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In Great Britain, Protecting Pedophile Politicians Is A Matter Of "National Security"

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

I’ve long written about how the percentage of sociopaths within a group of humans becomes increasingly concentrated the higher you climb within the positions of power in a society, with it being most chronic amongst those who crave political power (see: Humanity is Rising).

The reason for this is obvious. Those with the sickest minds, and who wish to act upon their destructive fantasies, understand that they can most easily get away with their deeds if they are protected by an aura of power and ostensible respectability. They believe that as a result of their status, no one would dare accuse them of horrific activities, and if it ever came to that, they could quash any investigation. Unfortunately for us all, this is typically the case. I previously covered the issue of powerful pedophiles in the UK in the piece: Former BBC Host “Sir” Jimmy Savile Exposed as Major Player in Massive Pedophile Ring.

Now we have evidence of yet another case.

The Guardian reports that:

The security services are facing questions over the cover-up of a Westminster paedophile ring as it emerged that files relating to official requests for media blackouts in the early 1980s were destroyed.


Two newspaper executives have told the Observer that their publications were issued with D-notices – warnings not to publish intelligence that might damage national security – when they sought to report on allegations of a powerful group of men engaging in child sex abuse in 1984. One executive said he had been accosted in his office by 15 uniformed and two non-uniformed police over a dossier on Westminster paedophiles passed to him by the former Labour cabinet minister Barbara Castle.

Ah, national security. Remember that the next time you are lectured that we need to give up our civil liberties in the name of “national security.” Think about what that really means. It really means the security of the status quo to continue to behave like insane criminals with zero accountability.

The other said that his newspaper had received a D-notice when a reporter sought to write about a police investigation into Elm Guest House, in southwest London, where a group of high-profile paedophiles was said to have operated and may have killed a child. Now it has emerged that these claims are impossible to verify or discount because the D-notice archives for that period “are not complete”.


“It feels like just another example of key documents from that period going missing. We need to know more about what has happened. The journalists who have said that D-notices were issued are respected people with no reason to lie.”


The two journalists, Don Hale, the former editor of the Bury Messenger, and Hilton Tims, news editor of the Surrey Comet between 1980 and 1988, both recall their publications being issued with D-notices around 1984. Tims, a veteran of the Daily Mail and BBC, where he was head of publicity for the launch of colour TV, said that his chief reporter had informed him that a D-notice had been issued to him after he tried to report on a police investigation into events at Elm Guest House, where Smith is said to have been a regular visitor.


“The reporter was told that there were a number of high-profile people involved and they were getting boys from a care home in the Richmond area. So I put someone on to it, the chief reporter I think, to make inquiries. It was the following day that we had a D-notice slapped on us; the reporter came over and told me. It was the only time in my career.”


Hale, who was awarded an OBE for his successful campaign to overturn the murder conviction of Stephen Downing, a victim of one of the longest-known miscarriages of justice, said he was issued with a D-notice when editor of the Bury Messenger. He had been given a file by Castle, by then an MEP, which had details of a Home Office investigation into allegations made by the Tory MP Geoffrey Dickens of the existence of a Westminster paedophile ring. The files contained the name of 16 MPs said to be involved and another 40 who were supportive of the goals of the Paedophile Information Exchange, which sought to reduce the age of consent.

The worst part about incidents like these, is that those closest to the situations will often blindly protect the offenders. Such as what is described in the following articles.

From Outside Magazine: The Sex-Abuse Scandal Plaguing USA Swimming

From the Associated PressClassroom Sex Abuse Case to Cost Nearly $140M

My heart goes out to all these young, helpless victims, and all those others whose stories haven’t been told.

Oil Plunges As Venezuela Hints No Output Reduction

Following the four-way pre-OPEC meeting between Russia, Mexico, Venezuela, and Saudi Arabia, Venezuela's foreign minister warned:


And oil prices slipped notably. "The most important thing is we are talking," Ramirez noted... but markets are not waiting.

Russia, Saudi Arabia, Venezuela, Mexico end 4-country talks on oil in Vienna, saying they agreed to monitor oil price for a year and possibly meet quarterly. However, the group does not agree any output reduction.



Nearing 2014 lows...


Furthermore, Rosneft's Sechin warns "Oil market is oversupplied but not critically," which seems to fit with the collapse of demand perspective...


Charts: bloomberg


















I said Looters, not Hooters!!!



Ferguson In Flames: The Morning After

Shortly after 9pmET last night, prosecutors relayed the grand jury's decision not to charge white Ferguson Police officer Darren Wilson over the death of black teenager Michael Brown... and all hell broke loose...






And finally... Michael Brown's mother...




Source: Bloomberg

Here Comes France: Right-Wing Leader Marine Le Pen Demands Central Bank Repatriate French Gold

First Germany, then the Netherlands, perhaps Switzerland this weekend, and now the French right-wing Front National, which shockingly came first in May's European parliament elections, and whose leader Marine Le Pen is currently polling in first place in a hypothetical presidential election (in both a first and run off round), ahead of president Hollande, has sent a letter to the governor of the French Central Bank, the Banque de France, demanding that France join the list of nations which have repatriated, or at least tried to, their gold.

From her letter, here is the full list of French demands (google translated):

  • Urgent repatriation on French soil of all of our gold reserves located abroad.
  • An immediate discontinuation of any gold sales program.
  • Conversely, a gradual reallocation of a significant portion of foreign exchange reserves in the balance sheet of the Bank of France by buying gold at each significant decrease in the price of an ounce (recommendation 20%) .
  • A suspension of any financial commitment or loan contract would wager that our gold reserves.
  • At the patrimonial and financial balance of the 2004 gold sales transactions ordered by N. Sarkozy.

