Author: admin

Steve Chapman on the Folly of Arming TSA Agents

TSALast week, a
man with a rifle shot three Transportation Security Administration
agents at Los Angeles International Airport, killing one. This
episode evoked the same response as every other aviation attack:
the impulse to devise a quick solution. The union representing TSA
employees urged that at least some security screeners be armed—a
request administrator John Pistole promised to consider. The
driving assumption is that you can never be too careful. But you
can, of course. Training TSA agents to carry firearms would cost
money, invite terrorists to locate their massacres elsewhere in the
terminal, and not necessarily save a single life. Besides, points
out Steve Chapman, equipping screeners with deadly weapons would
also heighten the sense of coercion and intrusion that makes air
travel resemble admission to a medium-security prison.

View this article.

from Hit & Run http://reason.com/blog/2013/11/07/steve-chapman-on-the-folly-of-arming-tsa
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Is The ECB Implementing ZIRP or ZEURP: Zero European Union Return on Potential

Inflation vs deflation vs stagflation 

Inflation vs deflation vs stagflation

The primary business of banks is lending.

  1. In a recession, not many people and businesses borrow, hence lending tends to be a poor business.
  2. In order to make money off of lending assets you need a reasonable return.
  3. When ZIRP (Zero Interest Rate Policy) is applied, said reasonable return does not exist unless banks dramatically mark up the cost of the loan which brings up back to point one.

In the states I made this point when most analysts insisted that ZIRP was good for the banks, to wit…

 

Now remember, I’ve been very bearish on the EU and thier banks and sovereign debt in particular, since Q! 2010 – way before most – reference Pan-European sovereign debt crisis. Yesterday morning if you were to Google the term EU recovery, you would see something like this in return… 

Well, somebody better tell Draghi, as per Bloomberg: ECB Cuts Key Rate to Record Low to Fight Deflation Threat

The European Central Bank cut its benchmark interest rate to a record low after a drop in inflation to the slowest pace in four years threatened its mission to keep prices stable.

Policy makers meeting in Frankfurt today reduced the main refinancing rate by a quarter point to 0.25 percent. The decision was predicted by three of 70 economists in a Bloomberg News survey. The ECB kept its deposit rate at zero and trimmed the marginal lending rate to 0.75 percent. ECB President Mario Draghi will hold a press conference at 2:30 p.m.

The ECB now has just one more quarter-point cut left before reaching zero, increasing the likelihood of unconventional tools such as quantitative easing or a negative deposit rate if prices slow further or the economic recovery stalls. Euro-area inflation is less than half the ECB’s target and unemployment is at the highest level since the currency bloc was formed in 1999.

“There comes a point where inflation is so weak, and coming in weaker than anticipated, that the case for loosening policy becomes too hard to resist,” said Richard Barwell, senior European economist at Royal Bank of Scotland Group Plc in London, who predicted the cut. “Bad unemployment numbers only make the case stronger.”

Does it seem like I’ve predicted the future hear once again as that Financial Nostradamus Dude???


 

Quantitative Easing

A Fed-style quantitative easing program has repeatedly been ruled out by ECB policy makers. The central bank is barred by European Union treaties from financing state debt, making large-scale purchases of government bonds open to a legal challenge.

While Draghi has floated the prospect of a negative deposit rate, the rate for commercial lenders who park excess cash at the central bank, policy makers have said that its effects can’t be adequately predicted. A negative deposit rate could hurt banks’ profitability by lowering money-market rates, potentially hampering credit supply to companies and households and reducing banks’ incentive to lend to other financial institutions.

“If inflation stays low, as seems likely, and the threat of inflation expectations becoming unanchored to the downside increases significantly, then all the tools in the box can come into play,” said Ken Wattret, chief euro-area economist at BNP Paribas SA in London. “But knowing the way the ECB operates
and how long it has taken to try and get support for a refi rate cut, doing the big stuff could take some time.”

