquo;puts&rdquo; and open-mouth word cloud emissions.</p> <p>Its all bunk, of course,&nbsp;yet bathtub economics is the source of the 2% inflation target. There is not a shred of actual empirical&nbsp;evidence for it. Its just an made-up axiom that purports to explain why there is a &ldquo;gap&rdquo; between the imaginary line of potential GDP and actual production, and why more inflation is necessary in order to goose a mythical ether&nbsp;called &ldquo;aggregate demand&rdquo;.</p> <p><strong>Indeed, the whole thing completely defies common sense and everyday observation.</strong> In a recent post, Mish Shedlock said it well. From Mish</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><div class="copy-paste-block"> <ul> <li>If price of food drops will people stop eating?</li> <li>If the price of gasoline drops will people stop driving?</li> <li>If price of airline tickets drop will people stop flying?</li> <li>If the handle on your frying pan falls off or your blow-dryer breaks, will you delay making another purchase because you can get it cheaper next month?</li> <li>If computers, printers, TVs, and other electronic devices will be cheaper next year, then cheaper again the following year, will people delay purchasing electronic devices as long as prices decline?</li> <li>If your coat is worn out, are you inclined to wait another year if there are discounts now, but you expect even bigger discounts a year from now?</li> <li>Will people delay medical procedures in expectation of falling prices?</li> <li>If deflation theory is accurate, why are there huge lines at stores when prices drop the most?</li> <li>(Mike &ldquo;Mish&rdquo; Shedlock<br /><a href="" rel="nofollow" target="_blank"></a></li> </ul> </div> </blockquote> <p>And that gets us back to Sweden. Like the rest of Europe, it&nbsp;is suffering from the burden on growth and wealth that accompanies a giant welfare state and its&nbsp;onerous burdens of taxation, regulation and incentives for non-production.</p> <p>Nevertheless, despite these headwinds,&nbsp;Sweden has experienced a&nbsp;moderate&nbsp;level of real growth (@ 2.5%/year)&nbsp;and a steady&nbsp;1.5% rate of inflation since the turn of the century. It is not plunging into some economic black hole, and does&nbsp;not face an emergency so severe that it needs to run its printing presses as if there is no tomorrow.</p> <p><img alt="Historical Data Chart" id="ctl00_ContentPlaceHolder1_ctl00_ChartUC1_ImageChart" src=";d1=20000101&amp;d2=20141231" style="height: 275px; width: 601px;" /> <img alt="Historical Data Chart" id="ctl00_ContentPlaceHolder1_ctl00_ChartUC1_ImageChart" src=";d1=20000101&amp;d2=20141231" style="height: 275px; width: 601px;" /></p> <p>Yet&nbsp;its central bank has not been penurious about expanding its balance sheet, either.&nbsp;The whole &ldquo;crisis&rdquo; which&nbsp;caused it to join the ZIRP&nbsp;money printers club is that after a&nbsp;burst of Riksbank credit expansion in response to&nbsp;the financial crisis,&nbsp;its central bankers made a feeble effort to slow things down.</p> <p><img alt="Historical Data Chart" id="ctl00_ContentPlaceHolder1_ctl00_ChartUC1_ImageChart" src=";d1=20070101&amp;d2=20141231" style="height: 275px; width: 601px;" /></p> <p>For that act of prudence, they were fired. And now the PhD who led the charge, Dr. Henry Ohlsson,&nbsp;is being put in charge.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Ohlsson, also a member of the board of the Swedish Public Employment Service, joins a bank that has lowered its benchmark rate to zero and this week pledged to do what&rsquo;s needed to jolt the largest Nordic economy out of a deflation spiral<em><strong>&hellip;&hellip;..The Riksbank has come under fierce criticism in recent years for cutting rates too slowly to address persistently low inflation, including in June from the Economic Council of Swedish Industry of which Ohlsson was chairman.</strong></em></p> </blockquote> <p>So it&nbsp;is a tyranny of the PhDs. <strong>It is a group-think mania that has gone global</strong>. It&rsquo;s also only a matter of time before the&nbsp;central bankers&rsquo; money printing spree takes down the very bubble-ridden financial system it has so recklessly&nbsp;spawned.</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="442" height="260" alt="" src="" /> </div> </div> </div> Central Banks Crude Discount Window fixed Free Money Global Economy Japan Krugman Paul Krugman Yield Curve Sun, 21 Dec 2014 23:50:26 +0000 Tyler Durden 499411 at Two More Cops Shot After Yesterday's Brutal New York "Execution" <p>Just a day after the premeditated execution of two NYPD officers in New York by a deranged, suicidal psychopath, two more police officers have been shot in America today. In St.Louis, an off-duty officer was shot multiple times and remains in critical condition while in Tarpon Springs, Florida, 45-year-old officer Charles Kondek - a 17-year-veteran and father of 5 children - was shot and killed early Sunday morning.</p> <p><a href=""><em>As Fox Boston reports,</em></a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Florida authorities say a police officer was shot and killed in Tarpon Springs early Sunday.