"If banknotes are outlawed you will be forced to hold money that is a liability of a commercial bank (deposits) and refused access to money that is the liability of the central bank (bank notes)... In such a world, zero-yielding gold would be a high-yielding instrument. If the authorities ever sought to restrict access to banknotes, then gold would suddenly find itself enfranchised as money for the first time in many decades. So, given the scale of these competing forces, it is just too early to say what might happen to the gold price, but the allure of gold will grow the more it becomes clear that central bank fiat has failed and the age of government fiat is dawning."
Rising tuition rates, high unemployment among recent graduates, and an anemic economic recovery have many questioning the once inviolable notion that a college education is the best way to ensure high-paying, full-time employment. A new study from Georgetown looks at the best and worst majors for those looking to maximize their annual income.
"From the BIS to BlackRock, and Jamie Dimon to Jose Vinals, everyone seems to be talking about market liquidity," Citi's Matt King writes, before taking an in-depth look at just how broken the 'markets' truly are. To summarize: no depth in the Treasury market, a duration mismatched powder keg in "long-term" mutual funds thanks to the fact that ZIRP has destroyed money market yields causing investors to find a new 'cash substitute,' and a magically shrinking repo market in the wake of new regulations ironically meant to promote stability.
"Too Big To Fail Is A License For Recklessness" America's Banking System Is A "Fragile House Of Cards"Submitted by Tyler Durden on 05/01/2015 17:45 -0400
"Too Big to Fail is a license for recklessness. These institutions defy notions of fairness, accountability, and responsibility... They benefit from the upside and expose the rest of us to the downside of their decisions. These banks are too powerful politically as well... Effectively we're hostages because their failure would be so harmful. They're likely to be bailed out if their risks don't turn out well and the largest financial firms in America can hide an enormous amount of risk in derivatives which creates a house of cards — a very fragile system."
JP Morgan’s massive silver buying brings to mind the Hunt Brothers' attempt to corner the silver market in the late 1970s. The Texas oil-tycoons tried to corner the silver market by accumulating a massive silver futures position. Ted Butler has estimated that JP Morgan may currently hold far more than their official figure of 55 million ounces.
Warfare today (and in the future) is (and will be) fought differently. In the 1950’s with the creation of more destructive bombs and weaponry, the idea was ‘Mutually Assured Destruction’ (MAD). The movie War Games helped us learn that there are no winners. The warfare ideology today is ‘Multilateral Unconstrained Disruption’ (MUD). This unrestrictive warfare is meant to disrupt societal functioning; to ‘poison’ information to elevate distrust of all computer information. Cyber-activity is the new ‘cold war’.
There was once a time, perhaps, when unprecedented things happened only occasionally. In today’s financial markets, unprecedented things are commonplace. The Queen in Lewis Carroll’s ‘[Alice] Through the Looking-Glass’ would sometimes believe as many as six impossible things before breakfast. She is probably working in the bond markets now, where believing anything less than twelve impossible things before breakfast is for wimps.
"The exchange's trading turnover exceeded 1 trillion yuan ($161.28 billion) for the first time on Monday, but the data could not be properly displayed because its software was not designed to report numbers that high," Reuters reports, in what looks like further evidence that China's self-feeding equity mania is reaching epic proportions. On the bright side, it's not often in today's market that man overcomes software, so score one for human traders.
While it is 'possible' that The Fed's net worth could become negative, such a phenomenon would be "temporary and would not create serious problems."
The endgame has indeed arrived. At the very least, the international elites seem to think success is within their grasp, for they now openly expose their own criminality. But they do so in a way that attempts to divert blame or to rationalize their actions as being for the "greater good." All signs and evidence point to what the IMF calls the "great global economic reset.”" The plans for this reset do not include U.S. prosperity or a thriving dollar.
“The biggest worry of the buy side around the world is that there has been a dramatic decline in liquidity from the sell side for many fixed income products,” Prudential's David Hunt tells Bloomberg, echoing Jamie Dimon and confirming what we've been shouting about for years.
"In some instances, malfunctioning algorithms have interfered with market functioning, inundating trading venues with message traffic or creating sharp, short-lived spikes in prices as a result of other algorithms responding to the initial erroneous order flow."... "If liquidity is as bad as it is now, what’s going to happen when things really get adverse?” said Richard Schlanger, who co-manages about $30 billion in bonds as vice president at Pioneer Investments in Boston.
"A slow start to the week has become customary, as Monday appears to have become the new Friday," Barclays says, noting that the humans simply aren't trading in a credit market where opportunities are scarce. Meanwhile, the robots do not rest, and on the Monday they simultaneously decide that some random data point or unduly hawkish/dovish soundbite out of an FOMC voter is cause for all the algos to chase down the same rabbit hole sending ripples through a fixed income market devoid of any real liquidity, the humans will be in for a rude awakening when they get to work on Tuesday morning.
Stan Druckenmiller's "Horrific Sense" Of Deja Vu: "I Know It's Tempting To Invest, But This Will End Very Badly"Submitted by Tyler Durden on 04/12/2015 19:45 -0400
“I just have the same horrific sense I had" before, Druckenmiller said to an audience at the Lost Tree Club in North Palm Beach, Florida (according to a transcript obtained by Bloomberg). "Our monetary policy is so much more reckless and so much more aggressively pushing the people in this room and everybody else out the risk curve that we’re doubling down on the same policy that really put us there."