Eastern Europe

Following the slaying of two members of Greece's far-rght Golden-Dawn party (and wounding of a third) on Friday evening, the Greek government’s crackdown on the country’s 'extremist' party has revived a vexing question that seemed to have disappeared with the Cold War’s end: Is there a place within liberal democracies for apparently anti-democratic parties?

• Republican Civil War Erupts: Business Groups v. Tea Party (BBG)
• Budget fight leaves Boehner 'damaged' but still standing (Reuters)
• Madoff Was Like a God, Wizard of Oz, Lawyers Tell Jury (BBG) - just like Bernanke
• Republicans press U.S. officials over Obamacare snags (Reuters)
• Brilliant: Fed Unlikely to Trim Bond Buying in October (Hilsenrath)
• More brilliant: Fed could taper as early as December (FT)
• Russia Roofing Billionaires Seen Among Country’s Youngest (BBG)
• Ford's Mulally won't dismiss Boeing, Microsoft speculation (Reuters)
• China reverses first-half slowdown (FT)
• NY Fed’s Fired Goldman Examiner Makes Weird Case (BBG)

Two bailouts, a default and a half later, it should be obvious that Greece was stripped of its sovereignty for nothing. Should I say "I told you so"???

The rise of Tomahawk force began in 1983 during the Reagan buildup, but the demise of the Evil Empire did not slow down its development one bit. By the end of the century the United States had about 150 surface ships and attack submarines that could launch these deadly cruise missiles and an inventory of nearly 5,000 missiles. Tomahawks have a range of seven hundred miles. This means that from their offshore platforms they can reach three-fourths of the world’s population. And during the last two decades they have been used in just this “stand-off” manner against targets in Iraq, Bosnia, Afghanistan, Sudan, Libya, and others—teaching presidents that they could meddle freely without getting bloodied.

Obama cancels meeting with Putin in Moscow amid tensions over NSA leaker Edward Snowden. http://t.co/Wdy2SYXvSt

— WSJ Breaking News (@WSJbreakingnews) August 7, 2013

Plunging Chinese manufacturing and an 11 month low PMI got you down? Don't worry: there's a Europe for that, which overnight reported that manufacturing and service PMI in Germany and, don't laugh, France soared far above expectations (German Mfg and Services PMIs of 50.3 and 52.5, up from 48.6 and 50.4, and above expectations of 49.2 and 50.8; French Mfg and Services PMIs of 48.3 and 49.8, up from 47.2 and 48.4 and an 11 and 17 month high, respectively, blowing away expectations of 47.6 and 48.8). The result was a composite Eurozone Manufacturing PMI of 50.1, above 50 for the first time since February of 2012, up from 48.8 and at a 24 month high - reporting the largest monthly increase in output sunce June 2011, as well as a composite Services PMI of 49.6, up from 48.3, and an 18 month high. In other words, European Composite PMI is expanding (above 50) for the first time since January 2012.

In an effort to soften the blow to our American readers, here is an analogy: You know when you move out of your parents’ house and live on your own, how you start hanging out with your friends’ families and you realize that actually, your family was a little screwed up? Stuff you always assumed was normal your entire childhood, it turns out was pretty weird and may have actually screwed you up a little bit. The point is we don’t really get perspective on what’s close to us until we spend time away from it. Just like you didn’t realize the weird quirks and nuances of your family until you left and spent time with others, the same is true for country and culture. You often don’t see what’s messed up about your country and culture until you step outside of it. And to our foreign readers, get your necks ready, because this is going to be a nod-a-thon.

"I am so old that I can remember when most of the people promoting race hate were white;" Thomas Sowell begins in this poignant essay amid the protests across the nation this evening. Apparently other Americans also recognize that the sources of racism are different today from what they were in the past. According to a recent Rasmussen poll, 31 percent of blacks think that most blacks are racists, while 24 percent of blacks think that most whites are racist. The time is long overdue to stop looking for progress through racial or ethnic leaders. Such leaders have too many incentives to promote polarizing attitudes and actions that are counterproductive for minorities and disastrous for the country.

