Category: zerohedge

With the recent adoption of explicit forward guidance as a stimulative policy tool by the major European central banks, virtually every major central bank is now using the tool in some form. The potential benefits and dangers of such policies as central bank communications have evolved are unclear as "the form of guidance" matters. As Robin Brooks notes, and is so well illusrated below in the example of the Riksbank's and Norges Bank's 'failures', "[In terms of implications for rates] the jury is still out on how well forward guidance works. What is clear, though, is that markets prefer 'deeds' to 'words'."

Forward Guidance has become extremely important…

As Central bank communications (whether at extremes of policy or not) have evolved dramatically over the past 20 years…

(click image for massive legible version)

Especially intriguing is Janet Yellen's note:

As recently as two decades ago, most central banks actively avoided communicating about monetary policy. According to Janet Yellen, the current Vice Chair of the Federal Reserve who was recently nominated to succeed Chairman Bernanke: “Montagu Norman, governor of the Bank of England in the early 20th century, reputedly lived by the motto “never explain, never excuse”.

 

The conventional wisdom among central bankers was that transparency was of little benefit for monetary policy and, in some cases, could cause problems that would make policy less effective.

Source: Janet Yellen, Speech: “Communication in Monetary Policy”,
April 4, 2013.

We have little historical precedent for judging the efficacy if explicit forward guidance. However, as Goldman Sachs notes, Norway’s Norges Bank introduced a form of forward guidance in 2005, while Sweden’s Riksbank followed soon after in 2007; and so we look to how well their "guidance" has fit reality (or shaped markets at the time)…

Lessons From Forward Guidance Pioneers

Forward guidance is not a policy reserved for only extreme situations. Indeed, well ahead of the global financial crisis and before the “zero lower bound” of policy rates motivated some central banks to explore the role of communication tools to achieve further easing,

Explicit but conservative

The Scandinavian central banks’ form of forward guidance is among the most explicit in nature: both Norges Bank and the Riksbank publish a “policy rate path” several times a year detailing the level of the policy rate expected by the (majority) of the Executive Board of the central bank over their forecast horizon (around three years). In addition, the Scandinavian central banks publish a range of economic forecasts, such as growth, inflation, the output gap and the unemployment rate.

Although the form of forward guidance may be one of the most explicit currently in place, the nature is more conservative: the “policy rate path” is a conditional estimate of future policy rates – based on the economy and market conditions – not a commitment.

With no intention of attempting to “tie their hands” in the way that Fed-style forward guidance aims to do by promising to keep rates “lower for longer” than would normally be the case, Norges Bank and the Riksbank maintain full discretion at all times. Forward guidance in Scandinavia is therefore a pure communication tool rather than an innovation in monetary policy strategy.

Relevant for the ECB?

Scandinavian central banks’ lengthy experience with forward guidance may be more relevant for the ECB’s nascent forward guidance than what one might immediately think. While the ECB’s style of forward guidance is rather vague, stating only that policy rates will remain at current or lower levels for an “extended period of time”, compared to the Scandinavian central banks’ detailed policy rate paths, both the ECB and Norges Bank/the Riksbank maintain full discretion of their policy rates at all times.

This is a crucial similarity. And with a shared fundamental underpinning of forward guidance, the Scandinavian experience may shed light on whether a more explicit form of forward guidance by the ECB, while maintaining full discretion, might help the ECB more effectively influence Euro area money market rates.

Gains from transparency despite discretion

A look at how past shifts in the Riksbank’s published policy rate path have impacted market pricing suggests that changes to the policy rate path can be just as important to shaping forward market pricing as changes to actual policy rates. Because the form of communication at the Riksbank is so explicit, this experience provides a likely upper bound to what can be achieved (e.g., by the ECB) with a fully transparent form of forward guidance that still allows for full discretion.

 

While we do not expect the ECB to adopt much more explicit forward guidance, let alone to actually publish a policy rate path any time soon, the Riksbank experience suggests that the ECB’s impact on market rates may be enhanced by increasing the information available to the market regarding the ECB’s view of future likely policy developments. This could take the form of increasing the length of the ECB’s forecast horizon (currently only between 1 to 2 years) or providing a greater account of the Governing Council’s deliberations.

