another site
$1 Trillion worth of central banking money printing around the world just does not seem to go as far as it used to… behold, the death cross of faith in monetary policy.
Given this chart, it is obvious what we need… more money-printing… </sarc>
(h/t @Not_Jim_Cramer )
via Zero Hedge http://ift.tt/1awvbpI Tyler Durden
Submitted by Chris Rossini via The Mises Economic blog,
Hjalmar Schacht was Hitler’s economic guy. According to Wikipedia, Schacht: ”became a supporter of Adolf Hitler and the Nazi Party, and served in Hitler’s government as President of the Reichsbank and Minister of Economics. As such, Schacht played a key role in implementing the policies attributed to Hitler.”
Now, we all know what happened to Hitler. But what about Schacht?
On June 9, 1947 Henry Hazlitt would write in Newsweek:
Nazism was defeated in war. Hjalmar Schacht, the Nazi economic wizard, is in jail.
So Hitler was dead, and his economic guy went to jail
But what about the economic ideas that the two would implement together? What happened to them?
Hazlitt continues:
But when Schacht and his surviving comrades survey the world today, they must feel consoled. Intellectually Schachtism has conquered Europe. The system of price control, wage control, profit control, interest control, exchange control, foreign-trade control, bilateral treaties, rations, priorities, allocations, quotas, with a special license required for almost every more, and with a mounting currency inflation hidden and repressed by these devices – this is Schachtism. And this is the system which nearly every country in Europe has now embraced.
So the ideas did not die, nor were they confined to a jail cell. Each and every one of those ideas, were not only embraced by Europe, but by the U.S. as well!
Hitler’s foreign policy aspirations may have been defeated by the war. However, the same cannot be said about his economic policies. Those ideas would be embraced and implemented by the victors of the war!
More than any other system of ideas, it is Fascism that should be #1 on the Libertarian priority list to debunk and persist against. The governing elites are well aware that even they can’t sustain themselves under a system of Communism. However they do believe that Fascism is their golden chalice.
What is Fascism?
Lew Rockwell has the answer:
Fascism is the system of government that cartelizes the private sector, centrally plans the economy to subsidize producers, exalts the police state as the source of order, denies fundamental rights and liberties to individuals, and makes the executive state the unlimited master of society.
Does that sound like America today? Do I even have to ask?
We are all involved in the struggle of Liberty vs. Fascism.
via Zero Hedge http://ift.tt/1awVT4w Tyler Durden
Submitted by Chris Rossini via The Mises Economic blog,
Hjalmar Schacht was Hitler’s economic guy. According to Wikipedia, Schacht: ”became a supporter of Adolf Hitler and the Nazi Party, and served in Hitler’s government as President of the Reichsbank and Minister of Economics. As such, Schacht played a key role in implementing the policies attributed to Hitler.”
Now, we all know what happened to Hitler. But what about Schacht?
On June 9, 1947 Henry Hazlitt would write in Newsweek:
Nazism was defeated in war. Hjalmar Schacht, the Nazi economic wizard, is in jail.
So Hitler was dead, and his economic guy went to jail
But what about the economic ideas that the two would implement together? What happened to them?
Hazlitt continues:
But when Schacht and his surviving comrades survey the world today, they must feel consoled. Intellectually Schachtism has conquered Europe. The system of price control, wage control, profit control, interest control, exchange control, foreign-trade control, bilateral treaties, rations, priorities, allocations, quotas, with a special license required for almost every more, and with a mounting currency inflation hidden and repressed by these devices – this is Schachtism. And this is the system which nearly every country in Europe has now embraced.
So the ideas did not die, nor were they confined to a jail cell. Each and every one of those ideas, were not only embraced by Europe, but by the U.S. as well!
Hitler’s foreign policy aspirations may have been defeated by the war. However, the same cannot be said about his economic policies. Those ideas would be embraced and implemented by the victors of the war!
More than any other system of ideas, it is Fascism that should be #1 on the Libertarian priority list to debunk and persist against. The governing elites are well aware that even they can’t sustain themselves under a system of Communism. However they do believe that Fascism is their golden chalice.
What is Fascism?
Lew Rockwell has the answer:
Fascism is the system of government that cartelizes the private sector, centrally plans the economy to subsidize producers, exalts the police state as the source of order, denies fundamental rights and liberties to individuals, and makes the executive state the unlimited master of society.
Does that sound like America today? Do I even have to ask?
We are all involved in the struggle of Liberty vs. Fascism.
via Zero Hedge http://ift.tt/1awVT4w Tyler Durden
Visa and American Express are up over 4.5% each today (the latter more earlier) to new record highs (on a day when Facebook, Google, and Apple are plumbing the day’s lows). The combined effect of the Visa and American Express gains are over 67 Dow points… the Dow is up 65.8 points on the day…
The AXP move is the largest since October 2011 and V the largest day jump since May 2013…
Looks like investors decide at 1045ET that it was time to sell AXP and greatly rotate into V.
