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Wed, 28 Sep 2016 07:30:00 +0000 Bob Corker, Boeing, General Electric, President Obama, Saudi Arabia, South Carolina, White House U.S. Corporations Side With Saudi Arabia Against The American People Over 9/11 Victims Bill
Submitted by Mike Krieger via Liberty Blitzkrieg blog,
Shortly after the release of the infamous 28-pages earlier today, the White House issued a statement dismissing allegations of Saudi involvement in the attacks of 9/11. I believe such assurances are intended to prevent people from reading it in the first place, because if you actually read them, your mouth will be wide open the entire time in disbelief.
There are only two conclusions any thinking person can come to after reading the 28-pages.
1. Elements within the Saudi government ran the operations behind the 9/11 attack.
2. The U.S. government covered it up.
– From July’s post: The 28-Pages Are Way Worse Than I Thought
If you want to know just how insignificant the interests of the American people are when they happen to conflict with the profit margins of multinational corporations, the following article should leave little doubt.
Politico
Saudi Arabia is mounting a last-ditch campaign to scuttle legislation allowing families of victims of the Sept. 11, 2001 attacks to sue the kingdom — and they’re enlisting major American companies to make an economic case against the bill.
General Electric, Dow Chemical, Boeing and Chevron are among the corporate titans that have weighed in against the Justice Against Sponsors of Terrorism Act, or JASTA, which passed both chambers unanimously and was vetoed on Friday, according to people familiar with the effort. The companies are acting quietly to avoid the perception of opposing victims of terrorism, but they’re responding to Saudi arguments that their own corporate assets in the kingdom could be at risk if the law takes effect.
It’s not just corporations of course, former Senators are also in on the betrayal.
Meanwhile, Trent Lott, the former Senate majority leader who now co-leads Squire Patton Boggs’ lobbying group, e-mailed Senate legislative directors on Monday warning that the bill could lead other countries to withdraw their assets from the United States and retaliate with laws allowing claims against American government actions.
“Many foreign entities have long-standing, intimate relations with U.S. financial institutions that they would undoubtedly unwind, to the further detriment of the U.S. economy,” r eads one of the attachments, obtained by POLITICO. “American corporations with interests abroad may be at risk of retaliation, a possibility recently expressed by GE and Dow.”
One source familiar with Boeing’s effort said the company wrote in the letter that the victims’ families deserve justice but argued that the economic consequences of the bill were important to consider. The letter warned of potential job losses, the source said. Dow Chemical is also lobbying against the bill, people familiar with the campaign said.
This seems to be status quo’s line when it comes to anything related to the Saudis. We can’t stand up to them, or our economy will go down the toilet. If our economy is really that fragile we’re in bigger trouble than I thought.
To prove the point, recall Wolf Blitzer’s despicable remark from last month’s post: The War Economy – CNN’s Wolf Blitzer Warns About Job Loss if the U.S. Stops Arming Saudi Arabia
Yet, it gets worse. Even if Congress happens to override President Obama’s veto (the first override of his Presidency), these critters are already scheming for an alternative way to water it down.
Indeed, when it comes to putting corporate and foreign interests ahead of the American public, the status quo never gives up.
But even if Obama receives the first veto override of his presidency, the story won’t end there: the Saudis will seek a new bill to scale back the law in the lame-duck session or in the next session, after lawmakers are relieved from the heat of the campaign, people familiar with the plans said.
“It’s Washington at its finest,” one of the people said.
The Saudis are now spending more than $250,000 a month fighting the bill, retaining powerhouses Brownstein Hyatt Farber Schreck, Glover Park Group, Sphere Consulting and Squire Patton Boggs. Besides working with companies invested in Saudi Arabia, the lobbyists are directly contacting lawmakers, placing opinion articles and seeking support from think tank scholars.
GOP Sens. Lindsey Graham of South Carolina and Bob Corker of Tennessee are trying to hammer out a compromise that would soften the bill, bringing it in line with previously proposed versions rather than keeping the harsher language that just passed.
Importantly, it’s not just corporations and former Congresspeople who are working diligently with the Saudis to prevent 9/11 families from having their day in court.
For example, in April’s piece “Getting Things Done” – The Brother of Hillary Clinton’s Campaign Chair is a Major Lobbyist for Saudi Arabia
Lobbying for U.S. corporations is one thing. Lobbying for a barbaric monarchy with “classified” ties to the 9/11 attacks is quite another. Yet that’s exactly what the Podesta Group does. Once again, the Founder and Chairman of the firm, Tony Podesta, is the brother of Hillary Clinton’s Campaign Chair, John Podesta.
