On the surface, earning $174,000 per year, while putting one solidly in the top 10% of all US earners, does not sound like much. This happens to be the 2014 allocated wage of America’s elected political representatives, the members of the House of Representatives. And indeed, in the grand scheme of things it isn’t much… until one considers that in the 102-day period between August 1 and November 12, this wage will be “earned” for just working a paltry 8 days, which, presuming 10 hour workdays, amounts to a whopping $608 per hour, on par with what some of America’s most prominent lawyers earn. It is also several times the hourly compensation of anesthesiologists, one of the highest-earning professions, according to the Bureau of Labor Statistics, at $113 an hour on average.

According to The Hill, liberal activist Ralph Nader worked out the eye-popping calculation in an angry letter he sent to Speaker John Boehner (R-Ohio) on Monday. From The Hill:

“While millions of Americans are working more and more for less and less, you and your House of Representatives seem to have no problem working less and less for more and more,” he wrote.

 

Nader calculated that Boehner, who earns $223,500 a year as Speaker, will earn roughly $781 per hour over a three-and-half month span, given Congress worked only eight days. Boehner has a higher salary than rank-and-file members.

 

Lawmakers and their aides rebut Nader’s claim by arguing that time spent in Washington is only part of their job. The other part is meeting with and serving constituents back in their home districts and states. That’s why they call the time away state and district “work periods.”

 

But critics, including President Obama, aren’t buying it. Obama scolded lawmakers on Aug. 2 for going “on vacation” without passing legislation to raise the minimum wage or reduce interest on student loans. 

Yes, we too find it ironic for Obama to be bashing others’ vacation practices, but in this case he happens to be right: because if there is one job that is more useless than that of the US GOTUS, it is that of a US politican, whose “work” is laid out as follows:

The House left for a five-week vacation from Washington on Aug. 1 and didn’t return until Sept. 8. After two four-day workweeks, it left again Thursday and is not due to return until Nov. 12.

 

The Senate worked a similar schedule. It took the same break as the House in August and also worked only two weeks in September before leaving Washington to campaign for the midterm elections.

 

Some lawmakers admit they should probably be working harder.

 

Rep. David Jolly, a Republican from Florida, sent a letter to the House Rules Committee asking for the House to adopt a rule that would require it to stay in session longer.

 

“I write to strongly advocate for a permanent rule change that would formally require the House to be in session significantly more days during the 114th Congress, which will convene in January 2015,” he wrote. “The House of Representatives, the ‘People’s House,’ simply cannot address the many priorities of the nation if we are not in session more days,” he added.

And while it is easy to be furious with America’s worthless landed political class – whose only contribution to society is being voted out or resigning – a logical question arises – why should the House, or the Senate, or even the President for that matter, work any hours in a world in which all the heavy lifting, or any lifting, is borne by the monetary authority, i.e., the Fed, which makes sure nobody in power has to make any decisions ever again just by pressing CTRL-P a few billion times every day.

Finally, while we are amused by the naive thinking that members of the House earn “only” $174,000 per year or however much per hour, it is not their wages that make most members of Congress millionaires. In fact, as the following chart shows, the 50 richest members of Congress all have a net worth of $7.5 million or higher!

They did not earn this money by collecting a paltry salary. Instead, they made it through kickbacks, bribes, and other “lobbying” funds. All of which, of course, are perfectly legal in the circus that passes for US government.

It is that which should be the target of public ire, not how much Congressmen make on an hourly basis. Because when one factors in all the undisclosed sources of funds, it is then that one would get a per hour number that would rival some of the best paid hedge fund managers in the US.

via Zero Hedge http://ift.tt/XVZRjV Tyler Durden

On the surface, earning $174,000 per year, while putting one solidly in the top 10% of all US earners, does not sound like much. This happens to be the 2014 allocated wage of America’s elected political representatives, the members of the House of Representatives. And indeed, in the grand scheme of things it isn’t much… until one considers that in the 102-day period between August 1 and November 12, this wage will be “earned” for just working a paltry 8 days, which, presuming 10 hour workdays, amounts to a whopping $608 per hour, on par with what some of America’s most prominent lawyers earn. It is also several times the hourly compensation of anesthesiologists, one of the highest-earning professions, according to the Bureau of Labor Statistics, at $113 an hour on average.

According to The Hill, liberal activist Ralph Nader worked out the eye-popping calculation in an angry letter he sent to Speaker John Boehner (R-Ohio) on Monday. From The Hill:

“While millions of Americans are working more and more for less and less, you and your House of Representatives seem to have no problem working less and less for more and more,” he wrote.

