Tag: finance

…and it appears few, even among his own party, are willing to be Obama’s much needed Lazarus.

 

 

…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/TKG9I3BzEcE/story01.htm Tyler Durden

With gold once again getting the slamdown treatment this morning (even as stocks shrug off any taper tantrum fears) the following article from Venezuelan newspaper El Nacional seems quite prescient. As Liberty Blitzkrieg's Mike Krieger notes, it appears to imply that the struggling South American nation has agreed to sell or swap the gold it still holds overseas at the Bank of England to Goldman Sachs. Perhaps that helps explain where Maduro got the money for the Samsung deal…

Via Liberty Blitzkrieg blog,

This is one of the major problems with gold. Despite what some may say, it is probably the most manipulated asset on the planet. Given the fact that so much of the gold is in the hands of sovereign nations and Central Banks that can be pressured by the U.S. empire, this is what happens. In fact, as I have said on many occasions, many of the Central Bank purchases we hear about do not consist of countries actually moving gold to within their borders, but rather just paper purchases. This does nothing to tighten supply/demand for gold. The main countries whose Central Banks actually appear to buy and deliver gold within their borders are China, Russia, Iran, and well, Venezuela. Until that changes, gold will be relatively easily manipulated, which is exactly why I support Bitcoin and why is taking off as it has.

From a sentiment perspective I think gold is buy, but personally I am waiting to see if we get one more major flush.

Here are excepts from the article courtesy of GATA. I believe it is a google translation and the actual sourced article in Spanish can be found here.

Venezuela’s Central Bank and Goldman Sachs are ready to sign an agreement to swap or exchange international gold reserves, with a start date in October, as stated in the contract, and until October 2020.

 

The negotiated amount, equivalent to 1.45 million ounces of gold, are deposited in the Bank of England and the transfers are made directly to Goldman Sachs once delivery times are stipulated.

 

The operation involves the delivery of gold from the central bank, which will receive dollars from the U.S. firm. The transactions are made through the creation of a financial instrument that is traded in the international market.

 

During the term of the instrument is an account called “margin,” in which the central bank agrees to deposit a larger amount of gold in the event that the price of gold falls or in which Goldman Sachs deposits a larger amount when gold increases. “At the expiration of the transaction the contributions are returned to their owners,” the document says.

 

There will be an adjustment to the asset value of 10 percent, to be used as a hedge in case the international market price falls, indicating that the U.S. bank takes care that if it produces a depreciation it will be covered and Venezuela would assume risk. The annual interest rate will be a combination of dollars with the call BBA Libor equivalent to 8 percent.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/6cva35nCVw0/story01.htm Tyler Durden

With the WTI-Brent spread at 8-month wides, RINs having collapsed, and US investors buoyed by gas prices at the pump near recent lows, the surge in crude oil prices today – by their most since October 2nd – may take some of the ‘tax-cut’ punch from the party (remember gas prices are still 11.4% above recent seasonal norms). The 2% jump in WTI (and 1.85% rise in Brent over the last 2 days) may have only pushed it back to one-week highs but breaks a trend of lower prices that many have hoped would persist. Desk chatter is that much of this move is a re-up of middle-east premia as Iran’s nuclear negotiator says no deal today.

 

 

Bear in mind that despite the euphoria over lower gas prices, they are still 11.4% above seasonal norms of the last 5 years…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/26aylzOQv6c/story01.htm Tyler Durden

Frustrated by constant republican opposition to pass Obama candidate nominations, Harry Reid may finally invoke the “nuclear option” and end the GOP’s ability to filibuster nominees. Politico reports that this may take place as soon as today. Politico reports: “Senate Majority Leader Harry Reid may move toward a historic change in the Senate rules to eliminate the filibuster on most nominations as soon as Thursday, according to senior Democratic aides. Reid is strongly considering calling up one in a group of blocked nominees to the D.C. Circuit Court of Appeals for another round of votes, furious that Republicans have thwarted the nominations of Robert Wilkins, Nina Pillard and Patricia Millette. If a second go-round fails on that judicial pick, Reid would likely unilaterally move to change the rules of the Senate by a majority vote — the “nuclear option,” Senate sources said.” This is not the first time Reid has threatened to go nuclear: “Privately, Senate Democratic leaders insist they prefer confirmation of Obama’s nominees rather than a rules change. And lawmakers have been at this point before.” However, it appears that this time he means business.

