Thursday, April 18, 2013

BEN FRANKLIN AND THE IMF

Here's a headline from a story in yesterday's WSJ: "IMF Renews Push Against Austerity."

The first paragraph, as it should, pretty much says it all.

"Seeking to keep a fragile global recovery on track, the IMF called on countries that can afford it--including the U.S. and Great Britain--to slow the pace of their austerity measures."

Forget horses. Most of these so-called leaders around the globe would give up their fiefdoms for some growth.  Well, maybe that's a bit too strong. These folks never give up anything, especially anything so lucrative and cushy.

But it's safe to say they're feeling some pressure, something the IMF is doing all in it bureaucratic power to ablate.  

In its semi-annual report on growth, the fund warned that across the board cuts, referring to sequester, would be a mistake leading to slower growth. They labeled it the "wrong way" to shrink the budget deficit.

Then they rolled out a few their favorite code terms. One of them is targeted reductions. Most likely in their vernacular cuts is too harsh, too graphic, too exact. These folks thrive on wiggle room.

It's their bureaucratic hyperbaric chamber. Like Count Dracula that's where they spend most of their time. Cuts the fund noted should take place further down the road. They failed to name the road. But a decent guess might be:  Never Lane or Circle Drive.

Keep in mind the IMF is home to more bureaucrats than a national political party convention. Fiscal cuts equals fewer bureaucrat jobs and fewer lush benefits. Slowing or halting across the board cuts is bureaucratic code speak for not right now.

A large fortune awaits some creative entrepreneurial soul who comes out with the first video game called: "Advance the Can." Every bureaucrat on the planet will want one.

If only Ben Franklin were still among us. Ole Ben was known for many things, including his aphorisms.  Here's one obviously most bureaucrats never heard: "A stitch in time saves nine."

http://online.wsj.com/article/SB10001424127887323346304578426502903053768.html







THURSDAY READS

The Gloom About Gold Piles Up
http://investorplace.com/2013/04/miners-have-bigger-issues-than-gold-prices/

Change In Route
http://oilprice.com/Latest-Energy-News/World-News/Keystone-XL-Route-Change-Puts-Environmentalists-on-the-Back-Foot.html

Hog Glut http://www.futuresmag.com/2013/04/17/hog-glut-gains-as-us-exports-drop-most-in-decade?ref=hp&t=commodities

A Bite From Apple
http://www.minyanville.com/sectors/technology/articles/Apple2527s-Problem-With-iPhone-Numbers-tech/4/17/2013/id/49303

Alaska Says It's Back http://www.nytimes.com/2013/04/16/business/energy-environment/alaska-grants-a-tax-break-to-oil-companies.html?_r=0

Muni Downgrade Possible
http://www.marketwatch.com/story/moodys-may-downgrade-125-billion-in-muni-debt-2013-04-17

Scientists Reverse Memory Loss In Brain Cells
http://www.sciencedaily.com/releases/2013/04/130417164451.htm

Wednesday, April 17, 2013

IT AIN'T MONETARY POLICY

Bundesbank President Jens Weidmann in an interview today with the WSJ floated the notion EU recovery could take 10 years.

It obviously wasn't something Europe's politically elite wanted to hear. It also sent a shot across the bow of those leaders who have recently suggested the EU's problems were mostly rear-view mirror.

Hardly a single interplanetary soul isn't aware such could mean: hello Japan, not a pleasant table setting to enjoy a good meal.

 Weidmann further suggested leaders needed to step up by overhauling some things, an oblique reference many believe to the fiscal train wreck that the EU is, and make funds available to small businesses.

Weidmann concluded that he didn't think monetary policy "is the key."

http://online.wsj.com/article/SB10001424127887324493704578428552244471438.html?mod=WSJ_hp_LEFTWhatsNewsCollection

WEDNESDAY READS


BUNDESBANK PRESIDENT INTERVIEW TODAY
http://blogs.wsj.com/eurocrisis/2013/04/17/jens-weidmann-qa/?KEYWORDS=Bundesbank+president

CONSIDER THE SOURCE
http://www.money.cnn.com/2013/04/17/news/economy/china-green-energy/index.html?iid=SF_BN_LN

CYPRUS SAGA CONTINUES
http://www.reuters.com/article/2013/04/17/cyprus-bailout-vote-idUSL5N0D42R020130417

EARNINGS WATCH
http://www.bloomberg.com/news/2013-04-17/u-s-stock-index-futures-drop-yahoo-sinks-on-forecast.html

LEFT VERSUS RIGHT FILM
http://www.newsmax.com/US/hating-breitbart-film-release/2013/04/17/id/499953

LEFF HAND RIGHT SYNDROME
http://www.marctomarket.com/2013/04/great-graphic-another-look-at-emu.html

MORE FED TALK
http://www.marketwatch.com/story/feds-plosser-wants-to-start-towards-qe-exit-2013-04-16?dist=lbeforebell

PINCHING THE POKE AT PROCTER
http://online.wsj.com/article/SB10001424127887324010704578418361635041842.html?mod=ITP_pageone_0

Tuesday, April 16, 2013

GOLD AS A HEDGE

Too many believe that gold is a hedge against inflation.

And it is but only indirectly. Gold is a hedge against central bank and government incompetence.

"I'm from the government and I'm here to help you." Besides "I promise to faithfully...," there's probably few more dangerous words around.

