Tag: finance

Wolf Richter   www.testosteronepit.com   www.amazon.com/author/wolfrichter

Nothing could have been a more pungent metaphor for the current investment climate than the headline, “Macau gambling revenue hits record $45 bn in 2013.”

Revenues jumped 18.6%, after rising “just” 13.5% in 2012 – which had caused a lot of handwringing, since they’d soared 42% in 2011. Post-financial-crisis Macau – like its bigger sister, high finance – fizzes with optimism. Last year, it extracted $45 billion from the pockets of people who gambled there; this year, it’s going to set another record.

Or maybe there was an even more pungent metaphor: Stephen Cohen’s pad in Manhattan. He personifies the smart money; his hedge fund, SAC Capital Advisors, pleaded guilty to insider trading and agreed to pay a fine of $1.2 billion and wind itself out of existence. So he is trying to sell his 9,000-square-foot duplex on the 51st and 52nd floors of Bloomberg Tower. The metaphor isn’t that he dropped his asking price by $17 million, from $115 million down to a measly $98 million, but what he’d paid for the two units in 2005, namely $25.9 million, plus whatever it took to combine and remodel them. That he thinks he can get nearly four times the amount he’d paid for it less than nine years ago – that’s the metaphor for our crazy investment climate.

Hedge funds raked in the moolah in 2013, with assets under management rising by $228.8 billion to an all-time record of $2.01 trillion – not counting the hedge funds that our TBTF banks have become. But returns paled compared to the miracles the Fed performed with the stock market. Hedge funds specializing in distressed debt outperformed all other strategies with a 16.8% gain, ahead of long/short equities hedge funds, up 14.3%, and event-driven hedge funds, up 11.3%. Compared to 29% for the S&P 500.

But hey, what matters is that the all-important metric of assets under management gets pushed to new highs. Hedge funds get paid 2% on it, come hell or high water, so about $40 billion in 2013. And they get paid another 20% on any gains, so roughly $55 billion in 2013, for a total fee intake of $95 billion or so. Hopes are riding high for a killer 2014.

Corporate deal-making also bloomed in the US in 2013: mergers rose 11% to over $1 trillion, the highest since the financial crisis. Reshuffling the corporate deck is good for everyone: CEOs, investment banks, hedge funds with insider knowledge, and workers who are going to get laid off as the post-merger synergies are being implemented….

“This era of low interest rates has encouraged companies to consolidate and clean up some structural inefficiencies,” is how Michael Carr, head of Goldman’s Americas M&A, explained the workers-getting-laid-off phenomenon. Goldman pocketed $1.5 billion in fees for its M&A advisory work.

The accelerating pace of the mergers during the last two quarters is goosing extrapolations of what an insanely good year 2014 is going to be – helped along by a “stronger economy,” some sort of “stability at the Fed,” and an inexplicable absence “of near-term economic bumps,” according to Scott Barshay, head of the Corporate Department at Wall Street law firm Cravath, Swaine & Moore. In reality, to get a bumper crop of mergers, you must have a gravity-defying stock market and a continued flood of freshly printed money made available to large corporations at near-zero cost.

Companies are motivated. Stock valuations have moved into the stratosphere. Financial engineering, such as share buybacks, has been covering up, more or less elegantly, the ugly reality of stalling growth in revenues and earnings. But there will be a moment of truth.

“The pressure is building for companies to justify their trading multiples,” warned Chris Ventresca, co-head of Global M&A at JPMorgan, which pocketed $1.3 billion in fees for its M&A advisory work. “It will be hard to deliver that organically, so you have to look for inorganic growth.”

You can practically hear the fizzing optimism for IPOs. In 2013, there were 229 IPOs, raising $61.3 billion, the highest amount since 2007, and up 58% from 2012 [read my take on this and other extraordinary accomplishments in 2013….. Financial Engineering Wildest Since The 2007 Bubble]. Now even Chinese IPOs are coming back. Everything that isn’t nailed down will get shoved out the door, viable or not, at dizzying valuations. And somebody is going to end up holding the bag.

“The longer this window stays open, the more the quality of the deals falls, the more you get the piggyback deals,” explained Tony Ursillo, a tech analyst at Loomis Sayles & Co., which has $193.5 billion under management. “I feel like we’ve cleaned out a number of the first-tier companies, from a quality standpoint.”

