by Zero Hedge - August 15th, 2010 11:46 pm
Courtesy of Tyler Durden
A look at the key economic events in the relatively quiet week ahead from the perspective (and benchmarks) of Goldman Sachs.
European developments As mentioned, the better than expected 2Q Eurozone GDP numbers on Friday failed to lift EUR/$, which ended the week 4% lower. As highlighted in Friday’s Daily, we do see near term risks for the EUR--one of the reasons we incorporated downside risks to our EUR/$ forecast (1.22 in 3-months), to reflect the potential for rising political tension again. We are again seeing some noise on this front in recent days with the EUR being weighed upon with news headlines such as possible Spanish deviation from fiscal austerity measures. It is interesting also to note that sovereign CDS spreads in the European periphery have also started to creep back up. This is something that we will be paying close attention to in coming weeks and months.
US manufacturing data This week’s Empire, Philly Fed, industrial production and advanced GLI reading are important as usual in gauging the pace of slowing industrial momentum in the US. Consensus expects a slight improvement in both the Empire and Philly Fed readings. We do not forecast the Empire survey, but on the more representative Philly Fed (which is also a component of our GLI), we are expecting a decline.
TICs We get the June TIC s release which will allow us to gauge the latest US Q2 BBoP picture. The US trade deficit has been widening out, especially stark in last week’s June release, which widened out to almost $50bn from $42bn. We’ll see what the upcoming TICs release shows but overall, the underlying flows picture is likely to remain USD negative still.
Central Banks We’ll see some central bank news in the form of the RBA and BOE minutes as well as meetings in Turkey and Mexico. We expect the RBA minutes to make it clearer that the Board is in no rush to move rates higher (even if a subtle tightening bias remains). Our Australian economists continue to expect rates on hold till November. For the BOE MPC minutes, we are not expecting much incremental information, coming right after the last Inflation Report. For the meetings in Turkey and Mexico, we are expecting rates to be left unchanged, in-line with consensus.
by ilene - August 15th, 2010 11:42 pm
Courtesy of The Daily Bail
Video: Dylan Ratigan torches Treasury Secretary Tim — Aired Aug. 3, 2010
Watch at least the first 2:45.
Video: One man battles Bank of America and wins — Dylan Ratigan Show
by ilene - August 15th, 2010 11:34 pm
Courtesy of The Daily Bail
|The Daily Show With Jon Stewart||Mon – Thurs 11p / 10c|
- "Republicans don’t realize that extending the Bush tax cuts will strengthen the deficit monster that’s going to eat our babies."
- Jon Stewart didn’t really know what to say last night about Republicans who complain about the deficit but advocate for renewing the Bush tax cuts. So he turned to House Minority Leader "and retired Syracuse mascot" John Boehner (R-OH) for a solution to the country’s economic woes. Boehner has said that "the only way we’re going to get our economy going again and solve our budget problems is to get the economy moving."
- "The only way to get our economy going, is to get it moving?" Stewart asked. "That is either the most profound or most retarded statement I’ve ever heard. You know what, actually it’s the most profoundly retarded statement I’ve ever heard."
Mission f’ing accomplished. Seriously. And for the record, I could care less about the Bush tax cuts and whether or not they’re extended. The top rate has alternated between 36% and 39% for 2 decades, and I honestly don’t think it will make much difference if it shifts back to 39%. Shoot me. I believe that tax cuts generally encourage growth, but austerity is finally coming to our shores, and I prefer not to fight something I’ve been begging for.
Back to the mission. Debt and deficit awareness. That’s all it’s about. It’s why I launched the Bail. I saw the train coming and knew there had to be a site to chronicle, curate, aggregate. And frankly, after worrying about unfunded entitlements for most of my adult life, I…
by Zero Hedge - August 15th, 2010 9:04 pm
Courtesy of Tyler Durden
Our religulous readers at theStreet.com decided to take a stab at Zero Hedge over the weekend due to our discovery, first among all media, that the Hindenburg Omen had struck this past Thursday. We take this opportunity to teach theStreet a few of the key rules of blogging etiquette.
1. A website run by Jim Cramer describes Zero Hedge narrative as if “writing in a vein that seems made for professional boxing or WWE pay-per-view event hype, describes the Hindenburg Omen as “Easily the most feared technical pattern in all of chartism (for the bullishly inclined). Those who know what it is, tend to have an atavistic reaction to its mere mention.“ Seriously? Jim Cramer’s website accusing someone of hype? That’s some serious “crossing the streams” voodoo. We have nothing to say here – South Park’s Eric Cartman did the best job of describing Mr. Cramer’s own style previously.
