• 09/21/2014 - 14:52
    Dear Janet; If I may be so forward, as a concerned citizen of the Constitutional Republic of the United States, it is with great consternation that I feel compelled to write you this distressing...

Budget Deficit

Tyler Durden's picture

7 in 10 Americans Think Government Is For The Banks And Big Corps (Not The People)





72% of the poor and 71% of the middle-class believe government policies (fiscal and monetary) have done little or nothing to help them. Of course, this will be eschewed by the academics (as Santelli recently exclaimed regarding the arrogance of the intellectuals) because "the people" just don't get it. But when 69% of all Americans, according a new Pew study, say large banks and financial institutions have benefited the most from post-recession government policies; communications policies are going badly awry. Despite a surging stock market, exploding home prices, and low rates spurring all kinds of subprime auto loan exuberance, there has been little change in these perceptions since July 2010.

 
Tyler Durden's picture

Quad Witching Day Has Quiet Start





It has been a quiet start to Quadruple Witching Friday (expiration of stock index futures, stock index options, stock options and single stock futures) but expect that to change, as erratic price action is a recurring hallmark of Quad Witches, especially with persistent low volume and markets that tend to shut down for no reason. So far stocks have traded steady in Europe this morning, credit spreads widened and Bunds traded in positive territory as market participants positioned for the much-anticipated German elections which are to be held on Sunday, with exit polls to be made available after the close of polling stations at 6pm local time. Ahead of that, and as reported here previously, Germany’s AfD Eurosceptic party could win enough support in the general election on Sunday to gain seats in the German Bundestag, an opinion poll published for a leading newspaper has forecast for the first time. Basic materials and utilities underperformed in Europe, with RWE trading sharply lower in Germany after the company announced plans to cut its dividend by half (and with the Adidas fiasco yesterday, one wonders just how bad things in Europe really are).

 
Tyler Durden's picture

63 High Government Debt Episodes And What They Tell Us About Our Options Today





Do you wonder what to make of America’s soaring government debt and what it means for the future? Or, if you already have it figured out, are you interested in research that might challenge your position? Either way, you might like to see the results of this exercise:

1... Take each historic instance of government borrowing rising above America’s current debt of 105% of GDP.
2... Eliminate those instances in which creditors received a lower return than originally promised, due to defaults, bond conversions, service moratoriums and/or debt cancellations.
3... Of the remaining instances, consider whether and how the debt-to-GDP ratio was reduced.

In other words, let’s see what history tells us about today’s debt levels and what comes next. You may find the answer surprising.

 
Tyler Durden's picture

The Surest Way To Spot Trouble: When Even The CBO Says There's A Problem





In light of this morning's Obama-Boehner volleys, we thought a reflection on the facts was useful. The Congressional Budget Office (CBO) released its 2013 Long-Term Budget Outlook yesterday morning, and its government debt projections are dismal... But the CBO’s featured chart only tells a small part of the story. The baseline scenario happens to be bogus. Even as it shows our addiction to debt worsening, it doesn’t do justice to the severity of that addiction. (You may want to show the chart to your children. After all, they’ll be the ones who’ll have to deal with the debt we’re piling on today.)

 
Tyler Durden's picture

Frontrunning: September 17





  • Less Tapering Becomes Tightening Credit No Matter What Fed Says (BBG)
  • Yellen Is Now Top Fed Hopeful (WSJ)
  • Syria - A chemical crime, a complex reaction (Reuters)
  • More ECB collateral: Wrecked cruise ship Costa Concordia raised off rocks in Italy (Reuters)
  • Aging Boomers Befuddle Marketers Eying $15 Trillion Prize (BBG)
  • Abe Turns Pitchman, Says Japan Is Now A Buy (WSJ)
  • Ex-JPMorgan Employees Indicted Over $6.2 Billion Loss (BBG)
  • Barack Obama blinked first in battle for Lawrence Summers (FT)
  • Berlusconi to support Italian government in video message: sources (Reuters)
  • How China Lost Its Mojo: One Town's Story (WSJ)
 
Tyler Durden's picture

Italy Public Debt Will Rise More Than Expected Next Year; Spain Debt Also Rises To Record





For all complaints about painful, unprecedented (f)austerity, the PIIGS (even those with restructured debt such as Greece) sure have no problems raking up debt at a record pace. Over the weekend, Spanish Expansion reported that Spanish official debt (ignoring the contingent liabilities) just hit a new record. "The debt of the whole general government reached 942.8 billion euros in the second quarter, representing an increase of 17.1% compared to the same period last year. Debt to GDP of 92.2% exceeds the limit set by the government for 2013..." Moments ago, it was Italy's turn to show that with employment still plunging, the only thing rising in Europe is total debt. From Reuters, which cites a draft Treasury document it just obtained: "Italy's public debt will rise next year to a new record of 132.2 percent of output, up from a previous forecast of 129.0 percent."

