With just 5 days needed for the Texas secession petition to surpass 100,000 signatories, all is not well with the Union. Actually, not only are things not well with the Union, things are getting worse by the minute, as American society splinters into diametrical opposites to a degree not seen in decades, a process which in itself virtually assures there will be no cliff compromise before the opportunity cost of ending the stand off becomes far too great. And with the option of the Mr. Chairman "getting to work" to fix things, one wonders - is even the market a motivating enough factor given a 20, 30 or even 50% drop in the rearview mirror: after all as the Fed has demonstrated, there is no need for a fiscal compromise to get the S&P to just shy of all time highs. Certainly, even America's politicians are very much aware of this by now (of course, this assumes that Bernanke is still in charge of the market: something we have claimed for two months is very much in question). Regardless, with the topic of secession on everybody's lips, here is what none other than Ron Paul has said about this suddenly very volatile issue.
If nothing else, read the five greatest dangers that the American people face today that impede the goal of a free society....To achieve liberty and peace, two powerful human emotions have to be overcome. Number one is 'envy' which leads to hate and class warfare. Number two is 'intolerance' which leads to bigoted and judgmental policies. These emotions must be replaced with a much better understanding of love, compassion, tolerance and free market economics. Freedom, when understood, brings people together. When tried, freedom is popular.
The best chance for achieving peace and prosperity, for the maximum number of people world-wide, is to pursue the cause of LIBERTY...
$1,130.33 is the average monthly social security benefit. Assuming you worked 40 hours a week, every week, that's the hourly equivalent of $6.40. Where can you live? Will savings save you?
If only the nation’s Founding Fathers could see us now! A Supreme Court totally gone wild, de facto legislating and imposing its will; a Congress, lair of lazy career politicians and self-serving scoundrels; and an Executive, wearing reversible togas colored blue and red, running the nation as an empire, and using the country’s military as police force for multi-national predatory capitalism… subsidized by taxpayers from America’s lower and middle classes. Are we at the embryo stage of a major military scandal… a Miligate? Petraeus and Allen are two Samson-characters who availed their modern day Delilah(s) with a razor-sharp lack of common sense. Paula Broadwell, Jill Kelley and Natalie Khawan are neither geishas, nor courtesans... perhaps more of a groupie-variety around the military. Let’s all be concerned with pressuring the politicians to defuse the “fiscal cliff,” and wait until appropriate investigations are concluded to determine whether there is a Miligate.
Much is made of the 'apparent' bubble in Treasury bonds - a 30-year or so relatively consistent trend in government bonds (through thick and thin) and yet allocations remain minimal compared to our increasingly similar Japanese friends have experienced. It would seem to us, thanks to Bernanke's 'visible' hand that the real bubble is in spread product - as rates are so compressed, investors seemingly oblivious to the word 'risk' (unintended consequence) have flooded into ever-increasing yield/spread products - with high-yield bonds now dominated by these technical inflows (as we noted in the close today). If ever the combination of anchoring bias, 'dance while the music is playing', and herding was evident, it is in corporate credit. To wit, the total disengagement from reality (both real 'micro' earnings and 'macro' economic uncertainty) that a flood of money has created in this increasingly crowded (and increasingly-er illiquid) market. Managers are well aware that the liquidity tsunami has moved the maturity mountain (as Citi's Matt King notes) but has helped the weeds as well as the roses.
House Republicans Find Corzine Guilty Of MF Global Collapse, Missing Funds; Democrats Refuse To Endorse FindingsIt appears that these days not even the Corzining of client money can happen without it being split across furiously polarized party lines. As it turns out hours ago, the Committee on House Financial Services released an advance glimpse into a report to be released in its entirety tomorrow, which puts the blame for the collapse of not only MF Global, but also the disappearance of millions in client money, right where it belongs: the firm's then CEO Jon Corzine. Yet that Corzine corzined millions, leaving clients scrambling in bankruptcy court in an attempt to recover what should have been segregated money from the very beginning, and also just happened to blow up one of the 21 Fed-anointed Primary Dealers, is not surprising: this has been long known by everyone. Those who need a refresher are urged to recall the Honorable's testimony before the House... or maybe not: after all it is not as if Corzine himself could recall a whole lot. Where it gets interesting is that the former Democratic governor, and senator, not to mention primary bundler for president Obama, is, in the eyes of the members of the committee, innocent: All the democrats on the Investigations Subcommittee refused to sign off on the findings, meaning that to them, Corzine is completely innocent. That this is purely a political move is glaringly obvious. It is also abhorrent, because as long as political ideology gets in the way of pursuing and imposing justice, the Banana States of America will remain just that.
