MELT-UPMONITORMeltup Monitor: Euro Pressure Going Critical - 28- Nov 2013 Meltup Monitor: A Regression-to-the-Exponential Mean Required - 25 Nov 2021 NEW SERIES RELEASE Lance Roberts Charles Hugh Smith John Rubino Bert Dohman & Ty Andros NOW SHOWING HELD OVER MONETARY MALPRACTICE MONETARY MALPRACTICE: Deceptions, Distortions and Delusions MONETARY MALPRACTICE: Moral Malady MONETARY MALPRACTICE: Dysfunctional Markets HELD OVER Currency Wars Euro Experiment Sultans of Swap Extend & Pretend Preserve & Protect Innovation Showings Below
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NO ONE WHATS TO TALK ABOUT THIS The Reality of Global Growth Forecasts ... and they are ALWAYS too optimistic! With the ex- ception of Western Europe, analysts have been lowering predictions for global GDP and across regions all year, suggesting a tough environment for 2014. Read More |
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US EMPLOYMENT - Trend Remains Chronic CONTINUED DROP IN PARTICPATION RATE IN 2014 Going forward, unless current fiscal policy is changed, about 1.3 million people who receive emergency unemployment benefits will not see them renewed at the end of the year. That will create a noticeable decline in the unemployment rate next year as these individuals exit the work force, thus causing the labor force participation rate to fall even further. OUTSIZED RETAIL HIRING Job gains during the November reporting period will probably be skewed toward the service sector, with retail hiring accounting for an outsized portion of the gains. i f there is a risk to the Bloomberg con - sensus forecast of 185,000 new jobs, it will most likely be due to the fact that the u .S . Thanksgiving holiday occurred late this year, on Nov. 28, thus causing a shift in some hiring to the December reporting period. i n addition to seasonal factors, softer P mi hiring estimates and the deceleration in service sector hiring as indicated in the November i S m non- manufacturing survey may weigh on the report. TAPER TO REMAIN ON HOLD Gains in private sector employment around the 190,000 level, which is also the average monthly increase during the past three years, are unlikely to be impressive enough to move the Fed to begin paring back the pace of asset purchases at its December meeting. Policy makers will probably need to see a sustained improvement in the level of employment, one that accompanies gains over a period of time of well above 200,000 per month before beginning to taper asset purchases. i ncoming Fed Chair Janet y ellen indicat ed as much in her testimony before the Senate Banking Committee last month.
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12-06-13 | US INDICATORS EMPLOYMENT |
7 - Chronic Unemployment |
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12-06-13 | EU MONETARY | GLOBAL MACRO |
THESIS & THEMES | |||
INEQUALITY - Rising Steadily U .S . sociological trends for income inequality, gun and ammunition purchases, and personal healthcare ex-penditure, which are rising steadily.
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12-06-13 | THEMES |
STANDARD OF LIVING
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MOST CRITICAL TIPPING POINT ARTICLES THIS WEEK - December 1st - December 7th |
RISK REVERSAL | 1 | ||
RISK - Better Understanding the VIX A Different Assessment of Risk 12-03-13 Phoenix Capital Research via ZH Perhaps the single most misunderstood item in the financial world is the Chicago Board Of Options Volatility Index, or VIX. The VIX is a measure of how much investors are willing to pay for portfolio “insurance.” If they’re willing to pay a lot (the VIX is high), then it’s assumed investors are nervous. If they don’t want to pay much (the VIX is low), then it’s assumed investors are calm and expecting blue skies ahead Because of this, most investors, including the majority of professional investors, believe the VIX provides a reliable barometer of market risk. This is not true. The reason is because investors are usually greedy when they should be fearful and vice