Merkel Ally Slams Draghi’s Plan To “Buy Junk Paper”

While Italian and Spanish political (and business) leaders are lauding Mario Draghi’s plan to buy more assets and print more money, it appears not everyone is so excited. As Reuters reports, Christian Social Union chairman and Bavaria state premier Horst Seehofer (who is well known as an ally of Angela Merkel), blasted the ECB’s plan: “It’s only going to frighten a lot of people when ECB chief Mario Draghi opens up the central bank’s money tap and at the same time buys junk paper,” somewhat breaking the political taboo of criticizing the potential independence of the central bank.

This post was published at Zero Hedge on 09/08/2014.

Gold Seeker Closing Report: Gold and Silver Fall About 1%

The Metals:
Gold dropped down to $1251.56 at about 1PM EST before it bounced back higher at times, but it still ended with a loss of 1.04%. Silver slipped to as low as $18.916 and ended with a loss of 0.89%.
Euro gold fell to about 973, platinum lost $11 to $1395, and copper remained at about $3.17.
Gold and silver equities fell over 3% by midday and remained near that level for the rest of the day.

This post was published at GoldSeek on 8 September 2014.

Much Dollar Ado About Nothing In Stocks & Bonds

Today some very significant moves across asset-classes – despite the apparent close-to-close ‘blahness’ of stocks (Dow, S&P, Trannies small red, Nasdaq green) and bonds (30Y unch, 5Y 2bps) from Friday’s close. The USD surged to fresh 15-month highs, ripping another 0.6% higher as GBP, EUR (1.28xx), and JPY (106.xx) all faded dramatically. US equity markets entirely decoupled from JPY (in fact became negatively correlated) and US Treasury yields ripped higher – tick for tick with USDJPY’s rise. Gold and silver slipped 1% on the day, copper limped higher (after an early plunge) andoil rebounded to close with a small loss near $93 (Brent under $100 for first time in 14 months). Late-day news of ‘delayed’ sanctions sparked the standard post-EU-close buying panic, regained S&P 2,000 (and Futs hit VWAP), and ensured Friday’s bad-news-is-good-news jobs meme stands.

This post was published at Zero Hedge on 09/08/2014.

Gold Daily and Silver Weekly Charts – Abide

Gold and silver had the usual hit today, that was almost perfunctory in its routineness. That did not make it any less obvious. There is quiet panic in the banks and the boardrooms, make no mistake of that. Russia has them perplexed. China has them confused. The rest of the world holds them in contempt. Most with eyes open can see their falsehoods. Their fabrications grow increasingly transparent. Force is extended to make up for the weakness of the fraud. Their empire of deceits are pervasive and fearsome in their shamelessness. How and when this will end, no one can say. For now we must be waitful and watchful.

This post was published at Jesses Crossroads Cafe on 08 SEPTEMBER 2014.

Obama’s Former Chief Economist Calls For An End To US Dollar Reserve Status

There are few truisms about the world economy, but for decades, one has been the role of the United States dollar as the world’s reserve currency. It’s a core principle of American economic policy. After all, who wouldn’t want their currency to be the one that foreign banks and governments want to hold in reserve?
But new research reveals that what was once a privilege is now a burden, undermining job growth, pumping up budget and trade deficits and inflating financial bubbles. To get the American economy on track, the government needs to drop its commitment to maintaining the dollar’s reserve-currency status.
The reasons are best articulated by Kenneth Austin, a Treasury Department economist, in the latest issue of The Journal of Post Keynesian Economics (needless to say, it’s his opinion, not necessarily the department’s). On the assumption that you don’t have the journal on your coffee table, allow me to summarize.
It is widely recognized that various countries, including China, Singapore and South Korea, suppress the value of their currency relative to the dollar to boost their exports to the United States and reduce its exports to them. They buy lots of dollars, which increases the dollar’s value relative to their own currencies, thus making their exports to us cheaper and our exports to them more expensive.
In 2013, America’s trade deficit was about $475 billion. Its deficit with China alone was $318 billion.
Though Mr. Austin doesn’t say it explicitly, his work shows that, far from being a victim of managed trade, the United States is a willing participant through its efforts to keep the dollar as the world’s most prominent reserve currency.

