Month: October 2013

Back on August 1, 2010, Alan Greenspan – who is once again making the media rounds in a desperate attempt to peddle his ridiculous book about forecasting (in which he explains it wasn’t the Fed’s models that were wrong; it was reality, and all those who inhabit it, that had a glitch) and is arguably the man who created the single biggest credit expansion in the Pre-New Normal era who no longer has access to the money printer so needs to sell books, and soon enough he may devolve to pitching newsletters – issued one of his most memorable post-Lehman bloopers. To wit: “if the stock market continues higher it will do more to stimulate the economy than any other measure we have discussed here.” We decided to investigate his claim…

First, since August 1, 2010, the stock market has risen a mind-boggling 74%, or 18.2% annualized: a return that has outperformed roughly 95% of all actively managed hedge and mutual funds, implying his successor, Ben Bernanke, is easily one of the best portfolio managers of all time. Except for Bernie Madoff of course.

So, if non-Superman Greenspan was right at least this one time (because he never was prior to this, as he refused to apologize ealier) the economy should have performed comparable right? Wrong.

Here is a simple comparison between the most recently preceding period in 2010 and currently:

Then:

• Annualized GDP was 3.9% and 2.8% in Q2 and Q3, 2010

Now:

• Annualized GDP is 1.1% and 2.5% in Q1 and Q2, 2013

* * *

Then:

• Americans on foodstamps: 41.8 million

Now:

• Americans on foodstamps: 47.6 million

* * *

Then:

• People not in labor force: 84 million

Now:

• People not in labor force: 90.6 million

* * *

But, it’s not all bad news:

Then:

• Household net worth: $60.8 trillion

Now:

• Household net worth: $74.8 trillion

* * *

And there you have it: despite the 70%+ increase in the stock market, the US economy is no growing at roughly half the pace it was back then, the middle class has seen 6 million people migrate away from the labor force, and into foodstamps…  but at least household net worth has increased by $14 trillion.

So much for Alan Greenspan blooper #1: perhaps it is time for a minor revision: “if the stock market continues higher it will do more to stimulate the “wealth effect” of the 1% while stealing from everyone else than any other measure we have discussed here.”

Which incidentally explains the Fed’s policy for the past 5 years. Only it doesn’t sound quite as palatable for Sunday morning TV if the former Fed chairman were to tell the truth that all it does now is to make the super wealthy super wealthier.

Oh, and don’t expect anything to change. When in another three years the S&P is 70% higher than where it is now, driven purely by the Fed’s balance sheet, and there is no US middle class left to even mention, well – we have these brilliant economists who have never held any real job outside of their academic ivory towers to thank. Of course, by then it will be too late to change the inevitable outcome, so well-rehearsed in a rather angry late 18th century France, but it is too late now anyway.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/w3SBygHas4E/story01.htm Tyler Durden

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

I have been cursed at a Chinese border. In Dubai, my passport was studied by three veiled women for over an hour and my suitcase completely dismembered. In the Philippines I had to bribe someone in order to get my visa extended for a few days. Borders, they can be tough, especially in countries known for corruption.

 

But never, ever, will I return to the United States of America.

 

– Excerpt from a must read article by Niels Gerson Lohman

Recently, one of my best friends from college had a horrific experience at the Canadian border. He told me he would write about his experience and allow me to post it on this site, so I hope to have that up in the near future. In the meantime, please take the time to read the story of Niels Gerson Lohman, a Dutch writer, designer and musician who had such a horrific experience at the border he has vowed to never return to these United States. This is an utter embarrassment and reminds me a lot of one of the more popular posts ever on this site:  Why I’m Leaving America by Michael Fielding.

From the Huffington Post:

After a year of traveling, I had planned a last, short trip. I was going to take the train from Montreal to New Orleans. The travels I had been undertaking earlier this year had brought me to places that were meant to form the background of my second novel.

 

This trip, however, was for my dad. He, a trumpet player, loved New Orleans and had died a year ago. It felt like the first sensible trip I undertook this year. I had been searching for ways to forget about the last hours at his deathbed. He had been ill for 15 years and his body just would not give up. It was a violent sight. I had decided the trip to New Orleans would put an end to those memories.

 

The customs officer walked by and asked everybody on the train a few questions. Where they were from, where they were heading. The usual stuff. Everybody who was not a U.S. or Canadian citizen was to head for the dining car to fill in an additional green form.

 

I had not finished my novel yet, but my passport was complete. It was filled with pretty stamps. He did not like the stamps.

 

First, he saw my Sri Lankan stamp. The customs officer raised his eyebrows.

 

“Sri Lanka, what were you doing over there?”

 

“Surfing. Traveling. My best friend lives there. He is an architect.”

 

The officer flipped on, seemingly satisfied. Secondly, he found my stamps from Singapore and Malaysia.