Bloomberg adds some additional quotes from the Nevada Senator for color:

• REID SAYS `AMERICAN PEOPLE BELIEVE CONGRESS IS BROKEN’
• REID SAYS HE AGREES THAT SENATE IS BROKEN
• REID SAYS OBSTRUCTION OF NOMINEES `UNPRECEDENTED’
• REID SAYS CONFIRMATION OF NOMINEES IS `UNWORKABLE’

What happens next:

The rules change being discussed among top Democrats would eliminate filibusters on all executive nominees as well as all judicial nominees, except those to the Supreme Court. Such a rules change would pave the path toward smoother confirmation for two more key Obama nominees: Janet Yellen to lead the Federal Reserve and Jeh Johnson to helm the Department of Homeland Security.

Still, Reid’s strategy may backfire if and when the republicans regain majority of the Senate:

Republicans are publicly warning that the change would simply be a path to eliminating the filibuster on everything, even on legislation — which would mean when the GOP takes the majority, Democrats will regret pushing the nuke button.

 

“You always have to take it seriously. I just think it would be incredibly short-sighted,” said Sen. John Cornyn of Texas, the Republican whip. “It just seems to be something they keep coming back to when [Democrats] don’t get their way.”

Then again, since Congress long lost control of a nation whose entire future hangs in the balance of the daily S&P closing print, what Reid or his peers do, is largely irrelevant, especially since Mr. Chairwoman just got the green light to get to work and make Congress even more irrelevant.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ct5lk0W22jQ/story01.htm Tyler Durden

Frustrated by constant republican opposition to pass Obama candidate nominations, Harry Reid may finally invoke the “nuclear option” and end the GOP’s ability to filibuster nominees. Politico reports that this may take place as soon as today. Politico reports: “Senate Majority Leader Harry Reid may move toward a historic change in the Senate rules to eliminate the filibuster on most nominations as soon as Thursday, according to senior Democratic aides. Reid is strongly considering calling up one in a group of blocked nominees to the D.C. Circuit Court of Appeals for another round of votes, furious that Republicans have thwarted the nominations of Robert Wilkins, Nina Pillard and Patricia Millette. If a second go-round fails on that judicial pick, Reid would likely unilaterally move to change the rules of the Senate by a majority vote — the “nuclear option,” Senate sources said.” This is not the first time Reid has threatened to go nuclear: “Privately, Senate Democratic leaders insist they prefer confirmation of Obama’s nominees rather than a rules change. And lawmakers have been at this point before.” However, it appears that this time he means business.

Bloomberg adds some additional quotes from the Nevada Senator for color:

• REID SAYS `AMERICAN PEOPLE BELIEVE CONGRESS IS BROKEN’
• REID SAYS HE AGREES THAT SENATE IS BROKEN
• REID SAYS OBSTRUCTION OF NOMINEES `UNPRECEDENTED’
• REID SAYS CONFIRMATION OF NOMINEES IS `UNWORKABLE’

What happens next:

The rules change being discussed among top Democrats would eliminate filibusters on all executive nominees as well as all judicial nominees, except those to the Supreme Court. Such a rules change would pave the path toward smoother confirmation for two more key Obama nominees: Janet Yellen to lead the Federal Reserve and Jeh Johnson to helm the Department of Homeland Security.

Still, Reid’s strategy may backfire if and when the republicans regain majority of the Senate:

Republicans are publicly warning that the change would simply be a path to eliminating the filibuster on everything, even on legislation — which would mean when the GOP takes the majority, Democrats will regret pushing the nuke button.

 

“You always have to take it seriously. I just think it would be incredibly short-sighted,” said Sen. John Cornyn of Texas, the Republican whip. “It just seems to be something they keep coming back to when [Democrats] don’t get their way.”

