Corporates
are in relatively good financial shape and theory says should respond
to high profits and cheap debt by investing more. However, while high
'profits' and low cost of debt are reasons for capex and opex to be
rising more quickly than they are, these two critical drives of
recovery show no signs of responding to these profit/debt incentives -
and so as Citigroup notes "recovering is not booming". Top-down,
compared to history, capex is low, following P/E's sentiment -
especially in Europe (indicating a lack of confidence in the future). However, at the sector level this reverses: high capex has been given a low PE, while low capex has a high PE. The market is effectively encouraging companies to invest less and return more money. Longer term the consequences for economic growth, inflation and earnings growth are negative - as we trade (once again) short-term equity gain for long-term sustainable economic gain.Bagus' Bernanke Rebuttal - Redux
At the end of December 2010, Philipp Bagus (he of the must watch/read 'Tragedy of the Euro') provided a clarifying and succinct rebuttal or Bernanke's belief in the extreme monetary policy path he has embarked upon. Bernanke's latest diatribe, or perhaps legacy-defining, self-aggrandizing CYA comment, reminded us that perhaps we need such clarification once again. Critically, Bagus highlights the real exit-strategy dangers and inflationary impacts of Quantitative Easing (a term he finds repulsive in its' smoke-and-mirrors-laden optics) adding that:Or we might name it after the intentions behind it: "Currency Debasement I," "Bank Bailout I," "Government Bailout II," or simply "Consumer Impoverishment."Money printing cannot make society richer; it does not produce more real goods. It has a redistributive effect in favor of those who receive the new money first and to the detriment of those who receive it last. The money injection in a specific part of the economy distorts production. Thus, QE does not bring ease to the economy. To the contrary, QE makes the recession longer and harsher.
Is 11% This Election's Most Important Number... And If Not, Why Isn't It?
With
the US presidential election looming in just two months, there is
hardly a state that is as critical to the outcome of who America’s next
president will be, as Florida. As Bloomberg vividly summarizes, Florida
- and specifically its five swing counties: Hillsborough, Orange,
Pinellas, Seminole and Volusia - was the state that determined the
president in all of the last 3 elections: set between the
Republican-dominated North Florida and the more Democratic southern
counties, these suburban communities of middle-class voters are known
for their shifting allegiances. In 2008, Obama took four of the five
counties to capture Florida. George W. Bush won three of the counties,
and the state, in 2004. In 2000, Volusia’s vote count was disputed by
Vice President Al Gore. Gore won the county yet lost Florida by 537
votes, giving Bush his first term as president. It is quite fitting then
that these five counties are very much indicative of the primary
malaise that has plagued the country for the past 4 years: the inability
of the housing market to rebound no matter how many trillions in
printed dollars are thrown at it. Which brings us to the key number that
probably should (but most likely won’t in this age of ultra short-term
attention spans and constant redirection and focus shifts): 11%
- this is the foreclosure rate in these 5 critical counties, double
what it was 4 years ago, and three times higher than the national
foreclosure average rate of 3.4%. In other words, if there ever
was a time and place when economics, through its sheer failure to
restore “household wealth” in this most decisive region, was a key
issue, now is the time.Robert Johnson: Audacious Oligarchy - Unmasking Wall Street and the Decline of Confidence
The
week ahead kicks off what we expect to be a period of intense event
risk. The combination of positioning, judging from the futures market
and anecdotal reports, and the low implied volatility in currencies and
equity markets warn of heightened risk in the period ahead.
The week begins off slowly with a long holiday weekend in the US. It is here where continued position adjusting may dominate. Of the central bank meetings, the Reserve Bank of Australia is first (Sept 4) and is the least likely to surprise the market. While most participants expect that the easing cycle is not over, most look for a resumption of it later in Q4. That said, a rate cut would likely push some of the Aussie bulls to the sidelines, even though Australia will continue to offer among the highest interest rates among the major industrialized countries.
The Bank of England meets Sept 6. An extension of its gilt buying program was discussed last month and evidence points to continued deterioration of the economy. Extending the current gilt purchases, which run through early November, would likely have little market impact. A rate cut would likely be seen as somewhat more negative for sterling.
Read More @ AlsoSprachAnalyst.com
Pandora’s box: A process that generates many complicated problems as the result of unwise interference in something.
My first car was a 1965 Chevy Malibu. Like many cars built at the time, it was a simple and straightforward design at every scale. You didn’t need a degree in electrical engineering, computer science, or be a mechanic to understand all the details of such a beautiful machine. Then again, like that car, society was once largely dependent on mechanical systems that could be explained, taken apart, fixed, and put back together again.
