SAVE YOUR CURRENCY AND YOUR SOVEREIGNTY

The Danes seem to get it more than most albeit they're still a piecemeal part of the European Union.

What they understand it appears are two terms we've discussed at length many times--solvency and sovereignty.  Like the lines of that old Sinatra tune, love and marriage, a horse and carriage, they go together. And it's pretty difficult if not impossible to have one without the other.

Last Thursday Danish voters sent a shrill warning to EU bureaucrats who are setting up for their next confab and confab is the correct term here because that's what bureaucrats spend their time doing. That itself should not surprise. That they get paid for it should.

There's another thing many Danes apparently understand, the dangers of immigration. Denmark has
reportedly some of the EU 's toughest immigration laws. Immigration today might be more dangerous than any time in the last 100 years.

As one scribe put it: The result marks a blow to a beleaguered EU, which faces the threat of a U.K. exit and a worsening crisis in Greece. The People’s Party has said it’s willing to enter an alliance with other EU-skeptical parties that would ask Danes to vote much more often on European reforms.

Next up is the UK, a nation already swamped in socialistic over-regulation and paralyzing bureaucracy. A campaign theme for the no crowd might be: Forget the Queen. Petition God to save your currency and your sovereignty.

REVISION OF THE REVISED

Just to pick up on our recent post about revision of the revised,financialspuds.blogspot.com/2015/12/what-is-two-plus-two, sounds like it could be a hot HBO series, here's a read everyone ought to read even those misguided souls who want to continue wallowing in their benighted states under that infamous Washington cry: "We're from the government and we're here to help you."

Unless you're suffering from a bad case of birth canal trauma or the hoodwinking so popular on today's college campuses, you might want to take a chance and step out of the Brainwashed Zone and think for yourself. We know it's painful, threatening, even downright frightening. The government is here all right, but only to take from you. That's their way of spelling help.

Recounting my own college years and how they taught "The Great Depression," and then spending years doing my own research, I eventually realized revision has been going on a lot longer than I even imagined. It's in the academic genetic code.

davidstockmanscontracorner.com/why-this-sucker-is-going-down-again

WHAT IS TWO PLUS TWO?

As we said recently, the news is out and it's all over the Street. Here's the blurb on it from
www.crossingwallstreet.com.

The November jobs report is out. Non-farm payrolls rose by 211,000. The unemployment rate held steady at 5.0%.

The September NFP was revised higher by 8,000 and October was revised up by 27,000. Average hourly earnings rose four cents to $25.25.

I think this pretty much guarantees a December rate hike. 

We don't question the poster. He's simply reporting what was announced. But our cynical side tells us two things: the Fed wants to raise rates before year end, right or wrong. The second thing is they're data freaks and desperately need data to support their constant stance of hedging or fence straddling.

In short, this not a group noted for its confidence or decisiveness. Check out Mario Draghi's action yesterday. We've written before about revisions and their constant part of government numbers. This is one of those: "Here,we can show you the figures!" Three out of four ain't bad, especially with the fourth one remaining stable.

It reminds of the story about a company CEO who calls in his CFO one day and asks: "What's two plus two these days?" And the CFO shoots back: "Anything you want it to be, boss!"

The Fed got want it wanted and needed, the numbers and the trend, to CYA.

OVERNIGHT

It's like doing so much sweet talking before your marriage that you set it up to be a big disappointment," Reuters quoted one market watcher after European Central Bank President Mario Draghi surprised many with modest actions Thursday.

To say it was less aggressive than many traders expected didn't take long to show up in markets around the globe either as Asian shares joined the selling overnight with"Japan's Nikkei .N225 tumbled 2.2 percent at the close, the biggest daily drop since Sept. 29. It was down 1.9 percent for the week, the most in three months and China's CSI300 index .CSI300 slipped 1.6 percent, shrinking gains for the week to 3.8 percent."

Currency markets also felt the sting with the Euro rising over 3 percent for its largest one-day move in over six years while the dollar index fell to a one month low before rallying over night.

In other news the Wall Street Journal reports that OPEC meeting in Vienna today most likely won't lead to any changes in production output.

The energy ministers of the OPEC nations gathered for the cartel’s policy meeting on Friday amid warnings from its staff that oil prices will likely remain low no matter what the group decides to do about production. 

