23 Miles Of Free Fall - Live Webcast Of Felix Baumgartner's Third World Record Attempt From The Edge Of SpaceSubmitted by Tyler Durden on 10/14/2012 10:45 -0400
Austrian skydiver Felix Baumgartner's previous two attempts to set a world record in freefalling from an altitude of 23 miles, or from "the edge of space" were aborted in the last minute due to heavy winds. In a few minutes, the daredevil will find out if third time will be the charm for gravity to finally not be denied. Watch the live webcast below and find out in an hour when the process is officially scheduled to begin.
First, last Wednesday, Turkey intercepted a Syrian civilian jet suspected of carrying Russian weapons to Syria, forcing it to land in Turkey. The jet subsequently continued on its trip following stern denials from both Damascus and Moscow, and after Turkey found no evidence of its claim. Then yesterday, Syria promptly retaliated against this overt and unjustified aggression by banning all Turkish aircraft from crossing its airspace. Now, moments ago, Turkey retaliated to an act of retaliation against its own initial provocation, by barring all Syrian flights above its own airspace, and in the process preventing virtually all local airborne traffic from taking place. In other words: more mindless escalation which usually ends in a very unfortunate way.
For all intents and purposes, there have been two US Presidents thus far in the 21st century - George Bush (the younger) and Barack Obama. If we take Mr Bush’s two terms to cover fiscal 2001 to fiscal 2008, the total rise in official Treasury funded debt over that period was $US 4.350 TRILLION. If we take Mr Obama’s first term to cover fiscal 2009 to fiscal 2012, the rise over four years was $US 6.050 TRILLION. Add the two together and you get a grand total of $US 10.4 TRILLION. That’s almost two thirds (65 percent) of the total funded debt of $US 16.066 TRILLION as of September 28, 2012.
Presented with little comment, except to say - it seems, as Boaz at EminiAddict points out, that the S&P 500 likes to travel around 808 points from swing low to swing high. Extending the analog suggests a drop to 565 on the S&P 500 by mid-2014.
"The European Union is a horrible, stupid project. The idea that unification would create an economy that could compete with China and be more like the United States is pure garbage. What ruined China, throughout history, is the top-down state. What made Europe great was the diversity: political and economic. Having the same currency, the euro, was a terrible idea. It encouraged everyone to borrow to the hilt. The most stable country in the history of mankind, and probably the most boring, by the way, is Switzerland. It’s not even a city-state environment; it’s a municipal state. Most decisions are made at the local level, which allows for distributed errors that don’t adversely affect the wider system. Meanwhile, people want a united Europe, more alignment, and look at the problems. The solution is right in the middle of Europe — Switzerland. It’s not united! It doesn’t have a Brussels! It doesn’t need one."
The overhwelming majority of investors seem to believe that some compromise will be reached to resolve the looming fiscal drag, and as we noted here, this fact is more than priced into markets. As Barclays notes however, a big deal that encompasses entitlement and tax reform is very unlikely before year-end. Hence, if the ‘cliff’ is avoided, it will be because Congress extends all expiring provisions for some time while it works on a bigger deal. Such an 'extension/compromise' move would not reduce investor uncertainty if it were only for a few months; bond markets would simply start counting down to the new date. More importantly, the discussion about the fiscal cliff misses a broader point: the US will probably have significant fiscal tightening over the next decade that is a drag on medium-term growth. Yet more investors dismiss last year's reaction to the debt-ceiling debate - a 17% decline in 2 weeks - as any kind of precedent, claiming (falsely) that this was more due to European financial difficulties. We expect fiscal issues to be the defining drivers of the next several quarters and as BofAML notes, Washington's view of this 'process' as a 'slope' combined with the dangerously negative election campaign (which will need a 180-degree reversal for any compromise) means the likelihood of a Wile E. Coyote Moment is considerably higher than most expect.
While we already know that 59-year-old (current Vice-President) Xi Jinping will become China's next President a mere two days after the US votes; the political and economic challenges he will face makes the appointment in the midst of structural upheaval a considerable 'unknown' for the many Western investors trying to decipher the CCP/PBoC's next steps (fiscally or monetarily). Stratfor's Colin Chapman and Rodger Baker succinctly discuss what we know about Xi Jinping and what the implications are for faster reform as the nation faces the end of the current economic model. Everything you wanted to (and need to) know about China's transition but were too tired to read.
When the topic of public suicides in Europe comes to mind, the natural instinct in the past several years has been to immediately think Greece, which has not only seen its suicide rate explode due to the never-ending economic depression, but witnessed a variety of activists take their lives in hopes, so far unmet, of enacting some form of political and social upheaval. Which is why it comes as a major surprise that the latest public self-immolation just took place not in Syntagma Square but in front of the German Reichstag. "Hundreds of tourists and Berliners on Saturday became eyewitnesses to a spectacular suicide in front of the Reichstag building. A 32-year-old Berliner stabbed himself in the chest according to police at noon at the main entrance of the Reichstag. He then doused himself with a flammable liquid and set fire to himself. Passersby alerted the police and rescue workers. They tried in vain to resuscitate the man. He succumbed to his injuries on site yet."