versa. If the VIX is up, it’s not because the market is “risky” or at risk of falling… it’s because the market already FELL! As anyone knows, the time to buy stocks is when they’re “low” as in “buy low, sell high.” But as I just explained, stocks are usually “low” when they’ve already fallen (which would mean the VIX is already spiking). Put another way, the VIX doesn’t really measure risk per se… instead it shows you when investors are panicked… and that’s when you should consider buying. Take a look at the above chart. Everytime the VIX spiked (the blue line below), the market had already dropped and was in the process of bottoming. Now let’s look at a longer-term chart. Once again, the VIX spiked after the market had already plunged. In fact, buying stocks around the time the VIX spiked was a GREAT way to trade the market going back for years. If you had done this, you would have profited handsomely. If you want to make a killing in the markets, you need to be willing to see the world the way it really is, NOT how you THINK it is. Most investors think the VIX measures the market’s risk, but really, it’s almost the opposite: a spike in the VIX almost always picks market bottoms! |
12-04-13 | RISK | 1 - Risk Reversal |
RISK - Even Goldman Can't Explain Away The Market Exuberance Even Goldman Can't Explain Away The Market Exuberance 12-02-13 Goldman via ZH From the start of 2012, the S&P 500 up over 40% with the bulk of that surge coming since QE3 (and 4EVA) was unleashed. Until that point, Goldman's global risk and macro models had stayed relatively well synced with stock market 'reality' but once that torrent of liquidity was released, all bets were off. As the following chart shows, more than half the equity market performance is due to factors unrelated to risk, macro fundamentals, or country-specific factors. So, BFTATH of course? Chart: Goldman Sachs Risk is a four-letter word 12-02-13 Anthony Peters, SwissInvest strategistRISK IS A funny old thing at the best of times, and even funnier when it is supposed to be correctly priced. Most of us grew up with the understanding that the correct price for credit – my main area of expertise – was a function of the default probability, adjusted for the expected recovery rate. Perhaps the simplest and cleanest example of risk pricing is to be found in the credit card industry, where your “bucketing” is of paramount importance. The lower your perceived risk is, the better a risk bucket you get lumped into and the lower your interest rate is. That’s banking 101, but it still isn’t clear to everyone that the net earnings from each bucket are expected to be similar, based on higher spreads being matched to higher defaults. Excess returns are generated when the expected defaults do not occur at the forecast rate. So far, so good. But then how does one extrapolate that basic rule of lending to the way credit markets have been performing of late? My old chum Suki Mann, living legend and credit strategist at Societe Generale here in London, highlighted the point – albeit probably not intentionally – in a piece he wrote this week. He asked, rhetorically, whether it would be possible for the credit markets to repeat this year’s performance in 2014 – wondering, in other words, whether a further 8.4% of returns on 220bp of spread tightening in high-yield or 2.4% returns with 22bp of spread tightening in investment-grade were possible. “We’d concur with the former,” he wrote, “but up to 7% is not impossible off 100bp of spread tightening; while in IG, we think 2%-plus is possible with tightening in [iBoxx] index spreads of around 30bp.” Although I don’t entirely disagree with Suki, I can’t detect too much science going into his pricing model, if that is what it is. The sole point of reference seems to be the all-time low spread of the iTraxx Main index, which was registered at 20bp in June 2007. As recently as early October it was trading at 100bp but is now marking around 75bp. Hence, his rather confident assertion that a further 20bp of tightening should not be a problem.
