Is the Next Crisis Upon Us?

The Fed played a big game with the markets from 2009 until today.

 

That game was engaging in reckless policy until something “breaks.”

 

The problem with “breakage” in the capital markets; is that when something breaks it has a tendency to be swift. Consider Italy. It was considered one of the pillars of the EU since it adopted the Euro in 1999. Because of this, the markets were happy to allow Italy to borrow at stable rates with the yield on the ten year Italy government bond well below 5% for most of the last decade.

 

 

Then, in the span of a few weeks, everything came unhinged and the yields on Italy government bonds spiked, rising over 7%: the dreaded level at which a country is considered to be insolvent and set for default. It was only through extraordinary lending mechanisms from the European Central bank (the LTRO 1 and LTRO 2 programs to the tune of hundreds of billions of Euros… for an economy that is €2 trillion in size) that Italy was saved from potential systemic collapse.

 

My point with this is that when the capital markets “break” due to a loss in credibility, the shift tends to be both swift and violent. I noted before that the yield on the ten-year Treasury is the basis for the pricing of all risk in the capital markets. With this yield being manipulated by the US Federal Reserve to the tune of $45 billion per month, the entire landscape for risk has become distorted.

 

In this context, what happened in Italy can be extrapolated to risk assets in general: when the adjustment finally does happen (when something finally “breaks” as a result of the Fed’s interventions) it will be a very rough period for the capital markets. And with the Fed having already used the vast majority of the tools in its arsenal creating this environment, it is not clear that the Fed will be able to step in and hold things together as the ECB did for Italy.

 

With that in mind, we ask, IS the next Crisis at Upon us?

 

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

 

 


    



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The Most Boring Superbowl Ever … Until 9/11 Truth Proponent Interrupts MVP Interview

This clip has gotten a lot of media attention … almost as much as Peyton Manning explaining why the football hit his helmet on the very first play (leading to a safety, and the fastest score in superbowl history).

Winning Seahawks coach Pete Carroll also questions 9/11. As do some old-timers, like 5-time NFL Pro Bowl center Mark Stepnoski (Dallas Cowboys and Houston Oilers) and former NFL running back Bill Enyart (Buffalo Bills and Oakland Raiders).

What do you think? How many of you think:

(1) The government couldn’t have foreseen 9/11, and did everything it could to minimize the damage (while perhaps being negligent in its foresight, coordination, communication, priorities or execution)?

(2) 9/11 was an inside job carried out by rogue elements of the U.S. government as a “false flag attack“?

(3) The government knew the attack was coming, but allowed it to succeed to justify the launching of the war for oil – er, I mean the “War on Terror” – and to consolidate power and crackdown on liberties at home?


    



via Zero Hedge http://ift.tt/1dn5hF5 George Washington

Gov. Deal: winter storm alerts will come via cellphone

Task force appointed to recommend changes as Deal orders GEMA to work with meteorologists in advance of storms

Taking advantage of available technology, Georgia residents will now receive a storm warning on cellphones in targeted areas to advise against road travel, according to Gov. Nathan Deal.

In the wake of the snowstorm that snarled metro Atlanta commuters Jan. 28, leaving some students stranded at schools and traversing iced-over roads on school buses, Deal announced further immediate changes today in a news release.

read more

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USDJPY Takes Out Stops, Plunges Under 101: Drags Stocks To New Lows

It’s just getting worse for global interconnected, correlated markets where every expression of risk is the USDJPY, and of course for the Nikkei and for Abenomics, who is now on Imodium watch.  Should the USDJPY tumble to double digit range, we are officially in global central banker intervention territory.


    



via Zero Hedge http://ift.tt/1fTI5RZ Tyler Durden

Mercedes Didn't Get The "Blame The Weather" Memo

While the bulk of retailers are blaming plunging kitchen sink sales on unprecedented and completely unexpected cold winter weather, and shocking snow – that defunct relic in a global cooling warming world – one company apparently did not get the “scapegoat the weather” memo: Mercedes.

Mercedes-Benz USA (MBUSA) today reported the highest January retail volumes in its history with sales of 24,413 units across the Mercedes-Benz, Sprinter and smart model lines, a 1.5% increase from the 24,059 vehicles sold the same month last year. The Mercedes-Benz brand alone achieved its best-ever January with sales of 22,604. Gains were made across the MBUSA brand portfolio as Sprinter Vans advanced 19.6% to 1,288 units and smart increased 8.3% to 521.

