Recently some of the more naive, not to mention top-ticking, financial commentators assumed that just because US regulators had not snapped shut a trap surrounding Bitcoin and other digital currencies yet, that this state of blissful cohabitation would continue indefinitely. Unfortunately, as we warned back in March during the initial leg higher in BTC following the Cyprus deposit confiscations, the well-known "honeypot" strategy was meant to draw out as many digital currency fans and participants as possible - who after all were warned by none other than the ECB that the current regime will never adopt a parallel, and quite threatening monetary unit - only to see the regulatory and enforcement fist of the nation that (still) hosts the reserve currency slowly but surely start to clench around the binary currency. Because, finally, after testing the ground long enough, the fist is starting to not only close but squeeze tight. And as Reuters reports, it is the U.S. Treasury Department's anti money-laundering unit that is now warning businesses linked to Bitcoin that they "may have to comply with federal law and regulation as money transmitters, a Treasury spokesman said."
Despite Li Keqiang’s desire for a healthier, more “people-focused” mode of urban growth; this has clashed with local governments’ desire to keep spending on infrastructure and real estate as a coherent urbanization policy has been nowhere to be found.This logjam looks to have finally broken over the weekend, when top Chinese leaders held both the annual Central Economic Work Conference to set policy goals for 2014, and a Central Urbanization Work Conference to lay the groundwork for an urbanization plan to be published next year. On balance, the news from these events is good for current and future residents of Chinese cities - but bad for those investors who may still be bullish on commodity prices.
"The Fed will never end QE for good..." blasts Marc Faber, "they may do some cosmetic adjustments, but within a few years, [Fed] asset purchases will be substantially higher than they are today." There will be another weakening in the US economy, Faber warns, and "the Fed will argue it hasn't done enough and will do more... they have been irresponsible for 20 years." Use rallies to reduce exposure, he warns, "we will go up until it is over; and when it is over the drop will be larger than 20%," and the best opportunity, Faber notes, is in the most-depressed asset-class he looks at: gold and gold stocks.
There are a thousand lessons to be learned from the Third Reich, from the evils of totalitarianism to the dangers of racial thinking. A key economic lesson is that, rather than curing the Great Depression, Hitler’s military Keynesianism on a massive scale left the German people starving and short of goods. It’s a lesson advocates of building tanks to make us rich, from John McCain to Paul Krugman (and now Shinzo Abe), would do well to learn.
With climate change impacting the poles, the potential for trade routes and resource extraction are improving.. and with that the world's powers are rattling sabres over who owns what. From Canada's claims to Russia's defense forces and China's purposeful dependence-building aid to small Arctic states, everyone knows the stakes. So, with very few big new diamond mines having been developed in recent years, the FT reports that scientists have found a site containing the rocks that often produce diamonds – in Antarctica. The problem is that the frozen continent is protected from mining for decades under an international treaty.
China’s crackdown on extravagance and its anti-corruption campaign appears to be having a significant impact as Bain & Co reports that spending on luxury goods is estimated to grow at only 2% in 2013 - its slowest pace since 2000 (and dramatically lower than the 7% growth last year). "The mindset among global brands [in China] is changing from 'where do we find growth' to 'how do we create growth'," Bloomberg reports as "gifting" to high-ranking officials - one of the major growth engines of the industry - has crushed luxury watch sales down 11% in 2013. Ironically, given yesterday's mall-jumping news, female shoppers are picking up some of the slack with shoes growing 8-10%. New store openings fell by 33%.
During 2013, America continued to steadily march down a self-destructive path toward oblivion. As a society, our debt levels are completely and totally out of control. Our financial system has been transformed into the largest casino on the entire planet and our big banks are behaving even more recklessly than they did just before the last financial crisis. We continue to see thousands of businesses and millions of jobs get shipped out of the United States, and the middle class is being absolutely eviscerated. Due to the lack of decent jobs, poverty is absolutely exploding. Government dependence is at an all-time high and crime is rising. Evidence of social and moral decay is seemingly everywhere, and our government appears to be going insane. If we are going to have any hope of solving these problems, the American people need to take a long, hard look in the mirror and finally admit how bad things have actually become.
JPY Dumps And Nikkei Explodes As Japan's (32nd Month In A Row) Adjusted Trade Deficit Hits Record HighSubmitted by Tyler Durden on 12/17/2013 20:43 -0400
Just because we thought it worthwhile to keep track of how out of control things are getting in Japan, a quick summary of this evening's data. The Japanese trade balance (adjusted) shows a deficit for the 32nd month in a row and has surged to its largest (worst) level on record. It has missed expectations in 5 of the last 6 months. Imports rose more than expected again with a 10.2% MoM gain in imports from the US (and 35% YoY). This massive deficit is before the military spending unveiled last night has hit though one thing is certain, Goldman Sachs will be out with a report any second proclaiming the mythical J-curve about to arrive any moment... The reaction - JPY dumps and NKY explodes higher as bad news is good news in QQE land.
Just when one thought the government's boondoggles couldn't get any worse, along comes this...
America’s political economy has changed incrementally enough that many people have not noticed what is really happening. It’s over for most of us. You can call it collapse, or you can call it restructuring. You can even call it a recovery. But you can not call it sustainable, or pleasant. The overall trajectory is toward decline, decay, destitution... This collapse is the collapse of dreams, hopes and expectations, not an obvious one like the collapse of the currency or the government. And if you have no hopes or dreams, and your expectations are sufficiently low, then you might not even be aware of it. For the time being, what is really in everyone’s interest, here and abroad, is to keep playing along. Collapse? What collapse? We all have to keep pretending everything is fine, or things will get even worse quickly - for us. But if things are continuing to get worse for us in any case...
According to a recent survey by the Pew Research Center, just 33% of Americans think their children will have a better life than they did. On the other hand, 62% believe their children will be worse off. They’re likely to be right. The typical American family has seen its real income (adjusted for inflation) fall for 5 consecutive years now, and it earns less in real terms that it did in 1989.
There seem to be two camps at Deutsche Bank these days: one, lead by the observant and somewhat contrarian Jim Reid, who recently asked the all important question about 2014 ("what if there is a recession?"), who accurately observed that something "structurally changed" since the great financial crisis (pretty clear what), and who even dared to suggest that the Fed will never taper, especially with the economy so late in the cycle already. And then there is Joe LaVorgna, best known for having a losing track record to Groundhog Phil. It appears that this morning Joey emerged from his lair deep inside 60 Wall, sniffed the cold air, and saw the shadow of a $10 billion taper, which is what he predicts the Fed will do tomorrow.
Treasuries rallied from the pre-open release of inflation data this morning and never looked back (with 30Y unch on the week and 5Y -4bps). Stocks tumbled notably through the US open but recovered as Europe closed hovering quietly around VWAP all afternoon. The rally back in stocks coincided with a drop in VIX which smacked of hedges being lifted and exposure being reduced into the momentum-ignoted strength. Gold and silver saw weakness (though the latter is still +1% on the week). The USD weakened notably as Europe closed with some significant CHF buying. Stocks closed ugly...as VIX was significantly bid (up for the 6th day in a row - and 14 of last 16 days) and the 4th Hindenburg Omen appeared as the cluster grows.