The Mess That Greenspan Made - Part 19

The Impressive ISIS PR Machine

Perusing just the first few pages of the latest issue of Dabiq, the official propaganda magazine of the self-proclaimed Islamic State, you’ll quickly realize what an uphill battle it will continue to be for those in the West to keep home-grown terrorism in check.

This is available at Scribd and you’ll quickly see how they appeal to young Americans in particular, praising those responsible for the failed terrorism attack in Texas. It kind of makes your skin crawl but, viewing the photo above, the appeal is understandable.

Tuesday Morning Links

Germany sees progress on Greece, EU officials to meet – Reuters
HSBC now fears world recession with no lifeboats left – Telegraph
Chinese Stocks Surge Most Since 2008 for World’s Biggest Rally – Bloomberg
China to extend military reach, build lighthouses in disputed waters – Reuters
China to expand naval reach after state media warns of “inevitable” war with the US – Quartz
Bolivar Plunges in Black Market as Venezuelans Stash Dollars – Bloomberg
Beheaded Corpses Said to be Lining Streets of Palmyra – Vice News
Why Iraq’s Military Has No Will to Fight – The Atlantic
States Band Together To Keep Obamacare Afloat – Fiscal Times
How the Fed Depressed the Recovery (excerpt) – Dr. Ed’s Blog
John Nash: A life of brilliance, madness, and reawakening – Quartz
John Nash and Ideal Money – Econospeak

Stocks cautious over Greece, China notches another big gain – AP
Dollar Jumps as S&P 500 Futures Fall on Fed; German Bonds Climb – Bloomberg
Summertime and the Fed may make stocks queasy – MarketWatch
Why you shouldn’t get too excited over the commodity rally – Financial Post
Bond Traders Uncover Secret to Rates That Fed Just Doesn’t Get – Bloomberg
Selling stocks in May can keep your cash cool this summer – MarketWatch
Gold drops more than 1 percent as dollar rally continues – Reuters
John Nash RIP: “Beautiful Mind” Game Theory May Lead to Gold Standard – GoldCore
Bullish And Bearish Forces In The Gold Market – GoldSilverWorlds
Ongoing Battles In Markets And Gold – Secular Investor

US Leads Slowdown in OECD GDP Growth – 24/7 Wall St.
Q1 Growth May Look Better After Upcoming Statistical Tweaks – WSJ
Buffett: Raising minimum wage ‘would almost certainly reduce employment’ – MarketWatch
Ten Takeaways from the ‘Rethinking Macro Policy. Progress or Confusion?’ – voxeu
Rajoy Aims to Restore Calm After Historic Local Ballot Loss – Bloomberg
China gets a new billionaire every week – CNN/Money
IMF: Yuan No Longer Undervalued Amid Reserve-Status Push – Bloomberg
The US Housing market rebounds with gusto – The Monitor
G-7 Finance Officials to Discuss Loose Monetary Policy Risks – WSJ
Fischer Flagging Gradual Fed Increases Flattens Treasuries Curve – Bloomberg


Still, Just the Cost of Doing Business

It’s hard to think of the many billions of dollars in fines that big banks have paid over the last few years or so as anything other than the cost of doing business. Here’s Matt Taibbi with Nermeen Shaikh and Amy Goodman of DemocracyNow to explain why.

Taibbi notes:

What’s humorous about this is that virtually all of these so-called too-big-to-fail banks have been embroiled in scandals of varying degrees of extreme seriousness since 2008. So for them to say, “Oh, it’s just a few bad apples in this one instance,” is increasingly absurd. They have been dinged for everything from bribery to money laundering, to rigging Libor, to mass fraud in subprime mortgages and now the forex markets. It’s one mass crime over—you know, after another, and there’s no consequence.

See also Banks Will Keep Doing FX Stuff That Got Them in Trouble at Bloomberg if you feel you’ve not been sufficiently disappointed by the above.

Friday Morning Links

Bank of Japan Chief Cheers On Tokyo’s Surging Stocks – WSJ
Hong Kong Investors Want More Oversight After $35B Wipeout – Bloomberg
China says U.S. actions in South China Sea ‘irresponsible, dangerous’ – Reuters
How China stealthily built a ‘kill chain’ in the South China Sea – The Week
Lower the temperature in South China Sea – Straits Times
Islamic State Now Controls Half of Syria After Seizing Palmyra – Vice News
Merkel Warns ‘Whole Lot Left’ to Do on Greece Bailout Talks – AP
Schaeuble Said to Cite Option of Greek Parallel Currency – Bloomberg
German and Greek leaders MOVED AWAY from each other at EU dinner – Express
Rand Paul Filibuster: ‘You Do Have a Right to Privacy’ –
The grand jury has indicted all 6 officers in Freddie Gray’s death – Vox
‘Shale-ionaires’ Suffering from Wave of Bankrupt Oil Drillers – Bloomberg
Banking should not be boring – Coppola Comment

China stocks hit 7-year high, Europe muted ahead of Fed – AP
Despite Fed’s warning, bond investors keep buying – USA Today
The 13 New Stocks on Goldman’s List of Hedge-Fund Favorites – WSJ
It’s time to dispel the myth of the summer rally in stocks – MarketWatch
Bubble trouble? Why frothy markets may not be ready to pop – Financial Post
OPEC may condemn the world to an oil glut for years – MarketWatch
Gold set for biggest weekly drop in four despite dollar stall – Reuters
LBMA: Trading Activity in Gold And Silver Drop Sharply In April – Kitco
Russia’s Central Bank Buys Another 9 tonnes of Gold –
Chinese Gold Leasing Not What It Seems – BullionStar

Dueling Views on the First-Quarter Slump – NY Times
Why the US can’t shake off the Great Recession – CNBC
EU agrees 1.8bn-euro loan to cash-strapped Ukraine – BBC
China, India likely to be biggest shareholders in AIIB – Reuters
Draghi calls for reform, points to Europe’s modest prospects – Reuters
Why Housing-Market Panic Is Overblown — For Now – The Motley Fool
When the Current Housing Bubble Finally Bursts – of two minds
Inflation Mystery Risks Making Central Bankers Bystanders – Bloomberg
Has the Fed got a grasp on economic reality? – CNBC
A Backdoor Way to End the Fed – Bloomberg


Groupthink at the Fed

Take away the regional bank presidents from this chart (said presidents being physically removed from the center of power in Washington D.C. and not being political appointments) and there are virtually no dissenting votes at any Federal Reserve policy meeting going back two decades, a point that should be cause for concern as detailed in this Bloomberg story.

Fortunately, unlike the executive branch of government, the central bank has no military to dispatch when enacting its chosen policy course, so, this is clearly a case where groupthink will have only limited (though still quite important) negative repercussions.

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