The casino mentality that has set in, and the billions it extracts from the real economy, is dependent on the most addictive drugs of all: a flood of nearly free money. It sets off a chain reaction, including ecstatic stock markets, where IPOs without earnings can soar and where even the most convoluted mergers that will haunt stockholders for years to come seem to make divine sense – and our favorite Wall Street engineers are out making hay while they still can.

Central banks rule! They’ve accomplished the impossible: separating stock markets from the economies they’re based on. But in 2014, the US and China are trying to unwind these crazy policies – without taking down the entire global economy. Read… So This Isn’t Exactly A Rosy Outlook For 2014, Or Something

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/F9DGX0yDdlY/story01.htm testosteronepit

While the non-luxury auto-manufacturers suffered from a case of cannel-stuffed constipation in December, Luxury brands appeared to do very well thank you Mr. Bernanke:

• *PORSCHE REPORTS RECORD SALES IN ’13 21% RISE OVER ’12
• *PORSCHE CARS NORTH AMERICA DEC. SALES UP 10%

As the company notes, it “exceeded 40,000 sales for the first time in the history of Porsche in the US,” as the 911 sold 10,442 units and Cayenne 18,507 units.

 

 

Porsche PR Statement:

Porsche Reports Record Sales in 2013; 21 percent increase over 2012

Best-ever U.S. sales fueled by 911, Cayenne models

Porsche Cars North America, Inc. (PCNA), the exclusive U.S. importer of Porsche sports cars including the Macan and Cayenne SUVs and the Panamera sports sedan, today announced it has once again set an all-time U.S. sales record, with 42,323 cars sold in 2013 (plus 21 percent over 2012). The previous record year for Porsche in the U.S. was 2012 when 35,043 cars were sold. In December 2013, Porsche dealers sold 3,246 cars, an increase of 10 percent over last December.

“Exceeding 40,000 sales for the first time in the history of Porsche in the U.S. makes us very proud,” said Detlev von Platen, President and CEO, Porsche Cars North America, Inc. “This success was possible only through the combination of a strong product offering, a highly professional sales organization and a team of dedicated dealers,” he added. “Since introducing 22 new models and variants into the U.S. market in 2013, we are entering the New Year with our youngest product line ever – thus, we are confident that we can continue writing the success story of Porsche in the U.S. over the next 12 months.”

The flagship 911 completed a strong anniversary year in 2013, with 10,442 units sold and the introduction of six new model variants including the limited-edition “50^th Anniversary” model. In December, the top-of-the-line 911 models (GT3, Turbo, Turbo Cabriolet) arrived at U.S. dealers, with those models accounting for four percent of December 911 sales.

Sales of the mid-engine Boxster and Cayman models were equally strong, with a combined total of 7,953 units, representing a 137 percent increase year-over-year. The newly-launched Cayman and Cayman S models were popular as well, with 3,383 units sold.

The Cayenne line carried equal weight in the automaker’s 2013 sales success, with 18,507 sold in all of 2013 (plus 16 percent over last year). With sales of 5,386, the Cayenne Diesel had a 29 percent share of overall Cayenne sales. With the arrival of the Macan compact SUV, its fifth model line, in the spring of 2014 Porsche will be entering into the fastest-growing vehicle market with the sportiest cross-over in that segment.
 
…

Last year, Porsche recorded a roughly even split of sales between its four-door and two-door sports cars (57 percent/43 percent).

Certified Pre-Owned Sales finished 2013 at 10,130 units, up 7 percent over 2012 (9,506).

 

++++++++

Thank You Ben…

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

While the non-luxury auto-manufacturers suffered from a case of cannel-stuffed constipation in December, Luxury brands appeared to do very well thank you Mr. Bernanke:

• *PORSCHE REPORTS RECORD SALES IN ’13 21% RISE OVER ’12
• *PORSCHE CARS NORTH AMERICA DEC. SALES UP 10%

As the company notes, it “exceeded 40,000 sales for the first time in the history of Porsche in the US,” as the 911 sold 10,442 units and Cayenne 18,507 units.

 

 

Porsche PR Statement:

Porsche Reports Record Sales in 2013; 21 percent increase over 2012

Best-ever U.S. sales fueled by 911, Cayenne models

Porsche Cars North America, Inc. (PCNA), the exclusive U.S. importer of Porsche sports cars including the Macan and Cayenne SUVs and the Panamera sports sedan, today announced it has once again set an all-time U.S. sales record, with 42,323 cars sold in 2013 (plus 21 percent over 2012). The previous record year for Porsche in the U.S. was 2012 when 35,043 cars were sold. In December 2013, Porsche dealers sold 3,246 cars, an increase of 10 percent over last December.