 

We knocked it out of the park last year and are moving into 2014 at a record sales pace,” said Steve Cannon, president and CEO of MBUSA. “The product milestones will continue this year with an all-new entry point on the SUV side in the form of the GLA, the next generation C-Class and standout additions to our high-end and high-performance lineups.”

But… but… the snow?


    



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

Mercedes Didn’t Get The “Blame The Weather” Memo

While the bulk of retailers are blaming plunging kitchen sink sales on unprecedented and completely unexpected cold winter weather, and shocking snow – that defunct relic in a global cooling warming world – one company apparently did not get the “scapegoat the weather” memo: Mercedes.

Mercedes-Benz USA (MBUSA) today reported the highest January retail volumes in its history with sales of 24,413 units across the Mercedes-Benz, Sprinter and smart model lines, a 1.5% increase from the 24,059 vehicles sold the same month last year. The Mercedes-Benz brand alone achieved its best-ever January with sales of 22,604. Gains were made across the MBUSA brand portfolio as Sprinter Vans advanced 19.6% to 1,288 units and smart increased 8.3% to 521.

 

We knocked it out of the park last year and are moving into 2014 at a record sales pace,” said Steve Cannon, president and CEO of MBUSA. “The product milestones will continue this year with an all-new entry point on the SUV side in the form of the GLA, the next generation C-Class and standout additions to our high-end and high-performance lineups.”

But… but… the snow?


    



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

Obamacare’s Grassroots Marketing Plan Falls Flat

Obamacare’s marketing to young adults isn’t going
as well as hoped.
According to Buzzfeed
, the original, highly targeted campaign
to reach out to the young and healthy individuals who the White
House has said are critical to the law’s success has been largely
scrapped:

The original recruitment plan envisioned by Enroll America and
other White House allies was highly targeted: Using an army of
grassroots workers, the groups planned to knock on individual doors
to find the uninsured and educate them about their new health care
options.

After relying on that method during the opening months of health
care enrollment, the effort has been largely scrapped, those
familiar with recruitment said, especially when it comes to young
people. It proved harder to find the volunteers supporters needed
for canvassing efforts than it did to find volunteers willing to
work at events, organizers said, and canvassing for young people
proved slower than expected. In its place now is a recruitment
drive focused on finding young people where they gather and handing
out information about the health care law.

The context here is that last summer, before the botched launch
of the exchanges, the White House was telling reporters that the
law’s success or failure hinged on the percentage of young adult
sign ups. “To the White House, the difference between success and
failure is straightforward: They need to entice a sufficient number
of young and healthy adults into the new insurance marketplaces
that open Oct. 1,” wrote The Washington Post’s Ezra Klein
and Sarah Kliff in
a lengthy report
on how the administration planned to convince
young people to buy insurance under the law. Persuading young,
healthy people to buy insurance, the pair wrote, was the “crux of
Obamacare’s challenge.”

That obviously hasn’t happened to the extent that the White
House was hoping. Before the exchanges went live, the
administration said it was looking for about seven million
enrollees in the exchanges, and needed about 39 percent of them to
be between the ages of 18 and 34. But the most recent data we have
indicates that, so far, that age cohort makes up more like 24-25
percent of the total.

The same Post report also describes the White House’s
belief that it will be able to use data-driven, campaign style
targeting to connect with uninsured young adults. The Buzzfeed
article suggests that those efforts haven’t really worked. The
administration and its allies are doing what they can to modify
their approach, but they’re also just redefining success, saying
that seven million sign ups was never really the goal and that
things will be just fine with a much lower percentage of young
adults than they’d targeted. Which was not only predictable but
predicted. “[The administration’s] job in 2013 is to
declare victory in any way possible,” Doug Holtz-Eakin, president
of the conservative American Action Forum, told the Post.
“They’ll keep moving goal posts until they can declare
victory.” 