Today, my neighbor complains that he doesn’t understand new cars. Being that he’s a mechanic, that’s a problem. Unlike my ‘65 Malibu, many cars on the road today are more electronic than they are mechanical. My neighbor doesn’t understand the modern vehicle because, like 99% of us, he can’t take it apart and put it back together again without destroying the thing. Why is that? The reason, of course, is that technology has evolved from separate mechanical subsystems—like our muscles and limbs—to highly integrated electronic networks—like the human brain. Thus, when he or I open up the hood of my new car today what do we see? Nothing but a nicely curved black box.
Read More @ Financial Sense.com
The week begins off slowly with a long holiday weekend in the US. It is here where continued position adjusting may dominate. Of the central bank meetings, the Reserve Bank of Australia is first (Sept 4) and is the least likely to surprise the market. While most participants expect that the easing cycle is not over, most look for a resumption of it later in Q4. That said, a rate cut would likely push some of the Aussie bulls to the sidelines, even though Australia will continue to offer among the highest interest rates among the major industrialized countries.
The Bank of England meets Sept 6. An extension of its gilt buying program was discussed last month and evidence points to continued deterioration of the economy. Extending the current gilt purchases, which run through early November, would likely have little market impact. A rate cut would likely be seen as somewhat more negative for sterling.
Read More @ AlsoSprachAnalyst.com
by Cris Sheridan, Financial Sense:
Black
box: Any complex piece of equipment, typically a unit in an electronic
system, with contents that are mysterious to the user.Pandora’s box: A process that generates many complicated problems as the result of unwise interference in something.
My first car was a 1965 Chevy Malibu. Like many cars built at the time, it was a simple and straightforward design at every scale. You didn’t need a degree in electrical engineering, computer science, or be a mechanic to understand all the details of such a beautiful machine. Then again, like that car, society was once largely dependent on mechanical systems that could be explained, taken apart, fixed, and put back together again.
Today, my neighbor complains that he doesn’t understand new cars. Being that he’s a mechanic, that’s a problem. Unlike my ‘65 Malibu, many cars on the road today are more electronic than they are mechanical. My neighbor doesn’t understand the modern vehicle because, like 99% of us, he can’t take it apart and put it back together again without destroying the thing. Why is that? The reason, of course, is that technology has evolved from separate mechanical subsystems—like our muscles and limbs—to highly integrated electronic networks—like the human brain. Thus, when he or I open up the hood of my new car today what do we see? Nothing but a nicely curved black box.
Read More @ Financial Sense.com
from RussiaToday:
While Germany is striving to make sure the Euro stays afloat, its old currency, the Deutschmark, is showing no signs of being discarded. RT’s Peter Oliver has the details of Berlin’s old school savings for a rainy day.
While Germany is striving to make sure the Euro stays afloat, its old currency, the Deutschmark, is showing no signs of being discarded. RT’s Peter Oliver has the details of Berlin’s old school savings for a rainy day.
The
European Central Bank should do more to stem the crisis in the eurozone
because the current financial facilities are not enough, the
secretary-general of the Organisation for Economic Cooperation and
Development has said.
from The Telegraph:
“If you have the ECB which can work in the markets in order to bring
down maturities then why not?” Angel Gurria told a news conference
during an international business and political conference in Slovenia.
“The system is at stake, the euro should not be put at risk … the EFSF and the ESM are not enough, fast enough, reactive enough,” Mr Gurria added.
He was referring to the European Financial Stability Facility and the European Stability Mechanism, the new, permanent euro rescue fund seen as a key fiscal pillar in Europe’s efforts to stem the crisis.
Mr Gurria said he “hoped and expected” Germany’s Constitutional Court would approve the ESM on September 12, after it was endorsed by parliament in June. Failure to approve it would almost certainly doom the ESM.
Asked if the ECB should start unlimited bond buying, he said: “Yes, I believe they should, the sooner, the better.”
Read More @ Telegraph.co.uk
from The Telegraph:
“If you have the ECB which can work in the markets in order to bring
down maturities then why not?” Angel Gurria told a news conference
during an international business and political conference in Slovenia.“The system is at stake, the euro should not be put at risk … the EFSF and the ESM are not enough, fast enough, reactive enough,” Mr Gurria added.
He was referring to the European Financial Stability Facility and the European Stability Mechanism, the new, permanent euro rescue fund seen as a key fiscal pillar in Europe’s efforts to stem the crisis.
Mr Gurria said he “hoped and expected” Germany’s Constitutional Court would approve the ESM on September 12, after it was endorsed by parliament in June. Failure to approve it would almost certainly doom the ESM.
Asked if the ECB should start unlimited bond buying, he said: “Yes, I believe they should, the sooner, the better.”