Her full letter below (link)

Mr. Christian Noyer

Governor of the Banque de France
31 rue Croix des Petits-Champs
75049 PARIS Cedex 01

Nanterre, November 24, 2014

Open letter to Mr Christian Noyer on the gold reserves of France

Dear Governor

On behalf of the French and in my capacity as the main opposition leader, I am writing to you because it is my duty to present a petition on the gold reserves of France, under the best interests of our nation.

Even before the outbreak of the 2008 crisis, the National Front had anticipated and informed the political institutions of the future worsening of the macro-economic and geopolitical context. As part of the business model increasingly libertarian adopted by France under pressure from Brussels, no economic fundamentals may not sustained improvement. All French can see that the austerity policies demanded by the EU and the ECB and implemented by the government are a proven failure and serious for our country.

The monetary institution you lead a historic mission to be the custodian of national central bank monetary reserves including gold reserves. According to our strategic vision and sovereign, they are neither the state nor the Bank of France but the French people and in addition serve as the ultimate guarantee of public debt and our currency.

In monetary Cold War played between the Western countries and the BRICS countries, gold gradually takes an important role. According to the World Gold Council, China's official gold reserves, India and Russia have increased significantly between 2007 and 2013.
For these reasons and because of the rapid growth of global systemic risk, it is of utmost importance to the future solvency of our nation to engage, by mid-2015, a detailed audit procedure, the results will be the subject of a report. This report must obtain validation of French macro-prudential authorities, ACPR, and will be made public in the year.

This comprehensive audit should contain:

  • A complete inventory of physical gold amounts to 2435 tons currently displayed and their quality (serial number, purity, bars 'Good Delivery' ...), conducted by an independent French body (to be defined). This inventory, under supervision of a bailiff, must indicate the country in which the gold reserves are stored in France or abroad.
  • A census of all formal financial employment agreement or secret vis-à-vis private banks and corporations, or bilateral loan between France and national and international institutions, having pawned the gold of France to ensure rescue of the euro. In this case, the comprehensive audit should contain the conditions of agreement or loans.


Whereas, on 30 November, will take place in Switzerland a vote on a request from popular initiative referendum "Save gold for Switzerland" of the UDC party (Democratic Union of the Centre) which provides for the repatriation of their reserves of gold on their soil.

Whereas at the request of some national central banks informed, this country phenomenon for the "return of national gold reserves" and democratic control exists since 2013 in Germany (Bundesbank), Poland etc.

Whereas the Dutch Central Bank recently said it had repatriated 122.5 tons of gold.

Whereas, on 19 May 2014 the Bank of France along with other banks of the Eurosystem, announced it has signed the Washington Agreement gold sales CBGA 4 (Dirty Gold Under the Central Bank Gold Agreements) which provides no transfer of quotas on this five-year period (2014-2019), in contrast to the three previous agreements.

Whereas in fact, the Bank of France already independent, conducted as part of the agreement CBGA 2 on gold sales agreed in 2004 by Nicolas Sarkozy, then Minister of Economy and Finance of the Raffarin government .

The declared official target of more actively manage the foreign exchange reserves of the state to generate € 100 million in additional tax revenue in 2005. N. Sarkozy also said that gold sales would be used "either to finance investments that prepare the future, either to reduce the debt, but in no case to fund operating expenses. "

Over the period 2004-2012, about 614.6 tonnes of gold were sold by France, while at the same time the other central banks of the Eurosystem with the ECB have agreed to limit their gold sales. According to a report of the Court of Auditors in 2012, this operation is extremely costly for public authorities and constitutes a serious violation of the national heritage, made without any democratic consultation.

Mr Governor, according to your statements, "gold remains an important element of global monetary reserves." For the French, you are considered the ultimate guarantor of the security of this gold reserve and therefore the stability of our currency and national financial stability. As a result, your responsibility is huge.

Also, depending on the situation we discover, I urge you to do it:

  • Urgent repatriation on French soil of all of our gold reserves located abroad.
  • In immediate discontinuation of any gold sales program.
  • Conversely, a gradual reallocation of a significant portion of foreign exchange reserves in the balance sheet of the Bank of France by buying gold at each significant decrease in the price of an ounce (recommendation 20%) .
  • A suspension of any financial commitment or loan contract would wager that our gold reserves.
  • At the patrimonial and financial balance of the 2004 gold sales transactions ordered by N. Sarkozy.

The implementation of these measures is crucial for the future of France face socio-economic problems that may occur.

Just like your heroic predecessors of the Bank of France in 1939 and 1940 had organized the evacuation of French gold, you need to undertake this vast national treasure of the security operation, patriotic act which will be recognized in due time by the public opinion.

I sincerely hope that, respectful of your duties as a senior official in the service of the state, you demonstrate lucidity and courage necessary for the defense of the general interest of our country. The stakes are high, it is the future of France in question!

Please accept, Excellency the Governor, the assurances of my highest consideration.

Marine Le Pen

The Smart Money Is Selling the Farm

“Buy stocks! It’s a great opportunity! They present great value.”


This is the non-stop mantra espoused on financial media. It’s simply astounding given that


1)   Everyone with a modicum of sense knows stocks are in a bubble

2)   Financial media viewership is plunging to multi-decade lows (you think they’d consider changing the content?)


Here are a few thoughts no one  in the mainstream financial media seems to address.


First of all, corporate insiders are dumping shares at a pace not seen since 2000.


That’s correct. The folks who know more about their companies and future growth prospects than anyone in the world are unloading their shares as quickly as possible.