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Israel Assassinate key figure in Hamas/ Strikes galore throughout Europe/Greek economy shrinks another 7.2%.European industrial production sinks again/UK Jobless rate increases again/
With the star (and legend) of John Paulson long dead and buried, and his Disadvantage Minus fund an embarrassment, wrapped in a monkeyhammering, inside a humiliation, there are few "groupied" HF managers left. One of them is Dan Loeb, who still manages to generate positive Alpha regardless of how Beta does, another one used to be William Ackman (not so much anymore, especially not with the whole JCP fiasco), some others are David Tepper, Seth Klarman, and a few others, but nobody has quite the persistent clout and following of young master, and poker maestro, David Einhorn, and his fund Greenlight. Below we breakdown his latest just released 13F, which as a reminder shows, his holdings as of September 30. Key changes: Einhorn cut his holdings in Best Buy, Carefusion, Compuware, Expedia, Hess and UnitedHealth, and started new, small, positions in Yahoo, Babcock and Wilcox, Aecon and Knight Capital. More importantly, he cut his top position, Apple, by nearly 30% from 1.45 million to 1.09 million shares, cut modestly his second biggest position Seagate, added materially to GM, making it his third position, added to Cigna at #4 and added modestly to the GDX Gold Miners ETF. Sad to say, unless he has changed his portfolio dramatically since September 30, Einhorn is likely not doing too hot, especially in the last week or two.
The remarkable forecasting skills of the Troika and the immense decisions being taken on the back of these 'sacrosanct' projections need to be put into context. We are more than happy to do that (as we did here - with hilarity ensuing), but the chart below shows even more clearly, so far so bad as the Troika has pretty much nailed it on the 'most optimistic mean-reverting model' ever. Not wanting to steal the jam from Europe's donut but the forecasts are - quite evidently - a complete and utter joke. Going forward though, we are sure it's different this time...
The crowded liquidity-fueled pump-fest of the last few months is beginning to unwind. Look around at where the damage occurred. Equities and Credit were smashed; the USD is practically unchanged; Treasuries very marginally bid; commodities sideways (aside from Oil's oscillations). The close did see some of the other asset classes start to catch down to equity and credit but based on our models, we see the S&P 500 having retraced about half its short-term mispricing relative to Treasuries. All the over-pumped sectors were the biggest laggards - Financials, Industrials, Materials, and Tech - but from the 11/25/11 beginning of the global coordinated central bank pump, there is still plenty of downside for stocks. Our greatest concern now is if high-yield bond ETFs are unwound (where so much liquidity is concentrated) and forces cash bond liquidations - there is simply no depth to soak up that move and the entire secondary market will reprice (and shut the primary market - which has lived on flows for so long).
It's Official: T1 Is Not T2; Tilson Liquidates To Buy More Of The Same), we got a glimpse of his just released 13F and are rather confident the man, the myth, the stuff of Anti-Tilson ETFs will shock and awe us all one more time. The reason? As of September 30, Tilson's inaccurately named T2 Partners - it should be T1 now that Glenn Tongue is long gone - had a total of $175 million in AUM. That's not the punchline: as part of this $175 million, Tilson had $63 million in put/call stock equivalents. In other words the much vaunted "asset manager" who for some absolutely inexplicable reason continues to get CNBC airtime, managed a grand total of $110 million in real (mostly family and friends) money. That's not the punchline either. The punchline is that Tilson's top 3 positions were AIG and AAPL, with AIG in both stock and Call format. In fact, more than 10% of the firm's virtual AUM, or $18.6 million was in stock equivalent calls for AIG and AAPL, stocks which since September 30 have gone in a literally, not virtually, straight line lower, and have as a result likely wiped out the entire intrinsic call value. The only silver lining: Tilson owned $5.5 mm in NFLX calls and a grand total of $3.6 million in NFLX stock. We hope it carries him far, because once the Icahn grand jig is up, in which the raider is exposed as having absolutely no intentions of buying the company, or even putting it in play, but merely squeezing the shorts courtesy of a costless collar and a sternly worded 13D, that will be the final straw for Tilson's second coming, and most likely, his career.
noted in early March what a ridiculous ponzi this was all becoming when the Bank of Israel announced its purchase of US equity positions including AAPL. In retrospect it is so gratifying to gloat at the self-confirming bias that enabled their reserve managers to buy on the way up as the stock that can do no wrong lifted all boats. Actually, it is easy to gloat in any 'spect'. We can only assume that Bernanke's Bat-phone is ringing off the hook this afternoon to 'get back to work' and come to the aid of his Bank of Israel mentor.
