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Vol.

02 Issue 22 | 08 November 2015

Things that make you go

SPECTRE

"SPECTRE always delivers what it


promises. Our entire organization
survives upon the keeping of those
promises..."
Ernst Stavro Blofeld, From Russia With Love

"This organization does not


tolerate failure"
Ernst Stavro Blofeld, You Only Live Twice

Things that make you go

Table of Contents
THINGS THAT MAKE YOU GO HMMM........................................................................................ 3
Ill Eat My Hat If We Are Anywhere Near A Global Recession............................................. 25
Why 2016 May Be The Most Important Election Of Our Lifetime......................................... 26
The Devils In The Debt........................................................................................................ 28
No Team? No Idea? No Problem! This VC Will Fund Your Startup Anyway ......................... 29
Companies Cash In Through Creative Bond Scheme......................................................... 31
Change In The Air................................................................................................................ 33
Cracks Are Showing In The American Dream...................................................................... 35
The German Governments Role In The VW Scandal.......................................................... 36
Communists Ready To Assume Power In Portugal & Topple Conservative Government..... 38
Deflation Risks May Warrant Radical New Central-Bank Thinking ..................................... 39
CHARTS THAT MAKE YOU GO HMMM... ................................................................................. 41
WORDS THAT MAKE YOU GO HMMM... .................................................................................. 44
AND FINALLY... .......................................................................................................................... 45

03 25 44
2

Things that make you go

THINGS THAT MAKE YOU GO HMMM...


SPECTRE

he Special Executive for Counter-Intelligence, Terrorism,

Revenge and Extortion is an organization which despite its


menacing name, has spawned nothing but wonderment and joy
in the minds of multiple generations of spy novel fans all around
the world.
I know. I was (and unashamedly remain) one of them.
Ian Flemings James Bond novels gripped espionage fans in the 1950s, but it
wasnt until 1962 and the appearance on movie screens of Sean Connery, an unknown
Scottish actor who first brought the role of James Bond to life, that the whole world fell in love with
Flemings gentleman spy.
Beginning with 1963s From Russia With Love and continuing with Thunderball in 1965, You Only
Live Twice in 1967, On Her Majestys Secret Service two years later and Diamonds Are Forever in
1971, though the various threats to the world took the form of distinctly different dastardly plots, each
designed to secure world domination, one single, shady organization, from which this weeks Things
That Make You Go Hmmm... (and, I should probably add, the latest James Bond movie) takes its title,
was behind them all.
SPECTRE was a commercial, very much for-profit enterprise led by Ernst Stavro Blofeld and run like
a multi-national company. The board was populated by 21 people18 of whom were responsible
for the handling of the companys day-to-day affairs. Those 18 people were drawn, in groups of
three, from six of the worlds most nefarious organizations; the Gestapo, SMERSH (Spetsyalnye
MEtody Razoblacheniya SHpyonov, a fictional Soviet counter-intelligence agency whose name, when
translated, is: Special Methods of Spy Detection), ex-Yugoslavian dictator, Josip Titos Secret Police,
the Mafia, the Franco-Italian Unione Corse (subject of the movie The French Connection) and a
Turkish heroin smuggling syndicate.
In short, not the sort of people youd choose to do business with.
Fleming fails to document which of SPECTREs various criminal factions was responsible for the
HR department or for procuring all those single-colour jumpsuits that the organizations employees
seemed to always be forced to wear, but he did at least identify the super-secretive organizations
mailing address (Paris, 136 Boulevard Haussmann).

Things that make you go

What world domination actually looked like was never properly documented in Flemings books.
Presumably it would involve endless paperwork but the perks would doubtless be myriad; a reserved
parking space outside the office, a private bathroom, catered lunches and, one would expect, a
corporate credit card with no spending limit.
Until a few years ago, the closest thing the world had ever seen to Blofeld and SPECTRE was Sepp
Blatters FIFA, but, since 2008, a new organization has risen from the ashes of the Global Financial
Crisisan organization which has been far more successful in securing a level of power that
constitutes some form of world domination than Blofeld managed in an entire series of novels.
Ladies and gentlemen, I give you SPECTRE - The Special Executive for Continually Trying to
Resuscitate the Economy.
This shady organization operates in plain sight but wholly above the law and, though
the international flavour of its executive board is consistent with Flemings criminal
franchise, the public face of SPECTRE shifts regularly.
In short, not the sort of people youd choose to do business with.
Back in 2008, in the midst of a crisis of global proportions,
Ernst Stavro Paulson and the enigmatic Dr. Yes brought
SPECTRE out of the shadows and into the collective
conscious of the world. They did so by seemingly
offering a cunning solution to the fears that
gripped mankind in the wake of the GFCfree money!
Since then, an ever-widening group of SPECTRE luminaries has worked
tirelessly to increase their grip on the world and to achieve their stated aim of world domination
resuscitating the global economy.
With Paulson & Dr. Yes now seemingly retired (presumably, the SPECTRE pension plan is both
defined benefit and, at the very top levels, extremely generous), it has fallen to the organizations #3,
Emilio Dragho to take the reinsaided and abetted by the fearsome Rosie Outlookand
their lieutenants stationed in places as far-flung as London and Tokyo.
But can the modern-day SPECTRE achieve their aims or will they,
like Flemings villainous cadre be foilednot by 007, but rather a
global economy that simply refuses to bend to their will and get off
its knees?

Things that make you go

By the time we reach 2030,


forecasts around the rankings of
the largest economies on Earth
will have changed little (even
though they will all, naturally, be
larger).

15

10

ia

Ko
re
a
S

st

ra
l

da

Au

Ca

na

ia
ss
Ru

a
di
In

ly
Ita

il
Br
az

ce
Fr
an

UK

an
y
G

er

pa
n
Ja

in

0
Ch

Two economies dwarfed the next


12 largest nations and, of course,
those two countries were the US
and China.

(Nominal GDP - $ tln)

20

As of the end of 2014, the worlds


major economies were in various
states of decay relative to both
their historical levels and where
SPECTRE needs them to be if
they are to declare victory.

Worlds Largest Economies - 2014

US

Its true, theyre already further


down the bumpy road to world
domination than Blofeld ever
traveled, but the rubber is
starting to meet the road and the
time is fast-approaching when
SPECTREs plans may need to
include a stolen nuke or two.

Source: IMF

Worlds Largest Economies in 2030


GDP in 2015
United States
China
India
Japan
Germany
Brazil
UK
France
Canada
Russia
Italy
Mexico
Indonesia
Australia
South Korea
Spain
Turkey
Saudi Arabia
Nigeria
Netherlands

China, India and Brazil are the


big movers with India predicted
to leapfrog both Japan and
Germany as well as the UK,
France, Italy and Brazil in order to
take its place as the worlds thirdlargest economy, while the size of
Indonesias economy is expected
to more than double in the next 15 years.

Projected growth in GDP by 2030


$24.8 trillion
$22.2 trillion

$6.6 trillion
$6.4 trillion
$4.5 trillion
$4.0 trillion
$3.6 trillion
$3.3 trillion
$2.6 trillion
$2.4 trillion
$2.3 trillion
$2.3 trillion
$2.1 trillion
$1.9 trillion
$1.9 trillion
$1.8 trillion
$1.6 trillion
$1.3 trillion
$1.0 trillion
$1.0 trillion

Source: Bloomberg

Clearly, for global growth to perform as forecast, the BRICs are once again going to be expected to do
a lot of the heavy-lifting.
5

Things that make you go

If, however, we look a little deeper at growth rates in key countries, we get a far better understanding
of the problem facing SPECTRE and, despite the soothing tones emanating from the organizations
various regional headquarters, for them to achieve their aims, they are going to have to overcome
forces far more powerful than a martinidrinking, tuxedo-wearing, gun-toting ladies
man.
Lets begin with the United States of America
the biggest economy on earth by some
distance. Clearly, if the global economy is
going to thrive, it cannot carry a passenger as
big as the United States the way it managed to
carry the second-biggest economy on earth,
Japan, for the best part of two decades.
The reason? That was then, this is now and
the stagnation of Japan happened to coincide
with the boom times in China, India and the
rest of the BRICS (as well as other emerging
markets).
Take a look at the OECDs long-term forecast
for the US economy (chart, right).
As you can clearly see, the group of
economists representing the 34 countries
that make up the OECD believe that this year
is essentially as good as its going to get for
the USA as the growth rate slips gently and
steadily lower for the next ohhhhhh.....45 years
(give or take).
Now, the trajectory of the actual prints we have
seen prior to the guesstimate phase period
where forecasts are substituted for concrete
data suggests that perhaps we should prepare for something other than the OECDs planned gradual
demise, but clearly, even if their trend forecast is correct (with broad fluctuations around that line) the
problem presented to the world is a fairly sizeable one.
(Incidentally, if you fancy taking a walk from SPECTREs top secret HQ to that of the OECD, itll take
you about an hour and is really quite a nice stroll through the streets of Paris.)
6

Things that make you go

Where was I? Oh yes, US GDP growth.


The average YoY growth for the US over the last 50 years has been 2.97% which is a pretty decent
clip. Over the last 25 years, it has fallen to 2.43%.
US GDP (YoY %)

US GDP (YoY%)

1965 - 2015

1990 - 2015

6
3

5
4

3
1

2
0

1
0

-1

-1
-2

-2
-3
1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

-3
1990

2014

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

Source: Bloomberg

Source: Bloomberg

US GDP Growth: Fed Model vs Actual GDP

Now, call me old-fashioned, but even I can see the


trends in these two charts and, given that OECD
baseline scenario doesnt have US GDP growth
as low as 2.43% until 2025, I am quite happy to
posit the idea that, as with most forecasts around
US GDP by academic economists or, worse,
government-related entities, a certain rose-tinted
hue can be seen.

