Physics has the elusive Theory of Everything which consists of several Grand Unified Theories and which represents the holy grail of the science and which "fully explains and links together all known physical phenomena, and predicts the outcome of any experiment that could be carried out in principle." In other words, once proven it would make life boring. We doubt it ever will be. Finance does not have anything like it, for the simple reason that while physics is a deterministic science, finance, predicated to a big extent on assumptions borrowed from the shaman cult known as 'economics' is always and everywhere open ended, and depends just as much on chaotic 'strange attractors' as it does on simple linear relationships. Yet when it comes to presentations, especially of the variety that attempt to explain not only where we are in the world, and how we got there, but also where we are headed, we have yet to see anything as comprehensive as the Investment Strategy guidebook from Pictet's Christophe Donay. If there is indeed a holy grail of presentations, this is it, at least for a few more instants, until something dramatically changes and the whole thing becomes an anachronism. In the meantime learn everything there is to know about global decoupling and the lack thereof, the reality of an over-indebted global regime and its 3 incompatible targets, the outlook for the US and the 30% probability of a hard recession, a recessionary Europe and the five possible outcomes of its crisis, China and its hard landing, and how this all ties into an outlook on where the world is headed together with appropriate investment strategies and proper asset allocation, the fair value of the EURUSD, systemic risk evaluation, cross asset correlation, the impact of central bank intervention, debt redemption profiles, the role of gold and commodities in the new reality, and virtually everything else of importance right here and right now.
Up until now, fraudclosure and robosigning were both merely civil offenses, and as such the banks were actively doing all they could to bury any and all pending litigation under a large settlement umbrella, wash their hands of the whole affair and move on, with nobody in danger of actually walking the plank and certainly not in danger of going to jail. That has all changed as of now, following a Nevada Grand Jury handing down criminal indictments against two title officers employed by Lender Processing Services Inc. for allegedly directing and supervising a robo-signing scheme, in which documents filed in foreclosure cases were signed without proper legal review, Nevada Attorney General Catherine Cortez Masto said Wednesday. The case which, if won on behalf of the plaintiffs, could easily mean several lifetime sentences for one Linda Green, is likely just the beginning of a wave of criminal charges against the thousands of robosigners involved at every stage of housing bubble, and quite possibly is starting as a midlevel fishing expedition which will see gradual escalation up the ranks as the "robotic" ones rat each other out in succession until the elevator goes to the very top floor. Just which floor that is remains to be see although somehow we have a feeling it will be found in the Bank of America tower.
The export miracle, that we have been cantankerously remonstrating against the possibility of for much of the last year, appears to be running into a wall of reality. The Economist puts its usual number-centric and acerbic spin on the nonsense that economists spew with regard to everyone exporting their way out of the debt-laden deleveraging quagmire we are in. Economists are constantly urging governments to adopt policies that would reduce global imbalances—which, in crude terms, means that China should slash its current-account surplus and America its deficit. Yet they ignore the biggest imbalance of all: the current-account surplus that planet Earth appears to run with extraterrestrials. The world exported $331 billion more than it imported in 2010!
The Fed makes a weird move