Re: {LONGTERMINVESTORS} Tracking the US economy -- Thread for discussion and sharing data.
RAJESH DESAI
• After yesterday's strong job numbers, expectations were high for today's employment report out at 8:30 a.m. ET. But the private sector added just 96,000 jobs in August, below expectations of 130K. The unemployment rate fell to 8.1 percent, but that was attributed to a drop in the participation rate. Markets which were modestly higher earlier in the day, sold-off right after the report and then came back.
• Morgan Stanley's chief U.S. economist David Greenlaw took to twitter to react to the jobs report. He tweeted that policy uncertainty would continue to impact hiring in the near-term and added, "We were skeptical that [the] Fed would trigger QE3 in Sept. but now see QE3 announcement Thursday as a toss-up."
• Goldman Sachs' Jan Hatzius said he now expects QE3 at the September 12-13 FOMC meeting. This compared with his previous call for QE3 at the December meeting.
• UBS's Sam Coffin was also of the same vein and wrote: "For the Fed, that growth pace does not represent the substantial and sustainable improvement in activity necessary to head off further accommodation. As such, we now forecast new easing at the September 13 FOMC meeting. That easing will probably take the form of a longer-term commitment to hold the funds rate at extraordinarily low levels as well as a new round of Treasury (and perhaps MBS) buying by the Fed."
Gold rushes to six-month high after US jobs data
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CA Mihir Desai
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CA. Rajesh Desai
RAJESH DESAI
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A man shows off the Instagram app on an iPhone. The newest iPhone could provide a significant boost to the economy, a JPMorgan economist says.
NEW YORK (CNNMoney) -- As anticipation builds for the launch of Apple's iPhone 5, one economist has got an additional selling point for the product: It could provide a significant boost to GDP growth.
JPMorgan's Michael Feroli says in a research note that the iPhone 5, expected to be unveiled Wednesday, could add between 0.25% and 0.5% to annualized economic growth in the fourth quarter.
To reach those figures, Feroli began by assuming that 8 million iPhone 5's will be purchased in the last three months of this year, as JPMorgan predicts. He then assumed a retail cost of $600 per phone and subtracted $200 for the cost of imported components.
Each iPhone sold would therefore add $400 to GDP, or $3.2 billion for the quarter. That's $12.8 billion at an annual rate, and would yield a boost in annualized GDP growth of 0.33% for the fourth quarter.
Overall, JPMorgan (JPM, Fortune 500) predicts fourth-quarter GDP growth of 2%.
Feroli noted that the iPhone's estimated GDP bump "seems fairly large, and for that reason should be treated skeptically." However, he said evidence from the launch of the iPhone 4S last year appeared to support the projection, estimating that that product may have added between 0.1% and 0.2% to growth in the fourth quarter of 2011.
Related: 3 big features the iPhone is missing
Dean Baker, co-director of the Center for Economic and Policy Research, said Feroli's analysis made the questionable assumption that Apple's (AAPL, Fortune 500) iPhone 5 launch wouldn't affect sales of other phones.
"Clearly, some fraction of that 8 million would have bought a phone in the fourth quarter whether or not Apple (AAPL, Fortune 500) came out with that new iPhone," Baker said.
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CA. Rajesh Desai
RAJESH DESAI
Facebook's Next Fight: Suits, and More Suits
Facebook Inc.'s FB botched initial public offering is turning into a potential legal morass for the social-networking firm, its investment bankers and the exchange on which it went public.
About 50 lawsuits have been filed against Facebook, Nasdaq OMX Group Inc. and underwriters of Facebook's May IPO, according to lawyers involved in the cases.
In addition, securities lawyers who represent Facebook investors say they expect hundreds of arbitration claims to be launched against brokers and securities firms that pitched the company's shares.
While investors face an uphill battle to recover losses, some legal experts said defendants in the arbitration claims and civil lawsuits face potentially large financial exposure given the stock's 47% slide since the IPO. The slump has erased about $38 billion in Facebook's stock-market value. On Tuesday, the company's shares fell 2.5%, or 51 cents, to $20.28 in New York Stock Exchange trading.
"IPOs are the most attractive kind of suit for the plaintiff's bar," said John Coffee, a law professor at Columbia University. While at least one-third of such class-action cases are thrown out, many of the rest eventually conclude in settlements for roughly 2% to 3% of the alleged losses, he estimated.