 

[ZH: While the result is still out, one thing seems very clear from the two charts above… Central bank "forward guidance" appears always and forever overly-confident of their ability (or willingness) to tighten…]

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/QC8qjWwfvyU/story01.htm Tyler Durden

The ironically-named Quality Software Services Inc (QSSI) responsible for the SNAFU that is the Obamacare website’s data hub has, incredibly, been named the new general contractor in charge off repairing the glitch-plagued HealthCare.gov. As The NY Post reports, as if the $150 million so far paid to this UnitedHealth subsidiary for its farcically bad implementation was not enough, the executive vuce president of the firm (Anthony Welters) and his wife were among Obama’s largest personal campaign contributors during the 2008 election cycle (and the firm has spent millions “lobbying” for Obamacare). The cronyism runs deep as the Post also notes, visitor logs show at least a dozen visits between the two by the end of 2012, the most recent information available.

 

The man at the center of the “cronyism”… Anthony Welters

 

Via NY Post,

A tech firm linked to a campaign-donor crony of President Obama not only got the job to help build the federal health-insurance Web site — but also is getting paid to fix it.

 

Anthony Welters, a top campaign bundler for Obama and frequent White House guest, is the executive vice president of UnitedHealth Group, which owns the software company now at the center of the ObamaCare Web-site fiasco.

 

UnitedHealth Group subsidiary Quality Software Services Inc. (QSSI), which built the data hub for the ObamaCare system, has been named the new general contractor in charge of repairing the glitch-plagued HealthCare.gov.

 

Welters and his wife, Beatrice, have shoveled piles of cash into Obama’s campaign coffers and ­apparently reaped the rewards.

 

…

 

The couple have been frequent guests at the White House.

 

Visitors logs show at least a dozen visits between the two by the end of 2012, the most recent information available.

 

The entire Welters family has gotten into the donation game.

 

The Welters, along with their sons, Andrew and Bryant, have contributed more than $258,000 to mostly Democratic candidates and committees since 2007.

 

What’s more, UnitedHealth Group is one of the largest health-insurance companies in the country and spent millions lobbying for ObamaCare.

 

…

 

The insurance giant’s purchase of QSSI in 2012 raised eyebrows on Capitol Hill, but the tech firm nevertheless kept the job of building the data hub for the ObamaCare Web site where consumers buy the new mandatory health- ­insurance plans.

 

QSSI has been paid an estimated $150 million so far, but officials couldn’t say how much more the company might collect on the ­repair contract.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/h3KZCM_am7w/story01.htm Tyler Durden

Paper gold in the developed world may trade based on the whims of marginal momentum chasers, and of course, the daytrading mood of the BIS gold and FX trading desk, but when it comes to physical gold and China’s appetite for it, one word explains it best: unstoppable.

After rising to a gross 131 tons imported from Hong Kong alone in August, which was the second highest ever monthly import tally, September saw a modest decline to “only” 116 tons: “only” because it is still 67% more than the amount imported a year earlier. 

The total gross imports since September 2011 is now a whopping 2232 tons. Why September? Because that is when we posted: “Wikileaks Discloses The Reason(s) Behind China’s Shadow Gold Buying Spree.” The chart below confirms precisely said reason.

The gross imports year to date are now over 1,113 tons, 91.3% more than the amount of gold imported through September of 2012.

Netting out exports to Hong Kong, September was virtually unchanged from August, at 109 metric tons vs 110 a month earlier. In other words, September was tied for the third highest net import month in Chinese history.

And yes, we realize that to western thinking buying more when the price is dropping in explicable: ironically even the vast majority of gold bugs are merely interested in a momentum conversion in and out of fiat, thus treating gold as an investable, fiat-denominated asset and not as a currency. China, on the other hand, continues to show that when one’s only intention is to purchase as much gold as possible to preserve wealth and purchasing power and/or unleash the gold standard back on the world (either alone or jointly with Russia and/or Germany), dropping or plunging gold prices are merely the icing on the cake.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/VCKePCkQ6D0/story01.htm Tyler Durden

Paper gold in the developed world may trade based on the whims of marginal momentum chasers, and of course, the daytrading mood of the BIS gold and FX trading desk, but when it comes to physical gold and China’s appetite for it, one word explains it best: unstoppable.

After rising to a gross 131 tons imported from Hong Kong alone in August, which was the second highest ever monthly import tally, September saw a modest decline to “only” 116 tons: “only” because it is still 67% more than the amount imported a year earlier. 

