USDJPY Ignition Lifts S&P 500 Futures To All-Time-Record-Er High (For Now)

It seems ‘someone’ needed to run the S&P futures market back over Friday’s highs just to flush the stops one more time. Thanks to some JPY-selling that momentum was ignited and S&P futures just made new all-time-highs… because, well why not. Soon after the stops were run in stocks, JPY started to revert and so are futures. Gold, oil, and treasuries are all unch for now as is EURUSD.

 

S&P futures were up over 5 points…

 

 

Chart: Bloomberg


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/K24HtWx0uRo/story01.htm Tyler Durden

Behold The Face Of Central Banker Hubris

Submitted by Simon Black of Sovereign Man

Behold The Face Of Central Banker Hubris

March 18, 1996. It was the height of the dot-com boom years. And gracing the cover of Fortune magazine was a photo of a rather smug looking Alan Greenspan, then Chairman of the US Federal Reserve.

The headline across the top– “It’s HIS economy, stupid”. The inside story was entitled “In Greenspan We Trust”.

And the article went on to suggest that, no matter WHO won the presidential election that year between Bill Clinton and Bob Dole, Greenspan would still be running the economy. And handily.

This is a major testament to the state of our financial system. We award a tiny banking elite nearly totalitarian control over our money supply… and by extension, the economy.

We’re just supposed to trust that they’re good guys. Competent guys. That they know what they’re doing.

Fast forward almost two decades. Long Term Capital Management. The NASDAQ bubble. The real estate bubble. The credit crunch. The mortgage crisis. The banking crisis. The sovereign debt crisis.

Now, this seemingly interminable series of emergencies is by no means the consequence of a single individual. But it’s clear that Greenspan (and his successor Ben Bernanke) have had, by the very definition of their position, tremendous influence in getting us to this point.

Yet Greenspan’s new book, The Map and the Territory, explains why he never saw any of this coming.

(You can read some of this for yourself if you’re so inclined– Foreign Affairs magazine just published an adapted excerpt from the book.)

Greenspan’s explanation is as infuriating as it is arrogant.

He stops far short of accepting any responsibility, and merely states that the “conventional method of predicting macroeconomic developments. . . had failed when it was needed most, much to the chagrin of economists.”

And of course, he melts his culpability away into the great masses of other economists, brashly stating that “virtually every economist and policymaker” completely missed the warning signs.

Yet as irritating as Greenspan’s confession may be, there is no surer condemnation of this faux-science of economics than a former maestro himself pillorying its deficiencies.

Let’s put it more bluntly. The guy who used to be in charge of the US economy openly admits that the ‘science’ they rely on to make decisions is fundamentally flawed.

The only thing these central bankers know how to do is print more money. Yet, as Greenspan tells us, they’re completely ill-equipped to be making these decisions. Nor do they realize how severe the consequences will be.

John Maynard Keynes, the godfather of their economic models himself, once wrote:

“The process [of debasing the currency] engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

Not one man in a million. Based on Greenspan’s own admission, this includes central bankers as well.

If all the objective evidence, and even their own assessment, points to the inevitable conclusion that this system is broken, isn’t it time to consider taking independent steps outside of this system to protect what you’ve worked for your entire life?


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/_l5hnJGjpVE/story01.htm Tyler Durden

BofAML Warns "US 10Y Yields Have Reached Massive Resistance"

Since mid-October the US$ has been under siege. However, As BofAML’s MacNeill Curry notes, that decline is showing signs of exhaustion from which a base and correction higher is likely. Curry’s “basing” view is further supported by the US Treasury market, where yields (particularly 5yrs and 10yrs) are poised to bottom and turn higher over the coming sessions

US Treasury yields set to base

US 10yr yields have reached “Massive” resistance. Specifically, the 2.474%/2.399% zone has been a long standing pivot which has repeatedly repelled. With momentum (14d RSI) at its most overbought since May, odds favor a medium term bearish turn in trend towards the mid-Oct highs at 2.759%.

