Guest Post: The Case For A Crash

Submitted by Charles Hugh-Smith via Peak Prosperity,

We’ve recently been treated to two mutually exclusive forecasts: that the Great Bull Market will run until 2016 or 2018, so no worries; and that markets are exhibiting bubble-like characteristics that presage another crash.

So which forecast is more likely the correct one?

Analysts of every stripe—fundamental, quantitative and technical—pump out reams of data and charts to support one forecast or another, and economists (behavioral, macro, etc.) weigh in with their prognostications as well.  All sorts of complexities are spun as a by-product of producing research that’s worth paying for, and it all becomes as clear as…mud. 

As an experiment, let’s strip away as much of the complexity as possible and look at a few charts of what many observers see as the key components of the U.S. economy and stock market.

Let’s start with a basic chart of the S&P 500 (SPX), a broad measure of U.S. stocks:

Without getting fancy, we can discern three basic phases: what we might term “the old normal,” from the late 1950s to 1982; an amazing Bull Market from 1982 to 1994 that saw the SPX more than double; and a third phase that some consider “the new normal,” a leap to the stratosphere in the 1990s, followed by sharp declines and equally sharp rises to new highs.

This third phase of extreme volatility does not look like the previous phases; that much is clear.  Is this a new form of volatile stability; i.e., are extreme bubbles and crashes now “normal”?  Or are these extremes evidence of systemic instability? About the only things we can say with confidence is that this phase is noticeably different from the previous decades and that it is characterized by repeating bubbles and crashes.

Let’s zoom in on this “new normal” from 1994 to the present. Does any pattern pop out at us?

Once again, without getting too fancy, we can’t help but notice that this phase is characterized by steeply ascending Bull markets that last around five years. These then collapse and retrace much of the previous rise within a few years.

The reasons why these Bull phases only last about five years are of course open to debate, but what is clear is that some causal factors arise at about the five-year mark that cause the market to reverse sharply.

The ensuing Bear markets have lasted between 2.5 and 1.5 years. We only have three advances and two declines to date, but the regularity of these advances and declines is noteworthy.

Next, let’s consider other potential influences on this “new normal” of wild swings up and down. Some have observed a correlation between the cycles of the sun’s activity and the stock market, and indeed, there does seem to be a close correlation—not so much with the amplitude of the market’s recent moves but with the economic tidal forces of recession and Bull/Bear sentiment.

But there is nothing here to explain why the highs and lows in the stock market have become so exaggerated in the “new normal.”

Many have attempted to correlate key dynamics in the U.S. and global economy to the stock market’s gyrations.  Let’s look at a handful that are often offered up as important to the U.S. markets: the bond market (TLT, the 20-year bond index), the Japanese yen, gold, and the U.S. dollar.

If there is some correlation between the SPX and the TLT, it isn’t very visible.

How about the Japanese yen? Once again, there is no correlation to the SPX that is obvious enough to be useful.

Some analysts see the yen and gold as tightly correlated; here is GLD, a proxy for gold:

There is a clear correlation here, but as we all know, correlation is not causation, which means that some underlying forces could be causing the yen and gold to act in a similar fashion. Alternatively, the yen is acting on gold in a causal role.

In either case, the problem with correlations is that they can end without warning.  Since neither the yen nor gold correlate with the S&P 500, neither one helps us forecast a continuing Bull or a crash.

Lastly, let’s look at the U.S. dollar (DXY).

As I have noted elsewhere, the dollar doesn’t share any meaningful correlation with the S&P 500, yen, gold, or bonds in terms of trends, highs, or lows.  Here is a longer-term view of the Dollar Index, and once again we see no useful correlation to the SPX:

 

Proponents of cycles (17.6 years, for example) claim a high degree of correlation with actual highs and lows, but these cycles do not exhibit the fine-grained accuracy we might hope for in terms of deciding to buy, short, or sell stocks.

Analyst Sean Corrigan has described a remarkable 33-year cycle of highs and lows in the SPX:  lows in 1949, 1982, and (forecast) 2015, and highs in 1967 and 2000, (forecast of next high, 2033). While interesting on multiple levels, these cyclical data points are rather sparse foundations for decisions on whether to sell or hold major positions in the stock market, and they do not provide a forecast of the amplitude of any high or low.  Given the extremes of the “new normal,” we would prefer a forecast, not just of time, but also of amplitude.

