Financial News 12/08/2011

• BLS:  381,000 unemployment claims filed for the week ending 12/03/2011
• BBC: 132 economic protestors arrested in D.C. and San Francisco
• Reuters: French credit rating downgraded to 'A-' by Chinese rating agency
• MarketWatch: Bank of England leaves interest rates unchanged at .5%
• ICI: Investors withdrew $17.560 million from U.S. equities in November
• ECB: Fixed rate lending facility lowered to 1%

Zero Hedge Website Review

Zero Hedge, some describe it as a fiscal doomsday cult led by a copyright infringing ex-securities dealer. Others refer to it as a good source of financial research. In terms of information, Zero Hedge's Manifesto is to improve upon the media by liberating 'oppressed' information and provide skeptical critique of events among other things. The view of Zero Hedge appears to be that the Internet is a better place because of it since the information it presents provides insights into financial events that are occasionally reported in a less revealing analytical light.

Who is Tyler Durden?

Tyler Durden is the name of the publisher on the site and a movie character. The author's picture, up to this point in time, is a an image of Brad Pitt's character in the movie 'Fight Club'. There is one post in the Zero Hedge blog by a person named 'Cornelius', however the blog 'Naked Capitalism' and New York Media, LLC refer to a former Securities Dealer named 'Daniel Ivandjiisk' as openly having stated to a hedge fund publication that he writes for Zero Hedge, but not as the sole author. Judging by the number of in depth posts, including guest posts per day, there is reason to agree with that statement.

What does Zero-Hedge mean?

Zero hedge is referring to the fact that on a long enough time horizon, risk off is the name of the game. In other words, we all die, therefore all attempts at risk management ultimately fail. Steven Hawking has a similar reasoning regarding the fate of the Earth, but not necessarily the human species as it at least has a chance of buying time if it can be relocated to other planets per  'Big Think'.

History

Zero Hedge began as a blog in July 24, 2009 with a post about the challenges facing legacy media products. The New York Times is an example of a legacy media product. The blog then goes on to dicuss Max Keiser, former Wall Street Broker and host of Russian Television's Keiser Report. Zero Hedge also favors the use of the word 'kleptocracy', used by Keiser to refer to those in power who wield authoritative decisions in an effort to steal. By July 29, 2009, only five days later, the Zero Hedge blog moved to the website http://www.zerohedge.com.

Copyright Infringement

Copyright infringement and violation of registered trademarks are apparently not an enormous concern for Zero Hedge.  There are a lot of posts on the website, whether or not all the texts, documents, slide shows, videos and images comply with the DMCA, fair use or applicable copyright licensing is up for debate and would take some research. In 2009 cease and desist notices were sent by Merrill Lynch to 'Tyler Durden' per the Citizen Media Law Project. For a publisher so bent on kleptocracy, Durden has a double-standard that echoes or hints of a similar agenda to WikiLeaks founder Julian Assange. Only thing is, Assange's content is probably copyright protected per  Plagiarism Today. Perhaps the Law Offices of Jeff Martin OR Goodman Acker could help 'him' out when they're not working on traffic claims as they both have license to the exact same commercial and attempt to give an  intimidating impression.

Where is the Zero-Hedge Server located? Switzerland, and the IP address for the website  is 178.209.48.14. Tyler Durden may even knowingly or unknowingly be a Russian propaganda agent bent on undermining the confidence of investors in U.S. markets. That is 100% pure tongue in cheek speculation based on symmetries in anti-banking themes and terminology between Zero Hedge and the Keiser Report. The Zero-Hedge Google website traffic rank is 6 of a possible 10, and it has over 12,000 backlinks per Alexa Website Traffic Stats.

Financial News 12/07/2011

• Bloomberg: Obama advocates ending 'deficit of trust'
• Forbes: Citigroup to layoff 4,500 and pay $400 million for it
• Reuters: France to lose 'AAA' credit rating in 3 months per economists
• UK Guardian: Euro debt saga continues with no clear resolution
• AP: China slowdown evident in housing, manufacturing and exports
• Nasdaq: Europe pushing for Iranian oil embargo, OPEC concerned

Financial News 12/06/2011: Why Keynesian Economics is Getting Bashed

A key premise of Keynesian economics is that government spending spurs growth per the Cato Institute. Many argue this is little different than throwing good money after bad. Pointing to the Japanese economy as an example, the Wall Street Journal highlights how a decade of government stimulus did not amount to a whole lot of GNP growth.

Perhaps what anti-Keynesian economics is overlooking is what will happen if stimulus spending does not occur. Government spending may not grow an economy by much, but it has prevented it from getting worse. However, as Chris Edwards of the Cato Institute suggests, long-run fiscal reforms are a suitable context with which to provide extended payroll tax cuts, a form of economic stimulus. 

The reasoning behind calls for fiscal responsibility and anti-Keynesian sentiment is the undeniable growing national debt; a debt that the 'Congressional Super-Committee' failed to come to terms with per USA Today. That's just the fiscal side of things; the Federal Reserve Bank has also been spending to buy with massive balance sheet expanding bond purchases, loan loss backstops, commercial paper funding, 'QE1 and QE2' etc. The CNN Money 'Bailout Tracker' illustrates just how massive the spending has been.

