Juggling Dynamite

“There will never be a good time to raise rates off zero when you’ve been there for six years,” Peter Boockvar, chief market analyst at The Lindsey Group, told CNBC. “The Fed’s screwed, essentially.”

Actually, the Fed members are well looked after financially, it’s the economy and asset markets that must pay the price.  Here is a direct video link.

“…the Fed has indicated a desire to tighten at a time when its biggest global counterparts are easing. That’s resulted in a firming of the dollar, a looming earnings recession in which U.S. profits are forecast to decline in two consecutive quarters—and could well turn negative for the year—and first-quarter GDP gains that could be anemic or nonexistent.

…some on Wall Street believe the market has not come to terms yet with just what is about to happen with monetary policy.”

For those dreaming that maybe today’s excessive valuations in most financial assets can resolve in a virtuous end of gentle mean reversion, or suddenly soaring GDP, sales and earnings that will miraculously ease current cash flow strains, we offer the following graphic of the once revered and now loathed mining sector. A new study finds that there are 589 publicly listed mining companies (roughly 40%) that should no longer be listed as they do not meet the continuous listing requirements required by the exchanges to have working Capital or Financial Resources of the greater of (i) $50,000 and (ii) an amount required in order to maintain operations and cover general and administrative expenses for a period of 6 months.  See:  A Miner Problem, $2 billion in negative working capital.

Notwithstanding their ineligibility, these nearly 600 companies so far still remain listed on public markets, because they generate fees for a variety of service providers such as lawyers, auditors, banks, and the exchanges themselves. Investors in this once loved sector, have already been pummeled with capital implosion. However, speculative boom/bust cycles cannot complete, until the grotesque excesses of the prior bubble are finally culled through the cleansing recognition of write-offs, write-downs and bankruptcy. Then the cycle can begin again…

I find data like this fascinating. Top earning world leader is Brigadier General Lee Hsien Loon, Prime Minister of Singapore since 2004 (with an outrageous lead). China’s Xi Jinping is pulling up a very distant rear. Of course special perks, benefits and graft would be on top of these salary numbers…

Courtesy of Ian Bremmer, Eurasia Group