Tuesday, October 16, 2012

Art Cashin: We’re Certainly At A Flashing Yellow Alert On Hyperinflation

from ETFDailyNews.com:

Too few understand just how disruptive hyperinflation in America would be. Truth is, it would be a nightmare. 
In an episode of hyperinflation, money loses value so rapidly that people spend it as quickly as possible, which only feeds the cycle of pushing prices higher and higher at a faster and faster rate.
Imagine prices at the food store and gas pump not just going up a few cents at a time, but doubling in a matter of months, weeks, or even days.
And now some economists and market experts think many of the ingredients for hyperinflation are brewing in America.
That’s because years of profligate U.S. government borrowing and spending have created trillions of dollars that lurk in the reserves of foreign countries and major financial institutions. The situation escalated after the 2008 financial crisis, with the U.S. Federal Reserve‘s policies of “quantitative easing” creating even more money.
Read More @ ETFDailyNews.com

Destroying The Myths Of Bernanke's Brave New World Of QEtc.

Entering the final quarter of the year, Lacy Hunt and Van Hoisington (H&H) describe domestic and global economic conditions as extremely fragile. New government initiatives have been announced, particularly by central banks, in an attempt to counteract deteriorating economic conditions. These latest programs in the U.S. and Europe are similar to previous efforts. While prices for risk assets have improved, governments have not been able to address underlying debt imbalances. Thus, nothing suggests that these latest actions do anything to change the extreme over-indebtedness of major global economies. To avoid recession in the U.S., the Federal Reserve embarked on open-ended quantitative easing (QE3). Importantly, in their view, the enactment of QE3 is a tacit admission by the Fed that earlier efforts failed, but this action will also fail to bring about stronger economic growth. H&H go on to break down every branch that Bernanke rests his QE hat on from the Fed's inability to create demand, to the de minimus wealth effect, and most importantly the numerous unintended consequences of the Fed's actions.

The Tax Facts: "You Do The Math"

As UBS reported said, in both the Republican primary and the general election campaigns in 2012, various Presidential candidates in discussing taxes have recommended that voters "do the math" in evaluating various tax change proposals. The following preliminary 2010 data from the Internal Revenue Service (IRS) should be helpful for performing such calculations. We present a variety of self-explanatory exhibits sourced directly from the IRS, which include all the DIY math on income distribution, tax rate schedules, who is affected if Bush taxes cuts for high-income taxpayers expire, sources of itemized deductions and higher incomes, the size distribution of businesses paying individual income taxes, and everything else that may and likely will be thrown out, if incorrectly, by one or both candidates tonight, in an attempt to rally any one group of people behind the cause (what cause exactly remains to be seen).

The Muni-Bond Buyer's Election Guide

The muni market is not yet fully pricing in potential negative outcomes around tax reform, for which both candidates propose reforming tax rates and treatment of investment income, including muni interest, in a demand-negative fashion. Morgan Stanley summarizes the muni credit outcomes of competing reform proposals for healthcare, defense, and entitlement spending, among others. The tax treatment of munis would be at risk under either an Obama or Romney administration. In aggregate, both policy sets are likely negative for munis’ tax value and a headwind for performance, though it is difficult to state if one set is definitively better than the other. However, we believe the muni market may need to reach yields equivalent to other credit options, at least temporarily, given that both proposals include the possibility of impairment of munis’ absolute or relative tax value.

The Pre-Debate Malarkey: Drinking Game And Why The Election Should Not Be For "The Shiniest Of Two Turds"

  The battle lines are set; the VeePs have stepped in (we laughed and we grimaced); and now its time for main-event. In preparation for this evening's Town-Hall style debate, we present the critical-to-enjoyment drinking game rules and live webcast scorecard (which stands at Team Obama 1 - 1 Team Romney) but perhaps more importantly, we offer the most epic rap-battle version of the debate with an eagle-riding Abraham Lincoln delivering these infamous words to the two challengers: "By the power vested in me by the power of this bald bird, the president shall not be shiniest of two turds." Indeed, Abe, indeed.