 

 

Source: BofAML


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/E4OtjUm7i7Y/story01.htm Tyler Durden

BofAML Warns “US 10Y Yields Have Reached Massive Resistance”

Since mid-October the US$ has been under siege. However, As BofAML’s MacNeill Curry notes, that decline is showing signs of exhaustion from which a base and correction higher is likely. Curry’s “basing” view is further supported by the US Treasury market, where yields (particularly 5yrs and 10yrs) are poised to bottom and turn higher over the coming sessions

US Treasury yields set to base

US 10yr yields have reached “Massive” resistance. Specifically, the 2.474%/2.399% zone has been a long standing pivot which has repeatedly repelled. With momentum (14d RSI) at its most overbought since May, odds favor a medium term bearish turn in trend towards the mid-Oct highs at 2.759%.

 

 

Source: BofAML


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/E4OtjUm7i7Y/story01.htm Tyler Durden

Guest Post: The Plan Is Not Working

Submitted by Jeffrey Tucker of Laissez Faire Club blog,

You didn’t want to be the guy chosen to tell Stalin that the wheat crop failed or the production quotas on trucks and cars were not met. Why?

Because despots always blame people, not systems.

In the same way, you don’t want to be the guy chosen to tell Obama that his health care websites are a disaster. But that’s what they are, and he’s managed to blame everyone but himself.

At his hilarious and embarrassing press conference on Monday, the president first assured us that “no one is madder than me” about website failures. Then, of course, he lashed out at the critics and implicitly blamed them for technical failures.

“It’s time for folks to stop rooting for its failure, because hardworking, middle-class families are rooting for its success.”

Someone needs to explain to this guy that rooting one way or another does not cause a website to fail. Crop failures in Russia were not because of the enemies of communism, and the failure of Obama’s health care websites are not due to his political enemies, either. The problem is that government is a bad developer, even when it’s contracting out.

Then Obama said, “We did not wage this long and contentious battle just around a website. That’s not what this was about.”

There he goes again, defining his own reality. By plunging into direct provision of a commercial service and forcing people to cough up for it, Obamacare and its website must be prepared to be accessed just like any other private market service.

People don’t like it when websites are flaky and do not perform. By dismissing this feature — treating the website as if it is just a luxury feature that has nothing to do with the program itself — he reveals that he’s stuck in the past.

A website is not just a convenience. It is the heart and soul of a service that purports to serve everyone. In some ways, this is the most important website this government has ever produced. People don’t use the sites of the Pentagon or Housing and Urban Development. But this one people not only use, but are forced to use. Its failure is epic.

The president then made matters worse. He pointed out that people can download a form and mail it in. Also that people can go to centers where there are people who can help. Then he even rattled off an 800 number that people could call.

As The New York Times said with a funny blandness: “Several calls to the number immediately after he read it produced busy signals.”

Busy signals? I think the last time I heard one of those I was in seventh grade. No one under the age of 25 even knows what a “busy signal” is.

The terrifying thing is that all the troubles with HealthCare.gov foreshadow what’s coming with the new system of health care. Who can doubt it? It is going to be thrown back, inefficient, backward-looking, full of bureaucracy, insanely expensive, characterized by busy signals, and ultimately ending with a demand to come back another day.

Let’s talk about expenses. The website Digital Trends estimates costs between $500 million and perhaps as much as $2 billion before the end of 2014 just to operate the website. This is, quite frankly, unthinkably absurd:

“Facebook, which received its first investment in June 2004, operated for a full six years before surpassing the $500 million mark in June 2010. Twitter, created in 2006, managed to get by with only $360.17 million in total funding until a $400 million boost in 2011. Instagram ginned up just $57.5 million in funding before Facebook bought it for (a staggering) $1 billion last year. And LinkedIn and Spotify, meanwhile, have only raised, respectively, $200 million and $288 million.”

In short, this stuff redefines the word “boondoggle.” And it’s not like the typical Pentagon scandal because, again, this is a regular commercial webspace. Every business in America builds websites. The big difference is they do it with their own money. People know how much sites cost and how they are supposed to operate. That’s why this government website failure is so significant.