 

Nader calculated that Boehner, who earns $223,500 a year as Speaker, will earn roughly $781 per hour over a three-and-half month span, given Congress worked only eight days. Boehner has a higher salary than rank-and-file members.

 

Lawmakers and their aides rebut Nader’s claim by arguing that time spent in Washington is only part of their job. The other part is meeting with and serving constituents back in their home districts and states. That’s why they call the time away state and district “work periods.”

 

But critics, including President Obama, aren’t buying it. Obama scolded lawmakers on Aug. 2 for going “on vacation” without passing legislation to raise the minimum wage or reduce interest on student loans. 

Yes, we too find it ironic for Obama to be bashing others’ vacation practices, but in this case he happens to be right: because if there is one job that is more useless than that of the US GOTUS, it is that of a US politican, whose “work” is laid out as follows:

The House left for a five-week vacation from Washington on Aug. 1 and didn’t return until Sept. 8. After two four-day workweeks, it left again Thursday and is not due to return until Nov. 12.

 

The Senate worked a similar schedule. It took the same break as the House in August and also worked only two weeks in September before leaving Washington to campaign for the midterm elections.

 

Some lawmakers admit they should probably be working harder.

 

Rep. David Jolly, a Republican from Florida, sent a letter to the House Rules Committee asking for the House to adopt a rule that would require it to stay in session longer.

 

“I write to strongly advocate for a permanent rule change that would formally require the House to be in session significantly more days during the 114th Congress, which will convene in January 2015,” he wrote. “The House of Representatives, the ‘People’s House,’ simply cannot address the many priorities of the nation if we are not in session more days,” he added.

And while it is easy to be furious with America’s worthless landed political class – whose only contribution to society is being voted out or resigning – a logical question arises – why should the House, or the Senate, or even the President for that matter, work any hours in a world in which all the heavy lifting, or any lifting, is borne by the monetary authority, i.e., the Fed, which makes sure nobody in power has to make any decisions ever again just by pressing CTRL-P a few billion times every day.

Finally, while we are amused by the naive thinking that members of the House earn “only” $174,000 per year or however much per hour, it is not their wages that make most members of Congress millionaires. In fact, as the following chart shows, the 50 richest members of Congress all have a net worth of $7.5 million or higher!

They did not earn this money by collecting a paltry salary. Instead, they made it through kickbacks, bribes, and other “lobbying” funds. All of which, of course, are perfectly legal in the circus that passes for US government.

It is that which should be the target of public ire, not how much Congressmen make on an hourly basis. Because when one factors in all the undisclosed sources of funds, it is then that one would get a per hour number that would rival some of the best paid hedge fund managers in the US.

via Zero Hedge http://ift.tt/XVZRjV Tyler Durden

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

What follows is the most powerful recorded police checkpoint scene I have witnessed since posting: Extremely Powerful Video – Happy 4th of July from a Police State Checkpoint, last summer. 

While the former incident happened in Tennessee, the following occurred in Illinois. The American pleb who was accosted by Illinois State Police was DeKalb resident Ryan Scott.

While it starts off slow, make sure you watch it all the way to the end.

While one of the the police officers is reasonable, the other one can’t stop yelling and seems to derive a particular pleasure from repeatedly informing the citizen he supposed to “protect and serve” that “driving is not a right, it’s a privilege.”

See for yourself:

 

What’s also interesting, is you have to wonder if the second officer would have acted even more aggressively if Ryan hadn’t informed him he was being recorded at the end of the conversation.

He seems to have backed down slightly upon understanding the repercussions of the recording. It just goes to show the importance of filming police encounters.

via Zero Hedge http://ift.tt/1v5PQN9 Tyler Durden

Sad but true. Current owner of the Twinkies and Ho-Ho brands, Mexico’s Grupo Bimbo, had planned to take advantage of an exuberant public stock market by bringing a secondary stock offering to reduce its leverage. Everything was good-to-go on Friday, but with the market now down a stunning 1.5% from pre-BABA IPO levels, they have pulled the offering:

• *MEXICO’S BIMBO SAID TO POSTPONE FOLLOW-ON SHARE OFFER: REUTERS

No comment as yet on the reason, though we assume “market conditions” will be cited as the fickleness of capital markets’ animal spirits is once again exposed for all to see. Perhaps Grupo Bimbo should rename themselves Grupo Bimbaba?

 

As Bloomberg reports, Friday things were all go-go-go…

Sale of 201.3m shares to be managed by BofA, BBVA, Citi, HSBC, JPMorgan and Santander, Bimbo says in e-mailed statement.

