Boy, when you think you’ve seen the worst in utterly shameless, self serving tripe, someone manages to outdo it. Admittedly, it’s awfully hard to beat Steve Schwarzmann’s recent one-two punch of utter canard wrapped in tasteless hyperbole, that of Obama proposals that private equity kingpins pay taxes on what is really the fruits of their labor like other working stiffs was a ” a “war… like when Hitler invaded Poland in 1939.”

But no, Pimco’s Bill Gross bests Schwarzmann in making it clear to the great unwashed his unabashed belief that what is good for him is good, period. Schwarzmann is a tad less horrid by at least limiting his grandiose claims to his own industry. Gross is marginally less offensive to good taste (although a discussion of his body odor in an investment piece is certainly a novel wrinkle), but makes it up by insulting his audience’s intelligence, namely, by presenting himself as a staunch ally of the little guy. READ MORE

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A lot of negative emotions accompany hardship: frustration, despair, fear, and doubt. People ruled by those feelings often make poor choices. This is why I recommend that you decide now to respond to troubled times the way the Israelites did: with praise. Even in the darkest hours, worshipping God fills the heart with joy and the mind with peace. A believer who is filled in this way can wisely keep a commitment to obey the Lord no matter what.

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Capital goods orders widely miss expectation, coming in at +0.3%, on a consensus of +2.8%, with the previous -1.2% drop revised to just -0.1%. Durable goods ex transportation came in at -3.8%, on expectations of 0.5% (previous -0.9% revised to 0.2%). And the kicker - non-defense capital goods ex. aircraft came in at -8.0% M/M versus expectations of 0.4% (with the previous print of 0.2% revised far higher to 3.6%). The 10 Year has hit 2.439% on the news. Pretty much game over for the reflation scenario. Check to you Bernanke - the only option left is the nuclear one.

Some highlights from the release:

Computers and electronic products, down following four consecutive monthly increases, had the largest decrease, $0.5 billion or 0.4 percent to $121.1 billion.

Inventories continue to grow:

Inventories of manufactured durable goods in July, up seven consecutive months, increased $1.8 billion or 0.6 percent to $311.2 billion. This followed a 1.3 percent June increase.

Machinery, up five consecutive months, had the largest increase, $0.9 billion or 1.9 percent to $51.4 billion.

Capital goods:

Nondefense new orders for capital goods in July decreased $1.8 billion or 2.8 percent to $64.1 billion. Shipments increased $0.9 billion or 1.4 percent to $64.7 billion. Unfilled orders decreased $0.6 billion or 0.1 percent to $487.2 billion. Inventories increased $1.0 billion or 0.8 percent to $129.8 billion.

Full release.

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The often ridiculed (for some incomprehensible reason) John Taylor of FX Concepts is once again proven spot on with his EUR top call, which came when the European currency was at 1.33, at about the time when Goldman reinforced its long EURUSD call. A few weeks and 6% lower, here is Goldman explaining what they really meant (again). In a nutshell - despite the transitory economic boost driven by a plunging EUR export-boom is over, Goldman is hopeful the lingering effects will remain forever. And Goldman continues to be very bearish on the dollar, for one simple reason: "Our expectations for sizeable [sic] additional QE by the Fed will only add to the Dollar negative mix towards the end of the year." We are waiting for the Jackson Hole announcement with bated breath: rumor is the Chairman has mastered the alchemy process of converting linen to gold, and will commence printing the shiny metal shortly.

From Goldman's Thomas Stolper

Recent EUR Negatives

Since early August three main developments have coincided with the renewed decline in EUR/$: politics, rate differentials and risk sentiment.

