Tag: news

Submitted by Adam Taggart via Peak Prosperity,

Every year, David Collum writes a detailed "Year in Review" synopsis full of keen perspective and plenty of wit. This year's is no exception. The 89-page tour-de-force is a must-read this holiday season for perspective on where we have been and where we are going. From Krugman to the abuse of civil liberties, from gold to muni bankruptices, and from Student debt bubble to Cyprus and beyond, Collum covers it all.

…

Why would anybody give a damn what an organic chemist thinks about investing, economics, and politics? I’m baffled. As a half-hearted defense, in over 34 years of investing with a decidedly lopsided portfolio, I have had only two years in which my total wealth decreased in nominal dollars. My 14-year return since 01/01/00 is 9% compounded with no leverage and no glass eye. (We all made money in the 90’s so I don’t even go there.)

Each review begins with a highly personalized account of my efforts to get through another year of investing, which is followed by an overview of 34 years of investing. I thought maybe I would drop the former, but I couldn’t because one of my two losing years was this year. Come again? You lost money this year? Yep, I’m the guy—an urban legend in the flesh. You cannot teach this kind of prowess. It was a very expensive year to be in the Church of Austrian Economics and Hard Assets. Thus, I must continue with the personal overview as a form of a trip to the confessional. The investing section may be instructive for those interested in my approach and for gold bulls on suicide watch. The bulk of the review, however, describes thoughts and observations—the year’s events told as a narrative. The links are copious, albeit not comprehensive. Some are flagged as highly recommended.

I try to avoid themes covered amply in my previous reviews. I won’t pick on the Roth IRA anymore (although I was right), and I’ve left resource depletion alone (it’s still a problem). Nonetheless, some gifts just keep on giving. Debt permeates all levels of society, demanding comment every year. Precious metals are a personal favorite. This year seems to be more about politics and less about economics. Sections entitled Baptists, Bankers, the Federal Reserve, and Bootleggers describe the players involved in the biggest battle since Frodo melted down the ring for beer money. Society is juiced on easy money, leaving some of us breathless. I finish with a book list that shaped my thinking.

Every year I have declared with an increasingly shrill voice now inaudible even to dogs that civil liberties must be protected at all costs and that we all should avoid using “conspiracy” as a pejorative term. Oh…my…God! Just as smartphones have put to rest the existence of Yeti, aliens, and the Loch Ness Monster, 2013 put to rest any claim that conspiracies do not exist. If you denounce conspiracy theories and conspiracy theorists to me, I will remind you of the quote from a 20th century philosopher:

“Everybody has a plan until they get punched in the face.”

~ Mike Tyson

The full review is below:

 

The contents are as follows:

    Background
    Investing
    The Bear Case
    The Economy
    Broken Markets
    Gold
    Debt and Retirement
    Municipal Debt
    Student Debt
    Bonds and Sovereign Debt
    Housing the Mortgage Markets
    Europe
    Cyprus
    Rest of the World
    Confiscation
    The Fourth Estate
    CNBC–Rise Above
    Bankers and Finance
    Federal Reserve
    Bootleggers
    Paul Krugman
    Baptists
    Government Gone Wild
    Mr. Obama Goes to Washington
    Civil Liberties Part 1
    Civil Liberties Part 2: Edward Snowden versus the NSA
    Books
    Acknowledgements
    Links

 

2013yearinreview-30

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/uf-rU3uqvIw/story01.htm Tyler Durden

The last few days have seen significant shifts in the term structure of US Treasury bonds; auctions have not gone well and despite the world’s expectations for ‘taper’ to lead to a surge in rates, the long-end of the bond-market has rallied. While Goldman might believe the ‘bond bubble’ is starting to pop, the following 223 years of Treasury yields (through free-markets and centrally-planned) sheds some light on what the ‘new normal’ level of rates really represents because, as we noted previously, the world is so levered now that any ‘reversion’ in rates is simply unthinkable.

 

 

Notice any difference pre- and post-Fed?