The Podesta Group is billing Saudi Arabia $140,000 a month for its public relations services. During the last few months of 2015, it sent 27 emails, had two phone calls and one meeting with lawmakers and staffers, journalists, and organizations including Human Rights Watch and the Center for American Progress, disclosure forms show.
The mere fact that the Saudis are so connected and can spend so much money to persuade politicians to affect U.S. policy is outrageous and should be illegal.
How can the American public compete with that kind of bribery? Look all around you. We can’t.
Close Wed, 28 Sep 2016 06:45:00 +0000 Greece, Newspaper Sweden Creates 55 "No-Go Zones" As It Loses Control Of Refugee Crisis
As migrants continue to flow into Europe, certain cities across the continent have seemingly lost their ability to maintain law and order amid a surge in violent crime. The level of violence within the so-called "no-go zones" has risen to a level such that even the police have abandoned efforts to control the streets. According to RT , one particular example is Sweden's third-largest city of Malmo whe
Read more.....
As migrants continue to flow into Europe, certain cities across the continent have seemingly lost their ability to maintain law and order amid a surge in violent crime. The level of violence within the so-called "no-go zones" has risen to a level such that even the police have abandoned efforts to control the streets. According to RT , one particular example is Sweden's third-largest city of Malmo where more than 70 cars were set on fire by arsonists over the past several days. Meanwhile, authorities noted that offenses range from vandalism to drug crimes, sexual assaults and gun violence.
Per recent media reports, there are now as many as 55 “no-go zones” spread throughout several Swedish cities where the police have little to no ability to control rising violence. The surging violence is putting a huge burden on over-worked police officers who are reportedly choosing to quit the force in record numbers. Per RT :
“We have a major crisis. Many colleagues are choosing to quit ,” police officer Peter Larsson told the Norwegian broadcaster NRK. “A drastically worsened working environment means many colleagues are now looking for other work.”
Recently the city of Malmo faced a string of arsons in which 16 vehicles were torched across the several neighborhoods in just one night. As fire commander, Magnus Johansson, noted the rising violence is exhausting public resources and making it impossible to service the needs of Swedish citizens.
“All our stations are overloaded and the whole of the Malmo force is out extinguishing the car fires, ” fire commander Magnus Johansson told SVT. “It is a burden for our organization, but also for other people who really need our help,” he added.
The burning of cars continued into the early hours of Friday morning, with a further 11 vehicles torched. A total of nine neighborhoods were affected by the arson attacks.
Meanwhile the Hungarian government recently introduced a website that alleged that as many as 900 "no-go zones" exist in major cities across Europe. The website also warned against mandatory European quotas that only serve to "increase the terrorist risk in Europe."
"The mandatory European quotas increase the terrorist risk in Europe and imperil our culture.
Illegal migrants cross the borders unchecked, so we do not know who they are and what their intentions are. We do not know how many of them are disguised and may be terrorists.
Those who come to the EU illegally do not respect our laws and do not want to share common cultural values.
If we do not act, we will not recognize Europe in a few decades.”
The Hungarian government has long rejected a mandatory quota for the resettlement of migrants and refugees with the Prime Minister calling for border walls to be built along the Bulgarian and Macedonian borders with Greece.
As rising immigration has become a political hot-topic across Europe, many elected officials have dismissed the existence of "no-go zones." Meanwhile, Ingrid Carlqvist, editor-in-chief of Swedish newspaper Dispatch International, told RT that terminology used to describe rising violence is "just semantics" but the fact remains that there are certain areas where "when the police come there, they will get stoned and people will try to set fire to police cars and so on."
No, it’s not. This is just semantics. The Swedish authorities don’t want to call them ‘no-go zones.’ They think that ‘no -go zones’ is place where no one can enter. But that is not what normal people mean. They mean that the ambulances can’t go there without police escort . When the police come there, they will get stoned and people will try to set fire to police cars and so on. They are lawless areas – and that is what people call ‘no-go zones’. No normal person would ever go inside there.
But what we see here is that people in these areas, the people who live there, who are mostly Muslims are actually saying this. When Swedish journalists go in there, they just tell them to “f*** off,” because this is not Sweden . They are trying to impose Sharia law in these areas and they are doing a good job about it . The police could do things: they could go in there and just stop all of it when they set fire to the cars and when they throw stones, they could do something. But the longer they wait, the more impossible this job will be of course, because now we have at least 55 of these zones in Sweden.