Then again, since Congress long lost control of a nation whose entire future hangs in the balance of the daily S&P closing print, what Reid or his peers do, is largely irrelevant, especially since Mr. Chairwoman just got the green light to get to work and make Congress even more irrelevant.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ct5lk0W22jQ/story01.htm Tyler Durden

While the world of mainstream media stock pundits would like investors to believe that there is a wall of money on the sidelines waiting anxiously to go all-in on stocks (bear in mind there’s a seller for every buyer and where does the cash on the sidelines go when it is handed over to the seller in return for his stock?), as none other than Charles Schwab notes in this brief Bloomberg TV clip, “investors are less rattled” than most believe, “and have stayed invested” in large part. “There hasn’t been a wholesale movement away from stocks,” he goes on, busting myths asunder, adding that “investors want to see market-driven conditions, not Fed manipulated ones.”

So perhaps – just perhaps – Schwab is right, if the Fed stepped away and let markets be markets once again, maybe real capital would flow once again?

Schwab goes on to discuss how the Fed’s policy has hurt the older generation – “it has been a terrible thing”

Beginning at around 50 seconds, Schwab calmly dismisses one of the biggest market myths and raises a few red flags – “we see the market go up or down depending on which Fed member is speaking…”

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/715XVNqZnek/story01.htm Tyler Durden

While the world of mainstream media stock pundits would like investors to believe that there is a wall of money on the sidelines waiting anxiously to go all-in on stocks (bear in mind there’s a seller for every buyer and where does the cash on the sidelines go when it is handed over to the seller in return for his stock?), as none other than Charles Schwab notes in this brief Bloomberg TV clip, “investors are less rattled” than most believe, “and have stayed invested” in large part. “There hasn’t been a wholesale movement away from stocks,” he goes on, busting myths asunder, adding that “investors want to see market-driven conditions, not Fed manipulated ones.”

So perhaps – just perhaps – Schwab is right, if the Fed stepped away and let markets be markets once again, maybe real capital would flow once again?

Schwab goes on to discuss how the Fed’s policy has hurt the older generation – “it has been a terrible thing”

Beginning at around 50 seconds, Schwab calmly dismisses one of the biggest market myths and raises a few red flags – “we see the market go up or down depending on which Fed member is speaking…”

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/715XVNqZnek/story01.htm Tyler Durden

With the market not sure what bad news would send it soaring higher today, here comes the Philly Fed to save the day by tumbling from October’s 19.8 to a paltry 6.5, slamming through expectations of 15.0 – the biggest miss since February – and assuring that ahead of today’s POMO there is enough ammunition for a stock ramp to end the three days of declines.

But while the leading indicators of New Orders, Shipments and Unfilled Orders all plunged (from 27.5 to 11.9; from 20.4 to 5.6 and from 9.1 to -4.2, respectively), it was the jobs number that showed just how bad things really are with the Number of Employees and Average Employee Workweek both sliding from 15.4 to 1.1, and from 8.5 to -8.6. This is what the report said: “Labor market indicators showed little improvement this month. The current employment index fell 14 points from its reading in October (which was at a two?year high), to 1.1. Nearly 13 percent of the firms reported increases in employment, which is lower than the 23 percent that reported increased employment last month. Firms, on balance, reported lower work hours, with the average workweek index falling from 8.5 to ?8.6 this month.” Thank you Obamacare for making even more people into part-timers.

And broken down by components:

And now, since the economy is once again sliding on every possible banana peel, we can calmly go back to the “market” ramp.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/B66FOuoDiKg/story01.htm Tyler Durden

That didn't take long…

• *SENATE BANKING PANEL VOTES 14-8 TO APPROVE YELLEN AS FED CHIEF
• *REPUBLICANS CORKER, COBURN, KIRK VOTE IN FAVOR OF YELLEN
• *MANCHIN ONLY PANEL DEMOCRAT TO OPPOSE YELLEN FED NOMINATION
• *YELLEN NOMINATION AS FED CHAIRMAN SENT TO FULL SENATE

Given this, the full Senate vote will be a rubber-stamp heralding the new era of Yellenomics as the QEeen takes her thrown.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/DvVhxFU3w1U/story01.htm Tyler Durden