According to Stanford University's Securities Class Action Clearinghouse, Facebook has been named as a defendant in 29 of the 53 securities class-action filings related to IPOs this year.
Facebook CEO Mark Zuckerberg gave his first interview since the IPO at TechCrunch Disrupt, a San Francisco conference for start-ups, where he spoke with TechCrunch founder Michael Arrington about the performance of his company's stock and his mistake of betting on HTML 5. (Photo: AP)
The highly-anticipated Facebook IPO was plagued with problems, potentially costing thousands of dollars to many small investors and further damaging Wall Street's reputation on Main Street. A Wall Street Journal report.
The bulk of the cases against Facebook and underwriters led by Morgan Stanley allege that investors weren't told clearly enough in disclosures that the social-networking firm's growth was suffering from a migration in customers to mobile devices from desktop computers. Some analysts are concerned about Facebook's advertising model for mobile devices.
Facebook and Nasdaq declined to comment.
In a securities filing, Facebook has said the lawsuits are "without merit." Just before the initial public offering, Facebook updated its stock-sale document with a warning about the mobile-device trend and its possible impact on results.
People familiar with the company's thinking say Facebook followed the securities rules mandating that certain deal-related communications be disclosed only in a deal's prospectus.
At the same time, many stock analysts covering Facebook reduced their revenue and earnings estimates for the company. That information was passed along to many large institutions—but not to many retail investors. Such information isn't required to be made public.
A Morgan Stanley spokesman said that the firm followed "all applicable regulations" with its handling of the Facebook IPO. It said that Facebook's revised prospectus filing on May 9 was "widely publicized" and that "a significant number of research analysts" reduced their earnings views to reflect the "impact of the new information."
Steven Caruso, a partner at law firm Maddox Hargett & Caruso in New York, says he is preparing to file as many as a dozen arbitration claims with the Financial Industry Regulatory Authority, representing investors who claim the deal's price was "elevated" or they "weren't given the same information."
Lawyers say some Facebook investors aren't doing anything until they know how much money will come from Nasdaq, which has admitted that technology glitches hampered investors' ability to buy and sell for a few hours on May 18. The exchange operator is willing to pay $62 million but has said it shouldn't be held responsible for all Facebook investor losses.
Last week, a judicial panel playing the role of legal traffic cop heard arguments about how and where the Facebook lawsuits should be heard in court. Legal experts say that many or all of the cases could be brought to the same court in the U.S. Southern District of New York, with the cases combined into a small group.
Among the civil suits filed so far, about 30 name Facebook as a defendant, according to the Stanford database. The rest are focused on Nasdaq, underwriters and directors, a lawyer familiar with the cases said. The Securities and Exchange Commission and state regulators are looking into how individual investors were treated in the Facebook deal.
Securities class-action suits can drag on for several years. Arbitration cases, which typically are ruled by fairness or equity issues rather than strict legal doctrines, generally appeal to investors with steeper losses.--
CA. Rajesh Desai
RAJESH DESAI
However, US market ended a blockbuster quarter with a whimper. US stocks closed out the third quarter of 2012 posting strong gains: Dow up 4.3%, S&P 500 5.8% and Nasdaq 6.2%. Year-to-date, the gains are even more impressive: the Dow is up 10%, the S&P 500 is up 15% and the Nasdaq has surged 20%.
On Friday, stocks opened lower and the sell-off gained steam after the Chicago PMI for September came in far below expectations and showed a contracting economy for the first time since 2009. The University of Michigan's consumer sentiment index for September also fell short of expectations.
Dow, S&P 500 and Nasdaq ended the trading day down 0.4% to 0.7%.
Stocks bounced off their lows after the results of stress tests for Spanish banks were in line with expectations. Greece, which is seeking a 2-year extension to comply with its bailout terms, is expected to release its 2013 budget Monday.
In Britain, a government recommendation was published Friday suggesting "a complete overhaul" of the interest rate benchmark Libor, following the recent scandal that exposed how banks rigged the rate for their own benefit.
European stocks closed lower. Britain's FTSE 100 shed 0.7%, DAX in Germany fell 1.1% and France's CAC 40 dropped 2.5%.
Outlook remained grim in Japan, where a government report showed Japanese industrial production and prices fell in August, a worrying development given the country's current territorial dispute over islands that have hurt Japanese businesses in China. As a result, Japan's Nikkei ended down 0.9%.
