The markets move higher. As little has changed today - the only difference between yesterday's market fall and today's market rise is ___________ [fill in the blank]. You can use our financial press headlines below to help you fill in the blank.
Genuine economic growth is something you can allow, but you cannot force. If you try to trick your way to it - with phony interest rates, more debt, and cockamamie inflation targets - you will retard the growth, not speed it up. This is obvious, too. But Ms. Yellen is paid not to see it. And in the absence of real growth, the Dow at 18,000 looks vulnerable. It wouldn't be at all surprising to see a rolling top take shape... with a sharp break in the fall.
But here we leave the vagaries of the market to pay homage to America's Second Greatest Generation.
In the wake of Memorial Day, we feel guilty about the way we've treated the old f**ts.
We wish to make amends to all our readers over the age of 55. After all, these are the people who made America what it is today.
The Funny-Money Generation
So, today, we rise to take their part... to sing praises to the fallen heroes... and to wave their banners. Here at the Diary, we are used to standing up for lost causes, die-hards, and underdogs. But today, we defend those who don't need it. Everyone knows that people who came of age in World War II were our Greatest Generation. They risked their lives to beat the grisly war machines of Nazi Germany and Imperial Japan. Not only that, but also they were the ones who made the innovations we take for granted today - freeways, credit cards, jet engines, pressurized air cabins, radar, nuclear power, the computer... you name it.
But it is to the baby boomers - the Second Greatest Generation in U.S. history - that we ...
ATHENS (Reuters) - Greece's government on Wednesday said it is starting to draft an agreement with creditors that would pave the way for aid, but European officials quickly dismissed that as wishful thinking.
NEW YORK (Reuters) - U.S. stocks rose on Wednesday, with the Nasdaq Composite setting a record closing high, led by a rebound in technology and healthcare stocks and on optimism that Greece would avoid defaulting on its debt.
The liquidators of a pair of failed Cayman Islands-based hedge funds run by a former Harvard quarterback are suing Barclays PLC to claw back some $80 million they say was illegally funneled to the bank to cover margin calls.
Several years ago, Kyle Bass gave the simplest bull case for gold:
"Buying gold is just buying a put against the idiocy of the political cycle. It's That Simple"
And since it is this same political cycle that is doing everything in its power to preserve what little credibility it has, and to avoid its naked idiocy from being revealed for all to see, it has done everything in its power to push the price of gold lower.
However, several entities refuse to be fooled by such "cheap" tricks. One is China, whose ravenous apetite for gold has been extensively discussed previously. The other is the Bank of Russia.
According to central bank data, Russia's gold reserves rose to 40.1 million troy ounces as of May 1 compared with 39.8 million ounces a month earlier. Russia increased its gold holdings for many months in a row last year, as shown by central bank figures and represented in the chart below.
So why is Russia engaging in this gold-buying spree when it likely has more immediately gratifying ways to spend its reserves?
The answer was given by Dmitry Tulin, who manages monetary policy at the central bank, was as concise, as sensible, and as lucid as that given by Bass. From Reuters:
Everything that has happened since 2007, every Central Bank move, ever major political decision regarding the big banks, every trend, have all been focused solely on one issue.
That issue is collateral.
What is collateral?
Collateral is an underlying asset that is pledged when a party enters into a financial arrangement. It is essentially a promise that should things go awry, you have some "thing" that is of value, which the other party can get access to in order to compensate them for their losses.
You no doubt are familiar with this concept on a personal level: any time you take out a bank loan the bank wants something pledged as collateral should you fail to pay the money back. In the case of property, the property itself is usually the collateral posted on the mortgage. So if you fail to pay your mortage, the bank can seize the home and sell it to recoup the losses on the mortgage loan (at least in theory).
In this sense, collateral is a kind of "insurance" for any financial transaction; it is a way that the parties involved mitigate the risk of their deal not working out.
