Econstorie’s latest video. While watching HFT algos trade the no volume melt up SPX market, you might get some insight into the academics of  Keynes and Hayek in this video.

Silver pushing higher again. The ETF is breaking up to new highs while the Usd slowly but surely is dissapearing.

Excellent video on the issue of Us Debt and the Usd as a world currency.

“From a bookkeeping point of view, Standard & Poor’s is absolutely right. U.S. spending policies are out of control; they’re not showing any sign of being fixed in the near future. That said, the U.S. is a special case because it is a country that can manipulate the currency policy of the entire global system for its own benefit, and as we’ve seen in the past, the Federal Reserve really doesn’t have a problem doing that.”(Stratfor)

SPX this week, adjusted for the Usd decline, is actually small negative, despite all the bulls screaming about the great performance. Usd falling off the cliff is not good long term. Even export led companies in the Us are starting to complain about the collapsing Usd. (Black line SPX, red line DXY index).

What happened actually to Mr Weber? We’ll probably never get to know. Congratulations to Draghi, and Goldman Sachs. Beside Geithner & Co, all ex “Goldmaners”, it looks like we will get another “Goldmanite” ruling the European centralbank.

Full story below,

http://www.bloomberg.com/news/2011-04-27/spain-calls-draghi-excellent-choice-for-ecb-isolating-merkel.html

What if we didn’t have that QE2? GDP has now been plunging below alla estimates compared to some months ago. Will QE3 help the economy instead?

Silver has been enjoying a tremendous run. If this is a bubble forming or not, is yet too early to conclude. Judging by the volumes during the last trading days, we can definitely conclude people are getting involved, and HFT algos have a new great product to trade.

One of the themes we have been discussing during the past monts, is the increasing inequality of the American wealth. The rich are getting overly rich, while the middle and low class aren’t getting any of the benefits. Long term this is a dangerous path that could lead to unwanted consequences.

“We’re not broke. We’ve been robbed by the super-rich and big corporations who are raking in the cash and running up the deficit. Our economy is still more than twice as large as any other country in the world. With 4% of the world’s population, we generate 24% of its wealth. We spend more on our military than almost all other nations combined and more than twice as much per person on health care as other developed countries. But over the past three decades, the rich have gotten richer while their tax rates have plummeted. While the income of the richest 400 Americans quadrupled — they now have more wealth than the 155 million Americans on the other end — their effective tax rates were cut almost in half.” (Newdeal, Richard Kirsch)

http://www.newdeal20.org/2011/04/25/we%e2%80%99re-not-broke-we%e2%80%99ve-been-robbed-42676/

http://blogs.reuters.com/prism-money/2011/04/27/sell-in-may-and-go-away-stock-strategists-not-so-sure/

Must see video,

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2755

Taleb: “The map into this terrain is quite difficult to follow. You have to avoid having things fail too late. You have to avoid debt because debt makes the system more fragile. You have to increase redundancies in some spaces. You have to avoid optimization. That is quite critical for someone who is doing finance to understand because it goes counter to everything you learn in portfolio theory…. I have always been very skeptical of any form of optimization. In the black swan world, optimization isn’t possible. The best you can achieve is a reduction in fragility and greater robustness. You may have heuristics, but not an optimization rule. I hope the message will finally get across because I haven’t succeeded yet. People talk about black swans but they don’t talk about robustness, which is the real lesson of the black swans.

Evolution works not with bailouts — there are no bailouts in nature — but with competition and natural selection. So you need to have some stressors and to use stressors to strengthen the system. We have not been stressed enough about the oil crisis, and it has led to a horrible situation in which the U.S. government is playing a hypocritical role driven by humanitarian forces in Libya, but at the same time supporting the Saudi royal family, essentially one tribe running a place — even giving its name to it. It is the most unstable place and the most backward of regimes in the world — all in the name of oil security.

We did not have a recovery. What we had is massive reliance on the printing press for more money. Did your tax base improve? No. Otherwise you wouldn’t have $1.3 trillion in expenses. So we are fooling ourselves with numbers….

You are eventually going to pay back this fake growth — [which is] sort of like Madoff style growth. Is it growth? Well, it looked like growth but it’s not really growth if you discount it by the probability that you have to pay it back.”

(knowledge@wharton)

Full transcript,

taleb