Investment legends are doing the same. Warren Buffett, perhaps the single biggest fan of stocks in the last 100 years is currently sitting on over $50 billion in cash. Buffett’s partner Charlie Munger recently commented that he has not bought a single stock in his personal portfolio in over two years.


Aside from Buffett and Munger, Carl Icahn, Stanley Druckenmiller and numerous other investment legends have warned of a potential market catastrophe. George Soros has even taken out a record size bet on the market collapsing.


Beyond the legends, institutional investors have been net sellers of stocks for most of 2014. The same goes for hedge funds. Do you think they’d be doing this if they thought stocks were offering a lot of opportunities and value today?


Market volume is collapsing to a dwindle and fewer and fewer companies area participating in the rally. Both of these are clear signs of a top forming. Nearly half of the stocks on the NASDAQ are down over 20% from their recent peaks.


Global growth is slowing down sharply. The only non-manipulated economic data point out of China (electricity consumption) shows GDP growth there is HALF of the official 7.5%.


In Europe, Italy is back in recession for the third time since 2008. Germany’s economy contracted in the second quarter of 2014 and will likely be in recession before the first quarter of 2015. France has registered zero growth for six months now. And the US is showing anemic growth if any.


So we have corporate insiders selling the farm, investment legends warning of a collapse, institutional investors selling stocks, and global growth slowing rapidly.


And now is the time to buy stocks?


Take note and prepare.


If you’ve yet to take action to prepare for the second round of the financial crisis, we offer a FREE investment report Financial Crisis "Round Two" Survival Guide that outlines easy, simple to follow strategies you can use to not only protect your portfolio from a market downturn, but actually produce profits.


You can pick up a FREE copy at:


Best Regards

Phoenix Capital Research





30 Year Yield Drops Below 3.00% As Richmond Fed Tumbles Most Since 2006

Despite the clear message from stocks that everything in the world is awesome, 30Y Treasury yields have tumbled back below 3.00% - 1-month lows. Perhaps the slew of disappointing data is right after all that the US is not decoupling... just don't tell stocks. Against expectations of a 16 print, Richmond fed printed 4, plunging from its  exuberant 20 levels last month. This is the biggest miss since Jan 2013 (and biggest MoM drop since May 2006) as new order volume collapsed, employment and workweek tumbled, and most major future expectations indices dropped.


Richmond fed collapsed...


What do stocks know?


As 30Y broke back below 3.00%


Richmond Fed Breakdown...

Record Stocks & Plunging Gas Prices Send Consumer Confidence Tumbling, Biggest Miss Since June 2010

With business confidence at post-crisis lows (in the US and around the world), it is hardly surprising that consumer confidence would fade and at 88.7 (vs 96.0 expectations), this is the biggest miss since June 2010. It appears last month's exuberant surge/beat was anomalous as we tumble from 94.5 in October, in spite of tumbling gas prices and record high stocks... The drop was largely driven by a slide in 'hope' as expectations fell to the lowest since June. Labor, employment, and business conditions all dropped.


Global Business Confidence Collapses To Post-Lehman Lows

As we noted here, despite record high stock prices and talking-heads imploring investors to believe CEOs are confident, they are not (consider the clear indication of a lack of economic confidence from tumbling capex and soaring buybacks), That is further confirmed today as Markit's survey of over 6000 firms showed optimism falling sharply in October, dropping to the lowest seen since the survey began five years ago. Hiring and investment plans were also at or near post-crisis lows, while price expectations deteriorated further. More worrying, perhaps, is the US is not decoupled whatsoever, with future expectations of US business activity at the lowest since the financial crisis.




The Markit Global Business Outlook Survey, which looks at expectations for the year ahead across 6,100 companies, showed optimism falling sharply in October, dropping to the lowest seen since the survey began five years ago. Hiring and investment plans were also at or near post-crisis lows, while price expectations deteriorated further.


Long list of worries

The surveys highlight a growing list of concerns among companies about the outlook for the year ahead that led to a cooling of business optimism in recent months.

Key threats include fears of a worsening global economic climate, and notably a renewed downturn in the Eurozone, the prospect of higher interest rates in countries such as the UK and US next year, geopolitical risk emanating from crises in Ukraine and the Middle East, plus growing political uncertainty in many countries, notably the US, UK and Japan.

“Clouds are gathering over the global economic outlook, presenting the darkest picture seen since the global financial crisis. Companies’ hiring and investment intentions have both fallen to post-crisis lows alongside the bleakest outlook for future business activity seen over the past five years.


“Inflationary pressures are expected to ease further, meaning central banks will have leeway to keep policy looser for longer to help support economic growth, especially as the risk of deflation remains a major worry.


“Of greatest concern is the slide in business optimism and expansion plans in the US to the weakest seen over the past five years. US growth therefore looks likely to have peaked over the summer months, with a slowing trend signalled for coming months.


“There’s also little sign of the Eurozone’s malaise ending any time soon, as companies have become even less optimistic about the outlook. Confidence is weakest in the core countries of Germany and France, with the gloomy mood in the latter being highlighted by France being the only country in the survey in which companies expect to cut staffing levels over the coming year on average.


“The Eurozone’s ongoing weakness remains one of the major concerns seen in the global survey, and especially in the UK, where optimism waned further from the post-crisis high seen at the start of the year. However, firms in the UK remain more optimistic than in any other major developed or emerging country, suggesting the UK will continue to outperform its peers in 2015, albeit with growth slowing from that seen in 2014.