Well, I believe QE has already been implemented by the ECB accepting trash sovereign debt as marketable collateral, but that’s a discussion for another day. Just listen to the Financial Nostradamus dude when he warns what happens when a larger, admitted QE program is instituted. For one, you’d probably eliminate that inflation problem… replacing it with…


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/PbCun3Pkp0s/story01.htm Reggie Middleton

Twitter Tags $50 Then Dumps Back Below Open Price

Nope, no bubble here… Having traded up to $50 (over 33x Price-to-Sales), it seems hitting every analyst profit target (aside from Topeka’s Anthony) within one hour of its release was enough for most… The ‘profit-taking” has started and now TWTR is trading back below its break price… But do not worry – everyone can rest assured as Cramer just said “we’re out of the woods here.” Of course, as everyone knows, it’s not where you start, it’s where you finish that counts…

 

 

 

Only Topeka sees more…


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/c8XscMAZV2I/story01.htm Tyler Durden

Video: Gaga Feminism: Sex, Gender & the End of Normal: A Conversation with Jack Halberstam and Thaddeus Russell

“Gaga Feminism: Sex, Gender & the End of Normal: A
Conversation with Jack Halberstam and Thaddeus Russell” is the
latest offering from Reason TV. 

Watch above or click on the link below for video, full text,
supporting links, downloadable versions and, and more Reason TV
clips.

View this article.

from Hit & Run http://reason.com/blog/2013/11/07/video
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Video: Gaga Feminism: Sex, Gender & the End of Normal: A Conversation with Jack Halberstam and Thaddeus Russell

“Gaga Feminism: Sex, Gender & the End of Normal: A
Conversation with Jack Halberstam and Thaddeus Russell” is the
latest offering from Reason TV. 

Watch above or click on the link below for video, full text,
supporting links, downloadable versions and, and more Reason TV
clips.

View this article.

from Hit & Run http://reason.com/blog/2013/11/07/video
via IFTTT

Start Hoarding Donuts: The FDA Is Banning Trans Fats

Not again!We probably should have seen it coming. After
places like New York and California instituted trans fat bans, it
was only a matter of time until it went national. The Food and Drug
Administration is going to force food manufacturers to dump
artificial trans fats. Via the
Associated Press:

The FDA planned to announce Thursday it will require the food
industry to gradually phase out all trans fats, saying they are a
threat to people’s health. Commissioner Margaret Hamburg said the
move could prevent 20,000 heart attacks and 7,000 deaths each
year.

Hamburg said that while the amount of trans fats in the
country’s diet has declined dramatically in the last decade, they
“remain an area of significant public health concern.” The trans
fats have long been criticized by nutritionists, and New York and
other local governments have banned them.

The agency isn’t yet setting a timeline for the phase-out, but
it will collect comments for two months before officials determine
how long it will take. Different foods may have different
timelines, depending how easy it is to find a substitute.

“We want to do it in a way that doesn’t unduly disrupt markets,”
says Michael Taylor, FDA’s deputy commissioner for foods. Still, he
says, the food “industry has demonstrated that it is by and large
feasible to do.”

If they don’t want to unduly disrupt markets they could always
just opt not to. As is typical of this sort of behavior, it’s going
to have a bigger impact on your neighborhood family-run bakery than
it will on big chains like Dunkin’ Donuts. Dunkin’ popped to mind
because they’re just now breaking into the California market, and
the local media is all over it right now.
Dunkin’ Donuts started voluntarily dumping trans fats in 2007,
which required them to reformulate more than 50 menu items. A big
chain like them can manage the transition just fine. But back when
California instituted a ban, some smaller bakeries
reported they’d have to raise prices as the ban both increased
production costs and also reduced shelf life of their goods. Back
around that same time a piece in The Atlantic explored
the challenges of replacing trans fats and noted the challenges for
certain types of baked goods.

Dunkin’ Donuts replaced their trans fats with saturated fats
(read their nutritional guide
here), which is another fat with a bad reputation. But in
October, a British medical journal argued that the
war on saturated fat was misguided, and it was being blamed for
heart problems that were likely being caused by carbs and
sugar.

The FDA acknowledges that trans fat consumption has already
dropped significantly in the past decade so mandating it is
necessary why exactly? The Associated Press notes:

Though they have been removed from many items, the fats are
still found in processed foods, including in some microwave
popcorns and frozen pizzas, refrigerated doughs, cookies and
ready-to-use frostings. They are also sometimes used by restaurants
that use the fats for frying. Many larger chains have phased them
out, but smaller restaurants may still get food containing trans
fats from suppliers.

It may end up being yet another barrier to entry for smaller
restaurants and producers to compete against established
chains.

