Wikileaks recently continued the release of what they refer to as the “Spy Files.” These files provide a look into some of the companies behind the rapid commercialization of the spy equipment industry, who’s clients include repressive governments and dictatorial regimes around the world. In a press release announcing these files Wikileaks states: Across the world, mass surveillance contractors are helping intelligence agencies spy on individuals and ‘communities of interest’ on an industrial scale. The Wikileaks Spy Files reveal the details of which companies are making billions selling sophisticated tracking tools to government buyers, flouting export rules, and turning a blind eye to dictatorial regimes that abuse human rights. One of the companies highlighted is an Italian based company called Hacking Team...
UPDATE: *GEITHNER STILL DOESN'T WANT TO BE CONSIDERED FOR FED CHIEF: WSJ
The next chairman's main job is going to be deciding how soon and how aggressively to pull back on Fed programs; and as none other than Fed whisperer John Hilsenrath notes, Larry Summers' withdrawal increases the likelihood of continuity in central-bank policy for the next few years - meaning any Fed wind-down of its easy-money programs will be slow and gradual. Of course he posits Yellen and Kohn as potential front-runners but throws Tim Geithner and Roger Ferguson back into the mix. Business-as-usual is back and the doves are in control - all the Fed needs now is bigger deficits to enable it to keep the pumps primed...
From Berlin to Ankara and even Damascus, the questions seem to be the same: Has the world order as we know it in the post-war era come to an end? What will the world look like without the United States in the role of superpower and ‘boss’?
"The (potential) hawk is dead, long live the doves," appears the chorus of approving 'traders' who have just bid the S&P 500 futures up over 1% to a new all-time high. The USD is getting monkey-hammered, Gold futures jumped $20 and Silver futures are up 3.5% (from the Friday PM fix) but are fading back close to the Friday trading close. Treasury futures open up over 1 point (implying 30Y -4bps, 10Y -8bps, 5Y -11bps) - jubilant at the money-printing to come - oh and WTI crude is -1.3% at $107.
"This is a good move by Larry. This is a short-term plus for the bond market.".... "If it's almost anybody but Larry, I think bonds will rally." ... "I do think there will be less for investors to worry about as there will be more policy continuity at the Fed." ... "Larry Summers' past decisions to deregulate Wall Street and do the bidding of corporate America has made the lives of millions of Americans more acrimonious. He would have been an awful Fed Chair. President Obama should appoint someone to lead the Fed who has not accepted millions in payments from Wall Street, and who will prioritize an economy that works for the little guy above further enrichment for the big guy."
"Market response - will add to downward pressure on bond yields and may be worth another 10-15bps on the downside. FX terms - hard to see it as anything but USD negative for now. Main buying opportunities probably high current account deficit EM, AUD,and JPY. Discussion of waning Summers odds had been in market last week so we would see impact on JPY in 0.5-1.0 percent range. Whether this puts Yellen in driver's seat is unclear, so this Wednesday tapering and FOMC forward guidance are still the focus. We still think tapering schedule rather than FOMC language will be the main market driver."
The froth is back. As we noted yesterday, corporate leverage has never been higher - higher now than when the Fed warned of froth, and as the BIS (following their "party's over" rant 3 months ago) former chief economist now warns, "this looks like to me like 2007 all over again, but even worse." The share of "leveraged loans" or extreme forms of credit risk, used by the poorest corporate borrowers, has soared to an all-time high of 45% - 10 percentage points higher than at the peak of the crisis in 2007. As The Telegraph reports, ex-BIS Chief Economist William White exclaims, "All the previous imbalances are still there. Total public and private debt levels are 30pc higher as a share of GDP in the advanced economies than they were then, and we have added a whole new problem with bubbles in emerging markets that are ending in a boom-bust cycle." Crucially, the BIS warns, nobody knows how far global borrowing costs will rise as the Fed tightens or “how disorderly the process might be... the challenge is to be prepared." This means, in their view, "avoiding the tempatation to believe the market will remain liquid under stress - the illusion of liquidity."
Starting two weeks ago, requests faxed to the Office of the Secretary of Defense (OSD) started coming back as undeliverable. After several subsequent attempts and troubleshooting on our end, MuckRock reached out to the OSD. Sure enough, their fax machine is down... possibly until November. Now, in 2013, you wouldn't think this would be an issue. But when an agency accepts FOIA requests by a) fax, b) mail or c) a clunky online request portal that doesn't play nice with other systems, suddenly that fax machine becomes a technical linchpin. It bears repeating: The office that oversees the most powerful military in history (not to mention the best-funded) is unable to project when its single fax machine will once again be operational.
