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Did QE Work?





Spoiler Alert: No!

 
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The WSJ’s Pathetic Sunnyside Journalism - Retracts Its Own GDP Narrative





Before: "The U.S. economy expanded steadily again during the third quarter, a sign of sustained growth fueled by American consumers and businesses despite mounting concerns about the health of overseas economies."

After: "The U.S. economy expanded at a healthy pace during the third quarter, a sign of sustained growth fueled by government spending and a narrower trade deficit despite mounting concerns about the health of overseas economies."

While the last clause in that sentence maintains the sunshine optimism, it is hardly the same interpretation, is it?

 
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Canada Suspends Visa Applications From Ebola-Affected Nations





While the Obama administration continues its schizophrenic approach in countering the threat of Ebola spreading on US soil, on one hand demanding that states eliminate mandatory quarantines of citizens in their Ebola response protocol since a ban on travel from west Africa is considered out of the question, while on the other the Pentagon just approved a mandatory 3 week "isolation" of troops returning from Ebola missions, yesterday Canada announced a far more practical solution: America's northern neighbor said it was suspending visa applications for residents of Ebola-hit nations in a bid to prevent the deadly virus from crossing its borders.

 
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Something Doesn't Add Up





On the one Hand: "Consumers expect better economic growth and rising incomes in the coming months, pushing a measure of confidence to a seven-year high in October. The University of Michigan said Friday that its index of consumer sentiment rose to 86.9 from 84.6 in September. That's the highest since July 2007, five months before the Great Recession began. Richard Curtin, the survey's chief economist, says that almost six in ten of the respondents said the economy has improved recently, the highest proportion in more than 10 years."

On the other: "Voters are deeply frustrated with the economy as they head to the polls Tuesday for a midterm election Republicans hope will yield them control of the Senate."

 
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Artist's Impression Of The Morning After Halloween At The White House





Presented with no comment...

 
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China's Economy Goes From Bad To Worse, In Charts





Prepare to once again hear the word "decoupling" a whole lot more.

 
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Child Poverty Jumps 2.6 Million Since 2008, While Number Of Billionaires Doubles





Two headlines came across my screen today, which taken together pretty much sum up the effects of policy decisions made by Central Bankers and politicians since the financial crisis. The financial oligarchs got bailed out, and the rich got richer due to decisions made by “leaders” around the globe. As such, the entire planet has now been transformed into a neo-feudal tinderbox.

 
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Japan: QE As Morphine For A Terminal Patient





If and when a country resorts to having it central bank buy up – the equivalent of – all sovereign bonds it issues, the snake truly eats its tail, and not in a metaphorical sense. Japan eats it children, most of them as yet unborn, to keep its rapidly ageing population contented and in relative wealth, because the alternative would cost Tokyo’s financial-political power cabal their jobs and heads.

 
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QE Added $9 Trillion In "Equity Wealth" Or 32% Of The Current S&P500 Level, JPMorgan Finds





"The decline in asset yields especially during QE3 created large wealth effects. Since the Fed's QE started at the end of 2008 the PE multiple of the S&P500 index (12-month forward) went up by five points, from 10.5 at the end of 2008 to 15.5 currently. This PE multiple expansion is responsible for around 650 index points or 32% of the current S&P500 index level. Extending that to the total stock of US corporate equities ($29tr currently), it implies an equity wealth boost of $9tr."

 
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Thoughts On Prosperity In America





After peaking in 1999 at 37%, the prosperity line has gradually declined since, and is now sitting at 34%. In between there was a housing boom and a global financial crash, both with noticeable effects on the line. That decline may not sound like much, but it will take years to rebuild all that wealth – assuming that the economy is moving in the right direction. And it was exactly at the bottom of the earnings scale that things got pretty bad. People earning less than $35,000 per year went from 31% at the turn of the century to 34% today, more or less matching the decline in percentage points at the top of the table. The new century brought a lot more discomfort to a growing number of Americans, fueling a lot of talk recently about income inequality in the country. Therefore, despite all the subsequent economic growth, large fiscal stimulus packages, unprecedented Federal Reserve intervention and booming capital markets, we could say that PROSPERITY IN AMERICA PEAKED IN 1999!

 
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Martin Armstrong: "At What Point Does Revolution Take Place?"





At what point does revolution take place? In our review of history, the probability is low but for the economic trend. In other words, turn the economy down and the percent of discontent rises exponentially. So beware – not ghosts and goblins, but politicians going forward. The problem is not that Americans are ignorant, they are being fed nonsense by the media to sell newspaper and TV advertising. We have fallen into a cycle of Yellow Journalism that was begun by Pulitzer. So perhaps Americans will wise up only when the economy turns down and the Internet provides a greater proportion of real news compared to mainstream media.

 
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The Story Changes: Ebola Is Now "Aerostable" And Can Remain On Surfaces For 50 Days





When it comes to Ebola, the story that the government is telling us just keeps on changing. At first, government officials were claiming that it was very difficult to spread the Ebola virus. Some of them were even comparing it to HIV. We were given the impression that we had to have “direct contact” with someone else’s body fluids in order to have any chance of catching the virus. But of course that is not true at all. Now authorities are admitting that Ebola is “aerostable”, that it can be “spread through droplets”, and that it can remain on surfaces for up to 50 days. That is far different information than we have been getting up until this point.

 
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"The Most Important Chart For Investors" Flashback, And Why USDJPY 120 Is Now Coming Fast





Back in late September, we posted what Albert Edwards thought at the time was "The Most Important Chart For Investors" which was quite simply, a chart of the USDJPY.  Considering the BOJ's overnight move, he was absolutely correct. So for all those who missed it, here it is again, because it explains not only where the Yen is headed next, but why, sadly, this could well be the end of Japan and the mirage of a recovery that has had everybody hypnotized for the past 6 years.

 
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A Massive FX Quake Hits Japan: This Is What It Looked Like





When central bankers go wild...

 
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Who Will Suffer From A Leveraged Credit Shakeout?





Marty Fridson, CIO at Lehmann Livian Fridson Advisors, has been a leading figure in the high-yield bond market since it was known as the "junk bond" market — and he sees as much as $1.6 trillion in high-yield defaults coming in a surge he expects to begin soon... “And this is not based on an apocalyptic forecast,” he warns.

 
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