Why Intel Better Not Be Economic Bellwether This Time Around

For those who missed it earlier, Intel reported results that were just slightly better than expected, and yet the stock tumbled over 3% after hours. The reason is because despite a weak quarter which had been pre-guided down by the sellside community every so effectively, the semiconductor manufacturer saw even more weakness in Q4. Those who wish to read the details can do so here. For everyone else who is more of a visual learning bent, we present the following chart which shows the year-over-year change in Intel revenue, which shows that for the first time in 12 quarters, INTC reported a decline in annual revenue. Furthermore, there is virtually no question that Q4 will also see a revenue decline: the only question is whether it will be greater than Q3's 5.5% Y/Y drop.

Is This The Chart The Bulls Are Banking On?

The period from 2003 to 2008 has been nicknamed 'The Great Moderation' as credit spreads collapsed close to zero, free-wheeling securitizations flooded the market with liquidity which repressed every credit instrument and forced investors to reach down in quality and out the curve for every extra tick of yield or carry. The period from the lows in 2009 could well be nicknamed 'The Great WTF' as credit spreads collapsed back down, and free-wheeling central banks flooded the market with liquidity which repressed every credit instrument and forced investors...blah blah blah... It would appear from the analog below that while markets do not repeat, they sure like to echo. We just remind those bulls looking for the next 18% lift that the analog period is when reality started to come out from behind the curtain - beginning in 2007...The Great Realization.

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Iran Threatens Oil Spill In Persian Gulf

A report from German news magazine Der Spiegel states that Iran's latest effort to disrupt key shipping lanes through the Strait of Hormuz may be to cause a massive oil spill. Code-named Murky Water, the operation may serve to force a temporary respite from sanctions targeting the country's energy sector. Iraqi leader Saddam Hussein tried a similar tactic during the first Gulf War to deter invading U.S. forces. If the German report is true, the Iranian operation could be a sign of Tehran's dwindling options.

Obama-Romney II - The 'Tumble In The Town Hall' Debate - Live Webcast

This is the real thing. Forget the Thrilla-in-Manilla or the Rumble-in-the-Jungle, tonight's no-holds-barred, no-truth-spoken 'Tumble-in-the-Town-Hall' debate promises much (but will likely deliver little). Fighting out of the blue corner is a toned middleweight - the comeback-kid Barack 'the basher' Obama. His opponent, fresh from victory in their previous epic battle, fighting from the red corner, the deceivingly slippery Mitt 'the mauler' Romney. Intrade has the 'basher' at 60.5% odds of winning it all on November 6th - at its lows of the day after suffering some heavy action in the early afternoon - while RealClearPolitics has the pair evenly matched. Live webcast below:

The Curious Case Of Debate-Day Stock Market Surges

In addition to the mysterious volley of recent economic data points that have blown even the most optimistic expectations out of the water, it is perhaps notable that not only is the economy in agreement with the status quo in the month before the election, but so is the market, and as can be seen below, on presidential (and vice) debate days, the market has posted some truly six sigma returns. For the month of October, the S&P 500 futures have risen a cumulative 20 points on the days of the debate; and fallen a cumulative 4.75pts on the non-debate days. Forget needing moar QE, we need moar debates! While we leave up to our readers to divine the implications of such outlier moves on debate days, our only suggestion for those who have missed their opportunity to buy the central bank policy vehicle, formerly known as the S&P 500, with both hands and feet, is to wait until the next presidential debate and go all in. After all, "it's only fair" that the market will soar hours ahead of the two teleprompter-less candidates debating highly irrelevant stuff.