</strong></p> <p>&nbsp;</p> <p><a href=""><img src="" style="width: 320px; height: 262px;" /></a></p> <p>&nbsp;</p> <p>The Pinellas County Sheriff's Office said in a statement that police have arrested 23-year-old Marco Antonio Parilla Jr. on suspicion of first-degree murder.</p> <p>&nbsp;</p> <p>The Tarpon Springs Police Department identified the fallen officer as 45-year-old Charles Kondek, a 17-year veteran of the local police department. Originally from New York, Kondek had previously served on the New York City Police Department for more than five years, authorities said.</p> <p>&nbsp;</p> <p><strong>Authorities say Kondek responded to a call for service shortly after 2 a.m. Police said the suspect shot at the officer and then fled the scene in a vehicle and crashed into a pole and another vehicle. He was then apprehended by police at that location.</strong></p> <p>&nbsp;</p> <p><strong>The Tampa Bay Times reports that Kondek was the father of five children.</strong></p> </blockquote> <p><a href=""><em>As KSDK </em><em>&nbsp;</em></a><em><a href=""><em>further adds </em></a>reports:</em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>An off-duty St. Louis police officer was shot multiple times Friday.</strong> It happened near the intersection of Breman Avenue and North 25th Street at approximately 3:55 p.m.<strong> </strong></p> <p>&nbsp;</p> <p><strong>Captain Michael Sack says the victim, a 28-year-old man with four years experience with the department, is in critical stable condition with injuries that are believed to be non-life threatening. </strong>Capt. Sack says the officer was shot several times in his lower extremities.<strong> </strong></p> <p>&nbsp;</p> <p>"An off duty officer had been driving down this street in his personal vehicle when he came across an occupant or occupants in another vehicle," described Capt. Sack. "We don't know what transpired, but the occupant or occupants of that other vehicle opened fire at the officer."</p> <p>&nbsp;</p> <p>The officer was in surgery Friday evening, so the department says it wouldn't be able to interview him until Saturday.<strong> </strong></p> <p>&nbsp;</p> <p><strong>"He was struck a number of times," </strong>explained Capt. Sack. "He drove a short distance where someone else, then, took over and drove his vehicle. We think it was someone who was not inside the car with him at that time."<strong> </strong></p> <p>&nbsp;</p> <p>Captain Sack says the officer was armed at the time of the shooting, but it is unclear if he fired any shots.</p> <p>&nbsp;</p> <p>Police are searching for a grey vehicle. There is currently no suspect description available.</p> </blockquote> <p>*&nbsp; *&nbsp; *</p> <p>As Ian Fleming wrote, <strong><em>"</em></strong><em>Once is happenstance. Twice is coincidence. Three times is enemy action." </em>Let's just hope that America's <em>SWAT</em>ified police forces don't decide that the time for war against enemies <em>domestic</em> has finally come, because as we noted previously in "<a href="">Across America, Police Departments Are Quietly Preparing For War</a>", they most certainly are ready:</p> <p><a href=""><img src="" width="600" height="578" /></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="320" height="262" alt="" src="" /> </div> </div> </div> Florida New York City Sun, 21 Dec 2014 23:19:07 +0000 Tyler Durden 499418 at Meet Joe Lewis - The $200 Million "British Madoff" <p>In an oddly familiar echo of Bernie Madoff's massive ponzi collapse, <a href="">The Telegraph reports</a>, <strong>a currency trader has vanished along with £130 &thinsp;million in investors’ cash in an alleged fraud that could be one of the biggest in recent British history</strong>. Joe Lewis, 59, is being investigated by police over almost $200&thinsp;million which he claimed was in clients’ accounts (incluidng professional footballers and golfers) but now no longer exists. In a stunning email sent to clients 2 weeks ago, Lewis admitted that his company - JL Trading - had stopped operating in 2009 (after suffering heavy losses on disastrous FX trades), adding that <strong><em>"I have covered up my mistakes from everyone including my staff, no one else knew what was happening."</em></strong> The father of two has since failed to answer emails and phone calls, and at his Istanbul apartment a doorman said he had not been seen for a few weeks.</p> <p>&nbsp;</p> <p><a href=""><img src="" width="305" height="381" /></a></p> <p>&nbsp;</p> <p><a href=""><em>As The Telegraph reports</em></a>,</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>In an email sent a month earlier – in response to growing concern from investors trying to get their money out – he claimed that his company was having “a stressful time” releasing $197&thinsp;million (£126&thinsp;million) from American brokers because of US red tape.</p> <p>&nbsp;</p> <p>...</p> <p>&nbsp;</p> <p>Mr Lewis admitted that his company, JL Trading, had stopped operating in 2009 after suffering heavy losses on disastrous foreign exchange deals.