However desirable it may be to protect the Earth from the dire consequences of a runaway climate the chances that the world will agree to cut its emissions quickly enough to stay below the 2C threshold are somewhere between zip, zilch and zero. (There’s also the question of whether cuts of the magnitude necessary would be politically, economically and technologically achievable if the world does agree, but we’ll leave it aside here.) Now imagine that you are one of the prominent politicians – Obama, Kerry, Merkel, Ban Ki-moon, Hollande, Cameron, Davey, whoever – who have publicly and repeatedly stated that climate change is the greatest threat facing the world, that the world is in serious trouble if nothing is done to stop it but that a solution is still within our reach. What do you tell people when next year’s make-or-break Paris climate talks show that it isn’t?
Since about 2001, several sectors of the economy have become increasingly inefficient, in the sense that it takes more resources to produce a given output, such as 1000 barrels of oil. This growing inefficiency explains both slowing world economic growth and the sharp recent drop in prices of many commodities, including oil. The mechanism at work is what I would call the crowding out effect. As more resources are required for the increasingly inefficient sectors of the economy, fewer resources are available to the rest of the economy. As a result, wages stagnate or decline. Central banks find it necessary lower interest rates, to keep the economy going. What we seem to be seeing recently is a drop in price to what consumers can afford for some of these increasingly unaffordable sectors. Unless this situation can be turned around quickly, the whole system risks collapse.
While inflation (explicit in price rises or implicit in USD debauchery) over the past 30 years has eaten away at the average American's standard of living, it is the cost of living the 1%-life that has truly soared. As Forbes' "Cost of Living Extremely Well" index (CLEWI) shows, since 1982, the 1% have seen prices for their goods rise at double the pace of the average joe. However, do not feel too sorry for them, as their net worth, courtesy of various Fed interventions has outpaced the cost of living extremely well by over 4 times.
There "Is" Blood: Energy Services Firm Civeo Cuts Headcount 45% & Guidance By 30%, Suspends DividendSubmitted by Tyler Durden on 12/29/2014 17:51 -0400
In what we suspect will be the first of many, Houston-based Civeo (which provides workforce accomodation to the oil industry) has crashed over 20% after-hours (after being down over 65% since September already) following the total carnage of its earnings report.
- *CIVEO HAS CUT U.S., CANADA HEADCOUNT BY 45%, 30% FROM EARLY '14
- *CIVEO SEES 2015 REV $540M-$600M, EST. $817.3M
Apparently having not only (Jana) but two (Einhorn) activist hedge funds is not nearly sufficient to send a stock soaring to all time highs, especially when said stock can no longer afford to buy back its own stock.
Just as T. Boone Pickens warned "watch the rig counts" last week, so the Baker Hughes rig countjust collapsed for the 3rd week in a row to 8-month lows. This is the fastest 3-week drop since mid-2009. Crude prices were already weak but the news has flushed WTI to a $52 handle (not seen in the front-month contract since May 2009)
The Japanese stock market reached its all-time-high on December 29th 1998, and as The Wall Street Journal reports, analysts were still looking forward to another strong year for shares in 1990, despite some signs of danger. Reading through the headline on that day suggests, 25 years later, investors and talking-heads have learned absolutely nothing...
Remember when evil North Korean hackers were blamed by everyone in the administration for penetrating the firewall of one of the wealthiest, most sophisticated, most secretive multi-national corporations in what now everyone realizes was an epic publicity, not to mention, punking stunt? Well, now that Kim Jong-Un has served his purpose, and the Interview has generated far more revenue than it would have otherwise (but not before North Korea got to troll the US, showing it too has lost all respect for the leader of the free world after it called Obama "A monkey in a tropical jungle") it is time to milk The Interview for some more propaganda talking points. And sure enough, here comes the Seattle-based cyber security firm Taia Global, which according to the NY Daily News as cited by the Mail has analyzed the "data" and concluded that not so Lil' Kim was right (the FBI was wrong) and it wasn't North Korea after all. So who was it? Why the evil Russians of course.
Since June, the U.S. military has been slowly stockpiling massive amounts of its gear coming out of Afghanistan at a depot in Kuwait adjacent to a bustling commercial port, in preparation for ultimately shipping it across the border into Iraq for an allied offensive against the Islamic State group, US News reports. Air Force Maj. Gen. Rowayne “Wayne” Schatz admitted, "from June to December, we’ve worked a lot on moving items into Kuwait," including 3,100 vehicles, most of them MRAPs. While the military stands by President Barack Obama’s repeated pledge that he will not put U.S. combat forces on the ground, an increasing number of U.S. troops has slowly trickled back into Iraq.
“There are far more people in the market, including mutual funds, than there is intelligence to go around.”
Things for Europe (and liquidity addicts around the globe) just got a little more complicated. Earlier today, moments after the failed Greek presidential vote pulled the forgotten topic of a Grexit up front and center, the IMF announced that it is suspending financial aid to Greece under its huge rescue program until a new government is formed. RTE quotes IMF spokesperson Gerry Rice who said discussion on the completion of the sixth review of Greece's bailout will resume once a new government is in place. Mr Rice added that the holdup in the program would not impact the country's finances in the short term.
We wonder if England will be reconsidering the secession vote?
- *SCOTTISH GOVT: CONFIRMED EBOLA CASE DIAGNOSED IN GLASGOW
- *SCOTLAND: PATIENT IS A HEALTH CARE WORKER, RETURNED FROM SIERRA LEONE DEC. 28
After Japan's stock market slid overnight following reports of Ebola in Tokyo, one wonders what a recurrence of Ebola headlines will do to risk complacency this time? Perhaps, since the Ebola Tzar's work is done in America, they can lend him out to The Scots?
When Fearmongering Goes Bad: Greece Scrambles To Prevent Deposit Run Goldman Warned About In Its "Worst Case"Submitted by Tyler Durden on 12/29/2014 10:32 -0400
Recall that just over two weeks ago, none other than Greek currency swap expert Goldman (alongside Jean-Claude Juncker who quite explicitly warned Greeks not "to vote wrong") came out with a Fire and Brimstone worst-case scenario which was nothing but an attempt at fearmongering designed to scare Greek MPs into doing Samaras' bidding, in which it said not electing the designated presidential candidate may lead to a worst-case scenario which involves a "Cyprus-style prolonged bank holiday." Basically what Goldman said is that unless Greece quickly folds back in line and does as the unelected Brussels eurocrats demand, there will be a Cyprus-style bank closure coupled with preemptied bank runs. Well.... oops. Because if that was the doubled-down bluff, then Greece just called it, and the "downside scenario" is now in play.
This wasn't supposed to happen. The Swiss National Bank has a problem - having announced on Dec 18th that it will impose negative deposit rates starting Jan 22nd, sight deposits soared (as opposed to the textbook expectations). Sight deposits (cash-like deposits commercial banks hold with the central bank) rose CHF10.8 billion this week (or 3.4%) - the most in over 18 months.