China’s economy grew barely above the government-decreed minimum of 7.5%. Deep frustrations simmer beneath the surface and can explode at any time. To maintain social stability, the government douses the land with money. Growth at any cost. But the results are majestic property and construction bubbles – and they can’t be inflated forever.
By Lacy H. Hunt, Ph.D., Economist: The Fed's capabilities to engineer changes in economic growth and inflation are asymmetric. Its tools are well suited to fight rampant inflation. But in an excessively over-indebted economy, when it tries to spur growth by cutting interest rates to zero and buying assets, its tools turn out to be powerless.
I’m not picking on IBM. I’m almost sure they have some decent products. So they had a crummy quarter – the sixth quarter in a row of sales declines. And their hardware sales in China have collapsed since Snowden’s revelations about the NSA and its collaboration with American tech companies. But in one area, IBM excels: its hocus-pocus machine.
By Dennis Miller: My grandfather was a common man. He was an army sergeant in WW II. When the war was over, he ran the family farm. I doubt he ever heard of Keynesian or Austrian economics. His advice and opinions were more of the commonsense variety: Spend less than you make, save the difference, and don't depend on the government.
The first shot was fired on Monday. Teradata, which sells analytics tools for Big Data, warned that revenues plunged 21% in Asia. Wednesday, it was IBM’s turn to confess: hardware sales in China had collapsed. Every word was colored by Snowden’s revelations about NSA’s collaboration with American tech companies, from startups to mastodons like IBM.
“The company could disappear,” said Alcatel-Lucent CEO Michel Combes, not exactly the kind of wondrous hype CEOs normally sputter to bamboozle people into plowing their money into the company’s stock. The end, after two decades of ingenious Wall-Street engineering, fee extraction, fanciful accounting, executive wisdom, and brilliant strategic thinking.
By Tim Parker, Benzinga Staff Writer: There’s bad news coming out of Ireland, but you’re not likely to feel too sorry for the victims. Ireland's Finance Minister Michael Noonan announced that he’d take steps to plug a loophole that lets multinational corporations have a presence in the country but not pay the 12.5% tax on money crossing its borders.
The amount in Federal assistance received by families of workers in the fast-food industry, who’re dogged by low wages, part-time work, and scarce employer-provided health benefits, amounted to $7 billion per year. A way for the $200 billion industry to shuffle off part of the costs of doing business to the hapless taxpayer.
By Joao Peixe of Oilprice.com: Property developers in the US, aware that land value jumps as soon as mineral deposits are found in the area, have begun to retain oil and natural gas extraction rights beneath the houses they sell – to sell those rights to oil and gas companies in the future. In many cases they don’t even advise property buyers.
European regulators are desperate. The only thing known about the holes in bank balance sheets stuffed with decomposing assets is that they’re deep. No one knows how deep. No one is allowed to know – not until Eurocrats decide who will pay for bailing out these banks. How do we know? ECB President Mario Draghi said that.
The US has abused its three phenomenal privileges – including the control of the only world currency – to put global financial stability at risk, “like a truck full of dynamite heading right toward us,” said the chairman of the International Advisory Board of the Universal Credit Rating Group. But a “new financial order” is forming. And there's a timeframe.
By Don Quijones: If there is a two-word combination that strikes primal fear into the hearts of global senior bankers and representatives of international financial institutions, it is “odious” + “debt,” a legal theory that holds that the national debt incurred by a regime for purposes that do not serve the best interests of the nation shouldn’t be enforceable.
David Stockman lashes out at the LBO of Extended Stay, a scam that made Blackstone billions, and saddled taxpayers with the detritus. It’s perhaps the most brilliant explanation ever as to why the Fed bailouts of Wall Street were an asinine idea that benefited the “0.0001%” but hurt everyone else, including taxpayers and the main-street economy.
By Dennis Miller: The holy grail of retirement? Good financial planners use computer programs to help us set retirement savings goals, based on assumptions about how the world works, and out pops a number telling us how much we should save during our working years. Reach it and you're set for life. But that thinking can spell disaster.
By Bianca Fernet, Argentina, The Bubble: I bring up Venezuela because I am frequently asked what I think is going to happen in Argentina. Venezuela provides a very sobering cautionary tale, because their economic policies look like Argentina’s on steroids.
They’re getting hilarious, the shenanigans on Wall Street. Revenues have been lousy all year, and despite feverish cost cutting, earnings are sliding. The third quarter has been over for almost two weeks, but Q3 earnings estimates are still being pushed down. A lot! So that companies can “exceed expectations.” They’re now at stagnation levels. And stocks soar.
By Shannara Johnson, Chief Editor, Casey Research: "After listening to the speakers, I made sure to program the number of the suicide hotline into my cell phone," real estate expert Andy Miller joked at the beginning of his speech. Rick Rule, resource investor and chairman of Sprott Holdings, quipped, "Amazing – I actually get to be the positive guy here."
By David Stockman (Remarks at the Edmond Safra Center for Ethics, Harvard University): “The Federal budget has become a doomsday machine because the processes of fiscal governance are paralyzed and broken,” Stockman writes. “Under these conditions what remains of our free enterprise economy will buckle under the weight of taxes and crisis.”
Alarm bells went off: “Yellen props stocks,” the headline read. Somebody needs to. Politicians are actively contemplating how to most effectively send the largest and brokest debtor in history into default. Corporate revenues can’t keep up with inflation. Earnings estimates and actual earnings growth plunge. And the S&P 500 soared 16% year to date.
By Lee Adler, The Wall Street Examiner: First time unemployment claims jumped as the effects of the chaos in Washington began to ripple through the economy. The media had some lame excuse about California’s reporting software being screwed up. But that doesn’t wash.