 

Chart: Goldman Sachs

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/cx4NWgb6XNo/story01.htm Tyler Durden

The last few days have seen significant shifts in the term structure of US Treasury bonds; auctions have not gone well and despite the world’s expectations for ‘taper’ to lead to a surge in rates, the long-end of the bond-market has rallied. While Goldman might believe the ‘bond bubble’ is starting to pop, the following 223 years of Treasury yields (through free-markets and centrally-planned) sheds some light on what the ‘new normal’ level of rates really represents because, as we noted previously, the world is so levered now that any ‘reversion’ in rates is simply unthinkable.

 

 

Notice any difference pre- and post-Fed?

 

Chart: Goldman Sachs

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/cx4NWgb6XNo/story01.htm Tyler Durden

Submitted by F.F. Wiley of Cyniconomics blog,

Here are a few moments from Wednesday’s FOMC press conference that stuck in our heads, all from Ben Bernanke’s comments in his last Q&A as Fed chair:

 

On financial instability questions

[W]e can’t control [financial instability concerns] perfectly and there may be situations when financial instability has implications for our mandate … which we saw of course in the Great Recession. So it’s a very complex issue. I think it will be many years before central banks have completely worked out exactly how best to deal with financial instability questions.

Has the chairman been this forthright recently about the Fed’s lack of understanding of financial instability? If so, I don’t remember it. He seemed to take a different approach in his last presser versus, say, congressional testimony. Here’s how Janet Yellen dealt with the same topic in her confirmation hearing last month:

No-one wants to live through another financial crisis, and the Federal Reserve is devoting substantial resources and time and effort at monitoring those risks. At this stage, I don’t see risks of financial instability. There is limited evidence of ‘reach for yield’. We don’t see a broad build-up in leverage or the development of risks that I think at this stage poses a risk to financial stability.

This is closer to what we’re used to, which is essentially: “Look, we have a whole bunch of people working on this thing and don’t see any problems. Next?”

On Bernanke’s personal regrets

Whether or not we could have prevented [the global financial crisis] or done more about it, that’s another question. By the time I became chairman, it was already 2006 and house prices were already declining. Most of the mortgages had been made. But obviously it would have been good to have recognized that earlier and tried to take more preventative action.

Do FOMC governors not count? Don’t they have responsibilities? Except for the last seven months of 2005 – when the FOMC was on an autopilot rate hiking program of 0.25% per meeting – Bernanke has participated in every FOMC meeting since August 2002 as either a governor or chairman. He never cast a dissenting vote. As a known deflation hawk and inflation targeting advocate, he was closely associated with the June 2003 rate cut that lowered the fed funds rate to its housing boom trough of 1%. He famously dismissed the possibility of a fall in house prices. Were the bolded sentences really necessary?

More on financial instability

Our general philosophy on financial instability issues is where we can that we try to address it first and foremost by making sure that the banking system and the financial system are as strong as possible.

This is another way of saying that the Fed will never again let another large financial institution fail. There’s nothing new here; just a reminder that all talk of ending bailouts is empty and all Fedspeak about the dangers of moral hazard is lip service.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/WaRHjKWw32c/story01.htm Tyler Durden

Submitted by F.F. Wiley of Cyniconomics blog,

Here are a few moments from Wednesday’s FOMC press conference that stuck in our heads, all from Ben Bernanke’s comments in his last Q&A as Fed chair:

 

On financial instability questions

[W]e can’t control [financial instability concerns] perfectly and there may be situations when financial instability has implications for our mandate … which we saw of course in the Great Recession. So it’s a very complex issue. I think it will be many years before central banks have completely worked out exactly how best to deal with financial instability questions.

Has the chairman been this forthright recently about the Fed’s lack of understanding of financial instability? If so, I don’t remember it. He seemed to take a different approach in his last presser versus, say, congressional testimony. Here’s how Janet Yellen dealt with the same topic in her confirmation hearing last month:

No-one wants to live through another financial crisis, and the Federal Reserve is devoting substantial resources and time and effort at monitoring those risks. At this stage, I don’t see risks of financial instability. There is limited evidence of ‘reach for yield’. We don’t see a broad build-up in leverage or the development of risks that I think at this stage poses a risk to financial stability.

This is closer to what we’re used to, which is essentially: “Look, we have a whole bunch of people working on this thing and don’t see any problems. Next?”

