Euro Suddenly Crashes On No News

Two weeks ago, this happened to the world’s allegedly most liquid On The Run bond on no news, which subsequently sent the entire market plunging before James Bullard was forced to hint at QE4 and send the market into a short-selling spasm (and a Bank of Japan hyperinflationary Hail Mary) that has since seen it hit record highs.

This post was published at Zero Hedge on 11/02/2014.

The Zombie System: How Capitalism Has Gone Off The Rails

Authored by Michael Sauga, originally posted at Der Spiegel,
Six years after the Lehman disaster, the industrialized world is suffering from Japan Syndrome. Growth is minimal, another crash may be brewing and the gulf between rich and poor continues to widen. Can the global economy reinvent itself?
A new buzzword is circulating in the world’s convention centers and auditoriums. It can be heard at the World Economic Forum in Davos, Switzerland, and at the annual meeting of the International Monetary Fund. Bankers sprinkle it into the presentations; politicians use it leave an impression on discussion panels.
The buzzword is “inclusion” and it refers to a trait that Western industrialized nations seem to be on the verge of losing: the ability to allow as many layers of society as possible to benefit from economic advancement and participate in political life.
The term is now even being used at meetings of a more exclusive character, as was the case in London in May. Some 250 wealthy and extremely wealthy individuals, from Google Chairman Eric Schmidt to Unilever CEO Paul Polman, gathered in a venerable castle on the Thames River to lament the fact that in today’s capitalism, there is too little left over for the lower income classes. Former US President Bill Clinton found fault with the “uneven distribution of opportunity,” while IMF Managing Director Christine Lagarde was critical of the numerous financial scandals. The hostess of the meeting, investor and bank heir Lynn Forester de Rothschild, said she was concerned about social cohesion, noting that citizens had “lost confidence in their governments.”
It isn’t necessary, of course, to attend the London conference on “inclusive capitalism” to realize that industrialized countries have a problem. When the Berlin Wall came down 25 years ago, the West’s liberal economic and social order seemed on the verge of an unstoppable march of triumph. Communism had failed, politicians worldwide were singing the praises of deregulated markets and US political scientist Francis Fukuyama was invoking the “end of history.”
Today, no one talks anymore about the beneficial effects of unimpeded capital movement. Today’s issue is “secular stagnation,” as former US Treasury Secretary Larry Summers puts it. The American economy isn’t growing even half as quickly as did in the 1990s. Japan has become the sick man of Asia. And Europe is sinking into a recession that has begun to slow down the German export machine and threaten prosperity.
Capitalism in the 21st century is a capitalism of uncertainty, as became evident once again last week. All it took were a few disappointing US trade figures and suddenly markets plunged worldwide, from the American bond market to crude oil trading. It seemed only fitting that the turbulence also affected the bonds of the country that has long been seen as an indicator of jitters: Greece. The financial papers called it a “flash crash.”

This post was published at Zero Hedge on on 11/02/2014.

Precious Metals Bear Market (Phase III)

We ended our last essay, entitled ‘Apocalypse Now ‘ with the question has your market guru been advising you to buy all the way down from the highs of 2011? If so, don’t you think it’s time to reexamine your premise. Well, if you have maybe you are ready to adopt a different strategy so as to survive the final phase III of this precious metals bear market. This final part 3 essay lays out a suggested game plan to both survive the bear and to transition to the next bull market in the PMs. I want to remind all readers that I am not anti-gold. In fact, I am a long term hard money advocate who in fact is anti-fiat money, however I prefer to lose my opinion over losing my money thus I am not attached to dogma and I strive to be objective while analyzing markets rather than apply my own ideology to fit the market. ()
I have deferred publishing The Strategy-part 3 until now as I first wanted Mr Market to deliver his verdict that we here at Rambus Chartology have gotten these market phases right. Since this analysis is so outside the mainstream it has been met with universal skepticism from the beginning. This week the PM market officially entered Phase III of the great precious metals bear market of 2011-201X, and the market has validated our thesis. No more can our analysis be panned by perma-bull soothsayers, as we have established a documented track record which forecast this event as far back as two years ago. After the Goldman bear raid 19 months ago, we were able to put a stake in the ground of this bear market and use that event to identify the public’s collective recognition that we were in a bear market which we labeled point of recognition (POR). Using the POR as a known time and event plus chartology we were able to model the eventual outcome of this bear market. Despite most PM market gurus repeating continuous calls of a bottom. we held steadfast in our conviction that this bear would not be over until we witnessed the final phase III.