The U.S. no longer controls more than 25 percent of global manufacturing, as evident in U.S. manufacturing employment data in a Reason Foundation report by Anthony Randazzo. Additionally, U.S. GDP as a percent of Global GDP translates to increased competition for global market share from Asia according to data from the International Monetary Fund.  In other words, U.S. national wealth is not growing like it used to, but spending like it still is continues.

• Reuters: S&P ratings agency puts Eurozone on credit watch
• ISM: November non-manufacturing index slowed by .9%
• Zero Hedge: Euro zone banks borrowed €252 billion to lose .35%
• Asia Development Bank: East Asia growth rates to moderate
• The Economist: Britain entering recession despite fiscal policy
• Reuters India: Chinese service sector index declined 1.6% in November

Financial News 12/5/2012-Patronage Declines Proportional to Income Gap Increases

Money buys a lot, including people and when that fiscal patronage starts to slip, things like the Occupy movement start to occur.  It is clear that income disparity is on the rise, it has been noted time and time again, year after year. The Organization for Economic Cooperation and Development (OECD) is among the more recent of institutions issuing an official statement on the matter. Specifically, the OECD reported this gap is at a 30 year high among the 34 OECD countries.

It would seem membership in the OECD is to income disparity, as membership in Facebook is to friendship with Mark Zuckerberg. In other words, by definition, economic cooperation means improving economies, not the lives of all people who constitute those economies. In this context, crying foul is a mere complaint about a subscription to capitalism, but are the terms of that subscription negotiable. The Occupy movement seems to think so, and wants to renegotiate the social contract.

• Reuters: U.S. Fed and 17 Euro-banks may fund IMF loans
• Live Leak: Occupy D.C. 'People's Pavilion' torn down
• WSJ: Government corn crop statistical forecasts are faulty
• OECD: Income disparity an issue to be dealt with by governments
• AP: Austerity cuts spreading to Italy via PM proposal to cut $40.5 billion
• Bloomberg: Spanish economy slowing per industrial and service data

Financial News 12/2/2011-Population Growth Outpaces New Hiring (Corrected)

The United States has a population of 312.705 million people per the U.S. Census Bureau;  With what The Economist calls a low birthrate of 4 million babies being born per year, in 18 years, they'll start entering the work force. Thus at that rate, 333,333 will need to be created each month, well below the November job growth rate of 120,000 per month. The outcome of this is reflected by a recent New York Times story that characterizes the plight of children entering a nation with less to go around.

Government employment data is conflicted as well. About 1.909 million work for the civilian government per the Bureau of Labor Statistics.  According to the St. Louis Federal Reserve Bank, via The Wall Street Journal, the 'public sector' has shed nearly 5 percent of its jobs since its 2009 peak. Yet, the Bureau of Labor Statistics claims Federal Government employment is forecast to increase by 9.5% by 2018 despite a proven unsustainable annual deficit spending. 

• BLS: Unemployment rate fell to 8.6% with hires of 120,000
• Reuters: American Airlines employees could lose up to $1 billion 
• OccupyWS and OT conduct Occupy Broad St. and buy nothing day
• Bloomberg: European bond auction showed lower yields
• CNBC: No short-term fix for Euro-debt crisis per German Chancellor
• ET: Indebted nations have less room to maneuver in stemming new crisis

Financial News 12/01/11-Bank of England Governor Sounds Alarm

If the Governor of the Bank of England saying the debt crisis in the Eurozone will cause damage to governments and is evident of systemic crisis is not enough, then perhaps the alarm needs to be louder even though it needn't be. Mervyn King as he is known said European governments have a solvency problem per the Wall Street Journal. If Eurozone governments decide to go all in via fiscal and political union, the strength of Germany will calm the fear that has been causing bond investors to charge higher yields for increasingly downgraded government debts, but will that happen? and how soon?

Many market observers and economists stress the key distinction in the current crisis is between monetary and fiscal decision making. Moreover, the first of these addresses funding and the latter is more a function of operational efficiency. Liquidity from bond purchases, and interest rate adjustments are monetary policy decision that affect how much money is available to financial systems. Moreover, the problem according to Mr. King isn't credit limit as much as the excessive use and abuse of that credit limit for the purpose of running governments ineffectively.

On other side of the pond things are better, but not swimmingly so. National Public Radio surveyed economists only to discover U.S. economic growth is anemic. This is somewhat echoed by a Bloomberg report on its own survey of economists. Even slow economic growth is better than none, however with many Eurozone sovereigns entering recession, and slowdowns in China and India underway is the U.S. economic engine enough to even tow its own weight in the near future. In other words, exports, industrial commodity demand, and investment could slow to the point where the international revenue many U.S. corporations rely on to maintain profit margins could also decline.

• Reuters: Retailers report better than expected November sales 
• Fed:  Price increases and hiring subdued, pickup in consumer spending
• DOL: 402,000jobless claims were filed the week ending 11/26/2011
• Reuters: Factories around the world are 'stalling'
• BBC: Chinese manufacturing index fell to a 32 month low
• WSJ: Bank of England governor sounds alarm on systemic crisis
• NPR: Economic growth not strong enough to lower unemployment