Though it is unsatisfyingly imprecise, the “new normal” phase strongly implies that future declines will be as dramatic as the advances and that the five-year clock is ticking on the current Bull market. Forecasting an advance that lasts years beyond this five-year pattern is equivalent to forecasting that the “new normal” phase is now ending and a new phase of much longer Bull advances is beginning.

That is a bold claim, and there is little historical data to give it much weight.  Stripped of complexity, the charts suggest that the current run will top out within the next few months and retrace most of the advance from 2009; i.e., a crash of significant amplitude.

In Part II: The Case for Cash, we analyze the indicators that help us determine the likelihood of a coming crash similar in magnitude to 2000-02 and 2008-09, and why a strategy of selling risk assets now, and holding the cash until income-producing assets “go on sale” at the trough of the next market decline, seems especially prudent at this time.

Click here to access Part II of this report (free executive summary; enrollment required for full access).

 


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/AFz_B2LFGp4/story01.htm Tyler Durden

This Is How Much The Banks Paid To Get The "Volcker Rule" Outcome They Desired

Curious how much the various banks who stood to be impacted by or, otherwise, benefit from either a concentration or dilution of the Volcker rule? According to OpenSecrets, which crunched the numbers, here is how much being able to continue prop trading meant to some of the largest US banks and lobby groups:

Not bad considering the loophole-ridden Volcker Rule will effectively permit “hedge” books (where an army of lawyers paid $1000/hour defines just what a hedge is) to continue piling on billions of dollars in wildly profitable, Fed reserve funded trades.

From OpenSecrets:

Regulators approved the Volcker rule yesterday, a central piece of the Dodd-Frank bill that limits the ability of banks to engage in high-risk trading. Their decision comes in spite of heavy lobbying from the rule’s main opponents: the banks themselves.

 

The American Bankers Association, which represents the interests of banks of all sizes, spent nearly $6.5 million on lobbying in the first nine months of 2013, with much of that money going to lobbying on behalf of “Dodd-Frank issues.” Wells Fargo and Citigroup each spent just over $4 million, while the Independent Community Bankers of America, another organization that represents banks, spent nearly $3.6 million. All three lobbied on the Dodd-Frank legislation.

 

Bank of America, meanwhile, spent just under $2 million on the Volcker rule and other issues, while JPMorgan Chase spent more than $4 million and listed “implementation and interpretation of the Volcker Rule” as one of its concerns.

 

The final rule is seen as a defeat for the commercial banking industry, which has already voiced its unhappiness with the decision. 

Congrats on the math, alas completely flawed conclusion: obviously the banks wouldn’t spend tens of millions not to achieve their goal, which they have – cover up a Rule which is only superficially named for Paul Volcker (even he admitted he had zero contribution in its drafting), and which was almost certainly penned by the banking lobby, in a way that allows banks to continue their prop trading status quo, only this time with the implicit blessing of the government. And since everyone knows how this movie ends, can we just please fast forward to the bit where one after another bank has to once again be bailed out on the taxpayer dime.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/RUfOwuh3fXg/story01.htm Tyler Durden

This Is How Much The Banks Paid To Get The “Volcker Rule” Outcome They Desired

Curious how much the various banks who stood to be impacted by or, otherwise, benefit from either a concentration or dilution of the Volcker rule? According to OpenSecrets, which crunched the numbers, here is how much being able to continue prop trading meant to some of the largest US banks and lobby groups:

Not bad considering the loophole-ridden Volcker Rule will effectively permit “hedge” books (where an army of lawyers paid $1000/hour defines just what a hedge is) to continue piling on billions of dollars in wildly profitable, Fed reserve funded trades.

From OpenSecrets:

Regulators approved the Volcker rule yesterday, a central piece of the Dodd-Frank bill that limits the ability of banks to engage in high-risk trading. Their decision comes in spite of heavy lobbying from the rule’s main opponents: the banks themselves.

 

The American Bankers Association, which represents the interests of banks of all sizes, spent nearly $6.5 million on lobbying in the first nine months of 2013, with much of that money going to lobbying on behalf of “Dodd-Frank issues.” Wells Fargo and Citigroup each spent just over $4 million, while the Independent Community Bankers of America, another organization that represents banks, spent nearly $3.6 million. All three lobbied on the Dodd-Frank legislation.