2010 - 2014

4.5

Jun 2010

4.5
Jun 2011
Jun 2012

4.0

4.0

Jun 2013

3.5

3.5
Mar 2014

3.0

Worse still is this chart (right), which demonstrates


better than perhaps any other, the triumph of hope
over experience at the real SPECTRE HQ, the
Marriner S. Eccles Building:

2.5

3.0

2.5

2.0

2.0
Actual GDP Growth

1.5

1.5

2010
2011
2012
2013
2014
2015
Sorry folks. Thats not even close (though it does
seem that, given March 2014s forecast, realization
may be finally starting to dawn). What is does do, though, is give a sense of just how skewed the
narrative coming out of the Fed is forced to be.

2016

Source: US Federal Reserve

The talk is (and predictions are) of strengthening growth. The actions (typified by excuse after excuse
to keep rates at zero) suggest something else and that something else spells trouble for the world.
7

Things that make you go

The idea of GDP growth being the best yardstick by which the strength of economies is measured
has come under increasing scrutiny in recent years. The main charge against it its use is that it fails to
capture many exchanges, actions and transactions which are all part of the economy and so the final
number is not representative of the true expansion (or contraction) of a countys economic well-being.
The OECD themselves summed the problem up thus in their 2004-2005 OECD Observer (when
growth, as measured by GDP, was just dandy):
(OECD): If ever there was a controversial icon from the statistics world, GDP is it. It
measures income, but not equality, it measures growth, but not destruction, and it
ignores values like social cohesion and the environment. Yet, governments, businesses
and probably most people swear by it. According to Franois Lequiller*, head of national
accounts at the OECD, part of the problem is that perhaps we expect too much from this
trusty, though misunderstood, indicator... If by growth you mean the expansion of output
of goods and services, then GDP or preferably real GDP which measures growth without
the effects of inflation is perfectly satisfactory. It has been built for this purpose...
The point, though, is that, for all its obvious faultsfaults highlighted by none other than Simon
Kuznets, the man widely acknowledged to have invented GDP as far back as 1934GDP provides a
consistent means of comparison between countries, regions and, crucially, time periods.
However, rather than focusing exclusively on growth, there are a great many ways of measuring
economic health and those benchmarks are perhaps a better indication as to what lies ahead.
In the US, for example, the ground level data have been fairly poor.
Manufacturing ISM is barely above recession levels and, while non-manufacturing has been strong in
recent months, the divergence between them is a worrying sign given their tight historical correlation.
US ISM: Manufacturing Vs Non-manufacturing

US ISM: Manufacturing vs Non-manufacturing


2009 - 2015

62

63

1997 - 2015
DIVERGENCE

DIVERGENCE
60

58

58

53
56

48
54

43
52

38

50

48
Nov 09

33
Nov 10

Nov 11

Nov 12

Nov 13

Nov 14

Nov 15

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: Bloomberg

Source: Bloomberg

Things that make you go

As ZeroHedge reported this week, real economic output is also falling:


(ZeroHedge): ...[real economic
output] is released by the BLS every
quarter, as a product of productivity,
hours worked, and compensation and
then applying a deflator adjustment.
This is perhaps an even more accurate
indication of the true state of the US
domestic economy considering all the
complaints by the Fed over the state
of the global economy and eliminates
the noise from trade which has been
depressing GDP for quarters.
Unfortunately, what the real output data reveals is not pretty. Rising by 2.3% Y/Y in Q3, this
was not only down substantially from 3.4% in Q3 and 3.5% in Q1, but this was the weakest
increase since Q1 2014
But its beneath the surface where the real disconnects between perception and reality lie and there is
nobody better at not only identifying such misalignments, but putting them in the perspective they so
desperately need than the brilliant Stephanie Pomboy of MacroMavens who this week has very kindly
allowed me to share a few short excerpts from a recent piece she published with the wonderful title
The Jerk Store Called... (Seinfeld fans will recognize the reference instantly, but for those among
you who have yet to discover the delights of Jerry & friends, Stephanie kindly provided a link to help
you keep up).
(Incidentally, any institutional readers who dont already subscribe to Stephanies magnificent
work should rectify that immediately (or sooner) by clicking here and finding out more).
Amidst the various problems Stephanie sees within the plumbing of the US economy, she reserves
elevated opprobrium for the inventory overhang about which few analysts are even talking:
(Stephanie Pomboy): ...With tightening credit conditions now quashing all the QE-induced
financial engineering, the distraction from dreadful pricing power is disappearing fast.
As it does, the inventory story Ive been regaling you with for a YEAR will finally come in
to focus. If history is any guide, it wont be pretty. The last four inventory cycles saw profit
growth go from rising +18% y/y on average at the inventory peak, to contracting -5%y/y at
its lows. Gulp!

Things that make you go

Here again, things look bad before


we even get started. As you can
see above, both the BEA and S&P
measures put profit growth at zero
through the 2nd quarter. If estimates
for the 3q (now being reported)
are correct, earnings will post
their second consecutive quarterly
decline. So, the profit recession will
be underway BEFORE the inventory
unwind begins. Yikes!
The fact that only a handful of bright people
recognize something as being wicked most
assuredly does not prevent it from this way
coming.
Stephanie continues:
...If the history shown [chart, right] is
any guide, the de-stocking cycle will
depress growth for many quarters to
comeputting the Fed farther from its
forecasts and its beloved targets.
Heres another scary thought: Imagine
what nominal GDP would look like
had it NOT been for this insane
inventory boom?? Oh. Right. No need
to imagine! Well find out once the
inventory cycle ends.
The average of the last four inventory
cycles saw nominal growth get cut
exactly in half, from an average of 7.9%
at the inventory peak, to 3.9% at the trough. A repeat today would take nominal growth to
just 1.8%. Suddenly 2.1% on the 10-year doesnt look so shabby, does it?!
But it was Stephanies final chart which had me breathing into a brown paper bag like a dowager
having an attack of the vapours. Pray silence for the inventory-to-sales ratio:

10

Things that make you go

Any questions?
Good, because that chart goes back
50 years.
Lets move on. Theres a lot more to
cover.
The combination of an impressively
crowded calendar of Fed governors
speaking engagements this week,
and Fridays absurd shocking
borderline ridiculous strong non-farm
payrolls number has put a December
rate hike very much back on the
cards and the futures market is now
implying a 70% probability for a
25bp increase - the first in almost a
decade. The problem, however (and
it is one we have discussed often in
these pages) is that, based on the
internal state of the US economy
(as well as that of the wider world
across both the sea and the shining
sea), the Fed being forced into hiking
rates even 25bp may be the last thing
anybody needs right now.

Fed Funds Futures: Implied Chance of 25bp Hike


At December 16th 2015 FOMC Meeting
80

70

60

50

40

30

20

10
Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Source: Bloomberg

My good friend Simon Hunt, a


confirmed naysayer about the optical
strength of the US economy also
weighed in this week in an email to
me in which he pointed out a few of
the data points which suggest all is

not well with the biggest dog in the park:


(Simon Hunt): US Real Household Income was released in September and shows how
household income has fallen in recent years with only the top 1% experiencing growth in
income and wealth. In fact the data shows that 60% of the workforce had a real income
that averaged $32,300 in 2014 with 40% having an average income of only $21400.
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Things that make you go

These official income figures hardly suggest that real retail sales are rising let alone
matching the official data. In fact every
Challenger Gray Job Cut Announcements (YoY %)
quintile including the top 5% has
Q3 2012 - Q3 2015
50
experienced a reduction in real household
40
income since their peaks in either 1999 or
30
20
2006; the bottom quintiles income fell by
10
17%, the fourth by 11%, the middle by 7%,
0
the second by 3% and the top quintile by
-10
2%...
-20
-30

Challenger Gray reports that in the third


quarter large US-based corporations
announced a total of 205,759 lay-offs, the
worst quarter since third quarter 2009. So
far this year these lay-offs totaled 493,431,
an increase of 36% over 2014.

-40
-50
-60
-70
-80
Q3 2012

Q3 2013

Q3 2014

Q3 2015
Source: Bloomberg

Then, just as I was ready to move a little farther down the list of those economies supposed to do the
heavy-lifting in the next couple of decades, up popped Fred Hickey with a few more observations of
his own as to the real health of the US:
(High Tech Strategist): Durable Goods orders (reported last week) were down a worsethan-expected 1.2% in September and for the first nine months of the year are 4.6%
lower compared to the same period in 2014...with the exception of autos, retail spending
has been soft, Auto sales have been strong for the same reason housing sales were in
the mid-2000slenders have
Median Expected Change in Household Spending (next 12 mos)
Jun 2013 - Aug 2015
basically abandoned lending
standards...looking forward, the
5.0%
New York Feds latest Survey of
Consumer Expectations shows
that Americans spending plans
4.5%
over the next year are sharply
deteriorating...The long-in-the4.0%
tooth, substandard recovery is
showing signs of rolling over, ed by
declines in industrial production,
3.5%
exports and a weakening
consumer...
3.0%
6/13

8/13

10/13

12/13

2/14

4/14

6/14

8/14

10/14

12/14

2/15

4/15

6/15

8/15

Source: NY Fed Survey of Consumer Expectations/Business insider

12

Things that make you go

Interestingly, both Fred and Simon included a quote from a recent conference call in their summaries
which I had also identified as worthy of inclusion in this weeks Things That Make You Go Hmmm.... It
was this one, from Daniel Florness, the CEO of Fastenal:
The industrial environment is in a recessionI dont care what anybody says because
nobody knows the market better than we do. You know, we touch 250,000 active customers
a month...
Apparently, 44% of Fastenals top 100 customers have reduced spending in the last year. 32 of them
had cut spending by more than 10% and 17 of them had cut expenditure by 25% or more. As Florness
said, Thats a sign of a recessionary environment.
We could go on trying to unravel the mysteries of the US economy for several more pages, but,
instead, lets take a quick tour around some of the other economies which are supposed to be driving
global growth going forward an see how theyre doing.
Firstly, China.
The opacity around Chinese data
is legendary, but some recent
releases cast doubt on how much
slack the Middle Kingdom can be
expected to pick up.