“Exceeding 40,000 sales for the first time in the history of Porsche in the U.S. makes us very proud,” said Detlev von Platen, President and CEO, Porsche Cars North America, Inc. “This success was possible only through the combination of a strong product offering, a highly professional sales organization and a team of dedicated dealers,” he added. “Since introducing 22 new models and variants into the U.S. market in 2013, we are entering the New Year with our youngest product line ever – thus, we are confident that we can continue writing the success story of Porsche in the U.S. over the next 12 months.”

The flagship 911 completed a strong anniversary year in 2013, with 10,442 units sold and the introduction of six new model variants including the limited-edition “50^th Anniversary” model. In December, the top-of-the-line 911 models (GT3, Turbo, Turbo Cabriolet) arrived at U.S. dealers, with those models accounting for four percent of December 911 sales.

Sales of the mid-engine Boxster and Cayman models were equally strong, with a combined total of 7,953 units, representing a 137 percent increase year-over-year. The newly-launched Cayman and Cayman S models were popular as well, with 3,383 units sold.

The Cayenne line carried equal weight in the automaker’s 2013 sales success, with 18,507 sold in all of 2013 (plus 16 percent over last year). With sales of 5,386, the Cayenne Diesel had a 29 percent share of overall Cayenne sales. With the arrival of the Macan compact SUV, its fifth model line, in the spring of 2014 Porsche will be entering into the fastest-growing vehicle market with the sportiest cross-over in that segment.
 
…

Last year, Porsche recorded a roughly even split of sales between its four-door and two-door sports cars (57 percent/43 percent).

Certified Pre-Owned Sales finished 2013 at 10,130 units, up 7 percent over 2012 (9,506).

 

++++++++

Thank You Ben…

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

While it will hardly come as a surprise that in the age of pervasive, accessible and cheap pink slime fast food, more people than ever are obese, the actual numbers may be a shock to most. Conveniently, quantifying the world’s obesity epidemic is precisely what the London-based Overseas Development Institute has done with a just released report titled Future Diets (pdf link). Its findings are stunning: more than a third of all adults in the world – 1.46 billion to be exact – are obese or overweight.

The main culprit: the development world, where the number of obese has nearly quadrupled from 250 million to 904 million between 1980 and 2008. What this means for the world’s soaring healthcare costs needs little explanation: “On current trends, globally, we will see a huge increase in the number of people suffering certain types of cancer, diabetes, strokes and heart attacks, putting an enormous burden on public healthcare systems.” according to the co-author of the Future Diets report. That’s ok, the already insolvent world, drowning in record debt, obviously can afford to spend even more on a record population of fatties.

AFP summarizes the report’s main findings:

The study said the rise in obesity was down to diets changing in developing countries where incomes were rising, with people shifting away from cereals and tubers to eating more meat, fats and sugar. The overconsumption of food, coupled with increasingly sedentary lives, was also to blame. The report said there seemed to be little will among the public and leaders to take action on influencing diet in the future.

 

“Governments have focused on public awareness campaigns, but evidence shows this is not enough,” said Wiggins.

 

“The lack of action stands in stark contrast to the concerted public actions taken to limit smoking in developed countries.

 

“Politicians need to be less shy about trying to influence what food ends up on our plates. The challenge is to make healthy diets viable whilst reducing the appeal of foods which carry a less certain nutritional value.”

Below are the report’s key findings straight from the horse’s mouth:

• Over one third of all adults across the world – 1.46 billion people – are obese or overweight. Between 1980 and 2008, the numbers of people affected in the developing world more than tripled, from 250 million to 904 million. In high-income countries the numbers increased by 1.7 times over the same period.
• Diets are changing wherever incomes are rising in the developing world, with a marked shift from cereals and tubers to meat, fats and sugar, as well as fruit and vegetables.
• While the forces of globalisation have led to a creeping homogenisation in diets, their continued variation suggests that there is still scope for policies that can influence the food choices that people make.
• Future diets that are rich in animal products, especially meat, will push up prices for meat, but surprisingly, not for grains. This suggests that future diets may matter more for public health than for agriculture.
• There seems to be little will among public and leaders to take the determined action that is needed to influence future diets, but that may change in the face of the serious health implications. Combinations of moderate measures in education, prices and regulation may achieve far more than drastic action of any one type.