This post was published at Zero Hedge on 09/08/2014.

New Jersey’s Debt is Downgraded by Fitch as Chris Christie Funnels Pension Money to Private Equity and Hedge Funds

David Sirota must be commended for his incredible work this year exposing the insidious relationship between public pension funds and ‘alternative asset managers,’ namely private equity firms and hedge funds. It is the private equity component that has captured my attention the most due to the industry’s notoriously opaque and seemingly illegal fees.
One example I highlighted earlier this year was: Leaked Documents Show How Blackstone Fleeces Taxpayers via Public Pension Funds. The reason this relationship between public pension money and private equity is so incredibly important is because so many in the private equity world are so incredibly shady. Let’s not forget what SEC official Drew Bowden said back in May:
At a private equity conference this week, Drew Bowden, a senior SEC official, told private equity fund managers and their investors in considerable detail about how the agency had found widespread stealing and other serious infractions in its audits of private equity firms.
Despite the at times disconcertingly polite tone, the SEC has now announced that more than 50 percent of private equity firms it has audited have engaged in serious infractions of securities laws. These abuses were detected thanks to to Dodd Frank. Private equity general partners had been unregulated until early 2012, when they were required to SEC regulation as investment advisers.
So how do public pensions fit in to this racket? Here’s how:

This post was published at Liberty Blitzkrieg on Sep 8, 2014.

Consumer Credit Surges Most In Three Years

If you like living beyond your means, you can keep on living beyind your means. US Consumer credit grew by over $26 billion in July – smashing expectations of $17.35bn – and rising by the most since 2011. As usual, the leap was led by non-revolving credit (rising $20.6 billion) as auto and student loans continue to surge.
Consumer credit grew at its fastest pace in three years.

This post was published at Zero Hedge on 09/08/2014.

SP 500 and NDX Futures Daily Charts – The Age of the Thing

“Greetings citizens. We are living in the age, in which the pursuit of all values other than money, success, fame, glamour have either been discredited or destroyed.
money, success, fame, glamour, for we are living in the age of the thing.
money, success, fame, glamour…”
Macaulay Culkin et al., Party Monster
The banality of evil is alive and well in our culture of death, that measures everything in dollars, and values nothing that is human for its own sake, whether it be truth, or beauty, or goodness.
That it is banal does not mean it cannot be noisy. That it wears a hand tailored suit instead of a uniform does not make it any less capable of causing great misery and destruction. That it speaks with sophistication or cleverness does not makes its words any less poisonous. That it will eventually destroy itself in the future does not detract from its power to taint and corrupt in the present. Markets moved sideways today, with the SP down a bit and the tech heavy NDX up a bit.

This post was published at Jesses Crossroads Cafe on 08 SEPTEMBER 2014.

The Top 10 Questions Everyone Should Ask About Alibaba

With the Alibaba roadshow kicking off this week, ConvergEx’s Nick Colas reviews the second-order implications of this historic transaction. Over the next two weeks investors will have to consider important issues, such as which stocks money managers will sell to fund their BABA purchase and what securities (stocks and ETFs) hedge funds may short to pair against an Alibaba long position. And consider: “Do big IPOs signal a market top?” Also, with an estimated $7 billion in fresh cash and a valuable public stock post-IPO, BABA will also be able to play the M&A game aggressively. Just consider its corporate North Star: “Our mission is to make it easy to do business anywhere” (the first line of the S-1 summary). In short, Colas concludes Alibaba really is a big deal (at 27.3x trailing EV/EBITDA).
Via ConvergEx’s Nick Colas,
Some 22 years ago I stood on the floor of the New York Stock Exchange with the management of the first Chinese company to come public in the U. S. Brilliance China Automotive made minivans in Shenyang under license from Toyota as well as producing its own somewhat older designs. The initial public offering was for shares in a Bermuda based holding company that owned shares in a Hong Kong business which in turned owned a piece of a charitable trust that held stock in the auto business. Despite that complexity, the allure of owning a piece of the Chinese car market generated tremendous investor interest. The IPO priced at $16, the first trade went off at $20, and the stock eventually doubled.