“Optimism in Japan continued to lag behind that of the US, UK and even the Eurozone, dropping to a twoyear low to suggest companies have become increasingly disillusioned with the potential for ‘Abenomics’ to boost growth, although there are signs that Japan’s recent deflation-beating policies will continue to drive prices higher next year.


“A key factor that has held back economic growth in recent years has been the disappointing performance of major emerging market economies, and this looks set to continue, and perhaps even intensify, over the coming year. Across the four ‘BRIC’ emerging markets, business optimism has sunk to the lowest seen since the financial crisis. Russia is the biggest concern, with sanctions, a spiralling currency and uncertainty driving business expectations down sharply to a new low. A slight upturn in business expectations in China provides some hope that companies there are at least not expecting a hard landing.”

As Markit reports, the US is not immune...

“This survey is a timely reminder that the U.S. economy has not been immune from weakening global business conditions, with euro area woes and heightened geopolitical risk weighing on firms’ business outlook and job hiring intentions for 2015.


“U.S. companies reported the lowest degree of confidence since the survey began in late 2009, reflecting domestic concerns and a subdued external demand environment.

*  *  *
So QE managed to surge inequality, did nothing for wages, and achieved nothing in sparking animal spirits... but apart from that it was a great success.

Presenting North America's Most Frustrating Airports

As the busiest travel week of the year gathers pace (amid fears of a winter storm cluserf##k on the East Coast), we thought Bloomberg Businessweek's rankings of the most (and least) frustrating airports in North America might help travelers looking to skip town...

The most frustrating airport in North America is.... Laguardia...based on the time it takes to get there; how easy it is to clear security; the quality of terminals and restrooms; amenities; and how often flights take off on schedule.


But JFK has the worst 'commute'...


And O'Hare the worst track record for on-time departures...


Source: Bloomberg Businessweek

The Rand-ian Writing On The Wall

Submitted by Jeff Thomas via The Burning Platform blog,

When you see that in order to produce, you need to obtain permission from men who produce nothing—when you see that money is flowing to those who deal, not in goods, but in favors—when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you—when you see corruption being rewarded and honesty becoming a self-sacrifice—you may know that your society is doomed. – Ayn Rand; Atlas Shrugged, 1957

Pretty strong words… the last four, in particular.

Ayn Rand knew whereof she spoke. Born in St. Petersburg, Russia, in 1905, she became politically conscious while still a child and did not favour the existing concept of constitutional monarchy. So, it would not have been surprising if, when the Russian revolution broke out when she was twelve, she bought into the proselytising of Vladimir Lenin, as so many did at that time.

Instead, she quickly surmised that the Bolsheviks’ claim to improve life for the average man was, in reality, a plan to diminish the quality of life for all of the people. In doing so, the Bolsheviks confiscated her father’s business and displaced her family. At one point they were nearly starving, but in 1925, she received permission to emigrate to the US. (She later attempted to get her parents and sisters out, but it proved to be too late.)

A Lesson Hard-Learned

In establishing her now well-known beliefs in governmental systems, Ayn Rand had the benefit of having observed the entire progression from a relatively benign monarchical system to totalitarianism. As a result, she not only learned that political leaders can be deceitful in their claims for social improvement, she also learned, first hand, that those leaders (and/or hopeful leaders) who promise that they are going to change the system in such a way that everyone will “have all they need,” are the most deceitful of all.

In my opinion, the greatest possible threat from the fanciful claims by politicians lies in the willingness of the populace to actually believe such claims. Sadly, it does seem as though the majority of people in any country tend to be extraordinarily gullible in this regard.

The very idea that some method can be found that would make it possible to equalise all people is patently ludicrous. There will always be differences in intellect, talent, and ambition from one individual to the next. The idea that any government should somehow enforce the more gifted or more motivated to continually give up the fruits of their efforts, whilst giving those fruits to others who are less gifted and less motivated is, by definition, unworkable.

The Obvious Choice

Such an idea, whether we consider it laudable or not, cannot ultimately succeed. The most that can be expected is that the idea could successfully be enforced, which would result, eventually, in the gifted and motivated ceasing to make the necessary effort to excel. And, of course, in socialist countries, this is what, over time, we see take place.

There is a direct relationship between the degree of “redistribution” by the government and the decline in effort by the gifted or motivated.

Still, there will always exist those who are less gifted or less motivated who will want to believe that political leaders can somehow make this impossible concept a reality. And of course, these people can fully be expected to vote for, or otherwise support, those who make such empty promises.

Therefore, the realisation that should be taken away from this discussion is that, over time, it is perfectly predictable that a given government might ultimately go in a direction of self-destruction, as it will be likely to pander to the majority, who seek such largesse at the expense of others.

What then, of the minority? What of those who are in that group of more gifted or more motivated people—the ones that do, historically, tend to push a society forward with their abilities and efforts?

They have a choice. They can “go with the flow,” should the country in question go into social and political decline; they can accept it and try to muddle through, as did Ayn Rand’s parents after the revolution. Or they can vote with their feet, as did Rand herself.

The results of these choices are plain: Zinovy and Anna Rosenbaum disappeared into Soviet obscurity, whilst daughter Ayn escaped to become a novelist in a freer and more inspiring country: the US.

This scenario repeated itself in Germany and Austria in the 1930s, when such notables as Albert Einstein, Friedrich Hayek, and Ludwig Von Mises made their exits to the US, England, and Switzerland, respectively.

The Writing Is on the Wall

And so it has gone, throughout history. When the writing is on the wall that “the society is doomed,” most people invariably stick it out where they are, hoping either that “things will get better,” or at least, that “it won’t get too much worse.”

