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Metaphysical Monetary Musings From Deutsche Bank

Tyler Durden's picture




 

Deutsche's Jim Reid has been on quite a flight of fancy in the past few days. His latest comment, mixing the metaphysical and monetary, is merely the latest indication showing just how ubiquitous the Fed's influential tentacles have spread.

From DB's Jim Reid

We are not alone. After going through the FT this morning it’s clearly a bit quiet as the story that has most caught my attention is the one suggesting that new research has estimated that there are more than 20bn Earth-like planets in our Milky Way with temperatures that could sustain life. A remarkable number. Maybe as we speak 5bn of them are contemplating tapering, 10bn have already tapered and 5bn are simply having too much fun to care!

 

A few years ago DB research put out a piece with the title "The Fed is from Venus and the ECB from Mars" which now seems a little parochial given this revelation.

 

Nevertheless news from planet Fed and planet ECB remain the key drivers at the moment. If you want a rough guide to how important central banks have become to the world’s economies and markets this year, in the 28 DB articles our weekly EWR publication highlighted last month, one in every two of them included discussion of central bank policy. By comparison in October 2012’s 22 articles, only three discussed central bank policy (14%). So markets aren't always this one dimensional.

And here, without any specific purpose, is a gratuitous photo of Carl Sagan.

 

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Tue, 11/05/2013 - 11:40 | 4122816 SheepDog-One
SheepDog-One's picture

Maybe 100% of Central Banksters can fuck off to one of those 20bn planets.

Tue, 11/05/2013 - 11:48 | 4122845 aint no fortuna...
aint no fortunate son's picture

"There are billions and billions of bankers on billions and billions of stars fucking over billions and billions of civilizations" - RIP Carl

Tue, 11/05/2013 - 11:47 | 4122846 VD
VD's picture

central banker metaphysical voodoo huffing routine:

1 paper or plastic bag, 1 can of glue; put bag with glue to mouth and inhale to max lung capacity; hold in lungs till you pass out: upon waking QE works to infinity; any doubts, repeat...

Tue, 11/05/2013 - 11:49 | 4122852 dick cheneys ghost
dick cheneys ghost's picture

