Month: August 2014

The zombification of corporate America is nowehere more evident than the yield-starved demand that has enabled companies with the lowest of the low credit ratings to raise debt capital and stay alive far beyond their ‘natural’ lifespan. As WSJ reports, investors are gobbling up some of the riskiest debt from junk-rated European companies at the fastest pace in years. The riskiest tranche of that debt – so-called second-lien, or junior, loans – amounts to $3.3 billion, almost double the amount raised at the same stage last year and the most over the same period since 2007. The reason is simple – Central Banks – “If you have more demand than supply then you end up with a loosening of terms and potentially more leverage and more aggressive structures.”

 

As WSJ reports, investors are gobbling up some of the riskiest debt from junk-rated European companies at the fastest pace in years.

Companies with lower credit ratings have raised $186 billion in junk loans so far this year, according to Dealogic. The riskiest tranche of that debt—so-called second-lien, or junior, loans—amounts to $3.3 billion, almost double the amount raised at the same stage last year and the most over the same period since 2007.

This is not simply a dash for trash – this is the absolute lowest of the low in the capital structure…

If a borrower goes bust, junior lenders are only repaid if some other, higher-ranking lenders, get all their money back. Only unsecured creditors and shareholders are further down the queue. Companies also get better terms—junior loans are less restrictive when it comes to taking on additional leverage than senior debt, while borrowers get more flexible repayment options than bonds.

 

In exchange for the additional risk, investors get a better return. Interest rates on junior loans are typically 3.5 percentage points higher than senior loans, bankers say.

The reason is clear…

The rise in junior-loan issuance comes as loose monetary policy from central banks has depressed yields, pushing some investors into riskier assets that offer higher yields.

 

“If you have more demand than supply then you end up with a loosening of terms and potentially more leverage and more aggressive structures,” said Elissa Johnson, a fund manager at Henderson Global Investors, which oversees around £1 billion ($1.66 billion) of loan assets.

 

Dealogic data show that more than half the loans that include junior debt have been used for acquisition financing, with a smaller proportion financing dividend payments.

And it’s not slowing down – yet…

Meanwhile deal sizes are getting larger too. Last month, Spanish private hospital operator IDCSalud raised €2.15 billion in junk loans, €350 million of which was in junior debt, the largest junior deal from a European company in three years.

 

“We’re seeing more and more requests from companies for these type of deals,”

Oh – and by the way – the risk is enormous…

Losses on junior loans can be steep if a company fails. The average recovery rate on defaulted junior loans in Europe between 2003 and 2013 was 36%, according to Standard & Poor’s. That compares with 76% on senior loans, S&P data show.

So be sure that extra 350bps of yield covers your 64% capital loss potential…

*  *  *

This is ‘mal-investment’ writ large, and at least as bad as during the 2007 bubble.

*  *  *

The only thing is… credit investors are getting antsy again…

via Zero Hedge http://ift.tt/1l6lQj3 Tyler Durden

Outspoken Union Theological Seminary professor Cornel West goes where very few ‘thinkers-of-color’ have had the courage to go in this interview with Salon’s Thomas Frank: “The thing is, [Obama] posed as a progressive and turned out to be counterfeit. We ended up with a Wall Street presidency, a drone presidency, a national security presidency. The torturers go free. The Wall Street executives go free… we ended up with a brown-faced Clinton. Another opportunist. Another neoliberal opportunist… So you got low-quality black leadership. Al Sharpton is who? He’s a cheerleader for Obama… Eric Holder won’t touch the Wall Street executives; they’re his friends… I think a post-Obama America is an America in post-traumatic depression.”

 

Excerpted from Salon,

…how do you feel things have worked out since then, both with the economy and with this president? That was a huge turning point, that moment in 2008, and my own feeling is that we didn’t turn.

No, the thing is he posed as a progressive and turned out to be counterfeit. We ended up with a Wall Street presidency, a drone presidency, a national security presidency. The torturers go free. The Wall Street executives go free. The war crimes in the Middle East, especially now in Gaza, the war criminals go free. And yet, you know, he acted as if he was both a progressive and as if he was concerned about the issues of serious injustice and inequality and it turned out that he’s just another neoliberal centrist with a smile and with a nice rhetorical flair. And that’s a very sad moment in the history of the nation because we are—we’re an empire in decline. Our culture is in increasing decay. Our school systems are in deep trouble. Our political system is dysfunctional. Our leaders are more and more bought off with legalized bribery and normalized corruption in Congress and too much of our civil life. You would think that we needed somebody—a Lincoln-like figure who could revive some democratic spirit and democratic possibility.