 

Bank of America, meanwhile, spent just under $2 million on the Volcker rule and other issues, while JPMorgan Chase spent more than $4 million and listed “implementation and interpretation of the Volcker Rule” as one of its concerns.

 

The final rule is seen as a defeat for the commercial banking industry, which has already voiced its unhappiness with the decision. 

Congrats on the math, alas completely flawed conclusion: obviously the banks wouldn’t spend tens of millions not to achieve their goal, which they have – cover up a Rule which is only superficially named for Paul Volcker (even he admitted he had zero contribution in its drafting), and which was almost certainly penned by the banking lobby, in a way that allows banks to continue their prop trading status quo, only this time with the implicit blessing of the government. And since everyone knows how this movie ends, can we just please fast forward to the bit where one after another bank has to once again be bailed out on the taxpayer dime.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/RUfOwuh3fXg/story01.htm Tyler Durden

The 'Depressing' Truth Of Greece's Insolvency

Despite hope (and talk) that Greece is on the path back to recovery, our recent discussion of the record deflation the nation is undergoing (and record unemployment) suggests Stournaras propaganda is just that. As Bloomberg’s David Powell writes, the embattled nation continues to push further into depression and a state of insolvency and appears highly unlikely to be able to reduce the domestic price level in order to restore competiveness and simultaneously avoid a second restructuring of its sovereign debt. Perhaps that is why Troika delayed its appearance in Athens as it is easier to ignore the truth that way? Especially as beggars, once again, will become choosers in the “grexit” debate.

 

Via Bloomberg’s David Powell,

Deflation in Greece continues to push the embattled country further into a state of insolvency.

The EU-harmonized measure of the headline consumer price index declined 2.9 percent year over year in November, according to data released by the National Statistical Service of Greece on Monday.

 

The gross domestic product deflator dropped 3 percent year over year during the third quarter of 2013, according to Bloomberg Brief calculations based on the levels of nominal and real GDP. The decline in prices is likely to have been greater than the economists of the International Monetary Fund had forecast. In the public sector debt sustainability analysis published in the latest review of Greece’s bailout package, they assumed the GDP deflator would measure minus 1.1 percent in 2013. It was released in July.

The official inflation forecasts for the following years also appear high. The economists assumed the GDP deflator would measure minus 0.4 percent in 2014, 0.4 percent in 2015 and 1.1 percent in 2016. Those figures may fail to materialize as a result of spare capacity in the economy. The unemployment rate measured 27.3 percent in August, the latest reporting period.

That compares with a recent peak in May of 27.5 percent, which was the highest level since the birth of the monetary union. The Organization for Economic Cooperation & Development estimates the non-accelerating-inflation rate of unemployment to be 15.6 percent. That’s a gap of 11.8 percentage points. A period of sustained deflation appears likely.

The experience of Japan demonstrates the difficulty of overcoming deflation. Nationwide Japanese CPI, excluding food and energy prices, slipped into negative territory in September 1998, measuring minus 0.1 percent year over year. It failed to move into positive territory for almost 10 years, hitting 0.1 percent year over year in June 2008.

In addition, spare capacity was much less in Japan than it is in Greece. The unemployment rate in the former never rose above 5.5 percent during the period. That compares with the latest estimate of NAIRU for Japan from the OECD of 4.3 percent.

Deflation raises the real interest rate on Greek debt. For example, the average real interest rate would rise to 5.7 percent from 3.6 percent in 2013, to 4.8 percent from 3.1 percent in 2014, to 4 percent from 2.6 percent in 2015 and to 3.2 percent from 2.1 percent in 2016, according to Bloomberg Brief calculations. Those figures assume the GDP deflator troughs at its present level of minus 3 percent in 2013 and rises to minus 2 percent in 2014, minus 1 percent in 2015 and 0 percent in 2016.

Deflation also weighs heavily on the pace of nominal GDP growth. It would fall to minus 7.1 percent from minus 5.3 percent in 2013, to minus 1.4 percent from 0.2 percent in 2014, to 1.9 percent from 3.3 percent in 2015 and to 3.7 percent from 4.8 percent in 2016, assuming the real GDP growth forecasts from the latest IMF review of the Greek economy and the aforementioned alternate inflation profile.