But we thought Angela Merkel made it very clear that "we can do this ."
Close Wed, 28 Sep 2016 06:00:00 +0000 Bond, Central Banks, European Central Bank, Eurozone, France, Global Economy, Japan, Lehman, Lehman Brothers, Monetary Policy, Money Supply, Quantitative Easing, Real estate, Recession, The Economist "The Only Way Out Is Creative Destruction" Sinn Fears "Self-Inflicted Malaise"
Authored by Hans-Werner Sinn, originally posted at Project Syndicate,
Almost exactly eight years ago, the Lehman Brothers collapse plunged the global economy into recession. The interbank market collapsed, and the entire industrialized world was thrown into the worst crisis since the end of World War II. Though central banks have maintained ultra-low interest rates, the crisis hasn’t yet been fully overcome. On the contrary, numerous economies, such as the southern European countries and France, simply aren’t making any headway. And Japan has been on the ropes for a quarter-century.
Some economists believe that this is evidence of “secular stagnation,” a phenomenon described in 1938 by the American economist Alvin Hansen, who drew on Karl Marx’s Law of the Tendency of the Rate of Profit to Fall . Owing to the gradual exhaustion of profitable investment projects, according to this view, the natural real interest rate has continued to fall. Stabilizing the economy thus is possible only by an equivalent decline in policy interest rates.
In view of the huge credit bubble that preceded the crisis in Japan, the United States, and southern Europe, and the aggressive policies pursued by central banks over the last few years, I doubt that this theory is correct. In fact, I find it plausible that a very different mechanism lies behind the post-2008 stagnation, which I refer to as “self-inflicted malaise.”
This hypothesis is best understood in the context of the economist Joseph Schumpeter’s theory of the business cycle. Faulty expectations on the part of market participants regularly cause credit and asset-price bubbles. Investors, expecting prices and incomes to rise, purchase residential and commercial properties, and they take chances on new business ventures. Real-estate prices start to rise, a construction boom occurs, and a new phase of rapid expansion begins, partly sustained by the revitalization of the domestic economy, including services. The growth in incomes increasingly emboldens borrowers, which further heats things up.
Then the bubble bursts. Investment collapses and real-estate prices fall; businesses and banks go bankrupt; factories and residential buildings are vacated; and employees are laid off. Once prices and wages have fallen, new investors step in with new business ideas and establish new firms. After this “creative destruction,” a new phase of rapid expansion sets in.
In the current crisis, however, monetary policy preempted the creative destruction that could have formed the basis for a new upswing in growth. Asset holders talked central bankers into believing that Schumpeter’s economic cycle could be overcome by large-scale bond purchases financed via the printing press, and by corresponding interest-rate reductions.
To be sure, these measures stopped the fall in asset prices halfway and thus saved much wealth. But they also prevented sufficient numbers of young entrepreneurs and investors from risking a new start. Instead, established firms remained in place, keeping themselves afloat but lacking the wherewithal for new investments. In Japan and Europe, in particular, large numbers of such zombie firms and banks survived, and they are now blocking would-be competitors able to drive the next upswing in growth. The resulting economic ossification looks like the secular stagnation that Hansen described; in fact, the malaise is self-inflicted.
And, because low interest rates have reduced asset managers’ returns, some central banks – and the European Central Bank, in particular – have relied on successive interest-rate cuts in an effort to engineer ersatz value gains for assets. The economy is thus caught in a trap, forcing the ECB to engage in ever more radical monetary-policy measures . Its current program of quantitative easing is meant to double the money supply in a very short period. Further guns are being moved into position, such as successively more negative nominal interest rates or so-called helicopter money.
The only way out of the trap is a hefty dose of creative destruction, which in Europe would have to be accompanied by debt relief and exits from the eurozone, with subsequent currency devaluations. The shock would be painful for the incumbent wealth owners, but, after a rapid decline in the dollar values of asset prices, including land and real estate, new businesses and investment projects would soon have room to grow, and new jobs would be created . The natural return on investment would again be high, meaning that the economy could expand once again at normal interest rates. The sooner this purge is allowed to take place, the milder it will be, and the sooner Europeans and others will be able to breathe easy again.
Close Wed, 28 Sep 2016 03:15:00 +0000 Department of Justice, Deutsche Bank, Dick Fuld, Germany, Google, Lehman Deutsche CEO Goes Full 'Dick Fuld': Bailout "Out Of The Question" Sees "Few Risks... Comfortable Liquidity"
Will John Cryan's name go down in the annals of financial history lore alongside Erin Callan, Joe Gregory, and Dick Fuld?