 

Offering in Mexico, U.S. and other countries will represent a capital increase of as much as 4.3%: Bimbo

And now…

• *REUTERS CITES STOCK EXCHANGE SOURCE ON BIMBO OFFERING POSTPONED

What a difference two days make!

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

Sad but true. Current owner of the Twinkies and Ho-Ho brands, Mexico’s Grupo Bimbo, had planned to take advantage of an exuberant public stock market by bringing a secondary stock offering to reduce its leverage. Everything was good-to-go on Friday, but with the market now down a stunning 1.5% from pre-BABA IPO levels, they have pulled the offering:

• *MEXICO’S BIMBO SAID TO POSTPONE FOLLOW-ON SHARE OFFER: REUTERS

No comment as yet on the reason, though we assume “market conditions” will be cited as the fickleness of capital markets’ animal spirits is once again exposed for all to see. Perhaps Grupo Bimbo should rename themselves Grupo Bimbaba?

 

As Bloomberg reports, Friday things were all go-go-go…

Sale of 201.3m shares to be managed by BofA, BBVA, Citi, HSBC, JPMorgan and Santander, Bimbo says in e-mailed statement.

 

Offering in Mexico, U.S. and other countries will represent a capital increase of as much as 4.3%: Bimbo

And now…

• *REUTERS CITES STOCK EXCHANGE SOURCE ON BIMBO OFFERING POSTPONED

What a difference two days make!

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

On one hand today’s 2 Year bond auction priced, as expected, at the widest level since April 2011, or 0.589%, on rising concerns that the Fed may, all economic signs to the contrary, raise rates in the coming year.

On the other hand, this was arguably the strongest 2 Year auction at this yield, in all of 2014. First, the auction stopped through a substantial 0.6bps through the 0.595% When Issued. Then, the Bid to Cover was a solid 3.564, the second highest of 2014, only lower than February’s 3.605. Finally, the internals also were very solid, with Directs taking down 16.11% and Indirects holding 40.91%, the most since March 2014, leaving only 42.98% to the Dealers, which was also the lowest since March.

A trend has emerged: the higher that yield, the more the demand, which is what one would expect in a world without endless Fed manipulation and central-planning. Could we be getting some hints of normalization? And how soon until yields resume their downward path as the current rate hike scare blows off yet agaian?

via Zero Hedge http://ift.tt/1x8qSjB Tyler Durden

Just over a year ago, we warned on the very real concerns about corporate bond liquidity drying up and the potentially huge problems associated with that, if and when the Fed ever pulls the rug out from the one-way street of free-money injections. It appears, as Bloomberg reports, having realized, we suspect, that they can't get out of their positions, the world’s largest money manager, Blackrock, believes the corporate bond market is "broken" and in need of fixes to improve liquidity "before market stress returns." Ironically, as we have also explained in great detail, it is this 'broken' market that has enabled corporations to borrow cheap enough to buyback half a trillion dollars of their stock in 2014.

As we discussed in great detail here, Federal Reserve intervention has had dramatic unintended consequences in the bond markets…

First, how does one define liquidity? Here is how the smartest guys in the room (and Matt King truly is one of the smartest guy) do:

 

 

As the chart points out, the biggest falacy constantly perpetuated by market naivists, that liquidity and volume (in this case in fixed income) are one and the same, is absolutely wrong.

 

…

 

The TBAC's conclusion: the longer central planning goes on, the less the actual large "block" trades, and even those are getting smaller.

 

 

The blue text above is self-explanatory: the slightest gust of wind, or rather volatility, threatens to shut down the secondary corporate bond market, which already is running on fumes.This can be seen in the final chart of this post which confirms that the Fed is succeeding… to its paradoxical chagrin! Because the more pure liquidity moves to the (Fed-backstopped) Treasury market, the more investors are moving away from the most liquid instruments.

 

 

In other words, while the Fed, and the TBAC, both lament the scarcity of quality collateral and liquidity in non-Fed backstopped security markets, it is the Fed's continued presence in the (TSY) market in the first place, that is making a mockery of bond market liquidity and quality collateral procurement.

 

And without faith in a stable credit marketplace, there is no way that a credit-based instrument can ever truly become the much needed "high quality collateral" to displace the Fed's monthly injection of infinitely funigble and repoable reserves (most benefiting foreign banks).