favor pls...........tell abe foxman to go fuck himself.........hahahaha

~~~~~~~~~~~~~

Tue, 11/05/2013 - 11:51 | 4122856 VD
VD's picture

tell ur boyfriend [banned] fox said hi; u next dick.

Tue, 11/05/2013 - 11:58 | 4122886 Herd Redirectio...
Herd Redirection Committee's picture

Tell Abe FS was banned too late.  His mission was already accomplished.

Tue, 11/05/2013 - 12:01 | 4122906 toxic8
toxic8's picture

Billions and Billions......

Tue, 11/05/2013 - 12:42 | 4123072 VD
VD's picture

his mission to look like inane bigot was successful no doubt; he cheapened the comments sections and lowered collective IQ; good riddance...

Tue, 11/05/2013 - 11:49 | 4122855 slaughterer
slaughterer's picture

At Deutsche there are basically three types:

1) the metaphysicians

2) the militarists

3) the careerist-idiots

Glad I no longer work there.  

Tue, 11/05/2013 - 11:51 | 4122865 HardlyZero
HardlyZero's picture

So the bankers are finally and financially "Spaced Out" ? 

Maybe they are trying to get Bezos to fund a new quest off planet and get them outta here !

HitchHiker's Guide to the Galaxy ?

Bring a towel.

Tue, 11/05/2013 - 11:39 | 4122822 jmcadg
jmcadg's picture

Fonz - what's going on!

Tue, 11/05/2013 - 11:40 | 4122824 DoChenRollingBearing
DoChenRollingBearing's picture

Um, well, to get to a realm I know better, I just read that LOTS of money is now coming into Miami.  They now have a program (serious or not?) to make the city a "tech capital" of Latin America.  They believe that they will need more tech workers soon...

More buildings are going up.  LOTS of money from Brazil, Mexico, Colombia, Argentina and Venezuela (especially V) is pouring in.

Bubble..., again?

Tue, 11/05/2013 - 11:43 | 4122835 LawsofPhysics
LawsofPhysics's picture

Inflation in those countries is out of control, no surprise that those currencies are being exchanged into dollars as fast as they can by any mechanism possible.

Tue, 11/05/2013 - 11:59 | 4122888 Herd Redirectio...
Herd Redirection Committee's picture

And what do you know, what does the flood  into USD, and immediately spending those USD, result in?

Tue, 11/05/2013 - 12:10 | 4122941 LawsofPhysics
LawsofPhysics's picture

Well, a change in ownership, for one thing.  A raise in wages for people in all countries?  Not so much.

Tue, 11/05/2013 - 12:23 | 4122992 Herd Redirectio...
Herd Redirection Committee's picture

Yes, but once people start using the world reserve currency not for saving, but for immediate spending, what happens?  Come on, I am lobbing up a softball here, LOL

Tue, 11/05/2013 - 12:30 | 4123028 fonzannoon
fonzannoon's picture

Who has any reserve currency left for spending, much less saving?

Tue, 11/05/2013 - 13:41 | 4123286 LawsofPhysics
LawsofPhysics's picture

Sorry, that inflation won't show up, because it isn't counted.  Come on, let me guess, you think the Fed will "taper" when that inflation shows up.  Please, tell me another bedtime story.

Tue, 11/05/2013 - 13:53 | 4123336 Buffalo Bones
Buffalo Bones's picture

We become fucked?

Tue, 11/05/2013 - 11:46 | 4122842 Running On Bing...
Running On Bingo Fuel's picture

What are they going to create? Buritto apps for their iChawowwow's. Big money I'm sure. More vaporware.

Tech is dead. See latest IPO for proof.

Over.

Tue, 11/05/2013 - 11:52 | 4122868 DoChenRollingBearing
DoChenRollingBearing's picture

Miami is safe, relatively speaking, to those other countries.  They are coming with their money to put it to work and keep it safe.  Just because some immigrating Latinos are rich does not make them dumb.

They also like buying real estate and other real-stuff too.  And start companies...

Some are even coming to Miami to work, not just to party.

Tue, 11/05/2013 - 12:05 | 4122887 Running On Bing...
Running On Bingo Fuel's picture

Oh please. I guess it's what they call Latin Time, arriving 20 years late to the tech party. That's dumb.

Stay home unless you have real innovation. And they don't.

Once they get in they immediately go for the tit and start sucking and sucking, breed more, bring in the cousins and family members, everyone sucking off the tit.

Stay fucking HOME!

Over.

Tue, 11/05/2013 - 11:51 | 4122864 Winston Churchill
Winston Churchill's picture

Miami beach and the waterfront are just fine.

The barrios behind them not so much.

I hate it with a vengance everytime I go down there.

Only so much lipstick available for that pig.

Tue, 11/05/2013 - 11:53 | 4122874 DoChenRollingBearing
DoChenRollingBearing's picture

There are vast ugly areas without doubt.  Miami is the poorest city in the USA.

Tue, 11/05/2013 - 12:04 | 4122918 Winston Churchill
Winston Churchill's picture

Which county are you in DoChen?

I'm up in Martin,beyond the Miami/WPB megapolis sprawl.

Tue, 11/05/2013 - 11:40 | 4122827 LawsofPhysics
LawsofPhysics's picture

Paper promises, credit, and money are being "created" exponentially faster than ever before with the click of a button.

Unfortunately, the real commodities and calories (energy) required to actually do anything of real value are finite.

The outcome will be no different than the last time greed and the human population outpaced real innovation

and the carrying capcity of the current society.  Of course, this time, the outcome will be global.

Hedge accordingly.

Tue, 11/05/2013 - 11:47 | 4122849 DoChenRollingBearing
DoChenRollingBearing's picture

Endo Pharmaceuticals (ENDP, a maker of pain meds IIRC) did kind of what you suggested.  They bought a Canadian company and switched their HQ to Ireland via some tricky little maneuver to lower their taxes.

Their stock went up (last I checked) some 24%.

Take that, Obama!

Tue, 11/05/2013 - 11:43 | 4122832 1stepcloser
1stepcloser's picture

Quadrillions and Quadrillions 

Tue, 11/05/2013 - 11:41 | 4122833 Running On Bing...
Running On Bingo Fuel's picture

"20bn Earth-like planets in our Milky Way with temperatures that could sustain life".

Surely we can put one aside and keep it Lizard free. Please.

Over.

Tue, 11/05/2013 - 11:43 | 4122834 fonzannoon
fonzannoon's picture