Given the extreme level of denial and hubris the Deutsche Bank C
Read more.....
Will John Cryan's name go down in the annals of financial history lore alongside Erin Callan, Joe Gregory, and Dick Fuld?
Given the extreme level of denial and hubris the Deutsche Bank CEO reportedly uses in an interview with Germany's Bild magazine , we'd say chances are better than even.
Echoing Fuld's blustering 2008 description of a Lehman balance sheet with "billions in highly liquid assets," sell prized assets , and threats to "hurt the shorts";
Deutsche's Cryan stated unequivocally that the bank is "comfortably equipped with free liquidity," that he sees no need for a capital raise - as he plans to sell Postbank - and a state bailout "is not an issue for us," could not understand "how someone can say that."
As a reminder, here are some special moments from Fuld and Callan's mouths as Lehman fell...
March 2008: eliminated close to 4,000 jobs in the last year.
April 2008: "The worst of the financial crisis impact is behind us" ... "environment will remain challenging for a while"
" by adhering to strong risk-management standards and running the company well, "I will hurt the shorts, and that is my goal."
Lehman has more than $35 billion of cash and liquid assets and another $65 billion of "unencumbered" assets that aren't pledged elsewhere and can easily be turned into cash, Fuld and Chief Financial Erin Callan said Tuesday.
And here, as Bild reports, is Deutsche Bank's CEO John Cryan explaining that everything is fine, nothing to see here... (via Google Translate)
The CEO of Deutsche Bank sees no need for state support of his institution. In an interview with "Bild" (Wednesday) John Cryan said aloud advance notification to the question whether the Bank need government aid: "This is not an issue for us."
The manager had also jected reports and speculation about alleged talks with German Chancellor Angela Merkel (CDU) on state aid for the German bank. "I have not asked the Chancellor at any time for help. I have indicated like nothing." Cryan said. He could not understand "how someone can say that."
Even its shareholders do not want to ask for help of the German Bank CEO. "The question of a capital increase currently does not arise," said the manager. The Bank met all regulatory capital requirements. They have "far fewer risks in the books than in the past" and was "comfortably equipped with free liquidity" .
The CEO described the situation of Deutsche Bank as better than it was currently perceived from the outside.
So no capital increase, plenty of liquidity, and fewer risks?
Investor jitters were stoked by a preliminary Justice Department request that the bank pay $14 billion to resolve a probe into its handling of mortgage-backed securities. The company has said it expects to whittle down the settlement amount, just as other Wall Street banks did during their talks.
“It was clear from the beginning that we would not pay this sum,” Bild quoted Cryan as saying.
“The Department of Justice will treat us with the same fairness as American banks that have already agreed on a compromise."
The bank is also selling assets
The CEO stressed that he considers the planned sale of Postbank started: ".. Everything is ready, we could pass Postbank tomorrow into new hands - but then the price has to be right, we have time."
When asked whether there would be a bonus waiver for directors like 2016 again next year, Cryan said:
"We're in a difficult transition, everyone knows that no one harbors unrealistic expectations.."
So there you have it. Nothing to see here at all. All you hedgers and speculators are crazy...
So who blinks first? The ECB - knowing the collateral chains that will snap. The Bundesbank - knowing their entire banking system is at risk. The German government - knowing it's over for them if DB depositors have to take a haircut... Or Brussells - who know the entire EU plan is teetering is done if anything but the 'rules' are applied to Deutsche. For now, there is one thing for sure - the market will press for one of these players to be forced to make decision.
Close Wed, 28 Sep 2016 02:54:19 +0000 Crude, Crude Oil, Natural Gas, Twitter, Twitter General Market Commentary 9-27-2016 (Video)
By EconMatters
By EconMatters
We talk about various markets from Bonds and Gold to Natural Gas and Oil in this video. Something seems to be going on underneath the radar in crude oil, maybe we are starting to experience some tighter markets right here. API had draws across the board tonight in the Oil Market.
VIDEO
© EconMatters Facebook Twitter YouTube Email Digest Kindle
Close Wed, 28 Sep 2016 02:50:00 +0000 George Orwell, SPY, White House A Few Uncomfortable Truths You Won't Hear From The 2016 Presidential Candidates
Submitted by John Whitehead via The Rutherford Institute,
“If liberty means anything at all, it means the right to tell people what they do not want to hear.”—George Orwell
In the interest of liberty and truth, here are a few uncomfortable truths about life in the American police state that we will not be hearing from either of the two leading presidential candidates.