Back in 2010 we started an annual series looking at the (re)distribution in the wealth of nations and social classes. What we found then (and what the media keeps rediscovering year after year to its great surprise) is that as a result of global central bank policy, the rich got richer, and the poor kept on getting poorer, even though as we predicted the global political powers would, at least superficially, seek to enforce policies that aimed to reverse this wealth redistribution from the poor to the rich (a doomed policy as the world's legislative powers are largely in the lobby pocket of the world's wealthiest who needless to say are less then willing to enact laws that reduce their wealth and leverage). Now that the topic of wealth distribution (or rather concentration) is once again in vogue, below we present the latest such update looking at a global portrait of household wealth. The bottom line: 29 million, or 0.6% of those with any actual assets under their name, own $87.4 trillion, or 39.3% of all global assets.

Currency wars are so pre-"QE eternity." At least that is the opinion of Indian multi-billionaire Lakshmi Mittal, and owner of the world's biggest steelmaker, who urged Europe to embrace protectionism and erect trade barriers to "protect" its manufacturers (benefiting one ArcelorMittal among others), while at the same time bashing austerity, saying "the futures of EU manufacturing depended on politicians in Brussels helping industry face what he said was unfair competition from China." In other words, it's time for Europe to escalate into full blown trade warfare with China. It is unclear if Mr. Mittal had any thoughts on how China would, in turn, escalate to this progression in trade warfare: whether with tariffs, subsidies, or outright dumping. What does appear quite clear is that the owner of ArcelorMittal, who on Friday posted a net loss of $345 million (down from a $92 million profit a year earlier) on Q1 sales plunging by 13%, whose stock is just off its 52 week lows, and who said he may close plants in Eastern Europe if the "economy continues to slump", may have some ulterior motives in asking that Europe fight his war for him.

For 727 editions, and nearly 30 years, Bill Buckler, the "captain" of the free market-praising Privateer newsletter provided a welcome escape from a world overrun with "free-lunch" economists, "for-hire" politicians, "crony-capitalist" oligarchs, "heroin-addict" bankers, "the-solution-to-record-debt-is-more-record-debt" Keynesians, and all those other subclasses of that species which Einstein, or whoever, described so aptly in saying that they all expect a different, and happy, outcome when applying the same flawed methods over and over. And for 30 years, Buckler's steadfast determination and adherence to his arguments, beliefs, reasoning and ironclad logic brought him countless followers, all of whom are now able to see past the bread and circus facade of a world every day on the edge of political and social collapse. Sadly, all good things come to an end, and so does The Privateer. We are delighted to celebrate its illustrious memory by presenting to our readers the final, must read, issue of the newsletter which encapsulates the philosophy and ideology of its author - a man much respected and admired in the free market circles - and thirty years of objective, unbiased market and economic commentary, best of all.

Often times, for the best, closest to the ground perspective on economic opportunities in any given economy, there is hardly any more convincing metric than observing the level of net migration of foreigners into a country, and subsequently out. First, it was Italy, where net immigrants from Afghanistan and Bangladesh came, they saw, and promptly took the first boat back to whereever it was they came from. Then, a year ago we first showed that the endless media propaganda has little to no impact on the marginal cheap worker in the US, as Mexican immigrants finally became emigrants after realizing that real demand for their services, even as bargain basement wages, simply does not exist. And now, it was only logical that Europe's economic basket case with unemployment levels so high one literally needs bigger charts, was the next to follow. As BBC reports, in 2012 the Spanish population of 47.3 million declined by some 206,000 as "immigrants left the country amid a major economic crisis." The actual population change consisted of native Spaniards growing by a token 10,000 more than offset by the 216,000 registered foreign residents who decided to just pack it up and go back, mostly from Ecuador and Colombia. One could say they threw in the proverbial (Spiderman) towel, or at least sold it on Ebay.

Where German industrial companies plan to invest: a slew of losers out there, including Germany

First CNN, then AP, now Reuters: the entire media is increasingly starting to look like amateur hour. Unless, of course, Soros is like Osama, and had several "reincarnated" body doubles, with the original specimen long gone. Here is our suggestion for another prepared article: "Today after XX centuries of monetizing debt, the Emperor of the Galactic Central Bank, Gaius Maximus Printius Bernankius the DCLXVI^th, ended QE in the year of the alien invasion, XXXXX. Bread costs XXXXXXXXXXX."

The present confusion is legitimate: it is far too early to be projecting much from Cyprus except a continued erosion of faith in Eurozone banks and leadership, and by default, the euro as a placeholder of purchasing power.