USD slid against the euro but gained versus the British pound and Japanese yen.
Crude Oil for November delivery rose 34 cents to $92.91 a barrel.
Gold futures for December delivery dropped $6.60 to $1,773.90 an ounce.
The price on the benchmark 10-year U.S. Treasury hovered around 1.64%
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CA. Rajesh Desai
RAJESH DESAI
First the scoreboard:
Dow: 13,437, -48.8, -0.3%
S&P 500: 1,440, -6.4, -0.4%
NASDAQ: 3,116, -20.3, -0.6%
And now the top stories:
• Overall, U.S. economic data was uninspiring today.
• Personal income climbed by just 0.1 percent in August, which was weaker than the 0.2 percent expected by economists. Spending, however, jumped by 0.5 percent. In other words, consumers are saving less than expected.
• Chicago's Purchasing Managers Index (PMI) unexpected fell to 49.7 from 53.0 in August. Economists were expecting the measure to slip to just 52.8. A reading below 50 signals contraction and this was the first sub-50 reading since September 2009.
• The University of Michigan's Consumer Confidence index came in at 78.3, which was slightly below the 79.0 expected.
• The big news of the day was certainly the Spanish bank stress test. According to consulting firm Oliver Wyman, which conducted the test, the capital shortfall came in at 60 billion euros. This was right in line with expectations.
• The fact that the stress test results weren't worse may have helped the euro jump and send stocks off of their lows of the day.
• Today also may have been a major turning point for China. Two big headlines crossed from this morning: 1) China announced a schedule for its leadership transition and 2) the Communist Party of China booted disgraced former leader Bo Xilai. "Simply put, the dust finally settled on new leadership," wrote Bank of America's Ting Lu. "These decisions will significantly reduce the political and economic risks perceived by both onshore and offshore investors. Note rumors about political infighting have significantly disturbed markets so far this year."
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CA. Rajesh Desai
RAJESH DESAI
First the scoreboard:
Dow: 13,575, +80.7, +0.6 percent
S&P 500: 1,461, +10.4, +0.7 percent
NASDAQ: 3,149, +14.2, +0.4 percent
And now the top stories:
• The biggest winners today were coal companies. Last night, Romney gave high praise to coal and clean coal technology. Shares of Alpha Natural Resources and Arch Coal soared today.
• Today's stock market rally was broad, but there were some losers. Specifically, green car-maker Tesla, which Romney called out, got crushed.
• Wall Streeters paid close attention to Romney's remarks slamming the Dodd-Frank bill. "This is the biggest kiss that's been given to — to New York banks I've ever seen," said Romney. "This is an enormous boon for them." However, he made very clear the value and importance of sound regulation.
• Initial jobless claims climbed modestly to 367k. This was well below the 370k expected by economists. This is the final employment data point ahead of tomorrow's September BLS jobs report. Economists estimate that the U.S. added 115k new payrolls, up from 96k last month.
• It's worth noting that oil prices surged today. Traders seem to be concerned that escalating tensions between Syria and Turkey will lead to oil supply disruptions.
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CA. Rajesh Desai
RAJESH DESAI
US major financials...since TARP (10/3/08)
Cross-asset-class retracement of pre-crisis peak...
Equities - DM Defensive and Smaller EMs have surpassed pre-crisis peaks, and Majors nearing those peaks...
Bonds & FX - well above their pre-crisis peaks...
In the case of some of these nominal recoveries, it's as if the crisis had never happened - just how the central planners had 'planned' it - though the evidence of newly forming bubbles is clear.
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CA. Rajesh Desai
RAJESH DESAI
Despite a better-than-expected report on the US job market, stocks faltered late Friday to end mixed. Dow added 0.2% while Nasdaq fell 0.4%. S&P 500 ended little changed.
For the week, however, the major gauges all advanced about 1%. Following this year's gains, the Dow and S&P 500 are trading near their highest levels since 2007, while Nasdaq continues to trade at levels that it last hit in 2000.
Labor Department's monthly report showed employers added 114,000 jobs in September, better than the 110,000 economists surveyed by CNNMoney had expected. And the unemployment rate dropped to 7.8%, falling below 8% for the first time since early 2009.
Investors are also concerned the U.S. economy could fall off the fiscal cliff of federal spending cuts and tax hikes if Congress fails to act.