The nominal size of the Greek economy would be much smaller in 2016 under the alternate inflation scenario. It would measure 199.2 billion euros using the baseline scenario of real GDP growth and inflation from the latest report of the IMF. It would measure 187.5 billion euros using the baseline scenario of real GDP growth from the latest report of the IMF and the alternate inflation profile.

A shrinking economy increases the relative size of a country’s sovereign debt. Greece’s debt-to-GDP ratio would measure 158.3 percent in 2016 under the baseline scenario of the IMF and 168.9 percent for the same year under the alternate inflation scenario.

Greece appears highly unlikely to be able to reduce the domestic price level in order to restore competiveness and simultaneously avoid a second restructuring of its sovereign debt.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/7WkJeeTvKMk/story01.htm Tyler Durden

The ‘Depressing’ Truth Of Greece’s Insolvency

Despite hope (and talk) that Greece is on the path back to recovery, our recent discussion of the record deflation the nation is undergoing (and record unemployment) suggests Stournaras propaganda is just that. As Bloomberg’s David Powell writes, the embattled nation continues to push further into depression and a state of insolvency and appears highly unlikely to be able to reduce the domestic price level in order to restore competiveness and simultaneously avoid a second restructuring of its sovereign debt. Perhaps that is why Troika delayed its appearance in Athens as it is easier to ignore the truth that way? Especially as beggars, once again, will become choosers in the “grexit” debate.

 

Via Bloomberg’s David Powell,

Deflation in Greece continues to push the embattled country further into a state of insolvency.

The EU-harmonized measure of the headline consumer price index declined 2.9 percent year over year in November, according to data released by the National Statistical Service of Greece on Monday.

 

The gross domestic product deflator dropped 3 percent year over year during the third quarter of 2013, according to Bloomberg Brief calculations based on the levels of nominal and real GDP. The decline in prices is likely to have been greater than the economists of the International Monetary Fund had forecast. In the public sector debt sustainability analysis published in the latest review of Greece’s bailout package, they assumed the GDP deflator would measure minus 1.1 percent in 2013. It was released in July.

The official inflation forecasts for the following years also appear high. The economists assumed the GDP deflator would measure minus 0.4 percent in 2014, 0.4 percent in 2015 and 1.1 percent in 2016. Those figures may fail to materialize as a result of spare capacity in the economy. The unemployment rate measured 27.3 percent in August, the latest reporting period.

That compares with a recent peak in May of 27.5 percent, which was the highest level since the birth of the monetary union. The Organization for Economic Cooperation & Development estimates the non-accelerating-inflation rate of unemployment to be 15.6 percent. That’s a gap of 11.8 percentage points. A period of sustained deflation appears likely.

The experience of Japan demonstrates the difficulty of overcoming deflation. Nationwide Japanese CPI, excluding food and energy prices, slipped into negative territory in September 1998, measuring minus 0.1 percent year over year. It failed to move into positive territory for almost 10 years, hitting 0.1 percent year over year in June 2008.

In addition, spare capacity was much less in Japan than it is in Greece. The unemployment rate in the former never rose above 5.5 percent during the period. That compares with the latest estimate of NAIRU for Japan from the OECD of 4.3 percent.

Deflation raises the real interest rate on Greek debt. For example, the average real interest rate would rise to 5.7 percent from 3.6 percent in 2013, to 4.8 percent from 3.1 percent in 2014, to 4 percent from 2.6 percent in 2015 and to 3.2 percent from 2.1 percent in 2016, according to Bloomberg Brief calculations. Those figures assume the GDP deflator troughs at its present level of minus 3 percent in 2013 and rises to minus 2 percent in 2014, minus 1 percent in 2015 and 0 percent in 2016.

Deflation also weighs heavily on the pace of nominal GDP growth. It would fall to minus 7.1 percent from minus 5.3 percent in 2013, to minus 1.4 percent from 0.2 percent in 2014, to 1.9 percent from 3.3 percent in 2015 and to 3.7 percent from 4.8 percent in 2016, assuming the real GDP growth forecasts from the latest IMF review of the Greek economy and the aforementioned alternate inflation profile.