The total gross imports since September 2011 is now a whopping 2232 tons. Why September? Because that is when we posted: “Wikileaks Discloses The Reason(s) Behind China’s Shadow Gold Buying Spree.” The chart below confirms precisely said reason.

The gross imports year to date are now over 1,113 tons, 91.3% more than the amount of gold imported through September of 2012.

Netting out exports to Hong Kong, September was virtually unchanged from August, at 109 metric tons vs 110 a month earlier. In other words, September was tied for the third highest net import month in Chinese history.

And yes, we realize that to western thinking buying more when the price is dropping in explicable: ironically even the vast majority of gold bugs are merely interested in a momentum conversion in and out of fiat, thus treating gold as an investable, fiat-denominated asset and not as a currency. China, on the other hand, continues to show that when one’s only intention is to purchase as much gold as possible to preserve wealth and purchasing power and/or unleash the gold standard back on the world (either alone or jointly with Russia and/or Germany), dropping or plunging gold prices are merely the icing on the cake.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/VCKePCkQ6D0/story01.htm Tyler Durden

Submitted by Lance Roberts of STA Wealth Management,

As we enter into the two final months of the year, it is also the beginning of the seasonally strong period for the stock market.  It has already been a phenomenal year for asset prices as the Federal Reserve's ongoing liquidity programs have seemingly trumped every potential headwind imaginable from Washington scandals, potential invasions, government shutdowns and threats of default.  This leaves us with four things to ponder this weekend revolving around a central question:  "Does the Fed's Q.E. programs actually work as intended and what are the potential consequences?"

1) Three Questions For Ben Bernanke (via ZeroHedge)

David Einhorn of Greenlight Capital turns his attention to Ben Bernanke with three primary questions:

"We maintain that excessively easy monetary policy is actually thwarting the recovery. But even if there is some trivial short-term benefit to QE, policy makers should be focusing on the longerterm perils of QE that are likely far more important. Here are some questions that come to mind:

 

How much does QE contribute to the growing inequality of wealth in this country and what are the risks this creates?

 

How much systemic risk does the Fed create by becoming what Warren Buffett termed 'the greatest hedge fund in history'?

 

How might the Fed's expanded balance sheet and its failure to even begin to 'normalize' monetary policy four years into the recovery limit its flexibility to deal with the next recession or crisis?"

2) Heal Thy Economy Or Fuel The Next Crisis  (Project Syndicate)

Nouriel Roubini, a professor at NYU's Stern School of Business, plays tag team with David Einhorn questioning the policies and programs of not only the Federal Reserve but of all global central banks.

"As below-trend GDP growth and high unemployment continue to afflict most advanced economies, their central banks have resorted to increasingly unconventional monetary policy. An alphabet soup of measures has been served up: ZIRP (zero-interest-rate policy); QE (quantitative easing, or purchases of government bonds to reduce long-term rates when short-term policy rates are zero); CE (credit easing, or purchases of private assets aimed at lowering the private sector's cost of capital); and FG (forward guidance, or the commitment to maintain QE or ZIRP until, say, the unemployment rate reaches a certain target). Some have gone as far as proposing NIPR (negative-interest-rate policy).

And yet, through it all, growth rates have remained stubbornly low and unemployment rates unacceptably high, partly because the increase in money supply following QE has not led to credit creation to finance private consumption or investment. Instead, banks have hoarded the increase in the monetary base in the form of idle excess reserves. There is a credit crunch, as banks with insufficient capital do not want to lend to risky borrowers, while slow growth and high levels of household debt have also depressed credit demand.

As a result, all of this excess liquidity is flowing to the financial sector rather than the real economy. Near-zero policy rates encourage "carry trades" – debt-financed investment in higher-yielding risky assets such as longer-term government and private bonds, equities, commodities and currencies of countries with high interest rates. The result has been frothy financial markets that could eventually turn bubbly."

 Nouriel's comments touch on a topic that has become much more "mainstream" as of late which questions whether asset prices have once again began to over inflate.

3) 5 Signs The Stock Market Is In A Bubble (CBS Moneywatch)

Larry Fink, CEO of giant money manager BlackRock, clearly thinks the market is frothy.

