The cloud is a growth industry. And a religion in Silicon Valley: you’re better off with all your data and software stored in a data center somewhere on the planet. It’s a beacon of growth that revenue-challenged global tech giants like Oracle and IBM wave in the faces of antsy investors. But now, they’re going to pay a steep price for their cooperation with the NSA.
John Paulson’s hedge funds that broke the sub-prime mortgage market “demonstrate the manner in which momentum-chasing hot money had come to dominate the Wall Street casino,” writes David Stockman as he mercilessly dissects the hedge fund industry. “But then the hot hands went stone cold.”
An awful turn of events in France, just when everyone was hailing signs of a recovery, of which evidence has been trickling in, albeit mixed at best. If you held your tongue just right, you could see vague glimmers of hope. Then came the results from France’s fourth largest industry, hotels and restaurants (along with the idea that you can always raise taxes).
By Lee Adler, of The Wall Street Examiner: By now it’s clear to everybody, even the Fed, that QE does absolutely nothing to stimulate economic growth while fomenting bubbles in housing and stock prices. The Fed will disingenuously use steady job growth as an excuse to begin cutting back on QE soon. But its real reason lies elsewhere.
By Scott Belinski, of OilPrice.com: Twenty-two years after breaking free from the USSR, Ukraine is now attempting to do the unthinkable and permanently shake Russia’s hold on the country. The plan? Looking westward to the European Union and building an energy hub that might just revolutionize the region’s geopolitical status quo.
When Bear Stearns blew up in 2008, the New York Fed handed it to JP Morgan Chase – the beginning of a vast bailout corruption fest. Turns out, five years later, the execs who caused it to blow up have jobs on Wall Street that are more lucrative than ever. To honor these sordid details, Nick Stuart wrote a hilarious, cynical parody about the last days of Bear.
“It’s about exposure,” he says. But it’s tough out there when you’re trying to make a living in the digital jungle where everyone scrambles on top of everyone else to get that exposure, and where giants dominate with such absurd magnitude that the little guy can only survive by slipping into the gaps between their toes when they step on him.
By Don Quijones, Spain: Since last year’s unprecedented protests to mark Catalonia’s national day of independence on September 11th, relations between Rajoy’s administration and Catalonia’s coalition government have soured to the point of curdling. Catalonia’s leader called it a “war of cultures” between the two “countries.”
China’s property and infrastructure bubbles, nurtured by limitless borrowed money, are still swelling up beautifully. Service industries are also growing. But hot air has been hissing out of manufacturing. Now Zhang Ruimin, CEO of China’s largest appliance maker Haier Group, put his finger on the problem. And it doesn’t look good for manufacturing in China.
By Chriss Street: Unburdened by the constitutional requirement to get a search warrant, the NSA has teamed with Apple, Google, and Microsoft to capture your party pictures, intimate letters, and financial activities in order to build a “permanent file” to be used against you later. That’s Edward Snowden's revelation as he accepted political asylum in Russia.
By Casey Research: The economy is manipulated and controlled by out-of-control central bankers and politicians determined to save their powerful positions. The distortions will destroy countless portfolios. But those with the courage to invest against the crowd can make historic gains. See the upcoming Casey Research Summit with former Congressman Ron Paul, James Rickards (author of Currency Wars), Doug Casey, and others.
Japan’s Prime Minister Shinzo Abe skillfully used his miraculous economic salvation plan, a religion lovingly dubbed Abenomics, as a platform to catapult his party, the LDP, into power. With the LDP controlling both houses of parliament, real changes, after years of dickering, might now finally be possible.
Wall Street engineering is back in the housing market. Its newest product is one heck of a contraption, a synthetic structured security of the type that helped blow up the financial system back in 2008. It’s like those triple-A rated mortgage-backed securities that became toxic waste in your “money-market-equivalent” bond fund – only worse.
Amazon’s promotion machine shifted into high gear to tout President Obama’s visit to one of its warehouses where he unveiled his “better bargain” for “middle class jobs.” The visit was artfully synced with Amazon’s announcement that it would create 7,000 jobs. Out of nothing. One of the ongoing lies in America’s jobs crisis – and Obama stepped right into it.
“The largest espionage scandal in the 21st century is shaking Germany,” wrote Peer Steinbrück, the man who's desperately trying to unseat one of the most popular German politicians, Chancellor Merkel. Massive anti-NSA protests spread across the country. Well, 1,000 demonstrators straggled through Frankfurt. It’s going to be tough for him.
“At junctures of extreme financial stress, the high level of carry trade funding” that hedge funds use during bubbles “results in violent market reversals,” David Stockman writes. “Wholesale funding evaporates and involuntary asset sales cascade into a bidless abyss.” Hence the collapse of 2000–2003 (45%) and 2008–2009 (55%). Now they’re doing it again.
Chicago CEO Club, With Rahm and Pritzkers on Board, Pushed for Chicago Bond Downgrade, Whacking Local Investors and Pension-Holders
By Yves Smith: Even more so than most cities, Chicago has had the best government money can buy. In this case, the money is willing to engage in a scorched-earth policy of crushing local investors and wrecking the city budget to achieve its end of taming unions and making Chicago even easier pickings for looting via infrastructure sales.
“You Are Who Google Says You Are”: This won’t help those who’re trying to dodge corporate or government surveillance, and it won’t do squat for NSA leaker Edward Snowden, the hottest brand on the internet, but for people with lesser challenges, a whole industry has jumped into this maelstrom where “privacy is dead” to manage their online lives.
People in the upper income categories, those who don’t have to worry about the price of toilet paper, have seen their incomes rise over the years. The rest are in a downward spiral: median household income, adjusted for inflation, has dropped 7.8% since 2000. The lower end got hit the hardest. For these folks, tissue makers have a special strategy: desheeting.
By Bud Conrad, Chief Economist, Casey Research: Foreigners recycling their trade surpluses with the US have been an important buyer of US government debt. But that buying collapsed during the financial crisis. Now, worried foreigners are once again bailing out. So far, the Fed is picking up the slack. But what if the Fed were to “taper” those purchases?