The nominal size of the Greek economy would be much smaller in 2016 under the alternate inflation scenario. It would measure 199.2 billion euros using the baseline scenario of real GDP growth and inflation from the latest report of the IMF. It would measure 187.5 billion euros using the baseline scenario of real GDP growth from the latest report of the IMF and the alternate inflation profile.

A shrinking economy increases the relative size of a country’s sovereign debt. Greece’s debt-to-GDP ratio would measure 158.3 percent in 2016 under the baseline scenario of the IMF and 168.9 percent for the same year under the alternate inflation scenario.

Greece appears highly unlikely to be able to reduce the domestic price level in order to restore competiveness and simultaneously avoid a second restructuring of its sovereign debt.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/7WkJeeTvKMk/story01.htm Tyler Durden

Former Hawkish Bank Of Israel Head Rumored To Be Next Fed Vice Chairman

 

While Bernanke may be about to leave; none other than his mentor and thesis adviser – former Bank of Israel chief Stanley Fischer is rumored to be in line for a new role:

  • FISCHER STEPPED DOWN AS BANK OF ISRAEL GOVERNOR IN JUNE
  • FISCHER LEADING CANDIDATE TO BE DEPUTY FED CHIEF: ISRAEL CH. 2
  • DJ WHITE HOUSE NEAR NOMINATING STANLEY FISCHER TO FED VICE CHAIR
And so the circle of life is complete. So far, the White House has declined to comment, but we note Fischer has a reputation for beng more hawkish than most – evidenced by his refusal to engage in the kind of dovish activity the rest of the world did while in charge in Israel and is especially downbeat on forward guidance.
 
Mr. Fischer said making such statements – known as forward guidance – can cause market confusion.You can’t expect the Fed to spell out what it’s going to do,” Mr. Fischer said. “Why? Because it doesn’t know.”
 
He added: “We don’t know what we’ll be doing a year from now. It’s a mistake to try and get too precise.” Mr. Fischer said he tried, on becoming governor of the Bank of Israel in 2005, to give signals to the market – but quickly gave up as he realized it restricted the bank’s future actions when circumstances changed.
 
“If you give too much forward guidance you do take away flexibility,” said Mr. Fischer. Part of the problem around giving indications of future actions is they are conditional and nuanced.

Also of note: Fischer was once upon a time considered the "dark horse" candidate to replace Bernanke:

Dark-horse candidates include Stanley Fischer, an American citizen who recently stepped down as governor of the Bank of Israel, and Roger Ferguson, another former Fed vice chairman and now chief executive of TIAA-CREF, a not-for-profit financial-services company.

For now the market seems oblivious that the #2 person at the Fed may be far more hawkish than Larry Summers ever would be.


    



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Big Tail Highlight Of 10 Year Reopening Auction, In Which Direct Bidder Allotment Drops To Lowest Since August 2012

Moments ago the Treasury sold $21 billion in 9 Year-11 Month paper in today’s 10 Year reopening of CUSIP WE6, which pricing at 2.824% was a sizable 0.7 bps tail to the 2.817% When Issued trading at 1 pm, and easily one of the bigger tails in the past year for the benchmark bond auction. And while the closing yield indicated a sudden drop off in demand into the auction, the internals were hardly as ugly, with a Bid to Cover of 2.61, below last month’s 2.70 (and below the TTM average of 2.73) but hardly a cliff drop in bidside demand. Breaking the allotment by final purchaser, Dealer got 40.5%, in line with the 39.2% average, while Indirects took down nearly half the auction, or 49.8% to be precise, far above the 38.3% LTM average, and the highest Indirect allotment since the 51.7% from June. Directs were therefore left holding 10.6% of the auction, the lowest such portion since the 5.2% in August 2012. Overall, hardly an impressive auction, and one which probably reflects concerns what the taper could do for longer duration in the months ahead.


    



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Damage Control: "Selfie At A Funeral" Photographer Explains What Really Happened

Following yesterday's "selfie-gate" furore at Nelson Mandela's memorial service, it is perhaps unsurprising that the AFP photographer responsible for the series of incriminating photos come out with a wordy (and picturey) response to explain what we all saw. Roberto Schmidt notes, "it was interesting to see politicians in a human light because usually when we see them it is in such a controlled environment. Maybe this would not be such an issue if we, as the press, would have more access to dignitaries and be able to show they are human as the rest of us." Indeed, especially for a president whose only focus is to be seen as "one of the people" and not actually doing, you know, work to help the people.