Thank goodness for credit card companies (but the Dow remains red for the year)
via Zero Hedge http://ift.tt/1awVSOh Tyler Durden
Visa and American Express are up over 4.5% each today (the latter more earlier) to new record highs (on a day when Facebook, Google, and Apple are plumbing the day’s lows). The combined effect of the Visa and American Express gains are over 67 Dow points… the Dow is up 65.8 points on the day…
The AXP move is the largest since October 2011 and V the largest day jump since May 2013…
Looks like investors decide at 1045ET that it was time to sell AXP and greatly rotate into V.
Thank goodness for credit card companies (but the Dow remains red for the year)
via Zero Hedge http://ift.tt/1awVSOh Tyler Durden
By EconMatters
EIA Petroleum Report
In reviewing the EIA weekly petroleum report, the oil imports figure came in at 6.889 (Million Barrels per Day) for the week ending 01/10/14. This number compared to a year ago 8.030 (Million Barrels per Day) puts a nice cap on the downtrend which really started gaining steam in 2010 onward.
Compare this imports number with the U.S. Production number of 8.159 (Million Barrels per Day) and it is clear that oil is being managed quite effectively to keep supplies and prices in check. A year ago U.S. Production was 7.041 (Million Barrels per Day), and so the goal is to try and offset imports to the increases in U.S. Production by importing less oil.
Managing Oil Supply
This is inventory and supply management 101, but unlike solar panels where supplies from China flooded the market, and prices plummeted sending many manufacturers out of business, oil and Brent especially has remained relatively high. In fact Brent is actually considerably higher than 2010 when the US was importing much more of the commodity.
Sure one could say that China is utilizing all the spare oil that used to come to the United States, but one look at Australia`s export numbers versus the boom in China for commodities when they were building new cities seemingly every month, seem to tell a different story.
Dramatic Paradigm Shift
These are not small numbers we are talking about here, the differences in U.S. Production and Imports since 2010 to the current numbers is just an incredibly big delta. For example, in 2010 U.S. Production was around 5,500 (Million Barrels per Day) and Imports were around 9,500 (Million Barrels per Day) on average. When one starts running the numbers for the entire year, for three years successively, the dramatic commodity paradigm shift is huge, and the overall number is quite large.
Price Independent of Fundamentals
Moreover, to think that price actually went against this trend in the largest oil consuming market in the world is even more astonishing when you think about it. Sure QE liquidity has in some sense inflated many of these commodities like Gold, Silver, and Copper along with every other asset known to humankind that is traded in financial markets.
But the major disconnect between the collapse in Iron-Ore prices with the slowdown in China and the rising with Brent Oil prices over the same time period with Global production outpacing demand on a weekly, monthly and annual basis is just an interesting feat in and of itself.
Sure the Middle East has flared up several times, almost every January to April time period for the last three years the Middle East flares up for a short time period. However, no real supply disruptions have materially occurred, and after several weeks of demonstrations, things routinely go back to normal. In the overall big picture these Geo-Political events are mere blips on the radar screen in the oil market.
Middle East Production Changes
Interestingly now that Iran, Iraq and Libya are all set to pump more oil in 2014 is this finally going to be the nail in the coffin for the Brent contract, so that it trades the bulk of the year on par, or even at a discount to WTI? Not if the US Refining Industry has any say in the matter, this WTI-Brent Spread is crucial for their business model, and they have a vested interest in defending the spread at all costs.
You don`t think this spread exists solely due to natural supply dynamics of the underlying products do you? There are vested interests and stakeholders at play here; the spread is encouraged because it meets the needs of many stakeholders on both sides of the pond so to speak.
Where is Supply Really Going?
It is obvious that a lot of this oil is just staying in the ground; some of it is probably being stored in China on a resource play as they build up their reserves.
But at some point reserves fill up, and these Middle East countries need more and more revenue to meet their expanding budget commitments. Therefore, holding back production to artificially manage global prices by limiting supply works for a while but eventually these same producers are going to need to start producing more to meet the expanding revenue requirements, especially if price is unable to compensate substantially for much lower production volumes.
Consequently, when this happens the world could experience its first real meaningful break in oil prices in the last 10 years (apart from the financial crisis temporary drop) even with a slightly improving global economy.
Final Thoughts
The three contributing factors would be the dynamics of the North American Oil Production market, the ending of QE Stimulus, and the eventual increased production from the Middle East (both in terms of New Oil coming onto the market & the increases in existing supply to meet revenue objectives which is currently being purposefully withheld from the market).
It may take towards 2015 for this to all play out, and with more fuel efficient vehicles in the developed world, and China already struggling with pollution overload ( the last thing they can handle is more cars on the road), it makes intuitive sense that at some point the fundamentals are going to dictate a lower oil price.
Furthermore, one would think that Brent comes under increased pressure in 2014; and accordingly it would seem that any rally in Brent should offer up a nice entry point on establishing a short position in the commodity.