China Manufacturing vs Non-manufacturing PMI


2007 - 2015

63

58

Firstly, like the US, it is seeing


53
a bifurcated economy with the
services sector doing far better
48
than its traditional manufacturing
base. This speaks to a degree
of success in the countrys
43
much-touted transition towards
a services-based economy,
38
HOWEVER, as you can see from
the chart, the trajectory of both
sectors is hardly the stuff of victory
laps and Mission Accomplished banners.

2007

2008

2009

2010

2011

2012

2013

2014

2015

Source: Bloomberg

Secondly, the widely-watched Li Keqiang Index (so-called as it represents the former Premiers
preference for tracking changes in bank lending, rail freight, and electricity consumption to measure
the strength of the Chinese economy as opposed to GDP figureswhich he believed were, according
to a Wikileaks cable, man-made) hardly paints a picture of robust health:
13

Things that make you go

China: Li Keqiang Index


(Bank Lending, Rail Freight & Electricity Consumption)
2007 - 2015

30

25

20

15

10

0
2007

2008

2009

2010

2011

2012

2013

2014

2015

Source: Bloomberg

Economic Statistic

Meanwhile, my great friend Raoul Pal recently put together


a little snapshot of the health of Chinas economy and...well
lets just say its not great:

Data

China Export Trade

-8.8% ytd

China Import Trade

-17.6% ytd

China Imports From Australia

-27.3% ytd

Industrial Output Crude Steel

-3% ytd

Cement Output

-3.2% ytd

Industrial Output Electricity

-3.1% ytd

Manufacturing PMI

49.8

Services PMI

50.5

Railway Freight Volume


Total Electricity Consumption

-17.34% YoY
-0.20% YoY

CPI

+1.6% YoY

PPI

-5.9% YoY*

Hot Rolled Steel Price Index

-35.5% ytd

Fixed Asset Investment


Retail Sales

+10.3%**
+10.9%***

Shanghai Composite Index

-30% since June

*43 consecutive months of decline


**average. +23% between 2009-2014
***slowest in 11 years

14

Things that make you go

China Containerized Freight Index


2010 - 2015

1340

1240

1140

Elsewhere, Chinas container freight numbers are


at their lows...:

1040

940

840

740
2010

2011

2012

2013

2014

2015
Source: Bloomberg

China: RRR & 1-Year Lending Rate


2010 - 2015

22

...and a whiff of desperation hangs over Chinese


interest rate policy as the PBoC tries the standard
SPECTRE operating procedure of explaining why
things are so great....while simultaneously cutting
both interest rates and reserve requirements as
fast as they can...:
Meanwhile, the plight of the steel market
exemplifies both the bind China finds itself
in as well as the knock-on effects of todays
interconnected global economy as the negative
consequences find their way into someone elses
backyard in very short order.

7.0

21

6.5

20

6.0

19

5.5

18

5.0

17

4.5

4.0

16
2010

2011

2012

2013

2014

2015
Source: Bloomberg

Chinese Steel Exports vs Composite Steel Price Index

Anytime the largest producer (and consumer) of


a commodity rapidly expands exports against a
backdrop of steadily falling prices, the marginal
producer is going to have something to say about
it. Come in India. We can hear you:

2009 - 2015

12000

5000

10000

4000
8000

(Bloomberg): ArcelorMittal is taking the


latest knock from record Chinese steel
exports hurting producers across the
globe.

6000
3000

4000

2000
2009

2010

2011

2012

2013

2014

2000
2015
Source: Bloomberg

15

Things that make you go

The worlds biggest steelmaker on Friday cut its full-year profit target and suspended its
dividend, putting the blame on the flood of cheap steel from Chinas loss-making mills.
The market is being overwhelmed with material coming from the nations state-owned and
state-supported producers, a collection of industry associations said Thursday.
It is obvious that we are operating in a very challenging market, Chief Financial Officer
Aditya Mittal said on a call with reporters. This is essentially the result of very low export
prices out of China that are impacting prices worldwide.
The steel industry has been roiled by the slowest economic growth in two decades in
China, the biggest consumer. The flood of cheap exports from the nation has drawn
complaints from Europe and the U.S. that the shipments are unfair.
Bloomberg Intelligence estimates Chinese steel shipments overseas will exceed 100
million metric tons this year, more than the combined output of Europes top four
producing countries.
...which is how the malaise spreads to Indiathe country forecast to be the #3 economy in the world
by 2030.
And, while India has plenty of positive tailwinds, the problems the country will face if both the US and
China slow will be impossible to counteract.
Japan, the #4 economy in 2030? Well if youre a regular reader, youll know how risible Abenomics
is and, rather than go through it all again, lets just pick a couple of bullets from the most recent
data release which happens to be a survey on household wealth published by the BoJ. The survey
highlights a scenario familiar to anybody paying attention to SPECTRE operations:
(Bloomberg): Signs of inequality in Japan are increasing as people living on their own fall
further behind and wealthier households accumulate more assets, according to surveys
released Thursday by the Bank of Japan.
The ratio of single-member households with no financial assets climbed to almost
48 percent in 2015, the highest level since 2007, from about 39 percent a year earlier,
according to an annual survey by the central bank. At the same time, households with two
or more people who held assets such as stocks and bonds saw these rise to a record high
18.2 million yen ($149,597), a separate BOJ report showed

16

Things that make you go

While the percentage of single households with no financial assets surged, it barely
budged among households with more than two people, going to 30.9 percent from
30.4 percent last year. The median of financial assets among one-person households
dropped to 200,000 yen from 750,000 last year, according to the BOJ data... Low-income
households are feeling the effects of last years sales-tax hike and limited wages gains
while more well off Japanese are benefiting from the swelling value of their investment
portfolios.
Inequality seems to be widening, said Hiroshi Hanada, head of economic research
at Sumitomo Mitsui Trust Bank Ltd. A sales-tax hike and price increases last year hit
households hard. Abe hasnt succeeded to bring benefits to most ordinary people.
Ahhhh.... SPECTRE.... maybe that whole idea of achieving world domination by concentrating power
in the hands of a few of your sympathizers wasnt so far-fetched after all.
Moving down the list of the biggest economies in 2030, we get to Germany at number 5:
(WSJ): A slump in German
industry hit economic growth in
the third quarter, as businesses
were feeling the pinch from weak
demand from China and other key
developing economies.
Fridays release of surprisingly
weak German industrial output
data prompted many economists
to lower their growth forecasts for
the eurozones powerhouse. But
lackluster German manufacturing
is also putting a big question
mark over the regions growth
projections for the third quarter,
economists cautioned.

Germany: Industrial Production (MoM %)


2009 - 2015

3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
-1.5
-2.0
-2.5
-3.0

Source: Bloomberg

Gross domestic product numbers will probably come in surprisingly weak compared
to what we and others expected back in summer, said Andreas Rees, UniCredits chief
German economist in Frankfurt.
China causes problems for Germany which, in turn, damages the rest of the EU... contagion is a
perilous thing.
17

Things that make you go

Next in the rankings is current problem


child, Brazil, an export-driven country
mired in a deep recession, its currency
under siege from a surging dollar and the
hole in its budget growing larger and more
mysterious by the week:
(FT): Every week that passes
in recession-hit Brazil seems
to bring a new, bigger estimate
for the size of the hole in the
governments finances.

Brazil: Change in GDP (Y0Y %)


1996 - 2015

10

-2

The latest came last week from


Hugo Leal, a lawmaker from
congresss fiscal commission who
is overseeing a bill covering the
governments 2015 budget.

-4
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: Bloomberg

Earlier this month he said he would amend the bill to allow for a 2015 primary fiscal deficit
the budget balance before interest rates of R$119.9bn (US$32bn), more than double
that of the governments most recent official estimate.
As government debt grows so does the burden of servicing it, eating up the budget in a
country that has among the highest interest rates in the world, with the central banks
benchmark lending rate running at 14.25 per cent.
It is going to be like [playing] Pac-Man, said Angel Gurra, the secretary-general of the
Organisation for Economic Cooperation and Development, during a recent visit to Brazil.
You run like crazy simply to stay where you are.
The deterioration in Brazils public finances follows the onset of what is expected to be
the countrys worst recession since the 1930s, with the economy on track to contract 3 per
cent this year and 1 per cent in 2016.
Much of that is down to a slowdown in China which has weakened demand for Brazils
commodities exports and lessened tax revenues. To counter this, the government of
President Dilma Rousseff, during her first four-year term that ended in 2014, implemented a
series of stimulus measures consisting of price controls and tax breaks for industry.
See any common themes in there? Yes, its our old friend the slowdown in China once again.