This post was published at Zero Hedge on 09/08/2014.

Events Impacting The Gold And Silver Price In The Week Of September 8th

The primary focus of our website is to report on the different aspects of the gold market: fundamentals, economic and monetary analysis, basic technical analysis. Our view on the real price setting in the gold and silver market differs from the mainstream view. Price changes happen to coincide with events or announcements; mainstream media are used to report a relationship between both. However, we believe that the real price setting for the time being is taking place in the COMEX futures market. Market expert Ted Butler does an outstanding job analyzing the weekly evolution in the COMEX market and how it affects price setting.
In this article, we summarize the key events of the running week that could have an impact on the price of gold and silver price because of trading in COMEX futures.
During the previous week, between September 1st and 5th, a number of economic data and central bank announcements resulted in selling pressure in dollar denominated gold and silver:

This post was published at GoldSilverWorlds on September 8, 2014.

Why Illinois Is Bankrupt: 6,000 Teachers Get Pensions Of $100,000

From 2013 to 2014, the number of teachers receiving six-figure pensions in Illinois increased by 24 percent. Today, 6,000 retired Illinois teachers are collecting at least 100,000 in annual pension money.
Yet, as Kelly Riddell reports for the Washington Times, if the Illinois Teachers Retirement Service (TRS) were forced to pay out the pensions it owes today, it would only be able to pay retirees 40 cents for every dollar. Indeed, the state’s pension fund is in trouble:
According to a report from the spending watchdog group Open the Books, over 100,000 Illinois teachers had already broken even on their pension payments after just 20 months of retirement. Illinois taxpayers can pay up to $2 million per teacher per retirement. The TRS pension fund is underfunded by $54 billion, according to the Illinois Policy Institute. By 2029, the fund could be entirely broke. TRS is the largest pension fund in the state. According to Riddell, Illinois legislators have continued to underfund TRS in order to free up funds for spending elsewhere. Yet, over half of Illinois teachers are retiring before the age of 60, and many teachers are making twice the amount they earned while they were actually employed. For example:

This post was published at David Stockmans Contra Corner on 6th September 2014.

John Hussman’s “Exit Rule For Bubbles”

…which brings us to the present, when I have again become no fun at all, largely because of a combination of high confidence, lopsided bullishness, overvaluation, and an overbought multi-year advance. There’s no question that the absence of consequences – to date – has led investors to believe that those consequences simply will not emerge. Once the consequences arrive, the preceding bubble seems obvious, but it’s a regularity of history that speculative episodes are only completely clear in hindsight.

This post was published at Zero Hedge on 09/08/2014.

The Silent Death Of The U.S. Dollar

To begin, I would like put forth the observation that the U. S. Government has become particularly belligerent militarily toward the rest of the world. Anyone who thinks the U. S. is not provoking Russia and China all over the globe has their head in the sand or is incapable of looking at the facts outside of the tragically skewed propaganda coming from Washington, DC that is being funneled through the U. S. media pipeline.
The reason the U. S. is trying to stir up global military chaos is simple, the U. S. dollar is being systematically removed from its reserve status. The latest evidence of this is the news report yesterday that China and Argentina are going to begin trading in their respective currencies, with trade settlement in yuan – NOT dollars: News Link. Please note this news is not being reported by the U. S. mainstream financial media.