</p> <p>&nbsp;</p> <p><strong>He confessed in the email that he had continued taking people’s money for the next five years in an attempt to turn his fortunes around, but that all those attempts had failed.</strong></p> </blockquote> <p><strong>Whatever the truth, the reality for investors – many of them British – is that they have each lost a small fortune. </strong></p> <p><strong>A civil action to freeze his accounts and seize any assets has also been started.</strong> The businessman, who traded from a smart residential address in Istanbul with views over the Bosporus, is understood to have left Turkey some weeks ago. His adult son said he had no idea where his father was. One report suggested he had briefly visited relations near Hull and may now be in the Far East.</p> <p><span style="text-decoration: underline;"><strong>In the email sent on Dec 3, Mr Lewis wrote:</strong></span></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"Dear investor,</p> <p>&nbsp;</p> <p><strong>I am writing to inform you that JL Trading is ceasing to carry on business. </strong>Contrary to the impression that I have hitherto given, the business has lost almost all of its assets, and there appears no prospect of those assets being recouped.</p> <p>&nbsp;</p> <p><strong>JL Trading ceased foreign exchange trading in 2009 following substantial losses and since that time the business has suffered further losses, which I have tried to make good through investments in a number of commercial projects. </strong>However, it is now clear that the business will not be able to recover its losses and must cease trading. This means that, contrary to what was reported to you previously, you cannot expect any payments in the future.</p> <p>&nbsp;</p> <p><strong>I can only apologise unreservedly for any losses or unfulfilled expectations of profit.</strong> I have tried to recover the position for a considerable period of time, but it is now clear that I will be unable to do so. I sincerely regret that I have not been able to do better on your behalf."</p> </blockquote> <p>On Sept 10 this year, Mr Lewis sent an email to clients that explained that he was <em>“not able to give an exact date when we can send monies out” due to ongoing problems with American regulators. Lawyers, he said, were working on it and “they have everything in hand”.</em></p> <p>On Nov 14, Mr Lewis sent another email. <em>“<strong>We are going through a stressful time having our funds returned from our brokers</strong>; this has led to many doubts and concerns about the security of funds being held,”</em> he wrote.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>His business was being wound up, but investors would all get their money back, he said. “So you can realise the extent of our business, our current values are: Due to clients, $197,000,000 in 893 accounts, worldwide. Due from Broker, $260,000,000 in 1 account, US,” he wrote, adding: “As we are no longer trading, these amounts should not change.”</p> <p>&nbsp;</p> <p><strong>Then came the email of Dec 3, in which he admitted he had not traded currency for five years.</strong></p> <p>&nbsp;</p> <p>Two days later, Mr Lewis sent out another email – the last anyone has received – changing his story again and in which he blamed the previous email on his legal team. <span style="text-decoration: underline;"><strong>“You have been sent an update this week which was worded by my lawyers, but I wanted everyone to know, I am not running away from things,”</strong></span> he wrote, “Whilst I regret some of the things I have done, I will do my best to remedy this situation.</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>“Please note, I have covered up my mistakes from everyone including my staff, no one else knew what was happening.”</strong></span></p> <p>&nbsp;</p> <p>Mr Lewis’s son James said: “He [Joe Lewis] didn’t live extravagantly. I don’t know where the money’s gone. I am happy to share information with the legal entities.</p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>“Everything he had is ruined. There are no assets at all that I am aware of.”</strong></span></p> </blockquote> <p>* * *</p> <p>Welcome Britain to the yield-chasing, get-rich-quick, consequence-less society in which we live...</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="305" height="381" alt="" src="" /> </div> </div> </div> Reality Turkey Sun, 21 Dec 2014 23:15:14 +0000 Tyler Durden 499410 at Maybe Oil Goes to $70 on its Way to $40 <p><a href=""><em>Submitted by Charles Hugh-Smith of OfTwoMinds blog</em></a>,</p> <p><span><i>A retrace that fills open gaps and kisses the 50-day moving average surprises everyone who was confident oil was heading straight down to $40/barrel.</i></span></p> <div><span><b>When the conventional media ordains oil inevitably dropping to $40/barrel, I start looking for something else to happen--like oil going to $70/barrel.</b>&nbsp;There are number of reasons this isn&#39;t as farfetched as it might seem at the moment.