Great and wondrous things seem to be afoot among the righteous bankers of the world. A few months ago Matt Zames was named to get JPMorgan's CIO office out of trouble - and also happens to be the Chairman of the all-powerful Treasury Borrowing Advisory Committee. Just yesterday, Mark Carney completed Europe's full-house of ex-Goldman Sachs alum running the region's monetary policy. Today we hear Lloyd Blankfein will be sidling up to Obama tomorrow. And now this; from the never-crony-capitalist himself, billionaire Warren Buffett has publicly blessed Jamie "apart from the failure of control" Dimon as the best man for the top job at the Treasury. "If we did run into problems in markets, I think he would actually be the best person you could have in the job," Buffett added (sounding more like the 'we' meant he) and dismissed the London-Whale "failure of control" with sometimes "people go off the reservation." With Zames running the Shadow Treasury and Dimon running the Real Treasury, is it any wonder that inquiring minds are asking who really runs America (and for whom)? Of course, in the pre-Fed era - over 100 years ago, JPMorgan Sr. 'bailed-out' America before...
- OECD slashes 2013 growth forecast (FT)
- Fiscal Cliff Compromise Elusive as Congress Returns (Bloomberg)
- China’s PBOC Chief Search Spurs Focus on Finance Regulators (Bloomberg)
- Elected, but Still Campaigning (WSJ)
- Pentagon Readies Options for Afghanistan Force After 2014 (Bloomberg)
- Greece Wins Easier Debt Terms as EU Hails Rescue Formula (Bloomberg)
- Monti presses Cameron for EU referendum (FT)
- Welcome, Mr Carney – Britain needs you (FT)
- Argentina seeks halt to $1.3bn debt order (FT)
- Asean chief warns on South China Sea disputes (FT)
- South Korea Tightens FX Rules to Temper Won Surge (WSJ)
Several months ago, an ad hoc consortium of self-proclaimed millionaires, sent a letter to Obama, Reid and Boehner, demanding that "For the fiscal health of our nation and the well-being of our fellow citizens, we ask that you increase taxes on incomes over $1,000,000." This grass roots initiative sprung up into existence in the aftermath of Warren Buffett's, since defunct, proposal to impose a "millionaire tax" rule. Luckily, as all these very much informed millionaires know quite well, the US Treasury has a dedicated section, named simply pay.gov, which allows anyone: billionaires (here's looking at you Mr. Buffett), millionaire, or even thousandaire, to make a donation which is used directly to pay down the US debt. Because in the absence of the government mandating rich people pay their "fair share" (as determined by a subcommittee of course) for now at least, there is always that other alternative: voluntary action, as per the auspices of something called free will.And not only that, but the US Treasury also provides the general public with a running tally of just how much "Patriotic Millionaire" initiatives have given so far to paying down said debt. As in talk is cheap, signing petitions even cheaper, but putting money where your mouth is actually does go to the bottom line. The bottom line so far in 2012? $7.7 Million - this is how much has been volunteered in total gifts to pay down the US debt. The $16.3 trillion in US debt.
In an attempt to break the now ubiquitous narrative that "its all about income tax rates", and to challenge the ridiculous new support for QEternity; 'The Bears' that brought you 'The Bernank' are back. In this cartoon, they explain how the bailouts made people like Warren Buffett far wealthier than they should be and exposes who actually benefits from all this QE. The Bears, The Buff-ate, and The Bernank - simply perfect.