…

And we ended up with a brown-faced Clinton. Another opportunist. Another neoliberal opportunist. It’s like, “Oh, no, don’t tell me that!” I tell you this, because I got hit hard years ago, but everywhere I go now, it’s “Brother West, I see what you were saying. Brother West, you were right. Your language was harsh and it was difficult to take, but you turned out to be absolutely right.” And, of course with Ferguson, you get it reconfirmed even among the people within his own circle now, you see. It’s a sad thing. It’s like you’re looking for John Coltrane and you get Kenny G in brown skin.

…

There’s a lot of disillusionment now. My liberal friends included. The phrase that I have heard from more than one person in the last year is they feel like they got played.

That’s true. That’s exactly right. What I hear is that, “He pimped us.” I heard that a zillion times. “He pimped us, brother West.” That’s another way of saying “we got played.”

…

I think Obama, his modus operandi going all the way back to when he was head of the [Harvard] Law Review, first editor of the Law Review and didn’t have a piece in the Law Review. He was chosen because he always occupied the middle ground. He doesn’t realize that a great leader, a statesperson, doesn’t just occupy middle ground. They occupy higher ground or the moral ground or even sometimes the holy ground. But the middle ground is not the place to go if you’re going to show courage and vision. And I think that’s his modus operandi. He always moves to the middle ground. It turned out that historically, this was not a moment for a middle-ground politician. We needed a high-ground statesperson and it’s clear now he’s not the one.

And so what did he do? Every time you’re headed toward middle ground what do you do? You go straight to the establishment and reassure them that you’re not too radical, and try to convince them that you are very much one of them so you end up with a John Brennan, architect of torture [as CIA Director]. Torturers go free but they’re real patriots so we can let them go free. The rule of law doesn’t mean anything.

The rule of law, oh my God. There’s one law for us and another law if you work on Wall Street.

That’s exactly right. Even with [Attorney General] Eric Holder. Eric Holder won’t touch the Wall Street executives; they’re his friends. He might charge them some money. They want to celebrate. This money is just a tax write-off for these people. There’s no accountability. No answerability. No responsibility that these people have to take at all. The same is true with the Robert Rubin crowd. Obama comes in, he’s got all this populist rhetoric which is wonderful, progressive populist rhetoric which we needed badly. What does he do, goes straight to the Robert Rubin crowd and here comes Larry Summers, here comes Tim Geithner, we can go on and on and on, and he allows them to run things. You see it in the Suskind book, The Confidence Men. These guys are running things, and these are neoliberal, deregulating free marketeers—and poverty is not even an afterthought for them.

They’re the same ones who screwed it up before.

Absolutely.

…

Let’s talk about Ferguson. All I know about it is what I’ve been reading in the newspapers; I haven’t been out there. But I feel like there’s a lot more going on there than this one tragic killing.

Oh, absolutely. I mean, one, we know that this is a systemic thing. This thing has been going on—we can hardly get a word out of the administration in terms of the arbitrary police power.

…

The Obama administration has been silent. Completely silent. All of a sudden now, you get this uprising and what is the response? Well, as we know, you send out a statement on the death of brother Robin Williams before you sent out a statement on brother Michael Brown. The family asked for an autopsy at the Federal level, they hold back, so they [the family] have to go and get their own autopsy, and then the federal government finally responds. [Obama] sends Eric, Eric’s on the way out. Eric Holder’s going to be gone by December.

…

Because what happens is you got Eric Holder going in trying to create the calm. But you also got Al Sharpton. And when you say the name Al Sharpton, the word integrity does not come to mind. So you got low-quality black leadership. Al Sharpton is who? He’s a cheerleader for Obama.

…

There’s no prophetic integrity in his leadership.

One last thing, where are we going from here? What comes next?

