http://www.silverdoctors.com/us-bank-run-imminent-as-fdic-expanded-deposit-insurance-ends-dec-31st/
1) Will investors pull money out in size due to the end of unlimited FDIC protection on deposits and if so , where does it go ?
US BANK RUN IMMINENT AS FDIC EXPANDED DEPOSIT INSURANCE ENDS DEC 31ST
2 ) And with victory puffing his sails full , Obama not likely to compromise - especially after the position taken during the campaign and his post - election rhetoric...........
Labor heads say Obama backs them on 'fiscal cliff'
WASHINGTON — Labor leaders say President Barack Obama remains committed to preserving tax cuts for middle class families and ensuring that the wealthiest Americans pay more in taxes.
The leaders of labor unions met with Obama Tuesday to discuss ways of averting the so-called "fiscal cliff" and find consensus on a plan to prevent more financial hardships next year.
AFL-CIO President Richard Trumka says Obama expressed his commitment to ensuring that the wealthy pay their fair share in taxes. He says labor leaders made clear their opposition to benefit cuts to Medicare as part of any plan to deal with the fiscal cliff.
Labor and progressive leaders say they plan to make a public campaign during the lame duck session to pressure Republicans to support higher taxes for the wealthy.
3 ) And general Fiscal Cliff concerns making investors queasy , but what about the corporate profit cliff.....
http://www.zerohedge.com/news/2012-11-14/good-it-gets
As Good As It Gets
While the impact of the Fiscal Cliff remains front-and-center in everyone's mind, SocGen's Albert Edwards has another, more prescient, insight into why stocks are reverting. In his words, "commentators are worrying about an impending fiscal cliff, we have actually already stepped off the profits cliff." As we noted last week, the divergence between markets and macro suggest a rather ghastly echo of 2008; as the market is falling in line with the dismal outlook for profits (rather than the more upbeat macro economic data). As far as the latter, we are getting close to a cyclical peak - so macro surprises are 'as good as it gets' - and for the former (earnings outlooks), Edwards shows an unprecedented level of optimism about EPS going forward. As we proceed into the new year, Edwards expects"the combination of poor profits and poor economic data to prove toxic."
Via SocGen's Albert Edwards:
Top Down, Edwards has concerns that we have 'topped out' in terms of economic surprise, and along with our views from last week, he also notes:
The resilience of the global equity market in recent months has been, in very large part, down to better than expected US economic data. The widely cited Citigroup Economic Surprise Index recovered from its nadir in late July and has been surging ever since. Together with the intoxicating vapours of QE3, the better than expected economic data helped drive the S&P to its mid-September 1475 peak.But, despite the economic data continuing to surprise on the upside, the equity market has started to slide sharply lower. And, although renewed worries about the fiscal cliff have resurfaced in the wake of the Presidential Election, the S&P was in clear trouble two weeks before the election, when on 22 October it broke decisively out of its H2 up channel.
the bottom line is: despite the upside economic surprises, profits have been spiralling downwards. It's not the impending fiscal cliff the market is worrying about, it?s the actual profits cliff we have already fallen off.
My former boss, Roger Palmer, who brought me into this business in 1988, used to say “if the market can’t go up on ‘good’ news it will fall very sharply on ‘bad’ news”. It's all about expectations. The very prescient market commentator John Hussman regularly uses the chart below to demonstrate thateconomists optimism goes in waves - and for some curious reason that wave lasts about 44 weeks.
As we get towards the end of the year, the economic data will inevitably disappoint as we begin to slide down the sine curve.
Bottom-up things are also concerning. Edwards cites his colleague Andrew Lapthorne who notes:
"the outlook for earnings has been extremely poor in recent weeks. Yes, the US reporting season led to an improvement in near term (2012) earnings forecasts with the ratio of upgrades to total estimate changes for 2012 earnings rising from 44% to 50% over the past month, but earnings momentum for 2013 has slumped, dropping from 48% to 42%, leading to a major divergence between the two. For earnings momentum to collapse during a reporting season is highly unusual, as optimistic forecasts are generally reeled in over the period between reporting seasons."
[ZH - the unprecedented divergence between FY1 and FY2 profits optimism suggests we are full of hope]
and goes on...
"The question is not the level of earnings growth, but the rate at which earnings are being downgraded, and currently with global earnings momentum down in the low forties, it suggests we are already in a profit recession."
As Edwards concludes:
Disappointing economic data AND falling profits. Now that IS a toxic mixture!
and of course there is Syria , Iran , Hamas vs Israel , what Egypt will or will not do after taking missile attack of a leading Hamas leader........ a lot on the plate ! FOMC Minutes have no levitation effect , similar to the reaction to Janet Yellin yesterday - in fact risk off accelerated afterwards on both occasions.....
http://www.zerohedge.com/news/2012-11-14/fomc-minutes-show-fed-members-expect-more-unsterilized-monetization-after-twist-ends
( No Fed bounce for the second day in a row... )
FOMC Minutes Show Fed Members Expect More Unsterilized Monetization After Twist Ends, As Expected
In what should be news to precisely nobody(especially our readers, for whom we laid out the next Easing steps very clearly on the day QEternity was announced, including the continuation of Twist after December 31, 2012 at which point the Fed would merely monetize long-dated paper without selling short-end, i.e. unsterilized), the just released FOMC minutes indicated that "a number" of FOMC members favored more (infiniter) QE after the end of Twist. In other words, the Fed will have to continue monetizing the long-end of the Treasury issuance in lieu of other willing buyers. Recall that the Fed is currently buying up all the 10 Year+ gross issuance. To assume that this can change in some way is ludicrous. It also means that going forward, anything less than $85 billion in monthly flow from the Fed will be seen as tightening. Apparently, this update was big news to the algos (and the BIS FX traders) in charge of daytrading the EURUSD, which ramped by 30 pips on the news. Stocks, however, are oddly enough, the rational instrument today, and have barely budged on this news, once again indicating (as shown during yesterday's Yellen comments), that the Fed has priced itself and its future decisions out of the market, also exactly as we predicted would happen minutes after QEternity was announced.
For those who still don't get it, here it is in under 140 characters, from long ago:
From the minutes:
Looking ahead, a number of participants indicated that additional asset purchases would likely be appropriate next year after the conclusion of the maturity extension program in order to achieve a substantial improvement in the labor market. In that regard, a couple of participants noted the likely usefulness of clarifying the range of indicators that would be evaluated in assessing the outlook for the labor market. Participants generally agreed that in determining the appropriate size, pace, and composition of further purchases, they would need to carefully assess the efficacy of asset purchases in fostering stronger economic activity and consider the potential risks and costs of such purchases.There were some rational voices...Several participants questioned the effectiveness of the current purchases or whether a continuation of them would be warranted if the recent moderate pace of economic recovery were sustained. In addition, several participants expressed concerns that sizable asset purchases might eventually have adverse consequences for the functioning of asset markets or that they might complicate the Committee’s ability to remove policy accommodation at the appropriatetime and normalize the size and composition of the Federal Reserve’s balance sheet. A couple of participants noted that an extended period of policy accommodation posed an upside risk to inflation.But fear not, they were promptly drowned out.As for those still confused, this is how the Fed's balance sheet will look over the next 2 years:Full report (link)
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