The IMF's World Economic Outlook (WEO) provided a plethora of data, trends, and extrapolations for investors to prognosticate upon. One that caught our eye is the rising trend of the 27 Developing Asian economies as a share of World GDP. Bloomberg's Chart of the Day notes that by the end of 2012, Developing Asia will account for 17.9% of World GDP - trumping, for the first time - Europe's 17-nation 16.9% share. The euro-area crisis has merely accelerated a trend that has been ongoing for several years - and we suspect, as former IMF board member Domenico Lombardi notes, makes it clear that euro-area economies need to address their structural reforms rapidly. America should not be too complacent however, as while China will top Europe by 2017 (as a share of global GDP), USA will welcome its own overlords in five short years when Developing Asia will have topped the USA for the first time ever.
Imagine if in 2007, Ben Bernanke, Mervyn King, Jean Claude Trichet et al, had actually possessed the analytical foresight to see what was coming, organised a meeting with the world's media and explained how, using their collective wisdom, they would solve the problem.
"There's going to be a massive global crisis, but there's no need to worry. We're just going to print money."
"Is that it?"
How would most people have reacted then? We think they would have laughed out loud. Why are so many of us reacting differently now? The nature of markets is that they periodically forget the lessons of history. Confidence in the status quo seems as entrenched now as it was in 2007 but Gold appears to be exhibiting 'Giffen-like' behavior where, instead of falling, demand is rising as prices rise.
What does an iron chancellor have to do to be loved these days? After scrambling 7,000 members of the Greek police force out of an early prepaid retirement for her brief, still inexplicable 6 hour visit to Athens last Tuesday, which caused the now usual Syntagma square rioting, Merkel next took the stage in a rainy Stuttgart, in a show of support for the local mayor candidate Sebastian Turner, which promptly devolved into 14 minutes of continuous booing.
While the entire 'developed' world is now openly engaged in destroying the balance sheet of its assorted central banks - the sole means to devalue local currencies, a liability, by accepting ever more toxic 'assets' as currency collateral - thereby pursuing strategies which until now were strictly relegated to the banana republic playbook, there are some countries who see what is coming over the horizon, and refuse to join the printing frenzy. One such place is China, for whom, as we have repeatedly shown the threat of a fast onset of inflation is far greater (3x more bank deposits as a % of GDP than in the US, means a soaring capital market as a result of inflation will benefit far less while a deposit exodus will cause hyperinflationary havoc in minutes) than any other developed world country. And with the inability to hide "non-core" CPI as a result of food and energy being such a greater portion of overall inflationary bean counting than in the US, it means that despite the demands of Tim Geithner for immediate more easing by China, the PBOC is now stuck waiting to import everyone else's inflation: this includes the Fed, ECB, BOE, BOJ, Korea, Australia and all other bank engaged in adding liquidity, while its own hands are quite tied. Because recall that it was only last year that the NYT said that: "Inflation in China Poses Big Threat to Global Trade." Now we are told that lack of inflation poses the same threat, when in reality what they mean is that with the world tapped out, one more source of marginal liquidity is needed. Judging by overnight comments from the PBOC's head Zhou Xiaochuan that liquidity, suddenly so very needed to keep the game of musical chairs going, is not going to come from China just as we have warned for months on end.
Ron 'I'm playing the long-game' Paul will not go quietly into the night - and rightly so, it would seem, given his truthiness. In a recent brief interview on CNBC's Futures Now, he managed to diss Romney, smash the 'belief' in a 'two-party' system, and undermine any hope for economic change from the farce of an election. Summed up simply: "There is essentially no difference between one administration and another, no matter what the platform."
As the day approaches when Israel may decide to launch a preemptive strike against Iran in order to cripple its nuclear infrastructure, Israeli policymakers and their allies abroad would carefully assess how the Lebanese-based group Hezbollah would react. With the debacle of the 2006 war against the Lebanese group still fresh in Israeli minds, the possibility that the "Party of God" Shi’a organization would renew hostilities against the Jewish state through cross-border raids, terrorism, or rocket attacks against its cities, will have to be part of Israel’s calculations for any “day after” scenario. The challenges posed by the Iranian nuclear program are numerous, with many of the different nodes being interrelated. The problem is made all the more intractable by an increasingly volatile region that is sharply divided along sectarian lines. Hezbollah is but one of the many players involved, but should it choose to do so, it has the capacity to inflict great harm on Israel.
As we noted last week, the US, long considered the standard bearer for economic freedom among large industrial nations, has experienced a rather remarkable plunge in economic freedom over the last decade. This excellent infographic summarizes what factors drove us here, which countries are on the rise, and why we are more like Venezuela, Argentina, and Iceland than many would like to believe.