</span><br />&nbsp;</div> <div><span><b>1. The huge gap begging to be filled on the chart of the Energy Select Sector exchange-traded fund XLE</b>&nbsp;and a bunch of other energy-sector stocks and etfs. Gaps like this usually get filled sooner rather than later.</span><br />&nbsp;</div> <div><span><img border="0" src="" /></span></div> <p><span><b>2. A bounce back to the 50-day moving average on the WTI oil index around $73 would be unsurprising.</b>&nbsp;As the old saying has it,&nbsp;<i>nothing goes down in a straight line</i>, and since oil fell in a parabolic curve down, some sort of retrace to a key technical level of resistance is to be expected.</span></p> <div><span><b>There are many ways to calculate Fibonacci levels, but a retrace to the 38.2% level equates to the mid-$70s.&nbsp;</b>By my reckoning, the natural starting place is the recent high around $116 in 2011 to the recent low around $53. The 38.2% level is $24 + $53 = $77.</span><br />&nbsp;</div> <div><span>Maybe price doesn&#39;t retrace all the way to the mid-$70s, but the possibility shouldn&#39;t be discounted.</span><br />&nbsp;</div> <div><span><b>3. Too many punters have bet on oil dropping straight to $40/barrel</b>, and all those put options offer the big financial players an incentive to spark a short-covering rally that outruns stops and scoops all the money by options expiration on January 16, 2015.</span><br />&nbsp;</div> <div><span>The more puts there are at $70/barrel (and equivalent levels in energy etfs, oil services stocks, etc., the greater the incentive to push the short-covering rally higher than expected.</span><br />&nbsp;</div> <div><span><b>4. The parabolic drop in oil resulted more from the panicky unwinding of a crowded and overleveraged trade than supply-demand.</b>&nbsp;As I explained in my series on the&nbsp;<i>financialization of oil</i>, the financial pyramiding of oil is much less visible than supply and demand, so the mainstream media focuses on what&#39;s easy, i.e. supply and demand issues.</span><br />&nbsp;</div> <div><em><span><a href="" target="resource">The Oil-Drenched Black Swan, Part 4: The Head-Fake Disruption Ahead</a>&nbsp;(December 4, 2014)</span></em><br />&nbsp;</div> <div><em><span><a href="" target="resource">The Oil-Drenched Black Swan, Part 3: Multiple Risks, Multiple Unknowns</a>&nbsp;(December 3, 2014)</span></em><br />&nbsp;</div> <div><em><span><a href="" target="resource">The Oil-Drenched Black Swan, Part 2: The Financialization of Oil</a>&nbsp;(December 2, 2014)</span></em><br />&nbsp;</div> <div><em><span><a href="" target="resource">The Oil-Drenched Black Swan, Part 1</a>&nbsp;(December 1, 2014)</span></em><br />&nbsp;</div> <div><span><strong>Crowded trades (trades where almost everyone is on one side of the boat) unwind in precisely this sort of freefall. </strong>Once the trade has been unwound, however, the selling cascade exhausts itself and insiders who know better start buying. Buying begets buying, shorts start covering, and voila, a retrace that fills open gaps and kisses the 50-day moving average surprises everyone who was confident oil was heading straight down to $40/barrel. </span></div> <p>&nbsp;</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="515" height="483" alt="" src="" /> </div> </div> </div> Black Swan ETC Fibonacci Sun, 21 Dec 2014 22:40:48 +0000 Tyler Durden 499409 at Hacking Collective Anonymous Says FBI Is Lying, "North Korea Is Not Source Of Hack" <p>Having confirmed unequivocally, <a href="">in a statement by the FBI</a> and reiterated by <strong><em>President Obama, that &quot;the North Korean government is responsible&quot;</em></strong> for hacking Sony, it appears the YouTube-less &#39;evidence&#39; the FBI provided is being questioned by the hacking-collective &#39;Anonymous&#39; and former Lulzsec hacker Sabu. <a href=";via=twitter_page">As The Daily Beast reports</a>, the hackers blasted, the North Koreans &quot;don&rsquo;t have the technical capabilities,&quot; and added <strong><em>&quot;we all know the hacks didn&#39;t come from North Korea, and &quot;all of the evidence FBI cites would be trivial things to do if a hacker was trying to misdirect attention to DPRK.&quot;</em></strong> Meanwhile, on Saturday afternoon, Guardians of Peace, the hacking group that&rsquo;s so far claimed responsibility for wreaking havoc on Sony, posted a message online <strong>mocking the FBI&rsquo;s investigation - a series of gyrating animated bodies shrieking, &quot;You are an idiot!&quot;</strong></p> <p>&nbsp;</p> <p><a href=";via=twitter_page"><em>As The Daily Beast reports</em></a>,</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>While the FBI, President Obama, and George Clooney seem thoroughly convinced that the Guardians of Peace are the work of Pyongyang&mdash;the name &ldquo;Guardians of Peace&rdquo; comes from a quote used by former President Richard Nixon describing South Korea&mdash;<strong>many hackers online have questioned the allocation of blame from Day One</strong>, including former Lulzsec hacker turned government information Sabu, who maintains <strong>they &ldquo;don&rsquo;t have the technical capabilities,&rdquo;</strong> and <strong>Anonymous, who wrote, &ldquo;we all know the hacks didn&#39;t come from North Korea,&rdquo; and threatened to launch further hacks against Sony if they don&#39;t release the film online.