The government is not our friend. Nor does it work for “we the people.”
Our so-called government representatives do not actually represent us, the citizenry. We are now ruled by an oligarchic elite of governmental and corporate interests whose main interest is in perpetuating power and control.
Republicans and Democrats are not sworn enemies so much as they are partners in crime, united in a common goal, which is to maintain the status quo .
Presidential elections are not exercises in self-government. They are merely business forums for selecting the next CEO of the United States of America, Inc.No matter which candidate wins this election, the police state will continue to grow. In other words, it will win and “we the people” will lose.
The lesser of two evils is still evil. There is virtually no difference between psychopaths and politicians .
Americans only think they’re choosing the next president. In truth, however, they’re engaging in the illusion of participation culminating in the reassurance ritual of voting. The U.S. government has become a greater menace to the life, liberty and property of its citizens than any of the so-called dangers from which the government claims to protect us.
The government knows exactly which buttons to push in order to manipulate the populace and gain the public’s cooperation and compliance.
Fear, which now permeates the populace, leads to fascism .
If voting made any difference, they wouldn’t let us do it. America’s shadow government —which is comprised of unelected government bureaucrats who operate beyond the reach of the Constitution—is the real reason why “we the people” have no control over our government.
The government does whatever it wants.
You no longer have to be poor, black or guilty to be treated like a criminal in America. All that is required is that you belong to the suspect class—that is, the citizenry—of the American police state.
Whether instigated by the government or the citizenry, violence will only lead to more violence. Anyone who believes that they can wage—and win—an armed revolt against the American police state is playing right into the government’s hands.
“We the people” are no longer shielded by the rule of law. Government eyes are watching you. Every move you make is being monitored, mined for data, crunched, and tabulated in order to form a picture of who you are, what makes you tick, and how best to control you when and if it becomes necessary to bring you in line.
Private property means nothing if the government can take your home, car or money under the flimsiest of pretexts, whether it be asset forfeiture schemes, eminent domain or overdue property taxes. Likewise, private property means little at a time when SWAT teams and other government agents can invade your home, break down your doors, kill your dog, wound or kill you, damage your furnishings and terrorize your family .
If there is an absolute maxim by which the federal government seems to operate, it is that the American taxpayer always gets ripped off. From the moment they are born to the time they legally come of age, young people are now wards of the state.
Americans are powerless in the face of militarized police.
Government bureaucrats believe they have the right to search, seize, strip, scan, spy on, probe, pat down, taser, and arrest any individual at any time and for the slightest provocation. Forced cavity searches, forced colonoscopies, forced blood draws, forced breath-alcohol tests, forced DNA extractions, forced eye scans, and forced inclusion in biometric databases are just a few ways in which Americans continue to be reminded that we have no control over what happens to our bodies during an encounter with government officials.
Finally, we all bleed red. And we all suffer when violence becomes the government’s calling card. Remember, in a police state, you’re either the one with your hand on the trigger or you’re staring down the barrel of a loaded gun. The oppression and injustice—be it in the form of shootings, surveillance, fines, asset forfeiture, prison terms, roadside searches, and so on—will come to all of us eventually unless we do something to stop it now.
These are not problems that can be glibly dismissed with a few well-chosen words, as most politicians are inclined to do. Nor will the 2016 elections do much to alter our present course towards a police state.
Indeed, the popularity contest for the new occupant of the White House will not significantly alter the day-to-day life of the average American greatly at all. Those life-changing decisions are made elsewhere, by nameless, unelected government officials who have turned bureaucracy into a full-time and profitable business.
As I point out in my book Battlefield America: The War on the American People these problems will continue to plague our nation unless and until Americans wake up to the fact that we’re the only ones who can change things for the better and then do something about it. Indeed, the Constitution opens with those three vital words, “We the people.”
What the founders wanted us to understand is that we are the government.
There is no government without us—our sheer numbers, our muscle, our economy, our physical presence in this land. There can also be no police state—no tyranny—no routine violations of our rights without our complicity and collusion—without our turning a blind eye, shrugging our shoulders, allowing ourselves to be distracted and our civic awareness diluted.
No matter which candidate wins this election, the citizenry and those who represent us need to be held accountable to this powerful truth.
Close Wed, 28 Sep 2016 02:25:00 +0000 None Caught On Tape: Hackers Take Control Of A Moving Tesla From Miles Away
Tesla can't seem to catch a break this year with multiple accidents blamed on the company's autopilot feature, earnings misses and huge cash burns on lower than expected deliveries that have resulted in the company hitting its bank "funding limit", and a controversial proposed merger with SolarCity . Fortunately, none of this has really mattered to shareholders who keep supporting the stock near its all time highs.