PERHAPS, BUT ONLY because the first rule of investing now appears to have become: if the worst is about to occur, then the monetary authorities will make sure that it doesn’t. Let’s face it, Saint Mario Draghi did not only say that he will do “whatever it takes”, the bit of his assertion everyone remembers, but also, and perhaps more importantly, “…and believe me, it will be enough”. In doing so, he removed huge swathes of what we once called risk – a concept that used to be known as a four-letter word. This raises the question: are risk assets now riskless assets or are they risk assets disguised as riskless? What goes for bonds appears to go for equities too, even though we did experience something of a wobble in the summer when the US Fed seemed set to taper its bond buying programme. Since then, though, the Fed, in its own inimitable way, appears to have let equity markets believe that it will do nothing that might hurt share prices and hence shareholders. If anything, the velocity of the rally now appears to be increasing rather than decreasing. Either the Fed is deceiving markets into believing that there is nothing to fear, or it is not making itself clear enough. To be frank, I doubt it is the latter. SO WHAT HAS become of risk pricing? Well, one might try to argue that if there is no risk, then there can be no price for it. But that would be perhaps taking it a little bit too far – even for me. Nevertheless, pricing risk has become so alien that even non-monetary policy-related risks are being disregarded. The little tiff between China and Japan (and by proxy the Americans) over a group of uninhabited islands never even caused a ripple in financial markets. And although it was written that oil prices had fallen in the aftermath of the interim agreement between Iran and the West, if one looks at the charts, WTI was trading well below its 300-day moving average long before the news broke – and the Geneva breakthrough doesn’t appear to have even registered. Is there no risk or has the way in which authorities prevented the fallout from the credit bubble and the events that led to its formation led a generation of traders and investors to believe that it is a thing of the past? One hedge fund manager once proudly stated that life is a bull market intersected by corrections. In the midst of the credit crisis I laughed at him. Looking at the state of the world now, he might be laughing back, having concluded that the 2007 financial crisis and the 2008 fall of the House of Lehman were nothing more than bigger corrections and hence thumping buying opportunities that could only have been missed by idiots. I guess that puts me in my place. Either that or there is something lurking out there that we have forgotten how to identify – and hence how to value. |
12-03-13 | STUDY | 1 - Risk Reversal |
PATTERNS - A Negative, Low-Probability Outcome May Quickly Become Exaggerated Negative, Low-Probability Outcomes Are Consistently Exaggerated 11-30-13 LPL Financial Research's Outlook 2014 The well-known bias of weather forecasters to exaggerate fears of negative, low-probability outcomes, such as the likelihood and amount of snowfall, also often appears in the forecasts of non-weather-related issues. We saw this bias in the media over the antics in Washington, D.C., fixating on the threat of a default on U.S. Treasury debt during the debt ceiling discussions, or a return to recession due to the impact of the sequester spending cuts. This bias could also be seen in events beyond the United States’ borders in the exaggerated attention devoted to the threat of another financial crisis stemming from the Cyprus bank bailout, the risk of the outcome of the Italian elections plunging the Eurozone debt markets into chaos, and the risks of a strike on Syria turning into a major geopolitical military engagement. Of course, the probabilities of those outcomes were very low, and the markets did not dwell on those potential outcomes. Market participants tuned them out, and the S&P 500 moved steadily higher throughout the year without experiencing more than a 6% pullback at any point [Figure 11]. We believe it will be safe in 2014 to again tune out much of the antics in Washington, D.C. as the mid-term elections turn up the volume but not the impact. The LPL Financial Research forecast: In the nearterm, Washington may be washed up when it comes to driving the markets. |
12-02-13 | PATTERNS | 1 - Risk Reversal |
JAPAN - DEBT DEFLATION | 2 | ||