"We've seen real bubble-like markets again," he said at a panel discussion this week, according to theBloomberg news agency. "We've had a huge increase in the equity markets."

 

Fink and many others are concerned about the impact of the Federal Reserve's "quantitative easing" program, under which the central bank is buying $85 billion a month in government bonds and mortgage securities in hopes of stimulating economic growth. These assets have vastly expanded the Fed's balance sheet, including recently. Since Sept. 4 alone, those balance sheets have increased 4.3 percent, while the S&P 500 has increased 4.9 percent.

In other words, investors are doubling down to capitalize on the cheap money that continues to flood the market."

The financial markets have long been seen as a gauge of future economic activity.   As the stock market rises the economy has also risen.  However, that has not been the case over the last several years with the economy stuck at a sub-par rate of growth.  Today, with the high degree of correlation between the Fed's balance sheet and the financial markets, it is getting increasingly difficult to make the case that the markets are reflecting anything but themselves.

 

4) Why The Fed Can't Taper (Via Pragmatic Capitalist)

Fraces Coppola, proprietor of the Coppola Comment, recently discussed the issues behind the Fed's inability to "taper" its current Q.E. program.

"Tapering is removing central bank support of asset prices. Unless not just the US economy but the GLOBAL economy is "on the up" at the time that tap
ering commences, the result of tapering will be a global fall in asset prices. That isn't going to cause hyperinflation, as the Austrian school thinks, but it would cause a global recession.

 

I'm afraid it is not US fundamentals, but global fundamentals that will determine the Fed's ability to taper. If the Fed tapers when the global economy is already in the doldrums, as it is at the moment, the recessionary rebound to the US economy would be considerable.

 

Because of the US dollar's pre-eminence (and the pre-eminence of USTs, too – we don't talk about that enough), the Fed is effectively the world's central bank. It is high time that the US accepted that its monetary (and fiscal) policies must be driven by the needs of the global economy, not just the US. The 'exorbitant privilege' is an exorbitant responsibility, too."

QE Doesn't Do Much

As I discussed this past week the reality is that the Fed is now caught in a "liquidity trap."  If they begin to remove its liquidity support the markets, and the economy, roll over.  The results would like be quite devastating for investors.   However, continuing to push asset prices higher also will eventually end badly.  It is quite the conundrum for the Federal Reserve and for investors.

While the Federal Reserve continues to push its liquidity programs, the reality is that it does little for economic growth.  Nobel Prize winner Eugene Fama discussed with Rick Santelli how the only thing that really benefits from QE programs, other than asset prices, are the "expectations" of benefits on the economy.  He explains, in the following CNBC interview, that there is really no reason why QE programs would have much economic impact at all.

 

How we got here is one thing.  Apparently, getting out will be quite another.  John Hussman summed this all up well:

"In regard to what is demonstrably true, it can easily be shown that unemployment has a significant inverse relationship with real, after-inflation wage growth. This is the true Phillips Curve, but reflects a simple scarcity relationship between available labor and its real price, but this relationship can't be manipulated to create jobs (see Will the Real Phillips Curve Please Stand Up). It's also true that changes in stock prices are mildly correlated with subsequent reductions in the unemployment rate and higher GDP growth. But the effect sizes are strikingly weak. A 1% increase in stock prices correlates with a transitory increase of only 0.03-0.05% in subsequent GDP, and a decline of only about 0.02% in the unemployment rate. So to use the stock market as a policy instrument, the Fed would have to move the stock market about 70% above fair value just to get 2.8% in transitory GDP growth, and a 1.4% decline in the unemployment rate. Guess what? The Fed has done exactly that. The scale of present financial distortion is enormous, and further distortions rely on the permanent belief that there is actually a mechanistic link between monetary policy and stock prices.

 

We know very well the mechanisms and actual historical relationships between monetary policy and financial markets, and doubt that any amount of quantitative easing will prevent a market slaughter in any environment where investors find short-term liquidity desirable (QE only “works” to the extent that zero-interest liquidity is treated as an undesirable “hot potato”). Still, the novelty of quantitative easing, and the misattributed belief that monetary policy ended the banking crisis, has created financial distortions where perception-is-reality, at least for now. We believe that the modifier “for now” will prove no more durable than it was during the tech bubble or the housing bubble."

It is something to ponder over the weekend.