The analysis, which was reviewed exclusively by The Wall Street Journal, underscores the conundrum faced by the Organization of the Petroleum Exporting Countries as it tries to respond to a prolonged oil-price slump. With global supplies of oil far outpacing demand, a debate is expected Friday between a faction that wants a reduction in production to boost prices and another arguing such a move would only give away market share to competitors in the U.S. and elsewhere.

The cartel is expected to continue with its policy of pumping flat out, even though prices for Brent crude, the international benchmark, have fallen to less than $45 a barrel compared with highs of $114 a barrel last year. That policy was set a year ago and was a departure for a group that normally pulled back output when prices fell to make oil scarcer and more valuable.

THEY'RE STILL SNIFFING

When you read MSM paragraphs like this one, it makes you want to go do you know what.

We especially like the one: Fed policymakers are widely seen raising interest rates for the first time in almost a decade at their next meeting on Dec. 15-16, but they continue to parse data and trends carefully given the uneven nature of the U.S. recovery. 

Today, speaking before Congress the good lady noted that even after a hike in rates, the Fed will remain accomodative. That's about as politically correct Fed speak as you can get. It's a warped twist on: "We're from the government and we're here to help you."

That they continue to parse data and trends carefully given the uneven nature of the economic recovery is laughable, to say the least. This is the largest group of economic data parsers this side of the ECB. The only thing uneven is the members of the FOMC.

That's essentially how they get appointed. They send out fliers to all economists saying: "If you!re really uneven, we might have a job for you." These are the one-handed, other-handed folks President Truman called out more than half a century ago.

Nothing new under the sun, the Good Book says. Then you have Yellen saying she's looking forward to the first rate hike in years because it will show the economy is recovering. A testament to that. Wow!

These economists remind me of my little dog on a cold, wintry night trying to decide the perfect place to do his business. Raises his leg here, raises his leg there, sniffs there, sniffs here, on the one hand this is the right place, on the other, nope! it's over here. Two or three frost bitten cheeks later....he's still sniffing.

THE SAME DAY

What could be more appropriate than this: Two former Pimco gurus speaking up on the same day.

Be careful or, to put it more abstractly, be diligent, say these two.

Bill Gross says investors should move to protect their money in 2016 rather than reach for higher returns as central bank efforts to stimulate the global economy set the stage for markets to ultimately fall.

Gross, the former manager of the world’s largest bond fund who joined Janus Capital Group Inc. last year, said central bankers have been doing the equivalent of printing money and acting like gamblers who keep doubling bets to recoup losses.

“One day the negative feedback loop on the real economy will halt the ascent of stock and bond prices and investors will look around like Wile E. Coyote wondering how far is down,” Gross wrote in an investment outlook Thursday for Denver-based Janus. Wile E. Coyote is a cartoon character who unsuccessfully hunts the fleet bird Road Runner, injuring and humiliating himself through his ineptitude.

.bloomberg.com/news/articles/2015-12-03/gross-says-de-risk-portfolios-as-wile-e-coyote-time-nears

DIVERGENCE PAIN.....?

 

 There's an old saying: Karma is a beach.

The same might be said shortly about interest rates and currency divergence. The prospect of central bank actions by the U.S. and the ECB creating divergence, maybe even the painful kind, is not going un-noticed by some.

If history is any guide, there are three major issues that warrant careful monitoring in the coming months. First, the U.S. is unlikely to stand by for long if its currency appreciates significantly and its international competitiveness deteriorates substantially. Companies are already reporting earnings pressures due to the rising dollar, and some are even asking their governments to play a more forceful role in countering a stealth “currency war.”

Second, because the dollar is used as a reserve currency, a rapid rise in its value could put pressure on those who have used it imprudently. At particular risk are emerging-country companies that, having borrowed overwhelmingly in dollars but generating only limited dollar earnings, might have large currency mismatches in their assets and liabilities or their incomes and expenditures.

And, finally, sharp movements in interest rates and exchange rates can cause volatility in other markets, most notably for equities. Because regulatory controls and market constraints have made brokers less able to play a countercyclical role by accumulating inventory on their balance sheets, the resulting price instability is likely to be large. There is a risk that some portfolios will be forced into disordered unwinding. Furthermore, the central banks’ policy of curtailing so-called “volatile volatility” is likely to be challenged. More:

MarketWatch.com/story/as-fed-hikes-and-ecb-eases-markets-could-get-wild-el-erian-says-2015-12-3

To be frank, there is nothing stealth about it.

DO YOUR HOMEWORK

One of our goals, we feel, is to bring useful information to readers. We don't vouch for it or intend to suggest you should follow it for your investing chores. But by adding it to any discussion it could help you do your homework.

