With September out of the way, most economists now expect a December tapering event. Steen Jakobsen, chief economist at Saxo Bank in Denmark is not one of them.
Via email, Steen writes ...
More QE, Less growth, Less Inflation and Less Upside
I have mentioned a few times how I see the fourth quarter having a dramatic slow-down effect, mainly due to unemployment rising, but also due to a serious drop in US housing activities. Please see the chart below. It clearly shows not only why housing will fall (correlation with a lag of mortgage rates) but also why we will see more quantitative easing (QE) rather than less.
With Months' Supply and Mortgage Rates Increasing, Sales and Prices Will Collapse in Q4 2013
Tapering will not happen in October or in 2013 for that matter. Not a single economic vector in our model is pointing up. All indicate less growth, less inflation and less upside. The problem? The market is still talking recovery, despite the US this year being barely able to muster 1.5 percent growth after 2.5 percent last year. If this is recovery, I don't want to experience recession.
Non-Tapering Changed Fixed Income's Relative Value Over Equities
Again, we are increasingly confident about our 2.25 percent 10-year US bond rate call by the end of Q4-2013 versus 2.65 percent now. The Federal Open Market Committee's fixed income put issued by the Fed's recent non-tapering act has changed the relative value of fixed income over equities. This story has only just begun.
Alpha-wise, increasingly my Gold calls still see 1525/75 before falling again, and finally I continue to play the US dollar short as the path of least resistance will be a lower US dollar to help refuel emerging market currencies.
Housing Bulls Increasingly Optimistic
Curiously, housing bulls in the US are increasingly optimistic.
For example Bloomberg reports Blackstone Said to Gather $2 Billion for Real Estate. It's important to note that Blackstone is raising money for European real estate (but it also has huge US commitment as well).
More to the point, I find the following Seeking Alpha headline rather amusing: It's Not Too Late To Capitalize On The Real Estate Recovery.
That title reminds me of my 2005 post "It's Too Late"
When you start seeing advertisements saying "It's not too late", or "Act now before it's too late", invariable the bulk of the gains have already been had, and the top is extremely close at hand, if not already gone.
One and Done Tapering?
That was a reasonably bold call by Steen. Another possibility is a "one and done" trivial amount of tapering in December. That is along the lines of what I expected in September.
For further discussion, please see ...
Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com
Read more at http://globaleconomicanalysis.blogspot.com/#G5BGVpMRfMwfLDsf.99
I received several emails regarding my post on Risk-Free Banking and Fractional Reserve Lending that I would like to share.
Reader Alice who travels the world at a ripe young age of 89, says ...
It is wise always for professionals to stand aside from conspiracy theories, There is no sense compromising the future because the past misread the tea leaves.
Bernanke is doing what he was appointed to do....keep the money coming for the US Government to spend, thereby monetizing all expenditures no matter the purpose.
The growing call from citizens for some form of fiscal sanity is beyond the purlieu of the Fed. It never was established to settle accounts, or keep them within bounds.
The founder of modern international finance, Amschel Rothschild, gave the aims and direction of his enterprise simple instruction when he declared he cared not what governments did, all he wanted was the right to control, print their money. Governments took him at his word and his business grew exponentially so he must have been doing something right or as Lloyd Blankfein said "doing God's work!"
Bernanke knows Obamacare may be "defunded" and other excesses curbed, and he doesn't like that. His stewardship of the Fed is not to maintain status quo but to expand its power, its "credit" base worldwide, to continue the momentum his predecessors started. He doesn't have to curry favor with politicians, since they love to spend and he provides the means to do so across national borders and in all commodities sold worldwide. So long as that function maintains any semblance of order, the Fed goes on and on, gathering more followers in every year.
I would love to see a return to "sensible accounting" but I am hard pressed as to what constitutes "sensible" these days. When I began investing, one looked at the real property on balance sheets. In today's tech driven world, the definition of value is more cloudy than ever before, especially since all transactions and exchanges are literally fabricated from thin air and deposited in "The Cloud".
The third dimension is printing money as if it was a magic wand to create everyone's dream.
All I know is that when I travel the world, (and I do every year) I see people who have never lived so well in any other time in history, including the poor and downtrodden. I know the American Century has something to do with that but I also know the British Empire had almost the same effect in its time at bat and I am waiting to see what happens, progresses next.