This post was published at Gold-Eagle on November 2, 2014.

The American Dream: “You Have To Be Asleep To Believe It”

“It’s never gonna get any better, be happy with what you got… because the ‘owners’ of this country don’t want that. The ‘real’ owners of America – the big wealthy business interests that control things and make all the important decisions – got you by the balls… What they don’t want is a population of well-educated people capable of critical thinking.”
Three minutes of uncomfortable truth…

Zero Hedge


This post was published at Zero Hedge on on 11/02/2014.

What About Gold Now?

Nick Migiliaccio has asked the question, ‘Why Is Gold Treated So Badly’ in this article from him.
His point is that gold prices are set in US Dollars primarily on the COMEX, and those prices are mostly created by algorithms and speculators (such as JP Morgan) selling PAPER contracts to others who want to buy PAPER contracts. Very little actual gold changes hands. So are COMEX prices real and representative of the actual physical market?
Option A: Yes, all prices are real. End of story.
Option B: COMEX prices are paper prices and are heavily manipulated by computer trading, High Frequency Trading algo’s, agents of the Central Banks, the Treasury, and other large pools of digital currency who have an agenda to either knock down or drive up the prices for gold.
His point: Look at MNT. TO which represents deliverable gold. It is more real than COMEX.
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Why is Gold Treated so Badly? By Nick Migliccio ‘How could this be in this time of instant information? Consider a programmer’s saying from the last century: ‘GARBAGE IN, GARBAGE OUT.’ Use compromised data going into your work and your answers will be compromised as a result.

This post was published at Deviant Investor on on November 2, 2014.

WHY I’M VOTING – TDV WEEK IN REVIEW, NOVEMBER 2, 2014

I am voting this year.
I usually don’t vote, not because of any “anarchist” principles but mostly due to apathy. Voting is definitely, 100%, NEVER EVER going to change the world for a holistic better, and if you think it is going to do so then I highly suggest studying up on Nazi Germany and the Soviet Union.
I don’t vote all too often. Instead I work very hard in favor of things that I believe in: love, peace, nature, etc. I try to harbor these things within me. These things have nothing to do with voting. The only thing that changes this world for the better is the awakening of the individual to his or her own agency in life. And usually this awakening leads to withdrawing from the hierarchy-promotion industry.
This year I am voting for a few reasons. In the State of California – of which I am currently a subject – there is a lot of stuff on the ballot. A lot of stuff about tax revenue and increasing it. These will all be ‘no’ votes. In fact, there are a lot of things on the ballot which benefit California, a state which incarcerates millions for non-violent offenses. I don’t want to raise money for a questionable organization. Any sort of propositions that equate to investment advice, I will be voting for things that do not promote the financial stabilization of California. If California wants useful investment advice, I require a retainer fee, a salary and benefits.

This post was published at Dollar Vigilante on November 2, 2014.

Most People Cannot Even Imagine That An Economic Collapse Is Coming

The idea that the United States is on the brink of a horrifying economic crash is absolutely inconceivable to most Americans. After all, the economy has been relatively stable for quite a few years and the stock market continues to surge to new heights. On Friday, the Dow and the S&P 500 both closed at brand new all-time record highs. For the year, the S&P 500 is now up 9 percent and the Nasdaq is now up close to 11 percent. And American consumers are getting ready to spend more than 600 billion dollars this Christmas season. That is an amount of money that is larger than the entire economy of Sweden. So how in the world can anyone be talking about economic collapse? Yes, many will concede, we had a few bumps in the road back in 2008 but things have pretty much gotten back to normal since then. Why be concerned about economic collapse when there is so much stability all around us?
Unfortunately, this brief period of stability that we have been enjoying is just an illusion.
The fundamental problems that caused the financial crisis of 2008 have not been fixed. In fact, most of our long-term economic problems have gotten even worse.
But most Americans have such short attention spans these days. In a world where we are accustomed to getting everything instantly, news cycles only last for 48 hours and 2008 might as well be an eternity ago.
In the United States today, our entire economic system is based on debt.
Without debt, very little economic activity happens. We need mortgages to buy our homes, we need auto loans to buy our vehicles and we need our credit cards to do our shopping during the holiday season.
So where does all of that debt come from?
It comes from the banks.

This post was published at The Economic Collapse Blog on November 2nd, 2014.