I think a post-Obama America is an America in post-traumatic depression. Because the levels of disillusionment are so deep. Thank God for the new wave of young and prophetic leadership, as with Rev. William Barber, Philip Agnew, and others. But look who’s around the presidential corner. Oh my God, here comes another neo-liberal opportunist par excellence. Hillary herself is coming around the corner. It’s much worse. And you say, “My God, we are an empire in decline.” A culture in decay with a political system that’s dysfunctional, youth who are yearning for something better but our system doesn’t provide them democratic venues, and so all we have are just voices in the wilderness and certain truth-tellers just trying to keep alive some memories of when we had some serious, serious movements and leaders.

One last thought, I was talking to a friend recently and we were saying, if things go the way they look like they’re going to go and Hillary Clinton is the Democratic nominee and then wins a second term, the next time there’ll be a chance for a liberal, progressive president is 2024.

It’d be about over then, brother. I think at that point – Hillary Clinton is an extension of Obama’s Wall Street presidency, drone presidency, national surveillance, national security presidency. She’d be more hawkish than he is, and yet she’s got that strange smile that somehow titillates liberals and neo-liberals and scares Republicans. But at that point it’s even too hard to contemplate.

I know, I always like to leave things on a pessimistic note. I’m sorry. It’s just my nature.

It’s not pessimistic, brother, because this is the blues. We are blues people. The blues aren’t pessimistic. We’re prisoners of hope but we tell the truth and the truth is dark. That’s different.

Read more here…

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Submitted by Nicolas Cachanosky via the Ludwig von Mises Institute,

Argentina’s economic minister, Axel Kicillof, has become famous for his assertion that it is possible to centrally manage the economy now because we have spreadsheets such as Microsoft Excel. This assertion comes from the mistaken view that the cost of production determines final prices, and it reveals a profound misunderstanding of the market process. This issue, however, is not new. The first half of the twentieth century witnessed the debate over economic calculation under socialism. Apparently, Argentine officials have much to learn from this old debate. The problem is not whether or not we have powerful spreadsheets at our disposal; the problem is the impossibility of successfully creating a centrally-planned market.

At the turn of the century Ludwig von Mises, Max Weber, and Boris Brutzkus independently offered critiques on the socialist commonwealth, understood to be a society where there is no privately-held means of production. Mises was simple and direct. Unlike families or small tribes, where there is intimate knowledge among members, a large society requires prices to organize efficiently. The socialists, argues Mises, are quick to point out market failures, but are silent on how to efficiently organize the socialist commonwealth without the existence of prices. Marx, who does not offer an explanation of how socialism would work once capitalism withers away, calls the socialists (i.e., Saint-Simon and Fourier), who do describe the resulting socialist community, “utopians.” Without economic calculation to reveal which activities add value to society (profits) and which do not (losses), it is an illusion to assume that efficiency would just happen. Arguments other than economic calculation can be put forward as a principle to organize society, but the question of how economic efficiency is achieved remains unanswered.

As a response to this critique, writers in the socialist literature went from describing imaginary societies and criticizing capitalism to trying to solve Mises’s challenge. Oskar Lange and Wassily Leontief are two of the most famous authors who tried to solve this problem. One of the answers offered is the assumption of perfect information (still present in economics textbooks). The argument goes, if we assume to have all the required information, then the economy can be at equilibrium, and therefore Mises’s challenge is interesting, but inadequate. A centrally-managed economy is possible, if we have perfect information. At this point in the debate, it is Hayek who responds to the socialists’ contention with four important points:

(1) The amount of information needed and the calculation constraints are prohibitive to the socialist project, even if we grant the assumption of perfect information. But this is just an illustrative point that Hayek is making. Even though socialists and Marxists usually stop at this point, Hayek’s point is much more subtle as the following points show.

 

(2) The assumption of perfect information is invalid. The challenge is not to be in equilibrium, but in the transition to equilibrium. Just as it is not possible to open a can of food by assuming a can opener, it is not an acceptable response to assume Mises’s challenge away by assuming perfect information. Where does this perfect information come from and to whom is it given? The assumption of perfect information does not simplify the problem to be solved; it alters it and becomes irrelevant to the debate. This is why Austrians have been traditionally more concerned with the market process and less with the equilibrium conditions.