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"We imagine that punishing the rich will miraculously uplift the poor," Says Washington Post Columnist

class warfareEvidently the Democrats hope that flogging the
class warfare, uh, the growing inequality meme will enable them to
cling to their control of the U.S. Senate and put them in charge of
the House of Representatives. Over at the Washington Post
columnist Robert Samuelson takes on the rhetorical misuse of
inequality and makes the entirely sensible point that…

Economic
inequality is usually a consequence of our problems and not a
cause.

For starters, the poor are not poor because the rich are rich.
The two conditions are generally unrelated. Mostly, the rich got
rich by running profitable small businesses (car dealerships,
builders), creating big enterprises (Google, Microsoft), being at
the top of lucrative occupations (bankers, lawyers, doctors,
actors, athletes), managing major companies or inheriting fortunes.
By contrast, the very poor often face circumstances that make their
lives desperate.

What kind of
circumstances
? Not graduating from high school and having kids
before getting married.

A few weeks back, citing recent Congressional Budget Office data
I explained “Why
President Obama Is Wrong on Inequality
“:

Are the rich getting richer? Yes. Are the poor getting poorer?
No. In fact, over the past 35 years most Americans got richer. Has
income inequality increased in the United States? Yes….

…from 1979 and 2010, the last year for which data are
available, the bottom fifth’s after-tax income in constant dollars
rose by 49 percent. The incomes of households in the second lowest,
middle, and fourth quintiles increased by 37 percent, 36 percent,
and 45 percent, respectively. The poor and the middle class got
richer.

Burtless then divides the households situated in the top fifth
of incomes into four groups: those in 90th percentile and below,
those in the 91st through 95th percentiles, those in the 96th
through 99th percentiles, and the top 1 percent. From 1979 to 2010,
incomes for those fortunate households increased by 54 percent, 67
percent, 79 percent, and 202 percent, respectively. The rich got
richer too, and they got richer faster.

Samuelson agrees. Parsing the CBO data a bit differently,
Samuelson reports:

True, the top 1 percent outdid everyone. From 1980 to 2010,
their inflation-adjusted pretax incomes grew a spectacular 190
percent, almost a tripling. But for the poorest fifth of Americans,
pretax incomes for these years rose 44 percent. Gains were 31
percent for the second poorest, 29 percent for the middle fifth, 38
percent for the next fifth and 83 percent for the richest fifth,
including the top 1 percent. Because our system redistributes
income from top to bottom, after-tax gains were larger: 53 percent
for the poorest fifth; 41 percent for the second; 41 percent for
the middle-fifth; 49 percent for the fourth; and 90 percent for
richest.

Samuelson concludes:

Americans in the top 1 percent are convenient scapegoats. They
don’t naturally command much sympathy, and their rewards sometimes

seem outsized or outlandish
. When most people are getting
ahead, they don’t worry much about this economic inequality. When
progress stalls, they do. There’s a backlash and a tendency to see
less economic inequality as a solution to all manner of problems.
We create simplistic narratives and imagine that punishing the rich
will miraculously uplift the poor. This vents popular resentments,
even as it encourages self-deception.

For more background see Reason.com editor Nick Gillespie’s
excellent column, “Why
Obama Can’t Solve Inequality
” over at The Daily
Beast
.

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“We imagine that punishing the rich will miraculously uplift the poor,” Says Washington Post Columnist

class warfareEvidently the Democrats hope that flogging the
class warfare, uh, the growing inequality meme will enable them to
cling to their control of the U.S. Senate and put them in charge of
the House of Representatives. Over at the Washington Post
columnist Robert Samuelson takes on the rhetorical misuse of
inequality and makes the entirely sensible point that…

Economic
inequality is usually a consequence of our problems and not a
cause.

For starters, the poor are not poor because the rich are rich.
The two conditions are generally unrelated. Mostly, the rich got
rich by running profitable small businesses (car dealerships,
builders), creating big enterprises (Google, Microsoft), being at
the top of lucrative occupations (bankers, lawyers, doctors,
actors, athletes), managing major companies or inheriting fortunes.
By contrast, the very poor often face circumstances that make their
lives desperate.

What kind of
circumstances
? Not graduating from high school and having kids
before getting married.

A few weeks back, citing recent Congressional Budget Office data
I explained “Why
President Obama Is Wrong on Inequality
“:

Are the rich getting richer? Yes. Are the poor getting poorer?
No. In fact, over the past 35 years most Americans got richer. Has
income inequality increased in the United States? Yes….