© EconMatters All Rights Reserved | Facebook | Twitter | Post Alert | Kindle
via Zero Hedge http://ift.tt/1cC3gob EconMatters
US equity investors have not been this “euphoric” since the peak of the US equity market in 2000. As Citi’s Tobias Levkovich notes, while he is longer-term a believer is the secular bull, one has to remember that there can be a secular run with substantive bumps along the way. No one questions the 1982-2000 equity bull market but there were some awful moments in that 18-year period including the stock market crash of 1987 and the sharp pullback in 1990 as well as in 1998.
With Citi’s proprietary Panic/Euphoria model at levels that imply an 80% probability of a negative return in the next 12-months, Levkovich warns chasing the tape simply on the basis of momentum may not be a good strategy since expecting another 25%-30% appreciation in 2014 seems rather excessive.
Source: Citi
via Zero Hedge http://ift.tt/1dYyCGr Tyler Durden
US equity investors have not been this “euphoric” since the peak of the US equity market in 2000. As Citi’s Tobias Levkovich notes, while he is longer-term a believer is the secular bull, one has to remember that there can be a secular run with substantive bumps along the way. No one questions the 1982-2000 equity bull market but there were some awful moments in that 18-year period including the stock market crash of 1987 and the sharp pullback in 1990 as well as in 1998.
With Citi’s proprietary Panic/Euphoria model at levels that imply an 80% probability of a negative return in the next 12-months, Levkovich warns chasing the tape simply on the basis of momentum may not be a good strategy since expecting another 25%-30% appreciation in 2014 seems rather excessive.
Source: Citi
via Zero Hedge http://ift.tt/1dYyCGr Tyler Durden
While everyone obsesses over the monthly payrolls report, which on a trailing 12 month basis is once indicating the creation of roughly 2 million jobs each year, or roughly where it was before the crisis (red line chart below), one aspect that is largely ignored is the amount of hiring.
Why is hiring important?
Because that is the actual process by which those without a job end up with a job. And as we just learned today after the latest JOLTS release, which showed that there were over 4 million job openings (4,001 to be precisely) for the first time since 2008, a far more important number is the update on Hires which at 4.5 million barely changed from last month, but more importantly, is barely a fraction of where it should be based on the number of job gains reported by the BLS monthly. The chart below confirms this stunning discrepancy: a surge in jobs with barely half the pre-recession hiring?
How does one explain this discrepancy in which the US economy supposedly is growing at its historic peak pace while hiring is at half the peak pace? Simple: the gains in nonfarm payrolls are due a decline in layoffs and other separations, not an increase in hirings: i.e., normal labor demand driven growth.
Which means that anyone hoping for a brisk increase in wages, i.e. worker leverage, is in for a prolonged shock.
The chart above simply shows that the leverage is and continues to be with the employers – instead of letting people go (or workers quitting at their volition) at anything close to a traditional pace, employers have a huge bargaining chip – a job. Because if a worker does not want to perform a job, tough: there are about 3 people willing to fight for every job opening. It also means that those who lose their job will find it doubly more difficult time to reenter the workforce as there simply is not enough hiring.
Which means that wage deflation, at least among prevailing jobs, will continue leading to declining real disposable income, a declining in personal savings and the continued use of “student loans” (since credit card deleveraging continues) to fund everyday lifestyles, at least until such time as the hiring trend has normalized.
The really bad news: while such a normalization will eventually happen, according to our back of the envelope calculations, it will take place some time in… 2020.
via Zero Hedge http://ift.tt/1dYyCpT Tyler Durden
It’s just not Whitney Tilson’s year/decade… the “money-manager” and co-founder of the invaluable Value Investor Insight newsletter has decided, with the exit of yet another partner – John Heins – that it is time to sell. In an email from the ex-financial-media-darling, Tilson explains “the business is a beautiful, high-margin cash cow,” is looking for a partner to buy the business.
From Whitney Tilson:
As Value Investor Insight enters its 10th year, my long-time partner and co-founder, John Heins, is contemplating a next stage of his career. This has prompted our contemplating a next stage in Value Investor Insight’s evolution as well. We’re exceedingly proud of VII and will ensure that it doesn’t miss a beat, but we’re starting to look for a partner or partners who might be interested in buying all or part of the business and taking over John’s full-time responsibility in running it.
(My involvement in the day-to-day operation is almost nil, both because John does an exceptional job interviewing investors and producing the newsletter and because my energies are focused on being a money manager, not interviewing other ones!)
The business is a beautiful, high-margin cash cow. If you or someone you know might have an interest in it, please let me know and I can give you further information.
Good luck with that… when all anyone needs to know is BTFATH, BTFD, and BTFMS (“most-shorted”) and fundamental (value investing or otherwise) is entirely irrelevant (see AXP today).
via Zero Hedge http://ift.tt/1dCi6RK Tyler Durden