 

(3) Hayek also distinguishes (admittedly with some confusion) between information and knowledge. Information is a quantitative concept, and as such, can be either complete (perfect) or incomplete (imperfect). This is what socialists refer to as the assumption of perfect information. But knowledge is a qualitative concept, and because of this it can be neither complete nor incomplete. Knowing how to ride a bike or how to successfully run a business is not the type of knowledge that can be input into an Excel spreadsheet. This distinction is important because it is entrepreneurs who are the engine of economic growth and development. In other words, Excel cannot solve the market problem that entrepreneurs have to solve because this requires interpretation and knowledge, not just numerical data. Little is achieved if all information is given to Kicillof’s team if they don’t know how to interpret it.

 

(4) Information and knowledge are not independent of the market process. Without private property there are no prices; without prices there is no information. Hayek is using the other side of Mises’s argument to say that by getting rid of private property one is at the same time getting rid of the information that the socialists need to assume as given.

As soon as we recognize all of Hayek’s points, we realize that to take the Excel spreadsheet approach is like building a car without an engine (the entrepreneurs) and without road signs (the market) to signal the right way to go. It is no surprise that the Argentine economy malfunctions without a clear route taken by government officials. It is a mistake to confuse market prices with regulated prices, and the prices that provide useful information are the ones that emerge from free exchanges in the market, not government imposed prices originating in an Excel spreadsheet. To use the same word “price” to describe these two different phenomena misleads him who arrogates to himself the right to decide the fate of thousands of people. It is an illusion to believe that the same information that arises from market prices will magically emerge from government-imposed prices. What Kicillof’s team inserts into the Excel spreadsheet are not prices, but expressions of desires detached from economic reality.

The success of economic policy and market regulation, however, is not evaluated on desires and intentions, but on results. The problem with the Excel spreadsheet approach is not the intentions of the policymakers, but that such tools cannot possibly replace the market process.

The undeniable economic problems of Argentina run much deeper than what number to input into Kicillof’s spreadsheet. The problem is a confused reading of how markets work, and how governments continue with deficit spending in the service of favored interest groups.

via Zero Hedge http://ift.tt/1zoE9kC Tyler Durden

Last week, when we reported on the latest breakout of a mysterious Ebola-like disease, which had claimed at least 70 people’s live at last check, we were skeptical by the WHO’s attempts to mask the fact that an Ebola outbreak is something else entirely, in a desperate attempt to avoid the panic that would inevitably result from the confirmation that the Ebola virus has officially made its way into the fifth country, this time the second largest African nation by surface area, the Democratic Republic of Congo.

As Reuters reported at the time, citing a WHO spokesman who had sent an email to the news agency, “this is not Ebola” to which we mused: “perhaps the WHO is fibbing just a bit to prevent another all out panic. If not Ebola then what? According to WHO, the deaths are the result of an outbreak of hemorrhagic gastroenteritis, a disease prevalent in… dogs?

We concluded: “So is the WHO simply trying to prevent the spread of panic and deny that Ebola has now spread to the second largest country in Africa? We will surely find out soon enough, especially if the WHO, too, advises the population “to keep calm and BTFD”…”

Three days later we have the answer and sure enough, as we suspected the WHO was indeed lying.

Reuters confirms: Democratic Republic of Congo declared an Ebola outbreak in its northern Equateur province on Sunday after two out of eight cases tested came back positive for the deadly virus, Health Minister Felix Kabange Numbi said. A mysterious disease has killed dozens of people in Equateur in recent weeks but the World Health Organization had said on Thursday it was not Ebola.

“I declare an Ebola epidemic in the region of Djera, in the territory of Boende in the province of Equateur,” Kabange Numbi told a news conference.

The region lies about 1,200 km (750 miles) north of the capital Kinshasa.

 

Numbi said that one of the two cases that tested positive was for the Sudanese strain of the disease, while the other was a mixture between the Sudanese and the Zaire strain — the most lethal variety. The outbreak in West Africa that has killed at least 1,427 people in West Africa since March is the Zaire strain.

 

The World Health Organization said on Thursday that the disease which had killed at least 70 people in Equateur was a kind of hemorrhagic gastroenteritis.