JAPAN - The Abe-nomics Failure This Inflation Is Supposed To Be GOOD For Japanese Workers? 11-30-13 Wolf Richter www.testosteronepit.com www.amazon.com/author/wolfrichter via ZH Japan’s new economic religion, lovingly dubbed Abenomics, relies mostly on a money-printing binge that monetizes the entire government deficit plus a chunk of its public debt, month after month. Printing yourself out of trouble and to wealth works every time. For the elite. This is a lesson learned from the Fed. But how are workers and consumers faring? And by implication the real economy? We keep getting juicy morsels of data on this phenomenon. Abenomics is accomplishing its two major goals – watering down the yen and stirring up inflation – pretty well. Over the last 12 months, the yen has been devalued by 20% against the dollar that the Fed is trying to devalue as well. So this is quite a feat! It's been devalued by 28% against the euro. And inflation is heating up. The consumer price index, released today, rose 0.1% in October and is now up 1.1% for the 12-month period. Less “imputed rent,” inflation rose 1.4% year over year. Service prices were up 0.4%, but goods prices jumped 1.9%. At this rate, Abenomics will have no problems meeting or exceeding by March, 2015, its “2% price stability” target, as the Bank of Japan has come to call it with bitter cynicism. WAGE INCREASES What isn’t happening: wage increases! The Japanese Statistics Bureau just reported incomes and expenditures of households with two or more persons. This is by far the largest category of households in Japan. Due to the cost of housing in large urban areas – and due to remnants of tradition – a large number of singles live with their parents. This category is further divided into “workers’ households,” “no occupation” households, and “other” households. Incomes of the all-important “workers’ households” rose a measly 0.1% from a year ago to ¥482,684. In nominal terms. But adjusted for inflation – yes, here is where the benefits of Abenomics are kicking in – incomes fell 1.3%. Disposable incomes fell 1.4%. The details were ugly: “Current income” (salaries and wages) dropped 1.2% and “temporary bonuses” plunged 19.5%. Income from self-employment and piecework plummeted 20.8%. So these strung-out workers’ households whose belts are being tightened by Abenomics and whose real incomes are being whittled away by inflation, how can they spend more to perk up the economy? Turns out, they don’t. Spending rose a scant 0.4% in nominal terms from a year ago – but adjusted for inflation, spending fell 1.0%. And this despite rampant frontloading of big-ticket purchases. The consumption-tax hike from 5% to 8%, to take effect on April 1, is motivating households to buy big-ticket items now and save 3%. It has turned into a frenzy. Durable goods purchases, the primary target of frontloading, jumped 40.4% in October from a year ago. While it’s goosing the economy now, it will create a hole starting next spring. Japan has been through this before. When the consumption tax hike from 3% to 5% was passed in 1996, Japanese consumers went out on a buying binge of big-ticket items to avoid paying the extra 2% in taxes, and the economy boomed. The hangover came around April 1, 1997, when the tax hike became effective. The economy skittered into a recession that lasted a year and a half. Now Japanese households are frontloading to avoid an additional 3% in consumption tax. The hangover next year is going to be painful. But frontloading of a few big-ticket items is hitting day-to-day expenditures. These households spent 1.8% less on non-durable goods and 2.0% less on services, compared to prior year. Hence, the drop of 1% in overall spending by these households, despite their splurging on a few big items. This is the benefit of inflation without compensation! A process that ever so slowly hollows out the middle class and pushes the lower classes deeper in the quagmire. It’s hurting workers and consumers. It’s constraining the real economy. Yet, holders of assets that the central bank inflates into the stratosphere benefit. Japan isn’t the only country that is practicing this large-scale redistribution of wealth from workers to holders of inflated assets. Abenomics is following the playbook of the Fed. But it’s pushing it further to the extreme. The dogfight over Japan’s biggest problem, its gargantuan government deficit, entered its annual ritual of leaks and pressure tactics that usually lead to a pre-Christmas draft budget with an even bigger deficit. But this time, it’s different. Very different. Read..... Japan Is Used To Natural Disasters, But This One Is Man-Made |
12-02-13 | JAPAN ABE- NOMICS |
2 - Japan Debt Deflation Spiral |
BOND BUBBLE | 3 | ||
EU BANKING CRISIS |