Notice in the last few days how often the 1300 level's been mentioned in MSM. The parrots are in good cackling order. Forget crackers. What these folks really want is restitution. 

In this case restitution of their alleged reputation as financial seers. Something with gold hanging on above 1600 was, like the words of an old Simon and Garfunkle tune, slip, sliding away.

If you understand the definiton of concerted, you're starting to get it. This is little more than a not-so-subtle concerted effort to pour more oil on the printing presses--the usual bureuacrat soultion to WTF's happening here?

Gun control is a hot button issue these days. But what about Ph.d-control?  The damage these folks can wreak, to use a good economic term, is incalculable. Maybe we should label it, aggregate damage, so nobody would understand.

The one thing you need to understand--and soon if you don't already--is nobody's safe.

And now you know what gold is. So keep your construction-site hard helmet close at hand. 


11

THEY NEED YOUR TEARS

"As a result, people are getting increasingly creative at skirting controls."

The above quote could be a segue into a discussion about tax evasion or tax avoidance, only one of which many seemingly forget is illegal--evasion. 

It's a story from today's WSJ about what happens when bureaucrats debase a currency and the people lose faith in their government. It's a story for those who believe it can never or won't ever happen here. See Boston marathon. 

It's a story for the most part being crowded out by other, seemingly more pressing events. It's a story about Argentina, a nation more than a little familiar with inflation, currency messes and incompetent governments. See history.

It's also a story about government statistical legerdemain every government in existence has and will continue to practice until people stand up to them. See inflation rate.

 http://online.wsj.com/article/SB10001424127887324010704578418662965631052.html?KEYWORDS=ARGENTINA




TUESDAY READS

NO SURPRISE 
http://money.cnn.com/2013/04/16/autos/aaa-driving-costs/index.html

WHAT'S NEW
http://online.wsj.com/article/SB10001424127887324345804578424480045988240.html?mod=ITP_pageone_1

GOLDMAN SACHS REPORTS
http://blogs.wsj.com/moneybeat/2013/04/16/goldmans-investments-in-companies-pay-off/

THE EU PICTURE 
http://www.guardian.co.uk/business/2013/apr/16/eurozone-crisis-growth-markets-oil-price


SACRED NO MORE
http://www.testosteronepit.com/home/2013/4/15/public-pension-plans-to-share-the-pain.html

MARKETS DOWN http://money.cnn.com/2013/04/15/investing/world-markets/index.html?iid=s_mpm


UP OVERNIGHT                  
http://www.marketwatch.com/story/us-stock-futures-push-higher-as-gold-gains-2013-04-16?dist=lbeforebell


Monday, April 15, 2013

GOLDMAN SACHS SACKS GOLD

Gold prices drop dramatically, down more than $100 to a two-year low.

TIPS sell off. Big restaurant chain McDonalds announces concern about future earnings, slowing consumer spending world-wide and the housing scene looks funkier than many of the bull market cheerleaders expected.

Forget a rainy night in Georgia. If this keeps up many investors will soon feel like it's raining all over the world. And it well may soon be if earnings disappoint.

Then there's the EU, China and Japan. It's a mixed-up world. US bureaucrats first want Japanese bureaucrats to inflate then warn not to over do it. And whatever happened to tiny Cyprus?

One Wall Street wag at Business Insider celebrated gold's fall from precious metal grace, claiming it and the equity rally are a sign Bernanke and his band of bureaucrats actually have an idea of what their doing. He's probably a closet Cubs fan.

Just today one member of the FOMC announced he felt good about the prospect of easing up on the bond-buying pedal by the end of the year. Let's hear it for more lumber trucks chugging around the old neighborhood.  

A longtime neighbor just last week told me lately he's seeing more chipmunks scurrying around his and a neighbor's backyard. As far as I know he doesn't drink or smoke.

The truth is Helicopter Ben and his motley crew are as clueless as those up on the Hill. Getting it right doesn't ramp up deflation concerns and send the stock market down 266 points, it's worst day in five months. Look for the next set of those recently released job numbers to be revised upwards big time.

Central banks have been selling and hedge funds net long the yellow stuff. There's an old saw in medicine: treat the patient, not a lab number. Bernanke and his crowd want the jobless rate well below 7%, a no-can-do certainty with gold above $1,600.

Too much talk in the media about easy money ramping up inflation. It was beginning to gain traction.

Then there's that tiny island of Cyprus. Caught in a bureaucratic squeeze, central bankers there suddenly threaten to unload what is most likely it's officially bloated gold holdings. More gold than that of either Spain or France. Meanwhile, no one really knows how much gold is held by whom.

Enter Goldman Sachs, the huge investment banking firm with more ties to central banks and central bankers than the annual economic confab at Jackson Hole, Wyoming. Check out the names Dudley, Draghi and Carney. If you need some help click on the link below.

On April 10th Goldman recommended dumping commodities, singling out the recent weakness in gold. The release came just a few days after hedge funds and investors purchased one of the dips.

If you're sniffing manipulation, you're getting warm. Goldman Sachs has another name in many circles, Government Sachs.

http://www.bloomberg.com/news/2011-06-30/goldman-sachs-connections-with-central-banks-reach-ever-deeper-after-hire.html


























http://www.bloomberg.com/news/2011-06-30/goldman-sachs-connections-with-central-banks-reach-ever-deeper-after-hire.html