On Bernanke’s personal regrets

Whether or not we could have prevented [the global financial crisis] or done more about it, that’s another question. By the time I became chairman, it was already 2006 and house prices were already declining. Most of the mortgages had been made. But obviously it would have been good to have recognized that earlier and tried to take more preventative action.

Do FOMC governors not count? Don’t they have responsibilities? Except for the last seven months of 2005 – when the FOMC was on an autopilot rate hiking program of 0.25% per meeting – Bernanke has participated in every FOMC meeting since August 2002 as either a governor or chairman. He never cast a dissenting vote. As a known deflation hawk and inflation targeting advocate, he was closely associated with the June 2003 rate cut that lowered the fed funds rate to its housing boom trough of 1%. He famously dismissed the possibility of a fall in house prices. Were the bolded sentences really necessary?

More on financial instability

Our general philosophy on financial instability issues is where we can that we try to address it first and foremost by making sure that the banking system and the financial system are as strong as possible.

This is another way of saying that the Fed will never again let another large financial institution fail. There’s nothing new here; just a reminder that all talk of ending bailouts is empty and all Fedspeak about the dangers of moral hazard is lip service.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/WaRHjKWw32c/story01.htm Tyler Durden

With a wave of detente spilling over the Middle East, following the surprising US overture to calm relations with Syria and Iran just months after it nearly launched an offensive war in the country over a few fabricated YouTube clops Looks like Africa will be the next geopolitical hotspot. But while France is the figurehead leading the offensive over west Africa, focusing on Mali and the Central African Republic, where they are “peacekeeping” (with the support of US drones), east Africa appears set for a full-blown flare out, with the Sudan area emerging as the dominant zone of instability and future escalation. Which is perhaps why not only a US aircraft, but a UN helicopter, both came under fire in the Sudan over the past 24 hours in what is assured to generate an “appropriate” response by the US. 

First, Reuters reports about a U.S. aircraft which was by gunfire in South Sudan:

A U.S. aircraft came under fire on Saturday on a mission to evacuate Americans from spiraling conflict in South Sudan and four U.S. military service members were wounded.

 

Nearly a week of fighting threatens to drag the world’s newest country into an ethnic civil war just two years after it won independence from Sudan with strong support from successive U.S. administrations.

 

The U.S. aircraft came under fire while approaching the evacuation site, the military’s Africa Command said in a statement. “The aircraft diverted to an airfield outside the country and aborted the mission,” it said.

 

Hundreds of people have been killed in the fighting that pits loyalists of President Salva Kiir, of the Dinka ethnic group, against those of his former vice president Riek Machar, a Nuer who was sacked in July and is accused by the government of trying to seize power.

 

Fighting that spread from the capital, Juba, has now reached vital oilfields and the government said a senior army commander had defected to Machar in the oil-producing Unity State.

And just to assure a condemning social response is generated, and the public mood against the South Sudan is sufficiently negative, the AP just reported that a UN helicopter in the region had been downed also following gunfire by local militant:

Two officials have told The Associated Press that a U.N. helicopter trying to evacuate peacekeepers and civilians was fired on and sustained significant damage on Friday in the same restive South Sudan state where a U.S. helicopter was hit Saturday.

 

Rob McKee of Warrior Security said the U.N. helicopter was hit by small arms fire and made an emergency landing while trying to evacuate personnel from a base in Yuai in Jonglei state. A second official who insisted on anonymity because the information hasn’t been released said the helicopter was abandoned and remains unable to fly. No injuries were reported.

 

A U.N. spokesman didn’t answer a phone call or email seeking comment.

 

U.S. aircraft were fired on Saturday in Bor, the capital of Jonglei. Four U.S. service members were wounded.

Of course, the question is why the US (and, laughably, French) scramble to get involved militarily in Africa now? The answer is easy: as we reported in June 2012, in the rush for Africa China has a multi-year head start in the colonization race. So what short cuts is a self-determined superpower to do to catch up – why find one pretext after another to send a military force and achieve through brute force what China has been able to attain through infrastructure and domestic investing over the past several years.

From June 2012:

“The Beijing Conference”: See How China Quietly Took Over Africa

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/pgDn_E6kJC0/story01.htm Tyler Durden