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EMERGING MARKETS - The "Original Sin" in International Finance Has Been Consumated History Ignored, Again Yet 12-03-13 Gen Re, CIO John Gilbert They have created a systemic risk in the world financial system for which they take little or no responsibility, because that which happens outside the U.S. is not their assignment. But as custodians of the reserve currency, it ends up that way. We may be seeing the leading edge of a wave of credit problems among corporate borrowers in emerging market economies. Lest one think it does not affect the U.S. and other developed market countries, recall the Asian crisis chronology. Thailand devalued its currency in the summer of 1997 and few outside of Thailand cared. But contracting Asian demand reduced demand for oil, and Russia (whose exports are 80% oil) defaulted in August of 1998. Risk spreads widened, and five weeks later, Long Term Capital Management was insolvent. That was a systemic event and caused disruption in markets in general, and a stock market decline. So for those who believe that they are protected from loss by central bank behavior, a little history is in order. As usual. It would seem fair if Twitter were to share. The company’s initial public offering was a staggering success, of course. Priced at $26, the stock closed its first day of trading at $45 per share. The company was thus endowed with a market capitalization of $25 billion. The company has no earnings, but who cares. Adding back non-cash charges to produce earnings before interest, taxes, depreciation and amortization, then adding back the financial value of non-cash employee compensation, the company can be regarded as profitable. Such a number for 2013 may approximate $50 million or so. The company is valued at 500 times such results, which exclude expenses that do have economic value. Correctly accounted, the company makes not a dime. But who cares when circumspection is the investment equivalent of tuberculosis. It should be obvious to everybody by now that such stock market largesse is made in Washington. The specific address is the Eccles Building on Constitution Avenue, home of the Federal Reserve. In fact as citizens and U.S. taxpayers, we think it would be an expression of gratitude if Twitter were to take a little pressure off of the Fed and buy some Treasury bonds themselves. But that is not our remit, the company would reply. We are here to, well, Twitter. Happily, not all members of the U.S. government are as pleased as the central bank to induce investors to behave foolishly. On the eve of Twitter’s IPO, Mary Jo White, chair of the Securities and Exchange Commission, offered cautionary remarks on investing in complex or inchoate technology businesses. The stock market ignored her, but her comments were well chosen. We have seen this all before and it ends badly. Ms. White’s remarks were presumably pollinated by the lessons of history. By coincidence, in the same week that Twitter completed its offering, another tech firm reported disappointing earnings. That firm was Cisco, which was one of the belles of the stock market boom of the late 1990s. By the peak in early 2000, Cisco was valued at about $500 billion, which was 200 times the company’s then earnings. An impressive valuation, also. But back then, Cisco and brethren were going to change the world. Sort of like Twitter today. Chart 1 is Cisco, tracing out the dreaded where-the-Rocky-Mountains-meet-the-Great-Plains stock price pattern. Cisco’s valuation has been decimated, and it trades today at only about 11 times earnings, a rather modest valuation, and a reminder that following such a crowd is an excellent hedge against ever being financially independent. Gravity wins in time. Cisco’s discouraging recent earnings disclosure was particularly ironic, coming as it did in the week that Twitter led the Fed-driven market upward. That is because the company made pointed comments about a sudden deceleration in their businesses in many emerging market economies in the last few months. This is not only a cautionary tale about the uncertainty implicit in technology businesses. We fear that it may precede more such news from a number of firms and emerging countries that have benefitted from the same central bank policies of which Twitter is the lottery winner of the moment. We applauded Fed Governor Jeremy Stein when, in his paper of February of this year, he broached the subject of unintended consequences of the Fed’s unconventional policies. We have long held that view. Governor Stein explored a number of evident candidates, including mortgage REITs and high yield bond issuance. One asset class that he did not discuss was emerging market debt issuance, which to us seemed then, and since, as even more important because of its systemic nature. Emerging market borrowers can borrow at very low rates in dollars, and have accepted the opportunity with alacrity. When Chairman Bernanke broached the subject of reducing bond purchases back in February, long-term rates began a sharp rise that took the yield on the 10-year Treasury from 1.6% to 2.5% to 3.0%, where they remain. While such yields are low by historic standards, the change at the margin is