Federal Reserve said consumer credit increased $18.1 billion in August. Economists had expected consumer borrowing to have increased $5 billion.
European markets ended higher. Britain's FTSE 100 rose 0.7%, DAX in Germany added 1.3% and France's CAC 40 gained 1.6%.
USD rose against the euro and British pound and Japanese yen.
Crude oil for November delivery fell $1.83 to end at $89.88 a barrel.
Gold futures for December delivery dropped $15.70 to settle at $1,780.80 an ounce.
The price on the benchmark 10-year U.S. Treasury fell, pushing up the yield to 1.72% from 1.66%
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CA. Rajesh Desai
RAJESH DESAI
Dow ended little changed, while S&P 500 lost 0.3% & Nasdaq declined 0.2%.
For the week, the Dow lost more than 2%, the biggest weekly decline since June 1. S&P 500 and Nasdaq suffered similar declines.
For the year, Dow has risen more than 7%.
The week ahead brings earnings and sales reports from 12 Dow components, including financial giants Bank of America and American Express, as well as chipmaker Intel and global conglomerate General Electric. In addition, a total of 80 S&P 500 companies will disclose quarterly results, including Citigroup, Goldman Sachs and Morgan Stanley.
On Friday, bank stocks were under pressure after Wells Fargo said sales fell short of expectations in Q3, even as profits were in line with forecasts. JPMorgan erased after the bank reported record quarterly profits.
In the semiconductor space AMD cut its revenue forecast for the third quarter.
Stocks were supported earlier in the day by a better-than-expected reading on U.S. consumers. The University of Michigan/Reuters consumer sentiment index for October rose to 83.1, the highest level in five years. It was expected to come in at 78.5.
A report by the Labor Department showed producer prices rose 1.1% in September, higher than anticipated. Government officials attributed much of that to spikes in food and energy prices. Excluding those increases, the prices of finished goods remained unchanged from the previous month.
European stocks closed lower. Britain's FTSE 100 and France's CAC 40 ended 0.6% lower, and DAX in Germany fell 0.7%.
USD fell against the euro, the British pound and the Japanese yen.
Crude Oil for November delivery fell 21 cents to end at $91.86 a barrel.
Gold futures for December delivery fell $10.90 to settle at $1,759.70 an ounce.
The price on the benchmark 10-year U.S. Treasury edged higher, lowering the yield to 1.63% from 1.68%
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CA. Rajesh Desai
RAJESH DESAI
Dow added 0.9% while S&P 500 and Nasdaq increased more than 1%.
Better-than-expected earnings from several companies drove the gains.
Goldman Sachs profit and revenue for Q3 topped expectations, while Johnson & Johnson's quarterly earnings also beat analysts' estimates.
Mattel's profit exceeded forecasts and revenue rose for the first time since last year, while UnitedHealth delivered robust third-quarter earnigns and raised its full-year outlook.
Citigroup's CEO Vikram Pandit is stepping down. Michael Corbat, who previously served as Citi's CEO of Europe, Middle East and Africa, was named as his replacement. Citigroup's president and COO, John Havens, also resigned. Shares of Citigroup rose 1.6% following the surprising shakeup at the top.
September reading of the Consumer Price Index, rose 0.6%. That's higher than the 0.5% increase that economists polled by Briefing.com had been expecting. Compared to a year earlier, prices have risen 2%. Based on this data, the Social Security Administration announced that recipients will receive a 1.7% cost-of-living increase in 2013.
Industrial production rose 0.4% in September. The reading was better than analysts were expecting.
Murphy Oil rose sharply higher after the company said it split into two separate companies, separating its exploration and production operations from its retail business of selling gasoline.
Coca-Cola slipped after the company missed revenue forecasts.
Fossil jumped after an analyst at Citigroup upgraded the stock to a buy rating with a $100 price target, up from netural.
After the market close, Intel reported earnings that beat Wall Street's expectations, but fell from a year ago. Shares slipped in after-hours trading.
Also after the closing bell, IBM posted earnings that topped forecasts by a penny, but revenue fell short of expectations. Shares declined in after-hours trading.
European stocks ended sharply higher. Britain's FTSE 100 rose 1.2%, DAX in Germany added 1.6% and France's CAC 40 jumped 2.1%.
USD slipped against the euro and the British pound, but gained versus the Japanese yen.
Crude Oil for November delivery rose 24 cents to settle at $92.09 a barrel.