2. Oddly enough, The Street had no such qualms about the description of the Hindenburg Omen by David Buik at BGC Partners. As the Telegraph highlighted out, Buik “drew attention to the Hindenburg Omen, which he described somewhat theatrically as “easily the most feared technical pattern in all of chartism”.” Hmm – this seems oddly identical to our own language, which the Street decided to ridicule. While we may or may not seek copyright arbitration vis-a-vis the nice folks at BGC, it seems somewhat obtuse of theStreet’s staff to take offense by our characterization of the H.O., but not an idential one presented by one “of the world’s leading interdealer brokers.” Why the bias?
3. It is accepted etiquette to link up to the source, especially when that source breaks the news. Benzinga and most other sources did so. Does theStreet.com think traditional web rules do not apply to it? Or perhaps, theStreet believes that no rules apply to it? To wit, and as a case study of hyperlinking for the sole benefit of theStreet, we present this example of how that whole procees works, from a previous Zero Hedge post. Note the hyperlink to thestreet’s form 12B-25:
Jim Cramer’s TheStreet Is Being Investigated By The SEC
Seek and ye shall find. Never has this been more
by Optrader - August 15th, 2010 9:01 pm
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by Zero Hedge - August 15th, 2010 8:15 pm
Courtesy of Bruce Krasting
by Zero Hedge - August 15th, 2010 7:28 pm
Courtesy of Leo Kolivakis
Jung Jae-yoon reports in the JoongAng Daily, Pension funds seen increasing equity stake:
Analysts say they expect the nation’s public pension funds, which now hold more than 300 trillion won ($252.73 billion) in assets, to be increasing their equity holdings soon.
A new survey showed that 330 trillion won in total is held by the nation’s main pension funds, including the National Pension Fund, the Retirement Pension Fund, the Korea Teachers Pension Fund, the Government Employees Pension Fund and the Military Pension Fund, the Financial Supervisory Service said yesterday.
The data is based on the amount held at the end of June, except for the Military Pension Fund, the latest figures for which were at the end of 2009.
Nearly 98 percent of the pension funds, or 326 trillion won, is invested in various financial instruments, with bonds taking the biggest portion, followed by equities and alternative investments such as real estate.
In the case of the National Pension Fund, which is the biggest by far with 294.95 trillion won in assets, 75.7 percent of its financial investments are in bonds, with 19.1 percent in various forms of equities and 5 percent in alternative investments.
Analysts say that the public pension funds are likely to increase their exposure to equities in an effort to get bigger returns on their investments than that offered by bonds.
Pension funds still lack the clout in influencing the stock market in the same way as foreign investors. At the end of June, foreigners held 301.07 trillion won worth in equities and 67.82 trillion won in bonds.
But market analysts believe there is a possibility that pension funds could become a key power in the local stock market to challenge that of foreigners.
“Domestic national pension funds will have little choice but to expand their portion of equity investments in the future since they can’t generate high returns through bonds when interest are so low. The pension funds hold a smaller portion of equity investments compared to those in advanced countries,” said Oh Sung-jin, research head at Hyundai Securities.
The National Pension Fund is the fourth largest in the world.
You’ll remember South Korea’s National pension Service recorded an overall return of minus 0.75% in 2008, its first loss ever, with its investment in stocks yielding…
by ilene - August 15th, 2010 5:40 pm
Courtesy of Michael Snyder of Economic Collapse
When they hear the word deficit, most Americans immediately think of the U.S. government budget deficit which is rapidly spiralling out of control. But that is not the only deficit which is ripping the U.S. economy to shreds. In fact, many economists commonly speak of the "twin deficits" that are destroying the U.S. financial system. So what is the "other deficit" that they are referring to? It is the trade deficit. Every single month, we buy much more stuff from the rest of the world than they buy from us. That means that every single month there is a massive outflow of wealth from the United States. Every single day, America becomes just a little bit poorer as Americans continue to run out and fill up their shopping carts with cheap plastic crap from China and dozens of other emerging economies.