…from 1979 and 2010, the last year for which data are
available, the bottom fifth’s after-tax income in constant dollars
rose by 49 percent. The incomes of households in the second lowest,
middle, and fourth quintiles increased by 37 percent, 36 percent,
and 45 percent, respectively. The poor and the middle class got
richer.

Burtless then divides the households situated in the top fifth
of incomes into four groups: those in 90th percentile and below,
those in the 91st through 95th percentiles, those in the 96th
through 99th percentiles, and the top 1 percent. From 1979 to 2010,
incomes for those fortunate households increased by 54 percent, 67
percent, 79 percent, and 202 percent, respectively. The rich got
richer too, and they got richer faster.

Samuelson agrees. Parsing the CBO data a bit differently,
Samuelson reports:

True, the top 1 percent outdid everyone. From 1980 to 2010,
their inflation-adjusted pretax incomes grew a spectacular 190
percent, almost a tripling. But for the poorest fifth of Americans,
pretax incomes for these years rose 44 percent. Gains were 31
percent for the second poorest, 29 percent for the middle fifth, 38
percent for the next fifth and 83 percent for the richest fifth,
including the top 1 percent. Because our system redistributes
income from top to bottom, after-tax gains were larger: 53 percent
for the poorest fifth; 41 percent for the second; 41 percent for
the middle-fifth; 49 percent for the fourth; and 90 percent for
richest.

Samuelson concludes:

Americans in the top 1 percent are convenient scapegoats. They
don’t naturally command much sympathy, and their rewards sometimes

seem outsized or outlandish
. When most people are getting
ahead, they don’t worry much about this economic inequality. When
progress stalls, they do. There’s a backlash and a tendency to see
less economic inequality as a solution to all manner of problems.
We create simplistic narratives and imagine that punishing the rich
will miraculously uplift the poor. This vents popular resentments,
even as it encourages self-deception.

For more background see Reason.com editor Nick Gillespie’s
excellent column, “Why
Obama Can’t Solve Inequality
” over at The Daily
Beast
.

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Was Herblock the Worse Cartoonist Ever? Or, Why Does Anyone Take Hendrik Hertzberg Cereal?

Over
at The Weekly Standard
, Andrew Ferguson has a great
piece about Herblock, the legendary and multiple Pulitzer
Prize-winning editorial cartoonist who, well, sucked at editorial
cartoons. The news hook for the piece is an HBO documentary,
The Black & The White, about Herblock, who died in
2001 and worked at The Washingon Post for 55 years.

From Ferguson’s piece, which is a great attack on the smug,
self-congratulatory tone among legacy media types:

The stars [of the documentary] are the real-life personages who
pop up to attest to Block’s greatness—his irreverence, his
bottomless imagination, his moral courage in taking on the powerful
and damn the consequences. They make quite a gallery, these
personages. Aside from a pair of show-biz stars, Jon Stewart and
the comedian Lewis Black, they are cave dwellers of the
Washington/New York media racket, what’s left of it. Most of them
are face-famous, of course, and instantly recognizable, but you can
also tell their stature from the things they actually make
themselves say. 

“It was as if Jesus himself were walking around the
newsroom,” says Hendrik Hertzberg of the 
New
Yorker
….

A Herblock cartoon, says Tom Brokaw, “was like a punch in the
face.”

“You didn’t want to be Herblock’s enemy,” says Ted Koppel. “He’d
nail your hide to the wall.”

“Herb exposed hypocrisy,” says Bob Woodward. 

“Herb was the conscience of the country,” says Roger
Rosenblatt. 

He was “irreverent,” “fearless,” “willing to offend”—so much a
renegade indeed that he won three Pulitzer Prizes, got syndicated
to 1,800 newspapers, mounted exhibitions of his work at the Library
of Congress, and received the Presidential Medal of Freedom. This
is a special kind of renegade.

The most impressive thing? Herblock did it all without ever
getting a laugh or providing anything like a real insight. That
takes talent, dedication, and, well, renegadism up the
ying-yang.


Read the whole article
.

More on editorial cartoons as a genre
gone terribly, terribly wrong
.

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