Read More @ Telegraph.co.uk
By Ross Kenneth Urken, Daily Finance
To most of us, “debtors’ prison” sounds like an archaic institution,
something straight out of a Dickens novel. But the idea of jailing
people who can’t pay what they owe is alive and well in 21st-century
America.
According to a report in The Wall Street Journal, debt collectors in Missouri, Illinois, Alabama and other states are using a legal loophole to justify jailing poor citizens who legitimately cannot pay their debts.
Here’s how clever payday lenders work the system in Missouri — where, it should be noted, jailing someone for unpaid debts is illegal under the state constitution.
First, explains St. Louis Post-Dispatch, the creditor gets a judgment in civil court that a debtor hasn’t paid a sum that he owes. Then, the debtor is summoned to court for an “examination”: a review of their financial assets.
Read More @ DailyFinance/com
To most of us, “debtors’ prison” sounds like an archaic institution,
something straight out of a Dickens novel. But the idea of jailing
people who can’t pay what they owe is alive and well in 21st-century
America.According to a report in The Wall Street Journal, debt collectors in Missouri, Illinois, Alabama and other states are using a legal loophole to justify jailing poor citizens who legitimately cannot pay their debts.
Here’s how clever payday lenders work the system in Missouri — where, it should be noted, jailing someone for unpaid debts is illegal under the state constitution.
First, explains St. Louis Post-Dispatch, the creditor gets a judgment in civil court that a debtor hasn’t paid a sum that he owes. Then, the debtor is summoned to court for an “examination”: a review of their financial assets.
Read More @ DailyFinance/com
by Michael Krieger, Liberty Blitzkreig
As of late, I have noticed increased usage of the very dangerous and
duplicitous meme “time to look forward.” This is typically used as a
rebuttal to someone questioning past crimes committed by the criminal
elite and their henchmen. The statement seems to work well on the
sheeple, as in their minds this sounds reasonable. That is always how
the elite target the sheeple mind. Say something that sounds good and
assume they won’t think too much. Unfortunately, it usually works. I
mean, why dwell on past mistakes when we have so much work to do to make
for a better future! Of course, this is completely ridiculous. For
one thing, the biggest threat to our future is a lack of confidence and
the reason for the lack of confidence is the increasing realization that
a criminal oligarchy runs America and is never held accountable for
their crimes. They have total immunity. So who wants to invest in and
participate in such a society? No one, of course.
However, the meme is even more dangerous on a philosophical level. By definition the moment after a crime is committed it is immediately “in the past.” So not dwelling on the past and “looking toward the future” means that you can essentially excuse any crime you want forever. Not only past crimes but also future crimes since as soon as a crime is committed it will be moved into the category of “the past.” See how these guys operate. They love semantics to make people think their own servitude “seems reasonable.” So my advice to everyone is that the minute you hear anyone in a position of power or influence utter this meme you know they are not to be trusted.
Read More @ LibertyBlitzkreig.com
As of late, I have noticed increased usage of the very dangerous and
duplicitous meme “time to look forward.” This is typically used as a
rebuttal to someone questioning past crimes committed by the criminal
elite and their henchmen. The statement seems to work well on the
sheeple, as in their minds this sounds reasonable. That is always how
the elite target the sheeple mind. Say something that sounds good and
assume they won’t think too much. Unfortunately, it usually works. I
mean, why dwell on past mistakes when we have so much work to do to make
for a better future! Of course, this is completely ridiculous. For
one thing, the biggest threat to our future is a lack of confidence and
the reason for the lack of confidence is the increasing realization that
a criminal oligarchy runs America and is never held accountable for
their crimes. They have total immunity. So who wants to invest in and
participate in such a society? No one, of course.However, the meme is even more dangerous on a philosophical level. By definition the moment after a crime is committed it is immediately “in the past.” So not dwelling on the past and “looking toward the future” means that you can essentially excuse any crime you want forever. Not only past crimes but also future crimes since as soon as a crime is committed it will be moved into the category of “the past.” See how these guys operate. They love semantics to make people think their own servitude “seems reasonable.” So my advice to everyone is that the minute you hear anyone in a position of power or influence utter this meme you know they are not to be trusted.
Read More @ LibertyBlitzkreig.com
by Jeff Berwick, Dollar Vigilante:
Hello from Santiago, Chile,
By the time you read this I should be back in Acapulco, but I write this from the airport in Santiago.
