More Posturing Out Of Europe: Franc Surges After SNB's Bluff Is Called, No Peg Announced, "More Of The Same"

As Zero Hedge was widely predicting (most recently here), there was no announcement of a fixed or floating peg in the CHF (which was obvious from a mile away: the desperate attempts to leak misinformation to the media and make the franc unattractive were enough to only fool various robots), and instead the SNB's now uber-powerless Philipp Hildebrand said that he "aims to expand banks’ sight deposits at the SNB further, from CHF 120 billion to CHF 200 billion." Translation: "we are terrified to do anything more, we can't afford any more balance sheet losses and for all those who called our bluff, you won" - the immediate result is a 300+ pip tumble in the EURCHF. Elsewhere - pervasive disappointment among the sellsiders who actually bought this theater hook, line and sinker: "SNB seems willing to drag feet for now before pulling trigger on FX spot intervention" Valentin Marinov, strategist at Citigroup, writes in note. Ironically the market is now falling for more of the same as it anticipates something to come out of the Swiss government to also discuss measures against the strength of the CHF. However, as Goldman says (note below) hardly anything will come out of it: "After all it is the SNB who decides on the currency regime and today's announcement is, in our view, a clear signal that the SNB first wants to see how the current measures work before they will decide on any additional measures." Prepare for another 11.5 sigma move in the USDCHF as the "priced in" central bank non-intervention unwinds.

 

Socialist Party of America Release The Names of 70 Democrat Members Of Congress Who Are Members Of Their Caucus

Posted on August 16, 2011 by Conservative Byte

This should come as a surprise to absolutely no one. The radical Marxist-progressives (communists) took control of the democrat party some time ago. They’ve only become more emboldened with the election of Barack Obama, who was raised as a communist from birth.
With their new found leader, Barack Obama, the Socialist Party of America felt secure enough to announce the names of 70 democrats in Congress that belong to their caucus.
Other than Bernie Sanders of Vermont, who openly ran as a socialist, the rest of this lot ran as “moderate democrats.” I think it’s time we put the myth of the “moderate” democrat to bed. They are all Marxists, or Marxist leaning. They all are big government totalitarians hell-bent on destroying America, the Constitution, and our way of life. One needs no other proof than the way Congress has acted since the Marxist-democrats took control four years ago, and the tyranny that has been championed since Obama was sworn in.
Read the entire document here.

Time to Wake Up: Economic Armageddon

  

 

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As China Says No More Stimulus, Obama Comes Begging For More.... While Promising Even MORE Cuts In The Unknown Future

Proving once again that when it comes to the definition of Banana Republic, America really has no equal, we first read in China Business News that according to PBOC adviser Li Daokui, China will "basically" maintain its existing monetary policy direction, and won't likely introduce stimulus measures as it did in 2008. Sorry "Rest of the World", you are on your own: China will no longer act as the last recourse economic (confidence) dynamo (because who the hell knows just what is going on in the mainland aside from building empty cities and grounding its entire monorail fleet, an action that was accompanied by so-called objective rating agency Dagong giving the rail ministry a rating higher than that of China itself!... once a rating agency...). However, this action of glaring sobriety does not stop our own fiscal monkeys from throwing feces at the stimulus wall in hopes something sticks. Just as last year the payroll tax was supposed to be the $100 billion gift that keeps on giving, yet crashed and burned miserable within months if not weeks, so this year we find that Obama is once again "recommending that the congressional deficit supercommittee back new measures to stimulate the lagging economy, people familiar with White House discussions said Tuesday." But that's not the funny part! No, the funny part is that even as he demands more alms, our munificent president would also "recommend the committee come up with a package that reduces the federal budget deficit by much more that its mandate of $1.5 trillion over the next decade, a senior administration official said, through changes in the tax code and social safety-net programs." So let us get this straight: more stimulus in the short-term, offset by quadrillions...nay... sextillions of savings at some point in the far future, long after the current administration is at the very bottom of the history books. Brilliant! But an even better idea: Obama should pull a Bryan Gardner and forge a money order from Hank Paulson, making Citi hand out a +/-$1 million check to every American, paid out of petty unaccounted for cash, as was the case before. Obviously, nobody noticed then; it is only Banana Republican that nobody will notice now.

Charting Japan's Latest Failed Currency Intervention Attempt

Bloomberg's Mike McDonough has put together the simplest, and thus best, chart of the latest epic collapse in the BOJ's attempt to intervene and keep the Yen from appreciating. The chart needs no explanation, and shows that the half life of BOJ interventions is not only exponentially shorter but now, outright laughable. What does need an explanation, however, is the prevailing quandary of just what sleeping medications Noda and Shirakawa will have to take once USDJPY touches on 75, then 70, then 65, then 60 and so on, and they watch, watch, watch, the "one-sided" moves in the USDJPY, helpless to do absolutely anything as the Chairman drop kicks yet another monetary opponent into a permanent knock out.

Putting The Cart On Top Of The Horse, Or Why Heaping Fiscal "Stimulus" Upon "Stimulus" Is Suicide For America

Every time someone mentions fiscal stimulus (and specifically the failure thereof), the conversation, after repeated empirical demonstrations that said stimulus virtually always ends in tears, will veer to the Economics 101 textbook definition of the savings-investment identity, in which Investment = Private Saving + Government Saving + Current Account (the simplistic argument goes that a surge in Government Savings, i.e. austerity, means a plunge in net investment as the private sector is unable to step up), which more than anything, seeks to provide the last possible goalseeked explanation of why Keynesian assumptions still work in post-modern monetary environments, in which monetary policy has passed into the twilight zone of global central planning (i.e., money printing is rampant and thus textbook definitions of "savings" in a ZIRP environment are completely irrelevant). The irony, as so often happens, is that those who invoke this identity (which John Hussman has done a very admirable explanation of here) mix apples and oranges, and use, incorrectly, a monetary flow concept to explain what is fundamentally a production efficiency and labor (and post facto: consumption) phenomenon. That many of said proponents also make the gross mistake in assuming that in some perverse post-Keynesian universe a reserve currency issuer (however temporary, because there is no such thing as permanent reserve) can issue an infinite amount of debt, which by implication would result in the grotesque lim interest rate=0 as debt issuance ->infinity is inconsequential: this may work in a black box vacuum, but most certainly does not work in a globalized world in which currency, and yes, binary reserve status (consisting of 1s and 0s), is fungible with a keystroke (ref: the historic August 22 start of Renminbi futures trading which the CME today disclosed the margin requirements for). What this lengthy preamble tries to say is that feeding the government monster is, contrary to what Krugman and other Keynesians will tell you, in the current regime of coincident monetary irrigation, an exercise in futility. Perhaps nobody does a better job to explain said futility than Bill Buckler in his latest edition of The Privateer, which we urge everyone, and most certainly the POTUS who just requested more fiscal stimulus, to read in order to take a step back from theoretical, and wrong, textbook formulations and to see the stimulus forest for the burning trees.






Getting “Ugly”, DC Style

Posted by: Bruce Krasting

Post date: 08/16/2011 - 21:00

What a show Perry is putting on. Did Bernanke see this coming? Maybe

The Eurozone Financial Crisis: Feeding the Dragon

Posted by : Luc Vallee

Post date: 08/16/2011 - 21:18

Winston Churchill defined appeasement as “feeding the dragon hoping he will eat you last.” As the eurozone banking crisis has morphed into a sovereign debt crisis, it is worth reconsidering the...