Gold futures for December delivery rose $8.70 to settle at $1,749.20 an ounce.
The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.73%
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CA. Rajesh Desai
Rajesh Desai
By Richard Cowan
WASHINGTON | Fri Mar 1, 2013 12:02pm IST
(Reuters) - The U.S. government hurtled on Friday toward making deep spending cuts that threaten to hinder the nation's economic recovery, after Republicans and Democrats failed to agree on an alternative deficit-reduction plan.
Locked in during a bout of deficit-reduction fever in 2011, the time-released "automatic" cuts can only be halted by agreement between Republican lawmakers and the White House.
That has proved elusive so far.
Both sides still hope the other will either be blamed by voters for the cuts or cave in before the worst effects - like air traffic chaos or furloughs for tens of thousands of federal employees - start to bite in the coming weeks.
Barring any breakthroughs in the next few hours, the cuts will begin to come into force at some time before midnight on Friday night. The full brunt of the belt tightening, known in Washington as "sequestration," will take effect over seven months so it is not clear if there will be an immediate disruption to public services.
President Barack Obama meets top leaders of Congress at the White House at 10 a.m. EST (1500 GMT) to explore ways to avoid the unprecedented, across-the-board cuts totaling $85 billion.
But expectations were low for a deal when the Democratic president huddles with Senate Majority Leader Harry Reid, Senate Republican leader Mitch McConnell, House of Representatives Speaker John Boehner, the top U.S. Republican, and House Democratic leader Nancy Pelosi.
Democrats insist tax increases be part of a solution to ending the automatic cuts, an idea Republicans reject.
"We should work together to reduce our deficit in a balanced way - by making smart spending cuts and closing special interest tax loopholes," Obama said on Thursday.
Congress can stop the cuts at any time after they start on Friday if the parties agree to that. In the absence of any deal at all, the Pentagon will be forced to slice 13 percent of its budget between now and September 30. Most non-defense programs, from NASA space exploration to federally backed education and law enforcement, face a 9 percent reduction.
The International Monetary Fund warns that the cutbacks could knock at least 0.5 percentage point off U.S. economic growth this year and slow the global economy.
ITCHING FOR A FIGHT?
Despite dire predictions that the budget cuts will jeopardize 750,000 jobs, rank-and-file Republicans and Democrats sounded as if they were itching for this fight to play out.
Republican Representative Lee Terry of Nebraska accused Obama of exaggerating the severity of possible disruptions in government services.
The public, Terry said, is "being told ... that Armageddon occurs on Saturday: You're never going to fly, you can't buy any meat at a grocery store, every illegal alien is going to be released, that our borders are going to be overrun by terrorists and al Qaeda will establish themselves in every city of the United States if this goes through."
Terry said Republicans "want the cuts" to trigger, but with more flexibility on how they are carried out.
Even some Republicans keen to rein in government spending are wary of sequestration because of its potential to cause pain. The cuts are designed to hurt by hitting a wide range of government programs whether cost reduction is warranted or not.
Liberal Democratic Representative Ed Markey of Massachusetts predicted a political victory for Obama in the days after the spending cuts are triggered.
He likened this fight to a Republican-led U.S. government shutdown in late 1995 and early 1996.
At the time, Markey said, "President Clinton began explaining the government and how it serves each part of the needs of American families and Republicans lost that debate and they're going to lose the debate again this time."
Markey said Obama too will have an opportunity to lay out the benefits of public services to Americans skeptical of big government. "The government is Medicare, it's Head Start (for pre-school kids), it's protecting the safety of food, it's ensuring that children are educated," he said.
DISEASE RESEARCH, WEAPONS HIT
If the cuts were to stay in place through September, the administration predicts significant air travel delays due to layoffs of airport security workers and air traffic controllers.
Some Pentagon weapons production could grind to a halt and the budget cuts would ripple through the sprawling defense contracting industry.
Meat inspections could get hung up, medical research projects on cancer and Alzheimer's disease canceled or curtailed and thousands of teachers laid off.
Instead of these indiscriminate cuts, Obama and Democrats in Congress urge a mix of targeted spending cuts and tax increases on the rich to help tame the growth of a $16.6 trillion national debt.
Republicans instead want to cut the cost of huge social safety nets, including Social Security and Medicare, that are becoming more expensive in a country with an aging population.
Meantime, Obama is edging closer to having to enforce the meat-axe approach.
