With 41 Days To The Election, Americans' Priorities Have Never Been Clearer

Forget foreign policy debacles; never mind the gridlock and polarization that is dominating a looming 'fiscal cliff'; ignore Super-PAC-dominated propaganda - it seems the well-educated American citizen is fully cognizant of what each Presidential candidate (and his party) truly stands for. As the chart below shows, priorities on Sunday night were extremely clear...

ESM Purchase Details Leaked

Hitting the tape are leaked detailes obtained by Bloomberg detailing what the ESM will focus on as it is unleashed on the world. From Bloomberg: Europe’s permanent rescue fund will invest the core of its assets in AA or higher-rated debt issued by governments, central banks, euro-area agencies and international institutions, with the power to diversify into bank debt as it grows, its draft investment guidelines say, Bloomberg’s Brian Parkin, Rebecca Christie and James G. Neuger report. The ESM will keep at least 15% of its maximum lending volume, or EU75b out of an ultimate EU500b, in “assets of the highest creditworthiness” as per guidelines obtained by Bloomberg News. Does that mean all countries rated AA or below are ineligible? Because that pretty much invalidates Spain and Italy? Or is the draft going to be releaked with the AA revised to A, then to B then to CCC until finally the EURUSD sustains an upward move for at least 10 pips? But the funniest headline of all:

• ESM PLANS `PLAIN VANILLA' BORROWING STRATEGY TO LURE INVESTORS 

Lure is truly such a great word here. After all nobody will ever get their money back.

IMF Invokes Grexit's Ghost

Perhaps the IMF forgot, but nobody in Europe is allowed to rock the boat until the Obama reelection. Either way, this just hit:

• International Monetary Fund won’t agree to further aid payment to Greece before decisions taken on new debt restructuring, Athens-based Skai.gr reports on website, without citing anyone.
• IMF insists debt ratio come down to 120% of GDP in 2020
• IMF may stop funding Greece under bailout agreement

Since the credibility of those "without citing anyone" reports is more or less negative, expect an official IMF response in minutes. On the other hand, if there is no IMF response, look for the #Grexit hashtags to promptly reappear.

Spain In A Nutshell

Confused why contrary to all public lies otherwise, Spain is Greece? Here's why

• TAX RECEIPTS THROUGH AUGUST FELL 4.6% ON YR, SPAIN DATA SHOW: perhaps their tax collectors were also on strike?
• SPAIN GOVT SPENDING THROUGH AUGUST ROSE 8.9%, BUDGET DATA SHOWS: missed the austerity by just thiiiiiiis much
• SPAIN JAN-AUG CENTRAL BUDGET DEFICIT 4.77% GDP VS 3.81% YR AGO

Luckily, there is always hope that the magic money tree will bloom eventually

• SPAIN EXPECTS HIGHER TAX REVENUE IN COMING MONTHS

So, to summarize: revenues down, spending up, budget deficit naturally higher than last year. Oh, stop calculating... and just buy their bonds. The Central Planners will make sure the math is irrelevant always and forever.

Cashin On 'Occupy' Spain

Somewhat under-the-radar amid the US media's attention to housing data is the growing chaos in Europe. UBS' Art Cashin ensures we do not forget that Europe still drives the bus as he reminds us of the rise of the 'Occupy Congress' movement in Spain and the protests later today. With youth unemployment over 50%, it is sure that Rajoy will be keeping a close eye on this demonstration and other European leaders (and Greek demonstrators) will also be paying close attention. As Art says "let's hope the streets don't explode," especially given the NY Times noting that the number of 'hungry' Spaniards rose to nearly one million this year, and even previously well-to-do middle-class citizens are now dumpster-diving for food.



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Consumer Confidence Soars As Richest And Poorest Feel Better; Middle Class Worse Off


The NY Fed is not the only place where Hopium grows anew. Moments ago the conference board reported its September confidence print, which soared by nearly 10 points to 70.3, from 60.6 in August, and expectations of a 63.1 print: this was the highest print since February when hopes that the European LTRO may work (it didn't), and the largest beat in seven months. Ironically, the February beat was driven by 6 month forward hope as well, hope which have been dashed by today's current conditions number as the spread between hope and reality once again collapses. Naturally, the driver for today's miraculous pre-election beat: 6 month outlook soared from 71.1 to 83.7. In other words, if the present did not quite work out as had been hoped, one can just defer hope one more time - surely this time the future will certainly be different. Finally, and as was to be expected, the "confidence" when broken down by income buckets: those with $50k and more in income feel better, those with $35k and less in income feel better. Who is worse off? Why the middle class of course, or those with incomes between $35-$50k.