Alas, I don't have much time to assay such things. At coming of age at 89, I may have to settle down here in Florida in my small villa and get reports second hand.
I do love your approach and you can be assured I will be reading you as you write.
Reader Rick comments on the moral hazards of Fed policy.
The title of Megan McArdle's article is "Banking Without Risk Is Impossible", yet she supports a policy that creates moral hazards. Instead of a system where both parties take a risk, one party is off the hook. This leads to bad lending policies because there are hardly any consequences to bad lending policies.
Indeed, as it stands banks are always bailed out at taxpayer expense, the very epitome of "moral hazard". In effect, the Fed encourages excess risk taking, and bubbles are the inevitable result.
True Meaning of Banking Safely
Reader Bruce pinged me with his thoughts on teaching his children the true meaning of "risk-free".
I have tried to educate my children on this very subject. We as a family are working our way to being debt free.
This is the only way I can see to bank safely. We have purchased rental property, business property, and are in the process of paying off our last home. We are also building up a large cash reserve (aware that inflation takes it toll).
We also have gold reserves, and liquid assets.
Owning property free and clear, especially income property, gives one options that those with mortgages don't have.
Thanks to all who wrote regarding fractional reserve lending (whether I commented or replied).
And also thanks to many of those who commented on Attack of the "Digger Bees".
Yes, I knew that "digger bees" (yellow jackets) are not bees but wasps.
Bees, as many readers pointed out are generally docile. I like bees actually and put out a "humble bumble" home and nests for mason bees.
We are looking into the EpiPen antidote system, because this is now the third stinging event regarding yellow jackets on my property.
Mike "Mish" Shedlock
s I watch the latest polls from Germany there are numerous outcomes, none of which will be pleasing to chancellor Angela Merkel, except outright victory by CDU/CSU +- FDP.
If anything but a CDU/CSU +- FDP majority happens, the chancellor will face seriously unwelcome choices.
For example: Reader Bernd pinged me with this comment yesterday "I just watched the last TV discussion. SPD has made it clear that EUROBONDS will be part and parcel of the package, if they come in with a coalition. Merkel was dead set against those up to now. Grand Coalition ??"
Indeed. Recall that Merkel is dead set against Eurobonds. Also recall eurobonds are against the German constitution.
And what is the price to pay for other coalitions?
Grand Coalition or Grand Fantasy?
A close friend continually points out: the German population wants a "Grand Coalition". And I agree with his assessment. But politically speaking, how stable would it be?
That is Merkel's concern, and that is why she is on a public campaign for voters to not split their votes.
But what if that is not good enough?
Here are the latest polls.
As INSA reports things, there are numerous possibilities.
Give or take a mere 1-2% there are many possibilities.
The only coalition that does not pose serious problems for Merkel is #3: CDU/CSU + FDP.
Mainstream Media Finally Catches On!
I have been talking about these issues since March. On September 19, CNBC finally reports Anti-euro party powers ahead as German elections near.
With just days to go until Germans head to the polls, the likelihood of Chancellor Angela Merkel retaining her crown grows ever larger. But Germany's establishment could still be in for a shock.
On Thursday, the anti-euro Alternative fur Deutschland (AfD) hit the 5 percent threshold for the first time that parties need to gain a seat in parliament, according to an INSA poll. The poll suggested Merkel may not be able to re-form her center-right coalition with the liberal FDP.
The poll gave Merkel's CDU/CSU coalition 38 percent of the vote, while the FDP got 6 percent. Their combined 44 percent would not give them a majority in parliament.
If the AfD makes it into parliament and the current liberal coalition partners don't, the party could prove a headache for Merkel. She will be faced with tough talks to form a new "grand" coalition and would have to join forces with Steinbrueck's SPD.
The margin of error on these polls is +-3% and given the 5% threshold, that makes many of the polls useless.
But notice the trend. And the trend by media was to completely ignore the possibility that AfD would make it into parliament.
The secondary trend assumption was that a "Grand Coalition" was likely.
While a "Grand Coalition" is possible, it is not a given, just as I have stated. And if it does happen, it will not be stable, as demand after demand will be placed on Merkel.
Biggest Political Chameleon in History
Of course Merkel could be ready and willing to sell voters straight down the river. Otherwise, some major compromises are in store.
The above discussion assumes that Merkel is really against Eurobonds except as a matter of political expediency. Is she? Or will the biggest political chameleon in history change colors once again?
