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The Gloves are Coming Off

First a little bit of recent history. Readers are probably aware that some questions about the occasionally malfunctioning Deep State android… no, wait, we’ll start again. Questions have recently been raised about the health of presidential candidate Hillary Clinton by various “alt-right” tinfoil hat-wearing conspiracy theorists, such as this one.


hillary_boogeyman_cartoon1The monsters are normally hiding under Hillary’s bed, but lately they have come out into the open and are getting way too many you-tube hits.


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Dark Social Mood Tsunami Washes Ashore

Early this morning one might have been forgiven for thinking that Japan had probably just been hit by another tsunami. The Nikkei was down 1,300 points, the yen briefly soared above par. Gold had intermittently gained 100 smackers – if memory serves, the biggest nominal intra-day gain ever recorded (with the possible exception of one or two days in early 1980). Here is a picture of Haruhiko Kuroda in front of his Bloomberg monitor this morning:


kuroda headThis can’t be happening… please… let me wake up and realize that it was all just a bad dream…

Photo credit: Reuters


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Another Vega Crush Target

Macy’s (M) may not be anyone’s favorite place to shop these days, but its volatility curve is set up nicely for a vega crush campaign.  We’re going to look at two different ways to take advantage of M’s volatility term structure ahead of earnings (tomorrow morning before open).


macys1900-1000x740Macy’s store of yore

Image via Frank Leslie’s Illustrated Newspaper


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Bizarre Monetary Experiment Expanded

As is well known by now, the ECB Council has decided to expand its bizarre monetary experiment further. All users of the euro are to be subjected to additional impoverishment, by means of the ECB lengthening the duration of its outright money printing scheme (while keeping its level steady at what is an already stunning €60 billion per month) and the even more absurd decision to lower its deposit facility interest rate further, to minus 30 basis points.


larry-summers-i-only-like-mario-draghi-right-nowECB chief Mario Draghi, who increasingly looks like something that has risen from the Crypt. US high IQ moron export Larry Summers likes his policies. Any more questions?

Photo credit: Michael Probst / AP


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A Strange Event

The topic of the SU-24 Russian plane shot down by Turkey over the weekend in Syria has been discussed all over the media ad nauseam by now, but we want to add a few observations and suggestions of our own. Some have perhaps not received the attention they possibly deserve.


Downed-Russian-Jet-1200Image of Russian jet shortly after it was hit by a Turkish missile. Luckily someone was promptly at hand to make a qualitatively acceptable video of the incident. As is well known, cameramen just waiting to film every remotely interesting activity are standing by all over Syria, which is why we get so much material about what is really happening there.

Photo credit: DPA


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The Successes of the Global War on Terror

One would think that the so-called “Global War on Terror”, which has been given fresh impetus by the Paris attacks, must be going swimmingly. What else could explain the great enthusiasm with which it is pursued? It may be recalled that it started in earnest after the WTC attack – also a declaration of war, as it was put at the time.

As is often the case when Islamist fundamentalists strike, the actual attackers immolated themselves on occasion of the attack itself, making it impossible to exact retribution. Except by proxy, that is. This was playing right into the hands of those who had planned the attacks. It seems to us that they have ultimately succeeded beyond their wildest dreams. Not to put too fine a point to it, our wise political leaders have evidently been outfoxed by a bunch of turbaned cave dwellers and goat buggerers in the Hindu Kush.


bomb somethingSteve Bell on the reaction to the Paris attacks.


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Venezuela: Real Wages Collapse amid Continuing Crack-Up Boom

While the crack-up boom in Venezuela continues, real wages in the country have have utterly collapsed. The bolivar is still trading close to 700 to the US dollar on the black market, and the Caracas stock index keeps making new all time highs in nominal terms almost every day. Ironically, Venezuela’s currency is called the “bolivar fuerte” (VEF), i.e. “the strong bolivar” ever since it has been “reverse split” 1 for 1,000 in January 2008.


brain-drainImage via


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Latest Developments

Alexis Tsipras has sent a letter to Jeroen Dijsselbloem of the euro-group (you can download the letter here, pdf), in which he requests a separate bailout from the ESM, essentially proposing that the ESM take over Greece’s liabilities for a period of two years. Unsaid, but implied, is that this would result in the referendum being recalled. More likely it is just a ploy to enhance Syriza’s chances of obtaining a “no” vote in the referendum.


