Month: February 2014

We find it truly extraordinary that anyone is surprised the financial system is under duress again.

 

After all, what have the Central Banks accomplished in the last five years?

 

1)   Did they clear out the bad debts that caused the 2008 collapse? NOPE

2)   Did they implement structural reforms to insure another 2008 didn’t happen? NOPE

3)   Did they punish fraud or corruption in any way to insure that the system was clean? NOPE

 

So what did they do?

 

They cut interest rates over 500 times and funneled over $10 trillion into the financial system, over 98% of which went to the very players (key banks) who nearly blew up the world in 2008.

 

And people are actually surprised that the system is back in trouble again? Would you be surprised if giving another shot of heroin to a drug addict who was in a coma didn’t bring him to health?

 

Honestly, did anyone think this would really work? I know that the connected elites loved it because the whole process allowed them to hand off their garbage investments to the public while leveraging up to acquire more assets via the Fed’s cheap money… but what about those who DON’T work for a top 20 global financial institutions? Did anyone actually believe this would work?

 

So here we are today, Europe’s already insolvent banks are now potentially on the hook for $3 trillion in Emerging Market investments.

 

When your entire banking system is leveraged at 26-to-1 it really doesn’t matter who you lend to… you’re bust. But in this case, the bad emerging market investments are just the icing on the rotten cake that is Europe’s banking balance sheets.

 

Hopefully Mario Draghi can “promise” something again and the whole system will hold together. After all, THAT and Bernanke’s decision to engage in more and more QE (despite NO evidence that QE benefits the economy) are what brought us back from the brink in June 2012… maybe Janet Yellen and Mario Draghi can repeat this.

 

Then of course there’s China… which has created the single biggest credit bubble relative to GDP in history. Nevermind, that they literally blow up buildings to build new ones to pad their GDP numbers… China is a miracle and its economy is on the verge of becoming another US.

 

The world believes China can become more driven by consumers… though the data shows consumer spending has grown by 9% a year for 30 years there… so hoping that things are going to erupt higher there is a little misguided.

 

And of course there’s the US, which is STILL printing $65 billion per month despite two QE tapers… which folks claim were terrible for the world (how exactly is printing $65 billion per month five years into an alleged recovery, a good thing? Doesn’t that NEGATE the entire claim of a recovery at all?).

 

You can build a house on a rotten foundation (bad debt, fraud, corruption) and it will stand for a while. But eventually it will collapse.

 

This will again happen with the markets. The only difference is that this time around, the Central banks have already spent most if not ALL of their ammo propping up the system.

 

For a FREE Special Report on how to prepare your portfolio for a bear market collapse, visit us at:

 

http://ift.tt/170oFLH

 

Best Regards

 

Phoenix Capital Research

 

 

 

via Zero Hedge http://ift.tt/1il5Eor Phoenix Capital Research

Earlier we reported how, in the CBO’s own words, Obamacare would result in (at least) 2.5 million (soon to be revised much higher) workers departing the labor force over the next decade, that would stay there were it not for the skewed incentives provided by this latest welfare Ponzi scheme. Sure enough, it took the White House mere moments to share its canned retort seeking to control the major fallout this report generated as it goes, once again, against all of Obama’s promises. From Reuters: “The White House on Tuesday refuted arguments that Obamacare reforms will hurt jobs, and said a new report from the Congressional Budget Office finds the reforms will spur hiring during the 2014-2016 period. “Claims that the Affordable Care Act hurts jobs are simply belied by the facts in the CBO report,” the White House said in a statement about the report, contradicting assessments that said the CBO showed reforms will result in a cut to hours.” So job losses after 2016, but before then the surge in hiring – of part-time workers – offset by mass layoffs of full-time workers as employers seek to game Obamacare. Just say that then.

Of course, the White House scrambling to contain the damage is expected. However, nothing compares to the “explanation” provided by The Bezos Post’s internal “fact checker.”  The “explanation” there why “No, CBO did not say Obamacare will kill 2 million jobs” (which it did) is truly an example of a Goebbelsian work of art when it comes slaying any facts that do not fit the “glorious leader” narrative.

The so-called “facts” according to the “fact-checker”:

First, this is not about jobs. It’s about workers — and the choices they make.

 

One big issue are the health insurance subsidies in the law. That’s a substantial benefit that decreases as people earn more money, so at a certain point, a person has to choose between earning more money or getting less help with health insurance payments. In other words, they might work longer and harder, but actually earn no more, or earn even less, money. That is a disincentive to work. (The same thing happens when people qualify for food stamps or other social services.)

 

Thus, someone might decide to work part-time, not full time, in order to keep getting health care subsidies. Thus, they are reducing their supply of labor to the market.

 

…

 

The CBO did look at the effect on demand for labor (i.e., jobs) but said that the effects are mostly on the margins or are not measurable. In fact, in contrast to a common GOP talking point, the CBO declares that “there is no compelling evidence that part-time employment has increased as a result of the ACA.”

 

Finally, we should note that the figures (2 million, etc.) are shorthand for full-time equivalent workers—a combination of two conclusions: fewer people looking for work and some people choosing to work fewer hours. The CBO added those two things and produced a hard number, but it actually does not mean 2 million fewer workers.

So, as a result of skewed incentives courtesy of Obamacare, there will be 2.5 million workers (or, by some forced logic 5 million part-time workers and so on) in the labor force over the next decade. In other words precisely what all those articles that the WaPo supposedly is refuting are saying? And this is what passes for “refuting” a fact in our day and age? May at least have added a few kittens and a slideshow to at least generate some ad revenue for Jeff Bezos.

via Zero Hedge http://ift.tt/1gK88jb Tyler Durden