The relatively new Minneapolis Fed president Narayana Kocherlakota is not known for any insightful, original ideas. Before he took over the MinnFed, he was a research economist at the bank in the late 1990s, a consultant there from 1999 to 2009, taught at the University of Minnesota from 2005 to 2010 and was chairman of the U’s department of economics before being named president of the bank. What he is best known for is his epic flip-flopping: from one of the Fed’s staunchest hawks early in his presidential career, to a dove so starved for the Fed’s monetary liquidity, he often puts even Charles Evans to shame. He is among the first to suggest that the Fed should hold rates at zero until unemployment hits 5.5% (which it never will unless of course the plunge in the labor participation rate continues) something which both Goldman and Yellen have now adopted as gospel. Nobody knows what precipitated this shocking metamorphosis, although it is said Ben Bernanke can be quite persuasive during unrecorded phone calls. Which brings us to the topic of this post: what does a suspiciously reformed Fed dove do when faced with increasingly louder, conflicting voices that challenge the delusion that the only thing that will fix a failing QE is more QE? He fires them of course.

As the Star Tribune reports, two top economists at the Minneapolis Fed were “shown the door” when they disagreed with their tyrannical money printing advocate. Who were the two?

The departing economists are Patrick Kehoe and Ellen McGrattan, both highly regarded researchers with long tenures in Minneapolis. Kehoe, a Harvard Ph.D. who has taught at the University of Pennsylvania and the University of Chicago, joined the Fed as a monetary adviser in 1997. He was the bank’s highest-ranked research economist, according to data from the St. Louis Fed.

 

“He’s a high-profile person in the profession, a world-class economist,” said Stephen Williamson, a former Minneapolis Fed economist who now works at the St. Louis Fed and is a professor at Washington University in St. Louis. “He’s a big deal.”

 

Kehoe declined to comment. McGrattan said Kehoe was fired on Oct. 18. He already has a position at the U, which often shares economists with the Minneapolis Fed. “Patrick Kehoe did not choose to quit or leave the Fed,” McGrattan said.

 

McGrattan, a Stanford Ph.D. who taught at Duke University before joining the Minneapolis Fed in 1992, will take a position with the University of Minnesota in January and will go on unpaid leave at the bank. She has been an adjunct professor at the U since 1993 and said she was pushed aside at the Fed more implicitly than Kehoe.

As a reminder, “The Minneapolis Fed has a reputation as one of the premier economic research institutions in the country. A close partnership between the U and the bank over the years resulted in an innovative marriage of academic economic research and policymaking. It was a fruitful collaboration in which economists such as Prescott, Tom Sargent, Chris Sims and Neil Wallace helped put the Minneapolis Fed and University of Minnesota on the map. Former President Gary Stern and Art Rolnick, the former research director, continued the tradition. Sargent, Sims and Prescott eventually won Nobel Prizes in economics, and Sargent and Prescott still have ties to the U and the Minneapolis Fed.”

Sargent, incidentally, is the same person who a few days ago was heard uttering the most apocryphal words a Fed cardinal could hear, namely that deflation is actually a good thing, and that Greece might benefit from returning to a gold standard. It is easy to see why Kocher does not like him.

But back to Kehoe and McGrattan who were mercilessly sacked by their dovish boss: why did he do that one may ask? Simple – they disagreed with his monetary religion.

There are subtle policy differences between Kocherlakota and the economists who are leaving. Kocherlakota has been at the center of a debate over the effectiveness of the Fed’s low-interest-rate policy. He has pushed for nearly two years for the Fed to hold down rates until unemployment drops to 5.5 percent.

 

He argues, in general, that what are known as “New Keynesian” economic models are helpful. This school of thought has helped create an unprecedented intervention in the financial markets by the country’s central bank — the $85 billion a month bond-buying program known as quantitative easing.

 

But Kehoe and McGrattan published a paper in 2008 arguing that monetary policy can do little to affect the unemployment rate, and Fed policymakers should instead focus primarily on controlling inflation.

 

“New Keynesian models are not yet useful for policy analysis,” they wrote.

Which is effectively the same as telling the Spanish Inquisition that god does not exist. Luckily, modern society is a little more developed (for now). Instead of Kehoe and McGrattan getting the iron maiden, they were merely fired.

Prescott laments that this sort of debate within the bank, long encouraged, no longer appears to be welcome. “A good administrator sets up a loyal opposition,” he said.

Don’t ask. Don’t question. Just accept. And with that it’s case closed for how the Fed’s pathological voodoo shamans deal with any dissent.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/64P8UQk-Dh0/story01.htm Tyler Durden