 
Asia Confidential's picture

A Wake-Up Call For Asia





Recent problems in Asia ex-Japan appear solvable. But the time for reform is now if the region's to take the next leap forward in its economic development.

 
Tyler Durden's picture

3 Potential "Taper" Surprises And FOMC Sugar-Coating





As we head for the fateful FOMC announcement on September 18, US data have continued to moderate. Accordingly, the consensus seems to be converging on a $10-15 billion initial reduction in monthly purchases (mostly focused on the Treasury side and less so on MBS) with any 'tightening' talk tempered by exaggerated forward-guidance discussions and the potential to drop thresholds to appear more easy for longer, since as CS notes, assuming Fed policymakers have learned anything in the last four months, they must know that the markets view “tapering” as “tightening,” even though they themselves for the most part do not. Thus, they are going to need to sugar-coat the message of tapering somehow. But as UBS notes, political risks have grown and there is little clarity on the Fed's thinking about the housing market. This leaves 3 crucial surprise scenarios for the FOMC "Taper" outcome.

 
Tyler Durden's picture

On A Taper "Relief-Rally", Moar "Boots On The Ground", And "European Instability"





An increasing cacophony of prognosticators are of the status-quo sustaining belief that stock and bond prices will rally next week when the Fed announces the taper. As Scotiabank's Guy Haselmann notes, the thinking goes that alleviation of the uncertainty will cause a "relief rally." However, as Haselmann notes, since the Fed has provided 5 years’ worth of massive stimulus that has launched asset prices to record highs, the commencement of the withdrawal process is significant... and any relief rally that ensues next Wednesday should be sold. His thoughts extend from Indonesian central bank's dilemma to European political instability, and the next stage of the Syrian crisis...

 
Pivotfarm's picture

Richest Countries in the World





Wealth has besotted people since time immemorial. It’s accrued, amassed, hidden, stolen and we would even die sometimes for it, or at least knock someone off more than likely to get what they have.

 
Tyler Durden's picture

'Ben'-edictions On The Economic And Profit Cycle





1:1 In the beginning, Ben Bernanke hath said, let there be liquidity.

...

1:6 And so each among them sayeth the following benediction: “May the Fed bless you and keep you; may the Fed extend its balance sheet to shine upon you; and may the Fed lift up asset prices and protect you from harm”

 
Tyler Durden's picture

Gundlach's Year End Bond Forecast, Revised





It would appear that the new normal's Bond gurus are struggling with the weight of the 'Taper'-ing, deleveraging, 'special-repo'-ing, government-repress-ing, EM-crisis-ing world of extreme fast money flows that the Fed has thrust upon us. Just 3 short months ago, Jeff Gundlach said that he "expects the absolute highest for the 10-year yield this year is 2.4%, but he expects it to stay closer to 2%." However, as the 10Y yield presses up towards 3.0%, he told CNBC (in this brief but insightful clip on world flows and how he sees markets playing out) that "the 10Y Yield may go up to as highs as 3.1% by year-end," because "investors have switched from "I don't care about volatility, I want income" to "I don't care about income, I dont want volatility." He sees no sign of that changing...

 
Tyler Durden's picture

The Chart That Every Taxpayer Deserves To See





This chart seems to sum up our fiscal challenges as well as anything else...

 
Pivotfarm's picture

Yes US Needs Immigration





The Border Security, Economic Opportunity, and Immigration Modernization Act. It’s a mammoth of a reform bill and runs 844 pages (plus 350 pages of annexes). A needed overhaul of the 1986 law, but it will have its downsides too.

 
Capitalist Exploits's picture

This Company’s Burn Rate Should Scare The Hell out of You!





Japanese finances are in a shambles and very soon investors are going to run screaming from the Yen and JGB markets.

 
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