More Reason on trans fat bans and other food police behavior
here.

If that’s not enough, Hank Hill can explain it
all for you.

from Hit & Run http://reason.com/blog/2013/11/07/start-hoarding-donuts-the-fda-is-banning
via IFTTT

Start Hoarding Donuts: The FDA Is Banning Trans Fats

Not again!We probably should have seen it coming. After
places like New York and California instituted trans fat bans, it
was only a matter of time until it went national. The Food and Drug
Administration is going to force food manufacturers to dump
artificial trans fats. Via the
Associated Press:

The FDA planned to announce Thursday it will require the food
industry to gradually phase out all trans fats, saying they are a
threat to people’s health. Commissioner Margaret Hamburg said the
move could prevent 20,000 heart attacks and 7,000 deaths each
year.

Hamburg said that while the amount of trans fats in the
country’s diet has declined dramatically in the last decade, they
“remain an area of significant public health concern.” The trans
fats have long been criticized by nutritionists, and New York and
other local governments have banned them.

The agency isn’t yet setting a timeline for the phase-out, but
it will collect comments for two months before officials determine
how long it will take. Different foods may have different
timelines, depending how easy it is to find a substitute.

“We want to do it in a way that doesn’t unduly disrupt markets,”
says Michael Taylor, FDA’s deputy commissioner for foods. Still, he
says, the food “industry has demonstrated that it is by and large
feasible to do.”

If they don’t want to unduly disrupt markets they could always
just opt not to. As is typical of this sort of behavior, it’s going
to have a bigger impact on your neighborhood family-run bakery than
it will on big chains like Dunkin’ Donuts. Dunkin’ popped to mind
because they’re just now breaking into the California market, and
the local media is all over it right now.
Dunkin’ Donuts started voluntarily dumping trans fats in 2007,
which required them to reformulate more than 50 menu items. A big
chain like them can manage the transition just fine. But back when
California instituted a ban, some smaller bakeries
reported they’d have to raise prices as the ban both increased
production costs and also reduced shelf life of their goods. Back
around that same time a piece in The Atlantic explored
the challenges of replacing trans fats and noted the challenges for
certain types of baked goods.

Dunkin’ Donuts replaced their trans fats with saturated fats
(read their nutritional guide
here), which is another fat with a bad reputation. But in
October, a British medical journal argued that the
war on saturated fat was misguided, and it was being blamed for
heart problems that were likely being caused by carbs and
sugar.

The FDA acknowledges that trans fat consumption has already
dropped significantly in the past decade so mandating it is
necessary why exactly? The Associated Press notes:

Though they have been removed from many items, the fats are
still found in processed foods, including in some microwave
popcorns and frozen pizzas, refrigerated doughs, cookies and
ready-to-use frostings. They are also sometimes used by restaurants
that use the fats for frying. Many larger chains have phased them
out, but smaller restaurants may still get food containing trans
fats from suppliers.

It may end up being yet another barrier to entry for smaller
restaurants and producers to compete against established
chains.

More Reason on trans fat bans and other food police behavior
here.

If that’s not enough, Hank Hill can explain it
all for you.

from Hit & Run http://reason.com/blog/2013/11/07/start-hoarding-donuts-the-fda-is-banning
via IFTTT

Gold Below EUR 1,000/oz – ECB To 0.25%, QE And Negative Deposit Rates?

Today’s AM fix was USD 1,316.00, EUR 973.45 and GBP 818.46 per ounce.
Yesterday’s AM fix was USD 1,317.00, EUR 975.05 and GBP 817.66 per ounce.

Gold climbed $6.40 or 0.49% yesterday, closing at $1,317.20/oz. Silver climbed $0.10 or 0.46% closing at $21.78. Platinum rose $13.25 or 0.9% to $1,460.99/oz, while palladium rose $13.50 or 1.8% to $751.50/oz.


Gold in Euros, 30 Day – (Bloomberg)

Today, all eyes are on the ECB rate decision. The ECB is expected to leave rates unchanged at 12:45 GMT (7:45 EDT), but may indicate that it will reduce rates soon which would be gold supportive, particularly in euro terms.