Deutsche Bank: negative interest ‘no longer a rarity soon’

Asoka Whrmann commands as chief investor Deutsche Bank over a trillion euros. He warns savers not to leave their money lying around on savings accounts. His appeal: Consume and invest.
From the perspective of the top asset manager of Deutsche Bank penalty interest on accounts and savings accounts will soon be the norm. ‘A few banks have charged their customers now negative interest rates. This is likely, given the low interest rate policy of the European Central Bank soon be no longer a rarity’.
DB – Negative IR for everyone soon
ell, now that Deutsche Bank is going public on this as well, we could see some people take his advice and move their money out of the banks’ Paper world …. into something real.

This post was published at Investment WatchBlog on November 2nd, 2014.

FBI To Probe Accounting Fraud At Multi-Billion REIT

While the Fed and the BOJ were by far the biggest news of the past week, explicitly admitting that the world simply can not exist without one central bank passing the monetization torch to someone else, a surprising, and scare for its shareholders, development took place when REIT American Realty Capital Properties, with a then-market cap of over $10 billion, announced, under the cover of the Fed ending QE3, that it had overstated its adjusted funds from operation, a cash flow key metric used by REITs, from the first- and second-quarters of 2014. As the WSJ reminds us, while the amount of money involved, some $23 million, was “relatively small”, the irregularities resulted in the resignation of the company’s chief financial officer, Brian Block, and chief accounting officer, Lisa McAlister. The result: a crash in the stock that wiped out nearly 30% or nearly $4 billion in market cap.
A bigger question of course is why did a multi-billion dollar company feel compelled to lie about what on the surface is peanutes, and what other lies plague the company’s cash flow and income statements, not to mention its balance sheets. That, and also because there is never just one lack of cashflow cockroach, one wonders which other REITs have been systematically overstating their financial health.
We may learn soon, because as Reuters reports the Federal Bureau of Investigation is conducting the investigation along with prosecutors from U. S. Attorney Preet Bharara’s office in New York, the sources said. Further details of the probe could not be learned.
American Realty Capital Properties said on Wednesday it would have to restate earnings after it discovered employees “intentionally made” accounting mistakes that caused it to understate net losses during the first half of 2014. Its chief accounting officer and chief financial officer resigned on Tuesday. Andy Merrill, a spokesman for American Realty Capital, had no immediate comment when contacted by Reuters.
A criminal probe raises the stakes for the company, which has seen its shares fall almost 30 percent since the disclosure of the accounting issues on Wednesday, wiping out around $4 billion of its market value. The U. S. Securities and Exchange Commission is also investigating the company, according to the Wall Street Journal.

This post was published at Zero Hedge on 11/02/2014.

Chart Of The Day: US Decouples From The Rest Of The World… And From The US Itself

The global economy is like a jetliner that needs all of its engines operational to take off and steer clear of clouds and storms. Unfortunately, as Nouriel Roubini tells The Guardian, only one of its four engines is functioning properly: the Anglosphere (the United States and its close cousin, the United Kingdom). AsRoubini continues, the question is whether and for how long the global economy can remain aloft on a single engine. Weakness in the rest of the world implies a stronger dollar, which will invariably weaken US growth. The deeper the slowdown in other countries and the higher the dollar rises, the less the US will be able to decouple from the funk everywhere else, even if domestic demand seems robust. But it’s not just the rest of the world that is decoupling from US growth… as the following uncomfortable chart shows, so is a crucial pillar of monetary policy transmission, consumer wealth perception, and economic stability – the US housing market itself.
The decoupling… globally (China, Europe, and Japan all seeing GDP estinmates slashed)

This post was published at Zero Hedge on 11/02/2014.

Oh Boy! Get Ready. The Paranoid Nutjobs at the NSA Will Be About To Read Your Thoughts

Believe it or not, Scientists at the University of California, Berkeley, have developed a machine and computer program which converts brain activity into sounds and words. That’s correct! Speech activates specific neurons as the brain operates to interpret the sounds as words. Each word activates a slightly different set of neurons. This is how language functions – it is actually pattern recognition with sound rather than sight.
These scientists have begun to develop an algorithm that can pick up the activity and translate it back into words from outside your mind. They claim this technology will help people who are unable to speak. In reality, it will help the NSA transcend everything to fill their paranoia about what people are thinking and can they eliminate those who would overturn their power. This is Stalin unplugged and unlimited.

This post was published at Armstrong Economics on November 2, 2014.

The oxymoron of the labor force when labor means not working: 92 million Americans are not in the labor force with 12 million of those being added only in the last 4 years.