</strong></p> <p>&nbsp;</p> <p>Some of the world&rsquo;s leading cybersecurity experts have also questioned whether North Korea is responsible for hacking Sony,<strong> claiming a decided lack of evidence or that it came from a group posing as North Korea as misdirection</strong>, such as Brett Thomas, chief technology officer of Redwood City, California-based online services company Vindicia:</p> <blockquote class="twitter-tweet" lang="en"><p>All of the evidence FBI cites would be trivial things to do if a hacker was trying to misdirect attention to DPRK <a href=""></a></p> <p>&mdash; Brett Thomas (@the_quark) <a href="">December 19, 2014</a></p></blockquote> <script src="//"></script><p>* * * </p><p>&nbsp;</p> </blockquote> <p>And it appears the alleged Sony hackers are not impressed...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>On Saturday afternoon, Guardians of Peace, the hacking group that&rsquo;s so far claimed responsibility for wreaking havoc on Sony, posted a message online mocking the FBI&rsquo;s investigation.</strong></p> <p>It is as follows:</p> <p>&nbsp;</p> <p><strong>&ldquo;By GOP<br />The result of investigation by FBI is so excellent that you might have seen what we were doing with your own eyes.<br />We congratulate you success.<br />FBI is the BEST in the world.<br />You will find the gift for FBI at the following address.&rdquo;</strong></p> <p>Then, they included a link to the following video titled &ldquo;you are an idiot!&rdquo;&mdash;essentially Rickrolling the FBI.</p> <p>&nbsp;</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 486px;" /></a></p> <p>&nbsp;</p> <p><strong>The video opens with some words in Japanese, before cutting to a series of gyrating animated bodies shrieking, &quot;You are an idiot!&quot;</strong></p> </blockquote> <p>*&nbsp; *&nbsp; *<br />Of course none of this changes the US Government narrative and that has North Korea upset...</p> <ul> <li><strong>*U.S. `GROUNDLESSLY&#39; BLAMING NORTH KOREA FOR SONY HACK: KCNA</strong></li> <li><strong>*N. KOREA SAYS SELF-STYLED `GUARDIANS OF PEACE&#39; HACKED SONY:KCNA</strong></li> <li><strong>*N. KOREA SAYS SONY HACKERS TOOK `RIGHTEOUS ACTION&#39;: KCNA</strong></li> <li><strong>*N. KOREA SAYS IT&#39;S UNAWARE OF `RESIDENCE&#39; OF SONY HACKERS: KCNA</strong></li> <li><strong>*N. KOREA SAYS IT DOESN&#39;T KNOW WHERE SONY HACKERS ARE: KCNA</strong></li> </ul> <p>Adding</p> <ul> <li><strong>*U.S. ADMINISTRATION INVOLVED IN MAKING OF SONY MOVIE: KCNA</strong></li> <li><strong>*N. KOREA SAYS `THE INTERVIEW&#39; INCITES TERRORISM: KCNA</strong></li> <li><strong>*N. KOREA SAYS `FORTUNATE&#39; MOVIE DISTRIBUTION WAS CANCELED: KCNA</strong></li> </ul> <p>*&nbsp; *&nbsp; *</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="631" height="511" alt="" src="" /> </div> </div> </div> FBI None North Korea President Obama Sun, 21 Dec 2014 22:05:48 +0000 Tyler Durden 499408 at Wall Street Gets A Merry Christmas Main Street Gets Keynesian Coal <p><a href=""><em>Authored by Mark St.Cyr</em></a>,</p> <p>Here we are going into what should be by all accounts one of the most festive times of the year. If one were to listen to most of the commentary coming from the mouths of what are proclaimed as the &ldquo;smart-crowd&rdquo; you would think we should be dancing in the streets, buying everything, and anything within arms reach, and much, much more.</p> <p><strong>Yet, anyone who owns, runs, or works for a business will tell you in private they are either paralyzed by uncertainty, or worse, they&rsquo;re just scared to death.</strong> It just seems nothing makes sense as to what they know &ndash; and what they&rsquo;re being told they should believe.</p> <p>I talk directly with people who are entrepreneurs and business professionals. One glaringly impression that gets made to me over, and over again, is they literally can&rsquo;t make heads or tails out of not only who to believe, but also what data to believe.</p> <p><strong>Everything they once thought they knew has not only been stood on its head, but in many cases the data or information they once used as touchstones as &ldquo;to keep an eye on the ball&rdquo; as to where the economy is possibly going &ndash; has now turned into a game having more in common trying to watch a ball with a street magician.</strong> And in my opinion; it just got a whole lot worse.</p> <p>&nbsp;</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 305px;" /></a></p> <p>&nbsp;</p> <p><strong>Turn on any &ldquo;news&rdquo; outlet and what will be touted in some form of giddy-esque fashion is the markets are once again hitting new all time highs.</strong> And not only will this Christmas be better than expected, it will be better because people will now enjoy a sudden rush of unrealized gains now that gasoline is plummeting. Sounds like a festive holiday season made to order.</p> <p><strong>Well it is, just not for Main St.