I spent most of the week in Santiago, Chile. I’m going to have a lot of updates for subscribers on what I found there… but in the meantime, at the Santiago airport I did as I always do and was waiting to be the last on the airplane. Just like Wayne Gretzky used to do… be the last on the ice. I’m always the last on the plane. While everyone else runs to line-up when they call for boarding I sit, calmly, usually drinking a scotch. Once everyone is on board I then stroll up and show my papers. Why do I do this? Because, then, as the last to board, any seat I want is mine. I can either choose to sit beside a cute girl or sit in an empty row. But the funny part of my boarding tonight at 2:40am in Santiago was that I was out most of the night enjoying the best that Santiago has to offer (which is a lot – more to subscribers soon) and arrived at the airport with a buzz. I compounded it by ordering what would technically be called in Canada a “quadruple scotch” in a plastic cup to go at an airport bar… but here it’s just called “a scotch”.
Read More @ DollarVigilante.com
Hello from Santiago, Chile,By the time you read this I should be back in Acapulco, but I write this from the airport in Santiago.
I spent most of the week in Santiago, Chile. I’m going to have a lot of updates for subscribers on what I found there… but in the meantime, at the Santiago airport I did as I always do and was waiting to be the last on the airplane. Just like Wayne Gretzky used to do… be the last on the ice. I’m always the last on the plane. While everyone else runs to line-up when they call for boarding I sit, calmly, usually drinking a scotch. Once everyone is on board I then stroll up and show my papers. Why do I do this? Because, then, as the last to board, any seat I want is mine. I can either choose to sit beside a cute girl or sit in an empty row. But the funny part of my boarding tonight at 2:40am in Santiago was that I was out most of the night enjoying the best that Santiago has to offer (which is a lot – more to subscribers soon) and arrived at the airport with a buzz. I compounded it by ordering what would technically be called in Canada a “quadruple scotch” in a plastic cup to go at an airport bar… but here it’s just called “a scotch”.
Read More @ DollarVigilante.com
from TheRealNews:
Bill Black: Even though many on Wall St. understand need for regulation, most want a free-for-all and damn the consequences.
Bill Black: Even though many on Wall St. understand need for regulation, most want a free-for-all and damn the consequences.
from AnotherBoringWeek:
National Archives and Records Administration – ARC Identifier 4525053 / Local Identifier 330-DVIC-709472 – The Invisible Sword – Department of Defense. Office of the Secretary of Defense. (09/18/1947 – ). Audience: All Service Attendees At Non-Commissioned Officer Academies Or Officer Career Courses. Synopsis: Provides soldiers with psychological operations (PSYOP) terminology and developments and shows how PSYOP is used as both an offensive and defensive tool. PSYOP coordination requirements and the integration process for including PSYOP into military operations is also included.
National Archives and Records Administration – ARC Identifier 4525053 / Local Identifier 330-DVIC-709472 – The Invisible Sword – Department of Defense. Office of the Secretary of Defense. (09/18/1947 – ). Audience: All Service Attendees At Non-Commissioned Officer Academies Or Officer Career Courses. Synopsis: Provides soldiers with psychological operations (PSYOP) terminology and developments and shows how PSYOP is used as both an offensive and defensive tool. PSYOP coordination requirements and the integration process for including PSYOP into military operations is also included.
by Charles Abbott, TheGlobeAndMail.com:
Comments by Federal Reserve Chairman Ben Bernanke at Friday’s Fed
symposium in Jackson Hole, Wyo., have many participants in the weekly
Kitco News Gold Survey saying they expect higher gold prices next week.
Bernanke said Friday he’s open to enact more quantitative easing to help bring down U.S. unemployment. The Fed has a dual mandate to keep inflation under control and stabilize employment.
In the Kitco News Gold Survey, out of 33 participants, 24 responded this week. Of those 24 participants, 15 see prices up, while six see prices down, and three are neutral or see prices moving sideways. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.
With the door opened to more quantitative easing just a little bit more, gold could continue to rally. Spencer Patton, founder and chief financial officer at Steel Vine Investments, said while Bernanke didn’t officially offer quantitative easing in his speech today, it’s on the table. “Markets and gold should rally on this all next week,” Patton said.
Read More @ TheGlobeAndMail.com
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Comments by Federal Reserve Chairman Ben Bernanke at Friday’s Fed
symposium in Jackson Hole, Wyo., have many participants in the weekly
Kitco News Gold Survey saying they expect higher gold prices next week.Bernanke said Friday he’s open to enact more quantitative easing to help bring down U.S. unemployment. The Fed has a dual mandate to keep inflation under control and stabilize employment.
In the Kitco News Gold Survey, out of 33 participants, 24 responded this week. Of those 24 participants, 15 see prices up, while six see prices down, and three are neutral or see prices moving sideways. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.
With the door opened to more quantitative easing just a little bit more, gold could continue to rally. Spencer Patton, founder and chief financial officer at Steel Vine Investments, said while Bernanke didn’t officially offer quantitative easing in his speech today, it’s on the table. “Markets and gold should rally on this all next week,” Patton said.
Read More @ TheGlobeAndMail.com
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