This is from dailyspeculations.com Doing your homework is really one of your best chances not to get caught unawares.

My take from eyeballing this chart of the day about the gold market: one should prepare in advance for buying opportunity. Chart is longer-term Bullish, as most asset charts are LOL. Trick is: gold bugs are getting progressively more rattled by the corrective phase that commenced 2011. More often than not, the nadir of such correction will trade very quickly - leaving the unprepared behind. Not sure one will be able to buy size on final low (as the algos are very adopt in frontrunning both ways). So if one is looking for size, and just needs to fine-tune timing, one should explore all kinds of venues. Gold equities will be the most leveraged Bullish bet. But the real deal is physical gold (stored under your control). Eventually, when Gold is attractive for extraordinary financial panic reasons - physical will outperform by leaps and bounds!

All this being said, the final low print will likely occur deep in three-digit territory. Any initial Fed tightening will hit all assets hard.

anonymous writes: 

Seems to me like a test of support at $1000 round, which was the 2008 crisis year high, might be in the cards one of these days.

IT'S ALL TOO DEPRESSING

Tomorrow, Mario "The Dragster" Draghi is set to pull out his magic tricks bag again

Some refer to Mr. Draghi as the most dangerous central banker in the world. We don't go that far, but close. Draghi, in case you missed it and if you have we can understand why, is Fed Chair Janet Yellen's counterpart at the European Central Bank. In short, he's been earlobe deep in the monetary pool of indecision for longer than it takes a Brussels bureaucrat to spell Grexit.

For much of 2015 central bankers and their MSM shills discounted the old game of Beggar thy neighbor, protesting against anyone who brooked the topic. The suggestion being those who dare bring it up are either cynics or just plain sinister. Central bankers the globe over wouldn't do such.

The proof of the ploy will be how much money departs the euro against the dollar and other currencies after the former Goldman Sachs executive opens his magical bag. You should take notice, if you have not already, that in Paris this week where all the climate change disciples are gathered, one of the main topics centers on a measly 2 degrees centigrade.

That's the supposed magical number if left uncontrolled destined to obliterate the Eco-sphere. And all the golden warblers along with it. Meanwhile, magical Mario and his other central banker compadres around the globe yearn for another magical 2 number, two percent inflation.

That raises a deeply profound question: What's up with that? Now we're aware of a lot of other twos like tea for two; two for tea; two's company, three's a crowd; to be or not to be; two of a kind and too much money business.

And that brings us to this bureaucratic fixation with the número two, two percent inflation, two degrees centigrade or whatever. From what we can find out--and hopefully we didn't waste too much time doing so--so we are told these now worshiped arbitrary bureaucratic numbers, or the lack thereof, could screw up lots of peoples' lives. And probably already has.

It's all too depressing.

THE TWO Ss OF REAL INDEPENDENCE

We post the following paragraph for a reason.

The possibility of Greece's exit from the EU pulled a Houdini for a while, disappearing from center stage and all the political cynosure. The bureaucratic hand wringing, if it went on, went on behind the scenes.

Why is Greece dragging its feet?  There appear to be technical and political reasons.  Greek laws, it appears, require the country's external borders to be monitored by Greek nationals. There are also some other idiosyncratic reasons offered. There is an unspoken reason that could be key.  From a Greek perspective, the country has already experienced a profound encroachment on its sovereignty.   Remember the key link is between solvency and sovereignty. Greece's problems with the former lead to the erosion of the latter.  

marctomarket.com/2015/12/is-grexit-back-on-table.

When you owe your soul to the company store, your choices are slim, slimmer and none. Call us paranoid, call us whatever, just so you call us something. The way you really damage anyone is by completely ignoring them the way this administration has completely ignored foreign policy.

One of the things behind all this craziness is globalization, a surrogate for one world government. Just a few of those dots are climate change, the Chinese yuan joining the basket of reserve currencies and, yes, Greece. A full, complete Greece exit most likely won't breakup the EU, but it's the first fissure in the stone masonry. And like cockroaches or termites where's there's one, there's most likely more. 

Sovereignty and solvency, as this writer notes, go together. Centralization, just another term for globalization, is an outright attack on your sovereignty and that includes your currency, your culture, whatever it might be, and your individual care. The last thing these elitists want is masses of people who can care for themselves.

So remember the two Ss in your personal lives. Honoring one will keep the other out of trouble.