 

Via Roberto Schmidt of AFP blog,

So here’s the photo, my photo, which quickly lit up the world’s social networks and news websites. The “selfie” of three world leaders who, during South Africa’s farewell to Nelson Mandela, were messing about like kids instead of behaving with the mournful gravitas one might expect.

In general on this blog, photojournalists tell the story behind a picture they’ve taken. I’ve done this for images from Pakistan, and India, where I am based. And here I am again, but this time the picture comes from a stadium in Soweto, and shows people taking a photo of themselves. I guess it’s a sign of our times that somehow this image seemed to get more attention than the event itself. Go figure.

selfie-combo_m.jpg

Anyway, I arrived in South Africa with several other AFP journalists to cover the farewell and funeral ceremonies for Nelson Mandela. We were in the Soccer City stadium in Soweto, under a driving rain. I’d been there since the crack of dawn and when I took this picture, the memorial ceremony had already been going on for more than two hours.

From the podium, Obama had just qualified Mandela as a “giant of history who moved a nation towards justice." After his stirring eulogy, America’s first black president sat about 150 metres across from where I was set up. He was surrounded by other foreign dignitaries and I decided to follow his movements with the help of my 600 mm x 2 telephoto lens.

So Obama took his place amid these leaders who’d gathered from all corners of the globe. Among them was British Prime Minister David Cameron, as well as a woman who I wasn’t able to immediately identify. I later learned it was the Danish Prime Minister Helle Thorning Schmidt. I’m a German-Colombian based in India, so I don’t feel too bad I didn’t recognize her! At the time, I thought it must have been one of Obama’s many staffers.

Anyway, suddenly this woman pulled out her mobile phone and took a photo of herself smiling with Cameron and the US president. I captured the scene reflexively. All around me in the stadium, South Africans were dancing, singing and laughing to honour their departed leader. It was more like a carnival atmosphere, not at all morbid. The ceremony had already gone on for two hours and would last another two. The atmosphere was totally relaxed – I didn’t see anything shocking in my viewfinder, president of the US or not. We are in Africa.

(AFP Photo / Roberto Schmidt)

(AFP Photo / Roberto Schmidt)

I later read on social media that Michelle Obama seemed to be rather peeved on seeing the Danish prime minister take the picture. But photos can lie. In reality, just a few seconds earlier the first lady was herself joking with those around her, Cameron and Schmidt included. Her stern look was captured by chance.

I took these photos totally spontaneously, without thinking about what impact they might have. At the time, I thought the world leaders were simply acting like human beings, like me and you. I doubt anyone could have remained totally stony faced for the duration of the ceremony, while tens of thousands of people were celebrating in the stadium. For me, the behaviour of these leaders in snapping a selfie seems perfectly natural. I see nothing to complain about, and probably would have done the same in their place. The AFP team worked hard to display the reaction that South African people had for the passing of someone they consider as a father. We moved about 500 pictures, trying to portray their true feelings, and this seemingly trivial image seems to have eclipsed much of this collective work.

(AFP Photo / Roberto Schmidt)

It was interesting to see politicians in a human light because usually when we see them it is in such a controlled environment. Maybe this would not be such an issue if we, as the press, would have more access to dignitaries and be able to show they are human as the rest of us.

I confess too that it makes me a little sad we are so obsessed with day-to-day trivialities, instead of things of true importance.

During Mandela's memorial service in Johannesburg. (AFP Photo / Roberto Schmidt)

During Mandela's memorial service in Johannesburg. (AFP Photo / Roberto Schmidt)


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/mUJRsh5tRes/story01.htm Tyler Durden

Damage Control: “Selfie At A Funeral” Photographer Explains What Really Happened

Following yesterday's "selfie-gate" furore at Nelson Mandela's memorial service, it is perhaps unsurprising that the AFP photographer responsible for the series of incriminating photos come out with a wordy (and picturey) response to explain what we all saw. Roberto Schmidt notes, "it was interesting to see politicians in a human light because usually when we see them it is in such a controlled environment. Maybe this would not be such an issue if we, as the press, would have more access to dignitaries and be able to show they are human as the rest of us." Indeed, especially for a president whose only focus is to be seen as "one of the people" and not actually doing, you know, work to help the people.