In George Orwell’s 1945 book, “Animal Farm,” the pigs convinced the other animals to revolt against the farmer, whom the pigs claimed was oppressing them. When the revolution succeeded, the animals proudly painted the words, “All animals are equal” on the barn. Later, under cover of darkness, the pigs changed the wording to, “All animals are equal, but some are more equal than others.”

This was literally the writing on the wall—the signal that the moment had arrived when the animals should have either overthrown the pigs or, if that was not possible, hopped the fence and skedaddled.

In real life, making this decision is quite a bit more difficult. However, it can be said that Ayn Rand made the task simpler for us. In the quote above, she offers the “writing on the wall.” It only remains to us to decide whether the point she describes has been reached. We can assume that, if we are presently living in a country that matches her description, and it remains possible at present to make an exit, as she did in 1926, we would be well advised to do so.

Certainly, her parents mistakenly waited longer, and young Ayn was the only one who escaped the Soviet Union.

We cannot control the obsessive behaviour of tyrants. They will forever be amongst us, and the majority of people do tend to “go along” in the end, either through ignorance or in the false belief that they will somehow benefit from such tyranny.

Our one choice, therefore, is the one that was faced by Ayn Rand and her parents. They chose differently and their fates could not have diverged more as a result.

Currency Wars Reignite As Yuan Tumbles Most In 2 Months And Chinese Bond Market Freezes

Did China just re-enter the currency wars? The Chinese Yuan dropped 0.29% overnight - its biggest drop since September and 2nd biggest devaluation since March - as the currency tumbles back in line with the PBOC's fixing for the first time in over 3 months. Despite 'hopes', S&P confirms the recent (and reconfirmed) rate cut doesn’t signal renewed government intentions to resort to aggressive stimulus to prop up economy. More troubling is the fact that China's huge corporate debt market appears to be freezing as over $1.2 billion in bond sales were scrapped or delayed last week suggesting wall of maturing debt will find it increasingly difficult to roll-over and keep the dream alive (especially in light of Haixin's bankruptcy last week).


CNY dropped notably overnight, now back in line with the PBOC fix for the first time in 3 months...


As Bloomberg reports,

PBOC will probably push USD/CNY fixing higher amid expectations for a weaker yen and euro, as well as the need for looser policy at home, according to Richard Iley, chief economist for Asia at BNP Paribas.


“China is losing the currency wars, steadily increasing the risk of another engineered bout of CNY weakness,” Hong Kong-based Iley says in interview today


Financial conditions are “uncomfortably tight,” and more easing will be required if real GDP growth is to “have any hope of being propped up close to politically mandated levels next year”

*  *  *

And the fundaraising strains appear to be showing up in the Chinese corporate debt space (as Bloomberg reports)

China’s companies scrapped or delayed at least 7.55 billion yuan ($1.2 billion) of bond sales since Nov. 20 as borrowing costs jumped, flagging fundraising strains even as the central bank eased monetary policy.



The yield on AAA rated corporate securities due in three years rose 17 basis points last week, the most in a year, to 4.43 percent. The increase comes as investors held more cash ahead of planned new share sales this week, with initial public offerings to lock up at least 1 trillion yuan, according to Australia & New Zealand Banking Group Ltd.

*  *  *

but but but, QE and rate cuts and stuff...

Liquidity Does Not Create Solvency

Excerpted from John Hussman's Weekly Market Comment via Jim Quinn's Burning Platform blog,

The actions of central bankers around the globe which have been driving stock prices higher are not a sign of control. They are signs of desperation. They are losing control. Their academic theories have failed. Their bosses insist they turn it up to eleven. Something is going to blow. You can feel it. John Hussman knows what will happen. Do you?

That said, it’s worth noting that the inclinations of central banks toward quantitative easing and interest rate suppression are increasingly taking on a tone of desperation in the face of accelerating economic weakness in Japan, Europe and China.


While the stated objective is to increase inflation, low inflation isn’t really the economic problem – low growth, intolerable debt burdens, and misallocated capital are at the core of global challenges here. Unfortunately, QE only misallocates capital toward more speculation and low-quality debt (primarily junk and leveraged loan issuance), without much impact on real growth. China’s move was prompted in part by a surge in bad loans to the highest level in nearly a decade. The largest European banks now have gross-leverage ratios as high as 30-to-1 (during the credit crisis, one could order the sequence of defaults accurately using this metric, with Bear Stearns, Lehman, and Fannie Mae right at the top). But liquidity does not create solvency, and with credit spreads widening, the growing desperation of monetary authorities is more a negative signal than a positive one.


This is much like what we saw in 2007-2008: when concerns about default are rising, default-free, low-interest rate money is not considered to be an inferior asset, and as a result, its increased availability does not provoke risk-seeking behavior. If we observe narrowing credit spreads and stronger uniformity in market internals, we will be able to infer a shift toward risk-seeking (and in turn, a greater likelihood that monetary easing will provoke further speculation). That won’t make stocks any cheaper, and downside risk will still need to be managed, but our immediate concerns would be less dire. At present, current market conditions and the lessons of history encourage us to be aware that very untidy market outcomes could unfold in very short order.



The upshot is this. Quantitative easing only “works” to the extent that default-free, low interest liquidity is viewed as an inferior holding. When investor psychology shifts toward increasing risk aversion – which we can reasonably measure through the uniformity or dispersion of market internals, the variation of credit spreads between risky and safe debt, and investor sponsorship as reflected in price-volume behavior – default-free, low-interest liquidity is no longer considered inferior. It’s actually desirable, so creating more of the stuff is not supportive to stock prices. We observed exactly that during the 2000-2002 and 2007-2009 plunges, which took the S&P 500 down by half in each episode, even as the Fed was easing persistently and aggressively. A shift toward increasing internal dispersion and widening credit spreads leaves risky, overvalued, overbought, overbullish markets extremely vulnerable to air-pockets, free-falls, and crashes.