Overnight Sentiment: Europe Back In Focus

After briefly attempting to stage a rise in the early overnight session, the EUR has since resumed its lower glidepath (something which Germany's export-focused economy and the only realy economic driver in Europe desperately needs: after all Europe is the only entity in the world whose central bank is working to promote a stronger currency) to the 1.2900 support, as once again Europe comes back into focus, exposing all its warts, scars and boils in perfect 1080HD resolution. Among the key events were a Spanish €4.00 billion bill sale as well as an Italian €3.94 billion 2 year bond sale, which despite selling at the maximum of the intended range, showed far less investor demand than on recent occasions, a development which Rabobank said is to be expected as the "Draghi effect" wanes, and once again Europe is left to its own devices. "The longer Spain delays on requesting bailout, the more the improvement in sentiment following Draghi’s pledge to save euro is likely to unwind" Richard McGuire, fixed income strategist at Rabobank, writes in client note. "Unraveling of “Draghi effect” may accelerate, with possible Moody’s downgrade this week and lack of progress at Oct. 8 Eurogroup summit." Other events out of Europe include the ongoing attempts in Spain to package lots of trash under the rug (see: Spanish Bad Bank Risks Investor Conflict With Stressed Lenders), the realization that the Swiss National Bank instead of continuing to exchange EUR for AUD, bought €80 billion of core debt according to S&P, the print of Italy's September consumer confidence which held near 15-Year lows, a French industrial sentiment which held near Two-Year lows, and so on. Greece too continues to make noises but it seems that the little country is being ignored by everyone. Catalonia's separatist tensions however are getting louder after the Barcelona province did not get the unconditional bailout it demanded (as we wrote yesterday).

One Third Of Athens Businesses Shuttered

Two weeks ago we showed the human aspect of the absolute economic collapse in Greece (because depression is too light a word to describe what is happening in this globalist vassal collony) when charting Greek unemployment surging by 1% in one month to 24.4%, and which as of September is likely nearly 30%. What this means in practical tax revenue terms (if the tax collectors were actually doing their job collecting taxes, instead of striking) is that there is nobody generating any economic products and services, and thus no state revenues. Today, Kathimerini confirms this, in a report that almost a third of all business in Athens have now shuttered: "The number of shuttered shops on the capital's busiest commercial streets, Panepistimiou and Stadiou, also hit a record high in August, reaching 34.7 percent on Panepistimiou and 42 percent on Akadimias, up 14 percent in the last six months." And so the close loop continues as fewer businesses are around to hire less people, generating less state revenue, encouraging less businesses to open and so on, until the entire country collapses in a heap of worthless debt.

Italian Parliament's Postman Revealed To Be A Coke-Dealing Mobster

It's perhaps not the most shocking headline given the circumstances but as Bloomberg reports via DPA, the man in charge of handling the correspondence at Italy's upper house of parliament was arrested Tuesday by police on drug charges. While there is no suggestion he peddled his drugs inside the senate, it seems mild-mannered Orlando Ranaldi who managed the Senate's post office by day, was a Tony Montoya-like 'Italo-Albanian' gang-member cocaine-dealer by night. We are sure Monti will just let this 'blow' over, but from now on - any unusual white powder found in envelopes may not be sniffed at like it was in the past.

Empty Promises Are Nothing New

Eric De Groot at Eric De Groot - 17 minutes ago

Bob, Why should politicians have exclusive rights to empty promises? This strategy has been used the dawn of empires. Leaders that promised the moon and spend like a drunken sailors stayed in power. That is, until the weight of debt crushes the empire from within while the barbarians cruise the perimeter probing for weakness. Only the names, faces, and the technology used to execute the... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Social, Political, and Economic Tension Rising as Global Economy Decays

Eric De Groot at Eric De Groot - 2 hours ago

2012-2020 will likely prove as challenging as 1932-1940. Headline: China carrier a show of force as Japan tension festers TOKYO/BEIJING (Reuters) - China sent its first aircraft carrier into formal service on Tuesday amid a tense maritime dispute with Japan in a show of force that could worry its neighbors. China's Ministry of Defense said the newly named Liaoning aircraft carrier... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

 

I Have Started Reassessing My View On Russia

Admin at Jim Rogers Blog - 2 hours ago

I have been terribly skeptical and downright negative on the Soviet Union and Russia for the past 40 or 50 years, but in the past few weeks and months I’ve started reassessing my view on Russia. - in the APEC CEO Summit, Vladivostok, Russia Related: Market Vector Russia ETF Trust (RSX) * **Jim Rogers is an author, financial commentator and successful international investor. He has been frequently featured in Time, The New York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The Financial Times and is a regular guest on Bloomberg and CNBC.* 