As many of you know, our entire global financial system is based on leverage or borrowed money. Collateral is what allows this to work. Without collateral, there is no trust between financial institutions. Without trust there is no borrowed money. And without borrowed money, money does not enter the financial system.
In this sense, collateral is the "reality" underlying the "imaginary" or "borrowed" component of leverage: the asset is real and can be used to back-stop a proposed deal/ trade that has yet to come to fruition.
For finacial firms, at the top of the corporate food ...
This post is a response to The End of Meaningful Work: A World of Machines and Social Alienation, an article I posted earlier. It is conducted in an interview style.
There is a huge and growing problem of low wages and unemployment. It is an existential crisis for millions. If millions of young Americans don't start earning more money, they can't afford to have children, or take care of them properly, and that is the end of us as a nation. Even though I deplore government interference in the marketplace, the problem is so severe that it demands government action.
You were wrong to discuss the idea of redistributed capital ownership. This idea is not worthy of discussion. Many people would blow their capital on booze, gambling, and luxury cars. The proportion of people who would blow it gambling on biotech stocks would be very small in proportion, and you should not have used that example because it would apply to such a small fraction of cases. Because many people would quickly squander their capital and soon become welfare or charity cases again, this i ...
With every DM central bank hell-bent on ensuring that the currencies which roll off their printing presses will become ever more worthless with each passing iteration of the global debt monetization ponzi scheme, and with calls growing louder to ban hard currency altogether in an effort to remove the effective lower bound and thus make it possible for bureaucrats to centrally plan every aspect of the economy right down to the micromanagement of people's spending habits, we suppose now is as good a time as any to make the switch to a medium of exchange not controlled by the Keynesian cabal and where better to go "crypto" than Switzerland which, according to Handelszeitung, is set to open its first Bitcoin bank.
Here's the story (via Google translate):
Switzerland's financial center is likely to be rich in the near future to one facet. Currently, preparations are underway for the establishment of the first Bitcoin Bank. The reportedly from multiple sources in the financial sector. Corresponding discussions with the Financial Market Supervisory Authority are to take place in these days. To date, there is in Switzerland no bank that offers services with the new digital currency Bitcoin.
The initiators of the project confirmed the facts: "The application for a banking license, we will submit in the next few weeks," says Guido Rudolphi. The IT specialist is one of a group of eight people, which are behind the planned establishment of the financial institution ...
AMSTERDAM (Reuters) - Airbus Group faced down a revolt by government shareholders over a board appointment and invited its chief executive to stay on until 2019 as Europe's largest aerospace company consolidated a recent push for political independence.
Earlier today, when commenting on the latest global criminal scandal, that of "rampant corruption" at FIFA, we - jokingly - said: "And now we just sit back and wait to see how many of the defendants sent "donations" to the Clinton Foundation and how many speeches Hillary and/or Bill gave at the Baur au Lac in the past two decades."
Then we decided to make sure the joke wouldn't be on us and that FIFA hadn't indeed donated to the Clinton foundation.
The joke was on us... because not only did FIFA donate to the Clinton Foundation...
The U.S. Air Force announced it has certified the Falcon 9 rocket of Elon Musk's Space Exploration Technologies for national security space missions. Deborah Lee James, secretary of the Air Force, said in a statement, 'This is a very important milestone for the Air Force and the Department of Defense.
Submitted by Jim Quinn via The Burning Platform blog,
"Things always become obvious after the fact" - Nassim Nicholas Taleb
"Facts do not cease to exist because they are ignored." - Aldous Huxley
The S&P 500 currently stands at 2,126, fractionally below its all-time high. It is now 300% above the 2009 low and 34% above the 2008 and 2001 previous highs. Most people believe this is the new normal. They are comfortably numb in their ignorance of facts, reality, the truth, and the inevitability of a bleak future. When the herd is convinced progress and never ending gains are the norm, the apparent stability and normality always degenerates into instability and extreme anxiety. As many honest analysts have proven, with unequivocal facts and proven valuation measurements, the stock market is as overvalued as it was in 1929, 2000, and 2007.
