Kicking the Can Down the Road

By John Mauldin  The Big Picture

How often did we as young kids go down the street kicking a can? “Kicking the can down the road” is a universally understood metaphor that has come to mean not dealing with the problem but putting a band-aid on it, knowing we will have to deal with something maybe even worse in the future.

While the US Congress is certainly an adept player at that game, I think the world champions at the present time have to be the political and economic leaders of Europe. Today we look at the extent of the problem and how it could affect every corner of the world,

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Ten Economic Questions for 2011

by CalculatedRisk

Ten economic questions for the US and abroad for next year:

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10 Lessons of Madoff’s Ponzi Scheme

By Barry Ritholtz  The Big Picture

Its been two years since the Madoff crime erupted across headlines. The massive theft punctured what little faith investors  had in the markets, investment firms and regulators.

Fraud rarely has a silver lining, but the least we can do is try to learn from other people’s mistakes. There were many many lessons to be learned from the atrocious theft committed by Bernie Madoff. Those who watch the massive scam unravel should take heed, and consider what lessons could be learned.

Here are my 10 takeaways from the scam:

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Lies, Lies, Lies

By Bill Bonner The Daily Reckoning

Let's begin by thinking about this, a quote from The Daily Bell: "The problem with where America is now is that the country has been built on one lie after another for the past decade and the lies show no signs of slowing down."

And then, there's this from Charles Hugh Smith via Marc Faber: "[T]he status quo would collapse were systemic fraud and complicity banished... They have become the foundation of the US economy and financial system..." Continued......

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An apocalyptic hard-money letter says party on — for now.

By Peter Brimelow, MarketWatch

The Adens expect a hyperinflationary collapse — but they also have great respect for the Federal Reserve’s ability to stave off the end, short-term. And they concluded that market action was telling them the Fed has succeeded, again.

Recently, the Adens explained their thinking on market signals. They began conventionally enough:

“It’s important to remember that the markets lead. They look ahead. They’re not reacting to what’s currently happening, but to what lies ahead and for now they’re telling us that better times are coming.”

Then they took an unusual twist:

Read the full story.......

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A Secretive Banking Elite Rules Trading in Derivatives

By Louise Story

On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan.

The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential.

Drawn from giants like JPMorgan Chase, Goldman Sachs and Morgan Stanley, the bankers form a powerful committee that helps oversee trading in .........

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The Fed? Ron Paul’s Not a Fan.

By SEWELL CHAN  The New York Times

Ben S. Bernanke, the chairman of the Federal Reserve, has been attacked for failing to foresee the financial crisis, for bailing out Wall Street, and, most recently, for injecting an additional $600 billion into the banking system to give the slow recovery a boost.

But Mr. Bernanke will face even more scrutiny in the months to come. On Thursday, House Republican leaders announced that Representative Ron Paul of Texas, the outspoken Republican libertarian who ran for president in 2008, will become the chairman of the subcommittee that oversees the Fed. His position on the central bank is captured in the title of his 2009 book, “End the Fed” (Grand Central Publishing).

Here’s some of what he wrote: 

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Banks Win Again

By Dan Denning The Daily Reckoning

The year began with everyone worrying about bank failures. It's ending with everyone worried about whole nations failing, or at least national governments. And it's not just Greece we're talking about. It's the Big Kahuna of the global economy, the United States. And to their credit, it looks like Australia's politicians know this. Read on...

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Death From Opinions

By No Brainer Trades

As traders, should we even care about opinion?

Collective thought drives this or any other market, so in this sense, yes. But understanding this collective thought should not be left to the opinion of anyone other than yourself.

What is truly the best way to learn how to trade?

Start with a shell, Continued....

 

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Positive Signs in the U.S

Trade Deficit Declines in October

Total October exports of $158.7 billion and imports of $197.4 billion resulted in a goods and services deficit of $38.7 billion, down from $44.6 billion in September, revised. October exports were $4.9 billion more than

September exports of $153.8 billion. October imports were $0.9 billion less than September imports of $198.4 billion.

And

Consumer Sentiment increases in December

The preliminary Reuters / University of Michigan consumer sentiment index increased to 74.2 in December from 71.6 in November.

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CHINA'S consumer price index accelerating

Aaron Back 

From:Dow Jones Newswires

CHINA'S consumer price index rose 5.1 per cent in November from a year earlier, accelerating from October's 4.4 per cent rise.