 

The Next Fed Chairman Will Also Be A Money Printer

Admin at Marc Faber Blog - 2 hours ago

Bernanke is a money printer and, believe me, if Romney wins the election the next Fed Chairman will also be a money printer. -* in CNBC * *Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.* 

 

Climbing the Wall of Worry

Eric De Groot at Eric De Groot - 3 hours ago

Standing alone with a singular mind while the crowd chastises you for being different will likely the greatest obstacle to profits for the vast majority of investors. How many recall a similar bearish call by GS in June 2012? Could the fiscal cliff cause stocks to decline next quarter? Sure, but the decline could very well be driven by the end of days... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] 

 

Deutsche bank issues call for purchase of gold and a return to gold standard/ Gold demand rises in India/German confidence levels sour/Catalonia may seek to secede from Spain/

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 17 hours ago

Good evening Ladies and Gentlemen: Gold closed down $13.20 to $1662.10.  Silver also fell in sympathy down 65 cents to $33.92. During the weekend, Deutsche Bank issued a report calling on investors to buy gold as an investment.  Not only did they pound the table for the purchase of gold but they also called for a return of the gold standard. Strange for a major bank!! Today we saw strong gold

Blowback Works Both Ways

Ahmadinejad may well be playing the same long game as Osama bin Laden:

We are continuing this policy in bleeding America to the point of bankruptcy.
Osama bin Laden

And they may succeed (although those who believe that war is a stimulus that can end a depression will surely disagree — as Antal Fekete has noted, Western governments may look to a new hot war in the middle east as an opportunity to exit an economic depression that they cannot control).  But for Ahmadinejad and Iran, it may come at a huge, huge cost — a long painful invasion, ending in death in the street or on the gallows. Neoconservatism — and Obama and Romney are both to lesser and greater degrees neoconservatives — is a violent utopian ideology that seeks to force the entire world — by whatever means and at any cost — to conform to American foreign policy imperatives. As America should have learned a long time ago — and as Ahmadinejad may well soon learn — needlessly pissing off violent utopian ideologues creates blowback.

Breaking Down The Fiscal Cliff In 12 Charts

Investors remain convinced, it would seem, that the fiscal cliff will not happen because our great-and-good politicians in Washington know full-well that the economic repercussions will be too great. Even though Ben's foot is to the floor, he has stated that monetary policy will be unable to offset the negative economic impact of the tax hikes and spending cuts. The prospect of agreement among a deeply polarized politik and just as Goldman expects, we worry that the S&P 500 will fall sharply following the election once investors finally recognize the serious possibility that the 'fiscal-cliff-problem' will not be solved in a smooth manner. In order to clarify that thinking, Bloomberg Brief has provided 12 charts on the timelines, impact, uncertainty, and possibilities surrounding this most obvious of risk events.

July Case Shiller Beats And Misses At The Same Time

Some time ago, before China's hard landing was virtually assured (see Iron Ore prices), there was a period when its data was a veritable cornucopia of Schrodingerian ambivalence, with various economic indicators representing either growth or contraction at the same time. It appears that the modified wave-particle duality has just shifted to the US, whose housing segment is the latest patient of wave function collapse as the July Case Shiller index printed both a beat and a miss at the same time. The Top 20 composite index beat in the NSA Year over Year price change, which was +1.2%, on expectations of +1.05%, and up from a revised 0.59. However, it missed in the sequential Top 20 Composite price change, which printed at 0.44%, below expectations and half off the June price increase of 0.91%. In fact, as the chart below shows, the July increase was now the slowest sequential increase in the past 5 months, and at this rate, the August, or September data at the latest, will show a sequential decline in prices, as the euphoria from the Rent-to-REO fades, and as the massively pent up foreclosure inventory is finally forced to come to market and drag prices far below where the currently artificially propped up market "clears" (read Foreclosure Stuffing).

Chart Of The Day: Entitlements Or Growth

"Dollars spent on entitlements dwarf those spent on discretionary items such as education, and tower over net fixed business investment, which is partially responsible for greater productivity, business expansion and rising living standards. Periods with greater investment as a share of GDP are highly correlated with both faster economic growth and rising living standards. One risk to the U.S. economy is that rising entitlement spending will require the government to borrow from the finite amount of capital held by private savers, thus squeezing out private firms that need the capital to expand businesses and increase productivity."