significant. It has already retarded activity in the U.S. mortgage market, for example. The most important emerging market borrowers have historically been sovereign governments, who could reduce their borrowing costs so long as the currency mismatch did not move against them. From time to time, it did, resulting in such borrowing being referred to pejoratively as original sin in international finance. But at least those were sovereign governments. An alarming feature as the current credit cycle has developed has been the rapid growth in borrowing by emerging market businesses. Many emerging countries have had boom conditions over most of the period since the Asian Financial Crisis. China’s accession to the WTO in 2001 was followed by a massive investment program that provided a massive and rapidly growing market for the exports of many other emerging nations—and the businesses that produced the coal, steel, copper and cement China required. The Lehman bankruptcy was an abrupt interruption of the boom, but China’s response was a redoubling of investment to overcome the financial crisis. So China’s demand for imports surged again, much of which was satisfied by emerging market vendors from Brazil to Indonesia to Africa. Those boom conditions coincided with the Fed’s everyday low price interest rate policy. The temptation to borrow in dollars at low rates, and take the chance on exchange rates, was evidently too powerful for many corporate borrowers. In fact, at the time, the currencies were moving in their favor. Booming exports made for resilience, or even strength, in their currencies against the dollar. Borrowing in dollars seemed to make all the sense in the world. The result was a boom in borrowing to match the boom in business. Chart 2 shows the increase in dollar—denominated borrowing by corporations since the Asian Financial Crisis in 1997–1998. It has exploded since the Federal Reserve has suppressed borrowing costs in the last five years. The result of this roaring issuance is that debt ratios have risen to a level not seen since the Asian Financial Crisis of 1997—1998, as shown in Chart 3 This might be disquieting, but not necessarily troublesome, if the currency mismatch were not an issue. But shortly after Bernanke’s suggestion in May that the punchbowl might be removed, capital began flowing out of the hot emerging markets. The result was downward pressure on their currencies, which in some cases is severe. Chart 4 shows the change in exchange values versus the dollar for a number of affected emerging countries. The systemic nature of the problem—booming debt issuance in dollars, followed by contemporaneous currency shocks in response to Bernanke’s comments in May—coincides with the sudden slowing in demand for Cisco’s equipment and, perhaps, others as well. This is a major component of the downside to the Fed’s program. They have created a systemic risk in the world financial system for which they take little or no responsibility, because that which happens outside the U.S. is not their assignment. But as custodians of the reserve currency, it ends up that way. We may be seeing the leading edge of a wave of credit problems among corporate borrowers in emerging market economies. Lest one think it does not affect the U.S. and other developed market countries, recall the Asian crisis chronology. Thailand devalued its currency in the summer of 1997 and few outside of Thailand cared. But contracting Asian demand reduced demand for oil, and Russia (whose exports are 80% oil) defaulted in August of 1998. Risk spreads widened, and five weeks later, Long Term Capital Management was insolvent. That was a systemic event and caused disruption in markets in general, and a stock market decline. So for those who believe that they are protected from loss by central bank behavior, a little history is in order. As usual. Particularly for Twitter aficionados. |
12-05-13 | EMERGING MARKETS
STUDY
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4- EU Banking Crisis |
SOVEREIGN DEBT CRISIS [Euope Crisis Tracker] | 5 | ||
CHINA BUBBLE | 6 | ||
RETAIL SALES - Thanksgiving Results Holiday Sales Sag Despite Blitz of Deals- Discounts, Earlier Opening Hours Fail to Pry More Dollars Out of Budget-Conscious Shoppers 12-01-13 WSJ
The estimates underscore how retailing has become largely a zero-sum game amid slow overall growth in consumer spending. Some retailers have warned that their margins will suffer as they use promotions to get reluctant consumers to spend more. On Thanksgiving Day, 45 million people went shopping, up 27% from last year, but traffic on Friday increased only 3.5% to 92 million. "Consumers are stressed. They're still under a lot of pressure from things like high unemployment," said GameStop Corp. Chief Executive Paul Raines. "We see that in our business."