 

Via Roberto Schmidt of AFP blog,

So here’s the photo, my photo, which quickly lit up the world’s social networks and news websites. The “selfie” of three world leaders who, during South Africa’s farewell to Nelson Mandela, were messing about like kids instead of behaving with the mournful gravitas one might expect.

In general on this blog, photojournalists tell the story behind a picture they’ve taken. I’ve done this for images from Pakistan, and India, where I am based. And here I am again, but this time the picture comes from a stadium in Soweto, and shows people taking a photo of themselves. I guess it’s a sign of our times that somehow this image seemed to get more attention than the event itself. Go figure.

selfie-combo_m.jpg

Anyway, I arrived in South Africa with several other AFP journalists to cover the farewell and funeral ceremonies for Nelson Mandela. We were in the Soccer City stadium in Soweto, under a driving rain. I’d been there since the crack of dawn and when I took this picture, the memorial ceremony had already been going on for more than two hours.

From the podium, Obama had just qualified Mandela as a “giant of history who moved a nation towards justice." After his stirring eulogy, America’s first black president sat about 150 metres across from where I was set up. He was surrounded by other foreign dignitaries and I decided to follow his movements with the help of my 600 mm x 2 telephoto lens.

So Obama took his place amid these leaders who’d gathered from all corners of the globe. Among them was British Prime Minister David Cameron, as well as a woman who I wasn’t able to immediately identify. I later learned it was the Danish Prime Minister Helle Thorning Schmidt. I’m a German-Colombian based in India, so I don’t feel too bad I didn’t recognize her! At the time, I thought it must have been one of Obama’s many staffers.

Anyway, suddenly this woman pulled out her mobile phone and took a photo of herself smiling with Cameron and the US president. I captured the scene reflexively. All around me in the stadium, South Africans were dancing, singing and laughing to honour their departed leader. It was more like a carnival atmosphere, not at all morbid. The ceremony had already gone on for two hours and would last another two. The atmosphere was totally relaxed – I didn’t see anything shocking in my viewfinder, president of the US or not. We are in Africa.

(AFP Photo / Roberto Schmidt)

(AFP Photo / Roberto Schmidt)

I later read on social media that Michelle Obama seemed to be rather peeved on seeing the Danish prime minister take the picture. But photos can lie. In reality, just a few seconds earlier the first lady was herself joking with those around her, Cameron and Schmidt included. Her stern look was captured by chance.

I took these photos totally spontaneously, without thinking about what impact they might have. At the time, I thought the world leaders were simply acting like human beings, like me and you. I doubt anyone could have remained totally stony faced for the duration of the ceremony, while tens of thousands of people were celebrating in the stadium. For me, the behaviour of these leaders in snapping a selfie seems perfectly natural. I see nothing to complain about, and probably would have done the same in their place. The AFP team worked hard to display the reaction that South African people had for the passing of someone they consider as a father. We moved about 500 pictures, trying to portray their true feelings, and this seemingly trivial image seems to have eclipsed much of this collective work.

(AFP Photo / Roberto Schmidt)

It was interesting to see politicians in a human light because usually when we see them it is in such a controlled environment. Maybe this would not be such an issue if we, as the press, would have more access to dignitaries and be able to show they are human as the rest of us.

I confess too that it makes me a little sad we are so obsessed with day-to-day trivialities, instead of things of true importance.

During Mandela's memorial service in Johannesburg. (AFP Photo / Roberto Schmidt)

During Mandela's memorial service in Johannesburg. (AFP Photo / Roberto Schmidt)


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/mUJRsh5tRes/story01.htm Tyler Durden

Tanking Stocks Are Catching Down To Credit's Reality

JPY carry trades are not helping and stocks just keep testing lows and finding no new BTFATH-ers for now. This will come as a little surprise to those who have watched the saturated and less exuberant credit markets unable to join the party for the last 2 months.

 

Credit never bought it…

 

and all those NFP taper-is-good gains are gone…

 

as JPY carry is being unwopund (for now)…


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/TtoMS6JCU7U/story01.htm Tyler Durden