Archive For: November 2014

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The Underside Of Cheap Oil-----A Thundering Squeeze On Debt, CapEx And Cash In The Global Energy Patch

Plummeting oil prices not only mirror the state of the – real – economy, they will also drag the state of that economy down further. Much further. If only for no other reason than that today’s oil industry swims in debt, not reserves. Investment policies, both within the industry and on the outside where people buy oil company stocks and – junk – bonds, have been based on lies, false presumptions, hubris and oil prices over $100....

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Why Citi Bank Chief Economist Willem Buiter's Attack On The Swiss Gold Vote Is Gibberish

I would conclude that when even the best and brightest economists in the world are at a loss to make a reasonable argument to vote no in the upcoming referendum it becomes abundantly obvious that a “Yes” vote is the right vote. And I expect a Yes vote in the Swiss gold referendum does more to nudge humanity back on track than any other single event since the fall of the Berlin Wall.....

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BMW Smacks Down Silicon Valley's Electric Car Gasbag: Elon Musk Was Just Spinning, Again

BMW insiders: Tesla CEO Elon Musk "is using us for PR purposes." Stung by Daimler's and Toyota's exit, he wants to "decorate" himself with the name BMW.

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Junk Bond Carnage, One Company at a Time

Money is drying up. And bondholders grapple with the sordid meaning of "junk."

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Here Comes The Ultimate Keynesian Scam: Helicopter Money For The People, Not Just Banks

Apparently the purveyors of these hoary inflationist schemes – which arguably are economically an order of magnitude more crazy than what modern-day central bankers have already perpetrated – have forgotten about John Law and post-revolution France. The assumption that the British pound would have retained anything close to its current purchasing power if 24,000 pounds had been mailed to every family in the UK is absurd...... these supporters of unbridled inflationism are making the cardinal mistake of confusing money with wealth.

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Giving Thanks For The Oil Collapse: It Reveals The Phony Recovery And Speculative Rot Beneath

The amount of money lost in the ‘overinvestment cycle’ will be stupendous, and you don’t need to ask who’s going to end up paying. Pointing to past oil bubbles risks missing the point that the kind of leverage and cheap credit heaped upon shale oil and gas, as Dizard also says, is unprecedented. As Wolf Richter wrote earlier this year, the industry has bled over $100 billion in losses for three years running.

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Central Bank "Wealth Effects" Doctrine At Work: Meet The $550K "Crap Shack" In Culver City CA

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Main Street America: Stuck In Reverse And Descending Into Trauma

While the media continue to just about exclusively paint a picture of recovery and an improving economy, certainly in the US – Europe and Japan it’s harder to get away with that rosy image -, in ordinary people’s reality a completely different picture is being painted in sweat, blood, agony and despair.....

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The American Imperium In Shambles: A Review Of Washington's Blinding Incompetence In Afghanistan And Iraq

The American national security machinery seems incapable of dealing with the single thing it was built to destroy in the 9/11 period: Islamic terrorism. Instead its troops, special ops forces, drones, and intelligence operatives have destabilized and inflamed country after country, while turning a minor phenomenon on the planet into, as recent figures indicate, an increasing force for turmoil across the Greater Middle East and Africa.

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Irrational Exuberance On Steriods------The Correction Will Be A Real Doozy

In light of the current rare extremes in positioning, sentiment and leverage, the eventual denouement of the current bubble should be a real doozy. Note that in every respect one can possibly think of – with the sole exception of household debt – systemic leverage is at new all time highs (not only in absolute terms, but relative to everything, including the size of the known universe), and is likewise positively dwarfing anything that has occurred before.

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