Barring an outright majority by CDU/CSU + FDP, we may soon find out.
Mike "Mish" Shedlock
Steen Jakobsen, Chief economist at Saxo Bank in Denmark, pinged me today with his thoughts on "the morning after" and "price discovery".
In my opinion these two paragraphs of the FOMC Statement are the key ones:
- The Committee sees the downside risks to the outlook for the economy and the labor market as having diminished, on net, since last fall, but the tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market.
- The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, but it anticipates that inflation will move back toward its objective over the medium term.
#1 – Tighter monetary conditions clearly concerns them – the only reason for forward guidance as per Vice-chairman Yellen is to “direct market” to FOMC central projection – this got out of control and we now effectively have not only a put on the stock market, but also a put on the bond market. The whole financial market is now “government controlled” – Price discovery has been reduced close to ZERO – as even the term-premium (expected rate expectations) is ignored and considered invalid by Fed and its merry men.
# 2 – The wording is mild, but it’s a real concern. I have no doubt inflation, or lack of, played bigger role than anything else in taking decision to not taper. An economy with weak inflation, is an economy with excess capacity – An economy with excess capacity is not an economy healing and creating jobs – hence – Fed also de facto yesterday stated: the unemployment rate is invalid to use as gauge for future monetary policy but also as statistical indicator.
Whole Financial Market Government Controlled
In regards to Steen's comments "The whole financial market is now “government controlled” – Price discovery has been reduced close to ZERO", I agree 100% (for now).
But will "control" last forever? If you think it will, then why did we have a housing and stock market crash?
In regards to inflation, I have to shake my head. Inflation is not a good thing, not now, not ever. And with so many boomers headed into retirement on fixed income with few assets, inflation is even more crippling.
I have a question: Does the following chart look like price stability?
Inflation Targeting at 2% a Year
The next chart will show you what happens when wages do not keep up with prices.
Real Disposable Personal Income Per Capita Detail
The above two charts from my post Huge Problem With Bernanke's 2% Inflation Target Explained in Pictures.
Click on the link for still more charts.
Is Inflation Really Under 2%?
I think not. In fact I know it isn't. You just have to know where to look.
Inflation is only under 2% if you ignore soaring money supply, the stock market bubble, bond market bubbles, a reblowing of the housing bubble, and other global bubbles.
And what is so magical about 2% anyway? Why not 1%, 3%, 5% or some other number?
Actually any price-inflation target is ridiculous. Price targets of any kind cannot accurately be measured precisely because price targets, by definition, ignore asset bubbles (including housing, which is not directly a part of the CPI).
And didn't we go down this path before? Twice?
Yes we did: first with a dot-com stock market bubble, then with an even bigger credit-housing bubble.
Was there anything stable about that? Indeed not. The Fed has a history of blowing bubbles of increasing amplitude over time.
Ridiculous Comment of the Day Revisited
Yesterday in Ridiculous Comment of the Day, I took exception to statement made by Paul Denoon, head of emerging-market debt at AllianceBernstein Holding LP (AB), who regarding the Fed's decision not to taper said "This creates stability."
My reply ...
Really? The Fed buying $85 billion in assets a month creates stability? Denoon must live in Bizarro World along with Ben Bernanke and the rest of the Fed.
In Fed Bizarro World; One-Sided Risk Assessment; The $64 Trillion Question I asked "How in the hell is the Fed going to normalize interest rates with a recovery in full bloom, with interest rates three or four full percentages points below normal?"
Some people prefer short-term stability even when the outcome is long-term disaster.
Is the Fed doing all of this on purpose? I think not. For further discussion, please see Purposeful Class Warfare? Breathing Room for Rupee? Sheer Stupidity?
Not My Fault Says Bernanke
Whether on purpose or not (and I strongly suggest "not"), the result is the same and it looks like this comic from Merk Investments, via email from Steen.
Bernanke Wants 2% Inflation in a Deflationary World
Here's the problem in a nutshell: Bernanke Wants 2% Inflation in a Deflationary World; Who Pays the Price?
Asset bubbles and massive income inequality are the direct results of Fed policies.
For still more reading, or in case you are unconvinced about who is to blame, please see Reader Asks Me to Prove "Inflation Benefits the Wealthy" (At the Expense of Everyone Else).