18

Things that make you go

Gross public debt is rising fastfrom 58.9% of GDP at the end of 2014 to 66% in September of this
yearand, with interest rates where they are, Brazils debt service costs already eat up almost 10% of
the countrys GDP.
OECD Secretary General, Angel Gurra was succinct in his summation of the problems facing Brazil:
The arithmetic is brutal.

Fauxsterity: UK Public Sector Borrowing Requirement (PSBR)


2009 - 2015
25

Indeed.

20

Right behind Brazil lies the UKa country where


one of SPECTREs most high-profile members
operatesa man known simply as Jaws.

15
10
5
0
-5

The UK has, to many observers, navigated the


crisis of the last few years magnificently with
plaudits for the Conservative governments
austerity program being thrown about like
rice at a wedding, but despite a supposedly
robust economy, decent employment growth
and a healthy manufacturing sector (UK
manufacturing PMI jumped to 55.5 in October
(versus expectations of 51.3)its strongest
performance in 16 months), something is amiss.
The PSBR continues to trend higher, gross
government debt likewiseand at a far steeper
rate than it ever did pre-austerity and, somewhat
mysteriously, the management of expectations
around the first interest rate hike are being
managed to an extraordinary degree:

-10
-15
-20
-25
-30
-35
-40
2009

2010

2011

2012

2013

2014

2015
Source: Bloomberg

UK Government Gross Debt


2000

1980 - 2015
The Age of
Fauxsterity

1500

1000

500

(UK Daily Telegraph As


0
policymakers voted 8-1
1980
1985
1990
1995
2000
2005
2010
in favour of leaving
rates unchanged,
Mark Carney, the Governor of the Bank of England, said Britains strong
domestic performance was set against foreign weakness, particularly in
emerging economies, which remained vulnerable to higher US interest
rates and subdued commodity prices.

19

2015
tSource: IMF

Things that make you go

The Banks quarterly Inflation Report showed the domestic economy was expected to
remain resilient, with real income growth this year forecast to be the strongest since the
financial crisis. Investment intentions also remained robust, policymakers noted.
However, the Bank trimmed its UK and global growth forecasts and said the renewed fall
in commodity prices and the impact of sterlings strength was likely to keep inflation, as
measured by the consumer prices index (CPI), below 1pc until the fourth quarter of 2016,
which is well below the Banks 2pc target...
...Carney says that there has been an implied move out in the date when interest rates will
start to rise in the UK.
The second thing that has changed since August is our outlook for global growth,
particularly for emerging markets.
We used this last three months to look at the medium term outlook for emerging markets
... [slower growth is] a notable drag [for the UK], almost exclusively because of emerging
markets.
The old emerging market weakness ploy, eh?
James Knightly of ING was just one commentator who was confounded by the disconnect between
word and deed:
This clear dovish shift in the BoEs thinking seems a little odd in an environment where
the growth numbers are looking pretty good and where service sector inflation is pushing
higher (currently 2.5%YoY).
Furthermore, next weeks labour report is expected to post another decent jobs gain and
wage growth figure...
Odd. Yes. Odd.
Against the backdrop of trying to adjust market expectations of a first rate hike into alignment with the
BoEs preferences, Carney threw in one more curious little nugget at his press conference; something
no strong economy should be withoutthe idea of potentially negative rates:
If we ever needed to, we could cut interest rates again
A familiar coordinated refrain from SPECTRE operatives of late as you can see:
(Reuters): The Federal Reserve would consider pushing interest rates below zero if the U.S.
economy took a serious turn for the worse, Fed Chair Janet Yellen said on Wednesday.

20

Things that make you go

Potentially anything - including negative interest rates - would be on the table. But we
would have to study carefully how they would work here in the U.S. context, Yellen told a
House of Representatives committee.
This would happen if the economy were to deteriorate in a significant way, she said,
adding that she believed negative rates would have some at least modest favorable effect
on banks incentives to lend.
Whilst desperately trying to bolster confidence in their own domestic economies, fear over
lower global growth percolates every official communication from SPECTRE operatives
around the world.
Strong economy + negative interest rates = SPECTREVISION.
There are clear discrepancies between the story SPECTRE are trying to sell to the public and the
data they are seeing coming down the pipe but because of the actions they have taken over the last
decade or so, they find themselves in the unenviable
France: Unemploment Rate
position of requiring absolute faith in their abilities to be
2000 - 2015
11
maintained otherwise their plans for the global economy
will be foiled.
10

We could carry on down the list of the worlds projected


top economies for 2030 to number 8, but that would
merely take us to France, the socialist basketcase
European powerhouse whose unemployment rate wont
fall below 10% and whose budget deficit is forecast to
miss EU targets this year, next year and again in 2017
(and this after a fresh two-year respite period being
granted by Brussels). In 9th spot we find Canada,
another resource-dependent nation with the added
bonus of a housing bubble and whose citizens owe
$1.67 in debt for every dollar of income they generate
and, at number 10, there is Russia who.... oh for
goodness sake...there just isnt time.

7
2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Source: Bloomberg

Canada: Household Debt to Income


1995 - 2015

168

158

148

138

The bottom line is this: No matter which way you cut it,
SPECTREs attempts to resuscitate the global economy
(even if they are trying to do it on a localized basis) are
becoming increasingly more desperate and increasingly
more likely to end in failure of some sortlikely total.

128

118

108

98
1995

2000

2005

2010

2015
Source: Statistics Canada/Bloomberg

21

Things that make you go

Recessions are NEEDED in so many countries that have binged on debt for decades on end that the
denouement of this sorry episode is all but baked in the cakebut that will never deter SPECTRE as
long as they can maintain belief in their capabilities. In order to stave off those recessions, the money
spigots are wide open, negative rates are very much on the table and fresh rounds of stimulus will be
applied as and when necessary.
Willem Buiter and Nouriel Roubini have recently joined the chorus of respected economists issuing
warnings of the rising chance of a global recession but one man who has drunk so much of the KoolAid hes virtually turned blue is Ambrose Evans-Pritchard and, while his thesis is based on his firm
embrace of Keynesian claptrap economics, its worth hearing him out (youll find the full article on
page 25):
(UK Daily Telegraph): The eurozone is no longer hurtling into a 1930s deflationary vortex. A
trifecta of cheap money, cheap oil and a cheap euro have entirely changed the landscape,
and now the European Central Bank seems curiously determined to push stimulus yet
further by doubling down on QE. Central banks are strange animals, pro-cyclical by nature.
The monetary results are already clear. The narrow M1 measure of cash and checking
accounts - watched as an early warning indicator of short-term spending - rose at an
explosive pace of 11.7pc in September. Lending is at last picking up.
For those who dismiss monetarism as akin to voodoo or soothsaying, the story is much the
same on the Keynesian front. Passive fiscal loosening is under way in all three economic
blocs.
The drastic fiscal squeeze that aborted the eurozone recovery four years ago and nearly
destroyed monetary union is nothing more than a bitter memory. Italy, Spain and France
are taking matters into their own hands, and Brussels has lost faith in its own theories of
expansionary fiscal contractions. Berenberg Bank says EMU fiscal policy is neutral in 2015
and 2016.
No matter what, SPECTRE cannot possibly be successful if they face a combination of weak
developed economies and weakening emerging economies. Their plans will end in smoking ruins
like so many others of similar nature as realization dawns on the citizens of the world they wish to
dominate that what they say doesnt tally with their actions.
As the main quote on the cover of this weeks Things That Make You Go Hmmm... so perfectly
conveys, the real world SPECTRE (just like its fictional counterpart in Ian Fleming s novels) finds
itself in an environment where its very existence depends upon the keeping of certain promises.

22

Things that make you go

Those promises seem to somehow


simultaneously include imminent
rate hikes and the possibility of
negative rates if needed and all
it is going to take is the world to
wake up to the idea that maybe,
just maybe, those two notions are
incompatible and SPECTRE is
bound to break one promise or the
otherperhaps both.
Should those promises be broken,
as Blofeld himself said, the
organizations entire survival is in
jeopardy and THAT prospect should
be enough to scare the Living
Daylights out of you.

World GDP (YoY%)


1996 - 2015

6
5
4
3
2
1
0
-1
-2
-3
-4
-5

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: Bloomberg

efore we get to whats in store for you in the pages ahead, my sincere thanks this week to so

many friends and peers for allowing me to use their brilliant material to help flesh out (and vastly
improve) my own thoughts. To Raoul, Simon, Fred, Stephanie (not just for the data and charts, but for
turning me on to the world of pre-idea fundingseriously! See p.29) and Richthank you!
This week, Ambrose Evans-Pritchard kicks things off with a rather bold wager regarding the possibility
of a global recession (I have a great deal of respect for Ambroses thinking, but, if youre reading this
Ambrose, I hope you like the taste of felt), before Lord Turner (to use the words of a friend of mine
who sent me this particular story) goes off the reservation.
We hear why the 2016 US Presidential race may be the most important election of our lifetime, how
Chinese companies are getting creative and cashing in and how the Portuguese Communist Party is
about to upset the European apple cart.
Myanmar goes to the polls and change is afoot (as well as plenty of political chicanery), the German
governments role in the VW scandal comes under the spotlight, the new Chief Economist at the
IMF demonstrates without doubt that he is the right man for the job and, as promised there is that
introduction to pre-idea funding. Market top, anybody?
23

Things that make you go

Jeremy Warner frets about cracks in the American Dream, Rich Ross has a point to make about the
2-year Treasury, the appalling job of communicating their intentions being done by the FOMC is laid
bare in a single chart and the damage VWs problems have caused to its supply chain partners make
for uncomfortable reading.
Lastly, we have a superb interview with the always-brilliant Jim Grant, we witness David Stockmans
capacity for patience under inane questioning and we go back in time to 1981 and a speech given
by Ronald Reagan which is an absolute must-watch to see a) how times change, b) what an honest
politician used to look like and c) how yesterdays ideas about what is literally beyond our human
comprehension can become commonplace in just a few decades (thanks Dom!).
Finally, strap yourselves in for an absolutely amazing video shot in the skies over Dubai.
Thats all from me for now, but before I leave you, a brief piece of housekeeping:
I will be taking a week off from publishing during the week before Thanksgiving as I will be traveling to
San Francisco and then London to speak at the Silver Summit and Mines & Money so Ill see you all
back here on December 6th.