As such, we suspect that Chinese hackers posting the first-ever evidence on youtube that they can hack into moving Teslas and control the vehicles from miles away won't be of much concern to shareholders either.
Nevertheless, we present the following startling footage of Tesla Model S vehicles being remotely controlled by hackers who demonstrate the ability to manipulate everything from overriding the internal displays to opening locked doors and slamming on the brakes while the car is moving. Seems pretty safe, right?
The following footage shows a hacker slamming on the brakes of this Model S from 12 miles away.
Per Forbes , the hack by Tencent’s Keen Security Labs Team was the first demonstration of anyone proving they could remotely control vehicles, making the potential for real-world attacks a little more realistic.
Keen said it had informed Tesla’s security team of multiple vulnerabilities in the latest models running the most recent software. Moreover, the hacks were found to work on various versions of the Tesla Model S and are believed to also work across all marques.
A Tesla spokesperson acknowledged the Keen hack and said it had issued an over-the-air update to "address" the vulnerabilities even though the "risk to our customers was very low."
“Within just 10 days of receiving this report, Tesla has already deployed an over-the-air software update (v7.1, 2.36.31) that addresses the potential security issues. The issue demonstrated is only triggered when the web browser is used, and also required the car to be physically near to and connected to a malicious wifi hotspot. Our realistic estimate is that the risk to our customers was very low , but this did not stop us from responding quickly.”
We agree, it's probably nothing to worry about.
The full video can be viewed here:
VIDEO
Close Wed, 28 Sep 2016 01:58:35 +0000 China, Housing Bubble, Real estate Viral Surveillance Video Reveals A Shocking Scene From China's Housing Bubble
Chinese home prices in August rose the most in more than six years, indicating local government efforts to avert a housing bubble have failed. Average new-home prices in the 70 cities rose 1.2% in August from July, the biggest increase since January 2010, while the value of home sales jumped 33% last month from a year earlier. At the same time, prices in Tier 1 cities, soared 3
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Chinese home prices in August rose the most in more than six years, indicating local government efforts to avert a housing bubble have failed. Average new-home prices in the 70 cities rose 1.2% in August from July, the biggest increase since January 2010, while the value of home sales jumped 33% last month from a year earlier. At the same time, prices in Tier 1 cities, soared 3.5%, the most on record .
Still, in ongoing efforts to limit speculation in China's latest housing bubble, cities such as Hangzhou have phased in ownership rules like banning those born outside the city from owning more than one property. Alas, squeezing demand represents a misguided way to tame a bubble, because if anything it leads to bursts of buying, sending prices soaring, followed by just as sharp plunges as the greater fools panic and rush to offload, forcing the initial rule to be undone, resetting the cycle... something which last happened in China in 2013 and is taking place again now.
Nowhere was this seen better than on a surveillance camera recording which captured China's sheer housing bubble lunacy in its shocking raw intensity.
As People's Daily reports , a surveillance camera - and the resulting viral video - caught the moment new real estate in east Hangzhou opened for sale on September 24. The resulting spree was prompted by the abovementioned new restrictions launched on Monday, which prevents people born outside Hangzhou from buying more than one property. What is mind-boggling is that despite one of the buying lunatics caught in the stampede literally tearing down the entrance door, all the properties sold out in a matter of hours.
VIDEO
Close Wed, 28 Sep 2016 01:43:59 +0000 Bond, Bridgewater, Capital Markets, Central Banks, default, Deutsche Bank, Monetary Policy, Output Gap Bridgewater Calculates How Much Time Central Banks Have Left
One of the key themes that have emerged in the past year is that, having loaded up their balance sheets with tens of trillions in various assets, central banks are "running out of road." While it is a topic extensively discussed on these pages, going all the way back to 2014 , a good summary of the practical limitations on central banks comes from the following series of ch
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One of the key themes that have emerged in the past year is that, having loaded up their balance sheets with tens of trillions in various assets, central banks are "running out of road." While it is a topic extensively discussed on these pages, going all the way back to 2014 , a good summary of the practical limitations on central banks comes from the following series of charts from Deutsche Bank.
The first slide looks at the bond transmission mechanism, namely that central banks have become increasingly aware of the adverse impact of low bond yields on financial sector profitability; another aspect is that European pension liabilities as a % of market cap are at a 10-year high – and above the levels they reached in 2008, when the European market cap was at half the current level. This means that absent an independent rise in inflation expectations, central banks’ attempts to push up nominal bond yields (via less QE or faster hikes) risks leading to higher real bond yields as well; the implication is that equities tend to de-rate when real bond yields rise (i.e. the discount rate increases).