And now – as Blackrock realizes that its massive (and likely levered) positions face a dramatic liquity risk cost if they are ever to 'realize' any gains from the Fed's handouts (by actually selling), they cry foul and proclaim the bond markets "broken" and in need of government fixes…

BlackRock, the world’s biggest money manager, said the marketplace for corporate bonds is “broken” and in need of fixes to improve liquidity.

 

BlackRock, a major competitor in the bond market with $4.3 trillion in client assets, urged changes including unseating banks as the primary middlemen in the market and shifting transactions to electronic markets. Another solution BlackRock proposed: reducing the complexity of the bond market by encouraging corporations to issue debt with more standardized terms.

 

Banks have retained their stranglehold on corporate debt trading despite years of effort by BlackRock and other large investors to eliminate their oligopoly. The top 10 dealers control more than 90 percent of trading, according to a Sept. 15 report from research firm Greenwich Associates. To BlackRock, the dangers of price gaps and scant liquidity have been masked in a benign, low interest-rate environment, and need to be addressed before market stress returns.

 

“These reforms would hasten the evolution from today’s outdated market structure to a modernized, ‘fit for purpose’ corporate bond market,’” according to the research paper by a group of six BlackRock managers,

 

…

 

Standardization would allow more trading to occur on exchanges and other electronic venues, and would help stabilize markets in periods when investors rush to sell bonds, Gallagher said. The risk posed by investors trying to dump bonds after the Federal Reserve raises interest rates is “percolating right under” the noses of regulators, he said.

*  *  *
So there it is – the truth carefully hidden – Blackrock is in full panic mode knowing that the game-theoretical first-mover advantage does not apply to their selling down their positions since they are simply too large… so we need to "fix" liquidity and standardize markets (to enable easy risk transfer to retail pension funds) or the Mutually-Assured-Destruction card will be played once again.

*  *  *
Of course, while they are correct in terms of liquidity (for a concerted exit of bond positions), we did not hear them complaining as cheap primary borrowing enabled half a trillion dollars of buybacks in 2014…

 

to sustain the mirage of economic growth via the stock 'market'…

*  *  *

This is of course just another canary in the coalmine that confirms trouble ahead in the corporate bond market – as we have discussed at length…

High-Yield Credit Crashes To 6-Month Lows As Outflows Continue

 

High-Yield Bonds "Extremely Overvalued" For Longest Period Ever

 

High Yield Credit Market Flashing Red As Outflows Surge

 

Is This The Chart That Has High-Yield Investors Running For The Hills?

*  *  *

While the 'market' impact of these facts is potentially economically devastating in its reality-endgame of bursting over-inflated buy-back-driven asset-bubbles, the traders and bankers themselves have also been crushed (schadenfreude-istically for many), as Bloomberg reports,

As trading in dollar-denominated bonds declined 22 percent in the past five years to an average daily $809 billion, so have the jobs, leaving even some of the most senior traders and salesmen moving from firm to firm. Dozens of journeymen are populating an industry that used to attract the young in throngs, lured by money and prestige
, according to Michael Maloney, president of fixed-income recruiting firm Michael P. Maloney Inc.

 

“The business model is broken and 50 percent of the people in our world who are in trading are stuck right now,” Maloney said in an interview in his New York office.

 

 

For every 10 of them there’s going to be three or four left,” he said. “What’s the timeframe? Well, everybody I know is looking for a job — not looking for a job, looking for a career.”

 

“It’s surprising how quiet a place could be compared to what I had known,” said Stein, who began trading bonds in 1985.

*  *  *
See what happens, Janet, when you screw with the 'market'?

via Zero Hedge http://ift.tt/1vd4JfT Tyler Durden

Just over a year ago, we warned on the very real concerns about corporate bond liquidity drying up and the potentially huge problems associated with that, if and when the Fed ever pulls the rug out from the one-way street of free-money injections. It appears, as Bloomberg reports, having realized, we suspect, that they can't get out of their positions, the world’s largest money manager, Blackrock, believes the corporate bond market is "broken" and in need of fixes to improve liquidity "before market stress returns." Ironically, as we have also explained in great detail, it is this 'broken' market that has enabled corporations to borrow cheap enough to buyback half a trillion dollars of their stock in 2014.

As we discussed in great detail here, Federal Reserve intervention has had dramatic unintended consequences in the bond markets…

First, how does one define liquidity? Here is how the smartest guys in the room (and Matt King truly is one of the smartest guy) do:

 

 

As the chart points out, the biggest falacy constantly perpetuated by market naivists, that liquidity and volume (in this case in fixed income) are one and the same, is absolutely wrong.

 

…

 

The TBAC's conclusion: the longer central planning goes on, the less the actual large "block" trades, and even those are getting smaller.