UNTIL NEXT TIME...

24

Things that make you go

ILL EAT MY HAT IF WE ARE ANYWHERE NEAR A GLOBAL


RECESSION: AMBROSE EVANS-PRITCHARD

he damp kindling wood of global economic recovery is poised to catch fire.

For the first time in half a decade of stagnation, government policy has turned expansionary
in the US, China and the eurozone at the same time. Fiscal austerity is largely over. The combined
money supply is surging.
Such optimistic claims are perhaps hazardous, given record debt ratios in most areas of the world and
given that we are six-and-a-half years into an aging economic cycle that might normally be rolling over
at this stage. It certainly feels lonely.
Citigroups Willem Buiter has issued a global recession alert. Professor Nouriel Roubini from New York
University joined him this week, warning that the odds of a fresh slump have doubled to 30pc.
Mr Roubinis gloom is unsettling for me. We saw the world in almost exactly the same way in the leadup to the Lehman crisis, when it seemed obvious to both of us that sharply rising interest rates would
prick the US housing bubble and the EMU credit bubble.
This time I dissent. Years of fiscal retrenchment and balance sheet deleveraging have prevented the
current global economic recovery from gathering speed, and have therefore stretched the potential
lifespan of the cycle.
The torrid pace of worldwide money growth over recent months is simply not compatible with an
imminent crisis.
A combined gauge of the global money supply put together by Gabriel Stein at Oxford Economics
shows that the broad M3 measure grew by 8.1pc in
August, and by almost as much in real terms. This is
the fastest rate in 25 years, excluding the final blow-off
phase of the Lehman boom.
The index has since fallen back slightly as the US
settles down but the pattern is clear. It bears no relation
to the monetary implosion in early to mid-2008 before
the collapse of Fannie Mae and Freddie Mac, the twin
mortgage giants that in turn brought down the banking
system.

25

Things that make you go

It is, of course, possible that money signals have lost their meaning in our brave new world of zero
rates and secular stagnation, but the current pace of growth would typically imply a flurry of economic
activity over the following year or so.
It is a very benign picture for the world. We should see above trend growth over the next year, said
Tim Congdon from International Monetary Research.
Mr Congdon said the expansion of broad money in China has accelerated to an annual pace of
18.9pc over the past three months, thanks in part to equity purchases by the central bank (PBOC),
a shot of adrenaline straight to the heart - otherwise known as quantitative easing with Chinese
characteristics.
The eurozone is no longer hurtling into a 1930s deflationary vortex. A trifecta of cheap money, cheap
oil and a cheap euro have entirely changed the landscape, and now the European Central Bank
seems curiously determined to push stimulus yet further by doubling down on QE. Central banks are
strange animals, pro-cyclical by nature.
The monetary results are already clear. The narrow M1 measure of cash and checking accounts watched as an early warning indicator of short-term spending - rose at an explosive pace of 11.7pc in
September. Lending is at last picking up.
For those who dismiss monetarism as akin to voodoo or soothsaying, the story is much the same on
the Keynesian front. Passive fiscal loosening is under way in all three economic blocs...

WHY 2016 MAY BE THE MOST IMPORTANT ELECTION


OF OUR LIFETIME: BLOOMBERG
With no incumbent on the ballot, the 2016 election will present a stark choice between a
Democratic Party moving to President Obamas left and a Republican alternative thats veered
sharply rightward. Although the views of the American public have remained relatively stable over the
past 60 years, the ideological polarization of Democratic and Republican politicians has increased
steadily for decades. The chasm between the two parties is the greatest its ever been, says Neera
Tanden, president of the Center for American Progress, a liberal Washington think tank.
What divides candidates in both parties isnt just their solutions to policy problems; they disagree
about what the problems are. In debate after debate, the most hotly contested issues differ almost
entirely depending on which party is doing the talking. The Democrats focus on climate change, police
brutality against black Americans, and the need to raise the minimum wage, whereas Republicans
emphasize immigration restrictions, religious liberty, and their desire to unwind Obamas major
achievements, including the Dodd-Frank financial reforms and the Affordable Care Act.
26

Things that make you go

Even within Democratic and Republican spheres, the discussion has shifted significantly. Consider
gun control, an issue Democrats assiduously avoided for a decade, after party strategists concluded
it cost Al Gore the 2000 election. No longer. Ive been told by some to quit talking about this, to quit
shouting about this, Democratic front-runner Hillary Clinton declared about her push for stricter gun
laws at an Oct. 15 rally in San Antonio, after attacking her chief rival, Bernie Sanders, for his tepid
support of gun control. I will not be silenced. We will not be silenced. We must continue to speak out.
In almost every area of domestic policy, Democrats and Republicans would point the country toward
radically different futures. The centerpiece of Obamas energy initiative, the Environmental Protection
Agencys Clean Power Plan, would restrict emissions from power plants. Republican-led states are
challenging it in court. If its struck down, the next president will rewrite the rules. Every Democratic
candidate shares Obamas commitment to halting climate change. Most Republican hopefuls reject
the science that explains rising global temperatures and have vowed to scrap controls on greenhouse
gas emissions. I will stop the EPAs Clean Power Plan, Marco Rubio said while introducing his energy
policy on Sept. 2.
Or take health care. Any Democratic president will preserve the Affordable Care Act. Whoever the
Republican nominee is, you can bet that repeal of the ACA will be a part of the platform, says Larry
Levitt of the nonprofit Kaiser Family Foundation, which studies health care. Its Republicans who want
to upend the status quo on health care, leaving the parties very far apart. A full repeal may not be
politically feasible, because the law covers 17 million people, and even some Republican governors
have embraced the federally funded expansion of Medicaid, Obamacares main vehicle for extending
care to the poor. Short of repeal, a hostile president might push to weaken insurance market
regulations, cut subsidies for the working class, and cap Medicaid spending.
The widest gap between the parties may be how they would reshape the Supreme Court, which may
have the final word over many of these policy questions. By next November, four of the nine justices
will be 78 or older, including the courts most frequent swing voter, Anthony Kennedy. Obamas
successor may have the chance to replace all four. If so, a Republican president could give the court a
7 to 2 conservative majority; a Democrat could create a 6 to 3 liberal advantage. Theres the potential
for a generational change in the direction of the court, says Ed Whelan, president of the Ethics
and Public Policy Center, a conservative think tank. We may be looking at a two- or three-decade
entrenchment of a liberal or conservative court.
The inclusive, post-partisan vision that animated Obamas candidacy in 2008 has long been dead.
This, at least, is among the dwindling areas of bipartisan agreement. Asked at the Oct. 13 Democratic
debate to name the enemy shes proudest of, a beaming Clinton replied, The Republicans. No one
can doubt the feeling is mutual...

27

Things that make you go

THE DEVILS IN THE DEBT: ADAIR TURNER

he 2008 financial crash was a self-inflicted, avoidable economic catastrophe. It wasnt

the result of war or political turmoil, or the consequence of competition from emerging
economies. It didnt derive from underlying tensions over income distribution or from profligate
government spending.
No, the origins of this crisis lay in the dealing rooms of London and New York banks and shadow
banks -- part of a global financial system whose enormous personal rewards had been justified by the
supposed economic benefits of financial innovation and increased financial activity.
Too Big to Fail Many people are legitimately angry that few bankers have been punished. Some were
incompetent, others dishonest. Yet they were not a fundamental driver of the crisis any more than the
misbehavior of individual financiers in 1920s America caused the Great Depression.
Post-crisis regulatory reforms also miss the mark. Much focus has been placed on making sure
that taxpayers never again have to bail out too big to fail banks. Thats certainly important, but
government bailout costs were small change compared with the total harm the financial crisis caused.
The Federal Reserve has sold all its capital injections into banks at a profit, and made a positive
return on its provision of liquidity to the financial system. Across the advanced economies, bailout and
support costs will be, at most, 3 percent of gross domestic product.
The full economic cost is far bigger. Advanced economies public debt on average increased by 34
percent of GDP between 2007 and 2014. More important, national incomes and living standards in
many countries are 10 percent or more below where they could have been, and are likely to remain
there in perpetuity.
Such losses could happen again, and neither bankers threatened by prison nor a no-bailout regime
will guarantee a more stable financial system. A fixation on these issues threatens to divert us from
the underlying causes of financial instability.
The fundamental problem is that modern financial systems inevitably create debt in excessive
quantities. The debt they create doesnt finance new capital investment but the purchase of existing
assets, and above all real estate. Debt drives booms and financial busts. And it is a debt overhang
from the last boom that explains why recovery from the 20072008 crisis has been so anemic.