Some other pretty charts from the report:

So, in other words, as long as the overweight world can eat its cake, and have others pay for the diabetes medication fees, all is well. However, once this too unsustainable ponzi scheme ends, run. Or at least jog casually away, because one doesn’t have to outrun everyone… just the fattest. And there are a lot of those around.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/rPJTaa7XtjU/story01.htm Tyler Durden

While it will hardly come as a surprise that in the age of pervasive, accessible and cheap pink slime fast food, more people than ever are obese, the actual numbers may be a shock to most. Conveniently, quantifying the world’s obesity epidemic is precisely what the London-based Overseas Development Institute has done with a just released report titled Future Diets (pdf link). Its findings are stunning: more than a third of all adults in the world – 1.46 billion to be exact – are obese or overweight.

The main culprit: the development world, where the number of obese has nearly quadrupled from 250 million to 904 million between 1980 and 2008. What this means for the world’s soaring healthcare costs needs little explanation: “On current trends, globally, we will see a huge increase in the number of people suffering certain types of cancer, diabetes, strokes and heart attacks, putting an enormous burden on public healthcare systems.” according to the co-author of the Future Diets report. That’s ok, the already insolvent world, drowning in record debt, obviously can afford to spend even more on a record population of fatties.

AFP summarizes the report’s main findings:

The study said the rise in obesity was down to diets changing in developing countries where incomes were rising, with people shifting away from cereals and tubers to eating more meat, fats and sugar. The overconsumption of food, coupled with increasingly sedentary lives, was also to blame. The report said there seemed to be little will among the public and leaders to take action on influencing diet in the future.

 

“Governments have focused on public awareness campaigns, but evidence shows this is not enough,” said Wiggins.

 

“The lack of action stands in stark contrast to the concerted public actions taken to limit smoking in developed countries.

 

“Politicians need to be less shy about trying to influence what food ends up on our plates. The challenge is to make healthy diets viable whilst reducing the appeal of foods which carry a less certain nutritional value.”

Below are the report’s key findings straight from the horse’s mouth:

• Over one third of all adults across the world – 1.46 billion people – are obese or overweight. Between 1980 and 2008, the numbers of people affected in the developing world more than tripled, from 250 million to 904 million. In high-income countries the numbers increased by 1.7 times over the same period.
• Diets are changing wherever incomes are rising in the developing world, with a marked shift from cereals and tubers to meat, fats and sugar, as well as fruit and vegetables.
• While the forces of globalisation have led to a creeping homogenisation in diets, their continued variation suggests that there is still scope for policies that can influence the food choices that people make.
• Future diets that are rich in animal products, especially meat, will push up prices for meat, but surprisingly, not for grains. This suggests that future diets may matter more for public health than for agriculture.
• There seems to be little will among public and leaders to take the determined action that is needed to influence future diets, but that may change in the face of the serious health implications. Combinations of moderate measures in education, prices and regulation may achieve far more than drastic action of any one type.

Some other pretty charts from the report:

So, in other words, as long as the overweight world can eat its cake, and have others pay for the diabetes medication fees, all is well. However, once this too unsustainable ponzi scheme ends, run. Or at least jog casually away, because one doesn’t have to outrun everyone… just the fattest. And there are a lot of those around.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/rPJTaa7XtjU/story01.htm Tyler Durden

As Europe closes, the ‘recovery’ in US equities has faded to red for the majors (though Trannies and all the high-beta momos are still in the green thanks to JPY just not wanting the party to stop – for now) seeimngly led by AAPL’s plunge to its 50DMA. This morning’s jerk higher appears as much about BTFD catch up for Trannies than anything else. Bonds sold off modestly but the USD continues to surge (led by EUR weakness after ugly loan creation data). WTI crude (and Brent) is tumbling further – back at $94.50 – but gold is surging back to yesterday’s highs at around $1236. VIX is stable for now around 14% as stocks rotate back to play catch-down.

 

VIX is stable as stocks catch back down to it…

 

S&P 500 futures rallied to previous support and faded back quickly….

 

But gold keeps pushing higher as Oil tumbles…

 

It appears the high-beta BTFD-ers were in early but are fading now…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/4d9_jEQFSc8/story01.htm Tyler Durden

So, what is money? According to Wikipedia: 

Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given socio-economic context or country. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past, a standard of deferred payment. Any kind of object or secure verifiable record that fulfills these functions can be considered money.