This post was published at Investment Research Dynamics on September 8, 2014.

US Bonds, Stocks Tumble As Dollar Surges On EUR, JPY, GBP Weakness

US equity markets are volatile this morning but appear to have now entirely decoupled from USDJPY as it careens headlong to new 5-year highs running stops to 106.00. US Treasury yields are tracking the collapse of JPY closely since the US open. EURUSD is also plunging (as did GBP this morning). Abe will be happy as JPY collapses so Nikkei futures surge… is this ‘great rotation’ from every asset in the world into the Alibaba IPO?
The USD is surging…

This post was published at Zero Hedge on 09/08/2014.

Japanese Economy Contracts Bigger than Expected 7.1% in 2nd Quarter; Really Bad Theories

By now it should be pretty clear that Abenomics is a complete failure. Abenomics did not spur lending, investment, hiring, or wage growth.
It’s one touted “success” is that prices have gone up. And for cash-strapped consumers facing higher taxes, that alleged “success” is actually a disaster.
Japanese Economy Contracts Bigger Than Expected 7.1% in Second Quarter
Please consider Japan says economy contracted 7.1 percent in April-June on bigger drop in business investment.
Japan’s economy contracted at a larger than earlier estimated annual rate of 7.1 percent in April-June, as companies and households slashed spending following a tax hike. The revised data released Monday show business investment fell more than twice as much as estimated before, or 5.1 percent, while private residential spending sank 10.4 percent, in annual terms. The earlier estimate showed the economy contracting 6.8 percent. The recovery of the world’s third-largest economy has slowed following the increase in the sales tax to 8 percent from 5 percent on April 1.

This post was published at Global Economic Analysis on September 08, 2014.

Use ‘Power Gaps’ to Build Your Own Empire

Whoa. We struck gold Friday…
Only minutes after we hit ‘send’ on Friday’s issue, the first reader response popped up in our mailbox.
A few minutes later, another. And then another…
An hour went by and we were up to our elbows in your emails. We haven’t seen anything like it.
We hear you loud and clear:
You want to publish that book, create that product, or launch that special project, but need ultra-strategic, PROVEN processes to skyrocket you ahead of the competition.
That’s where we can help.
We’re working on something very special for you behind the curtain. We’ll be leaking it out in these episodes, so stay tuned.
On Friday, we spoke briefly about a ‘hidden’ economy where you can test your product (and even sell it) for free…
In this ‘new economy,’ you can even sell your product or business idea before you create it.
Counterintuitive, right?
What we’re used to doing is spending tens (or hundreds) of thousands of dollars on creating a product and then… well… praying to the heavens.
Much of the time, unfortunately, our prayers fall flat. We end up with storage spaces full of unsold product…and ears full of the typical mantra from ‘mean-well’ family members…
…’I told you so.’
But that’s not the name of the game anymore. What you’re about to discover is a revolution in business and product creation.
It’s the beginning of what’s called the Economy 2.0. Which simply means supply and demand will soon start to match up in ways you might not even believe is possible.
Meaning, the future lacks mass-produced crap (yay!).
Which, in turn, means we’re at the beginning of more wealth…less waste…and more fun.
Learn this simple strategy now, and you’ll be light-years ahead of industry mammoths.
Before we get into that, though, let’s build some context. Let’s dive into why this revolution is happening right now…
What we’ve uncovered may surprise you.

This post was published at Laissez Faire on SEP 8, 2014.

How The Fed “Mysteriously” Eliminated $7 Trillion In US Debt

Anyone looking at the Federal Reserve’s own data set, that provided with the generous “free” funding of the US taxpayer by way of the St. Louis Fed’s FRED database, will notice something quite welcome, if magical: total US debt held by the public – that which is not part of intragovernment holdings, read Social Security – has mysteriously collapsed from $12 trillion to $5 trillion. Somehow, with nobody looking, the Fed managed to reduce US total debt by $7 trillion.