Sadly, this simply means that the WHO is just the latest global organization willing to sacrifice its credibility in order to avoid the spread of social panic, even though the truth always emerges in the end, and when society realizes it can’t even trust those mandated with telling the truth, the end panic is orders of magnitude worse.

One wonders: if the WHO was lying about this what other critical development is the organization fabricating and/or covering up?

And in a gruesome and very ironic twist, CNN reports that it was the very same World Health Organization, whose worker has fallen ill from Ebola for the very first time. The health worker is in Sierra Leone and receiving care, the WHO said, but provided no further details.

That’s not all: separately, a British citizen infected with the virus in Sierra Leone is being flown home in a specially equipped C17 Royal Air Force plane.

Plane carrying first British #Ebola patient has landed at RAF Northolt in London

— Sky News Newsdesk (@SkyNewsBreak) August 24, 2014

Nigerian doctors, who had been on nationwide strike, have decided “due to the national health emergency” to return to work Monday. And meanwhile, Ivory Coast announced Saturday that it’s closing its borders in response to the Ebola outbreak in West Africa as the official death toll (excluding ‘shadow zones’) reaches 1,427; and over 2600 cases as Liberia cases literally explode.

As CNN reports, a WHO health worker has become infected..

For the first time, a worker with the World Health Organization has fallen ill from Ebola, the WHO told CNN on Sunday.

 

The health worker is in Sierra Leone and receiving care, the WHO said. No further details were given immediately.

As WHO states:

Since the beginning of the international response to the outbreak in March, WHO has deployed nearly 400 people from across the Organization and from partners in the Global Outbreak Alert and Response Network (GOARN) to help respond to the disease in Guinea, Liberia, Nigeria and Sierra Leone. This is the first time someone working under the aegis of WHO has fallen ill with the disease.

 

The Ebola virus is spread through contact with bodily fluids and people giving care or working around infected patients are known to be a high risk group. In the past six months of the outbreak, more than 225 health workers have fallen ill and nearly 130 have lost their lives to the disease they were working to contain.

Which again makes one wonder – just how easily is this disease really spread if nearly half a year after the start of the epidemic the world’s most protected individuals can catch it despite all protective measures?

And separately…

a British citizen infected with the virus in Sierra Leone is being flown home, the British Department of Health announced Sunday.

 

The man, simply identified as William, lives in the West African nation in a home established by an American university for researchers.

 

He is a volunteer nurse in Kenema Government Hospital, where he was working with Ebola patients, according to Dr. Robert Garry of Tulane University.

 

…

 

The UK government said a specially equipped C17 Royal Air Force plane would transport the patient, who would be transferred to an isolation unit at the Royal Free London NHS Foundation Trust.

 

“UK hospitals have a proven record of dealing with imported infectious diseases and this patient will be isolated and will receive the best care possible,” said deputy chief medical officer John Watson in a press release.

Meanwhile:

Ivory Coast announced Saturday that it’s closing its borders in response to the Ebola outbreak in West Africa.

 

Prime Minister Daniel Duncan signed the order that closes the land borders Ivory Coast shares with Guinea and Liberia.

 

The borders will remain closed until further notice in an effort to prevent the Ebola virus from spreading into its territory, according to the government statement.

Finally, Nigerian doctors announced they will return to work after ending a nationwide strike:

• NIGERIAN DOCTORS END NATIONWIDE STRIKE, TO RESUME WORK TOMORROW
• NIGERIAN DOCTORS END STRIKE DUE TO NATIONAL HEALTH EMERGENCY
• DOCTORS TO RETURN TO WORK WHILE CONTINUING NEGOTIATIONS
• NIGERIAN MEDICAL ASSOCIATION PRESIDENT OBEMBE COMMENTS IN ABUJA

And visually, Liberian deaths and cases have exploded

Source: Ecologically Oriented

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Late on Saturday afternoon, supposedly in retaliation for yet another round of shelling by Hamas now that the X+1 “ceasefire” has failed to lead to anything tangible, Israel bombed an apartment tower in Gaza City, collapsing the 12-story building with 44 apartments. The dramatic strike is shown in the blip below. Amazingly, while dozens were wounded in the strike, no one was killed, Palestinian officials said.

From AP:

The targeting of large buildings appears to be part of a new military tactic by Israel. Over the weekend, the army began warning Gaza residents in automated phone calls that it would target buildings harboring “terrorist infrastructure” and that they should stay away.