Even though the problem is the Fed (central banks in general), coupled with fractional reserve lending and pseudo-money created out of thin air, many seriously misguided souls (including Keynesian high-priest Paul Krugman) think the answer is a destabilizing rise in the minimum wage and still more inflation!
Mike "Mish" Shedlock
The quote of the day goes to David Stockman. In a Bloomberg video, Stockman claims (and I agree) "Bubbles Ben to be Replaced by Calamity Janet".
They are stumbling into the endgame of this whole misbegotten spree of QE, ZIRP, and massive manipulation of financial markets.
We are going to basically replace bubbles Ben with calamity Janet.
She has no clue how to wean wall street from the pathetic addiction to this massive stimulus, easy money that has been going on for the entire century.
I backed that up because she has spent her whole life as a monetary bureaucrat in the Fed system, and has no clue what honest capital and genuine free markets are about.
[She] believes the entire system has to be run by a monetary politburo, turning all the dials and short-term interest rates and yield curves and the entire financial system.
She is part of group-think, part of the Keynesian consensus that 12 people are running at $16 trillion economy.
They are delusional.
Link if video does not play: Yellen Has No Clue How To Run the Fed
David Stockman was Ronald Reagan's Budget director.
Stockman is also the author of The Great Deformation: The Corruption of Capitalism in America and the #1 New York Times bestseller The Triumph of Politics: Why the Reagan Revolution Failed.
For more on Stockman, please see ...
End of U.S. Imperium—Finally!?
Heart of the War-Mongering Hypocrisy
Stockman nails the heart of US war-mongering hypocrisy with this question [on Syria]:
"After having rained napalm, white phosphorous, bunker busters, drone missiles, and the most violent machinery of conventional warfare ever assembled upon millions of innocent Vietnamese, Cambodians, Serbs, Somalis, Iraqis, Afghans, Pakistanis, Yemeni, Libyans, and countless more, Washington now presupposes to be in the moral-sanctions business?"
There is much more in the article. Please take a look.
Mike "Mish" Shedlock
On September 16, Spain's economy minister, Luis de Guindos, said Spain on Track to Meet Budget.
Spain is on track to meet the 2013 budget deficit target it agreed on with its European Union partners and should emerge from recession before the end of the year, the economy minister said on Monday.
After the financial crisis burst Spain’s construction bubble in 2008, “no doubt 2014 will be the first year when Spain will have some recovery,” the minister said.
Given the depth of Spain’s recession, the European Commission agreed in May to give Madrid more time to reach its budgetary targets. Mr. de Guindos said he expected Spain’s deficit to fall to the new target of 6.5 percent of gross domestic product — rather than the initial target of 4.5 percent — from 7 percent last year.
Although officials from the International Monetary Fund and other creditors started another review of Spain’s banking progress on Monday, Mr. de Guindos suggested that “Spanish banks don’t have an important capital need,” implying that Spain would not require an extension of its bank bailout.
How many lies and distortions can one man present in a few short paragraphs?
If by some miracle Spain meets this year's target, it is only because the target changed 4 times in the past two years.
Yet, I still have to ask: how likely is that?
Spain Budget Deficit Soars
On September 17, Dow Jones Business News reported Spain Budget Deficit Soars
Spain's government said late Monday the country's budget deficit stood at 5.3% of gross domestic product in the first seven months of the year, an indication that the euro zone's fourth-largest economy may miss its deficit target for the fourth consecutive year.
Spain is looking to bring its budget deficit to 6.5% of GDP this year, down from 10.6% last year. The target, set by the European Union Commission, was already relaxed earlier this year from a previous 6.3% of GDP, but many economists say even the easier target may be hard to attain, as the economy was in recession at least until the second quarter, and only moderate economic growth is anticipated in the second half, which should keep tax receipts at low levels.
Just Monday, think tank Funcas said 19 economists surveyed were expecting, on average, that the economy will grow 0.1% in the third quarter from the second, and Spain will post a budget deficit of 6.7% of GDP for the full year. The economists surveyed are also expecting that Spain will miss next year's deficit target, of 5.5% of GDP.
This is important because a string of large deficits has driven Spain's government debt to the highest level in over a hundred years. Last week, the country's central bank said debt stood at 92.2% of GDP as of June--well above the year-end target of 91.4% of GDP.
This reinforces the view held by many private sector economists, and the International Monetary Fund, that Spain's government debt will rise significantly above 100% of GDP before it peaks, despite government assurances to the contrary.