Read all of John Hussman’s Weekly Commentary

Just 8 Numbers

Originally posted at Macro-Man blog,

26.1% :  The amount that retail gasoline margins expanded in the United States last month, even as prices dropped $0.34/gallon.

202,000:  Number of Google results for "FX price fixing"

542,000:  Number of Google results for "Gas Station price fixing"

$500,000,000:  Average annual cost to the world if one assumes a daily FX fixing volume of $10 billion and that each rate was wrong by an average of 2 bps (bear in mind that those orders against the main direction of the fix receive a windfall, not a cost!)

$1.34 billion:  Average annual cost to just US consumers if we assume price gouging of $0.01 per gallon

$4.3 billion:  Amount of FX-related fines levied thus far

$41 billion:  Amount of total FX fines expected by Citi bank-stock analysts

$594 billion:  Total subsidies, in 2010 dollars, to fossil fuel companies from the US government, 1950-2010.

*  *  *

Makes you think eh?

Twitter "Hedge Fund Manager" Anthony Davian Sentenced To 4 Years 9 Months In Federal Prison

Over a year ago we reported that one of Twitter early and most aggressive self-promoters, Anthony Davian, was busted for what was at the time financial Twitters' the first Ponzi Scheme. In our words then:

Once upon a time there was a Twitter-based, pump-and-dumping daytrading bucket shop posing as a "successful hedge fund manager" also known as Davian Letter/Davian Capital Advisors run by an Ohio gentleman known as Anthony Davian, which for reasons unknown even managed to run outside capital (somehow raking up to $1.5 million in idiot AUM, mostly courtesy of his very aggressive self promotion on Twitter using the @hedgieguy handle), and which didn't like Zero Hedge much.


(but that's ok because the feeling was mutual - we had advised the SEC in late 2009 that the Davian operation was nothing but a ponzi scheme).


A few years later, said outside capital is gone (with losses that could have been prevented had the SEC moved earlier) and moments ago, following a four year delay since our notice, the SEC has finally acted and charged Anthony Davian with fraud.

Today, we can close the case on Athony Davian.

As SIRF reports, "Anthony Davian, a once-prolific presence on social media who held himself out as a iconoclastic hedge fund manager prior to his August 2013 indictment on a series of fraud charges, was sentenced several hours ago in a Cleveland courtroom to four years and nine months in federal prison."

The details of the sentencing courtesy of SIRF's Roddy Boyd:

Anthony Davian, a once-prolific presence on social media who held himself out as a iconoclastic hedge fund manager prior to his August 2013 indictment on a series of fraud charges, was sentenced several hours ago in a Cleveland courtroom to four years and nine months in federal prison.


Federal Judge Patricia Gaughan of Ohio's Northern District court also ordered Davian to make restitution of approximately $1.8 million to his defrauded investors and serve three years of probation after his release. Should Davian waive his right to appeal, he is slated to report to prison in late December or early January, pending his recovery from a recent foot surgery.


According to a pre-sentencing guideline federal prosecutors filed on November 18th, they sought a 60 month sentence (and full restitution) for Davian based on an investigation they claimed showed Davian had never sought to manage money, but only to raise investor capital to fund personal and business expenses, including paying off an office lease and attorney fees.


A once forceful presence on what is now known broadly as "Finance Twitter," Davian's signature remark was "Ching!" (after a trade he had been discussing allegedly turned profitable for his portfolio,) he was the subject of a July 2013 Southern Investigative Reporting Foundation investigation that raised doubts about his performance and whether he was even managing the several hundred million dollars he then publicly claimed.


In the weeks after SIRF's report was released, lawyers from the Security and Exchange Commission and the Department of Justice filed claims in federal court to shut Davian's portfolios down and seize assets. Apart from an expensive Audi and a Bath, Ohio property where Davian sought to build a mansion, there was apparently little for government lawyers to seize.


In the courtroom, according to notes given to SIRF by someone present in the courtroom who asked not to be identified because he sought "to put this behind me," Davian's wife and mother made statements that sought mercy from Judge Gaughan before the sentence was entered. His mother discussed what she argued was Davian's long history of mental illness; his wife said that all of their children had substantive medical issues that were "drowning them in medical expenses."

And now we look forward to which self-acclaimed "successful hedge-fund manager" on Twitter will take his place.

Ferguson Grand Jury Verdict: No Indictment; Police Report Shots Fired, Protests In Major Cities

UPDATE: Live Reaction Feed in Ferguson:

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Confirmed: shots fired across from #Ferguson PD and south of Ferguson PD.

— St. Louis County PD (@stlcountypd) November 25, 2014

Response in NYC

Protestors taking over 6th Ave. now heading to Times Square. #NYC

— Tracee Carrasco (@CarrascoTV) November 25, 2014

Officer Wilson's response...

Darren Wilson's statement regarding grand jury decision #Ferguson

— Christine Byers (@ChristineDByers) November 25, 2014

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The Grand Jury result will be announced at 9ET...



Michael Brown's father is "devastated" by grand jury's decision, spokeswoman says - CNN

— PzFeed Top News (@PzFeed) November 25, 2014

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AG McCullough appeared to blame social media...

Apparently Mike Brown was shot and killed by social media.