Of course, everyone knows that one of these is a speculative asset that people will buy (and not sell) no matter how high the price on the basis that The Fed will continue to print money and subsidize 'valuations' and the other is a long-term asset to preserve wealth. But which of these assets would one expect to react to a considerably hotter-than-expected inflation print and dramatically worse-than-expected retail sales print? The answer (for all those efficient market, hyperbolic discounting types) may surprise...
Just four short months ago, the Saudi religious police said "anyone using social media sites – and especially Twitter – “has lost this world and his afterlife." This followed Saudi Arabia’s grand mufti, the kingdom’s most senior Muslim cleric, dismissing Twitter users as "fools". So it is perhaps odd that Saudi Prince Alwaleed bin Talal (who previously noted that "ethics to me are very important") announced his vociferous support ahead of its IPO as he has invested $300 million in Twitter. "With the 300 million customers they have and half a billion tweets a day, the growth potential is tremendous," Alwaleed excitedly commented adding that, he's "totally against anybody who tries to control or censor Twitter or any other social media, even if it is governments. It's a losing war." Which seems a little strange given the imam of the Grand Mosque's public TV appearance warning the Saudi people that "Twitter was a threat to national unity."
With the NSA already tracking and recording every form of communication and electronic data exchange, it would hardly come as a surprise that the final piece of the puzzle was also actively being intercepted and collected by General Keith Alexander's superspy army: money, or rather tracking the global flow thereof. Which is why we were not surprised to learn just this, following the latest report from Germany's Spiegel that "The National Security Agency (NSA) widely monitors international payments, banking and credit card transactions" and has even created an internal branch titled appropriately enough "Follow The Money" (FTM). Once collected, the data then flows into the NSA's own financial databank, called "Tracfin," which in 2011 contained 180 million records. Some 84 percent of the data is from credit card transactions. But while collecting credit card data was to be expected, what is even worse is that the NSA has also secretly planted itself in the nexus of the entire global USD-intermediated financial transactions system courtesy of SWIFT. In other words, America's unsupervised uber spies, when not checking in on their former significant others, spend the bulk of their time tracking who is buying what, where, and with whose money.
Merkel Wins Bellwether Vote As Coalition Partner Founders; Anti-Euro Party Ascent Could Derail CoalitionSubmitted by Tyler Durden on 09/15/2013 13:50 -0400
There was good and bad news for Angela Merkel as today's exit polls from the Bavaria (GDP of $619 billion, bigger than the output of Poland or Austria) state elections - the bellwether vote ahead of next weekend's federal elections (previewed here) - were released. On one hand, the CDU's sister party, the Christian Social Union or CSU, was set to win a majority in Bavarian state elections (where the CDU does not contest the ballot), giving the incumbent a boost as she heads into the final week of her campaign before a national vote Bloomberg reports. But the surprise of the day was the strong showing of the The Free Voters, who want Greece to exit the euro, oppose euro-area bailouts and want to trim the power of the European Union, won 8.5 percent, the ZDF projection showed. It is precisely the ascent of anti-Euro powers that could upset the final election "arithmetic" in jeopardy. As Reuters reports, "a new anti-euro party could enter Germany's national parliament after an election next week, pollsters said on Sunday, potentially upsetting Chancellor Angela Merkel's hopes of returning to power with her current coalition partner."
With global trigger-finger tensions still running on full blast following the recent Syrian near-war episode, the last thing the jittery world needed is yet another "test fire" of a very lethal weapon, yet that is precisely what it got just after 8:40 am on Sunday when India test fired a nuclear-capable missile, with a range of 5,000 km, capable of reaching Beijing and Europe, bringing it a step closer to production of a nuclear deterrence agent. Why is India doing this now is unclear, although it has been suggested that India is merely trying to keep up with China's growth military strength and "wants to have a viable deterrent against its larger nuclear-armed neighbor." It is also a move targeting the rapidly growing nuclear arsenal of Pakistan, which has been increasing its inventory of nuclear warheads and developing short-range, tactical nuclear weapons, raising concern about an escalating South Asian arms race, the International Institute for Strategic Studies said on Thursday. The think-tank said in a report the race with Pakistan was increasing the risk of a nuclear exchange during a conventional conflict, perhaps sparked by an act of terrorism. Or a false flag act perhaps?