This week we will be getting the employment numbers. The unemployment rate is expected to stay steady or even drop which is comical given that we have 92 million Americans not working today and another 19 million that are fully unemployed. Those not in the labor force continues to grow beyond the basic changes in demographics. This topic rarely receives any coverage since those not working largely have no funds to back lobbying groups or to put ads out in the media. Yet we can see this dissatisfaction when Americans are asked about their views on the economy. The majority think the economy is doing poorly and this is expected given the underlying numbers. You have young Americans going to college and many are coming out to low wage jobs and hefty student loans. In the last 4 years alone we have added 12 million Americans to the not in the labor force category. This measure is used to calculate the unemployment rate and given this group is not factored in, the unemployment rate looks much better than it truly is. The oxymoron that we have is we have a labor force that is largely not doing labor.
Labor force not working
The biggest startling fact most Americans are unaware of is that one out of three Americans support the other two-thirds of the nation. First, you have the massive 92 million not in the labor force. Another 19 million are labeled as unemployed. Then you have over 32 million working in government jobs. When we look at the actual private sector workforce, we then begin to see that our employment numbers are not as great as many would like you to believe.
Take a look at these figures:

This post was published at MyBudget360 on November 2, 2014.

There Is No Stable Monetary Policy “Risk Channel”

Via Natixis’ Patrick Artus,
In reality, central banks control only the prices of the assets they buy directly
When a central bank buys an asset directly (often government bonds), it drives up the price of this asset, the demand for which increases. But the prices of the other asset classes increase only if the economic agents that have sold the first assets to the central bank use the money received to buy these other asset classes.
This transmission of increases in asset prices to all asset classes is therefore unstable, since it depends on the behaviour of investors and savers. Since 2012, we have seen that central banks’ purchases first led asset sellers to buy risky assets (equities, corporate bonds), whose prices rose. But in the recent period, the rise in risk aversion has turned them away from risky assets, whose prices have fallen, and they have invested the money received from the central bank in risk-free assets.
There is therefore no stable monetary policy “risk channel”; the only asset prices that are controlled by central banks in the longer run are those of the assets that central banks buy directly. This could in the future push central banks to buy riskier assets if they want to change their prices in a stable manner.
Central banks’ asset purchases have a direct impact on the prices of these assets
When a central bank buys financial assets, it increases demand for these assets, which directly drives up their prices.

This post was published at Zero Hedge on on 11/02/2014.

Monetary M**turbation No Match for Deflation

European bond yields went negative last week, saddling big investors who want to sit on cash with a weighty surcharge for the financial luxury of idling. While this abnormal state of affairs is not proof in itself that deflation has finally begun to overwhelm the central banks, we’ll lay odds that it’s not going to extract Europe’s economy from quicksand, let alone ignite an increasingly prayed-for inflation. As much could be said of Japan’s latest attempt to dynamite itself from the bog of deflation. BOJ announced it was raising its annual monetary target to $724 billion from around $580 billion. Twenty years of such shenanigans has produced no successes – unless you regard bear rallies in the Nikkei as productive. Still, because it’s more about enlarging expectations than about growing the money supply, perhaps there’s still hope for the Masters of the Universe, more than a few rubes actually seem to believe inflation is on the verge of breaking out. There’s ‘Jay,’ for one, who took me to task at Korelin Economic Report for my hardcore-deflationist views: ‘Ridiculous… still wailing on about deflation, Rick?? It’ll never happen for more than brief flashes in time. Japan is answering your deflation as we speak. And 5,000 to 10,000-contract dumps on Comex precious metals have ABSOLUTELY NOTHING to do with gold signaling deflation…. Preposterous, imo.’

This post was published at Rick Ackerman on ON NOVEMBER 3, 2014.

Venezuelans, Argentinians More Satisfied With Life Than Americans

On average, people in advanced and emerging economies are considerably happier with their life situation than those in developing economies even though people in emerging economies are considerably more satisfied with their lives today than they were in 2007. However, as Pew Global Research survey shows, socialist utopias Venezuela and Argentina appear to be populated by a greater percentage of ‘satisfied’ people than ‘American Dream’-ers in the USA. Perhaps the socialism-isation of ‘fair’ America is the right path to happiness?
Emerging Markets getting happier… and Developed getting less satisfied…

This post was published at Zero Hedge on on 11/02/2014.

