Journalists must straddle a fine line between treating subjects with kid gloves to obtain access and while maintaining the necessary distance to continue objective reporting. Hilsenrath became too close to Bernanke and the Fed so that he was no longer a reporter, merely a conduit of information from his anonymous source. This fact bodes well for his retaining his unofficial title as he has proven himself in the role.
Moreover, he is off too a good start to gaining the favorite’s confidence with this puff piece. Clichés like “hard-charging” and “demanding” are deployed while we learn little about the candidate that we already did not know. All you really need to know about Janet Yellen is that she is the candidate most willing to crank up the magic money machine to 11, and that is why she is garnering crucial support of the financial industry that will vault her into the role come 2014.
Germany experienced a shift to the right in Bundestag elections. Merkel’s own party drew support not seen since Helmut Kohl unified Germany and the two libertarian parties polled over 9% of the vote.
Much to both parties’ chagrin, the new AfP siphoned critical support away from FDP so that neither earned the 5% necessary to enter the Bundestag. So while Merkel received a large mandate, in practice it will be difficult to exploit this as she must either enter a grand coalition with the Social Democrats or pick one of the small, leftist parties with which to govern. This means that Merkel will rule from the center again, which probably indicates a more dovish approach to dealing with the periphery. Get ready to open your wallets, Germans.
Fox News likes to tell us that they report and we decide; not that it works this way in practice, but at least the issue is on their radar. On the other hand, the affiliated Wall Street Journal does not offer a similar claim. This is probably why it has reported that China flash PMI has risen to a six month high and decided that the number indicates an economic rebound.
Well, you’re not the boss of me, Wall Street Journal! I am deciding that the six month high in Chinese data represent easy money shenanigans courtesy of your PBOC. The green arrow indicates the July low in PMI that was cured by record injections of liquidity into the Chinese financial system. Some of this money is being used to inflate export receipts to create additional funds to invest outside the country, and that is why PMI is rising. In reality, Chinese manufacturing remains stagnant, not good but not bad either, more like meh.
Journalists travel in the circles of banksters, central banksters, government officials and corporate leaders so their views of the economy are very much influenced by these groups. If you belonged to one of those groups, you could be forgiven for believing that the economy is doing well. Stock markets are frothy, and now these PMIs are rising indicating a little GDP growth, which is at least better than a contraction.
However, the truth lies in the PMI employment component, which was given short shrift by the mainstream media. If you take a peek at our chart, you will discover that the Eurozone’s “recovery” just applies to those who own stocks and bonds while employment in the periphery continues to contract. Cheap money may be able to assist corporations financially engineer profits, but it does not seem to promote employment no matter which of the alphabet soup of central banksters you choose: the Fed, BoE, BoJ or ECB.
There are two reasons for doing something: the real reason and the reason one uses. The reason Draghi is using to print more money is some wonkish and obscure factors regarding “monetary transmission.” The real reason that Draghi will gladly offer another round of LTROs is that sick European banks cannot easily fund themselves. Since they are keeping their host countries afloat by continuing to purchase sovereign debt, they cannot be allowed to fail.