Recall from Warren Buffett's 2011 letter to investors: "Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion....You can fondle the cube, but it will not respond. " This is what said gold cube would look like, with distinctions for the various types of gold currently in existence:
- Weeks before U.S. election, Mideast gives Obama perfect storm (Reuters)
- Clashes intensify near US embassy in Cairo (Al Jazeera)
- Puppet governments in trouble: Mursi Risks Rift With U.S. or Voters as Islamists Rally (Bloomberg)
- Protests Put Egypt Relations on Edge (WSJ)
- Fed insists politics had no role in decision (FT)
- UBS "rogue trader" fraudulently gambled away $2.3 billion, court told (Reuters)
- Obama Holds Lead in Three Key States (WSJ)
- China's Xi recovering from bad back, could appear soon - sources (Reuters)
- Japan voices anger over Chinese incursion after vessels entered waters around disputed Senkaku islands (FT)
- Goldman Scales Back Junior-Analyst Program; No Contracts for College Hires (WSJ)
- China commentary slams Romney's "foolish" China-bashing (Reuters)
- Aging Baby Boomers Face Losing Care as Filipinos Go Home (Bloomberg)
Powerplant by powerplant
Buffett Joins Team Whitney; Sees Muni Pain Ahead As He Unwinds Half Of His Bullish CDS Exposure PrematurelySubmitted by Tyler Durden on 08/20/2012 21:42 -0400
Just under two years ago, Meredith Whitney made a much maligned, if very vocal call, that hundreds of US municipalities will file for bankruptcy. She also put a timestamp on the call, which in retrospect was her downfall, because while she will ultimately proven 100% correct about the actual event, the fact that she was off temporally (making it seem like a trading call instead of a fundamental observation) merely had a dilutive impact of the statement. As a result she was initially taken seriously, causing a big hit to the muni market, only to be largely ignored subsequently even following several prominent California bankruptcies. This is all about to change as none other than Warren Buffett has slashed half of his entire municipal exposure, in what the WSJ has dubbed a "red flag" for the municipal-bond market. Perhaps another way of calling it is the second coming of Meredith Whitney's muni call, this time however from an institutionalized permabull.
Here are my thoughts from the VALUEx Vail conference. The idea for this conference came to me when I attended VALUEx Zurich, organized by Guy Spier and John Mihaljevic in February 2011 (you can register for VALUEx Zurich 2013, here). The thought of spending three days learning and sharing ideas with smart, like-minded value investors felt instantly right. Investing on some level is a never-ending pursuit to get better. Most of us are locked up in air-conditioned offices where we learn through reading SEC filings, magazines, blogs, etc.
Keep kicking that can....
That the US government's activities as a share of GDP have gone from well under 10% at the beginning of the last century to over 40% today – and will go over 50% by the time Obamacare is fully implemented – makes it clear that this country is now operating on principles that run completely contrary to those that promote success and economic well-being. The consequence of continuing to operate on this model will be a steady decline in the quality of life for most Americans, while favoring a ruling elite that produces nothing… except more roadblocks.
The health of the economy is driven by after tax income. We need a big tax increase that does not reduce current income. My plan.
Life ain’t fair
Here We Go: Moody's Downgrade Is Out - Morgan Stanley Cut Only 2 Notches, To Face $6.8 Billion In Collateral CallsSubmitted by Tyler Durden on 06/21/2012 17:26 -0400
Here we come:
- MOODY'S CUTS 4 FIRMS BY 1 NOTCH
- MOODY'S CUTS 10 FIRMS' RATINGS BY 2 NOTCHES
- MOODY'S CUTS 1 FIRM BY 3 NOTCHES
- MORGAN STANLEY L-T SR DEBT CUT TO Baa1 FROM A2 BY MOODY'S
- MOODY'S CUTS MORGAN STANLEY 2 LEVELS, HAD SEEN UP TO 3
- MORGAN STANLEY OUTLOOK NEGATIVE BY MOODY'S
- MORGAN STANLEY S-T RATING CUT TO P-2 FROM P-1 BY MOODY'S
- BANK OF AMERICA L-T SR DEBT CUT TO Baa2 BY MOODY'S;OUTLOOK NEG
So the reason for the delay were last minute negotiations, most certainly involving extensive monetary explanations, by Morgan Stanley's Gorman (potentially with Moody's investor Warren Buffett on the call) to get only a two notch downgrade. And Wall Street wins again.
- Greek radical leftist SYRIZA leader Tsipras says will not join coalition government (as expected)
- Egypt Islamists claim presidency as army tightens grip (Reuters)
- French Socialists vow reforms after big poll win (Reuters)
- Greeks Back European Bailout (WSJ)
- France, Socialists Win a Solid Majority (WSJ)
- Denmark Warns over Pressure on Krone (FT)
- Obama to press Putin on Syria at G20 amid skepticism (Reuters)... Putin to smile
- China Home Prices Fall in Record No. of Cities (Bloomberg)
- Europe Gets Emerging Market Crisis Ultimatum As G-20 Meet (Bloomberg)
- Wolfgang Münchau – What Happens if Angela Merkel Does Get Her Way (FT)