</strong> Yes, it will cost one less to drive that boulevard, but stopping and shopping? Probably better to stay in the car and drive around looking at all the pretty displays. It&rsquo;s cheaper, maybe more memorable, and the chances of being shot drop lower than a bargain basement discount.</p> <p>If things have been so good for retailing, and the stock market the once &ldquo;gauge of gauges&rdquo; for optimism and health of an economy is once again at all time highs; then how can you have people such as long time retail consultants that cut their teeth in both good and bad times comment on both the state of malls, as well as the very people who shop in them like Howard Davidowitz (and he is not some glass half empty styled analyst, far from it) when he states:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;They&rsquo;re trying to change; they&rsquo;re trying to get different kinds of anchors, discount stores &hellip; [But] what&rsquo;s going on is the customers don&rsquo;t have the fucking money. That&rsquo;s it. This isn&rsquo;t rocket science.&rdquo; as reported in a story appearing in <a href="" title="link to original article">The Guardian&trade;</a> when asked about malls and their challenges just this year.</p> </blockquote> <p><strong>Although I agree with him, the Federal Reserve (Fed.) seems to believe the retail economy is &ldquo;rocket science&rdquo;. Just listen to a press conference to clear any doubt.</strong></p> <p>I don&rsquo;t know how many readers listened to the Fed. Chair Janet Yellen read her prepared remarks on the recent meeting. Personally I was left slack-jawed when I heard her summarize the expectations for the employment situation going forward.</p> <p>The assumption stated (I&rsquo;m paraphrasing to give the example) is that based upon the unemployment figures currently which are now under 6%. The committee sees reaching their target of maximum employment in about a year or so. Yes, you read that correctly, full employment is just around the corner based upon the data they use today. All I could think was: Are you seriously making that in a public statement? I mean &ndash; really?</p> <p>If you&rsquo;re a person in any way shape manner or form that needs reliable data to help formulate your decision on whether to open a new division, relocation, and more where employment data was critical to that discussion: <strong>Would you take seriously a person who stated where you were proposing to go was to be at full employment with a year or so knowing full well over 90 million of that base are jobless?</strong></p> <p>Of course not. You&rsquo;ld throw them out of your office. Yet &ndash; that&rsquo;s what the head of all monetary policy in that local not only says, but will base decisions that impact you directly going forward. Happy Holidays!</p> <p><strong>If your only interest is in Wall Street itself &ndash; then you should embrace the bubbly. Why?</strong> As posted by ZeroHedge&trade; <a href="" title="link to original article">&ldquo;Fed To The Rescue&rdquo; The Plunge Protection Team Makes The Front Page</a>.</p> <p>So adulterated have the markets now shown themselves to be, none other than the most G rated, of G rated newspapers for financial literacy the USA Today&trade; front paged the Fed.&rsquo;s omnipotence. No one needs to hide the &ldquo;chair&rdquo; behind the curtains any longer. It&rsquo;s now so obvious and accepted by everyone they can run the full frontal nudity of this assault to free market capitalism on the front page to an adoring public.</p> <p><strong>You&rsquo;re told to turn your eyes from any hint that retail sales might actually be flashing a warning sign with an unexpected drop.</strong> However, you are told to embrace the &ldquo;bubbly&rdquo; with both hands because the markets rallied in a manner not seen in years based on; great economic figures? Retail blowout reports from Black Friday sales? Massive retail upticks that people have needed to only arrive in panel vans or trucks capable of hauling home all those new presents for girls and boys? Nope. It was not only based on no new data, but just one new word: Patient.</p> <p>Yes, you can re-read that till your mind gels and strews out your ears. That is what led to nearly 1000 market points. Most business people could stand there all day and never &ldquo;get&rdquo; the causation. However, if you&rsquo;re a banker on Wall Street, it&rsquo;s Merry Christmas enjoy the holidays.</p> <p><strong><u>If you understand &ldquo;Fed. speak&rdquo; or global politics where nuances and words are taken to have very specific meanings (don&rsquo;t look for this in the main stream media they&rsquo;ve abandoned this analysis long ago) you heard the fear in the Fed.&rsquo;s statement that things are so fragile, so reliant on their intervention, the word &ldquo;patient&rdquo; which for all intents and purposes was supposedly the first indicator that the Fed was serious about changing its meddling &ndash; patiently punted.