Gold in euro terms is down 23.4% year to date. It appears to be consolidating between EUR 900/oz, the low on June 28th and EUR 1,100/oz, gold’s high back in late May. A signal from the ECB that it is going to loosen monetary policies even further could be the spark that gold needs to help prices get momentum to the upside again.

There is increasing pressure on the ECB, particularly from the banking sector, to adopt the ultra loose monetary policies being pursued and experimented with by the Federal Reserve. Policies, incidentally, which have not succeeded in reviving the moribund U.S. economy.

This pressure and a lack of inflation today may lead the ECB to signal that they intend reducing interest rates from 0.5% soon. They may also consider adopting even more radical monetary policies involving  quantitative easing (QE) or the creation of euros in order to buy or monetise government debt as the U.S. is doing with their $85 billion a month bond buying programme.

An even more radical option of negative deposit rates is also being considered. There are suggestions that the ECB is considering charging banks for depositing their reserves with the ECB by imposing a negative deposit rate.

Many banks would then pass on this negative rate to depositors meaning that extremely low yielding deposit instruments could become negative and actually cost depositors money.


Gold in Euros, 3 Year – (Bloomberg)

Expectations the ECB would cut its 0.5 refinancing rate rose last week after official figures showed a fall in euro zone inflation.  Citizens in most European nations would likely question the figures as the real world experience of people in most European countries is of rising prices. 

Draghi’s news conference, when he may prepare the ground for a cut in December, is at 13:30 GMT.


World Currency Ranker, Euro in G10 and Gold, Year To Date – (Bloomberg)

If the ECB suggest that they will reduce rates to a new record low of 0.25%,  this would put pressure on the euro and lead to higher prices in gold terms.

In dollar terms, the euro remains above strong chart support at $1.3462 from a trendline drawn from lows hit in early July. Technical analysts say a break below this line could lead to further losses for the euro, which only last week traded as high as $1.38 before the weak inflation data.

The euro will come under pressure if Draghi signals the possibility of negative deposit rates.

As soon as the ECB rate decision is over, attention will move to Friday’s U.S. jobs number. A poor jobs number tomorrow, should see gold rise on safe haven buying due to concerns about the struggling U.S. economy. A weaker economy will likely lead to a continuation of ultra loose monetary policies.

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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/YqWxOhAXP1s/story01.htm GoldCore

Twitter Opens At $45.10 (+73%); Trades Up To $48 (+84%)

+73% at the open… HFT activity is extreme

 

 

 

For now TWTR has reached $47.23…


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/NCX7IvBAoMI/story01.htm Tyler Durden

And The Latest Firm Under Investigation For Currency Manipulation Is… Goldman

With JPM having stolen the spotlight for every possible instance of fraud and market manipulation in the past year, it was easy to forget there are other prominent banks that engage in precisely the same deceptive practices as, well, everyone else. One such prominent bank is none other than everyone’s old favorite bloodthirsty mollusc, Goldman Sachs, which in a filing reported that “currencies and commodities were added to a list of financial products and related activities that are subject to investigation. The filing also added options trading and technology systems and controls to the list.” So, pretty much everything is being investigated.

Bloomberg reports that “Investigators are looking at the firm’s “trading activities and communications in connection with the establishment of benchmark rates,” Goldman Sachs said in the filing. The company “is cooperating with all such regulatory investigations and reviews.”

As noted above, Goldman is merely the latest bank to join pretty much everyone else, who is now under investigation.

At least eight banks including Citigroup Inc. (C) and JPMorgan Chase & Co. (JPM) have said they are being investigated by authorities examining the $5.3 trillion-a-day foreign-exchange market and are co-operating. Citigroup, JPMorgan and Barclays Plc (BARC) have suspended or put on leave some of their most senior currency traders amid the inquiry. No one has been accused of wrongdoing.

 

The U.S. Federal Reserve is examining legal and regulatory exemptions that have allowed banks including Goldman Sachs to trade and own raw materials such as oil, coal and metals, a person with knowledge of the matter said last month.

None of this should be surprising. What should, however, come as a big shock is that while JPM reported it has not had one trading loss either in Q3 or all of 2013 to date, Goldman just announced it lost money on a far more realistic 23% of all trading days, or 15 of 64, in the quarter.

It seems that unlike JPM, Goldman is taking the government’s fraud investigations seriously.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/VAWuuDer0JU/story01.htm Tyler Durden