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/z3oFuW4ocXw/story01.htm Tyler Durden

For over a year we have discussed that in Bernanke’s centrally-planned markets, in which the risk-return formula is now wholly absent the former, the best source of “alpha” (purely in the context of recognizing that the market has become a complete and total joke) for over a year has been going long the most shorted companies. And as we reminded just over a month ago, the most shorted stocks have returned double the broader market in the past year alone. Which is why we were not surprised to see that none other than Goldman yesterday, issued research formalizing none other than going long the most shorted stocks in a piece titled “Investors focused on the results of high short interest stocks.” Since Goldman is legendary for flipping at inflection points, especially with a 1+ year delay after the strategy has been working flawlessly, this probably means that going long the most shorted stocks is no longer a viable source of “alpha.”

From Goldman:

 

Short interest as a percent of S&P 500 market cap is currently 2.1%, in line with the average over the past year. While the share of market cap held short stayed flat, the short interest ratio (days to cover) has risen steadily since April 2012 as volumes remained low.

 

 

This week, investors focused on how stocks with high short interest as a share of market cap are trading this earnings season. Of the top 50 reported S&P 500 companies ranked by short interest, short interest ranges from 6% to 31% of market cap. Short interest for the median S&P 500 stock is 2.1% of float cap.

 

High short interest stocks reported a similar frequency of earnings beats and misses. Revenue results skewed more positive. 26% of S&P 500 companies beat revenue expectations while 36% of high short interest stocks exceeded consensus expectations by one standard deviation or more.

 

High short interest stocks were more likely to outperform the market on the next trading day than the typical S&P 500 stock indicating that there may be short covering post-earnings results. 58% of the high short interest names outperformed the S&P 500 one day after reporting results versus 47% for all reported S&P 500 companies.

 

However, performance of the median high short interest stock is similar to the median S&P 500 stock since the start of earnings season. Since October 4, the median high short interest stock returned 4.6% while median S&P 500 stock returned 4.1%.

 

Next week, six stocks with over 10% of float share held short are expected to report: Frontier Communications (FTR), IntercontinentalExchange (ICE), Windstream Holdings (WIN), Chesapeake Energy (CHK), Dun & Bradstreet (DNB), and Cablevision Systems (CVC).

 

Of course, if indeed this means that buying the most shorted stocks is no longer a “sustainable” strategy, that would be ok as it implies one small step toward returning to a normal, credible, non-manipulated market: something that both we and David Einhorn openly lament. Recall from David Einhorn’s Advice On How To Trade This Equity Bubble:

Finally, there are the market participants whose investment process appears to be “bet on whatever has made money most recently.” They’ve noticed that stocks with large short-interest ratios have materially outperformed over the last year and they continue to invest accordingly. When “high short interest” becomes a viable stock-picking strategy and conventional valuation methods no longer apply for many stocks, we can’t help but feel a sense of déjà vu. We never expected to find ourselves in an environment like this again, given the savings that were lost when the internet bubble popped.

Alas, we are smack in the middle of the same bubble once again, and will be until the Chairman keeps playing the musical chairs dance ever faster and faster until finally everyone drops dead.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/y0v1kmZLu7w/story01.htm Tyler Durden

Not even Paul and John would have any clue what the message is or what is going on in this psychedelic, Yellow Subamrine-inspired TV ad slot for Obamacare titled “Fly With Your Own Wings”, part of the Cover Oregon campaign (funded by US taxpayers). Perhaps: enroll in Obamacare, get a lifetime supply of LSD for free…

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ZuutNJ1KxP4/story01.htm Tyler Durden

It appeared the US dollar was bottoming in the first half of October.  We had noted the possibility of head and shoulders reversal patterns in sterling and the Swiss franc.   These proved for naught, and yet, it still appears the dollar is carving out a bottom. The technical tone for the greenback has improved in recent days.  

 

There has also been a  shift in the fundamental focus toward somewhat better news from the US and somewhat poorer news from Europe. There is mounting speculation that the European Central Bank will have to have some sort of policy response to the continued decline in private lending, weak growth in money supply, and near record low inflation. 