There is a limitation from the standpoint of markets as well: European 12-month forward P/E, at 14.9x, is around 20% above its 10-year average; DB notes that its P/E model suggests that this deviation is fully accounted for by the fact that real bond yields are 180bps below their 10-year average; more troubling is the admission that any removal of monetary accommodation would likely lead to a sharp rise in credit spreads to reflect the deterioration in fundamentals (with default rates now at 5.7%), while equity strategist note that accommodative monetary policy has driven aggregate bond and equity valuations to the highest level since 1800
In the third slide, DB points out that while equities would likely react positively to any rise in nominal bond yields driven by higher inflation expectations (rather than by higher real bond yields), underlying inflation is only likely to accelerate if growth accelerates to be clearly above potential (i.e. the output gap closes). Meanwhile, weakening growth momentum in the US points to downside risks for inflation, and that since the Chinese RMB is still around 10% overvalued – and any renewed devaluation is likely to weigh on DM inflation expectations.
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Ok fine, central banks are "running out of road", however at the same time they are terrified to rip (or even peel) the band-aid off. This has put the system in an unstable equilibrium: on one hand, central bankers - as even they admit - need to hand over the growth impulse over to governments, yet on the other hand, they terrified of even the smallest change to the status quo as they know they may undo some 7 years of "wealth effect" creation overnight.
How much longer can this charade continue?
While many would be quick to answer "indefinitely" that is not true, because with every bond, ETF or stock, purchased by central bankers they come to the point where they either monetize the entire lot, or they increasingly impair the functioning of the capital markets (just ask the dozens of marquee hedge funds that have shuttered in recent years).
Luckily, in a recent analysis, Ray Dalio's Bridgewater asked precisely this question, and even better, provided the answer to how much time is left until both the ECB and BOJ hit the limits on their existing programs.
As the chart below shows, assuming no changes to existing programs, the ECB and the BOJ, the two central banks most actively monetizing debt currently, have 8 and 26 months respectively, if they do no changes to their programs.
However, if incremental easing is layered on, like expanding the scope of their bond buying programs or purchasing equities even more aggressively, the total rises substantially. The final answer: 68 months, or just above 5 and a half years, in the case of the ECB, were it to steamroll all political opposition and monetize virtually every possible bond (and 20% of the equity market), and 48 months, or 4 years, in the case of the BOJ.
Which means for those market participants who have already torn most of their hair out from participating in a centrally planned "market" where nothing makes sense, get ready because, the insanity may last another 4 or 5 years longer...
Close Wed, 28 Sep 2016 01:35:00 +0000 Alan Greenspan, Arthur Burns, Capital Markets, Central Banks, China, Corporate America, Donald Trump, Gambling, Great Depression, India, Janet Yellen, John Stumpf, Main Street, Milton Friedman, Monetary Policy, New York Times, Paul Volcker, recovery, Steve Liesman, Tricky Dick, Wall Street Journal "The Donald Nailed It" Stockman Screams "We Are In A Big Fat Ugly Bubble"
Submitted by David Stockman via Contra Corner blog,
Most of the 90 minutes last night was a waste - with both candidates lobbing well-worn clichés, slogans and sound bites at the audience and each other.
But there was one brief moment that made it all worthwhile. That was when Donald Trump peeled the bark off the Fed’s phony recovery narrative and warned that the stupendous stock market bubble it has created will come crashing down the minute it stops pegging rates to the zero bound.
“……Typical politician. All talk, no action. Sounds good, doesn’t work. Never going to happen. Our country is suffering because people like Secretary Clinton have made such bad decisions in terms of our jobs and in terms of what’s going on.
Now, look, we have the worst revival of an economy since the Great Depression. And believe me: We’re in a bubble right now. And the only thing that looks good is the stock market , but if you raise interest rates even a little bit, that’s going to come crashing down.
We are in a big, fat, ugly bubble
Trump thereby landed a direct hit on the false Wall Street/Washington postulate that the Fed has been the nation’s economic savior.
To be sure, there were actually no “facts” to check in Trump’ statement. It was simply an entirely correct judgment that the utterly unnatural interest rates engineered by the Fed have fueled an egregious inflation of financial asset prices and that “some very bad things” are going to happen when the Fed’s market rigging operation is finally halted.