 

A senior military official confirmed that Israel has a policy of striking at buildings containing Hamas operational centers or those from which military activities are launched. The official said each strike required prior approval from military lawyers and is carried out only after the local population is warned.

 

However, he said, there was now a widening of locations that the military can target. The official spoke on condition of anonymity because he was not permitted to discuss the matter with reporters.

 

In the 12-story apartment tower, the target was a fourth-floor apartment where Hamas ran an operations center, according to Israeli media. In the past, Israel has carried out pinpoint strikes, targeting apartments in high-rises with missiles, while leaving the buildings standing. However, this time a decision was made to bring down the entire tower, according to Channel 10, an Israeli TV station.

 

The military declined immediate comment when asked why it collapsed the entire building instead of striking a specific apartment.

 

Meanwhile, Gaza militants continued to fire rockets and mortar shells at Israel, including at least 10 on Sunday, the military said. That was in addition to more than 100 on Saturday, most aimed at southern Israel.

So with that, and all the other geopolitical flare ups over the weekend, we look forward to the futures opening some 5 to 10 points higher in a few hours on all the “pent up de-escalation” from the past 48 hours.

via Zero Hedge http://ift.tt/1qDYf5S Tyler Durden

Submitted by Simon Black of Sovereign Man blog,

This one is almost too sensational to be real. Almost.

I’ve written to you before about the Financial Crimes Enforcement Network (FinCEN), an agency of the US Treasury Department that chases around people they suspect of committing financial crimes.

Unfortunately, their definition of ‘financial crime’ is not the same as our definition of ‘financial crime’.

FinCEN is completely unconcerned, for example, with the likes of Jon Corzine, who was at the helm of MF Global as it committed some of the worst financial fraud in history.

FinCEN has also not investigated any major US bank executives for their part in manipulating commodity prices or selling out customers to high frequency traders.

Nor have they raised an eyebrow at ratings agencies for gross negligence in slapping AAA ratings on toxic debt securities (which played a key role in destabilizing the banking system.)

Nay. To FinCEN, these are all trivial issues. Instead, the agency has an unhealthy obsession with rooting out little guys they think might have committed victimless crimes.

One of their favorite victimless crimes is failure to file ‘suspicious activity reports (SARs)’; this is a form that the US government demands of essentially any business that deals with paper money.

Banks. Brokers. Payday loan dealers. Remittance businesses (like Western Union). Even casinos.

In other words, the government demands all these organizations to be its unpaid spies. They all have quotas. And if any should fail to file a SAR, they’ll receive a visit from FinCEN.

Let me put this more clearly: even if a banker doesn’t feel like anything suspicious has happened, s/he is still required to file a minimum quota of SARs.

If you walk into a bank and say or do anything that’s slightly out of the ordinary, or simply different than the rest of the bank’s customers, chances are they’ll file a SAR.

FinCEN’s statistics show, in fact, that there has been a surge of SARs filed on bank customers who have conducted any Bitcoin-related transaction (i.e. transferring funds from a bank account to CoinDesk).

I used to know a broker who thought this requirement absurd and immoral. And in order to save his clients’ privacy, he would file all the SARs against himself.

But such values are unfortunately rare. Most bankers, brokers, etc. simply accept the duty of being an unpaid government spy. They’ll smile to your face and then file a SAR because you had the audacity to do something different.

I remember one FinCEN case in which they went after a remittance business in Chicago; the proprietor had been in business for decades and knew each of his customers personally.

He knew their circumstances, what they were doing, who they were sending the money to, etc. Many had even become personal friends. So he didn’t file any of the reports. FinCEN threw the book at him and ran the poor chap out of business. Totally disgusting.

But now comes a new case that takes the cake.

A few days ago, FinCEN enthusiastically announced that they had been working on a CRIMINAL investigation against a casino based in the Western Pacific… thousands of miles from US shores.

FinCEN had apparently sent some of its agents undercover to the Tinian Dynasty Hotel & Casino posing as hard-gambling, wealthy Russian businessmen.

These undercover agents indicated that they wanted to bring in large amounts of cash to gamble at the casino, and expressly requested that the casino not report the currency transactions.

