Federal Government

Two weeks ago, we predicted that if the same September storm clouds return, and if December, which is increasingly looking as shaky as August as a result of a return of China deval fears, soaring dollar concerns and - the cherry on top - the collapse in junk bonds, forcing the Fed to have some literally last minute concerns about a rate hike, then the Fed's official mouthpiece, Jon Hilsenrath will be very busy...

In what is possibly the most inane political statement ever, U.S. Senator Charles Schumer and Governor Andrew M. Cuomo today announced a push to prevent known or suspected terrorists from purchasing guns in New York State. Schumer and Cuomo areasking the federal government to officially add the U.S. Terror Watch List to the criteria it uses for federal background checks in New York State, exclaiming "we need to move to close the Terror Gap once and for all."

The Statement...

Submitted by David Stockman via The Daily Reckoning blog,

We are nearing a crucial inflection point in the worldwide bubble finance cycle that has been underway for more than two decades. To wit, the world’s central banks have finally run out of dry powder. They will be unable to stop the credit implosion which must inexorably follow the false boom.

It was a relatively calm overnight session in which European stocks wobbled modestly, Japan was up, China was down following the Yuan's weakest fixing since 2011 as the PBOC continues to aggressively devalue since the SDR inclusion (stoking concerns capital outflows are once again surging), EM stocks stocks were weak and the dollar was unchanged ahead of today's retail sales data and next week's Fed meeting, and then suddenly everything snapped.

Submitted by David Stockman via Contra Corner blog,

The chart below crystalizes why the Fed is stranded in a monetary no man’s land. By the time of next week’s meeting the federal funds rate will have been pinned at about 10 bps, or effectively zero, for 84 straight months.