Image via


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Tsipras Takes Door Number Three

Late last week, Greece’s creditors offered a bailout extension of several months, in the course of which Greece would have received sufficient funding to make all payments due during this time period. In order to receive this package the Greek government would have had to sign a final offer made by the creditors. If one looks at the details of the negotiations, only a tiny difference remained between the Greek offer and the offer made by the creditors in the end, reportedly amounting to approximately €100 million. This makes the Mr. Tsipras’ assertion that the final offer tabled by the creditors was an “affront to Greek dignity” not especially credible. It should be noted in this context that these arithmetic games are complete nonsense anyway. In light of €360 billion of public debt, does anyone really believe it will make an iota of difference whether the retirement age in Greece is increased in 2022 or 2025, or whether the small VAT exception for the tourism industry is revoked or not? We believe there are far more important reforms Greece needs to implement.


image1In the meanwhile, somewhere in Athens …

Photo via

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GDP Now in Dangerous Waters

The Atlanta Fed has posted today that its GDP Now measure has reached exactly the same level as a certain Mr. John Blutarsky’s mid-term grade average. This is to say, it has declined to 0.0%.


gdpnow-forecast-evolutionGDP Now goes Blutarsky – via Atlanta FED


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Game of Chicken Continues, EU Ratchets Up Pressure on Greece

After the ECB has made Greek debt no longer eligible for repos (note that this mainly concerns government bonds however, bank bonds that have been “guaranteed” by the government will however no longer be eligible after February 28 2015 either – these amount to a quite large € 25 billion), fears of an intensifying bank run in Greece are growing. At the end of December, Greek banks owed about € 56 billion to the euro system. This is estimated to have jumped to about € 70 billion since then.

These debts to the system have grown concurrently with a sharp decline in deposit liabilities since November last year, when it dawned on people that there might be an election. Unfortunately more up-to-date data aren’t available as of yet, but we will try to post them as soon as the Bank of Greece makes them available. However, there exist estimates regarding the extent of the decline in deposits since the end of December as well – very likely an additional € 15 billion has fled from the Greek banking system since then.



Photo credit: Pressmaster via Shutterstock


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Oil Prices, Deflationary Pressures, Bonds and Gold

The transcript of the Incrementum Fund’s fourth advisory board discussion is available for download below. The fund is managed by Ronald-Peter Stoeferle (formerly of Erste Bank, author of the annual “In Gold We Trust” report) and Mark J. Valek, employing a strategy focused on the effects of monetary policy on asset prices, with the help of proprietary indicators based on the monetary theory of the Austrian School of Economics. Here is Ronald’s brief summary of the discussion:


“The main topic of the discussion was the increasing deflationary pressure and its consequences on markets and central bank policy. We discussed the consequences of collapsing oil prices, a potential case for new all-time highs in treasury bonds, the impeding currency wars and the consequences for gold. As readers of our previous Advisory Board transcripts may remember, we already discussed the possibility of another round of quantitative easing in the US in our last advisory board meeting. It seems, as if the odds of such an event have increased since then, but generally still are considered as a highly improbable event by most market participants.

Perhaps the whole discussion can be accompanied by this quote by the great Ludwig von Mises: “No very deep knowledge of economics is usually needed for grasping the immediate effects of a measure; but the task of economics is to foretell the remoter effects, and so to allow us to avoid such acts as attempt to remedy a present ill by sowing the seeds of a much greater ill for the future.”



Ludwig von Mises, who first came to the world’s attention in 1912, as an eminent European monetary theorist with the publication of “The Theory of Money and Credit”

Photo via


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THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

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