 

The Dollar Index, which despite the fact that it is not reflective of US trade flows (two of the US 4 largest trading partners, China and Mexico, are not included, and it is heavily weighted toward the euro and currencies that move in the euro’s orbit), many participants see it a rough-and-ready proxy for the US dollar in general.  The key technical development is that it finished last week above the downtrend line drawn off this year’s highs in early July and the bounce in early September.   

 

If that down move is being retraced, the next target for the Dollar Index is the 81.20 area and then the 81.75-90 area, which corresponds to a 61.8% retracement and the 200-day moving average.   We note that the RSI and MACDs suggest additional gains and the 5-day moving average has crossed above the 20-day average.  A move now much below 80.00 would cast doubt on this constructive outlook.  

 

For its part, the euro has not violated a similar trend line, drawn off the early July and Sept lows. On Monday it comes in near $1.3425.  That area also corresponds to a retracement objective.  By the end of the week it is closer to $1.3460.  The 5-day average has not cross below the 20-day average, but it most likely will on Monday.  The RSI and MACDs are moving lower. Assuming the trend line is convincingly violated, the next target would be in the $1.3300-35 area, which represents the next retracement objective and the 100-day moving average.  The 200-day moving average comes in closer to $1.3270.  Given the magnitude of the decline in recent days, it probably requires a move back above the $1.3600-50 area to negate this bearish technical view. 

 

The dollar has also not violated its similar downtrend against the Swiss franc.  That trend line comes in near CHF0.9180 at the start of the new week, which corresponds to last month’s high, and finishes the week near CHF0.9150. The 5- and 20-day moving averages have not crossed, but they are poised to on Monday.   Once the trend line goes, the immediate objective is near CHF0.9220.  It will ultimately take a break of the CHF0.9420-50 area to raise confidence that a low of some import is in place.  

 

The dollar posted an outside up-day against the yen and the premium the US pays over Japan (on 10-year government paper) widened back above 200 bp for the first time since mid-October.   The technical tone is constructive, but within the context of the broad trading range conditions that have prevailed for five months now.   The dollar has been making lower highs and higher lows against the yen since the middle of Q2.  Last month’s high was near JPY99.00 and this represents the next target.  However, even a move a bit higher, even a little of JPY100, wouldn’t violate 5-month only trading range.  A move above September high near JPY100.60, though would suggest something more important is taking place technically.   The weekly technical readings warn of the upside risks to the dollar against the yen.  

 

Sterling appears to have carved out a double top (reversal pattern) in October, with gains in early and late in the month, stalling out near $1.6260.  It depends on how one draws the neck line, but it can be found in the $1.5890-$1.5915 area.  The pre-weekend low was near $1.5910.   A convincing break of the neck line, perhaps encouraged by accumulating evidence that the data is no longer surprising the market on the upside, would suggest potential toward the mid-$1.5500 area, which also roughly corresponds to a 50% retracement of the rally from the July lows near $1.4800. The 5-day moving average crossed below the 20-day before the weekend and the technical indicators are weak.   Resistance now is pegged in the $1.6040-70 area. 

 

The Australian dollar posted a key downside reversal on October 23, after poking through the 50% retracement of this year’s decline, and has not looked back since. The 5- and 20-day moving averages crossed in the second half of last week.  MACDs are have turned lower, but the RSI is not generating a strong signal.  A break of the $0.9430 area would target the $0.9325 area, though the real technical test may not come until closer to $0.9225.  If this correction in the Aussie is indeed over, the $0.9480-$0.9520 area should hold back stronger gains.  

 

The Canadian dollar is the only major currency to have gained against the US dollar last week (~0.25%).   Yet the Canadian dollar is not very inspiring.  It has been in a broad range for several months.  The US dollar has found demand near CAD1.02 and supply near CAD1.06.  The technical indicators are not generating strong signals.  Look for narrow CAD1.0350-CAD1.0450 range to dominate until toward the end of the week.  Both countries report Oct employment data on Nov 8.  

 

The US dollar is likely to push higher against the Mexican peso.  The 5- and 20-day moving averages are set to cross on Monday and, while the RSI is neutral, the MACDs are turning higher. A downtrend line drawn off the early Sept and early Oct highs comes in near MXN13.20 and this is a reasonable near-term objective.   If this near-term view is valid, the greenback should spend little if any time below MXN12.96.

