Submitted by Tyler Durden on 09/18/2015 - 18:54 "Instead of acting via bond markets and banking sector, why shouldn’t public sector bypass markets altogether and inject stimulus directly into the ‘blood stream’?... CBs directly monetizing Government spending and funding projects would do the same. Whilst ultimately it would lead to stagflation (UK, 70s) or deflation (China, today), it could provide strong initial boost to generate impression of recovery and sustainable business cycle... What is probability of the above policy shift? Low over next six months; very high over the longer term."
Submitted by Tyler Durden on 09/18/2015 - 20:40 Last week we warned of the ominously rising risks evident under the surface in US financials. Following Yellen's decision to chicken-out yesterday, it appears interbank counterparty risk is even ominous-er. With bank stocks prices tumbling, catching down to credit market's concerns, the TED Spread - implicitly measuring interbank credit risk - jumped over 21% yesterday - to its highest in 3 years.
Submitted by Tyler Durden on 09/18/2015 - 20:05 It is time for a radical denationalization of money, a privatization of the monetary and banking system through a separation of government from money and all forms of financial intermediation. That is the pathway to ending the cycles of booms and busts, and creating the market-based institutional framework for sustainable economic growth and betterment. It is time for monetary freedom to replace the out-of-date belief in government monetary central planning.
Submitted by Tyler Durden on 09/18/2015 - 15:05 Foreign Minister Walid al-Moualem says Syria may officially request the support of Russian combat troops in the fight to take back the country, a move that would pave the way for the Kremlin to overtly declare that Russia has joined the war in support of Bashar al-Assad. Meanwhile, Israeli Prime Minister Benjamin Netanyahu will meet with Putin on Monday to discuss concerns that Russia's involvement could end up strengthening the military capabilities of Hezbollah. Lurking in the background: the man one CIA officer once called "the most powerful operative in the Middle East today"...
Submitted by Tyler Durden on 09/18/2015 - 19:30 The man who made a billion dollars on Black Monday sums up his strategy perfectly in this excellent FOX Business clip with the money-honey, "I'm a hedge fund manager that actually hedges for his clients. This is something of an old fashioned idea in this day of just gambling on the next Fed bailout." Spitznagel, who is wholly unapologetic in his criticism of The Fed (and any central planner), unleashes eight minutes of awful truthiness on what is going on under the surface of the so-called 'market', concluding ominously, "if August was scary for people, they ain't seen nothin’ yet."
Submitted by Tyler Durden on 09/18/2015 - 18:20 "Activist Investors", the relatively new classification for corporate agitators, want you to believe that their intellectual tactics/ strategies improve both corporate governance and shareholder returns. That may be true but they also seem to be involved in another, less savory, tactic, that is, inflating their company “ownership” claims with extremely large derivatives positions as outlined in SEC disclosure filings.
Submitted by Tyler Durden on 09/18/2015 - 18:01 "As interest rates go more negative, market participants will have increasing incentives to make payments quickly and to receive payments in forms that can be collected slowly. This is exactly the opposite of what happened when short-term interest rates skyrocketed in the late 1970s: people then wanted to delay making payments as long as possible and to collect payments as quickly as possible.... if interest rates go negative, we may see an epochal outburst of socially unproductive—even if individually beneficial—financial innovation."
Submitted by Tyler Durden on 09/18/2015 - 17:45 The consequences of all this are grim, but the timing is hard to predict. Perhaps the government can somehow borrow amounts that no one previously thought possible. But its creditors will look for repayment. Either the creditors are going to walk away unhappy (in the case of default), or the holders of all dollars are going to be stuck with worthless paper (in the case of hyperinflation), or the taxpayers’ pockets will be looted (the longer things muddle along), or most likely a combination of all three will happen. This will not be a happy story for all but a few of us.
Submitted by Tyler Durden on 09/18/2015 - 17:35
Submitted by Tyler Durden on 09/18/2015 - 17:09 On Thursday, the Fed made it clear that its reaction function has changed. "Data dependency" is gone (or at least relegated to the backburner in times of global turmoil), and international and financial market developments are now officially guiding the FOMC's (tentative) hand. This epochal shift has left market participants asking one very simple question: "Ok, now what?"
Moody's Downgrades France, Blames "Political Constraints", Sees No Material Reduction In Debt BurdenSubmitted by Tyler Durden on 09/18/2015 - 16:45 Citing "continuing weakness in the medium-term growth outlook," Moody's has downgraded France:
*FRANCE CUT TO Aa2 FROM Aa1 BY MOODY'S, OUTLOOK TO STABLE
Apearing to blame The EU's "institutional and political constraints," Moody's expects French growth to be at most 1.5% and does not expect the debt burden to be materially reduced this decade.
Submitted by Tyler Durden on 09/18/2015 - 16:35 The current surge in deflationary pressures is not just due to the recent fall in oil prices, but rather a global epidemic of slowing economic growth. While Janet Yellen addressed this "disinflationary" wave during her post-meeting press conference, the Fed still maintains the illusion of confidence that economic growth will return shortly. Unfortunately, this has been the Fed's "Unicorn" since 2011 as annual hopes of economic recovery have failed to materialize.
