Ron Paul, The Catholic Church Wants To Know Too: "Who's In Charge?"

According to the BBC News, the Catholic Church ended up losing $14.3M in 2007. "That was despite receiving a single anonomous donation of $14.3."

Interestingly, per the article (link below), almost 1/4 of the Catholic Church's offerings annually come from Americans.

The US Peso's decline is proving to have far reaching effects within the contruct of the many geopolitical factors contributing to economies and organizations.



Chart of the Week: The Bull Market Emerging In The VIX

You can overlay your own economic cycle and/or risk management factors. This is as relevant a long term chart as any I have on my screens.

Eye on Putin Power, II...


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Eye on Putin Power...

By the time you're done your morning coffee today, you'll likely conclude that the geopolitical risk factors affecting markets have been stepped up a notch. The Israeli/Iran threat is the obvious one, but how many people are watching this Russian/Chinese alliance?

Putin's Russia joined arms with China vetoing a UN Security Council proposition to impose sanctions on Zimbabwe's Mugabe.

The US and the UK are lashing out against this move this weekend, and they should.

The higher energy prices go, the more amplified Putin's geopolitical power becomes.

Don't think for one minute that the Russians have enjoyed being subservient to US rhetoric for the past 20 years. That was approximately the length of the bull market in US stocks too. When everyone is making money, a lot of risks can get swept under the rug - when people stop making money is when you realize they are still there.

It is global this time, indeed.

Indy Mac: 2nd largest US Bank Failure Ever

Below is a picture of what it looks like when the US government seizes control over a bank, and you want in. Indy Mac's 33 branches will be shuttered this weekend.

Like most levered business models, Indy Mac's didn't end well. An old fashioned run on the bank is now a real time reality.

This is going to cost the FDIC $8 billion in bailout capital, which represents approximately 15% of the Federal Deposit Insurance Agency's "insurance" buffer.

Picture: Annie Wells / Los Angeles Times

Subway's $5 Price point

There are significant cost pressures on the restaurant industry and its suppliers; fuel related issues, increasing labor, utility and food costs. As a result, it's very difficult for companies to maintain their current price point. If the current trends continue, it's going to weed out the marginal players from the companies with good unit economics and strong balance sheets. The strong franchise systems will gain market share. Nearly every restaurant company has been taking some price (3%-4%) to mitigate margin pressure. What happens if the industry can't raise prices anymore?

Not long ago I wrote about traffic trends on deal in the QSR industry. It turns out that Subway is seeing a lot of price elasticity to the $5 price point. The 14% increase in traffic is nothing short of remarkable in this environment.

The problem for the industry lies in the fact that nearly every competitor is copying it; not just the sandwich guys but also the burger boys. The competition is trying its version of a $5 meal because it is such a good price point in this environment. The segment that could be hurt the most is fast casual. Fast casual chains are well positioned when people have money, but now people don't want to spend $8-$9 for lunch when they can spend $5.


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