Bank Of America Psychopath Murderer’s Automated Email Reply Says He Is An “Insane Psychopath”

Well, if alleged Bank of America prostitute killer, as described earlier, intends to plead insanity to all charges, he is one step ahead of the prosecution already. Below is the automated reply that emails sent to Rurik Jutting’s Bank of America e-mail address are getting, per Bloomberg.
I am out of the office. Indefinitely.
For urgent enquiries, or indeed any enquiries, please contact someone who is not an insane psychopath. For escalation please contact God, though suspect the devil will have custody. [Last line only really worked if I had followed through..]‘
A random sample of emails sent to Federal Reserve officials shows that for now Jutting is the only one telling the truth. SOURCE

This post was published at Zero Hedge on 11/02/2014.

Keynesian Shangri-La From Myth To Reality

In less than the time it takes for a chrysalis to release one of life’s remarkable transformations, many once called ‘capitalists’ woke to find the world they once new changed into something only dreamed or told in folklore.
Where business models resembling unicorns abounded along with rainbows in their resembling equivalent of over-arching ETF’s. All available in a multitude of hues and proportions so plentiful: It was hard for one not to well up when contemplating. For in this new fairytale land there must certainly be a pot of gold at the end of every ‘rainbow.’ However, one would be mistaken. For one must remember this is a ‘Keynesian Shangri-la’ and gold here is useless. (insert choir music here)
Today, at the end of these self propagated rainbows lies a Central Bank ready and willing to print as much money as one needs to see those vivid colors so plainly; only the term Technicolor seems appropriate as a descriptor. (no special glasses or headset required)
Although the above is a bit tongue in cheek what it isn’t sadly to say: is fiction.
We now have entered a time where what you once knew or thought about capitalism is out the window. At least when it comes to the global financial markets.
What was once the bastion of ‘free market capitalism’ has now metamorphosed into what the devotee’s of Keynesian economics have been chomping at the bit to unleash and install. And that day is – now here.
The only bug in their soup they forgot to remember while they’ve been drooling in anticipation, waiting for its possible arrival is this: Be careful what you wish for. For you just might get it.
The Keynesian argument has been made for decades. I wonder if the man (John Maynard Keynes) would be impressed with just how much his ideology is so vehemently held in the halls of academia and political circles. Many religious devotees pale in comparison.
Once upon time people believed in free market capitalism. The relationship with the money supply. The economy, markets, interest rates and their effects on keeping governments spending in line. All that and more is now out the window along with the old draperies. No need for those silly viewpoints nor those curtains because there’s no longer a need or even the inclination as to try to hide.

This post was published at Zero Hedge on 11/02/2014.

When the SHTF, These Cheap Items Will be Worth Their Weight in Gold

If society were to break down tomorrow, the value of the things we own and the skills we have would be turned on its head. Everybody knows that certain items will be far more valuable after a grid ending event. Stuff like gold, guns, and food are a given in any conversation on preparedness. Skills like hunting, reloading, and first aid would be indispensable, while skills accounting and day trading would be completely worthless.
There are of course, other items that we may be overlooking. While things like gold and guns will be expensive in the future, they’re already quite expensive now. Once you have those bases covered on your preparedness checklist, you can start thinking in terms of ‘What’s really cheap now, but will definitely be more valuable when the SHTF? What’s going to give me the greatest return on my money?’
With that said, here’s a few barter items you can buy right now, for a fraction of what they’ll be worth when the grid goes down. Bike Tire Patches If say, there was an EMP type of event to hit America, it would take several years for the grid to be repaired. If it’s a worldwide event it will probably take even longer. Either way, the need for transportation would not go away. However, I don’t see horses making a comeback anytime soon. Even if it takes a decade for the lights to come back on, I don’t think you could breed them fast enough to accommodate the survivors. What would be far more abundant, is bicycles.
Even without maintenance, the current stock of bicycles in circulation would last a long time. The only exception to this would be the inner tube, which is prone to punctures and leakage. So having a fully stocked repair kit would be a good idea. You can keep spare inner tubes for your own bicycles, or maybe even buy a couple more to trade with (most common sizes are 27, 28, and 29 inches). Fortunately, repair kits and inner tubes are both small, and very cheap. Vitamin C In a society where the medical infrastructure has collapsed, and doctors are hard to come by, vitamin C will become one of the most important nutrients. It will also become one of the hardest to find. As far as food goes, the most obvious source is from fruit.
Consider this though; how much of the fruit in your grocery store comes from hundreds or thousands of miles away?

This post was published at The Daily Sheeple on November 2nd, 2014.