28

Things that make you go

Debt creation is a form of economic pollution. Heating a house or fueling a car is necessary, yet the
carbon emissions are harmful to the climate. Lending a family money to buy a house is socially useful,
but too much mortgage debt can make the economy unstable.
Debt pollution, like environmental pollution, must be constrained by public policies that go beyond
current regulatory reforms. We must focus on the most important causes of the 2008 crisis and
recession. Those lay in the specific nature of debt contracts, and in the ability of banks and shadow
banks to create credit and money.
Throughout history, religious and moral philosophers have been wary of debt contracts. But
economists convincingly argued that debt contracts play a crucial role in capitalist growth. Debt
that delivered a predefined return made it possible to mobilize savings and capital investment for
19th century railways and 20th century manufacturing plants. These developments might not have
happened if investment had to take a more risky equity form.
But debt contracts also have adverse consequences: Theyre likely to be created in excessive
quantities. And the more debt an economy assumes, the less stable that economy will be. The
dangers of excessive debt creation are magnified by the existence of banks and the predominance
of certain kinds of lending. Almost any economics or finance textbook will describe how banks take
money from savers and lend it to borrowers, allocating money among investment options.
This is dangerously fictitious because banks dont lend out existing money. They create credit, money
and purchasing power that didnt previously exist. And the vast majority of bank lending in advanced
economies doesnt support new business investment but funds either increased consumption or the
purchase of existing assets, in particular real estate.
As a result, unless tightly constrained by public policy, banks make economies unstable. Newly
created credit and money increase purchasing power. But if the most desirable land in urban areas is
in scarce supply, the result is not new investment but asset price increases, which induces yet more
credit demand and yet more credit supply...

NO TEAM? NO IDEA? NO PROBLEM! THIS VC WILL FUND


YOUR STARTUP ANYWAY: WSJ

lejandro Vicente Grabovetsky wants to build a software program that checks the

veracity of online news items. The 30-year-old with a PhD in neuroscience from Cambridge
University plans to set his media-truth-detector loose on what he calls Russian propaganda, mostly
against his native Ukraine. He has three problems though: hes not exactly sure how its going to work,
he doesnt have any money to develop it, and hes got no team to work with.

29

Things that make you go

Also, hes not sure the technology is there yet.


Enter Entrepreneur First, a venture capital firm that says it invests in people pre-idea, pre-team,
which this week let Grabovetsky pitch his idea to see if he can get it off the ground.
Many wannabe entrepreneurs in EFs program are pre-selected while still at university, where EF has
close contacts with professors to spot the students with the best academic records, science projects,
internships or publications. Two academics even hold equity in the company. We spent a lot of time
on campuses, said Zoe Jervier, a member of EFs recruiting team, said.
As money pours into equity and venture capital firms, pre-acceleration programs are flourishing for
those interested in entrepreneurship but who dont know where to start. Its a risky, long-term bet on
untested entrepreneurs with no real product or business plan.
We are probably the most risk-seeking investors in the world, said Matt Clifford, EFs co-founder.
Despite the seemingly wide-open pre-team, pre-idea pitch, EF has a tough selection process: 10%
of applicants are accepted after multiple rounds of interviews and even a logics and computing test.
EF gives startups access to funding, investors, connections and commercial support. Its members
receive a 3,500 stipend for three months, an amount that is small enough to deter those who are
attracted by money, but big enough to live on in London, Mr. Clifford said. They are encouraged to
find co-founders and if they can show a product that gets positive reviews after the first tests, they are
incorporated as a company and given 10,000 for an 8%-equity stake.
This is standard for each company, and theres no negotiating terms.
EF says it has 100 entrepreneurs in its program, up from 33 people when it started in 2012.
Despite the risk-30% of the entrepreneurs EF funds drop out without ever creating a company
Clifford said he has no difficulty finding investors for his venture firm. Next week, EF plans to
announce it has raised new funding of many millions. He would not disclose who the funders are.
Five sponsors, including Microsoft +0.99%, the City of London Corporation and KPMG, cover 10% of
EFs costs in cash and services. In return, they get a chance to poach EF students and their ideas
before anyone else.
Well see if EF is a success in ten years, said Toby Coppel, an investor and co-founder of Londonbased Mosaic Ventures, a $140 million fund. The startups themselves can take 5-10 years to
mature into big hits, he added. In the interim, they recruit the top computer science and engineering
graduates, which are a key ingredient to any new disruptive startup.

30

Things that make you go

Entrepreneur First is not the only program that recruits entrepreneurs talent only. Silicon Valleybased Founder Institute also accepts applicants without a team or a project. This March, it launched a
4-month program in London. It costs wannabe entrepreneurs almost 1,000 and a 3.5% equity stake
to participate.
Among the 32 who joined, two-thirds have already quit. It is really hard to evaluate early stage
startups on their idea, the Institutes co-founder Jonathan Greechan said.
After 3 years, 70 people have graduated from EFs program, including Emily Brooke, the founder of
Blaze, a bike laser projection light for cyclists. Brooke expects to generate more than 1 million in
revenue this year. Before meeting Mr. Clifford, she had never heard of a start-up, she said.

COMPANIES CASH IN THROUGH CREATIVE


BOND SCHEME: CAIXIN

wo policy banks recently injected hundreds of billions of yuan into several publicly listed

companies after raising the money through a government bond scheme.

Some analysts are calling these cash-for-equity injections, worth upwards of 400 billion yuan
combined, a new and creative form of government stimulus set against the backdrop of Chinas
weakening economy.
And while the injections targeted companies, sources who spoke with Caixin about the so-called
special construction bonds scheme say some money is being channeled to pay off some of the more
than 15 trillion yuan owed by local governments around the country.
Policy banks raised the funds they used to buy equity by issuing and selling bonds to state-run Postal
Savings Bank of China, sources who asked not to be identified said.
Each company receiving an injection had applied for and won approval for financial support from the
National Development and Reform Commission (NDRC), the governments leading economic planner.
The criteria used to pick winners was not made public, although sources said most recipients were
expected to use their funds for building-related projects.
The NDRC designed the scheme, which sees the Ministry of Finance provide cash and that
companies get policy bank support or the local governments that control the companies ultimately
bear all debt responsibilities.
As of October 27, four companies listed on the Shanghai or Shenzhen stock exchanges had
acknowledged receiving equity investments from CDB Development Fund, an arm of the
governments China Development Bank (CDB), which is based in the capital.
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Things that make you go

These included auto parts manufacturer Wanxiang Qianchao Co., motor and electrical equipment
manufacturer Wolong Electric Group Co., and a maker of water treatment machinery called Chengdu
Xiongrong Environment Co.
Separately, the construction materials supplier Yatai Group said in September that it had received
financial backing from the Agricultural Construction Fund, a unit of the policy lender Agricultural
Development Bank of China (ADB).
Stock market investors reacted to the news by buying shares in companies targeted by the policy
banks, driving stock prices higher.
People close to the situation said the bond program tapped by the policy banks was approved in
August by the NDRC. The scheme calls for bond sale proceeds to be invested only in approved
companies.
Bond terms range from 10 to 20 years. Interest rates have not been disclosed, although one source
said the money was being made available at a 90 percent discount to market rates.
Bonds worth some 400 billion yuan were issued by the end of October, one of the sources said, and
an extra 200 billion yuan worth was expected to be issued this year.
Special construction bonds are being rolled out at a time of concern over Chinas economic slowdown.
The source said the NDRCs long-range plan calls for policy banks to help support the economy by
issuing up to 1.5 trillion yuan worth of bonds through 2018. Also on the drawing board is a plan to
expand the program beyond Postal Savings so that more banks could buy the bonds.
In addition, the NDRC was expected to start reviewing more applicants in late October, a CDB official
said. The amount expected to be raised through the next round of bond issues is larger than expected
due to concerns that the (economy) may be falling too quickly, said the official.
Companies that have already announced cash-for-equity deals said their policy lenders will have no
influence over their operations, and that all funds will be repaid. Nevertheless, one source said, all
projects to be funded through the injections must follow market rules and provide a return for the
policy banks.
Some firms receiving money through the bond scheme are paying nominal amounts of interest.
Annual rates are as low as 1.2 percent, one source said. But a regional NDRC official said most
projects are expected to generate returns of 3 percent to 5 percent over 10 to 20 years.

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Things that make you go

Some targeted projects are tied to Chinas effort to expand trade and business abroad through the
governments New Silk Road initiative. Others are designed to support transportation, construction
and industrial upgrading projects in regions targeted by the government for growth, including the
Beijing-Tianjin-Hebei Province area and along the Yangtze River.
The purpose of the policy is to boost growth, said the source.
Some funds will go toward the financing platforms run by local governments around China to improve
their capital conditions, said the general manager of a platform in the eastern province of Jiangsu.
Since local governments are seeing their fiscal revenues decline, many platforms are suffering from
capital shortages.
The financing platforms are the major carriers of local government debt, which was estimated at 15.4
trillion yuan nationwide in 2014. Many experts think this estimate vastly understates the debt load...