It is worth asking why a government with half a billion dollars and vast amounts of time and personnel to make a great site can’t actually manage to do it. It’s not as if the government didn’t have the incentive to do it right. The most powerful people on Earth wanted it to succeed — and in this respect, there is no question that Obama is telling truth. He really did wish upon a star.

The problem is that government is not the best means to do anything well. The problem is the absence of two crucial things: the knowledge to assemble the resources properly and the means to make the economic assessment of the value of competitive resources. This is what happens when you eliminate the profit-and-loss system. You can throw massive resources at a problem with the end result being disappointing.
You didn’t want to be the guy chosen to tell Stalin that the wheat crop failed or the production quotas on trucks and cars were not met. Why?

Because despots always blame people, not systems.

In the same way, you don’t want to be the guy chosen to tell Obama that his health care websites are a disaster. But that’s what they are, and he’s managed to blame everyone but himself.

At his hilarious and embarrassing press conference on Monday, the president first assured us that “no one is madder than me” about website failures. Then, of course, he lashed out at the critics and implicitly blamed them for technical failures.

“It’s time for folks to stop rooting for its failure, because hardworking, middle-class families are rooting for its success.”

Someone needs to explain to this guy that rooting one way or another does not cause a website to fail. Crop failures in Russia were not because of the enemies of communism, and the failure of Obama’s health care websites are not due to his political enemies, either. The problem is that government is a bad developer, even when it’s contracting out.

Then Obama said, “We did not wage this long and contentious battle just around a website. That’s not what this was about.”

There he goes again, defining his own reality. By plunging into direct provision of a commercial service and forcing people to cough up for it, Obamacare and its website must be prepared to be accessed just like any other private market service.

People don’t like it when websites are flaky and do not perform. By dismissing this feature — treating the website as if it is just a luxury feature that has nothing to do with the program itself — he reveals that he’s stuck in the past.

A website is not just a convenience. It is the heart and soul of a service that purports to serve everyone. In some ways, this is the most important website this government has ever produced. People don’t use the sites of the Pentagon or Housing and Urban Development. But this one people not only use, but are forced to use. Its failure is epic.

The president then made matters worse. He pointed out that people can download a form and mail it in. Also that people can go to centers where there are people who can help. Then he even rattled off an 800 number that people could call.

As The New York
Times said with a funny blandness: “Several calls to the number immediately after he read it produced busy signals.”

Busy signals? I think the last time I heard one of those I was in seventh grade. No one under the age of 25 even knows what a “busy signal” is.

The terrifying thing is that all the troubles with HealthCare.gov foreshadow what’s coming with the new system of health care. Who can doubt it? It is going to be thrown back, inefficient, backward-looking, full of bureaucracy, insanely expensive, characterized by busy signals, and ultimately ending with a demand to come back another day.

Let’s talk about expenses. The website Digital Trends estimates costs between $500 million and perhaps as much as $2 billion before the end of 2014 just to operate the website. This is, quite frankly, unthinkably absurd:

    “Facebook, which received its first investment in June 2004, operated for a full six years before surpassing the $500 million mark in June 2010. Twitter, created in 2006, managed to get by with only $360.17 million in total funding until a $400 million boost in 2011. Instagram ginned up just $57.5 million in funding before Facebook bought it for (a staggering) $1 billion last year. And LinkedIn and Spotify, meanwhile, have only raised, respectively, $200 million and $288 million.”

In short, this stuff redefines the word “boondoggle.” And it’s not like the typical Pentagon scandal because, again, this is a regular commercial webspace. Every business in America builds websites. The big difference is they do it with their own money. People know how much sites cost and how they are supposed to operate. That’s why this government website failure is so significant.

It is worth asking why a government with half a billion dollars and vast amounts of time and personnel to make a great site can’t actually manage to do it. It’s not as if the government didn’t have the incentive to do it right. The most powerful people on Earth wanted it to succeed — and in this respect, there is no question that Obama is telling truth. He really did wish upon a star.