 

 

Observations from the speculative positioning in the CME currency futures:

 

1.  There were mostly minor position adjustments in the most recent reporting week that ended October 29.   Of the 14 gross positions we track, 12 changed by less than 6k contracts, and of those, a third were less than 1k contracts.  Two gross positions were adjusted by more than 10k contracts:  long euros were added to while long yen positions were cut.  

 

2.  The gross long euro position came with spitting distance of the record high set in April 2007. Many observers focus on the net position, which will fail to reveal how large of a speculative long position has been accumulated.  The cut in the gross long yen position, almost in half from the previous week, is the smallest since March 2012.  

 

3.  In the week ending Oct 29, the gross long currency positions generally grew, with the yen and sterling being the exceptions.  There was a less of a pattern among the currency shorts, except to note the position adjustments were minor.  

 

4.  The net long sterling and Swiss franc positions are the largest since the start of the year, but were little changed from the previous period.  The net short Australian dollar position is the smallest since May.  

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Mta4Kjb6GCE/story01.htm Marc To Market

What is the common element between Liborgate, the Fed manipulating capital markets, China hoarding gold, and the recent ubiquotous NSA spying revelations? At one point, before they became fact, they were all “conspiracy theories” as were the Freemasons, the Illuminati, McCarthy’s witch hunts, 9/11, and so many more. The same theories, which – don’t laugh – are now part of a Cambridge University study titled Conspiracy and Democracy,  which looks at the prevalence of conspiracy theories and what they tell us about trust in democratic societies, about the differences between cultures and societies, and why conspiracy theories (ostensibly before they become fact) appear at particular moments in history. But, at its core, whether conspiracy theories will, as the BBC summarizes, it, eventually destroy democracy.

Because, supposedly, it is not the corruption at the top echelons of government, the ultimate usurpation of power by assorted globalist money groups “never letting a crisis go to waste”, that plunder wealth from what is left of the middle class and hands it over, via latent inflation, asset bubbles and capital appreciation to the 1% peak of society’s wealth pyramid (in the US), or kleptofascist, unelected bureaucratic groups seeking the “greater good” despite the complete tear of the social fabric (in Europe) that is a threat to democracy.

No – you see it is evil conspiracy theories and the theorists that spin them that are the biggest threat to the “democratic” way of life.

The BBC has more on this amusing, if potentially troubling, avenue:

“The reason we have conspiracy theories is that sometimes governments and organisations do conspire,” says Observer columnist and academic John Naughton. It would be wrong to write off all conspiracy theorists as “swivel-eyed loons,” with “poor personal hygiene and halitosis,” he told a Cambridge University Festival of Ideas debate. They are not all “crazy”. The difficult part, for those of us trying to make sense of a complex world, is working out which parts of the conspiracy theory to keep and which to throw away.

 

Mr Naughton is one of three lead investigators in a major new Cambridge University project to investigate the impact of conspiracy theories on democracy.

 

The internet is generally assumed to be the main driving force behind the growth in conspiracy theories but, says Mr Naughton, there has been little research into whether that is really the case. He plans to compare internet theories on 9/11 with pre-internet theories about John F Kennedy’s assassination.

 

Like the other researchers, he is wary, or perhaps that should be weary, of delving into the darker recesses of the conspiracy world.

 

“The minute you get into the JFK stuff, and the minute you sniff at the 9/11 stuff, you begin to lose the will to live,” he told the audience in Cambridge.

 

Like Sir Richard Evans, who heads the five-year Conspiracy and Democracy project, he is at pains to stress that the aim is not to prove or disprove particular theories, simply to study their impact on culture and society.

Impact on culture and society… and then judge: because if heaven forbid the fabled institution of higher learning that is Cambridge – the progenitor of many a statist thinkers – finds that conspiracy theories are a danger to fine, upstanding, democratic society… then what?

Why are we so fascinated by them? Are they undermining trust in democratic institutions?

No, but a far better question is do conspiracy “theories”, at least until confirmed, simply provide the beholder with a far more skeptical view of a world than the one spoon fed by a complicit media, whose sole purpose is to perpetuate and multiply – hence enrich – the advertising dollars of the status quo? And is the long overdue questioning of everything that emanates from institutions of power a bad thing, or were people simply too lazy to think for themselves and let the government do it, at least until said “cognitive outsourcing” led to the second great depression of 2008?