The November spike, unveiled in government data today, is the fastest rise since July 2008, likely adding to concerns rising inflation will require more tightening measures by Beijing. 
November's rise was above the median 4.7 per cent rise forecast by 15 economists, but.....

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Majority of Americans Say Fed Should Be Reined In or Abolished

By Joshua Zumbrun for Bloomberg

A majority of Americans are dissatisfied with the nation’s independent central bank, saying the U.S. Federal Reserve should either be brought under tighter political control or abolished outright, a poll shows.

The Bloomberg National Poll underlines the extent to which the central bank’s standing has suffered as it has come under fire in Congress, first from Democrats for regulatory lapses before the financial crisis and then from Republicans for failing to revive an economy in which the jobless rate hovers near 10 percent. Voters from both parties have criticized the Fed’s $3.3 trillion in aid to the financial system.  Continued.....

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ARMS Index (TRIN) extremely overbought

Dick Arms notes that the short term and longer term ARMS Index (TRIN) is extremely overbought. The ARMS index has a pretty decent track record. Traders should tread cautiously here:

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Bernanke - Now and Then

BERNANKE 2009

"Well, effectively (we've been printing money). And we need to do that, because our economy is very weak and inflation is very low. when the economy begins to recover, that will be the time that we need to unwind those programs, raise interest rates, reduce the money supply, and make sure that we have a recovery that does not involve inflation."

BERNANKE 2010

"One myth that's out there is that what we're doing is printing money. We're not printing money. The amount of currency in circulation is not changing. The money supply is not changing in any significant way. What we're doing is lowing interest rates by buying Treasury securities. And by lowering interest rates, we hope to stimulate the economy to grow faster. So, the trick is to find the appropriate moment when to begin to unwind this policy. And that's what we're gonna do."

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Food Stamp Rolls Continue to Rise

Sara Murray Wall Street Journal

More people tapped food stamps to pay for groceries in September as the recession and lackluster recovery have prompted more Americans to turn to government safety net programs to make ends meet.

Some 42.9 million people collected food stamps last month, up 1.2% from the prior month and 16.2% higher than the same time a year ago, according to the U.S. Department of Agriculture. Continued...

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How to Be Self-Reliant in the Age of Turmoil

By Simon Black The Daily Reckoning

We have entered what I call the Age of Turmoil, a time that is marked by rapid change and fluctuating crises. The old system of debt and consumption that gave us great salaries, generous benefits, stock market and housing appreciation, and a high standard of living is gone forever.

What's happening right now is a major sea change: the game is being reset, and the rules are being rewritten. Read on...........

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Three Stages of Delusion

 by Dylan Grice

The dawning of reality hurts. Prodded and bullied along a tortuous emotional path by events unforeseen and beyond our control, we descend through three phases: the first is denial that there is a problem; the second is denial that there is a big problem; the third is denial that the problem was anything to do with us. Continued...

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Double Dips, Dollar Declines and Disillusioned Doctors

By 

Bill Bonner The Daily Reckoning

Oh...and here’s something else to reckon with. New home sales took a dive in October. The FHFA has confirmed a “double dip” in the homing market. Prices are weak everywhere and falling in some areas.

And if you leave a house vacant, squatters might move in. Talk about complications! The house next door has been foreclosed. But the paperwork was fraudulent. Who owns it? So who’s got the right to expel the squatters?

Don’t worry about it. It will work its way out somehow. And on the other side of the globe, they’ve had enough too. Continued....

 

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Last unemployment check is in the mail

By 

Tami Luhby, senior writer

NEW YORK (CNNMoney.com)

Although the deadline to file for extended unemployment insurance is officially Nov. 30, many jobless have already filed their last claim for benefits. And since lawmakers aren't likely to extend the deadline anytime soon, many more unemployed Americans will run out of their extended federal benefits in coming weeks. About 2 million people are expected to stop receiving checks in December. Continued...

 

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America’s Leading Export: Inflation

By

 

Chris Mayer

  The Daily Reckoning

"Depending on how bad a crisis gets, gold ranges from being between the best answer and the only answer."

Inflation is on everyone's lips these days...everyone in Asia, that is. Because Fed Chairman, Ben Bernanke is so busy pumping up the US money supply to battle a perceived deflationary threat here at home, he is putting pressure on overseas economies to print money at the same pace, in order to prevent their currencies from appreciating against the dollar and, thereby, become less "competitive." The mechanics of all this are a bit complicated, but suffice it to say that the US is "exporting inflation." Continued....

 

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