The problem is that government is not the best means to do anything well. The problem is the absence of two crucial things: the knowledge to assemble the resources properly and the means to make the economic assessment of the value of competitive resources. This is what happens when you eliminate the profit-and-loss system. You can throw massive resources at a problem with the end result being disappointing.

Again, it is not just about the website. It is about the whole system. The fools who imposed this system had all the expertise, all the arrogance, all the money, and all the power, and they still couldn’t do it. Meanwhile, hundreds of thousands of workable and useful websites go up every day.

Has there ever been in our times a better symbol of the failure of government? The truth is this: Government doesn’t work. Here’s the proof. It’s just the beginning. If you want health care in the future, you are going to have to look outside the system. And plenty of people right now are working on that solution, which, unlike that which the experts create, will actually serve human needs. The fools who imposed this system had all the expertise, all the arrogance, all the money, and all the power, and they still couldn’t do it. Meanwhile, hundreds of thousands of workable and useful websites go up every day.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/tjjaC2zkW3c/story01.htm Tyler Durden

Mark Faber Fears "Stocks Could Be Dead Money For A While" But "Gold Has Bottomed"

“Since September 2011’s $1921 peak, gold has been in correction mode,” Mark Faber tells Barrons in this brief clip, but the overhwleminly bearish sentiment combined with the major accumulation (most notably by China) means “gold prices have probably bottomed,” and some gold mining stocks are well positioned. While Faber has recently expressed concern at the potential for a major correction in stocks, he notes that there are pockets of value worth investigating including European Telcos and Indo-China travel-related stocks. However, the Gloom, Boom & Doom report writer warns that “stocks could be dead money for a while.”

 

On Gold and Gold Miners:

Gold peaked at $1,921 an ounce in September 2011. Since then, it has been in a correction mode. Sentiment is bearish, but some countries are accumulating gold, notably China, which will buy an estimated 2,600 tons this year, exceeding annual production. Prices probably are bottoming.

 

Gold-mining shares aren’t expensive either, although many exploration companies won’t make it. If you buy the miners, look for companies that have raised capital already or have sufficient reserves. They are best-positioned to survive the next few years if there is no upturn in the gold price.

Full Barrons’ Interview below:

 


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/mbcIR6zsHzg/story01.htm Tyler Durden

Mark Faber Fears “Stocks Could Be Dead Money For A While” But “Gold Has Bottomed”

“Since September 2011’s $1921 peak, gold has been in correction mode,” Mark Faber tells Barrons in this brief clip, but the overhwleminly bearish sentiment combined with the major accumulation (most notably by China) means “gold prices have probably bottomed,” and some gold mining stocks are well positioned. While Faber has recently expressed concern at the potential for a major correction in stocks, he notes that there are pockets of value worth investigating including European Telcos and Indo-China travel-related stocks. However, the Gloom, Boom & Doom report writer warns that “stocks could be dead money for a while.”

 

On Gold and Gold Miners:

Gold peaked at $1,921 an ounce in September 2011. Since then, it has been in a correction mode. Sentiment is bearish, but some countries are accumulating gold, notably China, which will buy an estimated 2,600 tons this year, exceeding annual production. Prices probably are bottoming.

 

Gold-mining shares aren’t expensive either, although many exploration companies won’t make it. If you buy the miners, look for companies that have raised capital already or have sufficient reserves. They are best-positioned to survive the next few years if there is no upturn in the gold price.

Full Barrons’ Interview below:

 


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/mbcIR6zsHzg/story01.htm Tyler Durden

An Audacious Plan To Fix The QE Non-Taper And Fiscal Non-Action in One Swift Move

Submitted by F.F. Wiley of Cyniconomics blog,

eccles ford map 2

If you’re anything like us, you may have reached the conclusions that:

  1. Our elected officials are charting a course to a fiscal disaster.
  2. The Fed is repeating past mistakes by setting us up for another bust.