David Runciman, professor of politics at Cambridge University, the third principal investigator, is keen to explode the idea that most conspiracies are actually “cock-ups”.

 

“The line between cock-up, conspiracy and conspiracy theory are much more blurred than the conventional view that you have got to choose between them,” he told the Festival of Ideas.

 

“There’s a conventional view that you get these conspirators, who are these kind of sinister, malign people who know what they are doing, and the conspiracy theorists, who occasionally stumble upon the truth but who are on the whole paranoid and crazy. “Actually the conspirators are often the paranoid and crazy conspiracy theorists, because in their attempt to cover up the cock-up they get drawn into a web in which their self-justification posits some giant conspiracy trying to expose their conspiracy.

“And I think that’s consistently true through a lot of political scandals, Watergate included.”

Such a “complex” and profoundly introspective theory – truly something only a Cambridge professor could come up with.

[Runciman] is also examining whether the push for greater openness and transparency in public life will fuel, rather than kill off, conspiracy theories.

 

“It may be that one of the things conspiracy theories feed on as well as silence, is a surfeit of information. And when there is a mass of information out there, it becomes easier for people to find their way through to come to the conclusion they want to come to.

 

“Plus, you don’t have to be an especial cynic to believe that, in the age of open government, governments will be even more careful to keep secret the things they want to keep secret. “The demand for openness always produces, as well as more openness, more secrecy.”

You mean… like the NSA spying on everyone to be abreast of just what everyone knows?

Or does that mean that the Fed’s faux transparency affair is nothing but a red herring designed to redirect attention from the Fed’s true intentions somewhere else?

Unpossible.

That said, having been accused of a conspiratorial bent on a few occasions, we kinda, sorta see where this is going, and will go so far as to venture that in a few years, the Cambridge study’s conclusions (which certainly will cast all paranoid and crazy conspirators in a culpable light and worth of “social isolation”), will be escalated to enforce that anyone found of harboring “conspiratorial” thoughts will be bound and shackled in whatever WIFI-free dungeon the local host Big Brother government has created precisely for this ulterior subclass of humans.

But for now – conspire away… and upon exposing the deep lies beneath the surface of “democracy” – since the mainstream media simply refuses to be painted in the same paranoid and crazy brush – remember to promptly depart for the “evil undemocratic empire” that is Russia…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/zPB9MYE-kf8/story01.htm Tyler Durden

Submitted by Michael Krieger of Liberty Blitzkrieg

Top U.S. Hospitals Are Opting Out Of Obamacare

In the off chance you are actually able to access the website and successfully sign up for the epic disaster that is Obamacare, you might be a bit surprised about your options when you actually encounter a medical issue. Every American that is even considering signing up for this nightmare needs to be aware of the disturbing fact that many of the top hospitals in the nation will not be accepting Obamacare related insurance plans. Even worse, in many cases it is virtually impossible to find out which doctors and hospitals are on your plan.

One of the most egregious examples of failure is the following:

Seattle Children’s Hospital ranks No. 11 on the U.S. News & World Report best pediatric hospital list. When Obamacare rolled out, the hospital found itself with just two out of seven insurance companies on Washington’s exchange.

Seattle Children’s is the only pediatric hospital in King County, and offers keys services, such as cancer care, which are not available anywhere else in the region. So if you sign up for Obamacare, good luck surviving. Fortunately, that represents only about six people at the moment.

More from U.S. News:

Americans who sign up for Obamacare will be getting a big surprise if they expect to access premium health care that may have been previously covered under their personal policies. Most of the top hospitals will accept insurance from just one or two companies operating under Obamacare.

Watchdog.org looked at the top 18 hospitals nationwide as ranked by U.S. News and World Report for 2013-2014. We contacted each hospital to determine their contracts and talked to several insurance companies, as well.

The result of our investigation: Many top hospitals are simply opting out of Obamacare.

Chances are the individual plan you purchased outside Obamacare would allow you to go to these facilities. For example, fourth-ranked Cleveland Clinic accepts dozens of insurance plans if you buy one on your own. But go through Obamacare and you have just one choice: Medical Mutual of Ohio.

Consumers, too, will struggle with the new system. Many exchanges don’t even list the insurance companies on their web sites. Some that do, like California, don’t provide names of doctors or hospitals.

Continue reading ?

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/OFl2T2mNhds/story01.htm Tyler Durden