</u></strong></p> <p>Instead of changing its language from &ldquo;a considerable time&rdquo; to the more ominous &ldquo;patient&rdquo; (i.e., implying could happen sooner than later) they added the &ldquo;patient&rdquo; while also leaving in the &ldquo;considerable time&rdquo; in fear the headline reading, algorithmic, high frequency trading machines would run wild. (Yes, I spelled that all out on purpose to make one remember what &ldquo;trading&rdquo; is today. I think it&rsquo;s important not to forget that.)</p> <p>One of the greatest issues with this whole process that just infuriates me and is one of the main reasons why I took on trying to explain all this mind numbing minutia to entrepreneurs and business people alike is for the very reasons the people out here trying to build, and work their business can&rsquo;t make any sense of just what the hell is going on half the time.</p> <p><strong>They don&rsquo;t have the luxury of sitting back wondering if what the Fed does today might impact how they have to prepare and run their business tomorrow. </strong>And anyone who tries to tell you that it doesn&rsquo;t and you should just not pay attention it, and just be happy in your 401K is either a con man &ndash; or a fool. Most of the stuff coming across the wires if just nonsense, Pure &ndash; unadulterated &ndash; nonsense!</p> <p>I was perusing the financial media networks after listening to the Fed Chair give her press conference where I happened to hear a breath of sanity expressed by Melissa Francis on her show &ldquo;Money with Melissa Francis&rdquo; on Fox Business&trade; when she made a very pointed remark when trying to fish out implications going forward. (I&rsquo;m paraphrasing) <strong><u>&ldquo;If the Fed can just keep the markets afloat &ndash; then why do we need free markets at all?&rdquo;</u></strong> She was making it rhetorically but she&rsquo;s right on the money. And this is where it gets more dangerous by the day. Because some do believe that to be true. aka Keynesian&rsquo;s.</p> <p><strong><u>Right now it&rsquo;s a Keynesian wonderland with Wall Street year-end bonuses abound for everyone.</u></strong> With data made up, adulterated, or meant to mean anything you would like. Just plug-in what you want, and if that light don&rsquo;t light, don&rsquo;t worry, plug-in another one. And don&rsquo;t worry about the cost. They&rsquo;re free, or at the least, they&rsquo;re made off shore in a country that doesn&rsquo;t have the same labor standards or pay scales that we demand here, but not too worry, we don&rsquo;t talk about that here in Keynes-ville. (It helps the earnings report you get that right?)</p> <p>What&rsquo;s Keynes-ville you ask? Oh you remember that charming old Christmas story that plays every year with Jimmy Stewart. You know, where he was frightened of the prospects of a futuristic &ldquo;Potters-ville?&rdquo;</p> <p>Well that&rsquo;s the old make-believe version from theaters of yesteryear. But now we have it in full stunning detail with no funky headset or internet connection is needed to see to enjoy. Just venture into any downtown where currently over 90 million American unemployed reside.</p> <p><strong>It&rsquo;s not a movie &ndash; It&rsquo;s a running nightmare with no end in sight if the elites believe we could be at &ldquo;full employment&rdquo; in a little more than a year or so if we just let them continue on the way they&rsquo;re going unabated.</strong></p> <p>Talk about a stocking stuffer. That&rsquo;s more like giving us Santa&rsquo;s boot.</p> <p>In the teeth!</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="757" height="385" alt="" src="" /> </div> </div> </div> Black Friday Fed Speak Federal Reserve Fox Business High Frequency Trading High Frequency Trading Janet Yellen Main Street Melissa Francis Monetary Policy None Unemployment Sun, 21 Dec 2014 21:34:58 +0000 Tyler Durden 499417 at Forget Lost Decade, Japan Has Been 'Losing' Since WWII <p>Forget lost decade (or two), <strong>Japan's economic growth trajectory has fallen, almost unbroken, since the end of World War II</strong>... just one more decade, we are sure is all it will take to revive this Keynesian catastrophe... <em>(one way or another)...</em></p> <p>&nbsp;</p> <p><a href=""><img src="" width="600" height="456" /></a></p> <p><em>Source: Goldman Sachs</em></p> <p>Keep trying it though... Abenomics - FTMFW!!!</p> <p><a href=""><img src="" width="600" height="314" /></a></p> <p>&nbsp;</p> <p>Any month, quarter, year, decade now...</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="1586" height="1205" alt="" src="" /> </div> </div> </div> Abenomics Goldman Sachs goldman sachs Japan Sun, 21 Dec 2014 21:00:48 +0000 Tyler Durden 499407 at Chicago Mayor Rahm Emanuel's Teenage Son Mugged Near Home <p>While the <a href="">shockingly large scale of death and violence in Chicago</a> has now become so mainstream as not to warrant daily attention by the media, the news that <strong>Mayor Rahm Emanuel&#39;s son Zach was robbed of his cellphone and assaulted around 10:05pm Friday night near the family&#39;s affluent neighborhood home</strong> is likely to raise public awareness of just how bad things are getting in &#39;Chiraq&#39;. As The Chicago tribue reports, two males approached Zach from behind; one of them <strong><em>&quot;placed his arm around the victim&#39;s neck in a rear chokehold,&quot;</em></strong> and the second one struck the teen with a fist, knocking him to the ground. The robbers took the teen&rsquo;s cellphone and patted him down, the police report said. The mayor has an around-the-clock police detail - fully 5% of the 19th district&#39;s police manpower, but its whereabouts at the time of the robbery weren&#39;t disclosed.