I like the part where he admitted he works for the most overlevered, undercapitalized bank sitting on a heap of derivatives and toxic shit and totally depends on the fed for their existance. It was refreshing to hear that kind of honesty. Also when he said he was a turd burglar who plans on giving back all his compensation except for a few grand to be used to start his own dacha and trade with others in non fiat currencies was just a breath of fresh air.

Tue, 11/05/2013 - 11:43 | 4122837 rustymason
rustymason's picture

Carl Sagan. How appropriate.

Tue, 11/05/2013 - 11:48 | 4122848 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Must be a slow week and lack of material to write about for Mr. Reid.

Tue, 11/05/2013 - 12:22 | 4122850 Mercury
Mercury's picture

After going through the FT this morning it’s clearly a bit quiet as the story that has most caught my attention is the one suggesting that new research has estimated that there are more than 20bn Earth-like planets in our Milky Way with temperatures that could sustain life. A remarkable number.

 

Every number behind that estimate, just like every dollar in the Fed's digital wallet, is completely made up.

A much more accurate estimate is the number of stars in the observable universe.

The irony here is that soon you won’t be able to use the term “astronomical” when describing the size of the Fed’s balance sheet because the number is only 10^22...a mere 10,000 trillion.

 

 

 

Tue, 11/05/2013 - 11:54 | 4122871 Frank N. Beans
Frank N. Beans's picture

I miss Carl Sagan. 

 

Tue, 11/05/2013 - 12:25 | 4123006 Herd Redirectio...
Herd Redirection Committee's picture

Its a shame he had to smoke marijuana in private.  I respect his privacy on the matter, but it would have helped dispel notions of potsmokers as lazy anti-intellectuals.

Tue, 11/05/2013 - 11:56 | 4122879 dbTX
dbTX's picture

Carl is obviously on one of the 5 billion that simply don't care.

Tue, 11/05/2013 - 12:03 | 4122909 squid427
squid427's picture

DoChenRollingBearing

you think miami is poorer than new orleans?

Tue, 11/05/2013 - 12:03 | 4122917 squid427
squid427's picture

you can watch sagan on netflix, he was great

Tue, 11/05/2013 - 12:07 | 4122930 GOSPLAN HERO
GOSPLAN HERO's picture

Black hole in Whitehouse is devouring earth's green fiat matter.

Tue, 11/05/2013 - 12:18 | 4122972 Winston Churchill
Winston Churchill's picture

Do you mean the Wookie ?

Tue, 11/05/2013 - 12:21 | 4122981 Not_Sure
Not_Sure's picture

That's the problem with estimates. It's estimated that 99% of estimates are wrong.

Tue, 11/05/2013 - 12:25 | 4123005 GrinandBearit
GrinandBearit's picture

I'd like to take a teaspoon full of Neutron star matter and dump it on Obama's head.

Kudos to Carl.

Tue, 11/05/2013 - 13:02 | 4123139 ZH11
ZH11's picture

Bit rich DB talking about metaphysical money, aren't they the ones with the biggest derivatives book in the world?

Tue, 11/05/2013 - 15:40 | 4123731 polo007
polo007's picture

According to Macquarie Research:

https://app.box.com/s/j0desfvkuqh6bitsvhuz

Could the Fed flip flop?

“Enlargement” could become the new “tapering”

- Our view that tapering will commence in March 2014 has become the consensus and continues to be our base case (50% chance). We place a lower probability (15%) on an earlier taper (Dec/Jan) and a higher probability (25%) it occurs later (April to Sept). While incremental delays could impact near-term asset class performance these would only provide temporary respite from longer-term trends established when expectations for tapering began in early 2013.

- One outcome (to which we assign our final 10% probability) that would result in a more dramatic shift would be a 180 degree turn or flip flop in Fed communication that caused investor anticipation to move from “taper” to “enlargement”. The potential for such a shift is barely being acknowledged (no less considered!), by consensus. This is all the more reason to give it attention in our view. Such a flip flop would have important implications for asset market returns. In particular, it would likely lead to outperformance from emerging market equities and precious metals. Treasury bonds would also benefit.

The Fed would need to doubt the recovery’s sustainability

- Incoming data are an obvious catalyst for a Fed flip flop. The labour market has softened recently (Fig 8, 9), housing momentum has slowed (Fig 10, 11) and inflation is well below target (Fig 12, 13). Despite downgrades in its forecasts (Fig 14), the FOMC remains above consensus (Fig 15). While this evidence may be enough to delay tapering, modest downgrades or data misses likely won’t be enough to change the Fed’s tapering narrative.

- In our view, for such a flip flop to take place, members must become more pessimistic about the recovery’s sustainability. What might cause this? The combination of continued soft data alongside greater than expected fiscal tightening in 2014 is one possibility. It was the worry about the impact from the fiscal cliff, after all, that contributed to the QE3 launch decision in 2013.

And the Tea Party could provide the catalyst

- Consensus expects the Tea Party and other Republicans to take a less hardline approach towards negotiations in 1Q14 after they were punished in public opinion polls as a result of the shutdown. Such a near-term detente in Washington will only become likely should President Obama make concessions. Should this occur, the President may be more willing to sacrifice on near-term spending rather than changes to Obamacare (his legacy) or long-term entitlement programs (resistance from his own party) (see pgs 3 to 5).

- The magnitude required to impact the 2014 growth outlook is not high. Annual spending cuts offsetting just one-third of the long-term debt impact from Obamacare would act as an incremental ~0.4% headwind to growth in 2014 (combined with sequestration already embedded in current law, this would mean fiscal drag of ~0.5 to 1.0% for much of the year) (Fig 7).

Tue, 11/05/2013 - 17:23 | 4124184 kurt
kurt's picture

Douche Bank

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