The evolution of the Case-Shiller Index viewed in real time is like watching paint dry, but without the possible dramatics of runs... So far we are headed right down the middle towards the main area of stability, where inflation-adjusted house prices remained for about 50 years after WWII. You can throw an apple really high, but it's hard to keep it from falling afterwards. Clearly, if people are to get wealthy from real estate, Bernanke needs to keep blowing (or is it sucking?)
A mere 39 days after the once-largest-market-cap company in the world came to market with its bond issues, those that saw 'value' in the 3.85% coupon are not having a great run. The 30Y issue is now down 14% from the break price (and down over 18% from high price to low price since issuance). What is perhaps most notable is that while AAPL's equity price has also struggled, it is only down 9% in that period. And don't blame it all on those pesky Fed-driven rates, AAPL's spread (credit risk) has risen from ~90bps to over 110bps in this time.
There are a number of factors behind the widening canyon of economic inequality, but the primary driver is financialization. Financialization has given those with capital and access to financier expertise ways to skim great wealth from the system without creating any value whatsoever. The hidden toxin in financialization is the resulting concentration of wealth can buy concentrations of political power. Financialization is thus self-perpetuating: once the skimming operations generate billions of dollars in profit, it only takes a relatively small piece of these profits to buy/influence the political class. Once the politicos are in your pocket, the regulators and judiciary fall into line or are marginalized by new statutes or gutted budgets. Financialization is the disease eating away the heart of the economy and what's left of democracy.
And What About Your Smart Meter?
This is a game changer that's puts the power of observational surveillance in the hands of the common man and real time media broadcasting in the hands of the many. Few understand the consequences of what Google is proposing...
Someone once wrote that criticizing economist and New York Times columnist Paul Krugman and his "vulgar Keynesianism" is the internet’s favorite pastime. All along, the Princeton prof has stayed true to the cause of aggressive government action to forestall the downtrodden economy. Large fiscal expenditures, aggressive monetary stimulus, increased legal privileges for organized labor, and boosting the degree of state pillaging – Krugman is the caricature of a tyrannical apologizer who will defend the cause of rampant statism at any cost. But now, it appears Krugman has gone overboard with his progressive moaning. Instead of getting bogged down in the economic imbecility that frequents Krugman’s twice-weekly diatribes; there is a fallacy more fundamental in this latest theorizing. What Krugman is embracing in his latest attack on historical cases has much more to do with the man’s epistemological bent and approach toward economics.
Wondering why the money world got its knickers in a twist last week? The answer is simple: the global economy is breaking apart and its constituent major players are doing face-plants on the downhill slope of a no-longer-cheap-oil way of life. Let’s look at them case by case.
Government Hypocrisy Is the Core Problem
- Turmoil Exposes Global Risks (WSJ)
- China Money Rates Retreat After PBOC Said to Inject Cash (BBG)
- Fed Seen by Economists Trimming QE in September, 2014 End (BBG)
- Booz Allen, the World's Most Profitable Spy Organization (BBG)
- Abe’s Arrows of Growth Dulled by Japan’s Three Principles (BBG)
- China steps back from severe cash crunch (FT)
- Smog at Hazardous as Singapore, Jakarta Spar Over Fires (BBG)
- U.S. Weighs Doubling Leverage Standard for Biggest Banks (BBG)
Over the course of decades we have allowed ourselves to be corrupted by the love of material possessions, the lure of a debt based faux wealth, the money for nothing entitlement promises of dishonorable politicians, the evil of currency debasement, the effectiveness of mass media propaganda, and the belief that we could sacrifice freedom and liberty for promises of safety and security made by a cabal of powerful rich men. Power has been concentrated into the hands of the few, who operate in secrecy and despise the people. They don’t want transparency or open debate. Freedom of speech is nothing but a thorn in their side. They believe they are smarter than the serfs and have no morality when it comes to committing illegal acts and disregarding the Constitution. They are not acting in the public interest. Their abuse of power and looting of the national wealth have put us on a path towards a bloody revolution. This is not a time for conformity, obedience or submission. It’s time to stand up and expose the evil doers. It’s time to rally around those who care about this country. Who are the real traitors? You know the answer.
It appears that unlike the president, whose rating is plunging in the aftermath of PRISM-gate, US corporations are not eager to double down on their privacy intrusive ways, and some are becoming increasingly concerned about what all the recent exposure may do to their bottom line. Such as Google, which earlier today became only the first company to challenge the long-standing gag order issued by the secretive Foreign Intelligence Surveillance Court (FISA), arguing that the company has a First Amendment right to speak about information it is forced to give to the government. From Google: "Greater transparency is needed, so today we have petitioned the Foreign Intelligence Surveillance Court to allow us to publish aggregate numbers of national security requests, including FISA disclosures, separately." And yes, GOOG, which once upon a time pretended its motto is "don't evil" and since transformed it to "be evil, just don't get caught", still refer to "constitutional rights" - how quaint.
How is it possible to NOT monetize 200 million eyeballs?
- Obama Says Bernanke Fed Term Lasting ‘Longer Than He Wanted’ (Bloomberg)
- Merkel Critical Of Japan's Credit Policy In Meeting With Abe (Nikkei)
- China Wrestles With Banks' Pleas for Cash (WSJ)
- Biggest protests in 20 years sweep Brazil (Brazil)
- Pena Nieto Confident 75-Year Pemex Oil Monopoly to End This Year (Bloomberg)
- G8 leaders seek common ground on tax (FT)
- Putin faces isolation over Syria as G8 ratchets up pressure (Reuters)
- Former Trader Is Charged in U.K. Libor Probe (WSJ) - yup: it was all one 33 year old trader's fault
- Draghi Says ECB Has ‘Open Mind’ on Non-Standard Measures (BBG)
- Loeb Raises His Sony Stake, Drive for Entertainment IPO (WSJ)
China! Honestly, it comes to something when China jumps on the accusatory band-wagon asking the US administration to provide some comments about its monitoring programs and answer up to the international community.
Eager to take advantage of NSA-whistleblower Edward Snowden's current unincarcerated status and to ask him questions about his motives or thoughts? Here is your chance courtesy of the Guardian which is holding a live Q&A session with the famous leaker. As the Guardian notes: "He will be online today from 11am ET/4pm BST today. An important caveat: the live chat is subject to Snowden's security concerns and also his access to a secure internet connection. It is possible that he will appear and disappear intermittently, so if it takes him a while to get through the questions, please be patient." Some more from the Guardian:
- Edward Snowden is answering your questions about the NSA leaks live
- Post your questions in the comment section below and recommend your favorites
- We are posting Snowden's replies above the line
- You can also follow along on Twitter using the hashtag #AskSnowden
The live blog can be reached at the following link.