When currency is stable, money can serve all four of the functions above. Things get trickier when currencies are not stable. If we were all to be honest with ourselves, we’d have to query, “What fiat currency is truly stable over time?”.

 

When unstable currencies or engineered forms of financial capital are brought into play the fourth aspect of defined money (and the least addressed) gains significantly in importance. Here we must differentiate and distinguish between true capital (economic capital) which comprises physical goods that explicitly and directly assist in the production of other goods and services, e.g. hammers for carpenters, paintbrushes for painters, wrenches for plumbers, tooling for factories, etc., and financial capital. Financial capital is funds provided by lenders and/or investors to businesses and entrepeneurs to purchase economic capital (ie.equipment) for producing real goods and services.

To explain why the 4th aspect of money’s definition is important, yet often and in my opinion purposely ignored, let’s examine the three concepts of capital maintenance in terms of International Financial Reporting Standards (IFRS): (1) Physical capital maintenance (2) Financial capital maintenance in nominal monetary units (3) Financial capital maintenance in units of constant purchasing power.

1. Physical (economic) capital – We have covered already.
2. Financial capital in monetary units is best described as basic accounting. It’s how most financial reporting is done in the states (and in Europe). It fails to take into consideration the constant destruction of value of the fiat currencies, an aspect of the definition of money that is a foundation of money itself!
3. Financial capital measured in constant purchasing power – something that effectively never happens. It is the “Real” value of money, adjusted for destructive aspects, ex. inflation, particularly purposeful inflation brought upon by a banking system that attempts to adjust and control the prices of goods and services for its own end (as opposed to the end that will benefit the masses) through the artificial manipulation of the value of the means of exchange, the currency.

Financial capital is provided by lenders for a price, commonly known as interest. This  price to attain financial capital is not the only cost though, for the price of the financial capital provided by lenders through things such as debt does not take into account the cost of currency maintenance destruction, or the purposeful manipulation of the currency value by the lender or lending system to which the lender belongs to to further its own means. This is why the prudent may wish to identify a single standard of deferred payment to avoid purposeful manipulation (otherwise known as cheating) by transacting in a denominator of debt that the participant believes to be dropping in value, ie. fiat currency!

Relation to debt-based society

A debt in any form is essentially a deferred payment. The fourth definintion of money, standard of deferred payment,  is usually what the debts are denominated in. The value of any and all money – including the most liquid and deep, ex. dollars or euros, or the oldest and revered, ex. gold and silver, or the newest and least understood, Bitcoin and cryptocurrencies – may fluctuate over time via inflation and deflation and often through direct manipulation and unforeseen results that stem from the same. The value of deferred payments (the real level of debt) likewise fluctuates.

Money, as Leading Economists Such As Paul Krugman Appear To Know It, Is Obsolete – There’s a New Sheriff In Town

The definitions of money mentioned above are predicated upon the assumption that money must be dumb! What I mean by this is that money was defined in a time when the store of value was an inanimante object designed to represent a simple binary concept of buy or sell, that had no abilities other than to look or appear as if it had the value believingly bestowed upon it by society – or at least two of the participants in a particular transaction. What if money in this digital day and age was smart? What if money was able to do things besides just sit there and be called money?

Here’s an example…

Historically, and up until now, deferred payment was/is based on enforceability of debts and rule of law. The rule of law, particularly engagement within the legal system is destructively expensive, time consuming and essentially the antithesis of friction free commerce, ex. capitalism. The rule of law is generally not relied upon when debts are unlikely to be collectable. For illegal transactions, or for low or zero trust transactions, gold or diamonds may be preferred as the medium of exchange and in those circumstaces there is no recourse in case of counterfeit currency (bogus, bank peddeled Mortgage Backed Securities, fake US dollars, etc.) is being used. — and there is rarely any deferral of payment: if there is, it will most likely be stated in dollars – which brings us back to where we started.

What if currency was smart enough to act upon a predetermined set of parameters, even after being released to the payee? What if trust never had to be a factor in negotiation fo payment, even in a negative trust environment? What if the highly ineffecient legal system could be wholly avoided in the risk/reward calculation of a monetary transaction? Would the existence of this possibility, in essence, demand a 5th definition for money – intelligence and/or malleability? You see, the cryptographic digital currencies are smart as compared to the dumb dollar or euro, or yen or yuan! It is this intelligent ability to control money during a transaction and even post transaction, the abilty to instruct money to disburse iteslf only open mutual agreement by all parties present, that appears to elude the prominent MSM economists of today. 