With the defeat of California Prop 37, the fight to require labeling of genetically modified foods has passed on to other states, such as Washington and Vermont. Although California’s initiative failed on election day, the campaign brought national attention to the issue of labeling GM foods, with 30 other states now working to require GMO labels. Dave Murphy, executive director of Food Democracy Now, stated, “More than 4 million Californians are on record saying they want to know what’s in their food. This is a dynamic moment for the food movement.” (MercuryNews.com)
In Vermont, the VT Right to Know GMOs coalition has also started gathering signatures to present to elected officials about the need for GMO labeling on food products sold in retail stores. With this effort, Vermont joins the Coalition of States for Mandatory GMO Labeling comprising of the following states: Arizona, California, Connecticut, Colorado, Florida, Hawaii, Idaho, Illinois, Iowa, Maine, Massachusetts, Minnesota, Mississippi, New Hampshire, New Jersey, New York, North Carolina, South Carolina, Oregon, Pennsylvania, Vermont, Virginia, and Washington.
Read More @ Activist Post
Japan’s main opposition leader Shinzo Abe, seen as the most likely next premier if a snap election is held next month, called on the central bank to print “unlimited yen” to achieve a new inflation target.
In comments on Wednesday, he didn’t spell out what the inflation target should be. But in recent weeks he has called for the Bank of Japan [BNJAF 0.00 --- UNCH ] to achieve 3 percent inflation, three times higher than the current target, after years of deflation pressures.
Abe’s remarks keep the Bank of Japan under pressure ahead of its two-day rate review next week when its policymakers may debate the need for further economic stimulus to try to lift an economy widely seen as in recession.
Read More @ CNBC
Modern financial theory dictates that sovereign bonds are the most “risk free” assets in the financial system (equity, municipal bond, corporate bonds, and the like are all below sovereign bonds in terms of risk profile). The reason for this is because it is far more likely for a company to go belly up than a country.
Because of this, the entire Western financial system has sovereign bonds (US Treasuries, German Bunds, Japanese sovereign bonds, etc) as the senior most asset pledged as collateral for hundreds of trillions of Dollars worth of trades.
Read More @ GainsPainsCapital.com
Beyond the banking world, a parallel universe of shadow banks has grown in the form of hedge funds and money market funds. They’re outside the reach of conventional financial regulation, prompting authorities to plan introducing new rules to prevent the obscure sector from triggering a new financial crisis. But in doing so they risk drying up an important source of funding to banks and firms.
In the financial world, there is a narrow divide between heaven and hell. Frenchman Loïc Féry realized this when he was 33. He was a rising star in the banking world, managing the trade in complex loan packages for an investment bank. According to his business card, he was the bank’s “global head of credit markets.” But then one of his employees gambled away about €250 million ($317 million), and suddenly Féry was without a job.
That was in 2007. A number of investment bankers experienced a similarly precipitous fall in the turbulent years of the financial crisis.
Read More @ Spiegel.de
First, a history lesson: Hitler was appointed Chancellor of Germany on January 30, 1933. Hitler then moved quickly to marginalize and then dispense entirely with the German Legislature, the Reichstag, and to effectively eliminate all political parties other than the National Socialist (Nazi) Party.
The last step in Hitler’s quest for total, dictatorial power was the purging of the German military of any factions that were in any way autonomous and not 100% loyal to him, specifically the SA (Sturmabteilung, which means Storm Detachment).
The SA was run by Ernst Rohm, who, like most of the founding and high-level members of the Nazi Party and eventually the Third Reich, was a homosexual ephebophile (preferring teenaged boys). In fact, Rohm was a militant and vocal homosexual in the spirit of the ancient Greeks and musloids who believed that women were sub-human and that truly masculine men only had sex with other men and boys.
Original Source @ Barnhardt.biz