LTRO Smoke, OMT Mirrors, Fiscal Sledgehammers

The final quarter of 2012 is going to prove increasingly challenging. All the issues the EU Elites were able to bury, smooth and bluster through the summer are coming back to the fore. The immediate challenges are Spain, contagion, and banks, and who knows how many sucker punches wait in the wings? It’s no wonder banks are de-leveraging by cutting lending (and accelaterating recession) instead of raising new capital. Well at least the Euro Elites understand it.. This morning we have Bank of Italy chief Visco saying “Italian Banks lowering Leverage Reduces Risk…”

Daily US Opening News And Market Re-Cap: September 25

Risk-averse sentiment was prevalent throughout the session, after both Spain and Italy sold bonds/T-bills, which attracted weak bidding and hence saw lower than exp. b/c. In addition to that, yields on 3m and 6m Spanish T-bills were higher, with some pointing to the fact that the Treasury has been forced to step up its T-bill issuance to meet its zero net funding target (higher supply). As a result, peripheral bond yield spreads are wider by around 9bps, with Italian bonds underperforming given the supply later on in the week. This underperformance was also evident in the equity space, where the domestic stock exchange is seen lower by over 1%, compared to DAX which is only lower by 0.4%. In the FX space, firmer USD weighed on both EUR/USD and GBP/USD, both trading in close proximity to intraday option expiry levels.

Frontrunning: September 25

• China carrier a show of force as Japan tension festers (Reuters)
• Draghi Rally Lets Skeptics Dump Spain for Bunds (Bloomberg)
• China’s Central Bank Injects Record Funds to Ease Cash Crunch (Bloomberg)
• Obama warns Iran on nuclear bid, containment 'no option' (Reuters)
• When Would Bernanke’s Successor Raise Rates? (WSJ) that's easy - never
• Italy's Monti Downplays Sovereignty Risk (WSJ)
• Portugal swaps pay cuts for tax rises (FT)
• Madrid faces regional funding backlash (FT)
• Berlin Seeks to Push Back New Euro-Crisis Aid Requests (WSJ)
• Race Focuses on Foreign Policy (WSJ)
• China Speeds Up Approvals of Foreigners’ Stock Investment (Bloomberg)

Today’s Items:

First…
Greece and Its Oil Reserves
http://reaganiterepublicanresistance.blogspot.com

As Greece takes unpopular austerity measures to get their tattered books in order, what is interesting is that no one is talking about the 22 billion barrels, or $9 trillion worth in oil reserves in the Ionian Sea.    This may be one reason that Angela Merkel went from her previously ambivalent stand to save Greece at any cost position.    So, what the Greeks need to do right now is…    Get rid of Central Bankers interference, like Iceland, and then get to work and drill, drill, drill.

Next…
Bernanke is Getting Blamed?
http://www.businessinsider.com

Well holy bat crap folks! Monetarist, around the world, are actually beginning to turn on ole “Sugar Daddy” Benji Bernanke.    They are actually blaming him for stopping natural market forces, and creating the great recession or “Bernanke Depression” as they are calling it.    This is odd, since Benji is supposedly the expert on the makings of the “Great Depression.”    Where were these so-called economists for the past few years?    Were they trying on a blue dress, or something?    Of course, lets not forget the politicians, in both political parties, that stood by and cheered Benji on.

Next…
Silver Smashed
http://www.silverdoctors.com

In less than 5 minutes, 50 percent of the US annual production of silver was dumped onto the markets.    This dropped the price of silver by about two dollars; however, this is only more paper flying.    Remember, JP Morgan is simply taking the actions requested by the Fed err… its clients.

Next…
Towns Coin Their Own Currencies
http://www.cnbc.com

It is not just the US that has competing currencies that run in parallel with the establishment’s main collapsing currenies, there are some in the euro-zone as well.    In fact, one local currency saw a 6 million euro turnover, or a 20 percent change just last year.     As the main fiat currencies race to absolute trash, more and more of local currencies will come into existence.

Next…
Americans Are Literally Being Worked To Death
http://theeconomiccollapseblog.com

In the 70′s, the average American worked about 35 hours a week.    Today, if one has a full-time job, they work, on average, 46 hours and this does not include about 7 hours checking emails.    Many Americans are not working 60 or 70 hours per week because they want to.    Many are doing it because that is what they must do just to survive.    Needless to say, all this work is causing physical and emotional stress that leads to death.    If this describes you, you may need a vacation….    If you can afford it.

Next…
California Vote Against GMO
http://www.naturalnews.com

On November 6th, Californians will be voting on Proposition 37, which force mandatory labeling of genetically-modified organisms on  food labels.    Many so-called natural companies, which are subsidiaries of larger corporations, are against this because their product is not a natural as they claim.    With that in mind, Californians will hopefully vote for life and tell Nestle, Pepsi, Kraft, Kelloggs, and others exactly where to stick their stealth GMO foods.

Finally, please prepare now for the escalating economic and social unrest.    Good Day!

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