<br />&nbsp;</p> <p><iframe width="590" height="332" src=";widgetId=1&amp;trackingGroup=69016&amp;siteSection=latimes_hom_non_sec&amp;videoId=28279133" frameborder="no" scrolling="no" noresize marginwidth="0" marginheight="0"></iframe></p> <p>&nbsp;</p> <p><a href=""><em>As The Chicago Trbune reports,</em></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Mayor Rahm Emanuel&rsquo;s 17-year-old son was robbed near the family&#39;s Ravenswood home Friday night, according to a mayoral spokeswoman and police reports.</strong></p> <p>&nbsp;</p> <p>Zach Emanuel was robbed of his cellphone and assaulted Friday night but was able to join his family on a long-planned trip Saturday, according to a statement released by Emanuel spokeswoman Kelley Quinn.</p> <p>&nbsp;</p> <p><strong>&quot;The Mayor&#39;s focus is on his son&#39;s well-being, and as parents, he and Amy ask that the media respect their family&#39;s privacy at this time,&quot; Quinn said in the statement, referring to Emanuel&#39;s wife, Amy Rule.</strong></p> <p>&nbsp;</p> <p>Zach Emanuel was talking on his cellphone in the 4200 block of North Hermitage Avenue, across the street and a few houses down from the Emanuel home, when two males approached him from behind, according to the police report.</p> <p>&nbsp;</p> <p><strong>One of them &quot;placed his arm around the victim&#39;s neck in a rear chokehold,&quot; and the second one struck the teen with a fist, knocking him to the ground. </strong>The robbers took the teen&rsquo;s cellphone and patted him down, the police report said.</p> <p>&nbsp;</p> <p><strong>&quot;The offenders then asked the victim, &#39;What else you got?&#39; (and) forced the victim to enter his security code to unlock the phone,&quot;</strong> the police report said.</p> <p>&nbsp;</p> <p>The robbers then ran away.<strong> The teen was treated for cuts and bruises on his face</strong> by a personal physician at his home, according to the report.</p> <p>&nbsp;</p> <p><strong>Chicago police confirmed Saturday that a robbery occurred about 10:05 p.m. Friday near the mayor&#39;s home.</strong> Officer Thomas Sweeney, a police spokesman, reported that &quot;a juvenile male was walking on the 4200 block of North Hermitage Avenue when he was approached by two unknown male offenders who grabbed him and went through his pockets, taking his phone.&quot;</p> </blockquote> <p>This year in Chicago...</p> <p><a href=""><img alt="" src="" style="width: 572px; height: 450px;" /></a></p> <p><a href=""><em>Source: HeyJackass</em></a></p> <p>&nbsp;</p> <p>Of course, as <a href="">CWB Chicago reports, </a>the attack on the mayor&#39;s son got some special attention:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>CWB editors have heard Chicago police handle hundreds of strong-arm robberies in the 19th district over the past 18 months&mdash;including 2 others on the mayor&#39;s block. None drew the &quot;special attention&quot; of last night&#39;s incident.</strong></p> <p>&nbsp;</p> <p>While most strong-arm robbery victims are lucky to get the services of more than a couple of police units, last night&#39;s victim seemed to receive luxurious VIP treatment.</p> <p>&nbsp;</p> <p><strong>Most robbery cases go from 911 call to paperwork stage in less than 30 minutes&mdash;but last night&#39;s incident had a remarkable shelf life of over two hours. </strong>Among the unusual steps taken last night:</p> <ul> <li>30 minutes after the incident, a 19th district lieutenant&mdash;a supervisory position that virtually <em>never</em> dabbles in routine crimes&mdash;pulled a patrol car off of its normal duties to assist with the robbery. (When the officers were perceived to have been slow in calling the station for their assignment, the lieutenant barked on the radio, &quot;Have [them] call me NOW!&quot;)</li> <li>Nearly 50 minutes after the robbery, a sergeant sought information about the robbery&#39;s timing.</li> <li>The previously-mentioned lieutenant tried to contact the district commander to tell him about the very special robbery that had taken place.</li> <li>80 minutes after the robbery, a sergeant asked to have the offender descriptions broadcast again.</li> </ul> </blockquote> <p>And finally,<strong> we thought it intriguing that 24-hours-a-day, fully 5% of the 19th district&#39;s police manpower is committed to sitting outside of the mayor&#39;s house. Even when nobody&#39;s home.</strong></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="572" height="450" alt="" src="" /> </div> </div> </div> Hermitage None Rahm Emanuel Sun, 21 Dec 2014 20:30:48 +0000 Tyler Durden 499406 at