Most investors have heard Kyle Bass' rather eloquent phrase, "buying gold is just buying a put against the idiocy of the political cycle. It's that simple." However, what few may remember was his warnings in 2011, suggesting the University of Texas Investment Management Co. take delivery of its gold - as opposed to trusting it in the 'safe' hands of COMEX massively levered paper warehouse. Now, as The Star Telegram reports, Texas is going one step further with State Rep. Giovanni Capriglione asking the Legislature to create a Texas Bullion Depository, where Texas could store its gold. The goal is to create a secure facility that would allow the state to bring home more than $1 billion in gold bars that are owned by UTIMCO and are now housed at HSBC in New York.
The first step in any 12-step imperial-overstretch recovery program would involve accepting the fact that American power is limited and global rule an impossible fantasy. Accepted as well would have to be this obvious reality: like it or not, the U.S. shares the planet with a coterie of other major powers -- none as strong as we are, but none so weak as to be intimidated by the threat of U.S. military intervention. Having absorbed a more realistic assessment of American power, Washington would then have to focus on how exactly to cohabit with such powers -- Russia, China, and Iran among them -- and manage its differences with them without igniting yet more disastrous regional firestorms. But for any of this to happen, American policymakers would first have to abandon the pretense that the United States remains the sole global superpower -- and that may be too bitter a pill for the present American psyche (and for the political aspirations of certain Republican candidates) to swallow. From such denialism, it’s already clear, will only come further ill-conceived military adventures abroad and, sooner or later, under far grimmer circumstances, an American reckoning with reality.
China may raise the quota on a critical debt swap plan by as much as CNY1 trillion, underscoring how important its success is both in terms of kicking the can for the country's heavily-indebted local governments and in terms of jumpstarting the credit creation machine. Meanwhile, an effort to encourage ABS issuance is sputtering amid rising NPLs.
Ex-Im Bank distorts the market and reduces the average American's standard of living in order to increase the power of government and enrich politically powerful corporations. Congress should resist pressure from the crony capitalist lobby and allow Ex-Im Bank's charter to expire at the end of the month. Shutting down Ex-Im Bank would improve our economy and benefit most Americans. It is time to kick Boeing and all other corporate welfare queens off the dole.
The EU issued a press release this morning which could perhaps be summed up in 2 words - "not fair." Following the denial-of-entry by Russia of several EU politicians, Russia has released a list of 89 names who will face travel bans - of exactly the same type as EU and US enforced upon numerous Russian elites. Europe is displeased that Russia would dare do unto them as they have done unto others... "we deem this measure as totally arbitrary and unjustified," they exclaimed, adding, "we don’t have any further information on the legal basis or the criteria or the process of these decisions."
Last month, Chicago saw its debt cut to junk at Moody's, triggering billions in accelerated payment rights and jeopardizing efforts to improve the city's finances in the face of a budget gap that's set to triple over three years. Citi has more on the dreaded "downgrade feedback loop."
The somewhat farcical journey home from Europe for Secretary of State John Kerry continues. As we noted previously, after breaking his leg on an arbidged Tour de France'-esque accident in which he hit a curb, he was flown to Geneva in a helicopter where he was "stable and never lost consciousness," which makes sense (unless as many have suggested his brain lies considerably lower in his body than most humans). But then the escapade got beyond unreal as The White House sent a massive "specially-equipped" C-17 airplane (used to carrying over 100 combat troops and equipment into battle) to fly him to Boston for surgery. We assume he is covered by Obamacare, since the cost of this rescue mission - assuming roughly 10 hours flight-time - is at least $250,000... and all to avoid an Iran deadline no one expects to meet...
"The real lesson from Europe is actually the opposite of what conservatives claim: Europe is an economic success, and that success shows that social democracy works."
Japan's Pension System Hacked; 1.25 Million Identification Numbers, Birth Dates, Addresses CompromisedSubmitted by Tyler Durden on 06/01/2015 20:30 -0400
"Japan's pension system has been hacked and more than a million cases of personal data leaked, authorities said on Monday, in an embarrassment that revived memories of a scandal that helped topple Prime Minister Shinzo Abe in his first term in office," Reuters reports. China to be blamed in short order.
On a year-over-year basis, average spending in May of 2015 was $7 less than 2014, and nearly identical to 2013, when the US unemployment rate was nearly 3% higher, and the economy was supposedly sputtering badly enough for the Fed to launch QE3. Finally, as the chart below shows, this was the biggest month of May consumer spending drop in nominal dollar terms since the 2008 financial crisis.
One might be predisposed to thinking that monetary policies aimed explicitly at inflating prices for the assets most likely to be concentrated in the hands of the wealthy would have a high likelihood of exacerbating the wealth divide. Not so, says Ben Bernanke in a new blog post. "Certainly, inequality and lack of social mobility are issues of first-order significance for economic policy in general. Should they also be first-order considerations for the making of monetary policy? I have my doubts."
"US authorities need to take serious actions to show some sincerity, and to prove that they are not bad guys. Perhaps letting one of the most controversial intelligence-related acts expire is an acceptable solution."
With the tragic deaths (in a taxi accident) of John Nash and his wife, we explain Nash’s contributions to the general public. With real-life examples, from "the battle of the sexes" to picking your future wife/husband we hope everyone can better understand just what Nash accomplished in his celebrated 27-page doctoral dissertation.