After the drama of the debt ceiling debate and the Fed’s non-tapering surprise, we see no reason to doubt these views.

But the latest developments got us thinking, and we have an unusual proposal. Before we share it, we’ll need to provide some background.

Recall that the Fed extended and released its economic outlook at its non-tapering meeting in September, and the Congressional Budget Office (CBO) published new projections at about the same time.

The chart below compares GDP growth forecasts from both institutions, including one path per FOMC member for the Fed’s outlook (from September’s meeting) and a single path for the CBO’s outlook (from figures published in May and used in the latest projections):

audacious plan

Apparently, the CBO’s Kool-Aid is much stronger than the Fed’s. You might even say it’s more hallucinogen than sugary fruit drink. Forecasting helpers aside, though, note that the predictions fit perfectly with themes favored by each institution:

CBO: The buoyant growth projection is merely an annual renewal of a long-standing CBO assumption that we’ll snap back to normal. It’s not so much a forecast but a connect-the-dots exercise of joining today’s GDP with a long-run trend line. It also explains the popular claim that there’s nothing urgent about our debt problem. By assuming a robust recovery, the CBO bends debt-to-GDP projections downward for the next few years, providing a convenient excuse for inaction. (See here or here for the debt charts and further discussion).

Fed: The unspectacular but unalarming growth forecasts are exactly what you would expect from our monetary policymakers. They’re unalarming for the obvious reason – the FOMC can’t just say the economy’s headed down a sinkhole, at least in public. And they’re unspectacular because policymakers have begun to grasp how broken the economy is, even if they don’t accept that their own policies helped with the breaking. Also, the tepid forecasts justify policymakers’ “whatever it takes” story, preserving both ZIRP and QE.

An intriguing solution

Getting back to our proposal, why not just trade the CBO’s economists for the Fed’s economists? One group of forecasters moves from the Eccles Building to the Ford House, and the other moves in the opposite direction. That’s 2.26 miles according to Mapquest, all in the same taxi zone. Relocation reimbursements would surely be unnecessary.

Think about the policy implications:

  • With a growth outlook matching the Fed’s figures above, the CBO’s projected debt ratios would no longer bend downward. This wouldn’t completely pull the rug out from under the “deficits don’t matter” crowd, but it should have some effect. We should at least see a little more urgency on measures to fix our fiscal problems.
  • As for the Fed, the buoyant outlook reported by the CBO’s economists would make QE less defensible if not redundant. This should encourage policymakers to follow through on their tapering plan, instead of reprising this year’s head fake.

But wait, you say: “Deep down, the CBO doesn’t like delivering bad news; and deep down, the Fed doesn’t want to taper. You can switch economists, but you can’t change outcomes.”

We know.

Even if it were plausible, our proposal wouldn’t necessarily work, and that doesn’t reflect well on the research that shapes public policies.

Which leaves us where?

In all seriousness, CBO and Fed forecasts have been wildly inaccurate, year after year. Evidence shows that these institutions don’t understand our economy. Yet, they refuse to migrate from failed methods to more successful ideas. They may claim to be learning from mistakes, but the basic approach is unchanged. You might say they’re trying to adjust to the automobile age by strapping wheels to a horse.

Take Austrian business cycle theory, for example. Fair-minded people recognize that recent years’ booms and busts were predicted by the Austrian school, even as mainstream macroeconomists were mostly flummoxed. But the mainstreamers refuses to concede that simple truth. Austrian principles are just too far removed from the abstract mathematical modeling that dominates the profession. Acknowledging that real life has proven these principles accurate and the modeling useless would not only devalue resumes but invalidate entire careers.

Unfortunately, much of the establishment considers CBO and Fed pronouncements to be gospel. We know better. The next time you hear someone giving the fiscal “all clear” based on CBO debt projections, pull out the chart above to show what’s really behind them. And the next time you hear someone extolling the Fed’s expertise, point out that a whole school of economists who actually got things right would disagree.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ZV7vZ2nmWkg/story01.htm Tyler Durden