Still, and opinion or not, Appelbaum emitted a barrage of harrumphing and scolding, implying that Trump is some kind of yokel who does not understand the sacred independence of the Fed:
In attacking the Fed, Mr. Trump is plowing across a line technocratic devices
Technocratic devices? Now that is downright balderdash because what the Fed is doing is profoundly and resoundingly political.
To wit, after 94 months on the zero bound the Fed has executed the most massive income and wealth transfer in American history.
Needless to say, a wealth redistribution that monumental in scope and capricious in impact would never see the light of day among the unwashed “politicians” that Appelbaum apparently thinks are too benighted to be involved in monetary policy. That’s because whether or not they embrace the Keynesian nostrum that saving is bad and debt is good, the nation’s politicians are smart enough to know that the sweeping fiscal transfer at the core of Fed policy would be shouted down by the voters in a thunderous chorus of denunciation and derision.
Stated differently, the politician at least know that if the Congress were to enact anything remotely similar to the Fed’s savage and relentless attack on savers and wage-earners, they would be on the receiving end of the torches and pitchforks that would descend on the Imperial City.
In fact, this wanton redistribution from savers to debtors and speculators is occurring only because a happenstance of history has put lethal financial power in the hands of an insulated, unelected monetary politburo; and one that has been taken-over by a tiny posse of delusional and power-hungry Keynesian academics, to boot.
Journalistic hacks like Appelbaum, along with Steve Liesman of CNBC and Jon Hilsenrath of the Wall Street Journal, not only exhibit the worst kind of access-driven mendacity; they also faithfully perpetuate all the myths, shibboleths and outright lies that insulate the Fed from any policy accountability whatsoever.
In the case at hand, Appelbaum claims that it was Nixon’s manhandling of the spineless Fed Chairman, Arthur Burns, in the run-up to the 1972 election that proved the case for the strict “independence” of the Fed. The resultant decade-long inflationary wave instigated by the nefarious Tricky Dick, therefore, was the inadvertent founding event; it allegedly fostered a newly minted separation of powers doctrine that has invested the 12 members of the FOMC with virtually dictatorial powers over the nation’s financial system.
Well, yes, Nixon was the evil-doer that paved the way to our present form of mutant casino capitalism. But it was not because Arthur Burns had a propensity to bend over in the presence of great power.
To the contrary, the real evil happened in August 1971
It did take several decades, of course, for the denizens of the Eccles Building to realize that with the shackles of gold and convertibility removed, they were free to generate dollar liabilities at will. Indeed, the great Paul Volcker fully understood what had happened at Camp David, and strove mightily during the next decade, first at the NY Fed and then in the Eccles Building, to keep the fiat genie bottled-up via sheer intellectual discipline and willpower.
But it couldn’t last, and not just because Alan Greenspan checked in his hard money doctrines in the cloak room of the Eccles Building the first day he arrived and never reclaimed the check. What happened was that the financial press discovered that it could swap journalistic integrity for access, and the rest is now history.
What has materialized, in fact, is a cult of central bank flattery and subservience that is every bit in the emperor has no clothes modality.
But now it’s gotten downright hideous. There is not an honest price left in any precinct of the financial system. Dangerous, unstable speculative bubbles infest every corner of the money and capital markets.
Likewise, the Fed’s fatuous policy of inflation targeting has caused the massive off-shoring of breadwinner jobs to the China Price for goods and the India Price for services. And that wasn’t the half of it.
At the same time, this sweeping and perverse job destruction policy has generated massive slack in the domestic labor markets—upwards of 180 billion hours in quantitative terms. That overhang, in turn, has suppressed nominal wage rates in the middle and bottom end of the labor market, causing wage-earners to fall increasingly behind a relentlessly rising cost of living.
And then it has added insult to injury by fueling the fantastic bubble in the stock market that Trump so accurately called-out last night. Its not just that it will soon crash and wipe-put tens of trillions of paper wealth. Actually, the real evil of ZIRP and QE has already been done.
To wit, can anyone not drinking the Wall Street Cool-Aid believe that John Stumpf and his patron, St, Warren Buffet, were actually running a bank?
In fact, the C-suites of corporate America have been turned into stock gambling dens, and corporate balance sheets have been strip-mined to fund the greatest financial engineering ponzi schemes every conceived.
The truth is, Janet Yellen is a paint-by-the-numbers academic fool who has no clue about the havoc she and her posse have unleashed on the American economy.
Thank heavens for the Donald. He knows a rigged job when he sees it, and, at least last night, was undomesticated enough to let 100 million voters hear the truth.
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