Furthermore, dumb money as purely fiat is truly without physical value or utility value as a physical or digital commodity. It derives its value by being declared by a government to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for all debts, public and private – including taxes, where in the US, it is the only currency accepted. Laws in place such as these essentially imbue fiat money with the value of any of the goods and services that it may be traded for within the nation that issues it. The fact remains though, the value of fiat money is held in belief and belief only, enforced by the whims of government. With this being the case, there is no true utility argument to be made for fiat currencies, including the USD.

Digital cryptocurrencies such as Bitcoin, however, have an implicit edge on the fiat currencies in that its utility (or use value) is dramatically leveraged as compared to fiat because it comes part and parcel with its own, virtually unassailable transmission system. In essence, this means that if Bitcoin, the USD and the EUR were cars, BTC would be the only one that comes with its own international roads open 24/7 that were able to bypass all of the toll roads and bridges, everywhere there was an Internet connection – not to mention power itself with a virtual fuel that was limitless and had no costs. Now, if one were to think of it, such an aspect is so valuable and useful (as in utilitarian) that not only does it qualify for significant use value, but in the very near future one could wonder how the world ever got along without it. Does this mean that a sixth aspect of the definition of money needs to be added – autonomous transferability!

This is why I say there’s a new sheriff in town and the old schoolers whose eyes are not yet open should recognize that the future of money is here!

According to famed economist and NY Times pundit Paul Krugman, “To be successful, money must be both a medium of exchange and a reasonably stable store of value. And it remains completely unclear why BitCoin should be a stable store of value.”

I counter these widely believed assumptions with the fact that the USD, the world’s reserve currency, has not been a stable store of value. As a matter of fact, from its underpinnings (as described in the BoomBustBlog link below) and throughout its history, the dollar has consistently lost its value over time to inflation. Thus, as per Krugman, the USD is not successful!

As per Wikipedia:

To be widely acceptable, a medium of exchange should have stable purchasing power (Value) and therefore it should possess the following characteristics:

1. Value common assets
2. Constant utility [I have explained the constant utility of Bitcoin above, a utility which trumps the relatively dumb dollar]
3. Low cost of preservation [the cost of preservation is a fraction of that of the dollar, with constant reprinting of physical dollars and coins and the power, machinery and labor required to do so; as well as the recircutlation of those new bills, not to mention the destrcution of the old bills]
4. Transportability [This is moderately difficult with large amounts of physical bills, but much easier with the digital manifestation of those physical bills that most institutions deal with. The mere existence of the banks as necessary intermediaries and middlemen add signficant, and in this day and age of P2P technology, unnecessary costs and frictions and rules. This hampers portability significantly – no transfers on weekends and bank holidays, no low margin business models due to artificially high transaction costs, big up Visa, Mastercard and Paypal!)
5. Divisibility
6. High market value in relation to volume and weight [Bitcoin can’t be beat in this regard]
7. Recognisability
8. Resistance to counterfeiting [A currency based on cryptography, need I say more?!]

As quoted from the Wikpedia link above:

“fiat money is the root cause of the continuum of economic crises, since it leads to the dominance of fraud, corruption, and manipulation precisely because it does not satisfy the criteria for a medium of exchange cited above. Specifically, prevailing fiat money is free float and depending upon its supply market finds or sets a value to it that continues to change as the supply of money is changed with respect to the economy’s demand. Increasing free floating money supply with respect to needs of the economy reduces the quantity of the basket of the goods and services to which it is linked by the market and that provides it purchasing power. Thus it is not a unit or standard measure of wealth and its manipulation impedes the market mechanism by that it sets/determine just prices. That leads us to a situation where no value-related economic data is just or reliable.^[3][4]“ 

I will continue this missive in part 2 of the series wherein I will announce my efforts in bringing the beneftis of smart money to light. I’m sure these concepts and products will blow your socks off, even if you are an old school economist! For those who don’t follow me, this is who I am. – Who is Reggie Middleton? I believe track record speaks louder than Op-Ed columns, degrees or TV show appearances. Let me know if you agree…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/bfCDK6VLNkw/story01.htm Reggie Middleton

With unemployment stuck at record highs and loan delinquencies surging (as we discussed here, here and here), it is hardly surprising that El Economista reports that more than two-thirds of Spaniards do not believe the “recovery” promised by Prime Minister Rajoy has been created. While Cramer ignorantly confidently espoused this morning that Spain is recovering (and with Spanish stocks and bonds back near pre-crisis levels), a massive 75% of the Spanish people believe their personal situation will be the same or worse in 2014.