Not that trade is a bad thing. Trade can actually be a very good thing. But the gigantic trade imbalances that the United States has been running for years are absolutely bleeding us dry. Unfortunately, our politicians have just stood idly by as each month we continue to transfer massive amounts of wealth out of the United States.
The U.S. Commerce Department recently announced that the U.S. trade deficit increased by 18.8 percent in June to $49.9 billion. Most analysts had expected the figure to be somewhere around 41 to 43 billion dollars.
In the month of June, imports rose to approximately $200 billion while exports fell to about $150 billion.
So can we afford to have a net outflow of 50 billion dollars each and every month?
Of course not.
by ilene - August 15th, 2010 5:30 pm
Courtesy of Robert Reich
America’s biggest — and only major — jobs program is the U.S. military.
Over 1,400,000 Americans are now on active duty; another 833,000 are in the reserves, many full time. Another 1,600,000 Americans work in companies that supply the military with everything from weapons to utensils. (I’m not even including all the foreign contractors employing non-US citizens.)
If we didn’t have this giant military jobs program, the U.S. unemployment rate would be over 11.5 percent today instead of 9.5 percent.
And without our military jobs program personal incomes would be dropping faster. The Commerce Department reported Monday the only major metro areas where both net earnings and personal incomes rose last year were San Antonio, Texas, Virginia Beach, Virginia, and Washington, D.C. — because all three have high concentrations of military and federal jobs.
This isn’t an argument for more military spending. Just the opposite. Having a giant undercover military jobs program is an insane way to keep Americans employed. It creates jobs we don’t need but we keep anyway because there’s no honest alternative. We don’t have an overt jobs program based on what’s really needed.
For example, when Defense Secretary Robert Gates announced Monday his plan to cut spending on military contractors by more than a quarter over three years, congressional leaders balked. Military contractors are major sources of jobs back in members’ states and districts. California’s Howard P. “Buck” McKeon, the top Republican on the House Armed Services Committee, demanded that the move “not weaken the nation’s defense.” That’s congress-speak for “over my dead body.”
Gates simultaneously announced closing the Joint Force Command in Norfolk, Virginia, that employs 6,324 people and relies on 3,300 private contractors. This prompted Virginia Democratic Senator Jim Webb, a member of the Senate Armed Services Committee, to warn that the closure “would be a step backward.” Translated: “No chance in hell.”
Gates can’t even end useless weapons programs. That’s because they’re covert jobs programs that employ thousands.
He wants to stop production of the C-17 cargo jet he says is no longer needed. But it keeps 4,000 people working at Boeing’s Long Beach assembly plant and 30,000 others at Boeing suppliers strategically located in 40 states. So despite Gates’s protests the Senate has approved ten new orders.
by ilene - August 15th, 2010 5:29 pm
Courtesy of Jim Quinn of The Burning Platform
“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.” – Charles Mackay - Extraordinary Popular Delusions and The Madness of Crowds
The American public thinks they are rugged individualists, who come to conclusions based upon sound reason and a rational thought process. The truth is that the vast majority of Americans act like a herd of cattle or a horde of lemmings. Throughout history there have been many instances of mass delusion. They include the South Sea Company bubble, Mississippi Company bubble, Dutch Tulip bubble, and Salem witch trials. It appears that mass delusion has replaced baseball as the national past-time in America. In the space of the last 15 years the American public have fallen for the three whopper delusions:
- Buy stocks for the long run
- Homes are always a great investment
- Globalization will benefit all Americans
Bill Bonner and Lila Rajiva ponder why people have always acted in a herd like manner in their outstanding book Mobs, Messiahs, and Markets: Surviving the Public Spectacle in Finance and Politics:
“Of course, we doubt if many public prescriptions are really intended to solve problems. People certainly believe they are when they propose them. But, like so much of what goes on in a public spectacle, its favorite slogans, too, are delusional – more in the nature of placebos than propositions. People repeat them like Hail Marys because it makes them feel better. Most of our beliefs about the economy – and everything else – are of this nature. They are forms of self medication, superstitious lip service we pay to the powers of the dark, like touching wood….or throwing salt over your shoulder. “Stocks for the long run,” “Globalization is good.” We repeat slogans to ourselves, because everyone else does. It is not so much bad luck we want to avoid as being on our own. Why it is that losing your life savings should be less painful if you have lost it in the company of one million other losers, we don’t know. But mankind is first of all a herd animal and fears nothing more than not being part of the herd.”