This post was published at Zero Hedge on 09/08/2014.

Contagion – What the Next Wall Street Crisis Will Look Like

Last week the Fed announced a plan for the next financial crisis that feels to some observers like a plan to burn down the trading houses on Wall Street – or, alternately, guarantee another massive taxpayer bailout of the biggest banks.
The Federal Reserve Board and its regional banks are overflowing with economists. What the Fed does not seem to have is an honest, informed voice to consult about how trading markets think in a severe financial crisis.
Last Tuesday, the Federal Reserve Board along with other bank regulators announced a new liquidity rule for the largest Wall Street banks – the ones that required the massive bailout in the 2008 to 2010 financial crisis. The goal of the new rule, according to the Fed, would be to force the biggest, most complex banks to hold enough ‘high quality liquid assets’ (HQLA) so that they could be easily liquidated if there was a run on the bank, eliminating the need for another taxpayer bailout. So far, so good.
Then the Fed and its fellow regulators did something that raises serious doubts about their market sophistication. They announced that in addition to U. S. Treasury securities, where a flight to safety always flows in a crisis, the big banks could also hold corporate bonds and corporate common stocks in the Russell 1000 index among their newly defined ‘high quality liquid assets’ earmarked for an emergency.
Just six weeks before the Fed anointed non-exchange traded corporate bonds as liquid assets, all the way down to investment grade, the Financial Times ran this opening paragraph in an article by Tracy Alloway:
‘The ease with which investors can trade corporate debt has declined sharply in the five years since the financial crisis according to research that is likely to feed fears over the prospect of an intensified sell-off in the $9.9 trillion US market.’

This post was published at Wall Street On Parade By Pam Martens and Russ Marte.

The Pursuit Of Money Over Personal Satisfaction

This article was written by Tom Chatham and originally published at Project Chesapeake
Have you ever asked a person why they work? If you have the answer will likely end with a statement that they need to pay for stuff. It’s a truism in the world we live in that you must pay for many of the things we need. Its this need to pay for more and more stuff that leads to the need for higher paying jobs.
This perceived need leads many to seek jobs they do not necessarily like but need to achieve this end result. The race for the almighty buck has many unintended consequences. It has been said that if you do not like your work, you will not like anything else about your life.
The pursuit of money leaves many people with a hollow void that is never filled and causes them to lash out at society in their discomfort. This is seen in the many cases of domestic abuse, road rage and general lack of politeness in society. In many cases the more the person makes, the more likely you are to see these traits.

This post was published at Alt-Market on 08 September 2014.

Nixon’s Vindication

Forty years ago many Americans celebrated the demise of the imperial presidency with the resignation of Richard Nixon. Today it is clear they celebrated too soon. Nixon’s view of presidential powers, summed up in his infamous statement that, ‘when the president does it that means it is not illegal,’ is embraced by the majority of the political class. In fact, the last two presidents have abused their power in ways that would have made Nixon blush. For example, Nixon’s abuse of the Internal Revenue Service to persecute his political opponents was the subject of one of the articles of impeachment passed by the US House of Representatives. As bad as Nixon’s abuse of the IRS was, he was hardly the first president to use the IRS this way, and the present administration seems to be continuing this tradition. The targeting of Tea Party groups has received the most attention, but it is not the only instance of the IRS harassing President Barack Obama’s political opponents. For example, the IRS has demanded that one of my organizations, Campaign for Liberty, hand over information regarding its major donors.
Nixon’s abuse of federal power to spy on his ‘enemies’ was abhorrent, but Nixon’s abuses of civil liberties pale in comparison to those of his successors. Today literally anyone in the world can be spied on, indefinitely detained, or placed on a presidential ‘kill list’ based on nothing more than a presidential order. For all his faults, Nixon never tried to claim the power to unilaterally order anyone in the world detained or killed.

This post was published at Ron Paul Institute on September 7, 2014.