 

 

Via El Economista (Google Translate),

The Prime Minister, Mariano Rajoy, and closed over the 2013 promising that the new year would be the “economic recovery”…. More than two thirds of the Spanish population momentum promised by the leader of the executive is not created.

 

This emerges from a survey released Wednesday by the newspaper El Mundo… a mere 17% trust the recovery next year and 8% estimated that recovery has actually happened in the latter part of 2013.

 

Curious that, in this study by Sigma Dos, to the Popular Party voters distrust the information provided by the Government. 47% of respondents who said they voted in the party believe that the dominant trend for next year is pessimistic and start putting the recovery in 2015.

 

For other years, the hunch of Spanish has gotten worse. If a year ago 30% of Spaniards saw in 2014 the year of recovery, now that number is down to 17% already cited.

 

With regard to the personal situation of respondents, only 20% believe their life from the economic point of view better. 75% believe it will do the same or worse.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/I7edYieJNms/story01.htm Tyler Durden

With unemployment stuck at record highs and loan delinquencies surging (as we discussed here, here and here), it is hardly surprising that El Economista reports that more than two-thirds of Spaniards do not believe the “recovery” promised by Prime Minister Rajoy has been created. While Cramer ignorantly confidently espoused this morning that Spain is recovering (and with Spanish stocks and bonds back near pre-crisis levels), a massive 75% of the Spanish people believe their personal situation will be the same or worse in 2014.

 

 

Via El Economista (Google Translate),

The Prime Minister, Mariano Rajoy, and closed over the 2013 promising that the new year would be the “economic recovery”…. More than two thirds of the Spanish population momentum promised by the leader of the executive is not created.

 

This emerges from a survey released Wednesday by the newspaper El Mundo… a mere 17% trust the recovery next year and 8% estimated that recovery has actually happened in the latter part of 2013.

 

Curious that, in this study by Sigma Dos, to the Popular Party voters distrust the information provided by the Government. 47% of respondents who said they voted in the party believe that the dominant trend for next year is pessimistic and start putting the recovery in 2015.

 

For other years, the hunch of Spanish has gotten worse. If a year ago 30% of Spaniards saw in 2014 the year of recovery, now that number is down to 17% already cited.

 

With regard to the personal situation of respondents, only 20% believe their life from the economic point of view better. 75% believe it will do the same or worse.

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Moments ago, GM, now fully non-government backstopped (and perhaps because of), reported adjusted US vehicle sales of 230,157, a decline of 6.3% from the 245,733 cars delivered a year earlier, on expectations of a 1.5% increase in sales. As Kurt McNeil, VP of US sales, announced ““December started a little slow but sales were stronger later in the month, especially in the week between Christmas and New Year’s. We didn’t make any big changes to our ‘go-to-market’ strategy during the month, which is to offer competitive incentives and market aggressively, and we are carrying good momentum heading into January.” GM also was quick to put blame on wintry weather in December – fear not though, they won’t be the last. It was unclear just how substantial GM’s incentives were in a month in which below margin inventory liquidation was the name of the game for all retailers: we expect to learn soon.

Still, despite the weak December, GM did report a 7.3% increase in total 2013 sales, which rose from 2.6 million to 2.786 million sales, although judging by the weak end of year performance, many prospective buyers may have tapped out their government-funded car loans, which as we reported a month ago, represented together with student loans some 99% of all loan issuance in the past year!

The full breakdown of GM’s December car sales can be seen below: of note – the surge in Corvette sales, which GM said had its best December sales since 2006. Perhaps less exciting was the 9.2% Y/Y drop in Volt sales. Are Americans losing their fascination with electric cars?

But perhaps the most interest datapoint in today’s release, and one which may explain why GM’s sales missed, was that the car’s near record channel stuffing, which as we reported last month had soared in the past three months at a record pace, and was just shy of its all time high, saw a modest decline from 780K to 748K. Still, the latter number was still the highest ever December GM dealer inventory for the month of December in the restructured company’s history. It would appears even dealers can’t take any more, which also means to expect significant weaknesses in the various January manufacturing diffusion indexes and hard data points.

Source: GM

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