On politics, there has been a raft of small news items, which taken together suggest the Euro-zone crisis this spring has not yet been forgotten and market sensitivities remain. Among the headlines that have emerged in recent weeks were the announcement of a general strike in Spain for late September and the later-denied speculation about a new stimulus package, also in Spain, which could have undermined fiscal consolidation efforts. Rumours about potentially large job cuts in Greece on the back of the austerity program highlighted that many people are yet to experience the fully impact of the tightening. And finally some Irish banks were perceived to be under increased pressure once again. READ MORE

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The Gulf Crisis is Not Over

Slow Violence and the BP Coverups

By ANNE McCLINTOCK

Three vanishing acts are being played out in the Gulf: the disappearing of the oil from the ocean surface by Corexit, the disappearing of the story by the media blockade, and the disappearing from view of the shadowy private contractors who are making a mint helping BP and the Coast Guard keep a cover on the clean-up. This triple vanishing trick, collectively choreographed by BP and sundry federal agencies, culminated on August 4th in a report released by NOAA that claimed 75% of the oil spill had been captured, burned, evaporated or broken down. The White House hailed the report as something to celebrate. Energy advisor Carol Browne announced: “the vast majority of the oil is gone.”

A clamor of outrage immediately rose from the Gulf, as residents refused to dance the crisis-is-over, happy-feet dance. Hundreds of locals furiously insisted that they were still seeing masses of oil on ocean, beaches and marshes, and dead fish, dolphins, sharks, birds and other marine life washing ashore. Then on August 18th scientists from the Universities of Georgia and South Florida produced an open challenge to the White House report, asserting that 70% to 79% of the oil in the Gulf still remained in the water. Charles Hopkinson, a professor of marine science at the University of Georgia declared: “The idea that 75% of the oil is gone and of no concern to the environment is just absolutely incorrect.”   READ MORE

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WASHINGTON (MarketWatch) -- The sale of existing U.S. homes sank 27.2% in July -- the biggest one-month drop ever -- largely because of the phase-out of a federal tax credit, according to an industry trade group.

The National Association of Realtors said existing-home sales fell to a seasonally adjusted annual rate of 3.83 million in July from 5.26 million the month before. Sales of single-family homes fell to the lowest rate in 15 years.

A year earlier, existing home sales totaled 5.14 million in July.

Inventories of unsold homes rose 2.5% to 3.98 million, representing a 12.5-month supply, the highest level since at least 1999, the trade group said. And the supply of unsold single-family homes reached its highest rate since 1982. Read the full report on the NAR website.

READ MORE

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The Global Perspectives Update team invites your comments here on the featured, 'On The Edge with Gerald Celente'.

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Courtesy of Jesse's Cafe Americain

Thanks to Janet Tavakoli for a great takeoff on Milligan's classic laugh.
 

It’s September 2008. Goldman and AIG are trading in the markets, and Goldman notices that AIG seems to be having very severe liquidity problems. AIG needs to renew repo agreements after investing the trades’ cash in plunging mortgage collateral bought from investment banks, and asks around for various other sources of funding.

Recognizing an emergency, Blankfein whips out his cell phone and calls Hank Paulson. He gasps to the Treasury Secretary and former Goldman CEO: "AIG, one of my favorite trading partners is going under! This will cause a market meltdown! What should we do?"

Paulson, in a calm comforting voice says: "Take a deep breath and pull yourself together. I can help. First, let's make sure AIG is really going under."

There is a long pause, during which Blankfein checks the status of his credit default protection and other hedges against an AIG failure, yanks AIG’s credit lines, and presses AIG with calls for collateral on credit default swap agreements on plummeting CDOs.

Blankfein’s voice finally comes back on the line. He says: "OK, now what?"

Spike Milligan's Original

Two hunters are out in the woods when one of them collapses. He doesn't seem to be breathing and his eyes are glazed. The other guy whips out his phone and calls the emergency services. He gasps, "My friend is dead! What can I do?".

The operator says "Calm down. I can help. First, let's make sure he's dead."

There is a silence, then a shot is heard.

Back on the phone, the guy says "OK, now what?"

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VIDEO HERE

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