Holiday Sales Expected To Be Less Than Half Fed's "Wealth Effect" Hope 11-27-13 Zero Hedge Based on the Fed's wealth effect creating surge in stock prices, Guggenheim's Scott Minerd believes retail sales should be up 5.8% in Q4 2013. However, as we noted before, expectations are for a dismal 1-2% holiday spending growth at best; as 2013 is set to be the worst holiday spending season since 2009. Stores from Tilly's to Abercrombie and Wal-Mart are warning, the NRF projects the first drop YoY since 2009, and gas prices are set to rise (further pressuring consumers' disposable incomes). The bottom line - as we already know - is that QE's effects on the real economy (if there were ever any?) are set to end in the 2013 holidays. A 1-2% spending rise expectation is less than half the S&P's surge would imply... Chart: Guggenheim Black "Weekend" Shopper Traffic Down 4% Led By Plunge In Electronics 12-03-13 Zero Hedge Over the Thursday-Sunday Black "Weekend", Shoppertrak reports that traffic fell a notable 4% from last year with sales up a measly 1% - very much in line with our expectations of a weak holiday spending season. Total in-store shopper traffic increased by 9.4% in the apparel sector, while traffic in the electronics sector decreased by 6.5% for that same time period. Regionally, traffic fell the most in the Northeast (-9.8%) and the Midwest saw the largest drop in sales (-2.9%) with only the West increasing notably (+5.5%). |
12-04-13 | US CON- SUMPTION | 20 - Slowing Retail & Consumer Sales |
SENTIMENT - Crisis of Trust Two-Thirds Of Americans Can't Be Trusted 12-01-13 AP via ZH Only one-third of Americans say their fellow countrymen can be trusted according to a recent AP-GfK poll, down from over half 40 years ago. Americans are suspicious of each other in everyday encounters and who can blame them with the government appearing to bless any and all surveillance and intervention in the interests of the status quo. "I'm leery of everybody," warns one respondent, and as AP reports, this is a potential problem for economic growth as "social trust" brings good things. A society where it's easier to compromise or make a deal; where people are willing to work with those who are different from them for the common good, appears to promote economic growth. Distrust, on the other hand, seems to encourage corruption and there's no easy fix. Via AP,
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12-02-13 | SENTIMENT | 22 - Public Sentiment & Confidence |
TO TOP | |||
MACRO News Items of Importance - This Week | |||
GLOBAL MACRO REPORTS & ANALYSIS |
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VENEZUELA - President Maduro Lays Out Socialist Vision On National TV New vision for the country was being presented on national TV just before A NATIONAL blackout struk. Via Bloomberg:
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12-03-13 | REGIONAL CRACK-UP BOOM |
MACRO |
US ECONOMIC REPORTS & ANALYSIS |
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CENTRAL BANKING MONETARY POLICIES, ACTIONS & ACTIVITIES | |||
Market Analytics | |||
TECHNICALS & MARKET ANALYTICS |
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VALUATIONS - PE's At Historical Regression Boundary Condition Stealth Bubble 11-29-13 Decison Point Carl Swenlin This chart shows the S&P 500 Index (black line) in relation to its normal P/E range. A P/E of 10 is undervalue, a P/E of 20 is overvalue, and a P/E of 15 is considered to be fair value. |
12-02-13 | FUND- MENTALS VALUATIONS |
ANALYTICS |
COMMODITY CORNER - HARD ASSETS | PORTFOLIO | ||
GOLD - Below Cash Cost, Approaches Marginal Production Costs Gold Drops Below Cash Cost, Approaches Marginal Production Costs 12-02-13 Zero Hedge The marginal cost of production of gold (90% percentile) in 2013 was estimated at between $1250 and $1300 including capex. Which means that gold is now trading well below not only the cash cost, but is rapidly approaching the marginal cash cost of $1125.
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12-03-13 | GOLD | PRECIOUS METALS |
COMMODITY CORNER - AGRI-COMPLEX | PORTFOLIO | ||
SECURITY-SURVEILANCE COMPLEX | PORTFOLIO | ||
THESIS Themes | |||
2013 - STATISM |
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STATISM - Spain And Japan Move To Criminalize Protests
War On Democracy: Spain And Japan Move To Criminalize Protests 12-02-13 Michael Krieger of Liberty Blitzkrieg blog,via ZH As might be expected as political and economic policy failures pile up and citizens become increasingly mad, the status quo is becoming increasingly authoritarian (recall blogger “Mish” was just fined 8,000 euros for a blog post). In the latest disturbing news from a desperate power structure, the conservative government in Spain has passed an Orwellian bill titled the Citizens’ Security Law, which allows for fines of up to 600,000 euros ($816,000) for “unauthorized” street protests, and a 30,000 fine for merely having signs with “offensive” slogans against Spain or for wearing a mask. This law is a perfect example of the increasing neo-feudalism being implemented across the globe by a corrupt, decadent and depraved status quo. Such laws must be immediately resisted or they will only get worse, much worse. It is quite obvious what the power structure in Spain in trying to do. It is putting into place an egregious punishment framework that could bankrupt a person by merely protesting. Such a threat is intended to make people not even consider their rights as human beings to express grievances to a crony government. Instead of eye for an eye, it is like 25 eyes and a limb for an eye. If this does’t tell the Spanish people all they need to know about their government I don’t know what will. Below are some excerpts from a Reuters story covering the law:
It’s not just Spain though. This sort of panic attack from desperate members of the status quo is popping up elsewhere. Japan is another example, and over the weekend I read that Liberal Democratic Party Secretary-General Shigeru Ishiba compared demonstrations to “acts of terrorism.” From the Japan Times:
My take is that people worldwide will not stand for such nonsense. Increasingly citizens have very little to lose and if they all say no together, there is not much the state can do. Just look at how Ukrainians responded to a ban on protests. Hundreds of thousands of them filled the streets in defiance. Below is a video of just one of the many incredible street scenes from over the weekend. In this case we see demonstrators using a tractor to break police barricades. Interesting times indeed. |
12-03-13 | THESIS | STATISM |
2012 - FINANCIAL REPRESSION |
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2011 - BEGGAR-THY-NEIGHBOR -- CURRENCY WARS |
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2010 - EXTEND & PRETEND |
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THEMES | |||
NATURE OF WORK -PRODUCTIVITY PARADOX | |||
GLOBAL FINANCIAL IMBALANCE - FRAGILITY & INSTABILITY | |||
CENTRAL PLANINNG -SHIFTING ECONOMIC POWER | |||
SECURITY-SURVEILLANCE COMPLEX -STATISM | |||
STANDARD OF LIVING -GLOBAL RE-ALIGNMENT | |||
STANDARD OF LIVING - Signs of the Times Record Numbers Of Homeless Flood Massachusetts Even As State Shelters Overflowing 12-02-13 In Bernanke's centrally-planned, inverse Robin Hood world, record stock prices for the few unfortunately mean record homelessness for the many: this is what the state of Massachusettes found out the hard way after it was flooded with a record number of homeless families who are overwhelming the state's emergency shelter system. As the Boston Globe reports, citing a recent report from the Department of Housing and Urban Development, the number of homeless people in shelters and living on the streets in Massachusetts has risen 14 percent since 2010 to a record 20,000 in January 2013, even as homelessness has declined nationally.
However, in what may be the most curious twist, and yet another example of how perverted the incentive and capital allocation system in the US is, the nearly 2,100 families who could not find place in shelters, were housed in motel rooms at a greater cost to all US taxpayers amounting to tens of millions.
The rest of the story is largely well-known. "This jump in homelessness is another example of an uneven recovery. Even as stocks soar to new heights and real estate values rebound, many of the state’s poorest residents remain without jobs and homes four years after the last recession. The problems have been compounded by the dramatic federal spending cuts, known as sequestration, which have cut housing and food subsidies."
Whatever the reason for the record class disparity (and the reason is quite clear - Ben Bernanke - whose existence has made America's legislative branch obsolete, and with it taken away the only thing that may help America's poor: fiscal reform), one thing is certain: as tales of the hotel-housed homeless spread, everyone and their grandmother (quite literally) will scramble to join the ranks of people without a roof and be housed, on the taxpayers' dime, in your friendly, local and quite comfortable hotel.
In the meantime, Massachusettes (and the homeless of course) are grateful for the generosity of America's taxpayers.
Naturally, the people are angry:
However, something tells us that one of the proposed solutions...
... namely converting short-term help into long-term (read perpetual) state and government help, is hardly the solution either. Then again, who really cares about the plight of a few thousand homeless families as long as America's billionaires can tweet about a stock, and immediately become billionairish-er, in the process buying off however many politicians and regulators is required to keep behavior such as that legal. |
12-05-13 | THEMES |
STANDARD OF LIVING
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CORPORATOCRACY -CRONY CAPITALSIM | |||
CORRUPTION & MALFEASANCE -MORAL DECAY - DESPERATION, SHORTAGES.. |
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SOCIAL UNREST -INEQUALITY & BROKEN SOCIAL CONTRACT | |||
CATALYSTS -FEAR & GREED | |||
GENERAL INTEREST |
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