Spain's Budget Deficit €54 Billion Through July
Via translation from Guru's Blog, please consider Spain's Budget Deficit Rises to €54 Billion Through July.
Let's try not to lose the debt and deficit data since our politicians have a special ability to change forecasts as if nothing had happened.
The deficit totaled €54.293 billion in the first seven months of the year, and representing 5.27% of GDP against a target of 6.5% set for the full year, according to the latest data released Monday by the Ministry Finance and Public Administration.
The odds of meeting the deficit target, barring last-minute window dressing is quite low.
Total government debt is €947.184 billion, a new record. The ratio of public debt to GDP level is 92.6%, according to the Bank of Spain.
Recall that in September 2012, the government forecast for year-end 2013 was debt-to-GDP ratio 90.5%. Unless miracles, we will be well above that figure.
By the way, the total debt of €87.660 billion in short-term securities matures within one year.
Is Spain going to meet even four-times reduced targets? I highly doubt it.
Mike "Mish" Shedlock
Anyone smart enough to withdraw from the race to replace Ben Bernanke
as next Fed chairman must have something on the ball, at least
The Larry Summers' haters got their wish today as Summers withdrew his name from consideration.
Summers called president Obama, then issued a a formal withdrawal letter stating "I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration or, ultimately, the interests of the nation's ongoing economic recovery."
In response, the White House issued a statement "Earlier today, I spoke with Larry Summers and accepted his decision to withdraw his name from consideration for Chairman of the Federal Reserve. Larry was a critical member of my team as we faced down the worst economic crisis since the Great Depression, and it was in no small part because of his expertise, wisdom, and leadership that we wrestled the economy back to growth and made the kind of progress we are seeing today. I will always be grateful to Larry for his tireless work and service on behalf of his country, and I look forward to continuing to seek his guidance and counsel in the future."
Barry Ritholtz at the Big Picture mocked the withdrawal with a spoof Translated into Truth: On Summers Withdrawing Name
“Earlier today, I spoke with Larry Summers and accepted his decision to withdraw his name from consideration for Chairman of the Federal Reserve.Will Yellen Be Any Better?
Larry was a critical contributor to the radical deregulation that was one of many causes of the worst economic crisis since the Great Depression. It was in no small part because of his lack of expertise, false wisdom, and inept leadership that the economy crashed and burned and even today is still failing to be to back to its full growth potential.
As Treasury Secretary, he helped to pass the Commodity Futures Modernization Act. This turned derivatives into a unique financial instrument with no oversight, reserve requirements, mandated disclosures, or listing minimums. The CFMA all but guaranteed that Derivatives would eventually implode. Summers further contributed to the crisis by Summers by overseeing the repeal of Glass Steagall. With this firebreak between Wall Street and Main Street effectively removed, the financial conflagration of 2008 spread from Wall Street to every corner of the economy.
Further, his terrible advice and lack of insight is in large part the reason we see so little progress being made today — the lack of economic growth, the concentrated bank power, the still dangerous financial system and of course, the sub par job creation.
I will always blame Larry for the way he damaged my presidency. To anyone who to seek his guidance and counsel in the future, please don’t make the same naive errors I did.
The Detractors WinYellen 100% Assured to Make a Mess
The detractors win both sides. Neither Yellen nor Summers is qualified. In fact, there is not a single person who would take the job that is qualified. There should not be a Fed at all.
The idea that a group of economic wonks can sit down and micromanage the economy to health is preposterous. Central bank clowns have proven time and time again they have no idea what the interest rate should be.
A massive bubble in dotcom stocks followed by a massive bubble in housing is proof enough. And this Fed on which Yellen sits has triggered asset bubbles in stocks and bonds and she cannot even see it.
Crisis Management Needed
Curiously, lots of analysts suggest we do not need Larry Summers because there is not going to be another crisis.
Rest assured there will be another crisis, and much sooner than most think. But that does not make Summers qualified. His role is to help create crises, not stop them.
Tweedle Dum vs. Tweedle Dee
The only candidate that makes sense is the candidate who will set a target date to end the Fed. Unfortunately, no such candidate is on the short list.
The choice is between Tweedle-Dee who rates to slosh money around even more than Bernanke in a futile effort to create jobs, and Tweedle-Dum who will do whatever Wall Street wants.