 

“What were you doing over there? Singapore and Malaysia? Aren’t those countries Islamic?”

 

Looking over my shoulder, his eyes searched for his colleague’s confirmation.

 

“Malaysia, I think so, yeah. But not Singapore. It’s a melting pot. A very futuristic city. Airconditioned to the ceiling. To Singapore I went mostly for the food, to be honest.”

 

“Sure.”

 

“I’m sorry?”

 

“Nothing. And how about Malaysia?”

 

I explained flights departing from Malaysia were cheaper compared to Singapore. That I only went there for a few days, but also, a little bit, for the food. The customs officer went through some more pages. Then he found my Yemeni visa. He put my passport down and stared at me.

 

“What the hell were you doing in Yemen?”

 

“I went to the island Socotra, it’s not on mainland Yemen. It’s a small island closer to Somalia. A very special place, some call it ‘Galapagos of the Middle East.’ I think 85 percent of the plants and animals there, are indigenous.”

 

In the five hours that followed, I was questioned twice more. During the first round I told, amongst others, my life’s story, about my second novel’s plot, gave my publisher’s name, my bank’s name and my real estate agent’s name. Together we went through all the photos on my laptop and messages my phones had been receiving for the past months. They wrote down the names of everybody I had been in touch with. In my pirated software and movies they showed no interest.

 

“So… what’s the verdict?”

 

“We are under the impression you have more ties with more countries we are not on friendly terms with than your own. We decided to bring you back to the Canadian border.”

 

They brought me back. In the car, no words were said. It was no use. I was defeated. To the Canadian border they said:

“We got another one. This one is from the Netherlands.”

Yep, you got him alright cowboy. Thanks for embarrassing an entire nation.

The Canadian officer looked at me with pity. She asked if there was anything I needed. I said I could use some coffee and a cigarette. She took my passport to a back room and returned within five minutes, carrying an apologetic smile, a freshly stamped passport, coffee, a cigarette, and a ticket to the next bus back to Montreal.

This ladies and gentlemen, is what we have become.

Full article here.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/b8BP7lMGq88/story01.htm Tyler Durden

Credit markets remain notably less sanguine than stocks; VIX remains relatively well bid; and in a freakish state of affairs most US equity indices closed the day with an odd shade of red against their price… all that is, except for Trannies which soared 0.67% to new all-time highs once again. Nasdaq was the worst (-0.7%) as more momo slipped (TSLA’s turn today), the S&P 500 oscillated in a very twitchy manner all day around its VWAP (for its first losing day in 5 sessions) tracking EURJPY once again, and CAT dragged on the Dow.  Sector dispersion off the lows from 2 weeks ago narrowed notably today. Elsewhere, the USD slipped further, now down 0.4% on the week; commodities drifted lower with oil worst  (-3.8% on the week closing below $97!); and Treasuries rallied very modestly (yields down 1-2bps).

 

Credit remains less excited…

 

S&P 500 futures oscillated around VWAP in a very twitchy pattern all day…

 

But Trannies didn’t care about any of it…

 

Sectors, rather notably, saw dispersion post debt-ceiling lows collapse…

 

VIX remains bid…

 

and notice the noise around EURJPY… the algos are fighting hard to hold this…

 

Commodities slipped all day…

 

Charts: Bloomberg

Bonus Chart: TSLA got the NFLX treatment on downgrades…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/BiSB0uENp9o/story01.htm Tyler Durden

Following his "can we get some mexican music to go along with that" Ted Cruz comments, the always "apolitical" Steve Liesman – who honed his 'economic' teeth while on a mission to communist Russia – has issued an apology. Explaining his remarks were not meant to be "offensive in any way," Liesman suggested perhaps country-western would be a better choice next time…

 

The "oops" moment…

On Tuesday morning’s CNBC Squawk Box, senior economics reporter Steve Liesman blamed the weak jobs report on Senator Ted Cruz (R-TX). He said, “We’re going to call this the Senator Ted Cruz jobs report. These are the jobless claims of Senator Ted Cruz.” As CNBC showed a picture of Cruz, Liesman added, “There he is! There he is! Can we get some music to go along with that, some Mexican music maybe?”

 

 

and the apology…

Regarding my recent remark on Squawk Box regarding Senator Ted Cruz, I first want to deeply and sincerely apologize if my remarks were insensitive.

 

Second, I want to explain that it was not intended to be offensive in any way.

 

I thought of him only as an American senator from Texas, and in an attempt, on the fly, to choose music representing that state, I chose Mexican music.

 

As a musician for many decades, I've played and listened to tons of Texas songs infused with Mexican themes. A better choice would have been Country/Western or Texas Roadhouse Blues – it was a bad reach all the way around.

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/-Q1V-zPMpFo/story01.htm Tyler Durden