 

 

The blue text above is self-explanatory: the slightest gust of wind, or rather volatility, threatens to shut down the secondary corporate bond market, which already is running on fumes.This can be seen in the final chart of this post which confirms that the Fed is succeeding… to its paradoxical chagrin! Because the more pure liquidity moves to the (Fed-backstopped) Treasury market, the more investors are moving away from the most liquid instruments.

 

 

In other words, while the Fed, and the TBAC, both lament the scarcity of quality collateral and liquidity in non-Fed backstopped security markets, it is the Fed's continued presence in the (TSY) market in the first place, that is making a mockery of bond market liquidity and quality collateral procurement.

 

And without faith in a stable credit marketplace, there is no way that a credit-based instrument can ever truly become the much needed "high quality collateral" to displace the Fed's monthly injection of infinitely funigble and repoable reserves (most benefiting foreign banks).

And now – as Blackrock realizes that its massive (and likely levered) positions face a dramatic liquity risk cost if they are ever to 'realize' any gains from the Fed's handouts (by actually selling), they cry foul and proclaim the bond markets "broken" and in need of government fixes…

BlackRock, the world’s biggest money manager, said the marketplace for corporate bonds is “broken” and in need of fixes to improve liquidity.

 

BlackRock, a major competitor in the bond market with $4.3 trillion in client assets, urged changes including unseating banks as the primary middlemen in the market and shifting transactions to electronic markets. Another solution BlackRock proposed: reducing the complexity of the bond market by encouraging corporations to issue debt with more standardized terms.

 

Banks have retained their stranglehold on corporate debt trading despite years of effort by BlackRock and other large investors to eliminate their oligopoly. The top 10 dealers control more than 90 percent of trading, according to a Sept. 15 report from research firm Greenwich Associates. To BlackRock, the dangers of price gaps and scant liquidity have been masked in a benign, low interest-rate environment, and need to be addressed before market stress returns.

 

“These reforms would hasten the evolution from today’s outdated market structure to a modernized, ‘fit for purpose’ corporate bond market,’” according to the research paper by a group of six BlackRock managers,

 

…

 

Standardization would allow more trading to occur on exchanges and other electronic venues, and would help stabilize markets in periods when investors rush to sell bonds, Gallagher said. The risk posed by investors trying to dump bonds after the Federal Reserve raises interest rates is “percolating right under” the noses of regulators, he said.

*  *  *
So there it is – the truth carefully hidden – Blackrock is in full panic mode knowing that the game-theoretical first-mover advantage does not apply to their selling down their positions since they are simply too large… so we need to "fix" liquidity and standardize markets (to enable easy risk transfer to retail pension funds) or the Mutually-Assured-Destruction card will be played once again.

*  *  *
Of course, while they are correct in terms of liquidity (for a concerted exit of bond positions), we did not hear them complaining as cheap primary borrowing enabled half a trillion dollars of buybacks in 2014…

 

to sustain the mirage of economic growth via the stock 'market'…

*  *  *

This is of course just another canary in the coalmine that confirms trouble ahead in the corporate bond market – as we have discussed at length…

High-Yield Credit Crashes To 6-Month Lows As Outflows Continue

 

High-Yield Bonds "Extremely Overvalued" For Longest Period Ever

 

High Yield Credit Market Flashing Red As Outflows Surge

 

Is This The Chart That Has High-Yield Investors Running For The Hills?

*  *  *

While the 'market' impact of these facts is potentially economically devastating in its reality-endgame of bursting over-inflated buy-back-driven asset-bubbles, the traders and bankers themselves have also been crushed (schadenfreude-istically for many), as Bloomberg reports,

As trading in dollar-denominated bonds declined 22 percent in the past five years to an average daily $809 billion, so have the jobs, leaving even some of the most senior traders and salesmen moving from firm to firm. Dozens of journeymen are populating an industry that used to attract the young in throngs, lured by money and prestige, according to Michael Maloney, president of fixed-income recruiting firm Michael P. Maloney Inc.

 

“The business model is broken and 50 percent of the people in our world who are in trading are stuck right now,” Maloney said in an interview in his New York office.

 

 

For every 10 of them there’s going to be three or four left,” he said. “What’s the timeframe? Well, everybody I know is looking for a job — not looking for a job, looking for a career.”

 

“It’s surprising how quiet a place could be compared to what I had known,” said Stein, who began trading bonds in 1985.

*  *  *
See what happens, Janet, when you screw with the 'market'?

via Zero Hedge http://ift.tt/1vd4JfT Tyler Durden