CHANGE IN THE AIR: ECONOMIST

housands waited for hours under a blazing sun on the football field in Taungup, a small

town near the Bay of Bengal in Rakhine state in Myanmars west. Most wore the red T-shirts
of the National League for Democracy (NLD) and waved flags emblazoned with the partys star-andpeacock symbol (pictured). One teenager carried a rose, intending to present it to my leader, to my
president. When Aung San Suu Kyis four-wheel drive bumped into view, the crowd chanted Maa
Suu!Mother Suu.
On the face of it, the campaigning across Myanmar ahead of a general election on November
8th might seem nothing exceptional. Yet the scene in Taungup would have been unthinkable five
years agonot least because the NLD was banned, Miss Suu Kyi was under house arrest and a
downtrodden people were under the armys boot. Today Miss Suu Kyi sits in parliament. Her NLD is
set to reap the most votes in the election. To many in the West, it looks like a happy end to Myanmars
long and dark journey. In fact, the election is but one stepping stone to an uncertain future. Many
questions remain unanswered, including whether the Burmese can pull themselves out of poverty and
when ethnic conflicts that have raged for decades will end.
The most immediate question is how much power Myanmars armed forces, who have been in charge
since 1962, are willing to cede. The army wrote Myanmars constitution, which a sham referendum put
into effect in 2008. Two years later a few generals traded in their uniforms for longyis and set up the
Union Solidarity and Development Party (USDP). Together with the quarter of seats reserved by the
constitution for the army, it has a comfortable parliamentary majority.

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Things that make you go

Unlike in 1990, when the army ignored the election result, at least the outcome of this one appears
likely to be respected. But the soldiers are taking no chances. However well or badly the USDP does
in the election, the armys 25% bloc will remain in place. The opening that Myanmar has witnessed
over the past five years is astonishing in comparison with what went before. But it is taking place on
the armys terms.
The election is not entirely fair. Voter lists are inaccurate and ripe for abuse. In some violent areas
voting will not take place at all. Meanwhile, perhaps 1m Muslim Rohingyas in a largely Buddhist
country have been deemed statelessnon-persons ineligible to vote at all (see map). Three years
ago Taungup was at the centre of communal mayhem that quickly flared into a pogrom carried out by
Buddhist Rakhines against the Rohingya population. Tens of thousands of Rohingyas fled abroad on
rickety vessels.
But Miss Suu Kyi, a Nobel peace-prize winner, is turning a blind eye to some of the elections
blemishes, believing the process still marks a big step forward. Her visit to Rakhine was not a gesture
of sympathy with the Rohingyas. She has been shamefully silent on the topic. Muslims make up only
4% of Myanmars population, but being accused of supporting them is a fast way to lose Buddhist
votes.
That matters to Miss Suu Kyi. She shows a steely determination to help her party win. Wirathu,
a vitriolic Buddhist monk, and members of a pressure group calling itself the Association for the
Protection of Race and Religion, better known as Ma Ba Tha, have been campaigning against the
NLD in rural areas. They accuse the NLD of being pro-Muslim. Miss Suu Kyi says she deplores such
chauvinism. But the NLD has no Muslim candidates. In Rakhine, Muslim shopkeepers complain that
Buddhists boycott their shops and bus stations refuse them tickets. Yet on the campaign trail Miss Suu
Kyi offers only bromides.
In by-elections in 2012 the NLD won 43 out of 44 seats. This time it could win two-thirds of the 75%
of seats that are up for grabs, which it would need for a parliamentary majority. But a landslide is not
guaranteed. Despite Miss Suu Kyis popularity, and however hard it is to meet anyone who claims to
be a USDP supporter in the big cities, the army-backed party is a well-financed machine able to get
out the vote. Meanwhile, over 90 other parties, many ethnic-based ones, are also fielding candidates.
Not all support the NLD.
The parties have their eye on who will succeed President Thein Sein, a former general. His successor
will be elected by the new parliament when it convenes early next year. Legislators will choose from
among three candidatesone each nominated by the upper house, the lower house and the army.
The two losers automatically become vice-presidents, while the winner selects the cabinet...

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Things that make you go

CRACKS ARE SHOWING IN THE AMERICAN DREAM:


JEREMY WARNER

s it RIP for the American dream, the founding ideal of the richest nation on earth? Reports of

its death have been doing the rounds for decades, but have generally proved much exaggerated.
Despite setbacks, Americas capacity to inspire, innovate and grow has always eventually bounced
back. Now along comes the latest winner of the Nobel Prize for economics, the British-born Angus
Deaton, with some hard evidence of very serious deterioration, if not outright death.
With his wife, Anne Case, Deaton has crunched the numbers on
mortality and morbidity in the US and found that among middleaged, white, non-Hispanics, things are not going at all well. Unlike
virtually every other advanced economy, where rates of death and
ill-health in this particular cohort have been falling steeply, in the
US there has been virtually no progress for 25 years. Worse, the
rate has picked up sharply since the turn of the century, and is
now far and away the worst among rich, industrialised economies.
The chief causes of this reversal are alcohol, drugs and suicide, a
quite shocking finding that looks worryingly indicative of a broken
and divided society. Its not quite Russia, which has virtually
Third World rates of mortality among middle-aged men, but it is
getting there. For a large number of non-college-educated white
Americans, hope and aspiration has given way to despair and
addiction.
There is nothing new about disillusionment with the American dream, which has an extensive literary
tradition, from Scott Fitzgeralds Great Gatsby to Arthur Millers Willie Loman. In Death of a Salesman,
Lomans eventual suicide prompted by a growing sense of failure and lack of self-worth is eerily
predictive of todays epidemic of self-harm.
America still takes great pride in its reputation as an equal opportunities country, where determination,
self-reliance and hard work are all thats required to succeed. This may always have been something
of a myth, but to the extent that it ever was true, it has rarely looked under greater threat.
What has gone wrong? The higher death rate identified by Professor Deaton cannot be entirely
blamed on the destructive consequences of the financial crisis; it long pre-dates it, and in any case
mortality rates have continued to decline in most European countries, which if anything suffered an
even deeper slump.
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Things that make you go

There may be some oddities in the American situation, for instance in the propensity of US doctors
to prescribe much higher dosages of opiates and other painkillers than their European counterparts.
But in the round it is hard to resist the conclusion that these higher mortality rates are mainly about
growing economic insecurity.
Globalisation has undermined many traditional sources of once secure blue-collar, and even whitecollar, work, making many forms of employment much more precarious. High school drop-outs have
particularly depressing wage and career prospects. Earnings and opportunity have continued to grow
strongly for the educated and well-trained. But the great hinterland of unskilled well theyve gone
nowhere...

THE GERMAN GOVERNMENTS ROLE IN THE VW


SCANDAL: DER SPIEGEL

his week wasnt just a bad one for the Volkswagen concern. The German government is

also happy that its over. Berlin had painstakingly developed a damage control strategy in
an effort to prevent the VW scandal from damaging the reputation of German industry as a whole.
Top advisors to Foreign Minister Frank-Walter Steinmeier had even written a confidential letter to
German diplomats around the world, providing guidelines for how they should go about defending the
Germany brand. The emissions scandal should be presented as a singular occurrence, they wrote.
External communication should focus to the extent possible on preventing VW and the Made in
Germany brand from being connected.
But then Monday arrived and the announcement by the Environmental Protection Agency in the
United States that VW has once again failed its obligation to comply with the law that protects clean
air for all Americans. In addition to the 11 million diesel vehicles whose emissions values were
manipulated, additional models are also thought to have been outfitted with illegal software to cheat
on emissions compliance tests, including the popular SUV Cayenne. That vehicle is manufactured by
Porsche, the company that VWs new CEO, Matthias Mller, used to lead before being hired to replace
Martin Winterkorn, who was ousted when the VW scandal first broke.
Then Tuesday arrived, and along with it the admission from Mller that VW had deceived even more
of its customers. The fuel consumption claims for more than 800,000 vehicles were manipulated, with
the specified average mileage not even achievable in testing, much less in real-world conditions. The
new scandal affects models carrying the companys own environmental seal-of-excellence known
as BlueMotion, a label reserved for the most fuel efficient cars of their class, as the company itself
claims.

36

Things that make you go

It has now become clear that such claims are a fraudulent lie. And it shows that this scandal may
continue to broaden before VW manages to get it under control.
Thus far, the Made in Germany brand has not been noticeably damaged; German exports are at a
record high. But concern is growing at competitors like Mercedes-Benz and BMW that they too may
ultimately be affected by the scandal. They believe there is a danger that diesel engines as a whole
could fall into disrepute. And without diesel motors, which are relatively efficient, European CO2
emissions reduction targets will not be met.
A combination of astonishment and horror has gripped Volkswagen headquarters, one manager
relates. And new legal investigations could be on the horizon. Braunschweig public prosecutor Klaus
Ziehe, who has jurisdiction over Volkswagen, says: Following the new accusations, we are looking
at the possibility of opening an additional investigation. The new situation, he says, is not covered by
the investigation that was launched in October because of the obviously new circumstances with the
possible involvement of other actors.
Legal experts say that the owners of the 800,000 vehicles with manipulated fuel efficiency values
could now demand a conversion. In other words, they would be within their rights to return their
vehicles and demand the reimbursement of the purchase price, minus a use fee for the period of
ownership.
VW has calculated its possible risk exposure at 2 billion ($2.15 billion), but that may not be enough.
Were owners to return even half of the cars affected, the company would likely face costs of between
4 billion and 8 billion -- in addition to the 6.5 billion that has been set aside for the rectification of
the problems with the diesel engines.
In the beginning, the company
insisted that the emissions problems
were caused by a small group, but it
has since become clear that several
factions within the concern were
engaged in defrauding customers,
dealerships and government officials
in many countries for years at a time.
Those responsible can be found in
VW headquarters in Wolfsburg, but
they had plenty of help from German
government officials in Berlin and EU
officials in Brussels...