— God (@TheTweetOfGod) November 25, 2014

For those wondering why release the decision so late

Live Feed (via NBC)

Live Feed (via 41 Action News)

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Crowds are gathering

WATCH LIVE: Aerial footage of protesters gathering in Ferguson, MO

— CBS News (@CBSNews) November 25, 2014


@PzFeedLive: LIVE FEED: Watch what's poppin on the ground right now in #Ferguson -

— Mad MATTigan (@staycoolwheels) November 25, 2014


Ferguson protesters create human chain blocking intersection ahead of grand jury announcement. Stay w/ @CNN for more.

— OutFrontCNN (@OutFrontCNN) November 25, 2014


Missouri Nat'l Guard preparing for #GrandJuryDecision in #Ferguson. Watch Live:

— KTVU (@KTVU) November 25, 2014

Just in case...

#Ferguson ~

— ARC (@AnonRoughCoitus) November 25, 2014

UPDATE: The Ferguson School District has been closed for tomorrow.


And protests are spreading

And citywide Tactical alert...

#BREAKING: Citywide tactical alert declated by LAPD. #Ferguson via @PzFeed

— Conflict News (@rConflictNews) November 24, 2014

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Having quietly got married this weekend, the 28-year-old Ferguson police officer Darren Wilson - who fatally shot unarmed black teen Michael Brown in August - will discover shortly after 5pmET today if he will stand trial for Brown's death after the grand jury verdict is released by the St.Louis prosecutors office. As Brown's lawyer previously noted "ninety-nine percent of the time the police officer is not held accountable for killing a young black boy," Crump said. "The police officer gets all the consideration." Dragging the decision out over the weekend has some fearing it has merely stoked tensions, and protests have already been arranged for later this evening. Police, as we previously noted, are prepared; and the White House has reiterated their call for calm. After-school activities in Ferguson have been cancelled (somewhat suggesting the outcome is not what Ferguson residents are hoping for).

#FERGUSON: All After-School Activities Cancelled Ahead of Grand Jury Announcement -

— Breaking911 (@Breaking911) November 24, 2014

We shall see shortly...


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Some background color from ABC

More ABC US news | ABC World News

The Grand Jury

Possible charges against Darren Wilson #Ferguson #inners

— All In w/Chris Hayes (@allinwithchris) November 25, 2014



Locals are preparing

The jig is sky high right now RT @scottbix: Reminder: Ferguson, Missouri, is 67.4% black.

— Rueben (@Rue9378) November 24, 2014


The White House has reiterated its calls for peaceful protest...

BREAKING: President Obama urges those who wish to protest in #Ferguson to do so peacefully: White House spokesman

— Reuters Top News (@Reuters) November 24, 2014

Perhaps something to consider...

#Ferguson verdict announced today...

— Karl ‏ ?‏Kroshinsky (@KarlKroshinsky) November 24, 2014

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Could be a long night...


Maybe the preparation was worth it...


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Media is in Ferguson en masse

RT @MalinAaron: Media camp (one of many) across from the justice center in Clayton. #Ferguson

— Owl Akata Shakur (@OwlsAsylum) November 24, 2014


Not everyone agrees with the decision...

Wanted for the murder of Michael Brown. #Ferguson

— Truth Seeker (@xfilestrustno1) November 24, 2014

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A timeline of key events following the fatal police shooting of 18-year-old Michael Brown in the St. Louis suburb of Ferguson. (via FOX)


AUG. 9 — Brown and a companion, both black, are confronted by an officer as they walk back to Brown's home from a convenience store. Brown and the officer, who is white, are involved in a scuffle, followed by gunshots. Brown dies at the scene, and his body remains in the street for four hours in the summer heat. Neighbors later lash out at authorities, saying they mistreated the body.

AUG. 10 — After a candlelight vigil, people protesting Brown's death smash car windows and carry away armloads of looted goods from stores. In the first of several nights of violence, looters are seen making off with bags of food, toilet paper and alcohol. Some protesters stand atop police cars and taunt officers.

AUG. 11 — The FBI opens an investigation into Brown's death, and two men who said they saw the shooting tell reporters that Brown had his hands raised when the officer approached with his weapon and fired repeatedly. That night, police in riot gear fire tear gas and rubber bullets to try to disperse a crowd.

AUG. 12 — Ferguson Police Chief Thomas Jackson cancels plans to release the name of the officer who shot Brown, citing death threats against the police department and City Hall.

AUG. 14 — The Missouri Highway Patrol takes control of security in Ferguson, relieving St. Louis County and local police of their law-enforcement authority following four days of violence. The shift in command comes after images from the protests show many officers equipped with military style gear, including armored vehicles, body armor and assault rifles. In scores of photographs that circulate online, officers are seen pointing their weapons at demonstrators.

AUG. 15 — Police identify the officer who shot Brown as Darren Wilson, 28. They also release a video purporting to show Brown robbing a convenience store of almost $50 worth of cigars shortly before he was killed, a move that further inflames protesters.

AUG. 16 — Missouri Gov. Jay Nixon declares a state of emergency and imposes a curfew in Ferguson.

AUG. 17 — Attorney General Eric Holder orders a federal medical examiner to perform another autopsy on Brown.

AUG. 18 — Nixon calls the National Guard to Ferguson to help restore order and lifts the curfew.

AUG. 19 — Nixon says he will not seek the removal of St. Louis County prosecutor Bob McCulloch from the investigation into Brown's death. Some black leaders questioned whether the prosecutor's deep family connections to police would affect his ability to be impartial. McCulloch's father was a police officer who was killed in the line of duty when McCulloch was a child, and he has many relatives who work in law enforcement.

AUG. 20 — Holder visits Ferguson to offer assurances about the investigation into Brown's death and to meet with investigators and Brown's family. In nearby Clayton, a grand jury begins hearing evidence to determine whether Wilson should be charged.