By midnight, he is required to issue an order to federal agencies to reduce their budgets and the White House budget office must send a report to Congress detailing the spending cuts. In coming days, federal agencies are likely to issue 30-day notices to workers who will be laid off.
Despite warnings that it had little flexibility on executing the cuts, White House budget office controller Danny Werfel outlined some steps that could come before major program cuts are instituted.
Federal travel, conferences and training classes could first be canceled, he said, as could worker bonuses and new hiring. Agencies have also been instructed to identify contracts and grants that could be canceled or delayed.
Even so, the process has already generated uncertainty among businesses that work with the federal government, as well as throughout the agencies that run Washington.
Referring to the partisan battles that have dominated budget fights for two years, Republican Representative Scott Rigell told Reuters: "This reminds me of a couple of crocodiles in a death grip underwater and they're running out of oxygen and we're all going down" with them.
Rigell's eastern Virginia congressional district has the highest concentration of active-duty military personnel in the country and houses major Pentagon shipbuilding facilities that could come under the budget axe.
(Additional reporting by Thomas Ferraro and Roberta Rampton, Editing by Alistair Bell and Todd Eastham)
CA. Rajesh Desai
Rajesh Desai
Could The Fed Lose Control Of The Frankenstein Economy It Has Created?
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
What if there are tail risks present in the Fed's Frankenstein Economy of the same sort that Greenspan et al. failed to identify in 2008?
A longtime correspondent emailed me last week about the apparent contradiction between a Federal Reserve that has had the power for five years to counteract any decline and my call for a market decline in 2014: why would the Fed allow a market it has pushed higher for five years to ever fall?
It's an excellent question, as it summarizes the key question: is there any limit on "don't fight the Fed?" Can the Fed push assets higher essentially forever? And if so, why did it fail to do so in 2008?
Former Federal Reserve chairman Alan Greenspan's recent bleatings in Foreign Affairs,Why I Didn't See the Crisis Coming, offered one primary reason: the Fed's models failed to accurately account for "tail risk," (otherwise known as things that supposedly happen only rarely but when they do happen, they're a doozy), because guess what--they happen more often than statistical models predict.
I would add that tail risk is a fancy name for unintended consequences of central planning. Thus Greenspan had more in common with failed Soviet planners than he would ever admit.
Greenspan also confessed that the Fed overcame the meltdown by creating and lending unlimited sums of money--yes, unlimited. Various accountings after the fact identified $16 trillion in direct Fed backstops and loans to global banks, but implied or indirect subsidies, backstops and lines of credit added tens of trillions of dollars to the total bailout of the privately held banking cartel.
This money spigot has remained open for five years, and a tiny reduction ($10 billion a month) is all the Fed dares to do lest the global markets melt down again.
So are there no "tail risks" or unintended consequences to leaving the money spigot fully open for five years running? Those who believe the Fed's record of five years of rising asset prices proves its ability to drive prices higher for another five years. In other words, having created a Frankenstein economy that depends on unlimited credit pumping, the Fed can control its monster with uncanny finesse.
The Fed's extraordinary success in suppressing risk, tail and every other variety, has given punters and strategists alike a supreme confidence in the Fed's ability to suppress risk for another five years, and another five years after that. (The similarity to Soviet-era five-year plans is ironic coincidence.)
What if there are tail risks present in the Fed's Frankenstein Economy of the same sort that Greenspan et al. failed to identify (or grossly under-estimated) in 2008?
If the limitless hubris of the Frankenstein story doesn't resonate for you, consider the unseen risks of monoculture agriculture as an apt analogy. In this view, the financial markets are a Fed-farmed monoculture that is sustained solely by massive quantities of financial fertilizers and carefully engineered "crops." The Fed claims its engineered monoculture is as resilient as a market-based ecosystem, but this is simply not true: monocultures are exquisitely vulnerable to tail risks that are impervious to the policies intended to kill all threats.
Indeed, in the monoculture analogy, central planning engineering perfects the power of threats to bypass the system's defenses.
Despite the supremacy of Fed hubris and punter confidence in the Fed's Frankenstein Economy, the likelihood of some tail risk emerging out of nowhere is rising. Indeed, the very confidence in central planners, i.e. that the Fed is now the ultimate power in the Universe, is a prerequisite for collapse.
Debt = Serfdom (April 2, 2013)CA. Rajesh Desai