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Things that make you go

COMMUNISTS READY TO ASSUME POWER IN PORTUGAL


AND TOPPLE CONSERVATIVE GOVERNMENT: UK DAILY TELEGRAPH

ortugals Communist party has struck a historic deal with the countrys Socialists and

radical Left in a bid to assume power and overthrow the incumbent centre-right after just 11

days.

After weeks of negotiations, the anti-EU Communists have resolved their differences to form a
triple Left coalition that will topple the government of Prime Minister Pedro Passos Coelho when a
parliamentary vote of confidence is held on Tuesday.
A statement on the partys website said conditions are in place to bring an end to the nascent
minority government. Between them, the Communists, Socialists and Left Bloc would have a 51pc
parliamentary majority.
Mr Passos Coelho was only sworn into office last Friday. His centre-right coalition oversaw four years
of austerity policies in the former bail-out country, but lost its parliamentary majority in elections last
month.
The re-appointment of the centre-right has been clouded in
controversy after Portugals head of state vowed to block antieuro Communists and Leftists from assuming power to protect
the country from forces hostile to the EU.
President Anibal Cavaco Silva could now be forced into a
humiliating climbdown when the minority government is set to
fall on Tuesday.
He has warned that Portugal risks becoming ungovernable and urged Leftist forces to respect the
terms of Portugals EU membership.
Should the president fail to provide a governing mandate to the coalition, a caretaker regime is likely to
assume office until new elections are held in March 2016.
The left-wing coalition would be led by Socialist party leader Antonio Costa - a moderate who has
promised to adhere to the bail-out terms set by the countrys former creditor powers.
But anti-austerity forces are set to derail Portugals fiscal consolidation by raising the minimum wage,
and reversing cuts to social security and pensions. The Left have also renounced the terms of the
EUs Fiscal Compact and could force Mr Costa into slashing VAT rates and scrap cuts to public sector
wages.
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Things that make you go

A political stalemate has seen Lisbon fail to submit its draft 2016 budget plans to Brussels by an
October deadline.
Despite exiting its 78bn rescue programme last year, Portugal continues to lumber under the highest
combined debt burden in the eurozone.
The economy is only set to grow by 1.5pc next year - lower than its former bail-out counterparts in
Spain and Ireland...

DEFLATION RISKS MAY WARRANT RADICAL NEW CENTRALBANK THINKING, THE IMFS CHIEF ECONOMIST SAYS : WSJ

he Bank of Japan and other central banks around the world may need to try radical new

easy-money policies to stave off the rising specter of deflation and revive sickly economic
prospects, the International Monetary Funds new chief economist warns.
I worry about deflation globally, new IMF Economic Counselor Maurice Obstfeld said in an interview
ahead of an annual IMF research conference that focuses this year on unconventional monetary
policies and exchange rate regimes. It may be time to start thinking outside the box.
Weakand in some cases fallingprice growth has plagued Japan, Europe, the U.S. and other major
economies since the financial crisis. Plummeting commodity prices are exacerbating the so-called
lowflation and deflation problems that curb investment, spending and growth.
Surveying several dozen of the largest economies around the world, Mr. Obstfeld said the number
of countries experiencing low inflation is rising. Combined with slowing emerging market output,
ballooning government debt and monetary policy constrained by the lower limits of interest rates, the
deflation risk is fueling fears the global economy could be fast stuck into a deep low-growth mire.
In the wake of the financial crisis, the Federal Reserve, the Bank of Japan and the European Central
Bank launched unprecedented easy-money stimulus programs to avert economic disaster and
jumpstart growth. The Feds efforts have cut the unemployment rate but failed to sufficiently juice
inflation. Tokyo has struggled to pull the long-listless economy out of the doldrums. And the ECBs
efforts have only narrowly avoided a triple-dip recession. Some economists argue the ECBs actions
have pumped up corporate cash reserves, but done little to boost employment or investment.
So, what would be thinking outside the box for Mr. Obstfeld? One option is a proposal by Adair Turner,
a member of the Bank of Englands Financial Policy Committee, for central bankers to overtly finance
increased budget stimulus with permanent increases in the money supply. By contrast, the increased
money supply resulting from recent central bank bond-buying programs is meant to be temporary.

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Things that make you go

In a paper prepared for the IMF


conference, Mr. Turner contends Japan
will be forced to use such monetary
financing within the next five years
and says the policy should become
a normal central bank tool for all
economies facing stagnation.
Such an option would be highly
provocative to fiscal hawks and those
who fear giving central banks too
much power, especially when many
economists question both the returns
and financial-turmoil side effects from
existing easy-money policies.
The provocative nature of the proposal
underscores the extent of the deflation-related anxiety among some policy makers, however.
Perhaps a little less controversial option is for central banks to consider overshooting their inflation
targets.
You can always, always deal with high inflation, Mr. Obstfeld said. But, at the zero lower bound, our
options are much more limited.
In order to bring inflation expectations firmly back to 2% in the advanced countries, where wed like
to see it, its probably going to be necessary to have some overshooting of the 2% level, or at least to
entertain that as a possibility, he said.
Although some Federal Reserve board members have floated the idea, Chairwoman Janet Yellen has
given little indication shed backed the proposal...

40

Things that make you go

CHARTS THAT MAKE YOU GO HMMM...

ich Ross, Head of

Technical Analysis
at Evercore ISI closed the
introduction to his alwaysexcellent weekly chart deck with
these words this week:
Rates are going up, the
Dollar is going up, and
stocks remain poised for a
consolidative pause.
Hard to arguecertainly
with the first of those three
predictions, given the evidence
he presents...
The sad/amazing* part of all
this is that we have sleepwalked
into a world where a 5
year high yield on the 2-year
treasury being 0.8859% is not
something worthy of comment
other than to point out where it
is relative to the last 60 months.
Kinda ridiculous if you stop and
think about it...

* Delete where applicable

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Things that make you go

When Should The Federal Reserve Raise Interest Rates?


(11,530 Respondents)
By the end of 2015

They will never raise rates

32%

33%

16%

19%

Not until at least 2017

Sometime in 2016
Source: UK Daily Telegraph Survey

he quality of the job the Fed

has done in communicating their


intentions to the market with regards the
commencement of a rate hike cycle is
laid bare in this survey, commissioned
by the UK Daily Telegraph.
As of the end of October, there was a
definitive split between soon and never.
Great job guys. That big improvement
in your communication strategy is
working out just brilliantly...maybe the
chart on the right is a clue as to where
youre going wrong?
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Things that make you go

s Volkswagen stock

tumbles in the aftermath


of the emissions-cheating
scandal, its bringing some of
its top suppliers along for the
ride. Heres how the stocks of
those most dependent on the
company for revenue have
fared.
LINK

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Things that make you go

WORDS THAT MAKE YOU GO HMMM...

im Grant is a regular in these pages

because hes without doubt one of the


most brilliant thinkers in finance. This week,
sit back and enjoy another masterclass in
clear and effective communication of similar
ideas to those Ive been trying to convey
this week by by a man whose command of
the English language is good enough to put
this particular Englishman to shame.

his is David Stockman.

David Stockman was Director of the


Office of Management and Budget under
Ronald Reagan (1981 - 1985).
In this alarming Bloomberg clip, David is
schooled on what would have happened in
2008 had the fed not stepped in.

CLICK TO WATCH

Rarely do blind faith and complete


misunderstanding come together with such
force...

here is very little to say about this

CLICK TO LISTEN

1981 speech by David Stockmans boss,


Ronald Reagan, in which the then-President
of the United States addressed the American
people on what he called the worst economic
mess since The Great Depression except this:
As you listen to it, imagine how the same
speech would sound today.
Of course, today, it would never and could
never be made...

CLICK TO WATCH
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Things that make you go

AND FINALLY...

y
l
l
a
n
d fi

an

CLICK TO WATCH

ts official: Theres something more ridiculously daring than skydiving, and it

requires a jetpack. In a new video by Emirates and Jetman Dubai, two menexfighter pilot Yves Rossy and parachuter Vince Reffetsoar through the sky, dipping
and diving around a massive Emirates A380 airliner, held aloft solely by jetpacks. The
tiny airborne men are dwarfed by the airplane, which at 238 feet long is the worlds
largest passenger airliner. Together, the behemoth A380 and the nerveless men
perform a beautifully terrifying synchronized dance through the sky, and the entire
stunt is filmed from every angle. Its undeniable proof that man was meant for flight.
Truly amazing.

45

Things that make you go

About The Author


to his chagrin, Grant Williams
Much
has reached 30 years in finance.
Over that period, he has held senior positions at a number of investment banks
and brokers including Robert Fleming,
UBS, Banc of America and Credit Suisse
in locations as diverse as London, Tokyo,
New York, Hong Kong, Sydney and Singapore.
From humble beginnings in 2009, Things
That Make You Go Hmmm... has grown
to become one of the most popular and
widely-read financial publications in the
world.
Grant is a senior advisor to Vulpes Investment Management in Singapore and
also one of the founders of Real Vision
Televisionan online, on-demand TV
channel featuring in-depth interviews
with the brightest minds in finance.
A regular speaker at investment conferences across the globe, Grant blends
history and humour with keen financial
insight to produce unique presentations
which have been enthusiastically received by audiences wherever he has
traveled.

To subscribe to Things That Make You Go Hmmm... visit:


www.ttmygh.com
For more information, please contact: info@ttmygh.com