Japan

25% Of Americans Prefer Socialism Over Capitalism

While Americans are preached that "free market capitalism is the best path to prosperity," it appears that not everyone is buying it. Whether it is the failure of prosperity to trickle down (and the inequality that has been created) or just the herd-like need to be told what to do (and never take risks), Pew Research finds a stunning 25% of Americans do not believe people are better off in a free market system - implicitly preferring centrally-planned lives. Ironically, belief in the free market tends to be highest in developing countries while in Japan and Spain, a majority prefer to be managed than free.

Paul Craig Roberts: The Global Financial System Is "A House Of Cards Resting On Corruption"

Washington’s ability to rig markets has allowed Washington to keep its economic house of cards standing. The extent of financial corruption involving collusion between the mega-banks and the financial authorities is unfathomable. The Western financial system is a house of cards resting on corruption. Can it stand forever or are there so many rotted joints that some simultaneous collection of failures overwhelms the manipulation and brings on a massive crash? Time will tell.

China's Shadow Banking Grinds To A Halt As Bad Debt Surges Most In A Decade

What is the main culprit for the contraction in China's all important credit formation? In two words: shadow banking. As Bank of America summarizes "shadow banking is being tamed" because "the changing structure of TSF suggests that Beijing’s efforts in controlling some types of shadow banking have made some achievements. Two major drivers for the steep decline of TSF from Sept to Oct were the falling of non-discounted bills (down RMB241bn) and falling trust loans (down RMB22bn). By contrast, new corporate bonds were at RMB242bn, a sharp rise from RMB151bn in Sept." In other words, China's shadow banking not only ground to a halt, it actually continued moving in reverse!

David Stockman Warns, They Don't Ring A Bell At The Top

Needless to say, this relentless expansion of the bubble eventually kills off the bears, the skeptics, the prudent and even the militantly incredulous. Undoubtedly, that is where we are now because the global economic news has been uniformly negative since the October dip, yet the market has resumed its relentless melt-up. Under such circumstances, therefore, it is well to remember that we are in the middle of the greatest central bank fueled inflation in recorded history, and that this insidious inflation has been channeled into financial assets owing to the arrival of peak debt everywhere around the world. But that is the Achilles heel of the game. As the bubble takes on ever greater girth, it becomes increasingly susceptible to a negative shock to confidence.

David Fry's picture

The weak dollar trend has lasted long enough to become embedded in diversified portfolio models used by financial advisors as many have accepted typical non-dollar ETFs as a common investment inclusion for most diversified portfolios.

But things are changing.

Debt, Propaganda And Now Deflation

Our world, our life, has been built on debt and propaganda for many years. They have kept us from noticing how poorly we are doing. But now a third element has entered the foundation of our societies, and it’s set to eat away at everything that has – barely – kept the entire edifice from crumbling apart. Deflation.

Axel Merk: Why The Swiss Should Vote "Yes" On The Gold Initiative

With gold already moving today on rumors of an increasingly positive tone towards Switzerland's referendum on the Gold Initiative, Axel Merk notes that it appears widely misunderstood and discusses implications for gold, the Swiss franc and Switzerland as a whole. "Gold is the people’s money, not the government’s money to splurge...gold is a store of value that ought to back the currency in circulation." Ultimately, people should never rely on their government to pursue a gold standard, but consider pursuing their own, personal gold standard.

Perhaps The BIS Can Share Its Next "Debt Trap" Warnings With Its Own Board Of Directors First

Here is the BIS once again with its noble - and now thorughly 'Austrian' - public service announcement, this time warning about the implications of a global "debt trap" and how everything will end in tears (stop us when this becomes familiar). We have just one request. Next time, instead of sharing these profoundly Austrian observations with the general public, maybe you can just discuss them at the next BIS Board of Directors' meeting which consists of...

5 Things To Ponder: Market Stew

The markets have been pushing new all-time highs this past week as earnings season begins to wind down. Starting next week, much of the focus will shift back to the economy and holiday retail sales. Expectations are for a robust season but the early arrival of winter could have a more negative effect on the economy than anticipated should current weather patterns persist.

Frontrunning: November 14

  • "The hate us for our..." Americans’ Cellphones Targeted in Secret U.S. Spy Program (WSJ)
  • Ukraine and Russia take center stage as leaders gather for G20 (Reuters)
  • Moscow and Kiev trade accusations; U.S. warns Russia against escalation (Reuters)
  • Heartland Central Banker Calls Asset Bubbles Top Concern (BBG)
  • U.S. Said to Give Banks December Deadline in FX Probe (BBG)
  • Series of Failures Enabled White House Breach, Report Finds (WSJ)
  • Yen plumbs seven-year trough on likely Japan sales tax delay (Reuters)
  • JPMorgan Chase Bankers Said to Lead Moscow Departure (BBG)

Italy Remains In Recession As Germany Avoids Triple-Dip By Smallest Possible Margin

The key event overnight was the release of European Q3 GDP data, which saw Germany averting a recession by the narrowest of margins when following a -0.2% drop in Q2 economic growth, Germany grew by the smallest amount possible in Q3, or 0.1%, in line with expectations, thus averting two consecutive quarters of decline, the technical definition of a recession. The French economy likewise posted a modest increase in Q3, although one wonders how aggressively the data had to be fudged for a country whose PMIs all indicate a -1% or greater contraction. Italy however was less creative with its use of "hookers and blow", and continued its recession with a 3rd negative print, contracting at -0.1% as expected, while Portugal also missed third quarter growth estimates.