Practically speaking, is there really a difference?
France operates an “immense” surveillance system of telephone, email and internet traffic similar to the US operation revealed last month by whistleblower Edward Snowden, Le Monde newspaper reported on Thursday."Margins of Legality"
Like the systems apparently operated by the National Security Agency in the US, the DGSE surveillance covers the identity, place, date, duration and “weight” of telephone calls, but not the content.
Similarly, the “metadata” of text messages, faxes, emails and “all internet activity” on networks run by companies such as Google, Facebook, Microsoft, Apple and Yahoo are collected, Le Monde said.
President François Hollande reacted sharply to Mr Snowden’s allegations that the NSA had spied on EU and European offices, including the French embassy in Washington.
He said such activities were “unacceptable” and should “cease immediately”. He has called for a full explanation from the US government, linking any progress on key EU-US trade talks due to start next week to full disclosure from Washington.
Paris insisted it does not spy on its allies, but Mr Hollande’s outburst raised some sceptical eyebrows among the diplomatic community in the French capital.
Le Monde said the DGSE system was conducted with “complete discretion, at the margins of legality and outside all serious control”.
It quoted Bernard Barbier, technical director of the DGSE, as saying at public seminars that France “probably has the biggest information centre in Europe after the English”.
If the revelations about the U.S. spying program Prism led a chorus of indignation in Europe , France, she did minor quibbles. For two good reasons: Paris already knew. And does the same thing.Don't Worry It's Only "Alegal"
The World is able to prove that the Directorate General for External Security (DGSE, the services special) systematically collect electromagnetic signals from computers or phones in France, as well as flows between French and abroad: all our communications are spied. All e-mails, text messages, telephone records, access to Facebook , Twitter , are then stored for years.
If this huge database was used by the DGSE who officiates as outside French borders, the case is already illegal. But six other intelligence services, including the Central Directorate of Internal Intelligence (DCRI), customs or Tracfin service fight against money laundering, including the data that draw interest daily. Discreetly on the sidelines of the legality and beyond serious control. Political know perfectly, but the secret is the rule.
An Illegal Device
This Big Brother French, brother of U.S. services is illegal. However, its existence appears discreetly in parliamentary documents.
The Target: "Metadata"
DGSE and collecting the phone records of millions of subscribers - the identifier of the calling and called the place, date, time, the weight of the message. Same for mail (with possibility to read the mail subject), SMS, fax ... And all Internet activity, which involves Google , Facebook, Microsoft , Apple , Yahoo! ... This is what the parliamentary delegation intelligence rightly calls "the signals intelligence" (SIGINT), translation of SIGINT (signal intelligence) of the NSA.
Supercomputer at Boulevard Mortier
DGSE and collecting trillions of data compressed and stored in Paris, on three levels, boulevard Mortier, in the basement of the headquarters of the DGSE.
Bernard Barber then spoke of the "development of a computer-based FPGAs" (programmable logic circuits), which is "probably the biggest center computer in Europe after the English ", able to handle tens of petabytes of data - that is to say tens of millions of gigabytes. The heat generated by the computers enough to heat buildings DGSE ...
Lack of Control
The device is completely illegal - "a-legal", corrects one of the bosses of the intelligence agencies "The legal regime for security intercepts prohibited implementation by the intelligence services of such a procedure. Prism that ensures the National Commission on Informatics and Liberties ( CNIL ). Each requisition for data or interception is targeted and can not be done on a massive scale, as quantitatively as temporally. Such practices would therefore legally unfounded.
An unambiguously wrong, disruptive and often deliberately committed act for which there is not yet a specific law making that act expressly illegal. (See Extralegal) Financial and white collar crimes, such as offshore banking, misrepresenting the value of investments and temporarily selling 'junk' assets to create cashflow are prime examples of "a"legal activities. Alegality is a corollary of the distinction between amoral and imoral reasoning as applied to legality.Mish Definition of Alegal
Broker#1: We're putting together a portfolio of failing investments so we can sell it investors then short against it and make a killing.
Broker#2: Isn't that illegal?
Broker#1: Nope, just alegal... Now lets get some lattes.
Open Letter to Obama and Congress From Internet Giants Calls For Reining In Government Surveillance | Nick Sorrentino
(An important interview) Saving the Net from the surveillance state (And Crony Media): Glenn Greenwald speaks up (Q&A) | Nick Sorrentino