Spain denies bailout request/troika walks away from Greece/gold and silver rebound

Good evening Ladies and Gentlemen: Gold closed up by comex closing time to the tune of $8.70 to $1744.70.  Silver also rebounded finishing up by  21 cents to $32.92.  The big news today was the resignation of Victor Pandit of Citibank.  Their earnings reported yesterday was state of the art, phoniness. The troika walked away from Greece today setting a showdown sometime in November when the cash

As Coke Goes, So Goes 20% Of The Greek Stock Market (Which Is Now Smaller Than Vietnam's)

The erstwhile 'developed' market of the Athens Stock Exchange has just suffered a major blow. Coca-Cola Hellenic Bottling Co (CCHBC), the world's second largest Coca-Cola bottler, will quit the exchange for London next year, cutting the value of equities listed in Athens to a mere $31bn - smaller than Vietnam's $35.2bn. CCHBC is Greece's largest company by market value and sets a rather ugly precedent in leaving the troubled nation. Accounting for 23% of the benchmark index weight, it is 50% larger than all four of Greece's major banks combined. A new company, headquartered in Switzerland, will make a share-exchange offer for CCHBC and seek a primary listing on the London Stock Exchange - which will mean around 10% of all trading volume on the Athens Stock Exchange will be lost. The decision to leave Greece was prompted by concerns over political and economic stability - so for the Greeks, Coke Is not It.

Citi Shares Outstanding Under Pandit: From 500 Million To 3 Billion

While earlier we reported that the under Vikram Pandit the stock price of Citi, net of reverse stock splits, has collapsed by 90%, some have inquired how it is possible that the market cap under Pandit has declined by far, far less, or from about $150 billion when Vikram was appointed to CEO, to a little over $100 billion today. The answer is simple: shares outstanding.

Stocks See Biggest 2-Day Gain In 5 Weeks On...Denied Rumors?

UPDATE: IBM -3% after-hours (equiv. 50 Dow Points)
Citi was the headline-maker of the day and is now (somehow) up 12.4% from QEtc. AAPL's low average-trade-size but reasonable volume rip (+2.3%) just failed to fill the gap-down from 10/5 but provided just the excuse the market needed to rip on a debate-day. Tech remains the only sector in the red post-QEtc. The last two days we have seen the same pattern play out as in the last few weeks, a plunge-plunge-linear-ramp with the opposite scale on volume during these moves. Today's equity market levitation was predicated on rumors of a pending credit line with Spain - which was denied by everyone involved but by then correlations were high and momentum was in charge. FX markets are highly dispersed with JPY weakness and EUR strength leaving the USD -0.44% on the week. Commodities recovered a little on the day with Oil/Copper +0.25% on the week and gold/silver still lagging. Treasuries bear-steepened with 30Y +8.5bps. VIX dropped marginally to 15.22%. Credit was dead after Europe closed, underperforming equities push.

Hours Ahead Of The Presidential Debate, Total US Debt Hits Record $16.19 Trillion

Moody's Refuses To Junk Spain Ahead Of US Election, Raffirms Baa3 Rating - Full Text

For those who are curious why Tim Geithner has been invisible in the past 2 months, the answer is he has been manning the phones like a true patriot, and making sure nobody dares to rock the European boat ahead of the US election (as was already disclosed), in this case exemplified by Moody's just released announcement that the rating agency will not downgrade Spain to junk, soaring debt, collapsing GDP and laughable unemployment rate notwithstanding (unless of course the ECB fails in its mission to scare all shorts from approaching within 10 miles of an SPGB, and Spain loses private market access again, in which case Moody's would proceed with a "multiple notch downgrade"). At least not until the US election that is. After that... well, with the fiscal cliff, debt ceiling, Greece vs Troika, etc, etc, buy VIX.


London Trader – Competition To Buy Physical Gold Is Fierce 

from KingWorldNews:

With many global investors still concerned about the recent price action in gold and silver, today King World News interviewed the “London Trader” to get his take on these markets. The source assured KWN that “… we are not going to see a waterfall decline in the gold market.” The source also said, “… the competition to buy physical is extremely fierce right now.”
King World News will be releasing a total of three written interviews with the London Trader today. Due to recent market action, these interviews covering the gold and silver markets will be released as soon as possible.
Here is what the source had to say: “In the past we have seen waterfall type declines when small speculators are heavily leveraged. But the market has changed. When the physical market was not as strong as it is now, these corrections would go $200 to $300 in gold. As an example, we went from a previous peak of about $1,900 down to around $1,500, or roughly $400 in that case.”
Read More @ KingWorldNews.com

Fake Climate Change Studies Aim to Influence Public Opinion Through Propaganda

by Susanne Posel, Occupy Corporatism:

Alarmists from Harvard University published a study claiming that certain thunderstorms expel water vapor miles into the stratosphere, called convective injection, and that this phenomenon is causing the ozone layer to break apart. The study was funded by the National Aeronautics and Space Administration (NASA). The US being an industrialized nation is a major polluter and therefore thinning the ozone layer over the North American continent, claim the researchers.
This alleged destruction is the justification behind banning chlorofluorocarbons (CFCs) to reduce pollution.
James Anderson, professor of atmospheric chemistry at Harvard and lead researcher for the study decries that this new discovery directly links human activity to the destruction of our ozone which will quickly become a global issue. However, going back several decades, Anderson has been supporting colleagues who say that CFCs are the reason for the destruction of the earth’s ozone layer. Now, this new study, which he was a part of, proves his long held theory and adds to the demonization of humanity in favor of saving the planet.
Read More @ OccupyCorporatism.com

Syria: An Energy-Based Proxy War in the Making?

by Marin Katusa, Casey Research:

The Vietnam war wasn’t really about Vietnam. Spaniards may have fought in the Spanish Civil War, but the real opponents were elsewhere. US and Soviet machinations in Afghanistan in the late 1970s had little to do with liberating a repressed population.
They were all proxy wars, struggles between superpowers that chose to fight their battles in faraway lands and inflict their collateral damage on other peoples instead of their own.
Each war had a cover. Each time the superpowers of the world got involved – overtly or covertly – to right an arguable wrong. Really though, they were there to fight each other. To weaken each other. To claim moral superiority and political preeminence. And to win the right to use the proxy nation’s resources and location to their advantage.
It would be lovely to think such wars are a thing of the past… but another proxy war is rapidly developing.
Read More @ CaseyResearch.com

Report: Special Operations Teams on Standby for Libya Revenge Strike

by Mac Slavo, SHTFPlan:

It looks like it may be time to wag the dog a bit as President Obama is losing traction in national polls and the administration has taken a significant amount of heat for mid-east policy failures that recently culminated in the death of an American ambassador.
According to a report from the Associated Press numerous sources inside the White House indicate that U.S. special operations teams are awaiting orders to strike those responsible for the attack in Benghazi, Libya which left four Americans dead:
Administration officials say the White House has put special operations strike forces on standby and moved drones into the skies above Africa, ready to hit militant targets from Libya to Mali, if U.S. investigators can find the al-Qaida-linked group responsible for the death of the U.S. ambassador in Libya.
Read More @ SHTFPlan.com

Ground under Fukushima Unit 4 sinking, structure on verge of complete collapse

by Ethan A. Huff, Natural News:

Though the mainstream media has long since abandoned the issue, the precarious situation at the Fukushima Daiichi nuclear power facility in Japan is only continuing to worsen, according to a prominent Japanese official. During a recent interview, Mitsuhei Murata, the former Japanese Ambassador to both Switzerland and Senegal, explained that the ground beneath the plant’s Unit 4 is gradually sinking, and that the entire structure is very likely on the verge of complete collapse.
This is highly concerning, as Unit 4 currently holds more than 1,500 spent nuclear fuel rods, and a collective 37 million curies of deadly radiation that, if released, could make much of the world completely uninhabitable. As some Natural News readers will recall, Unit 4 contains the infamous elevated cooling pool that was severely damaged following the catastrophic earthquake and tsunami that struck on March 11, 2011.
Read More @ NaturalNews.com

Fed policy: good for gold but bad for the economy

from Gold Money:

As a student (and teacher) of the Austrian School of economics, I despise the interventionist ways of the Federal Reserve. But as a gold investor, I appreciate the Federal Reserve’s “help” in boosting my portfolio. Like any prudent investor, I aim to buy low and sell high, and Fed policy right now can only lead the gold price in one direction: higher.
According to the Fed’s most-recent FOMC announcement, the Fed is looking to hold the federal funds rate near 0% for “at least through mid-2015,” which means that Operation Twist – the Fed’s programme for selling its short-term government debt in order to buy more long-term government debt – is being extended for an additional year. On top of this, we have the organisation’s new commitment to buying $40bn a month of mortgage-backed securities until such a time it deems this money printing unnecessary.
Read More @ GoldMoney.com

Germany’s Schäuble Presents Master Plan for Euro

from Spiegel International:

German Finance Minister Wolfgang Schäuble is determined to end the euro crisis once and for all. On Sunday he effectively ruled out a Greek bankruptcy, and is now proposing far-reaching reforms to stabilize the currency union. Under his plan, Brussels would be granted far greater powers over national budgets.