Submitted by Tyler Durden on 09/18/2015 - 15:50 The reality is that while most folks who are reading this may find it difficult to empathize, the vast majority of Americans are scratching for any extra $0.75 an hour they can find. At the same time CEO’s and highly paid bureaucrats continue to tout policies that have enriched themselves beyond the wildest dreams and comprehension of the average American. Yet they promote these policies as being in the best interest of the working class.
Submitted by Tyler Durden on 09/18/2015 - 15:37 Normally when the world needs an equity market boost, a broken market suffices to slam VIX and save the world. This time not so much.. and the carnage that this will cause into quad witch is frightening...
On 7 September 2002, U.S. President George W. Bush blatantly lied to concoct a “new report” by the IAEA about Saddam Hussein’s weapons of mass destruction program, and the U.S. news-media reported the statement but hid that it was a lie.
He said (and CNN and others quoted it): “a report came out of the Atomic — the IAEA that they were six months away from developing a weapon. I don’t know what more evidence we need,” when he was asked at a press conference, “Mr. President, can you tell us what conclusive evidence of any nuclear — new evidence you have of nuclear weapons capabilities of Saddam Hussein?” Immediately, the IAEA said then that there was no such “new report,” and that the last they were able to find, there was nothing left of WMD in Iraq.
“Our clients will call up saying ‘I hear the Comex is running out of gold, what do you make of it?’ and our quick answer is that this is a non-issue,” Jeffrey Christian, managing director at CPM Group, said in a telephone interview.
“Even if you look at the fact that registered stocks have declined, the fact of the matter is most Comex futures contracts” are cash-settled, and traders don’t take delivery of the metal, he said.
While the percentage of Comex gold open interest covered by total Comex reported stocks has fallen over the past year and a half, it “remains very high by historical standards and presents no perceptible risk of imminent problems with deliveries,” CPM Group said in a report dated Sept. 14…
The Federal Reserve has just announced that its target for the federal funds rate will be kept at 0%. It has now been at 0% since December 16, 2008.
I stated as far back as 2010 (and often since) that the Federal Reserve can never allow interest rates to rise again due to the massive amount of debt that this system has created. Most people called me crazy.
Since the financial crisis in 2008, which was what prompted the Federal Reserve to take such an extreme measure of lowering rates to 0%, the total debt of the US government has nearly doubled.
All week markets were waiting for the star event: a small increase in the Fed Funds Rate, which didn’t materialise.
It is actually an important development, because the Fed had been preparing markets for a September rate rise for some months, and then just backed off.
It’s looking very difficult, perhaps impossible, for the Fed to escape the zero bound. The macroeconomic view, that money at close-to-free interest rates would kick-start the economy, has turned out to be incorrect. Since December 2008, the Fed Funds Rate has been held at the 0-0.25% range: unless one believes the Fed will try negative rates, there is nowhere left to go.
Ned Schmidt returns to the program…
There’s a complete absence of precious metals in the portfolios of virtually any major fund in the world. Prices are incredibly cheap.
At the same time, stock markets are tanking around the world. No one wants to show any gold stocks in their portfolio as they show their year end statements. But come next year, then the move will be on. The technical outlook doesn’t get any better.
Ned says, “January will be the month!”
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Silver gets little respect, but that is sensible in a world dominated by paper assets and pretend values. Similar to a murder investigation, let’s examine the motive, means and opportunity used to “manage” silver prices.
MOTIVE: The price of silver is important to industrial users, since there are thousands of uses for silver, many of which have no alternative except silver. If the price of silver rises too rapidly, people notice. Worse, a price rally in silver probably will spread to the gold market, which is watched globally by banks, institutions, and people. A rapidly rising price of gold informs the world that central banks are “printing” to excess, governments are creating too much debt, and the financial elite are mismanaging by “skimming” too much from the global economies. A rising gold price is worrisome to many.
Investigators are looking into a case of what appears to be intentional poisoning or possibly even attempted homicide that affected nearly three dozen holistic doctors attending a recent conference in Hamburg, Germany. Reports indicate that the 29 healers fell ill after being exposed to a dangerous and illegal amphetamine drug known as 2C-E, or “Aquarust.”
Initial reports of the incident implied that the 29 naturopathic doctors, who had been attending a homeopathic health conference, might have voluntarily taken the drug as part of an “experiment.” However, follow-up reports reveal that none of the healers had willingly taken anything and that someone might have intentionally poisoned and/or tried to murder them.
In 2008, I was asked if I was voting for Barack Obama. I said knew better and continued to explain that his political experience was very limited. At the same time, Obama promised America that he was five days away from fundamentally transforming America. By the way, I was called a racist when I said I was voting for Ron Paul as a “write in” candidate instead of voting for the man who came out of nowhere for President.
No matter how astute I thought I was at that time, I could not have envisioned how destructive Barack Obama would prove to be to the lives of every American. Whenever I meet an Obama supporter, and they are getting harder to find, I ask that person what Obama has done to improve their life and the lives of their family? I have yet to hear an answer that makes any sense.