Business

Authored by Lena Komileva, originally posted at The Financial Times,

The US Federal Reserve raised rates for the third time in six months in June, even though inflation had stayed below its 2 per cent target for much of the past decade. Why? The justification lies with the return to “economic normalisation” (a more normal US growth and credit cycle), a reflationary global environment and easy financial conditions all combining to banish the extreme “tail risks” of a deflationary slump that followed the financial crisis.

With oil crashing, 'hard' economic data slumping, political chaos ahead of the debt ceiling debacle, and The Fed about to embark on something no central bank has ever done (let alone done successfully), it should be no surprise that earnings expectations are being ramped exponentially higher and The Dow (thanks in large part to Boeing recently) has exploded near 22,000 today for the first time ever making yet another new record high...

Gold prices just hit $1280. That is the highest since The Fed raised rates in June and follows the best month since February.

However, as the precious metal surged 6% in July, ETF investors abandoned the barbarous relic by the most since May 2013.

As it seems the ETF is seeing notable liquidations... perhaps reducing the implied leverage against physical holdings?

As we see physical gold holdings within the ETFs being drawn down as prices surge...

Something changed.

When it comes to Netflix and its stratospheric (forward) valuation, the thesis is simple: the company is (so far) the undisputed leader in the arena of internet streaming. As the LA Times summarizes, the global streaming giant today boasts impressive stats: 104 million subscribers worldwide, up 25% from last year and almost quadruple from five years ago. Its series and movies account for more than a third of all prime-time download Internet traffic in North America. Its more than 50 original shows garnered 91 Emmy Award nominations this year, second only to premium cable service HBO.

Former Fed chair Alan Greenspan blasphemously warned a year ago of an "imminent crisis":

"This is the worst period, I recall since I've been in public service. There's nothing like it, including the crisis - remember October 19th, 1987, when the Dow went down by a record amount 23 percent? That I thought was the bottom of all potential problems. This has a corrosive effect that will not go away. I'd love to find something positive to say."