Facts haven't mattered, as belief in the infallibility and omniscience of Federal Reserve bankers, has convinced "professionals" to program their high frequency trading supercomputers to buy the all-time high. If central bankers were really ...
(Reuters) - Michael Kors Holdings Ltd reported its slowest quarterly revenue growth since it went public in December 2011 as demand for its handbags and accessories weakened in North America, its biggest market.
(Reuters) - Luxury jeweler Tiffany & Co reported better-than-expected quarterly sales and profit as it benefited from higher spending by tourists in Europe and growing demand for its Tiffany T line of fashion jewelry.
There are no longer words to summarize the utter devastation taking place in Venezuela's 'socialist paradise' economy, but one can try.
Unfortunately for residents of the Latin American country, what had been predicted on these pages for the past several years is finally coming to pass, as is Venezuela's official currency: the bolivar fell 25 percent on the black market last week to 423 per dollar. As the unofficial Venezuela currency has weakened 80% in street markets in the past year, it is now worth about 66 times less than the primary official rate of 6.3 bolivars per dollar.
According to Bloomberg, the bolivar's dwindling value leaves many Venezuelans stuffing their pockets with wads of cash, since stacks of bills are often required for a routine trip to a restaurant or supermarket.
Asdrubal Oliveros, director of the Caracas-based consultancy Econanalitica, put it rather succinctly: "You want to buy a car? There aren't any. You want to buy an apartment? You can't afford one. Basic products aren't available," he said. "The only refuge that people have is buying dollars, and because of that, the demand doesn't stop."
Since unlike the "developed" world where the debt slaves are misled to believe they too can experience the "wealth effect" by dumping their disposable income in the stock market, people here are buying dollars because of a scarcity of hard goods that could serve as a store of value, according to Oliveros.
And what hard goods can be found can no longer be afforded by anyone.
In fact, Venezuela is gripped in the worst case of hyperinflation currently on earth. According to Bank of America "April inflation reached 100.7% year-on-year and that monthly inflation averaged 8.5% in the first four months of the ...
With the Fed's Stanley Fischer yesterday reminding everyone of what Jim "QE4" Bullard said a month ago when he hinted that the Fed may be hiking rates only to slam the economy into a recession thus leading to a prompt rate cut (also known as the top Jean-Claude Trichet trade of 2011) and then launch QE4 promptly thereafter, some have wondered - what will the Fed's next quantiative easing episode looks like?
The reason for the confusion is that in recent public statements, Yellen has expressed a concern with not only market overvaluation but also complacency: which is why using even more Fed reserves to prop up the artificially inflated and ever more illiquid markets would be myopic as it would push stocks even recorder without leading to any economic benefits and certainly no benefits for 90% of the population.
We got a glimpse of just what Yellen has in mind for the next 'monetary transmission mechanism' yesterday, when a mystery drone appeared above the Rosa Parks Circle in Grand Rapids, Michigan and literally rained down money on the people below, leading to what the Mail describes as a "cash-grabbing frenzy."
The drone was recorded hovering above crowds enjoying a family event in Grand Rapids yesterday
Econintersect wants your comments,
data and opinion on the articles posted. As the internet is a
"war zone" of trolls, hackers and spammers - Econintersect must balance its
defences against ease of commenting. We have joined with Livefyre
to manage our comment streams.
To comment, using Livefyre just click the "Sign In" button at the top-left corner of
the comment box below. You can create a commenting account using your
favorite social network such as Twitter, Facebook, Google+, LinkedIn or
Open ID - or open a Livefyre account using your email address.
You can also comment using Facebook directly using he comment block below.
Econintersect Live Market
Print this page or create a PDF file of this page
The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.
Take a look at what is going on inside of Econintersect.com