Wolfgang Schäuble knows that the quiet on the markets over the past few weeks has been deceptive and that the euro crisis could erupt again soon. After all, doubts remain about whether Greece can remain in the currency union in the long term. If it triggers a chain reaction, the entire euro project could collapse. In addition, the willingness of many euro-zone member states to eliminate the design defects of the common currency appears to be diminishing.
Cash-strapped Greeks, fatigued Europeans — Germany now wants to solve both problems for the long term. “There will be no state bankruptcy in Greece,” Schäuble said in a speech in Singapore on Sunday. He also wants to give a new boost to the reform impetus for restructuring the euro zone. “We now need to go a major step in the direction of a fiscal union that will go beyond the proposals made so far,” Schäuble said on Monday night during his flight back to Berlin.
Read More @ Spiegel.de

Riots In America

from crabbydogtrix:

EU Censors Alternative News in Bid to Dominate Narrative

Western media quietly attempts to censor growing global opposition, begins with Iranian media.
by Tony Cartalucci, Activist Post

Iran’s Press TV reported in their article, “Press TV viewers slam EU move to ban Iran channels as illegal, hypocritical,” that “Press TV viewers have condemned as illegal and hypocritical the ban imposed by the European officials on the broadcast of several Iranian satellite channels.”
Nearly no mention is made in the Western media regarding the blatant act of censorship – an act that runs contra to all perceived notions of “Western values,” and an act that directly undermines the narratives of the West supporting “freedom” and “democracy” around the globe.
The West has spent billions trying to leverage “freedom of speech” and “human rights” as a means to undermine, destabilize, overthrow, and replace governments around the world, from the US-engineered Eastern European “color-revolutions” after the fall of the Soviet Union, to the latest US-engineered “Arab Spring,” and all across Southeast Asia.
Read More @ Activist Post

The Next Food Crisis Will Be Caused By Globalist Land-Grabs and Privatization

by Susanne Posel, Occupy Corporatism:

The UN warns that global food stores like grains are depleting at an expediential rate and when combined with failing harvests, there will be a food crisis in 2013.
The UN Food and Agriculture Organization (FAO) explain that “we’ve not been producing as much as we are consuming. That is why stocks are being run down. Supplies are now very tight across the world and reserves are at a very low level, leaving no room for unexpected events next year.”
Since 2010, the FAO have stated that the rise in food prices is directly correlated to the 80 million people being added to the world’s population annually. This fact, according to the globalists at the UN, is beginning to “tax both the skills of farmers and the limits of the earth’s land and water resources.”
Read More @ OccupyCorporatism.com

Call The Cops At Your Own Risk

by Jeff Berwick, Dollar Vigilante:

Would you dial up a known criminal, like a murderer or rapist, to come help you after you’ve been the victim of a crime? No? Then why in the world would you call the police after you’ve been assaulted, robbed or otherwise violated?
The police do not consider their job to protect you. They used to at least pay lip service to “keeping the peace”, but nowadays in the USSA it is clear their job is to enforce the law. In fasco-communist America, the law stopped being about your protection decades ago. The law is about the expansion of state power and control. That’s why there are so many of them, with more coming all the time.
There are literally thousands upon thousands of reasons in the Federal Code for the police to arrest you. That’s the very essence of a police state. Everything is literally a crime. As Lao Tsu said in the 6th century, BC: “The more artificial taboos and restrictions there are in the world, the more the people are impoverished…The more that laws and regulations are given prominence, the more thieves and robbers there will be…”
Read More @ DollarVigilante.com

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