AUG. 21 — Nixon orders the National Guard to begin withdrawing from Ferguson.

SEPT. 25 — Holder announces his resignation but says he plans to remain in office until his successor is confirmed.

SEPT. 25 — Ferguson Chief Tom Jackson releases a videotaped apology to Brown's family and attempts to march in solidarity with protesters, a move that backfires when Ferguson officers scuffle with demonstrators and arrest one person moments after Jackson joins the group.

OCT. 10 — Protesters from across the country descend on the St. Louis region for "Ferguson October," four days of coordinated and spontaneous protests. A weekend march and rally in downtown St. Louis draws several thousand participants.

OCT. 13 — Amid a downpour, an interfaith group of clergy cross a police barricade on the final day of Ferguson October as part of an event dubbed "Moral Monday." The protests extend beyond Ferguson to sites such as the nearby headquarters of Fortune 500 company Emerson Electric and the Edward Jones Dome in downtown St. Louis, site of a Monday Night Football game between the St. Louis Rams and the San Francisco 49ers.

OCT. 21 — Nixon pledges to create an independent Ferguson Commission to examine race relations, failing schools and other broader social and economic issues in the aftermath of Brown's death.

NOV. 17 — The Democratic governor declares a state of emergency and activates the National Guard again ahead of a decision from a grand jury. He places the St. Louis County Police Department in charge of security in Ferguson, with orders to work as a unified command with St. Louis city police and the Missouri Highway Patrol.

NOV. 18 — Nixon names 16 people to the Ferguson Commission, selecting a diverse group that includes the owner of construction-supply company, two pastors, two attorneys, a university professor, a 20-year-old community activist and a police detective. Nine of its members are black. Seven are white.

NOV. 24 - Grand Jury finds...

Did This New Bill Really Get Passed In The The Land Of The Free?

Submitted by Simon Black via Sovereign Man blog,

Science is about truth. It’s about fact.

It’s about forming hypothesis and either proving or disproving that hypothesis through what we can observe, test, and measure.

For thousands of years it’s been through this method that humanity has progressed. And history shows that every time “authorities” get involved, it invariably arrests this process.

Human civilization lost centuries of progress in the “Dark Ages” (a bit of a misnomer, given that societies were flourishing in Asia at the same time).

European governments would burn anyone at the stake who dared to write that the Earth wasn’t the center of the universe.

We’d like to think we’ve come a long way since then. But have we really?

It was just a few years ago that the EPA was slammed in a scandal for putting political pressure on scientists to influence their work.

And just last week, the United States House of Representatives passed a bill that effectively kicks the scientists out of the EPA’s Scientific Advisory Board, and makes room for industry insiders.

What’s curious is that this bill specifically allows for industry representatives to serve on the advisory board even when they have a direct conflict of interest with the board’s advisory activities.

This makes it yet even easier for a handful of big companies to influence public policy and force everyone else to do their bidding.

By themselves, companies would never be able to set policy. But when you put them in bed with government, they can do so at the point of a gun.

To give you an analogy, this would be the same thing as commercial banks like Citi or JP Morgan getting to choose the representatives that set monetary policy at the Federal Reserve.


—Oh wait, they’re already doing that.


Or it would be like the Department of Homeland Security buying completely useless body scanners from a company linked to the former head of DHS.


—Oh wait, they already did that too.


Or it would be like the FDA selecting some of its top executives from big agriculture companies like Monsanto.


—Oh wait, they already do that too.

Abraham Lincoln famously said at Gettysburg in 1863 that a government of the people, by the people, for the people, shall not perish from the earth.

The system we have today is none of those things.

  • The EPA is not there to protect the environment.
  • Homeland Security is not there to secure the homeland.
  • The FDA is not there for the health and safety of Americans.

And you’re far more likely to get shot by a police officer now in the Land of the Free than you are to ever even see a terrorist.

This system isn’t there to support you or protect you. It’s there to extract as much as possible from you through taxes and inflation at the point of a gun, and then force you to follow the rules that they create which benefit themselves the most.

That’s what passes as a free society today.

And it’s the biggest threat to our liberty, the biggest threat to our livelihood, and the biggest threat to future generations that won’t even be born for decades.

US Stocks Surge To 'Best' Streak In 86 years

The last few weeks have been the strongest and most consistent rallies in US equity market history. US equity markets have traded above their 5-day moving average for 27 days - the longest such streak since March 1928 (h/t MKM's John Krinsky) and all amid  GDP downgrades, missed PMIs, and downward earnings outlook revisions. Given the holiday week, it is hardly surprising volume was weak today. Stocks were very mixed today with Russell 2000 and Nasdaq leading the way (along with Trannies) as Dow and S&P showed very small gains - to record highs though. Bonds were also bid with a strong 2Y auction extending the drops in yields (0-2bps) led by 7Y. The USDollar fell 0.4% - led by EUR strength - as JPY, CAD, and AUD all weakened. Despite USD weakness, oil (big drop intraday), copper, and gold also dropped on the day with silver ending +0.25%. VIX dropped to 12.66 - its lowest close in over 2 months.


27 days and counting for the S&P... an 86 year record... (within a year of this exuberance stocks had doubled and then halved!!)


This is what happened the last time the market did that...


On the day, Dow lagged, Small Caps led...


But yet again bonds weren't buying it


Treasuries were also bid...


The USD lost 0.38% on the day- but CAD, JPY, and AUD all weakened as EUR strength drove USD weakness


But that did not help commodities as Oil tumbled notably intraday


Charts: Bloomberg