The casino agreed. After all, why would an offshore casino bother reporting anything about Russian nationals to the US government anyhow?

Why indeed?

But such logic does not factor into FinCEN’s motivation. So they slammed the casino’s VIP Services Manager (a guy who’s not even a US person) for not filing any SARs.

There’s so many things wrong with this it’s hard to know where to begin.

Jon Corzine (of MF Global) walks the streets a free man.

Yet FinCEN is wasting taxpayer resources sending undercover agents to entrap some offshore casino, and they act as if they’ve infiltrated a major terrorist organization.

This is practically secret police stuff… all because a non-US person working overseas didn’t file a meaningless report on Russian businessmen.

Amid all the debt, graft, and incompetence that’s so prevalent today in government, this is another sad testament to the direction that things are headed.

via Zero Hedge http://ift.tt/1BSfY2a Tyler Durden

Yesterday it was China slamming America’s superpower status (and thus dollar reserve currency status) when in Sina News it stated the following:

Their various reconnaissance aircraft have been wandering around foreign airspace for decades and watching the military secrets of other countries like a disgusting thief spying over his neighbor’s fence. However, when the neighbor comes back with a big stick, the thief will turn tail and run away, blaming the neighbor.

 

When you show people weakness, they will bully you. When you show people strength, they will respect you.

 

We [the newspaper] believe the Chinese Air Force and Naval aviation should maintain a high level of vigilence and morale in southeast coastal region to prevent the further US action.

 

America has lost face and does not want to show the world they are sick. They have been lording over other countries for so long, and they will never let it go after they eat this loss.

Now it is Russia’s turn, whose Ministry of Foreign Affairs issued a statement on Friday, following the UN’s delay in adopting a statement calling for a ceasefire in Ukraine after the US once again opposed Russia, which claimed among other things that “if the US opposes an absolutely non-confrontational, reconciliatory text, there can be no doubts that Washington intends to have the armed confrontation in Ukraine continued. It could be seen only as an attempt to ‘undermine’ the humanitarian mission.” A mission which Russia greenlighted despite stern US opposition, and also concluded without incident as we reported yesterday, when the convoy returned to Russia after a brief stay in east Ukraine.  
 
Moscow believes that such policy is hypocritical, the ministry added. Of course, if indeed the Ukraine economic crisis is the direct result of US and CIA meddling as the Victoria Nuland intercepted recording validates, then Russia has every right to such an opinion.

The punchline:

“Cynical disregard for the fate of civilians and ‘couldn’t care less’ attitude toward the international humanitarian law when it comes to geopolitical interests, becomes the core of the policy of the United States and its European satellites regarding Ukrainian,” the statement read.

“More and more questions are being raised about the ability of the current US administration to participate in the development of realistic and pragmatic approaches to international problems, to adequately assess the situation in the various regions of the world,” the Russia Foreign Ministry noted.

One wonders if based on his recent track record in the international arena, the president of the US wouldn’t agree.

President Barack Obama, left, bumps fists with Cyrus Walker, right, cousin
of White House senior adviser Valerie Jarrett, as Glenn Hutchins, center,
looks on while golfing at Vineyard Golf Club

via Zero Hedge http://ift.tt/1t4ASsb Tyler Durden

As part of his latest weekly report, Goldman’s David Kostin breaks down the full array of strategy “baskets” used by hedge funds at this moment to outperform the market in 2014. In a nutshell, the best performing strats right now involve betting on a high vs low tax rate divergence (perhaps because companies facing high tax regimes are soaring on hopes they will engage in a price-boosting tax inversion deal), and shorting BRIC exposure:

… on betting aggressively against high quality and shorting strong balance sheet names (thanks to the bond bubble which allows the worst of the worst companies to refinance in the current environment) while at the same time betting that companies will engage in aggressive stock buybacks and generate a return to shareholders (via dividends and general total cash):

… and finally, on once again parking into high hedge fund concentration stocks such as Goldman’s Hedge Fund VIP basket, and boosting high concentration positions while shorting names out of hedge fund favor, as well as going long the high sharpe ratio names. Finally, and perhaps surprisingly, going long the most shorted names, a strategy that generated the best returns in 2012 and 2013, has been relatively mute so far in 2014.

 

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